Rolling Hills Real Estate Info

How To Avoid Buyer's Remorse

2012-01-18T11:49:00.000-08:00

The excitement of buying a new home is indescribable. You spend all of your time going over all the details of each and every possible home that is suitable for you. Then you actually find a home that you just love. After spending a great amount of time thinking about your dream home, you make an offer. Then it happens, you get that call from your realtor - your offer has been accepted. All of a sudden the reality that you just bought a home hits you like a ton of bricks!

Buyers have different reactions the that "Oh My Gosh, I Just Bought A House" feeling and understandably so. Buying a home is a BIG decision. Many people begin to have second thoughts about their decision. Did I do the right thing? Can I afford this? What if something happens? How much money did I just spend? Can I come up with the down payment? How much are the closing costs going to be? Etc.

You feel like your life is going to be changed forever. You think that you will never again be able to live the life that you currently have - enjoying eating at a restaurant, going to the movies whenever you feel like it, having a shopping spree. You think your entertainment budget has been shot out the door! Then you get the dreaded truth in lending statement and you see just exactly how much your mortgage including the interest will be over 30 years and you are shocked and dismayed. You think "what have I done?"

Sit down and relax. Millions of people buy new homes every day and get through it with no problems. Don't worry, what you are feeling is normal and you will be glad to know that it is temporary. This too shall pass. You will adjust your lifestyle and things will be back to normal before you know it.

Try to replace all of those negative feelings with positive ones like - imagining yourself sitting in your new home, enjoying your new life. Picture how well your new home suits your family's needs. Think about all of the things that you will have in your new home that you don't have in your current home. Give it time, you will get the hang of it.

If you still have those "Buyers Blues" then call your realtor immediately. Your real estate agent has years of experience helping their clients through the home buying process from start to finish and they will be more than happy to help you with anything you need. So remember, these feelings are normal. Then go relax and enjoy yourself. Go and eat at your favorite restaurant or do a little shopping; whatever it takes to rid yourself of the buyers blues and before you know it you will be sitting in your new home wondering why you ever had any doubts!

Buying A Home At A Discount

2012-01-12T12:09:00.001-08:00

Real estate is no exception when we talk about how inflation has affected each and every aspect of our life. At first, buying a home was only a matter of selecting your area, surveying places around it and making a decision. Times have changed now and the first thing that you bring under consideration is affordability. Not that you didn’t worry about finances back then, but you at least knew you weren’t over paying for your property. So the name of the game, when it comes to buying real estate today, is not only to get the best house of your liking but also to get the best financial deal for yourself.

Short Sales

So what do you do to get a discount while buying your dream home? The first step that you can take in order to find good financial deal on your next house is reviewing Short Sales.
A short sale means a sale that falls short of the amount owed on the mortgage. They happen only when the seller can't come up with the cash to pay off the difference. Most important, though, is that they can happen only when the lender agrees to accept the reduced payoff. However, it doesn’t mean the lender will agree to sell to you in all cases.

Lenders aren't in the business of accepting less than they are owed, so few short sales make it to the finish line. The best way to go about it is to hire an agent who has experience with short sales. He knows how to find people who are looking to sell. First, find out if the bank even has a clue that the seller is trying for such a deal; it would be a complete waste of time to try and bargain with the seller just to have the bank refuse the deal.

Foreclosures

Another way to look for a discounted deal is to look for foreclosures. Everyone has heard about foreclosures and the overwhelming inventory available. Situations like this usually give rise to discounted prices, especially in today’s times, because of the large inventory of homes sitting on bank books.
Buyer Beware; this process is lengthy and buying a foreclosed home can be full of pitfalls. If you have this picture in your mind of a well-maintained family home, surrounded by a white picket fence that is owned by an elderly woman who couldn’t keep up with mortgage payments, think again. Those types of foreclosures are few and far between. Unless you are a licensed general contractor, bring someone who is highly knowledgeable about construction with you.

Many foreclosed homes need repairs and most have been gutted by squatters looking to sell the best features of the home. Assuming that you’ve done all your homework and you still want to purchase that foreclosed property, your real estate agent will make an offer to the bank.

Best advice before getting to this point is while seeking that foreclosed home, get your financing complete with pre-approvals – the deal will go a lot smoother if the bank sees that all the foot work has been completed.

Short sales and foreclosures are just two options available to you. And, while they may be challenging deals to put together, they can be a great avenue towards home ownership.

6 Common Mistakes Homebuyers Still Make

2012-01-06T11:51:00.001-08:00

Getting a new home is easy but tricky at times. Many buyers are encountering stumbling blocks en route to their chosen house. This is because they commit minor mistakes along the way that hinders smooth processing. This can be prevented only if you are familiar with these common mistakes.

1. Having no pre-arrangements with the bank for mortgages before making an offer is the most popular mistake. Communicate with a bank to know the price range you are capable of paying and other mortgage details that you need to know.

2. Knowing your exact budget is critical. Most people look around for houses even without the budget in mind. First thing you need to know before finding a home to purchase is how much you can pay for a new home. You can save much time if you trim down your list of houses based on its price; imagine finding that dream home only to find out you won’t be approved for the mortgage?

3. Getting unreliable and inexperienced real estate agents is a big no-no. Choose an agent that has the background to back him or her up. Also, consider the real estate companies you are dealing with. Make sure that they have a good standing in terms of the services they are providing.

4. Most people are shopping around within a limited market. You can find homes for sale anywhere such as internet, print ads, and even on TV. You may also want to ask for help from your agent to provide you a list of preferred houses. You can save time if you know what kind of house you are looking for.

5. Purchasing a home long distance without thorough inspection is a mortal mistake. After choosing a home, it is a must to visit it personally so that you can see it in a closer view. Some pictures only show the good angles of the house. It can be very deceiving at times. Check the structure and foundation to ensure safety. Also, look around the neighborhood and get comfortable with it.

6. Buyers tend not to compute the total cost of the house. Other expenses such as home insurance, association dues and even lawyer's fee for proper documentation of the purchase should be considered. We are not talking about coins here. These range from hundreds of dollars to even thousands. You need to prepare your pocket for it.

Buyers are usually not aware of all the details. It is your home and you are responsible for it. You need to know and understand everything about it, from home warranty to insurances and even the history of the house.

How To Enhance Your Kitchen's Appeal

2012-01-03T11:53:00.001-08:00

You know it. I know it. We all know it. Your kitchen is the most important room in the house and the one room that can make or break the sale of your home. So how does your kitchen look? Is it outdated? Does it need a little TLC? Ok, don't panic because there are a few things that you can do to your kitchen to make it more inviting to prospective buyers without breaking the bank.

The first thing you need to do is to stand back and take a good hard look at your kitchen. What do you see? Maybe it just needs a good thorough cleaning. If you have lived in your home for a while you may not be able to see the forest through the trees. So look at your kitchen as if you were buying your house and make notes about what you are seeing and what needs to be done.

Here are some quick tips to help enhance your kitchen and possibly add thousands to your bottom line.

1. Clean, Clean, Clean - don't forget to scrub the cabinets inside and out, and remember the floors, and the appliances too
2. De-clutter everything, including the cabinets, drawers and pantry. Your buyers will be looking at everything
3. Remove all personal items - this will help buyers to see your home as theirs and not yours
4. Go through all of your cabinets and remove any unnecessary items. This goes for your pantry as well. You want to showcase your kitchen as clean, neat and orderly - this is what sells
5. Clear off the countertops of small appliances and gadgets - this will make your kitchen look bigger
6. A fresh coat of paint will go a long way and give it a fresh, updated look for very little cost and this is something that is easily done yourself
7. If you have wallpaper, assess its condition and age and consider having it textured and painted. Sometimes wallpaper can date your kitchen quicker than anything else. Your buyers will see outdated instead of clean and fresh and this will reflect in a lower offer
8. Look at the floors. Are they outdated and worn? A simple new vinyl floor covering will make your kitchen look newer than perhaps it really is. A vinyl floor is a very cost effective way to instantly upgrade your kitchen with very little expense but could add to the value of your home in the mind of the buyer
9. Do you have cabinet knobs? Are they making your kitchen look dated? If so then change them, this is just another relatively simple way to make your kitchen look as if it has been upgraded
10. How about your countertops. How do they look? Did you know that there are companies that will come to your home and spray a new decorative surface on your countertops for pennies on the dollar of what it would cost you to replace them and it makes your kitchen look fabulous and barely cost you a thing. Again, this is just another quick, inexpensive way to update your kitchen.

Try some of these simple tips and tricks today and get ready for those top dollar offers to pour in. A few minor touches could make the difference between a good offer and a great offer.

Can You Afford A New Home

2011-12-19T11:54:00.001-08:00

Buying a new home can be the most exciting thing you've ever done and it can also be the scariest! You need to think things through and look at the big picture. Write things down, weight out everything so that you don't become just another statistic. Here are some tips to deciding if you can afford to buy a new home.

1. How much can you afford? You should talk to a lender to help you with this question. They will talk to you about your income and your debts and together you can decide how much you can afford and how much they will lend you.

2. Get pre-approved for a loan. Once you have talked to a lender about your finances and your credit worthiness they will give you a pre-approval letter. A pre-approval letter will give you the upper hand once you find a home that you want to purchase.

3. It is a good idea to keep your monthly costs under 28% of your monthly pre-tax income. This should include what your mortgage payment will be. Don't forget to include the real estate taxes and insurance if they are not going to be included in your monthly mortgage payment.

4. If you have any long term debts like a student loan, car payments etc, then you should keep your monthly costs under 36% of your pre-tax income. This includes your monthly housing expenses.

5. Decide what type of loan you will be applying for such as Conventional, VA or FHA loan.

6. Decide what type of mortgage you will be using. Are you going to use a fixed rate mortgage or an adjustable rate mortgage (ARM)? If you decide to use an adjustable rate mortgage you must think ahead and plan for when the rates go up, because your mortgage payment will go up when the rates go up, depending on the terms of your agreement.

7. Consider homes in various price ranges.

8. Think about your future plans, perhaps you should purchase a home at the top of your price range. This will give you more time to outgrow your home and will save you money in the long run.

9. Make a budget. Write down every little expense you have - it all matters.

10. Look at your expenses. What do you really need? What can you do away with?

11. Plan for emergencies. Do you have savings? What will you do if an emergency arises? Be prepared, you don't want to lose that beautiful home you saved so long for.

12. Don't over extend yourself.

Ok, now you have thoroughly thought everything through and it's time to make a decision. Go ahead; make the decision one way or another. If you are not ready to buy, decide what it is you need to do to get to where you need to be. Either way, start talking to your realtor today!

Whatever it is start handling it now. The sooner you take care of business, the sooner you will be in your new home. If you are ready to buy don't procrastinate, because you never know when the rates will go up or when you will lose out on your perfect home.

Buying A Second Home

2011-12-13T12:26:00.001-08:00

Buying a second home - should you or shouldn't you - that is the question. Well, buying a second home could very well be the absolute best thing you have ever done but you have to do it for the right reasons. Let's talk about a few of the things you need to consider before making any quick decisions.

First you must ask yourself why you want to purchase a second home. Is it to invest in your future? Is it to use for a vacation home? Are you doing it for an additional income? The answer to these questions is critical so let's look at all of the facts.

If you are buying a second home as rental property to use as part of your retirement plan then you have made the right decision. Buying a home forces you to make regular savings in the form of a mortgage payment each month and that is money in the bank when it comes to a retirement fund.

You must make sure,however, that you have enough money to cover the mortgage payments plus any additional expenses such as repairs, yearly taxes and insurance, if they are not a part of your mortgage payment, and anything else that may arise. The good news is if you buy the right house at the right price, your rental property should always stay rented.

Another reason a second home as part of your retirement plan is a good idea is due to the fact that your investment money is subject to less income tax and the interest and taxes may be deductible. So planning ahead could pay off in a big way.

Housing, for the most part, appreciates over time. There are definitely ups and downs in the housing market but buying a home is a long term investment that can ride those tides very well. A home is an inflation proof investment.

The experts have predicted that both fixed rate and adjustable rate mortgages will probably remain in the single digits for the foreseeable future. Therefore, financing a home with a nominal down payment should remain achievable for quite some time.

Buying a home is very exciting and can be a very profitable experience but your decision cannot be made lightly. It is wise to give a lot of thought to why you want a second home, then make a financial plan and stick to it.

If you have some disposable income, then purchasing a vacation home may be just what you need to add a little spice to your life. Then by all means, go ahead and find the perfect house, buy it and enjoy.

Whatever the reason you want or need a second home, please think about your reasons, make a plan and follow through. It is also advisable to talk to a real estate agent about all of your options before diving in. A real estate agent can help you make the best decisions and could potentially save you thousands of dollars in the long run.

Improving Your Purchase Power And Credit

2011-12-09T11:45:00.000-08:00

You examine your budget and determine that you cannot afford the home of your dreams because your credit and financial situation isn’t stellar. What’s your next step? Should you keep looking for a lender willing to work with your credit or should you begin to improve your financial picture?

The majority of people want it now. Why do so many individuals seek a mortgage program that will work with their credit situation instead of simply improving the overall picture? While it may be tempting to find a mortgage program that will work with your current financial situation you should stop and think if this is a temporary problem you’re having or if you cannot control you’re spending. If you’re having issues now it’s not likely to change when you become a homeowner.

With a few changes and little extra effort you could be in a completely different state of affairs within a year.

First, you need to analyze your spending habits. Where does your money go on a monthly basis? Consider the following;

1.Stop using credit cards. Credit cards always create financial hardship for most consumers. Often you will overspend with credit cards believing that you will pay for the difference next month. However, that rarely occurs. Additionally, credit card interest is high – too high – and can keep you in debt longer than you think. The best thing you can do is freeze your cards, pay off the debt and keep one for emergency. Go on a cash-only budget. Not only will this force you to live within your means, but you will appreciate your spending more when you are paying with cash.

2.How much car do you really need? Most of us possess a nice car but how often do you need to buy a new vehicle? Without even thinking about it as soon as it’s paid off, many of us run out and upgrade to a newer model. Who needs a new car payment – this will keep you in debt. If you want to save a ton of money monthly, keep up on your vehicle maintenance and keep your old car.

3.How much food do you eat – where and when? Buying out is a trap! How many of us pick up a quick breakfast on the way to work? And if you’re buying lunch every day, brown bag it. The more packaging and preparation that’s involved in making a meal, the more expensive it will be. Prepare a quick estimate of how much you spend each day on food and I’ll bet you can save a significant amount each month.

Your overall goal should be to save money, reduce debt and improve your credit. If you do all three things you will dramatically turn your financial situation around within the first 6 months. Not only will this be reflected within your credit score but your financial picture would be healthier and you’ll have more money for a down payment.

Upscale Downsizing For The Retiree

2011-12-07T10:36:00.000-08:00

Today’s seniors are busier than ever with friends, family, part-time jobs and even weekend escapes. Who wants a house to clean, or snow to shovel? And those flower beds that seemed like a lovely idea years ago don’t seem like a good idea today. Yet, while many seniors want to scale down, no one wants to give up their upscale expectations.

The trick is to find retirement properties that offer downsizing with all the amenities you’ll love.

All retirement communities offer independent seniors the chance to live near neighbors of similar age and interests. Most are located close to medical facilities, shopping, and places of worship. Many offer club house activities, a pool, tennis courts and even shuttle bus or van service. So how do you find the retirement community that is all-inclusive and fits your expectations? With the help of a real estate agent you can find the community that fits your needs now and later.

Consider the location of any Active Retirement Community. What is most important to you and how close do you want to be to outside recreational activities? Many of the more upscale communities offer some or all of the following amenities on-site;

• clubhouses

• pools/saunas/spa facility

• exercise facilities

• craft and hobby shops

• libraries

• media rooms

• movie theaters

• hiking trails

How important are planned activities? Many active retirement communities employ full-time activity directors to plan events such as day trips, shopping excursions, special-interest groups, card clubs and book clubs. Additionally, many active retirement communities offer a wide variety of travel options, including day trips, member excursions and private travel agencies on site. Some will also recognize the importance of activities that are age-appropriate for visiting family and friends.

Retirement communities are also forward-thinkers that consider the issues relating to aging-in-place. Convalescent care, assisted living, and respite care are just a few of the concerns active retirement communities have considered. Proactive retirees looking for that all-in-one community can downsize to a home-like environment. Staffed by medical professionals, all health concerns are attended to, while remaining in the same community. There is no need to pack up and move to accommodate growing health concerns.

Preparing for such a transition can be daunting, however when you consider the array of activities and opportunities that are available when you downsize, it becomes easier to prepare for the next chapter in life.

Top 3 Foreclosure Myths That Keep Potential Homebuyers Away

2011-12-05T11:29:00.001-08:00

Bad things can happen to good people and we’ve seen this many times, especially when it comes to owning real estate. Many people get themselves into situations beyond their means and the end result in real estate is often foreclosure. Yet, this opens the doors to incredible opportunities to purchase a home at a bargain.

Just about every consumer has heard about buying a foreclosure yet many shy away from these types of transactions because of misconceptions. Foreclosures are abundant in the marketplace and can save you anywhere from 20 to 40 percent off the selling price; sometimes more.

Are you hesitant to purchase a foreclosed property?

Myth #1 – Foreclosures are only found in the bad neighborhoods. This is certainly not true. Foreclosures can occur anywhere. People have mistakenly assumed that foreclosures are always the result of financial irresponsibility and this usually occurs in more crime ridden neighborhoods. Foreclosures have been caused by divorce, medical and health problems, predatory lending and death, just to name a few. Everything from estate homes and undisturbed lots to townhomes, condos and mobile homes have been foreclosed upon. Real estate agents have access to lists containing all the foreclosed properties available for sale.

Myth #2 – I must attend the auction to buy the property

Foreclosure notices are published for several weeks before the auction. This in-between period is referred to as the pre-foreclosure. Real estate agents can easily find homeowners in the early stages of foreclosure and work out a deal. Buying a pre-foreclosure does have its advantages. The homeowner is a bit more desperate to avoid the actual foreclosure. In addition, you are able to actually perform a walk-thru of the home and inspect before placing any contract.

Myth #3 – The only source of foreclosed properties is at courthouse auctions

Many potential homebuyers envision bidding on the courthouse steps to purchase a foreclosure. The fact is there are other opportunities to purchase a foreclosed property with less stress.

Lenders have an abundant inventory of foreclosed properties that never sold; these are referred to as REO properties. REO properties have several advantages;

• You can fully inspect these properties because in most cases the previous owners have already been evicted.

• You can bring a contractor with you to get a detailed list of what needs to be fixed and/or replaced and make an educated assessment of the property.

• Lenders are offering bargain-basement deals on these properties and since they are losing money on their inventory, they have an incentive to quickly sell.

No matter how hard you try when you’re buying any home there are risk involved. Taking on new challenges can be intimidating, yet buying a foreclosure isn’t so complicated that you should avoid this type of transaction. It only takes time and an experienced real estate agent.

Saving Money With Multi-Family FHA Loans

2011-11-30T12:03:00.001-08:00

In the 1900s you would commonly find family generations living under one roof. For the last decade, extended families have begun to move farther apart. But again, this trend is changing.

Mostly for economic reasons, extended families have begun to live together once again. Thinking of ways to save and cut corners? Look into an FHA loan on a multi-family home.

A multi-family property is any home or residential building that has more than one unit. Most people purchase multifamily housing in order to invest in the property and use the rent from the tenants to pay the mortgage. The newest trend has been to purchase a multi-family home and move extended families under one roof.

FHA insured home loans can be used for a variety of properties, including purchasing the multi-family home for up to four families, or a condo or even a “manufactured home” on a permanent foundation.

FHA loans are an excellent choice for those with less than 720 Fico scores, and the FHA is still guaranteeing home loans.

• There is a minimum down payment of requirement for all FHA new home loans.

• Credit guidelines are more lenient with acceptable scores in the 600s.

• FHA does allow loan applicants to borrow money for a down payment, with restrictions

Some borrowers still have a difficult time coming up with the down payment and closing cost fees, however there are many programs available that “gift” these fees to the borrower.

Fannie Mae and Freddie Mac have no direct grant programs for down payment or closing cost assistance, so borrowers are not able to apply directly. Borrowers can inquire about these programs from their Mortgage broker or lender.

Many lenders participate with local, state and federal programs that provide down payment and closing costs assistance, i.e., all mortgage lenders and brokers are not created equal. This is why it can be vital to look around and ask your broker or lender which programs they take part in.

Living with parents just became the new trend

Many people looked down on the notion of “still” living with the parents, but today, mom and dad, siblings with husbands in tow and grandparents can be beneficial in many ways.

1. With several incomes, the monthly mortgage is more affordable

2. Child care fees are greatly diminished

3. When living with family, we tend to spend less on entertainment and enjoy more family time, which greatly benefits the younger generation

It may not be an ideal situation for everyone, but many families are making this FHA multi-family mortgage benefit them in many ways, especially with today’s tightened grip on our finances.

Speak with a real estate agent and lender to discuss your options.

Retiring For The Budget-Conscious

2011-11-28T12:06:00.001-08:00

Being budget conscious does not necessarily mean that you have to deprive yourself of an enjoyable retirement. Of course the more money you have to retire with, the less you’ll have to worry and the best way to boost your retirement fund is to start saving early. Even those with limited retirement funds can benefit from some smart planning.

Re-Evaluate what you need

The first step is to create a retirement spending plan – where do you stand? The most important thing to consider when you create your retirement spending plan is whether or not the plan is reasonable. If it’s not, you probably won’t stick to it.

Mistake #1; the biggest mistake prospective retirees make is when they do not take a hard look at their overall retirement situation. Is your nest egg enough to generate retirement income for the next decade or more? Take a good look at your retirement situation because it could be time to downsize.

How much annual income will you need during retirement?

Financial planners suggest that you’ll need about 75 to 85 percent of your pre-retirement gross income to maintain your current standard of living. Of course, this can vary according to your lifestyle.

During retirement, you will pay less in taxes, save less, and you should have less of a mortgage burden than you did while working. While many expenses will decrease during retirement, many will increase.

Mistake #2; one in 10 Americans choose to downsize early, at the onset of retirement. Early planning to downsize to more affordable lifestyles can save you thousands every year. Only recently during our economic downfall have Americans began planning for retirement sooner than later. Why wait until you’re under water and barely surviving?

The practical alternative is smaller

Who said you would have to sacrifice the amenities when you downsize? The American dream was built around the idea of bigger is better but lifestyles have changed and the aging population are opting out of the “big” notions and choosing to keep it small. Retirees are turning to alternatives.

Whether it’s one-floor ranch styled homes, modular homes and manufactured homes or perhaps a home on wheels, retirees have a bevy of options to reduce living expenses.

Think about this – retirees require only the basics for living, sleeping, cooking and bathing. Do you really need several bedrooms, a family room, dining room, basement and more? This only translates into more electricity, more rooms to clean and more expenses.

Smart seniors realize that small can be advantageous, especially to the pockets.

Pricing A Home To Sell

2011-11-21T11:59:00.000-08:00

Psychologically which price looks and feels better to you - $299 or $300? People generally feel like it’s more of a bargain with $299, although the difference is a mere dollar.

There’s a fair amount of psychology and strategy that goes into determining a home’s asking price and while you may have a price in mind, that doesn’t mean your home is priced to sell. It’s all about tapping into the mind of potential buyers and how they identify with your price.

The biggest hurdle is to determine a fair price for your home, sans any emotions. Ask any homeowner what their home is worth and the price will include all the memories that have gone into making a piece of property a home. Emotions have no place in this business practice.

It’s understood that sellers don’t want to simply give their homes away and everyone wants to sell for the maximum price, but buyers are seeking bargains and with an abundant inventory, sellers must be flexible.

The real estate agent will identify the approximate value of a property based on comparisons of similar properties sold in a neighborhood, the market conditions, competing surrounding properties, and the time of year. Once all of these elements are considered, the real estate agent will have a price range in mind.

Here are a few strategies for the seller to consider;

• Listen carefully to your agent’s pricing strategy – they are the experts. It’s their job to know what works and what doesn’t. And as with any strategy, be prepared to have an ongoing discussion about pricing with your real estate agent. If potential buyers are not biting, it may be time to re-think the asking price.

• By pricing your property on the average to the lower end of the price range, you will stimulate more interest among more than one buyer. Also, for those homeowners in a position to sell quickly, this would be a good option to get more offers. Sellers who list their homes too high miss out on a segment of buyers.

• Forget the creative pricing strategy - $488,888? Odd priced homes call attention to the price for no good reason. The goal is to showcase the property, and to appeal to as wide an audience as possible. Getting eccentric with your asking price counteracts the tried-and-true strategy of psychological pricing. Well thought out rounded figures work best - $299,000

A lot of factors can come into play when selling or buying a home, and not all of them can be anticipated. If you can be flexible and react quickly to changing market conditions you’re more likely to get the best price with the least aggravation.

South Bay Home Sales Rise

2011-11-18T11:31:00.001-08:00

The local housing market enjoyed an increase in single-family home sales for October, even as prices fell.

South Bay cities - excluding the Palos Verdes Peninsula and Inglewood - saw 183 sales of single-family homes, up 8 percent from the same month a year ago.

In a statement released Wednesday, the South Bay Association of Realtors reported that the median price of those sold homes was $400,000, down 26 percent from a year earlier.

The median price is the middle figure where half of homes sold for more and half for less.

The improved sales with lower values represent real estate's uncertain future as monthly data give mixed signals about the industry's direction.

"Increased single-family sales suggest that buyers and sellers are coming together more effectively and new families can get into homes for which they are qualified to buy," association President Caren Greenwood said in a statement. "If this trend continues in the coming months and going into 2012, and appropriate financing is available to qualified buyers, then we hope that it signals the economic recovery gaining strength."

Sales of local condominiums and town homes were less promising, with 6 percent fewer transactions in October compare with a year earlier.

The median price in this segment was flat at $409,000.

Warren Snyder, co-owner of a mortgage brokerage and real estate company, said he has been an uptick in business in part because of low interest rates.

"We're doing a lot of refinances, and we're also doing a lot of sales right now through short sales," said Snyder, of Carriage Realty & American Broker Loans in Rolling Hills Estates.

While the housing market continues to look shaky, Snyder said that lower home values mean he has been able to help his clients lower their assessed property taxes.

Statewide, home sales also rose last month, according to the California Association of Realtors.

Resales of single-family homes across the Golden State reached 493,240 in October, up 8.5 percent from a year earlier, and a 0.9 percent rise from September of this year.

The statewide median price was $278,060, down 8.9 percent from a year earlier and 3.3 percent decline from a month earlier.

Note: Article written by Muhammed El-Hasan of the Daily Breeze.

Does Your House for Sale Advertisement Say "Buy Me Or Boring"?

2011-11-17T13:04:00.001-08:00

It's no secret that human beings react to words, and any edge that a seller can gain - starting with the house ad - is vital.

While advertising your home is not an exact science, some words seem to give a listing more power than others. "Beautiful" rather than "move-in condition" translated on the average to three percent or more on the sale price - that works out to $9,000 on a $300,000 house.

Words that denoted "curb appeal" or general attractiveness - such as good neighborhood or excellent upkeep, for instance - helped property sell faster than those that described "value" and "price."

There is always something that can be said in an enticing influential way, which will force a buyer reading the ad to see opportunities. It is always important to help elaborate on the home's assets by providing descriptive details and giving the buyer a visual.

Placing a spin on the advertisement is the best opportunity to getting people in the door. You may chose to say, 'professionally designed,' 'Laura Ashley-inspired,' 'designer decor' or 'gourmet kitchen,' ".

It is also important to use proper terminology to enhance a feature. For example, heated floors in a master bathroom should be referred to as 'radiant heating' or a 'spa-like master bathroom.' If an owner claims there's nothing new, it can be referred to as, 'lovingly maintained’.

Many times sellers can make overstatements about the home. Your realtor will perform a walk-thru and ensure all the characteristics of the home have been considered; real estate agents create that visual romance that potential home buyers are looking for.

Is it Help or Hype?

Everything these days is about price and timing; potential buyers know a good deal is possible. Combine that with a properly worded advertisement, and you have the better chance than the next seller.

Buyers are attracted to verifiable amenities – the new roof, new carpeting, updated kitchen, beautiful landscaping, finished basement, golf course community, lakefront, or a gated community. If a property has a finished basement, it should be fully finished – not just one room in the basement.

Constructing your Ad

1.Start with a strong opening statement about the home

2.Mention the one or two key benefits that will attract buyers' attention and spark their interest

3.Include the significant facts about the property, such as the number of bedrooms and bathrooms

4.Use words that appeal to the emotions and senses

5.Be accurate. Prospective buyers are bound to feel disappointed or manipulated if the home doesn't match your description.

Lastly, always close with a statement that encourages prospective buyers’ – don’t leave a blank slate. "Call today" is a call-to-action statement that translates into ‘catch me now while the getting is good’.

Buying A home May Now Be Cheaper Than Renting That Apartment

2011-11-16T12:24:00.000-08:00

In an ironic turn of events, many people are finding they cannot afford to pay rent and are turning to buying a new home.

Falling house prices and increasing rental demand have made it cheaper to buy a property than to rent. Individuals are quick to assume a rental would be much more peaceful on the pockets, but it turns out most rentals are priced, on average, approximately 25 percent higher than a monthly mortgage.

With home prices way down, low interest rates and sky high demand in the private rental sector, buying has never been a better option for those able to secure a mortgage. And with home owners reducing prices even further, in preparation for a quick sale during the holiday season, this has become one of the best times in history to purchase a home.

The statistics in every state show that the average rent is more than a monthly mortgage payment. When you add on the incentives to owning a home, it’s a strong argument to contact a real estate agent quickly.

Take a look at average rental prices in a few states;

Alabama $ 724

Arizona $ 815

California $ 1455

Colorado $ 1032

Florida $ 982

Georgia $ 819

Illinois $ 1098

Maryland $ 1283

Nevada $ 811

New Jersey $ 1468

New York $ 1672

Pennsylvania $ 1009

South Carolina $ 753

Tennessee $ 794

Texas $ 946

Virginia $ 1149

Average rates, based on 2 bedroom

Renters have failed to realize what an opportunity they have right now. There is an abundance of homes to choose from; and a larger selection of available homes versus rental units. Imagine shaving off $300 from your monthly rental payment? What about purchasing a new home, with all your required amenities, in the vicinity that’s central to everything, all at a lower monthly cost?

But the million-dollar question is whether prospective homeowners can get a loan.

After the mortgage meltdown, banks tightened credit standards including increasing down payments which shut out many potential homebuyers; however, there are many programs available to help get those homebuyers into a new home.

Many factors have created great deals in the housing market, but those same factors also might be too daunting for many individuals to overcome right now.

Everyone should know where they stand. At a minimum, meet with a mortgage broker and real estate agent to ascertain what home loan programs you may qualify for. This could very well be the best time in U.S. history to purchase property.

A Better Advantage With Credit Union Mortgage Loans

2011-11-15T12:26:00.001-08:00

Amidst the topsy-turvy spiral of mortgage lending, most borrowers feel as though they need to hire a team of expert finance and legal consultants before pursuing a mortgage loan. Who can blame them? From the unintelligible disclosures to the twists, turns and requirements presented during processing, borrowers must approach the loan process with an eagle eye on the bottom line. Getting the most bang for the bucks.

After the wave of borrowers lost their homes in the fiery ashes of mortgage-gate, many prospective homeowners are hesitant about mortgage loans in general. Adding fuel to this fire are unattainable rates, poor servicing and being subjected to polices that serve the lender, but not the borrower's needs.

Credit unions are showing that there’s a better way to bank with several distinct mortgage loan advantages;

• More flexibility when locking in rates. Published mortgage rates can be locked for 45 to 60 days without a fee, when most banks quote 15 or 30 day rates.

• Credit union mortgage rates are better than those of other lenders because the company does not build a profit margin into its loans.

• Most credit unions do not have prepayment penalties on mortgage loans and do not charge origination points, unlike commercial lenders.

• Credit unions have more flexibility of approving loan applications.

• Credit unions can charge lower rates than conventional lenders because they are nonprofit institutions.

• Credit unions can save hundreds in closing costs by eliminating or decreasing many of the usual fees.

Service, low closing costs and mortgage rates are the differentiating factor among lenders, not to mention trust. Credit unions have a stable, reputable status and are not marred by the economic mess created by commercial lenders. A strong point when deciding whom you should submit an application.

These loans, which are available to anyone who meets a credit union’s membership terms, are not typically marketed, yet they have grown increasingly attractive during the last year.

Time to Compare Lenders

Many people will tell you they’re too busy to switch banks or comparison shop. Well, start with a quick call to your current financial institution and check to see if they are willing to decrease some fees and sweeten the deal for you. We are dealing in tough times and with the current economic demise, banks should be on the lookout to keeping customers happy. If they are unwilling to budge, it’s clearly time to shop around.

You can search for credit unions in your region at asmarterchoice.org, the website run by the industry’s trade association.

5 Reasons To Buy A Home Now

2011-11-10T12:37:00.000-08:00

With prices declining in many markets, it now makes the cost of buying a home a better financial deal than renting. However, many potential homebuyers are transfixed on the market, wanting to believe prices will drop lower. The question is how low do you expect home prices to fall?

Now is the right time to buy and here are some great reasons to rush to your realtor now;

• Renting isn’t such a great deal. This is all about Economics 101: Demand for rentals the past few years has increased — a consequence of foreclosures and fewer existing renters making the decision to buy – and supply hasn’t kept up as there has been little new construction since the financial crisis hit. That’s pushing up rental prices.

• Mortgage rates are at historic lows. Right now the average mortgage rate hovers around 4.6 percent on a 30-year fixed rate mortgage which is beyond dirt cheap. While many mortgage lenders advertise fire-sale cheap rates that are lower than four percent, the fees almost double to that of the averaged rate loans.

• There is far less competition for buyers. There may be plenty of potential homebuyers at open houses these days, but the anemic sales pace is proof that there are fewer serious buyers looking to make a deal. That makes it less likely you’ll find yourself in a bidding war today. It also means you can negotiate more effectively with eager sellers. Wait to dive in and you could find yourself in a more crowded pool of buyers.

• Qualifying for a mortgage is likely to get harder, not easier. The goal of Washington in the coming years is to shift more of the mortgage market out of the hands of Fannie Mae and Freddie Mac and into the hands of the private market. It is admittedly too early to know when and what that transition might look like. But whether the government backing is scaled down or disappears all together, that means higher borrowing costs. Moreover, there’s already a new federal regulation being considered that would require banks that want to keep selling 100 percent of their mortgages to Fannie and Freddie to hold borrowers to tougher lending standards.

Its common sense that potential homebuyers want the best price possible but the market is at the lowest it’s been in over 30 years. Wait much longer and you may be spending hundreds more on a monthly mortgage loan.

Buying a Budget Home

2011-11-04T13:04:00.001-07:00

When it comes to real estate, it’s really hard to beat an inexpensive home. You may call it inexpensive while others refer to it as a cheap home – but they are very affordable and ideal for those on a budget.

These bare-bone types of homes represent a way to purchase property at a low price, build it up, and have instant equity. Making money with real estate is easy to do - no matter how you look at it.

Although you can find cheap homes throughout your state, some will obviously be better than others. Some are in great neighborhoods, giving you plenty to see and plenty to do all around you. On the other hand, most towns that offer the cheapest homes normally have a bad situation when it comes to the job market. They can be great to retire to or settle down in if you own a business, although they aren’t great if you need a job. Internet marketers and writers are finding these areas, and are flocking to them at a very fast pace.

The Best Way to Purchase Low

You can save quite a bit of money by buying a home that is practically unfinished, but still fits your needs. What this means, is buying a home in the inexpensive areas of your town, or buying a home that has not been completed yet. You shouldn’t be focused on one type of home or neighborhood, but instead look at your available options and compare prices.

Many builders have gone out of business, leaving plenty of unfinished properties. Let your real estate agent investigate how to purchase these almost finished properties. You’ll save a bundle and can have the home completed within months.

Keep in mind that buying cheap homes doesn’t necessarily mean buying a rundown place or buying your home in a bad part of town. You can get a cheap home in a great neighborhood, if you weigh your options accordingly. If you shop around and look at different areas, you might find yourself very surprised at just how many homes are available at cheap prices.

In some cases, you can end up paying the full price of a home and still end up spending less than someone else might spend. Although price has an impact, financing is also an area that can help to make a home more affordable. If you get a low interest rate, you’ll save a lot of money when you buy the home. There are several ways that you can save money through your finance options, which is why you should always research what’s available to you before you buy.

Contact a real estate agent and provide a list of what you’re looking for and how you want to save money. Finally, keep your options open because now is the best possible time to negotiate.

Three Reidential Improvements That Add Value

2011-11-03T13:05:00.001-07:00

There are two ways to go about making home improvements. Either you splurge for things purely for the pleasure of having it or you take a pragmatic approach, making purchases that will increase your home's market value.

Exactly how much you'll recoup in costs depends on several factors, including the value of the homes in your neighborhood, when you plan to sell the home and the nature of the project itself.

But there are three improvements that will up your value no matter what!

1.Install a Standby Generator. Standby generators can add value to your home and while they are moderately expensive to install, they will safeguard your family by keeping power running in an emergency. Unlike a portable backup generator, which you store in the garage or shed and roll out during an emergency, a standby generator is permanently installed on a gravel bed or concrete pad next to your house. If the power goes out, an electronic switch automatically signals the unit to turn on, keeping essential household systems and appliances running

The cost of these units all depend upon your comfort level and what your expectations are. If you lose power, would you prefer the whole house remains running as if nothing ever happened or do you need just the basics to get through the rough time? Prices for standby generators can start as low as $1700, however, this does not include the price for an electrician to install and test the generator.

2.Create a Home Office. Many companies are looking for ways to reduce costs and minimize space to house employees; additionally, millions of Americans work from home and that number grows every year. This has made a home office more of a necessity than a luxury. Creating a dedicated work space not only adds value to your house, but it also makes your telecommute tax deductible. Converting an unused den, sunroom or extra bedroom is a great way to take care of business from the comfort of your home.

3.Infuse some Curb Appeal. If your house doesn't look appealing from the outside, chances are a potential buyer will never make it inside. Paving a driveway or walkway that is in disrepair is a must, because this is what leads people to your home -- you want it to be welcoming. Attractive, manicured front-yard landscaping will also add value to your home. Drought-tolerant plants are a great option if you don't have a green thumb. And don't forget about your backyard either. Outdoor living is very popular as more people wish to entertain. Raised garden beds and attractive lounging furniture will definitely appeal to future buyers. Who said you must spend a fortune? Curb appeal can be created for under $500.

Keep in mind that design tastes can shift significantly over time. A house that's priced higher than its neighboring homes could be perceived as overpriced even if it does have more value.

Turning Your Attic Into Living Space

2011-10-31T12:59:00.001-07:00

An attic can yield up to hundreds of square feet of unused living space in your home. Do you have another child coming into the family? Are you starting a new business that requires more office space? Would you like to turn that attic into a guest room? All of these are viable ideas to create a room out of storage space that is rarely used! With a little sprucing up, maybe a fresh coat of paint and some windows added into the space, the attic could become one of the warmest rooms in the house! Use these tips to help you create your attic room!

Sometimes a fresh coat of paint is all it takes to add life to a room. Consider that most attics are unpainted and unfinished with low ceilings there are many painting techniques that we can use to make the ceilings appear higher, and make the room appear brighter. The lighter the color of the walls, the larger the room is going to appear. Take note of the walls, are they finished? Is the wood in good condition? Would it be beneficial to keep the history and paint the walls or would it be best to finish the walls with drywall and paint?

Take into account what the room will be used for. Often, attics are not insulated. If the room is going to be used for an office, den, living space or bedroom it is a good idea to insulate the walls before finishing the drywall. This will add warmth to the room, because no one is going to want to spend time in a freezing cold room. Make sure that it is insulated properly, contact the local professionals.

Attic floors can be customized to give the room character. Often, all they need is a good sanding, and a couple coats of wood varnish. The older the home, the more authentic that the attic floors are going to be. Add in a few area rugs here and there, and floors, and walls will be complete. These are two major parts of completing your attic room, and making it ready for your family or for guests, so these two tasks could have you on your way!

Next comes the ceiling, after the walls have been painted, it is time to look at the ceiling. How is the shape of the ceiling? Should it be replaced? If the ceiling needs to be replaced, it could be completed at the same time that the walls are finished with drywall. Be sure to use thin drywall, as attic rooms are small, and we need all the space that we can get.

After the main elements of the room have been completed it is time to think about décor. Finishing the room on a budget could mean visits to the local chain store, or thrift store to find cozy, chic furniture for less. This means, that you could spend more on fabrics, accessories and other elements to make the room feel more like home.

Improving Your Purchase Power And Credit

2011-09-30T16:27:00.001-07:00

With a few changes and little extra effort you could be in a completely different state of affairs within a year.

First, you need to analyze your spending habits. Where does your money go on a monthly basis? Consider the following;

Financing Home Improvements With The FHA PowerSaver Program

2011-09-29T16:41:00.001-07:00

Despite the slumping housing market and rising energy bills, the government might help you secure a long-term remodeling loan. Over the past several years the government has taken an interest in steering homeowners in a greener and more energy efficient direction when it comes to residential energy consumption.

The FHA (Federal Housing Administration) is offering the Power Saver Program, a mortgage insurance product to Homeowners desiring to make energy-saving improvements; you can secure up to a 20-year $25,000 loan to make improvements as outlined and approved by the FHA and the DOE (Department of Energy).

Who Qualifies for Mortgage Insurance?

The loan must be secured by an existing first loan. The homeowner's credit score must be a minimum of 660 points in order to be considered a reasonable credit risk. The debt to income ratio must be 45% or less.

It's important to know that the loans themselves are not provided by the government but are simply guaranteed by the FHA, which assumes 90% of any defaulting loan while the commercial lender backs the remaining 10%. The interest rates typically range between 5% and 8%. As of April 21, 2011 there were a total of 18 approved commercial lenders.

What Kind of Home Improvements are Covered?

Since the intent of the Power Saver program is to implement energy-conserving measures, the FDA recommends an energy audit to determine how best to invest the money. Specifically, HUD (Housing and Urban Development) recommends, the installation of insulation, duct sealing, replacement doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems.

Items like insulation and replacement doors are relatively inexpensive investments, with the prices rising from there with energy-efficient replacement windows and geothermal systems getting into some serious money. The upside is that after installation, utility bills will be easier to control and some of these investments are eligible for federal energy tax credits.

Since this is a new program, job layoffs continuing to rise nationally, and the lending community is in such a guarded mode, the number of people that will take advantage of this program is difficult to estimate.

As with all capital-intensive renovation projects, it's critical to reevaluate the home's total replacement cost and update homeowners insurance policy after remodeling.

Defects You May Overlook When Buying A House

2011-09-29T16:09:00.000-07:00

You love the house, but conventional wisdom will lead you to identifying defects that you do not want to overlook in your excitement about buying your house. Buying a house is one of the most important personal and financial decisions you'll make.

Your home and its location will help define you and your family and will be the focal point for most of the activities of your lives for years to come.

Here are five strategies to identify defects that could be overlooked in the purchase of a house:

1. First, review the Inspect America Engineering website:

[www.inspectamerica.com]

This site is a wealth of information for you to understand when buying a house. One of the best features of this website is their extensive checklist for home inspections. You can print off all the pages and place in a binder for you to identify house defects.

2. Rely upon the expertise of a qualified licensed professional engineer (P.E) home inspector.

There are businesses out there offering their services for home inspections, but you should hire one with the P.E. certification.

3. Attend the inspection so that you understand all aspects of what to watch for. This is more helpful than reading a report.

4. Be sure to get a full written report from the inspector telling you, in detail, what is wrong, why it's wrong, and what must be done to correct the identified defects. That checklist described in the #1 strategy is just to orient you. You will need an actual report, not a checklist when it comes to having real information to create that total picture of the house's condition.

5. That detailed report from the licensed professional engineer will establish a professional relationship with that engineer so that you can go back to the engineer with further questions, advice, and direction.

Buying a house that you carefully select and have inspected is the best proactive step any homebuyer can take. Identifying defects, especially the hidden ones, can eliminate much of the uncertainty of your future in that house.

In order to help you remain an informed home buyer here is a list of some of the house defects that can be overlooked:

a) structural additions and renovations - that were most likely installed by the previous home owner

b) defective furnace heat exchangers

c) extensive water damage or leaks that can lead to structural damage

d) electrical concerns that do not meet current standards

e) irregularities in the: roof framing, exterior wall framing, interior framing, cracks in the foundation wall

f) proper grading of land around the home - to divert water away from the home to prevent the water from entering the home

There is nothing like peace of mind when it comes to making big decisions about which house to buy.

Avoiding Mortgage Junk Fees

2011-09-14T16:33:00.001-07:00

If you look down your long, long list of closing costs at your lender’s office, you probably won’t find one labeled “junk.”

That’s because lenders don’t like to admit that some of the charges they’re passing off as “necessary’ are really “junk”.

Actually, they aren’t junk to the lender because they represent an important stream of profit. But we certainly don’t need those added fees. Junk fees are a good place to negotiate with the lender for a better deal. But the time to negotiate is before you sign the loan application. Once you’ve signed, you’ve sealed your deal for better or worse.

The lender does have legitimate costs that are passed along to you, the borrower, in the form of closing costs and fees; however, by the time you see the fees they’ve been inflated. For example, if the lender has an electronic appraisal done on your property, it might cost him $25, but he’ll charge you $125.

Lenders are required to give you a good faith estimate of your closing costs when you first contact them, but it's not required to be completely accurate! So they often give a lower estimate to get your business, and then increase fees once you have committed. Thankfully, new mortgage legislation has limited the amount by which your fees can change once disclosed.

Inflated costs are just one example of junk fees and costs that get built into your loan without you knowing it. A more egregious example is the charges for made-up things, like “underwriting fees” or “document preparation.”

• A lender will tell you an underwriting fee is the cost that they incur to underwrite your loan. They need someone to go through your whole package to make sure it complies with secondary underwriting requirements.

But an underwriting fee is purely a junk fee because the whole point of applying for the loan is so that it gets underwritten. You’re being charged an extra fee on top of all the other fees to do exactly the same thing.

• Another common junk fee is the cost for document preparation. Basically, computer programs print all the necessary paperwork at the touch of a button. Someone will key in the necessary information. But again, underwriting the loan and preparing the paperwork is within the general scope of, well, getting the loan approved for you.

The problem with junk fees is that they all sound so legitimate. It’s difficult to tell what’s real and what isn’t. As the borrower, you’re entitled to an explanation of each and every charge in a way you can understand. If the lender throws some jargon your way, stop and ask for a detailed explanation.

To avoid the problem of bait and switch, talk to several lenders, and don't just compare interest rates -- compare fees.

Selling Your Home In A Buyers Market

2011-09-08T16:44:00.000-07:00

Many experts have declared that any meaningful housing rebound will begin soon; and how long have we heard that? Home prices continue to decline fueled by tight lending standards and a rising supply of houses on the market.

In today’s market you have to be determined to sell and face the reality in many regions -- it's a buyers' market, and you will be competing with a growing supply of motivated sellers to get buyers interested in your house.

When trying to sell your home in a buyers' market, the three most important factors are price, condition and flexibility. Just because you may have paid too much for your home doesn't mean buyers think they should have to pay; pricing must be based on today’s market, no matter how difficult it may be for you to realize that.

Price It Right: Real estate pros say the key to selling a house is to "price it right." Set the price at what you can get, not what you think its worth. The fact is, it doesn't matter what you think your house is worth -- the only thing that matters is what a buyer is willing to pay. You don't want to over-price your house because buyers ignore it and your listing will lose its freshness and appeal, not to mention the uncompensated effort of keeping the home spotless during the showings. Also, the "original listing price" and "current asking price" are on your home's Multiple Listing Service (MLS) listing; if you do not show some decline from the original offering price, some buyers will see it as a sign you have unreasonable expectations of what you can fetch for your home.

Research Local Market: The best way to know if your home is priced fairly relative to comparable houses for sale is to compare your asking price to comparable homes in your community.

1. Get the listings of the houses in your area, and the price range. Look at the listing for every comparable home that is or was listed in your neighborhood over the past six months.

2. Compare similar properties; make adjustments for locations, age, upgrades and lot sizes and come up with a range of values.

3. Also, get a list of the recent sales prices and the original listing prices of comparable houses in the area. You can track this down on web sites such as www.zillow.com and www.realtor.com

Get a Pre-Sale Inspection: Sellers are strongly advised to consider getting a pre-sale home inspection, especially if their home is older or in need of repairs. They can either use a clean home inspection report as a selling advantage or take care of the repairs listed on the inspection report.

And lastly, be flexible. In this market, buyers will expect to pay less than the asking price. They will be armed with the original list prices and final sales prices of comparable homes and will know the price reductions other sellers are accepting.

Relying on Online Reviews – Consumer Decisions

2011-09-06T16:13:00.001-07:00

Can you recall what it was like not having the web? When we picked up the phone to check out a business?

47% of consumers rely on online reviews about products or services on company websites before making a purchase decision. These results highlight the importance for organizations to have up-to-date reviews; but how trustworthy are those reviews?

“Mr. Handyman wasn’t very handy”, “I was impressed by how fast the HVAC Tech responded….”

You may think user reviews are posted by your typical shopper. But consumers beware because you can't believe everything you read.

It's not unusual for those rave user reviews to be written by people who work at the company or who are paid to write the recommendations. In fact, many companies are opting for paid reviews these days – you hire a blogger or content writer to highlight the positives about your business and even exaggerate a little.

However, this form of reviews isn’t legal; a chain of cosmetic surgery clinics was fined $300,000 because its employees published positive reviews and engaged in deceptive commercial practices.

It’s impossible to determine a service’s effectiveness by reading the sales page; along with positive reviews you also have plenty of unworthy negative reviews. How would you really know which one to rely upon?

Several popular consumer review sites have sprung up over the years, some better than others and some controversial for their practices;

1. Angie’s List

2. Yelp

3. Pissed Consumer

All of these websites provide the same basic services however they all have different guidelines in which consumers are able to place a review about the business.

What are some warning signs of suspect reviews and how do you distinguish the good from the bad?

• When there's no mention of personal experience with the item.

• When the reviewer only lists the pros and not the cons.

• What’s the language tone? Is it full of selling and hype? Too good to be true? If so, it’s probably not a good review.

• Is there any actual value in the review? Any meat and potatoes details about the product or service?

• Look for reviews that set out both advantages and disadvantages of the product or service.

Also be on the lookout for sponsorship disclosures. But they can be hard to spot, so look close at the bottom of the page.

Also, compare the reviews to other online reviews. Don’t rely upon one website before making your decision. And how about picking up a phone and asking the businesses a few questions of your own? We do still use telephones, you know?

The bottom line is to be skeptical. Before you buy, check lots of sources.

Qualifying For A Mortgage With Unconventional Income

2011-09-01T16:41:00.000-07:00

Not everyone makes money the conventional way. Some people have sporadic sources of income but which sources of income will a lender use to qualify you for a mortgage?

Lenders will review all sources of income, but typically use only sources that are expected to continue on a steady basis.

They will distinguish between sporadic or occasional sources of income, and stable, regularly scheduled income. Borrowers can document supplemental sources of income by providing copies of bank statements showing deposits of amounts claimed, tax returns, and payroll/deposit stubs from employers.

There are special rules that apply to certain types of income, and these exceptions are reviewed case by case;

• Trust Income. If the trust is irrevocable and guarantees a payout for three years after closing, the income may be used. The borrower must provide a copy of the trust agreement and proof of two years of continuous payments.

• Social Security, disability and public assistance. This income must be verified as nontaxable. You’ll be required to provide documentation and tax returns. The borrower must also show proof that these payments are likely to continue.

• Unemployment income. Some lenders will allow this income to be used, if you can show you’re a seasonal worker. You’ll have to show that you have been receiving this type of income for the past two years. Proof is imperative, so you’ll have to show records of payments received.

• Notes receivable. If you hold a note and are collecting interest for a minimum of two years previous and will continue to collect this interest going forward, the interest may be added in as income. This doesn’t include a personal loan where your sister, for example, owes you $10,000 and pays you $100 per month.

• Rental income. You will have to show the lease that the tenant has signed as well as documented proof of the rental income, such as bank statements. Only 75% of rental income can be used towards qualifying a borrower for a mortgage.

The key factor for lenders to determine your income eligible for use in prequalifying you is continuity. Do you have continuous and reliable income that can be used to repay your mortgage? You can also include salary and/or wages from full and part time permanent jobs and employer paid bonuses that are paid on a predictable, periodic basis.

Those borrowers who are qualifying for a mortgage loan should pay special attention to the sources of income you use because it can help you understand how much you can really afford to pay for a home.

Going From Homeowner To Renter

2011-08-29T16:37:00.001-07:00

During the past few years many well-intentioned homeowners have suffered the wrath of our housing crisis and unfortunately must become a renter. It’s probably been quite a while since you’ve searched for apartments, negotiated with landlords or signed a rental agreement. The single most dangerous mistake you can make is failing to get your rental terms on paper, before the move in.

The differences between a Lease and Rental Agreement

Both leases and rental agreements are legally enforceable and they establish the terms of your tenancy. Both cover basic issues such as the amount of rent, security deposits and who can live in the rental unit. But the primary difference between the two types of agreements is the length of tenancy.

• Rental agreements establish a tenancy for a short period of time, usually one month. A month-to-month rental agreement automatically renews each month unless you or your landlord gives the other the proper amount of notice [typically 30 days] to end the agreement.

A landlord can change the terms of a rental agreement, for example, increase the rent with proper written notice.

• Leases obligate both the tenant and the landlord for a set period of time, usually a year. Your landlord can’t raise the rent or change other terms until the lease ends. Your landlord also cannot force you to move out unless you breach an important term of the lease such as failing to pay the rent, nuisance or other property laws. At the end of the lease you or your landlord may decline to renew the lease or simply negotiate to sign a new lease with the same or different terms.

Oral agreements and un-written understandings…

While an oral agreement is legal and enforceable, it’s difficult to prove and unwise to rely upon. People’s memory become unreliable, leading to who said what and it just turns into misunderstandings.

Which is Better - Lease or Rental Agreement?

A lease provides the tenant with more security than a month to month agreement. A lease is usually the better option for tenants who plan to stay put for the foreseeable future. However a month to month gives you flexibility, especially if you are not intending on staying for a full year. Also, if you are in a bad situation, but are forced to rent a place you’re not all that happy with, a month to month will allow you some place to live while you search for something better.

Foreclosure Survival Ideas

2011-08-24T16:41:00.001-07:00

The one word that strikes pain and fear in homeowners is Foreclosure. But today, being threatened with foreclosure or even receiving formal notices from the bank doesn’t mean you’ll lose your home. You still have some options.

Negotiating with the Lender

Your best approach is to start negotiating with your lender as quickly as you can.

• You may be able to get temporary relief from having to make monthly payments (forbearance).

• A plan to make up for missed payments, at the end of your mortgage

Of course, there are many stories I’m sure you’ve heard where lenders won’t return phone calls or simply refuse to negotiate; however, it is always wise to start with this option since later down the road, you can bring this up as a defense to show they wouldn’t cooperate early on. You can negotiate directly with the lender or work through a non-profit housing counseling agency.

Filing for Bankruptcy

Chapter 13 – with this type of filing you are able to develop a plan for making your regular monthly payments and paying off the arrears. If the bankruptcy court approves your plan, you’ll have between three and five years to make your payments. Chapter 13 also reduces or eliminates your total debt load, making your mortgage more affordable. In many situations, you can eliminate a second or third mortgage and reduce your first primary mortgage to the market value and probably reduce the interest rate to just above the prime rates.

Chapter 7 – with this type of filing you are able to wipe out your unsecured debt like credit cards, personal loans, medical debt, judgments, etc. This will free up more of your funds so you can place the money towards your mortgage. Chapter 7 may not be appropriate for you; because of the equity, if any, in your home, a Chapter 7 filing could trigger the sale of the home.

Fight the Foreclosure in Court

If you can show that the lender or mortgage servicing party violated your state or federal rights, you may be able to derail the foreclosure, at least temporarily. An increasing number of courts are siding with the borrower when it comes to presenting documented evidence of ownership. Because of the way mortgages have been sold and resold, the evidence is either lost or procedurally inadequate, meaning, your paperwork was not completed correctly.

Violations of federal lending rules and other federal and state laws regarding consumer transactions may provide protection against foreclosure.

It’s very important to contact a lawyer and if you cannot afford one, get in touch with legal aid to see if you are eligible for free legal representation.

Disclaimer: Do not construe this information to be legal advice; nothing in this article should be construed by you as a source of a legal relationship. This Legal Information is solely intended for general informational purposes only.

Firm's database helps keep Americans in homes

2011-08-22T17:03:00.001-07:00

Consumers can't access MortgageKeeper Referral Services directly, but lenders and others can connect clients to its database for help on a variety of issues, including house payments and food assistance.

Last winter, Consumer Credit Counseling Service of San Francisco helped a Dayton, Ohio, housekeeper catch up on her mortgage payments and utility bills, find food assistance and get her property taxes lowered.

But how does a Northern California-based counseling agency know whom to call to get local help for a struggling homeowner living halfway across the country? By tapping into a national database of community resources operated by MortgageKeeper Referral Services Inc.

Created six years ago by a college professor and a housing policy wonk with extensive experience in foreclosure intervention strategies, MortgageKeeper's database is rich with 6,000 resources nationwide that can help financially strapped borrowers dig out from under their problems — if borrowers only knew about them.

The resources are out there for the asking, says MortgageKeeper President Rochelle Nawrocki Gorey, but for any number of reasons, people in need can't find them or don't try. Sometimes people are too afraid of losing their homes to con artists to seek help.

Enter MortgageKeeper, which connects distressed owners with reputable, fully qualified and totally vetted community services in all 50 states, but with a major focus on the 80 metro areas that account for roughly 90% of all foreclosures.

"Our database gets answers to homeowners fast, getting to the root cause of their loan delinquency," says Gorey, who has spent nearly two decades in housing policy research. "Hopefully, the end result is owners who have both their financial and personal needs met so they can stay in their homes."

In July alone, the Downers Grove, Ill., company made more than 75,000 referrals, its highest usage ever. That's about 2,500 people a day who were connected "directly and discreetly" to someone willing not just to listen to their stories but also to help them overcome their difficulties.

The only problem: Consumers can't reach MortgageKeeper directly. They have to go through the company that services their mortgage or a housing counseling agency.

Not all loan servicers or counseling agencies are affiliated with MortgageKeeper. But Gorey and her partner, Michael Collins, an assistant professor of consumer finance at the University of Wisconsin in Madison who has studied consumers in the marketplace for more than 10 years, recently signed Saxon Mortgage Services Inc. as a client.

Saxon, a top-25 mortgage servicer, according to National Mortgage News, joins a list of companies that also includes Ocwen Financial Corp., which claims to be the country's largest administrator of subprime mortgages.

Lenders' participation in MortgageKeeper isn't totally altruistic. After all, a typical foreclosure results in a $50,000 hit to a lender's bottom line. Borrowers who have help solving their issues are more likely to remain or become current on their house payments and avoid foreclosure altogether.

But if your servicer isn't a MortgageKeeper participant, you can still get through by contacting one of several counseling agencies.

Besides Consumer Credit Counseling Service of San Francisco, which, contrary to its name, is national in scope, company clients include Money Management International, CredAbility and the Homeownership Preservation Foundation's hot line at (888) 995-HOPE, each a law-abiding consumer counseling agency.

MortgageKeeper's up-to-date, real-time community resources are embedded into its clients' borrower-dedicated Web pages. Once you are there, you simply type in your ZIP Code and the service categories that interest you, and up pops a list of service descriptions and the relevant contact information.

MortgageKeeper has a list of up to 20 categories, everything from food assistance to job training to help with prescription drugs. Clients pick the ones they deem most pertinent based on their experience with borrower defaults. Saxon, for example, offers 12 categories.

In July, more folks who accessed the MortgageKeeper database asked for help with their utilities and with food than anything else. Employment, housing and credit counseling also were of big interest. And for the first time, help with rental housing was a top-five resource referral.

"There are a lot of nonprofits and government agencies that want to help with financial and personal challenges," Gorey says. "Many times, they are located right in their neighborhoods, but people are just not aware of them. Our database gets answers in seconds from a list of exhaustively researched, best-in-class agencies."

NOTE: Article written by Lew Sichelman

Does refinancing your home make financial sense?

2011-08-19T15:54:00.000-07:00

A home mortgage refinance may sound like a good idea in theory, but it's not always possible or desirable.

For starters, lenders have tightened up the approval process, making it more difficult to get a loan.

"Homeowners today need to be triathletes to qualify for a loan, with great income, great credit and great value in their home," says Anthony Hsieh, founder and CEO of loanDepot.com, headquartered in Irvine, Calif.

In addition, a refinance may not make sense financially, particularly for borrowers who plan to sell their homes in the next few years.

Before taking the leap and opting to refinance, homeowners should ask themselves the following six questions.

Do I have equity in my home?

Homeowners need to have at least 20 percent equity in their home to qualify for a new loan without paying private mortgage insurance.

Adding PMI to the cost of a new loan could negate the benefit of a refinance.

Today, many homeowners are underwater - meaning they owe more on their mortgages than the house is worth.

However, being underwater or having little equity does not necessarily rule out a refi.

"Homeowners should still apply for a refinance even if they have low equity, because there are some Fannie Mae and Freddie Mac programs and FHA loans that may accept them," Hsieh says.

"The best way to find out if you fit into a program is to go to a lender."

Roy Meshel, district vice president for W.J. Bradley Mortgage in Phoenix, recommends homeowners refinance quickly in case the housing slump deepens, causing values to depreciate even more.

Patrick Cunningham, vice president of Home Savings & Trust Mortgage based in Fairfax, Va., recommends an increasingly popular approach - the so-called "cash-in" refinance.

"Some people are opting to bring cash to the settlement in order to pay down their loan balance to qualify for a refinance," he says.

Do I have good enough credit?

Borrower credit scores play a big role in securing a good mortgage rate. In fact, you'll need a good credit score to qualify for any type of mortgage at all.

Mortgage rates operate on a sliding scale, with the lowest rates going to applicants with the highest credit scores of 720 or higher.

Borrowers with scores below 620 will have trouble qualifying for a mortgage at any rate.

What are my financial goals?

Many homeowners refinance to lower their monthly payments. A mortgage calculator can give borrowers a sense of what their new payment would be after a refi.

Others choose a shorter-term loan with higher monthly payments so they can reduce overall interest payments and own their homes faster.

"Some people are restructuring their loans to a 20-, 15- or 10-year mortgage, which works well for people with plenty of disposable income," Cunningham says. "But I worry that people are too focused on paying off their mortgage and not integrating this decision with their overall financial plan."

Cunningham urges borrowers to make sure they contribute to retirement savings and college savings, pay off high-interest debt, and save six to 12 months of expenses "before opting for a shorter, more expensive mortgage."

Meshel says people should consider whether they want to retire without a mortgage before opting for a new 30-year loan. Those who have employment concerns may want to refinance into the lowest possible payment in case they experience a job loss.

How long do I plan to stay in this home?

Mortgage professionals generally tell borrowers to expect a home refinance to cost 3 percent to 6 percent of the loan amount. A simple calculation shows how long it will take to reach the break-even point when the savings outweigh the costs.

"If the breakeven is at 15 months and you plan to stay in the home for five years or longer, it is probably worth it to refinance,"

Cunningham says. "But if you plan to move in two years, it may not make sense."

Meshel says long-term homeowners who are close to paying off their mortgages might not want to refinance because of the costs incurred.

What are the terms of my current loan?

Borrowers with adjustable-rate mortgages or interest-only loans should consider the potential benefit of switching to a fixed-rate loan. Hsieh says all borrowers with ARMs should switch to a fixed-rate loan unless they intend to move within one year.

However, Cunningham says some borrowers can benefit by sticking with their current ARM.

"Consumers with a subprime ARM should definitely switch to a new loan," Cunningham says. "But some with conventional ARMs may find that they are in a good loan and that their rates are actually dropping."

While new loans today rarely have a prepayment penalty, many homeowners still have loans with that restriction, which could reduce the financial gain of a refinance, Meshel says.

Do I have a second mortgage or line of credit?

Cunningham says borrowers with a second mortgage will face additional complexity when refinancing.

"Borrowers can either pay off the second loan or combine the two loans into a larger first mortgage," Cunningham says. "Otherwise, the lender holding that second loan must agree to stay in second position behind the lender of the first mortgage, which the lender may or may not be willing to do."

Note: Article written by Michele Lerner at Bankrate.com

Estate Planning And Real Estate

2011-08-19T15:39:00.001-07:00

There are many reasons people don’t plan for the one certainty in life – Death. Some people would rather not think about grim thoughts; others could care less about planning and what happens after they are gone. And many people just rest upon false premises that of course their prized possessions would pass on to their loved ones without doubts.

A judge would disrespectfully disagree with those statements and you may be leaving behind one big mess.

• Martin Luther King Jr

• Howard Hughes

• Jayne Mansfield

• Sonny Bono

• Rita Hayworth

• John Denver

All of the people mentioned above died without leaving a will. The civil rights leader, Dr Martin Luther King Jr died without leaving a will and his estate became the jurisdiction of Georgia. Sure, everyone knew he was married to Coretta Scott King and had four children; however, the widow needed to post a bond in the amount of $20,000 for Dr King’s estate. If Dr King had done some estate planning and prepared a Will, it could have expressly stated that the executor, Mrs. King, need not post any bond.

Probate-avoidance isn’t complicated; you simply create a revocable living trust. The trust document names people you want to inherit each item of property. One significant advantage of a living trust is that you can name alternate beneficiaries – people who will inherit if your first choice does not survive you. You can even name alternatives for each of your alternatives.

You name a trustee, the same as if you were to name an executor to carry out your wishes upon your death. The trustee is in charge of keeping complete control of all the property and transferring to family, friends or whomever you named as the beneficiaries; and it’s handled all at no cost. So in the end, say you left your real estate to your eldest son, James Jr., the trustee can simply sign a deed transferring the property to James Jr.

Living trusts are the most flexible way to avoid probate. If there is a challenge to your living trust, it’s extremely difficult to attack. The person challenging your trusts would have to prove your signature was forged or influenced by someone else because you were incompetent at the time.

Setting up a valid living trust isn’t difficult; many do-it-yourself kits are available and you can get it notarized and witnessed to prove your frame of mind. For real estate purposes, a living trust is a wise strategy to avoid court.

Credit Killers That Ding Your Fico Score

2011-08-17T17:05:00.001-07:00

There are a growing number of people who started out with great credit and who are now borderline. But then again, what is borderline? I hear the average FICO score just dropped to 703; then I hear from a mortgage broker you need a 770 to get the best interest rate; it’s really all up to the source, but consumers need to know what will boost your score and what kills your credit.

What makes up your Score?

1. Payment History; have you paid your bills on time and for how long. This accounts for approximately 35 percent of your score. If you have paid one or more of your bills 30 or more days late, your score begins to drop.

2. Amount owed; this accounts for approximately 30 percent of your score. Keep in mind, debt-to-credit ratio on your credit report is determined differently than on a mortgage application. Debt-to-credit ratio for your FICO score is determined by adding up all your outstanding balances divided by available credit.

3. Length of credit history; the amount of time you have held credit accounts for 15 percent of your score. This is not even included in your FICO score if you have had less than 6 months of active credit.

4. New credit. This amounts to 10 percent of your FICO score. Attempts to acquire new credit affect your score.

5. Type of credit you use (credit cards, installment loans, etc.). This accounts for 10 percent of your score.

Those are the 5 factors that make up your FICO credit score and while the financial world knows what makes up your credit score, FICO doesn’t exactly let us know much more. What’s so mysterious is how they use each factor.

It hasn’t been certified, however, it’s said that if you apply for a credit card, never use it and simply close the account that is a negative against your FICO score. Figure that out?

The Credit Killer

High Balances. If you have high balances on your credit cards and loans, your debt-to-credit ratio is going to be high which impacts your FICO score dramatically.

Not enough credit. The biggest myth is thinking you can have one credit card, make payments in full, on time every month and you’ll be rewarded with a outstanding credit score. Wrong! If you have only one credit card you look unimpressive, as if you can’t handle credit.

Length of credit history. Even if you have open accounts, active and paid on time, your credit history must go back 24 months to make a difference.

Closing accounts. When you close accounts, your debt-to-credit ratios take a big ding and this ratio makes up to 30% of your score. The longer each account is open, the better.

Now you know what makes up your score and the weight each item is given. Prioritize your actions and ramp up that FICO score.

Notices of Default in California Decline Sharply

2011-08-16T16:10:00.000-07:00

The number of Californians entering foreclosure dropped steeply in the second quarter to the lowest level since 2007, a sign the foreclosure crisis in California is easing as the housing market stabilizes and regulators increase scrutiny of lenders. (Learn more this Wednesday, free, details here.)

Notices of default filed against California homes dropped 17% from the previous quarter and 19.2% from the same period last year, according to San Diego research firm DataQuick (full report here). A total of 56,633 homes received a notice of default, which is the first formal step in the foreclosure process.

“Homeowner distress spreads fastest when home price declines are steepest. And it now appears likely that, barring some new economic shock, the worst of the price declines are behind us,” said John Walsh, Data Quick President.

The number of homes taken back by banks also fell in the second quarter. A total of 42,465 homes were repossessed during those three months, a 10.9% decline from a year earlier and a 1.4% drop from the first quarter. On average, California homes took 10 months to wind their way through foreclosure, up from 9.1 months in the previous quarter and the year-earlier period.

Foreclosures have slowed nationally partly because homeowners are challenging them in court and the nation’s biggest banks are negotiating a settlement with regulators over faulty repossession practices. Some experts believe that if a settlement is reached, foreclosures could surge again once banks overhaul their practices and compensate borrowers. But unlike states where the foreclosure system is overseen by the court system, California has seen a steady decline in default notice filings for more than two years with the housing market recovering faster than other hard-hit regions.

The second quarter marked the lowest level of default notices received by California homeowners since the second quarter of 2007. Last quarter’s numbers were also well below the record 133,431 default notices filed in the first quarter of 2009, when home prices were dropping sharply.

Homeowners in more affluent, coastal counties were less likely to enter foreclosure than those in other parts of the state. Mortgages on properties in San Francisco, Marin and San Mateo counties were the least likely to go into default, while those in Kings, Sutter and Yuba counties were the most likely, DataQuick reported.

In one sign that the most beaten-down areas of the state might be getting some relief, the default-notice decline was greatest in the state’s least expensive communities, where foreclosures had been the most prevalent, DataQuick said.

Most loans receiving default notices last quarter were made in 2005 through 2007, the tail end of the bubble, indicating that the most distressed homeowners in the state bought their properties during the run-up in home prices and during the height of the shoddy lending practices that pervaded the mortgage industry.

There has never been a better time to jump into foreclosure investing. Sellers and Banks are super motivated and the wholesale deals have been flying. See for yourself with a few our recent student deals here. You need to get your buying business off the ground now, as it doesn’t get better than this.

Note: Article written by Alejandro Lazo of the LA Times

San Pedro, Marymount Expand Ties

2011-08-15T16:25:00.000-07:00

EDUCATION: Business, global studies classes will add to the university's Sixth Street presence

Building on a partnership that seems to be off to a strong start, Marymount University will expand its footprint in downtown San Pedro this fall.

The first floor of the former Northrop-Grumman facility at 222 W. Sixth St. will be transformed into classroom space and offices to accommodate upper division business majors and students majoring in global studies, according to university spokeswoman Kelly Curtis.

That will be on top of the returning theater arts and music students set to return for classes on Aug. 29 in the Grand Annex in the 400 block of West Sixth Street. Those students also will expand their use in the coming year of the Warner Grand Theatre at 478 W. Sixth St.

But that's not all.

The following year, a two-story vacant storefront at 430 W. Sixth St. - the former Lad 'N' Lassie children's clothing shop - will be turned into art exhibit space, classrooms, research areas and offices.

Cultural arts benefactors Marylyn (Ginsberg) and Chuck Klaus purchased the building for the university in the couple's ongoing effort to support young artists while also bringing the arts and more life into downtown San Pedro.

For Marymount, the satellite location - now called Marymount's waterfront campus - has provided extra space needed after the Rancho Palos Verdes Catholic school expanded to a full four-year institution.

The growing partnership has paid off for everyone, Curtis said.

"We have just a tiny auditorium, so last year when we moved all our film series and theater students (to the 1,500-seat Warner Grand Theatre), we have much more student interest in theater," she said.

"The same with the jazz ensemble which now performs at (San Pedro's) First Thursdays and on a big stage (at the theater)."

The university's speakers series also will make use of the Warner Grand this year, she said, with Father Greg Boyle, the Jesuit priest who founded Homeboy Industries, scheduled to give a talk for students and the community at 7 p.m. Nov. 10.

"We believe (the partnership) is one of the most significant things to happen in downtown San Pedro in many years," said Liz Schindler Johnson of the Grand Vision Foundation.

"We felt that downtown San Pedro already has the flavor of a college town with its narrow, tree-lined streets, quaint stores and lots of artistic activities."

NOTE: Article written by Donna Littlejohn

Mortgage Rates Keep Dropping

2011-08-12T11:10:00.000-07:00

The average interest this week fell to 4.32% on a 30-year fixed home loan and 3.5% on a 15-year fixed mortgage.

Mortgage rates are continuing to fall amid economic uncertainties and a sagging stock market, with the 30-year home loan available this week at an average 4.32% — the lowest fixed rate of the year, according to mortgage company Freddie Mac.

The typical rate for a 15-year fixed mortgage was 3.5%, Freddie Mac said Thursday — the lowest since Freddie began tracking it in 1991.

Despite 30-year rates averaging about 4.5% and the cheapest housing prices in eight years, home lending has slipped this year to the lowest level since 1997.

But with rates near record lows, the Mortgage Bankers Assn. says loan applications have spiked more than 20% because of the latest surge in refinancings.

The increase occurred despite a slight decrease in applications to buy homes. Refinance applications were up by 30%, the trade group said Wednesday.

Greg McBride, senior analyst for rate tracker Bankrate.com, said people with large mortgages in expensive markets like California should feel a particular sense of urgency if they are considering refinancing.

As a result of the credit crisis, the limit for a conforming loan — one that can be backed by Freddie Mac and or Fannie Mae — was increased to $729,750 in the most expensive regions to support the housing market. That increase is set to expire Oct. 1, when the conforming loan limit will fall back to $625,500.

Loans higher than the conforming limit, known as jumbos, are available — but rates have been running at least half a percentage point more than for conforming loans. And as McBride pointed out, people refinancing into a jumbo loan are required to have more equity in their homes, typically 25% or 30% instead of the 20% requirement on smaller mortgages.

For someone refinancing a $700,000 loan, "It means you've got to get the loan closed by the end of September before the goal posts move," McBride said.

Freddie Mac surveys lenders early each week, asking them what conforming loan rates they are offering to borrowers with good credit and 20% down payments or, in the case of refinancings, at least 20% equity in their homes.

The borrowers in the latest survey would have paid 0.7% of the loan amount in upfront lender fees and discount points, along with additional payments for appraisals, title insurance and other third-party costs, Freddie Mac said.

Note: Article written by E. Scott Reckard, Los Angeles Times

Living Together Clauses and Options

2011-08-12T11:04:00.001-07:00

Living together has never been more popular. Cohabitation between un-married people has increased almost 80% in the last 20 years. However, there are laws that affect your co-habitation, especially if you break up.

While most un-married couples safely master living together, there are many reasons couples should invest in legal and financial agreements. See, you may think keeping property separate is simple and oral agreements are all you need, but think again. The lack of a written agreement can be an invitation to your partner claiming some of your prized possessions.

We never want to think that will happen but it does, time and time again. To avoid any possibility of misunderstandings create a contract for both of you to sign, agreeing to keep property separate. The property both of you brought into the relationship, including whatever was purchased separately during the relationship will remain separate.

A Cohabitation Agreement can assist separating partners in determining such things as:

• The ownership of various properties upon separation (not just land, but also such items as bank accounts, investments, jewelry, vehicles, time-share vacation properties).

• Which person will be responsible for the various debts that exist at the time of separation

• How jointly owned property will be handled – if one or both spouses wish to buy the other spouse’s interest in a jointly owned house, furniture purchased together, etc.

In the event of a break up however, if you are not able to sort matters out amicably, and you find you are in a dispute over how to work things out, you will need to use the cohabitation agreement in a legal setting – in other words, go to court.

Your agreement is more likely to be treated seriously by a court if you follow these guidelines.

The document should be:

1. In writing. This shows that you intend to be legally bound and the agreement can simply state you have such an intention.

2. Clear and unambiguous. You have to be very specific about your intentions. For example, if part of the agreement relates to one of you making financial provisions for the other, you need to stipulate where the money will come from and how it will be paid. Using vague or general terms could make the agreement 'void for uncertainty'.

3. Be made after taking independent legal advice. This is particularly important if the terms of the agreement seem to favor one of you over the other. Otherwise, it may be argued that one of you tried to disadvantage the other unfairly.

Most couples avoid co-habitation contracts like the plague for fear of jinxing the relationship. It's just good planning, that's all and making an agreement now will help you through any rough patches in the future.

Rolling Hills Estates Gives Chandler Ranch Project The Go-Ahead

2011-08-04T16:42:00.000-07:00

After decades of discussion about the future of a giant, dusty rock quarry in Rolling Hills Estates - including some eight years devoted to a specific proposal - it took the City Council just 40 minutes this week to give Chandler Ranch the go-ahead.

Near one of the main entryways to the affluent Palos Verdes Peninsula community, the 114-home luxury residential project will replace the industrial Chandler's Sand and Gravel facility and create a new golf course for private Rolling Hills Country Club.

It's the final vision in a series of reuse concepts that have been proposed since the 1980s for an eyesore that brings some 60,000 rumbling trucks to and from the quarry-turned-landfill each year.

More than 25 years ago, 600 homes were proposed. but that plan was abandoned after community outcry.

In 2003, the city created a committee to refine a proposal for the site that would fill in the deep quarry and sustain the neighboring country club, which was facing an expiring long-term lease.

"Then, it was just kind of pie-in-the-sky: `Will this ever get done and will I be alive when this happens?"' Councilwoman Judy Mitchell said. "It's been quite a few years."

At Tuesday's City Council meeting, the panel voted unanimously - to applause - for a series of measures that will allow the project to move forward.

"This is a major step in our city, for a major project. It is a first step; by no stretch of the imagination is it a last step," Councilman Frank Zerunyan said.

Challenges remain, including approval from the city of Torrance and a 32-acre land swap between the two cities that will keep all Chandler Ranch homes in Rolling Hills Estates. A regional boundary commission must approve the swap.

At the same time, the foundering real estate market and general poor economy make up a fairly atrocious environment for a massive undertaking that will cost more than $350 million.

Still, Tuesday's action constitutes a milestone.

"We've gone through this for 25, 30 years," said John Robertson, grandson of Linden Chandler, who opened the quarry in the 1930s.

"I never thought we'd see this day. ... I think grandpa would be very proud."

The project, brought jointly by the Chandlers and neighboring Rolling Hills Country Club, raised some significant opposition - mostly from local equestrians concerned about its lack of horse facilities. But the project's backers negotiated their way to acceptance.

In fact, no members of the public rose to comment on Chandler Ranch before the council voted on it.

Robertson joked that he had not attended public hearings - instead sending Mike Cope, who has managed the project for a decade - because he gets "too excited."

Council members and project supporters remarked that prolonged negotiations and discussions had soothed opponents and addressed city concerns.

"You see a lot of ruffled feathers along the way, but it was really satisfying last night to see how everybody came together," country club General Manager Greg Sullivan said Wednesday. "In the end, the project satisfied everybody."

The 228-acre plan will include a new 18-hole, Arnold Palmer-approved golf course surrounding the 114 Mediterranean-style homes with red-tile roofs. The club will get a new 61,000-square-foot clubhouse and tennis courts.

Design details of the buildings will be subject to city neighborhood-compatibility hearings in the future. Also planned is an underground water filtration system that would clean runoff and reduce pollution downhill in Harbor City's Machado Lake.

The 114 homes will be split between three school districts - Palos Verdes Peninsula, Torrance and Los Angeles Unified. Changing those boundaries is something the future home-builder company would have to pursue, if desired, Sullivan said.

The project's backers have agreed to donate about $1 million to the city for equestrian improvements, an amount that will be matched by developer fees. Altogether, the money should bring serious improvements to municipal horse facilities and trails.

That was done in part to quell opposition from equestrians who were unhappy that the project was removed from the city's "horse overlay," meaning homeowners will not be allowed to keep horses. Horse owners also were originally unhappy that a proposed loop trail around the city will not be completed because of the project.

Though the Palos Verdes Peninsula Horsemens Association came to support Chandler Ranch, some equestrians remained unconsoled. In recent months, one even mentioned taking legal action against the project.

Others demanded that the developer make sure to test more thoroughly for suspected Indian remains before construction, a request to which the Chandlers and country club have agreed.

Tuesday's meeting was the council's third on the project, following a handful of Planning Commission meetings beginning last fall.

The council approved a tract map, General Plan amendment, zone change, environmental impact report and the land swap with Torrance. Also approved was a development agreement allowing 10 years for construction to begin, plus a possible five-year extension.

Councilwoman Susan Seamans recused herself because she lives within 500 feet of the project and is a "social member" of the Rolling Hills Country Club.

The project will go to the Torrance Planning Commission in coming months, and then on to a regional commission overseeing municipal boundary changes.

Note: Originally written by Melissa Pamer of Daily Breeze

'Big Step' For Chandler Project

2011-08-04T15:16:00.001-07:00

Tuesday night, the Rolling Hills Estates City Council certified the final environmental impact report, accepted amendments of certain land-use designations in the city’s general plan, and approved a tentative tract map, grading plan and conditional use permits for the Chandler Ranch/Rolling Hills Country Club project. Mayor Pro Tem Susan Seamans recused herself from the discussion and vote.

This is not the end for the decade-long process, but it signals the beginning of the end.

“I never thought I’d see this day,” said John Robertson, grandson of Linden Chandler, founder of the the Chandler Sand and Gravel Facility.

It was a major step for the city and project, Councilman Frank Zerunyan said.

“Perhaps with our due diligence that we have and the type of city that we run, maybe we were too slow for you. … We never intended to be a difficult city, only a transparent city,” he said.

The 228-acre project, which straddles the cities of RHE and Torrance, is a collaboration between the Country Club and the Chandler family, who still owns the sand and gravel facility on Palos Verdes Drive East. Since 2002, the two entities have worked on a plan that includes the development of 114 single-family homes, a new 61,000-square-foot clubhouse and related facilities, and a redesigned 18-hole golf course.

Since that time the plan and its EIR have gone through a number of revisions. During public hearings, residents have cited traffic, noise, school district boundaries, the horse overlay zone, as well as the aesthetics of the clubhouse and the 114 homes to be built if approved.

City staff and the project’s managers have gone back to the drawing board many times to modify the plan to mitigate some of the residents’ concerns.

Some of the compromises include: The club and the Chandler family agreed to earmark $2 million for equestrian projects, including trail improvements, in exchange for the removal of horse zoning from the housing project; and the homes, the clubhouse and related facilities must fall within the city’s neighborhood compatibility ordinance, and those plans will have to be reviewed by the city’s Planning Commission.

Still to be determined are the school borders. The city of Torrance has agreed to give RHE jurisdiction of 32 acres of the project that falls within its borders, but the Torrance Unified School District has made no agreement. Some of the students residing in the housing development will attend TUSD. The other students are expected to attend schools within the Palos Verdes Peninsula Unified School District. However, in June, a question regarding houses falling within the Los Angeles Unified School District arose.

“It does appear from the information that we have from the district that five of the homes are within the LAUSD boundaries,” Niki Cutler, the city’s principal planner, said Tuesday night.

City Council will have a second reading of three ordinances approving the zone changes and amendments to the general plan related to the project at its Aug. 9 meeting.

Projects, such as building designs, will go through the Planning Commission and City Council as they come about. If the redevelopment does not happen because of economic reasons, the city’s ordinances, zones and trails will remain as they are today.

“This is the beginning of a long process. I hope the economy recovers, comes back faster than we think, so that we see a project,” Zerunyan said.

Note: Originally written by Mary Scott of Peninsula News

What's popular with homebuyers in 2011

2011-08-03T15:55:00.000-07:00

Some items on the shopping list: a home in great condition with rooms that can do double duty. Areas that mingle indoor and outdoor living - patios, porches, decks and outdoor rooms - are always a plus. And so are those features that offer a little luxury, like garden tubs, first-rate appliances and high-dollar countertops.

They're also going back to basics: searching for solid, well-maintained properties that will give them their money's worth.

"I think this year they're buying properties that are in good mechanical condition that have inherent value," says Ron Phipps, president of the National Association of Realtors.

But more than anything, buyers want to drive a hard bargain.

They want "great deals," says Patricia Szot, president of the MetroTex Association of Realtors. "And no matter where a seller prices their property, they're looking to negotiate."

Here are nine items popular with buyers this year:

Homes in good condition

Buyers demand homes that are well maintained, Phipps says. "There's not a lot of flexibility in that." The attitude is: "I'd rather spend the money getting into the house" and not have to spend more money later, he says. Buyers don't want an unknown expense hanging over their heads.

Pat Vredevoogd Combs agrees. "I'm not working with too many people who want a fixer-upper," says Combs, past president of the National Association of Realtors and vice president of Coldwell Banker AJS Schmidt in Grand Rapids, Mich.

One big reason: With most transactions, "buyers have limited amounts of cash," Phipps says. "Even if they want to do a fixer-upper, they don't have the money to do it."

"Buyers have enough money to buy," he says. "They don't have enough money to buy and improve. And the lenders make it really difficult."

Rock-bottom bargains

Buyers "are more focused on negotiating, drawing limits in their mind and focusing on the strategy," says Justin Knoll, president of the Denver Board of Realtors.

Some of it is a point of pride, he says. "They want to tell their friends and family that they really got a smokin' deal."

They "want value," says Alice Walker, president of the Greater Nashville Association of Realtors. "They are very picky. They're just a lot more critical. They are not going to settle because they know they don't have to."

Her advice to sellers: Repair, update, clean and stage. "You have got to remove every obstacle possible for the buyers," Walker says.

The more-for-less approach even holds when buyers consider bank-owned properties, says Joan Pratt, real estate broker, Re/Max Professionals in Castle Pines, Colo. "They want the short sales and the foreclosures and they want them to look like they're owner-occupied," she says. "They don't want to paint. They don't want to put carpet in.

They don't want to clean."

And they're surprised when they don't find it, Pratt says.

Outdoor living areas

"The thing that we've seen over the past couple of years is more outdoor living areas," says Laurie Knudsen, president of the Charlotte Regional Realtor Association. Some popular features: Decks, outdoor kitchens, two-way fireplaces.

"It's a selling point if a house already has it," she says. And "it's going to make it more competitive on the market."

Incentives

Call it "Rock-bottom deals, part two."

Along with pricing, "it's all about incentives," says Mab l Guzm n, president of the Chicago Association of Realtors.

To pique buyer interest, sellers offer everything from gift cards for new furniture and paint to financial assistance at closing.

Szot agrees, and laments that it's made the road more difficult for sellers.

"Not only are (buyers) asking them to lower the price, but they are asking for a lot more," Szot says. "So negotiations are a lot more difficult now."

Practical green features

Call it "Yankee frugality," says Phipps. But what he sees on buyer shopping lists is a home that is easy on the planet because it's easy on the wallet.

Buyers are looking for things like triple-glazed windows, high-efficiency boilers and energy-efficient appliances. "The buyer of today wants to make sure that the ongoing operating costs of the house are as controlled and economical as possible," he says.

Another popular item: nontech green features. Buyers are looking at the sun exposure in relation to energy efficiency, he says. And that's something that will vary with the area and region, he says.

Open kitchens

"The wall between the kitchen and the family room is evaporating," Phipps says.

"The kitchen is becoming part of the gathering space," he says. "And it's ironic - it's the way it was 300 years ago. We've come full circle."

Repurposed materials

Buyers like a material that looks or feels natural, even if it's not the genuine article, Phipps says. For example, "granite (for counters) is still popular, but it doesn't have to be granite," he says. "It can be stone, another natural material or something that looks like stone."

"We're seeing lots of different materials and lots of reusable materials, which is interesting," he says. "Also a lot of unusual uses of hardwood - like pine flooring (reclaimed and) reused for counters," or terra cotta slabs - beautifully glazed - used for countertops, he says.

Smaller, less-formal homes

Buyers are buying smaller homes, but they want to be able to use and reuse every inch of space, Phipps says. "They are being much more strategic and efficient with how they use it."

Formal spaces that might only be used three or four times per year are disappearing. "The slipcover rooms are gone," says Phipps.

That's "led to a repurposing of space," he says. Formal living rooms have been added to great rooms or converted into home offices or entertainment rooms.

"Three to five years ago, if they could get a loan that would get them into a McMansion with stone and tile and brick and more rooms than they needed, they would do it," says Jeff Wiren, president of the Portland Metropolitan Association of Realtors. "Now they're saying `I don't know if I want to heat that place and clean it.' They're being much more realistic."

Touches of luxury

Buyers like luxury. And sometimes the amenities that convey that feeling of living large are relatively simple or inexpensive.

One example: coffee bars in the master bedroom. "It's like a butler's pantry in your bedroom," Pratt says. "An area for your coffee pot and accoutrements and a little fridge."

The feature has been popular, especially in high-end homes, for about five years, she says.

Another luxury touch: high-dollar finishes in less-expensive homes, Knoll says. Granite counters and stainless steel appliances, marble tiles in the bathrooms and vessel or undermount sinks continue to impress, he says.

Buyers also like "a living space where you can have barstools and do some entertaining," he says.

Says Knoll, "There is a sex appeal about housing, and they do get excited about those kinds of things."

How Potential Home Buyers Are Buying More With Less

2011-08-03T15:26:00.000-07:00

There was a time when keeping up with appearances was a goal for many potential homeowners; no cares or worries about the price, as long as the home was spacious and worthy of the Joneses; the traps of a spending frenzy for big homes, nice cars and gadgets galore.

That thinking is long gone because potential homebuyers have learned that when you buy smart you can get more for less.

You want to approach buying your first house with a financially realistic point of view; the rules are Keep it simple. Buy smarter. Buy cheaper. Look for the Bargains.

Determine what you can afford. The days of easy money are over. Mortgage lenders have tightened their standards and are requiring larger down payments with strict credit criteria.

Typically, they want buyers to spend no more than 28% of their gross monthly income on mortgage payments, real-estate taxes and home insurance.

Know your market. Now more than ever, location is crucial, down to the neighborhood and street level. Focus on good school districts, crime statistics and any impending construction or public works that could increase or decrease the value of a home. But compare everything.

Make your dollars count. Although conditions vary by market, look for a home that is significantly lower than its 2008-2010 prices. Yes, there are homes still on the market from 2008 and most are in the “immediate move-in” category.

Haggle. Don't assume the seller is even in the right ballpark with his asking price. Take a lesson from property investors and check out prices from other angles as well. Consider what it would cost to buy land and build a comparable structure.

Compare your estimated monthly costs for the mortgage, taxes and other expenses with the cost of renting a similar place nearby. If you can rent virtually the same house for a much lower cost, the seller is asking too much.

Builders, sellers and banks are eager to unload unoccupied houses, giving the buyer more leverage to ask for lower prices or incentives. And don't overlook REOs "real estate owned" properties held by lenders.

Most first-time home buyers don't buy the house they're going to end up in. You should purchase a home only if you intend on living there for seven to ten years; its smarter to stay in a home and build equity and when you move, you’ll probably profit from it.

Choosing A Preferred Or Approved Lender When Buying New Construction

2011-07-25T17:12:00.000-07:00

We all see the enticing advertisements hoping to sway us in choosing a lender. What’s the difference between a “Preferred” lender and an “Approved” lender and which one gets our loan accepted quicker?

A Preferred Lender is a loan originator who has a relationship with the builder and who has processed many of their loan packages. They know the builder’s processes and will keep the builder informed of any problems.

Approved Lenders are loan originators who no doubt will have strong credentials, but they usually don’t have an extensive history with the builder. Approved lenders have been qualified to work with specific loan packages. They follow stricter criteria, while not appeasing the builder. It’s not that you’ll get incompetent or inferior service by choosing an approved lender but you’ll probably miss out on some of the incentives that are only offered to those using a preferred lender.

1. Preferred lenders help expedite the loan approval and closing process.

2. Approved lenders have been certified and accepted to approve loans for specific loan packages.

So what should you do? Go with the “Preferred” or the “Approved”? Look for a lender that has a range of loan programs with a commitment to service. And while you’re at it, look for the benefits in the deal;

• Is the lender attentive? Send a few inquisitive emails to see how long it takes for a response.

• Ask them for quick summary of the top 3 programs you may qualify for? While many lenders may quickly tell you to complete an application to see which programs you’re eligible for, the real gems will mention their “star” programs that stand out and have general criteria. For example, I’d rather a lender mention a neighborhood revitalization program that provides down payment assistance for low, mid and higher incomes than receiving the standard answer of “complete a quick application so I can evaluate your options”.

• How long will a mortgage decision take after an application is submitted?

• What is the minimum down payment requirement for each type of loan?

• How long will a mortgage commitment remain effective?

• Does the interest rate remain constant on the loan commitment?

Even when you decide upon choosing a preferred or approved lender, you should still do your homework; Study the types of lenders and their advantages and disadvantages for your situation.

Beyond the interest rates, there are closing fees and points, and occasionally commissions that you don't see. You will want to compare these for all the lenders on your list.

Compare a minimum of three or more lenders before making a decision. You'll want to compare rates, fees, and points, but you will also want to know a slew of other things. Don't be afraid to ask: Lenders know you have options, so being forthright should not be a problem.

HOA Q&A: Can a real estate agent serve on the board?

2011-07-12T15:50:00.000-07:00

Q. I am a licensed real estate agent that lives in a community association. I have represented people who have purchased homes within the community and people who have sold their homes. I have been informed by the President of the board that I may not serve on the board because my work as an agent conflicts or may conflict with my responsibilities as a board member. The President has requested that I sign a statement acknowledging his conclusion.

What are your thoughts?

A. I have the following comments:

1. The fact that you have a real estate license and represent buyers and sellers within the community does not by itself create a conflict of interest between you and the association, buyer or seller.

2. While it is possible that a conflict could develop between you and the association, or a prospective buyer or seller of a home in your community, this is also possible with unlicensed board members.

3. Should a conflict of interest develop between any board member and the association, or a potential buyer or seller, any such conflict would not disqualify the person from serving on the board. It would simply mean that the particular board member could not vote on a matter involving the subject of the conflict.

4. The fact that a licensed board member knows that a seller is in foreclosure does not create a conflict. The fact that a seller is in foreclosure must be disclosed by an agent to a prospective buyer whether the agent is on the board or not.

5. Business that is conducted outside of executive sessions must be reflected in the association's minutes which is information routinely provided to prospective buyers. Consequently, this information is not confidential and providing it to potential buyers would not by itself create a conflict.

6. Should a seller be delinquent in paying his or her assessments, that information would be confidential and should not be disclosed to a prospective purchaser by any board member. The fact that a licensed board member has such information does not create a problem any more than an agent knowing that a seller will accept a certain price, or a buyer will pay a certain price, creates a problem. The agent is simply under a duty not to disclose such information to the other party. This is routine in the real estate business.

7. Sellers have an interest in making certain that all material facts are disclosed to a prospective buyer because failure to do so, could result in legal liability. An agent who is on the board of a community association is clearly in an excellent position to make a complete disclosure when representing a person who owns a home within that community.

8. Buyers have an interest in receiving and evaluating all material facts concerning a property that is under consideration for purchase. An agent who is on the board of a community association is in an excellent position to make a complete disclosure of all material facts regarding a home within that community.

9. During many years of practicing law as a homeowner association and real estate attorney, I have had the opportunity to observe and deal with many board members. While each board member is an individual with different skills, attributes, and attitudes, it is my opinion that real estate agents generally make excellent board members. Real estate agents tend to be professional in dealing with association business and the knowledge gained in preparing for the licensing exam has great value.

Article written by Michael T. Chulak, the founding partner of Michael T. Chulak & Associates, A Law Corporation. Questions can be sent by e-mail to MChulak@MTCLaw.com. Answers are general in nature. An attorney should always be consulted when legal advice is needed.

Possible Third Extension Of Tax Credit

2011-07-12T15:42:00.001-07:00

The original homebuyer tax credit was so successful for first-time homebuyers that congress is thinking about again.

If approved, the previous credit of $8,000 for first time homebuyers and $6,500 for current home owners purchasing a new primary residence would be extended for one year. According to the IRS 479,622 homebuyers claimed the credit in 2009 and this third extension would be a big boost to the housing market.

While bills are introduced all the time and it’s no telling whether the president will sign this one, if it is approved can you imagine what it will mean to potential new homebuyers?

Right now, you can pretty much buy a home for 30 to 40 percent less than what you would have paid 5 years ago; in addition, mortgage interest rates are at their lowest making for an unbelievable combination.

Top that off with another reinstated homebuyer tax credit and you can move into the home of your dreams without much capital at all.

While many potential homebuyers are looking at a bleak picture of what the housing market looks like now, many others see the potential value of buying a new home now – instant equity.

It’s predicted that the housing market will begin to recover faster towards the fall of this year which translates into higher prices, higher mortgage interest rates and higher property values. New homebuyers are looking at instant equity, just by purchasing homes right now. The longer you wait the less equity you instantly accumulate.

With today’s depressing economy, you can pretty much get more than what you need and almost all of what you want; price reductions, improvements, and closing costs and some of the features of buying a home now. Sellers want contracts so they can move on with their lives.

It’s in every new homebuyer’s interest to start looking for a new home because if this third extension is approved it will be competition to get the best of homes with all the incentives included.

Stricter Qualifications To Get A Mortgage

2011-07-07T16:52:00.001-07:00

You’ve done everything right; you’re credit is strong and stable, yet you still have problems securing a mortgage. What will it take?

Ripples from the national crisis are affecting all borrowers nationwide as they try to secure new mortgages. And while those credit-worthy borrowers would think they have nothing to worry about when it comes to securing a loan that just isn’t the fact anymore.

Would-be borrowers these days may have to set aside a little more for a down payment, have a slightly higher credit rating than the perfect rating they thought they already had, and plan on a lower debt-to-income ratio than they would have a couple of years ago.

Changes to guidelines are being imposed on lenders and their customers by mortgage insurers and the secondary mortgage market — the big banks or federal institutions that buy your mortgage from smaller banks or credit unions.

These days’ mortgage insurers have stricter guidelines than lenders.

One of the biggest losers in the banking meltdown was mortgage insurance companies; now they won't insure loans if they don't meet stricter qualifications. And without insurance, a mortgage becomes too risky and unsalable to investors, which mean lenders probably won’t be interested in making the loan in the first place.

Mortgage insurance guidelines are frequently tougher on loans that come through mortgage brokers than they are for loans that come in through direct lenders like banks yet mortgage brokers can be a great tool for finding the best deal for your loan.

Even for people considered good credit risks are having trouble securing a mortgage loan.

Sure, FHA guidelines say the qualifying credit score is 640 yet that has been really difficult to get approved. And while there may be exceptions to the rule, typically your score must be closer to 700 in order to get underwriters to give the borrower more latitude.

Despite the economy and credit tightening, there are no shortages of potential homebuyers looking to get loans but there is a huge shortage of loan approvals.

Even when an insurer's guidelines theoretically allow a loan to be approved on the premise of your credit-worthiness, lenders nationwide report that getting an actual approval has been nearly impossible in troubled states that have high occurrences of economic distress.

What Should You Do?

Jump through hoops, continuously explain and submit paperwork and in the end you’ll probably work directly with the big banks since mortgage insurers are more apt to be lenient with “bigger” than “smaller”.

Strategic Downsizing To Cut Costs

2011-07-07T16:41:00.001-07:00

Everyone feels the strain of rising costs here and there. It may be groceries or it could be gas, but many of us are looking for solutions to an on-going problem. How to cut costs?

These days it becomes more of a strategy to save money. If you move to a walkable neighborhood you can cut down on gas, kids can walk to neighborhood schools, find entertainment at nearby parks and centers and more pep in your step means a healthier you.

You’re not just downsizing your space but you’re strategizing to move to a simpler life. You look at all the ways you can save on money just by moving to the right neighborhood. Ask yourself a few questions;

1. If you drive your kids to school or if your teenagers drive to school, wouldn’t it save money to downsize to a community where they can walk or buses will pick up?

2. What communities have shopping within walking distance? If you buy local you can save.

3. Which community could you move to that has a bus stop or train station nearby?

4. Are there banks/ATM machines in the community? Do you know how many times people must run out and drive to an ATM machine just to give money to the kids? What a waste of gas!

There's more than one way to reduce housing costs. A smaller home typically means a smaller mortgage and smaller property taxes. It also means lower utility bills and reduced maintenance costs.

The biggest problem with downsizing to new homes is that people have trouble parting with the past but you always have your memories and trinkets.

The bottom line is that costs go up and down but they will never be so low that you won’t feel pocket stings, especially when you get closer to retirement age. That’s why downsizing is strategic; you must focus on cutting your expenditures so you have more going in your pockets than going out.

Asking yourself is it Worth It?

In most cases, the answer is yes. Sizing down will almost always mean saving money. Lifestyle is perhaps your wild card in this equation, and depends entirely on your personal wants, needs and any changes you hope to introduce.

If you strategize in the choices you make it can have a profound impact on your pockets and in your life.

Loan-modification complaints bring BofA, Citibank and others to the courthouse

2011-07-05T10:53:00.000-07:00

LOS ANGELES -- It seemed Maria Campusano's financial problems were behind her when the mortgage on her Victorian home in a Massachusetts mill town was chopped by hundreds of dollars a month.

She soon learned that her troubles had just begun.

Weeks after making her first payment under the new rate, the school district staffer began receiving past-due notices, documents showing wildly inaccurate loan balances and letters threatening foreclosure. She now fears she'll lose her home.

"How can they take away what I have worked so hard for?" Campusano said.

Campusano is one of two named plaintiffs in a proposed class-action lawsuit alleging breach of contract by Bank of America and subsidiary BAC Home Loans Servicing.

The lawsuit, filed in Los Angeles federal court because BAC is located in nearby Calabasas, is among a growing number of legal complaints accusing banks of disregarding what should be binding agreements to reduce the monthly mortgage payments of troubled borrowers.

The suits involve permanent modifications through the U.S. Treasury-administered Home Affordable Modification Program, which offers incentives to loan servicers who extend modifications, as well as so-called proprietary modifications, which banks offer independently of the government guidelines.

They represent a new wave of complaints against banks that have already weathered years of criticism for their reluctance to modify loans and for foreclosing on borrowers after offering them trial modifications.

Some have faced lawsuits alleging that the foreclosures amounted to a violation of the deal they struck with the government when they accepted funds from the $700 billion Wall Street rescue. And earlier this month, U.S. Treasury officials announced it was withholding incentives from Wells Fargo, Bank of America and JPMorgan Chase for incorrectly determining that many borrowers were ineligible for HAMP modifications, a claim that the banks denied.

Recently, though, government officials and mortgage lenders have been touting statistics showing an increase in the number of modifications being extended.

The U.S. Treasury said in its April HAMP report, the most recent, that 70 percent of the trial modifications initiated since June 1, 2010 under the program's guidelines have been made permanent, up from 42 percent for trials started before that date.

Meanwhile, the Hope Now group -- an association of large banks, mortgage servicers and others -- reported that its members had modified 1.8 million loans in 2010, up from 1.2 million modifications in 2009.

But even as troubled borrowers increasingly manage to pry modification deals from reluctant banks, they're finding that problems persist long after the ink dries on their new loan contracts.

The Connecticut Fair Housing Center looked at 655 mortgage modifications granted in recent years to clients of partner organizations in 10 different states and found that nearly a quarter were having problems with inaccurate balance statements, erroneous default notices and other issues.

Campusano's lawsuit cites remarks from an unidentified former call center worker who said staff received bonuses for collecting more than was due under the modification deals. Attorney Shennan Kavanagh declined to make the worker available, but said the worker would testify or provide a declaration if needed during trial.

However Tracey Seslen, a real estate finance professor at the University of Southern California's Marshall School of Business, said the banks are probably just overwhelmed.

"There's not the kind of manpower for the quality control that's needed to make sure these things don't happen," he said.

Whether the problems are due to clerical errors, lack of oversight or something nefarious, the impact on homeowners is severe.

Julie Lewis, a 53-year-old mother of four, modified her contract with CitiMortgage for her Staten Island, N.Y. home after getting a divorce and suffering injuries in a car wreck that kept her from working.

In October 2010, after accepting her modified payments for more than half a year, CitiMortgage told her the modification had been denied, according to documents filed as part of a federal lawsuit in New York.

Bank agents now visit her street to take pictures of her home or hang fliers on her doorknob demanding that she call to discuss purportedly late payments.

"The banks act like bullies," said Lewis.

CitiMortgage spokesman Mark Rogers said legal restrictions kept him from discussing Lewis's situation.

Also in Staten Island, Merab Abdaladze and Tamar Bibishvili are having problems getting Chase to recognize a HAMP modification that it made permanent in September 2010.

After accepting the couple's first payment under the modified plan, the bank said the modification was invalid and stopped cashing their checks, according to a motion filed with New York state court. Chase lawyers have since assured the couple's attorney the modification was valid, but the bank still returns their checks uncashed.

Chase spokesman Gary Kishner said he could not comment on pending litigation.

And in the Seattle suburb of Issaquah, Nathaniel and Emily Perrone, both 29, saw a missed payment notice appear erroneously on their account statement soon after BAC approved their permanent modification in October 2010.

BAC customer service staffers have repeatedly assured Nathaniel Perrone that the charge was a mistake, but it remains on the account eight months later, along with late fees.

Bank of America spokeswoman Shirley Norton declined to comment on the cases involving the Perrones or Campusano, who are co-defendants in the proposed class-action lawsuit.

Campusano's problems began when she sought to modify a loan she refinanced years earlier to finish repairs to her Victorian-style home in Lawrence, Mass.

The 44-year-old single mother said she wanted to reduce her housing expenses because she was about to begin repaying a graduate school loan and had recently taken in a niece and nephew after the death of her sister.

Campusano made all of her payments under the modification she was granted in April 2010, but three months later received an account statement that misidentified her mortgage as being an interest-only loan. Over the following months, she was sent bills demanding late fees for payments she never owed.

In November, when she called the bank to ask about letters she received threatening foreclosure, she was told that she was actually ahead on her payments, according to the lawsuit. But the next month, she received four separate foreclosure notices, each giving a different figure as her monthly payment amount.

"I'm a very responsible woman and I don't think it's fair to be treated this way by the bank," she said. "If we signed an agreement, how can I be going through all this?"

"Bee" Safety Reminders

2011-06-30T17:19:00.000-07:00

Spring and summer are when residents are most likely to encounter bee swarms and hives. It is best to remain indoors if you see a swarm or hive. For information about how to address swarms or hives, please call Los Angeles County West Vector Control District at (800) 825-3400 or visit their website at www.lawestvector.org

Help Reduce the Risk of Fire

2011-06-30T17:15:00.000-07:00

As the warm weather returns and fire season rapidly approaches, residents are reminded to be sure that workers on your property do not smoke while they are working. Also, when weed or tree trimming equipment is being used, be sure there's a fire extinguisher present to put out any fires that may be accidentally ignited.

Selecting The Right Retirement Community

2011-06-30T14:52:00.001-07:00

More and more people are choosing to move to a retirement community. The very first thing you need to take into consideration is where you want your retirement community to be located. You could choose from an urban environment or a country setting but understanding what your particular needs are – now and in the future plays a big part in which retirement community you should move to.

Many people like to be close to where they live now, just a little further out. But some like to move to the city where there are more sights and accessibility.

If you have children, you might also want to consider a location that is near to them so you can more easily spend time with them and with your grandchildren. In addition, if you have special medical needs, you might want to choose a community that is near to certain medical facilities. Or, if you are interested in pursuing educational interests that you never had the time for before retirement, a college community might be the best location for you.

Know Your Needs and Desires

Not all retirement communities are the same, so you need to have a clear idea of what you need and what you want in a retirement community. First, some retirement communities are set up like apartments, while others utilize manufactured homes, RVs, townhomes and single family homes. Therefore, you will first need to make a decision regarding which of these building styles is most desirable to you. If you are looking for a little more privacy and ease of access, a retirement community made of manufactured homes or single family homes may be the best option for you.

Be sure to consider your hobbies as well. In that way, you can select a retirement community that will make it easier for you to pursue those hobbies. For example, if you enjoy golfing, you might want to find a retirement community that is on a golf course. If you like fishing, then a community near the lake is ideal. If you want to be able to have most of your needs met within the retirement community, you might want to seek out a resort-type community. On the other hand, if you might occasionally need some assistance with your basic living needs, you might want to consider an active adult community that also offers basic assisted living services.

Once you have your choices narrowed down, contact the retirement communities you are considering and ask for more information. They will likely send you a packet filled with information that you can browse through.

In many cases, the retirement community will also offer a visitor’s program or a vacation getaway program that will allow you to take a tour of the property or stay overnight. This will help you get a better idea of whether or not the community is right for you.

And remember, before selecting any retirement community try getting a second opinion from a relative or friend. Often, we fall in love with what we want, blocking out any negative aspects. Another opinion offers you advice that you may never have thought of.

Looking For More Than Just A Place To Live

2011-06-29T16:14:00.000-07:00

Home buyers are looking for much more than just their current needs and wants when choosing the right community; where are you going to live long-term and reap the best benefits?

Consumers are seeking more than just a place to live; they want to enjoy the community and its surroundings.

Many homebuyers never worry about local venues or even what schools are nearby; they figure they’ll just drive to wherever the need takes them. That’s all changing.

How do you find that golden community with fiscal strength that is also close to the optimal combo of job opportunities, top notch schools, low crime, low traffic, lots to do, and many other factors that help make a community fantastic for raising a family?

Well, while many families are focusing on the best price and value they can get, savvy home buyers are putting more time into research before signing on that dotted line. You probably won’t find the perfect community that offers you a one-stop-shop and that over the rainbow feeling but there are plenty of communities out there that sure come extremely close.

Delve deeper into the surroundings

• Many home buyers never worry about the unemployment rate in their vicinity. High unemployment could mean future foreclosures so this is something that you should research to see how this may affect the community you’re looking to move to.

• Attend PTA meetings and ask about all the topics that you care about. Sure, most people want to know reading and math scores but dig deeper; how many high school students took the SAT; how many graduating seniors went on to college; you may want to ask how the school handles bullying; the ratio of students to teachers; suspension and expulsion rates in the schools; fights, teacher assaults, etc.

• What does the local community offer in terms of extracurricular activities? Does the town partake in little league sports? Are there any “dives” to enjoy a sumptuous meal and just hang out on lazy days? Is there a community center nearby or what activities will you or your children discover on the weekends?

• How far are you willing to drive to find everything you need?

You’d be surprised at the things that suddenly creep up when you move into a new community. Those homebuyers that are delving deeper into what they really need in the long run save money.

So what do you really want from your community? Jot down all the things that are important wants and needs and then add in what you may think is frivolous but could make living more enjoyable.

Lavish Incentives To Buy A New Home

2011-06-28T17:02:00.000-07:00

Savvy home buyers are seeing the best deals ever and the pickings are fabulous when it comes to selecting your dream home.

With a wave of foreclosures homebuyers have been reluctant to purchase new homes when they could snag a foreclosed home with a deep discount; but now, the big boys are introducing all types of incentives that really have placed foreclosed properties on the back burner.

Imagine purchasing a customizable colonial for under $200,000 with a brand new 2011, $17,000 car. Perhaps you’d be interested in a quaint and pristine brick-and-stone townhouse that comes with $25,000 in free upgrades that include wood-burning fireplaces, stainless steel kitchens and marbled bathrooms tricked out with double-bowl vanities and whirlpool soaker tubs. Sounds enticing, right?

Obviously, business has been soft in the housing market and these incentives are more evidence that buyers have the upper hand and every qualified buyer should be running to a real estate agent. However, this is becoming a bigger problem for sellers. Competition is stiff – not that sellers cannot compete and accomplish a sale, but it takes a few tips and tricks to get there.

Many potential homebuyers are taking their time to purchase a home; some have commitment phobia, others believe the housing market will become far worse opening up better deals with lower mortgage interest rates; these scenarios are unlikely since the housing market is pretty steady in most parts of the country.

Advantages of Buying a New Home Now

• Right now you are able to purchase more home than you could have 2 years ago. Builders that re-started their momentum 3 years ago have discounted brand new communities. You could purchase a single family home for under $350,000 and now that price is discounted.

• Buyers are being lavished with lawns sodded to perfection, absurdly low financing and free insurance that will pay the mortgage if you lose your job.

• Reduced costs on “immediate availability” sales; many times a transaction falls through because the homebuyer could not secure a mortgage on the home they selected; these homes go back on the market at reduced costs. The builder wants to sell immediately and the buyer is in the driver’s seat. To get the best deal on these homes you need a real estate agent because the builder’s sale team will definitely try and get the most out of this deal and you could wind up overpaying.

The biggest issue with home buying used to be raising the deposit and closing costs but with new home pricing and incentives to help with closing costs, all those costs excuses are a thing of the past.

The housing market’s recovery is definitely slow but we are within the greatest time to purchase right now; as we’ve already seen, mortgage interest rates slowly increase and home prices will follow.

Annenberg Foundation To Consider Scaling Back Its Point Vicente Project

2011-06-23T11:44:00.000-07:00

The Annenberg Foundation may scale back its proposal for an animal-focused education center at Lower Point Vicente in response to conversations with federal and state officials who would need to approve the unusual plans for a public park.

A representative of the charitable family foundation said at a Rancho Palos Verdes City Council meeting Tuesday that changes are under consideration for the controversial project, which would create a "discovery park" on vacant, municipally owned coastal land next to the Point Vicente Interpretive Center.

Annenberg and city officials have been seeking clarification from state and federal parks officials on whether the ambitious plan could be built as proposed in light of deed restrictions that require the former military property to be used for passive recreation and as a public park.

"If there are some modifications that address their concerns ... we'll certainly talk about that," said Robert Uram, an attorney speaking on behalf of the Annenberg Foundation.

"The foundation is still very excited about this process, and it's committed to working with the council and the community," Uram added.

The Los Angeles-based foundation wants to use 26 acres at Lower Point Vicente to erect an educational complex that would be focused on "companion animals" and their relationships to humans. The project would include native habitat, trails, a demonstration Tongva village, and adoption suites for 10 dogs and eight cats.

The project has drawn a fierce reaction from local residents opposed to the concept, which would cost more than $40 million and would be funded entirely by the foundation. While some locals have been swayed by the foundation's public outreach and advertising campaign, a sustained and organized opposition has arisen since plans were submitted to the city in 2009.

About a dozen speakers on both sides addressed the council Tuesday, in contrast to previous meetings on the project that have drawn a full house.

Council members, who said little other than to caution audience members that no action was to be taken, voted to receive and file an update from city planners on the project. The item came six months after the council directed city staff to seek a review of the project from state and federal officials, despite not having completed environmental review or the normal local planning process.

That direction, given in December, was prompted by letters of concern from the National Park Service, which oversees the use of former federal land, and from the state parks department's Office of Grants and Local Services. The two agencies said that for the project to move forward, the city might have to seek an exemption to long-standing restrictions on use of the land.

The two possibilities for that are a "public facility" exemption, which would allow the land to be developed if intended for public use, or a "conversion," which would essentially require a swap of new public parkland to replace lost acreage at Lower Point Vicente.

Annenberg officials believe their project constitutes a public facility, but National Park Service officials have said that the project as currently configured would require a conversion.

In a letter sent last week to the National Park Service, Uram wrote that he does not believe a conversion is required.

"We believe the project fully meets the requirements for a public facility ... and that the project should viewed as a model for its innovative approach of using domestic pets as a key interconnection with outdoor recreation and protection of native wildlife and habitat," Uram wrote.

A former U.S. Interior Department attorney who recently joined Annenberg's team, Uram wrote to request a meeting with the service's regional director, based in Oakland.

Annenberg in March submitted an incomplete draft application to state parks officials, but that document has been kept secret. The city's attorney has said the application is exempt from public records requests because is it is preliminary, and city planners said state officials wanted to keep the document private to prevent confusion over possible future changes.

In the meantime, city and Annenberg officials are trying to figure what shape the project could take to gain approval.

"We're trying to get a better understanding and direction from these two agencies in order to know how to really complete this application," Principal Planner Ara Mihranian told the City Council.

A letter sent Monday by foundation Executive Director Leonard Aube to council members said the organization has discussed reducing the size of the main building by 8,000 to 15,000 square feet. The central structure is currently proposed at about 51,000 square feet, including about 9,000 square feet of underground parking.

Aube wrote that he anticipates returning to the City Council with "updated thinking about the proposed infrastructure and program direction" ideally by next month.

City planners would then seek direction from the council on how to proceed, Mihranian said Wednesday.

Note: The article original written by Melissa Pamer @ The Daily Breeze.

How To Quickly Improve Your Credit Score

2011-06-21T10:52:00.000-07:00

Lenders approve mortgage loans to those potential homebuyers with the best credit scores over 700. Yes, I know it’s advertised that you need 640+ for an FHA loan however those are only guidelines; it’s the lenders that will ultimately approve your loan and new strict rules with higher credit scores are required.

But all is not lost because you can improve your credit and boost your credit score in just a few months.

First, to improve your credit score, it's important to know where you stand so you must request a free credit report and work on the negative trade lines first.

Here’s a plan for a quick boost to your credit score:

• Apply for an installment loan

You'll get the fastest improvement in your scores if you show you're responsible with a major loan: (personal loans, auto, mortgages and student loans). If you don't already have an installment loan on your credit report, consider applying for a small personal loan or buy a small car that you can pay back over time. Nothing expensive, just something that is manageable.

• Get a credit card if you don't have one

Don't fall for the myth that you have to carry a high balance to have a good score. You don't, however you need to show responsibility so you will have to use the credit card, sparingly. Having and using a credit card can really build your score quickly. If you can't qualify for a regular credit card, consider a secured credit card.

• Pay down your credit cards

The most dramatic boost to your credit score will come from paying down your accounts such as credit cards. Not paying it off, just paying it down. Lenders like to see a big gap between the amount of credit you're using and your available credit limits.

• Use your cards lightly

Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. The underwriters will look at your habits and if you are running up your balances each month they have to determine will you have reserves each month to pay your mortgage on time.

Many new homebuyers are not aware of the process to get a mortgage loan; your application is run through an initial automated model of a loan method to get early approval, but that is not the entire process.

The underwriters review all the paperwork and scrutinize your credit history to see if you are a good risk in order to use their money. During the process they review how you pay your bills and the probability of you running into trouble.

So the use of your credit is examined in depth.

Everyone can repair and improve their credit scores but it doesn’t happen overnight. If you plan on applying for a mortgage loan and you need to work on your credit, have a 6 month plan and you’ll become homeowner before you know it.

Be Specific When Writing Home Purchase Contract

2011-06-20T10:58:00.000-07:00

When buying a home, mean what you say and say what you mean when filling out the contract.

That's the advice of lawyer Jeff Marks, a partner with Ryan and Marks Attorneys LLP in Jacksonville, Fla. A real estate dispute in the Sunshine State illustrates his point.

Christine and Nigel Gibney contracted to buy a house from Helen and Randy Pillifant for $620,000. The purchase contract provided that the sale was "contingent upon this property appraising for no less than $620,000," according to court documents.

Two appraisals were done. One arranged by the Gibneys (the buyers) came in at $560,000. The Pillifants secured an appraisal that valued their house at $635,000. The buyers refused to close and terminated the contract.

The sellers sued for breach of contract, arguing that any appraisal of $620,000 or more obligated the Gibneys to buy the house. The Gibneys argued that any appraisal for less than $620,000 allowed them to terminate the contract.

Who's right? Florida's Second District Court of Appeal favored the would-be buyers, ruling in April 2010: "In our view, `appraising for no less than $620,000' means that no appraisal may be less than $620,000," the court ruled. "The appraisal contingency allowed the Gibneys to terminate the contract if any appraisal valued the property at less than $620,000."

Too often, homebuyers and sellers think a contract allows for one thing, when the language says something else.

"Contingencies should be written in full sentences," Marks says. "In this case, it should have read, `This agreement is contingent, at buyers' option, on the property appraising for at least $620,000 as determined by the appraiser for the buyers' lender,"' he says.

"There's no confusion in that language."

Here are four ways to avoid making common contract mistakes.

Give yourself time to get a loan

Many contracts are contingent upon the buyer getting financing by a certain date. In today's tough lending climate, buyers are wise to allow themselves plenty of time to get mortgage approval for a loan.

If the date passes and no financing has been secured, the sellers may terminate the contract and keep the earnest money deposit.

"You should also be realistic about your closing date," says Patti Lawton, a broker with Welcome Home Realty in Brunswick, Maine. "Don't try to close too quickly. There are a lot of things that need to be done properly and you must give lenders, title companies and others time."

Be specific about which items stay with the house

You've heard the story of the buyer who walked into a new home only to discover that the refrigerator and chandeliers were missing. Check the contract. As a seller, be sure you specifically state on the contract what will stay with the home. As a buyer, pay attention.

Don't assume that the Sub-Zero refrigerator is yours once you close.

Know the effective date

Surprise! The contract doesn't always go into effect on the day you sign it. "In every contract, there are things that must be done within X number of days from the effective date: inspections, loan applications and approval, title searches," Marks says. "If you don't know the date that the contract went into effect, you may not have a valid contract."

Get everyone to sign

"Sometimes the home is owned by both spouses, other owners or an entity such as corporation," Marks says. "Make sure all of the parties sign the contract. If a party to the transaction fails to sign, they're not bound to perform the contract."

You've heard it before: Buying a house is one of the biggest financial decisions you're going to make. Simply said: "Take it seriously and make sure everything that's important to you is in writing," Lawton says.

Note: This article originally written by Tracey C. Velt of Bankrate.com

How To Get The Best Deal When Buying A Home

2011-06-20T10:53:00.001-07:00

It can pretty difficult to know exactly what is happening in the housing market today; we hear prices going up then prices going down but one thing is for sure – this is the best time to wheel and deal and get more value for your bucks.

To start your search clearly you must have a budget in mind; once you know your price range your real estate agent can access the homes you should begin looking at. Some of the homes will be right on mark, some higher and some lower than what your budget demands but this gives you room for negotiation.

Do you have a community in mind?

• Find out what other properties in that area have sold for on the market recently to get a good idea of what you should offer for it. You can also check public records at the county clerk's office to find out what they deem the property to be worth.

• If the average time a property is on the market is approximately 10 weeks and the property you are looking at has been on for 13+ weeks then you definitely have room for negotiations.

“New home buyers recently reported they got the best deals with homes that were on the market 100+ days and the price had been discounted from the original price twice.”

So how do you find the deeply discounted gems? Size up your seller, perform a bit of research and ask the right questions.

The reasons for selling a home places more pressure on the seller:

1. Divorce, most couples want to end joint ownership of a home as soon as possible.

2. Job transfer, seller has to be at a new location by a definite date.

3. Buying another home, seller signed a contract to buy another home and needs a quick sale.

Questions that lead to Discounts

While viewing homes, even if you fall in love with a property the minute you walk through the door, stay calm and do not give away how enthusiastic you are about the home.

Instead, ask questions to establish the possibilities for negotiation. For example, ask

• Again, Why the owner is selling the home (if it is a result of an imminent job move or financial difficulties they may be eager to make a quick sale),

• How many people have viewed the property, and

• How many have been back for a second viewing – if there haven't been any they are unlikely to have had many/any offers.

So negotiating to get the best deal when buying a home is a bit of art and a bit of science; a savvy real estate agent can make all the difference in helping you get the best price.

Homeowners Are Able To Stop Foreclosure And Strip Down Mortgage Debt

2011-06-14T14:55:00.000-07:00

With home prices at record lows and foreclosures at record highs, many homeowners know that their home is worth substantially less than what is owed on their mortgage. While many have made the difficult decision to walk away from their properties, there are many homeowners using chapter 13 bankruptcies to bypass a foreclosure.

There are two areas where homeowners can use a chapter 13 bankruptcy filing to remain in their homes;

1. One, when they are behind on payments and need time to get caught up, and

2. Two, to remove a second mortgage or home equity line of credit from their home.

You cannot eliminate any of the debt from a first mortgage, but second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.

By filing a Chapter 13 bankruptcy, your second mortgage can be stripped off your home and treated as unsecured debt; however, this can only be applied to remove a second mortgage off your home if the value of the property is at or below the outstanding balance on your first mortgage.

• For example, if your home is worth $300,000 and there are two outstanding mortgages, in the amounts of $400,000 (for the 1st mortgage) and $75,000 (for the 2nd mortgage), then a Chapter 13 bankruptcy unsecured debt can be applied. In this scenario your home value of $300,000 would be below the first mortgage, which would allow you to strip off the second mortgage. So your second mortgage of $75,000 is completely unsecured debt.

When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments are required while the homeowner completes a repayment plan for other debts --which typically takes three to five years. After the repayment plan is complete, the second mortgage is eliminated.

Many of these second mortgages were granted during the housing boil, when home prices were going in one direction – boiling up, up and up. It’s simply a fact that a majority of those loans shouldn't have been made at all, and as a result, homes are “upside down”.

This bankruptcy law is not new at all; this law has been used for years; it’s just never been utilized as much because in the past there usually was enough equity in the home to cover the second mortgage.

Of course mortgage bankers don't like the practice, especially since more and more homeowners are finding this practice a viable plan to save their homes from foreclosure, pay less per month and strip thousands of dollars away from their debt.

Bottom Line is – time is always of the essence and there are no longer enough excuses for allowing your dream to be taken away from you.

Buying A Home With Bad Credit Is Still An Option

2011-06-10T15:09:00.001-07:00

Would you believe over 50,000 U.S. homes were purchased with owner financing last year? The high rate of foreclosures, nationwide economic distress, coupled with stricter lending practices drained the pool of creditworthy homebuyers. But homeowners still had to find ways to recoup lost funds and owner financing is still an option.

While the risk of owner financing is significant and really an act of faith, it’s definitely a possibility with the help of an experienced real estate agent and a real estate attorney; both parties - home buyer and seller – can work out an advantageous contract that everyone can work with.

Some sellers focus on those homeowners who suffered a foreclosure because of extenuating circumstances while other sellers are not that concerned on credit issues or how your state of affairs came about – as long as you can afford the monthly payment.

In most situations owner financing is still cheaper than renting a house or apartment.

Advantages of Owner Financing

1. No Closing Costs; seller financed transactions never boasts the usual fees traditional lenders add on like origination fees, discount points and mortgage insurance premiums

2. You can close the transaction quicker

3. There is more flexibility; home buyers can negotiate better down payments and interest rates. While traditional lenders may be firm on a 20% down payment, you may be able to combine several balloon payments that equal the 20% over a specified time.

Disadvantages of Owner Financing

1. Owner financing can be expensive; the average mortgage interest rate hovers around 5 percent, however with seller financing you may pay an 8 or 9 percent interest rate.

2. The interest rate may not be fixed; you could wind up with variable rates, of course, written into the contract.

While seller financing can be expensive those with tainted credit histories can still get into a home that they will eventually own.

Keep in mind, sellers are taking a big risk and want something extra for not being able to cash out on the home right away, as they would in a traditional sale. The key here is to negotiate reasonable and fair terms that everyone can live with.

Two important elements that all parties will need are a savvy experienced real estate agent and a real estate attorney that represents the interests of the individual client.

Seller financing can be a great tool for those who are unable to get approved for a traditional loan as long as you’re prepared for the journey.

Delinquent Loan Rules Updated

2011-06-08T14:43:00.000-07:00

Fannie Mae rolled out new rules that require home loan servicers to communicate more directly with borrowers who have fallen behind on mortgage payments and expedite arrangements aimed at helping homeowners avoid foreclosure.

The new standards require servicers to take a more consistent approach to how they deal with troubled borrowers, beginning in the initial months after a loan becomes delinquent, through any efforts to modify the terms of the loan and, if necessary, through the foreclosure process.

"We want homeowners to be able to understand their options when facing foreclosure, and we want servicers to reach homeowners early in the process, communicate frequently and clearly, and help homeowners avoid foreclosure," said Jeff Hayward, senior vice president of Fannie Mae's national servicing organization.

Why Renters Should Consider Buying

2011-06-01T17:02:00.001-07:00

At some point most renters will take a look around their boxed in apartment and ponder should they be buying a home instead of giving the money away. You pay more in rent and never realize the tax advantages and basically, you’re handing over all the benefits to your landlord.

Stop giving your hard earned money away!

Many renters give up the dream of owning their own home simply because of the financial strategy needed to begin the process. Looking at the route, it seems to be more of a hassle than a welcomed reality. Down payments, perfect credit history, funds to bring to settlement; you start to feel fenced in like owning a home is just not in the cards for you.

That’s because you’ve only heard half the story; of course you can own a home without too much of the hassles.

The hardest part of buying a home these days is having a good enough credit history. I mean with the down slump of this economy, whose credit didn’t become just a bit blemished? Banks have tightened up on their criteria for home loans and are scrutinizing past payment histories a lot more. But credit can always be fixed. It just takes time and you can accomplish a lot in a year?

The Biggest Hurdles to Overcome when Buying a Home:

1. Accumulating a down payment & Settlement Fees

2. Re-establishing Great Credit

These two things are all that is really keeping renters from buying a home. So how do you overcome the issue of having blemished credit and saving enough money when most of it goes to your landlord?

Consider these 3 Little Known Facts That Can Help You Buy Your First Home.

1. Did you know when buying a new home there are government programs to help with down payment assistance? Most are state and city funded programs to help new home buyers. You could get as much as 3% to 5% down payment assistance AND there are other programs that help with both the down payment and settlement fees. These programs have very little budgets so they don’t advertise statewide, however a good realtor will know about the programs.

2. If you have any assets such as stocks, bonds, a car, or anything else of value you can use it as collateral to secure a loan. Get an appraisal and ask your realtor which lenders are more likely to help you finance using this type of asset.

3. You could look for “Lease to Own” properties; Sellers know the market isn’t as steady as we would like and banks have become so strict it’s difficult for people with perfect credit to secure home loans, so sellers will lease their property to you for a specified amount of time with the intent of you buying it down the road. In laymen’s terms, you rent it for perhaps two years with maybe 10% or more of each monthly payment going towards the purchase price (this acts as your down payment). After that two year period you agree to purchase the property. This gives you time to accumulate a down payment and fix any credit problems you may have.

Every renter should speak with a realtor because an informative conversation will cost you nothing but will enlighten you to all the programs available. Isn’t it time to explore your options and learn how your money can benefit you more?

The Good, The Bad and The Ugly of a Home Owner’s Association

2011-05-31T16:55:00.000-07:00

Home Owners Association, better known as the “HOA” have become “Big Brother” of many communities. These associations were formed to ensure neighborhoods remained esthetically pleasing to owners and visitors and a more uniform look and feel remained balanced. However, as the years have passed home owners associations have changed the rules, bylaws and guidelines for living comfortably in your castle.

When we make a purchase as important as a home we’d like to think we could do just about anything but developers err on the side of uniformity and like-minded individuals who’d rather ensure their homes bring increasing value. And when you get right down to the reasoning of an HOA, you must ask yourself; is it really all that bad to keep your community looking good?

While taking a pragmatic view of the Home Owners Association the good effects really outweigh the bad; your bylaws explain what you can and cannot do in your community. This is essentially an agreement between you and the community that you signed off on when you moved in and it’s the HOA’s responsibility to ensure you live up to your agreement.

What many people do not realize is that you have the right to call the HOA before you buy a home. You can ask questions to make sure you are willing to live by all the regulations set forth for that community. No one really goes through the trouble of inquiring what the guidelines are before purchasing a home and that is one of the biggest problems.

The HOA determines:

What type of fence you can install and specifically where on your property you can install it;
What style and color deck you can build and the dimensions of the deck;
What day and time you are able to place your garbage bin outside on garbage day and how long it can remain out before you are fined;
Whether basketball courts, swimming pools, bar-b-cue grills or the color, type and style of your front door are within the guidelines of that community

In simple terms – you must ask your HOA for permission to change, install or erect anything on your property. Why? Suppose you’re trying to sell your home and your neighbor wants to paint their front door a designer’s psychedelic color? How many people will purchase your home knowing they will have to live next to Picasso, never knowing what color’s he’ll use next?

This is why the HOA ensures uniformity and you never have to worry about crazy colors or embarrassing statues suddenly appearing on someone’s front lawn. But not everyone enjoys living under the rule of a Home Owner’s Association.

There will always be those who love to rule with an iron fist; and then you have some people who are not ethically and morally capable of handling an HOA position.

The developer first places HOA board members there and when the community is complete the new board is then voted in by a quorum of homeowners. Each position has a certain term limit and each position comes with a clause that many feel is unfair.

Board members are insured, payable with community funds, against any lawsuits; meaning you cannot sue them based on their decisions whether good or bad.

A board position comes with a lot of power and many homeowners do not enjoy having rules enforced especially when it’s easy for malicious intent. Cars towed, fines combined, requests denied and funds misused; any number of issues pop up when board members and homeowners views are conflicting and then combative. Oh yes! Many issues have turned into bloody noses and black eyes.

So how do you resolve issues with the HOA? Just about all bylaws explain how to remove the board of directors from the HOA. Or you could take the easy route before you move into a new community and call your HOA management company to ask questions.

Be sure to note the most important aspects of your happiness in your new home such as should you want to change the color of your front door or entire house, what colors have been approved? Asking plenty of questions now can resolve lots of headaches down the road.

Simpler Mortgage Forms Are Proposed

2011-05-24T16:54:00.001-07:00

The myriad of complex disclosure forms required in getting a mortgage soon could ease a bit as a new federal agency tries to streamline and simplify an important part of the process.

In its first major move the Consumer Financial Protection Bureau released two prototypes of shorter and easier-to-understand disclosure forms that lenders must give home buyers when they apply for a mortgage.

The overall goal of the agency is to help consumers better comprehend the terms of the loans and compare them with mortgages available from other banks.

The forms will have simpler language and use high-lighted terms, arrows and "yes" or "no" graphics to provide key details about a loan, which include whether the mortgage terms can change, projected monthly payments for different years and a new piece of information - how much of the loan would be paid off in 5 years.

Some mortgage industry leaders have supported the simplification of disclosures but feel the changes would cost too much and cause legal liabilities.

The new form would replace two slightly longer mortgage disclosures that many home buyers complain are duplicative and difficult to understand.

The changes are due in great part because of regulatory failures leading up to the subprime mortgage meltdown, the consumer bureau is making simplified mortgage disclosures a priority as it prepares to start operations in July.

Changing the disclosure forms is the first of several ways the agency will become a key player in mortgage regulation. For instance, it also will set new standards for how companies service home loans.

The financial reform law enacted last year created the consumer bureau and directed it to develop a "single, integrated disclosure for mortgage loan transactions" by July 2012.

Lenders are required to provide two forms to a consumer within three days after he or she applies for a mortgage. The forms outline the loan's interest rate, initial monthly payment and other features.

One form is a two-page Truth-in-Lending-Act mortgage disclosure statement. The other is a 3 page "Good Faith Estimate (GFE)" required by the Real Estate Settlement Procedures Act.

In a poll last fall by Consumer Reports magazine, 84% of respondents who had applied for a loan or credit card recently said they had some difficulty understanding the financial disclosures.

The consumer bureau released the forms as part of its "Know Before You Owe" project to get feedback from the public, consumer groups and the mortgage industry.

Over the next four months, the agency will conduct interviews about the forms with consumers and mortgage industry officials in six cities - Los Angeles, Chicago, Albuquerque, Baltimore, Birmingham, Ala., and Springfield, Mass.

The 4 Factors That Make Or Break Your Mortgage Loan Application

2011-05-23T14:18:00.001-07:00

There are 4 primary factors a loan processor will look at when you’re being considered for a mortgage loan. Many prospective buyers fail to take the time and review those factors that will be considered and this can lead to disappointment.

By having a clear understanding of your financial history you’ll be able to cleverly negotiate your loan terms.

Income & Employment

• What is your gross income?

This question is used to gauge your pre-tax and pre-deduction earnings. This is the baseline lenders use to determine the mortgage amount that you will qualify for.

• Do you make any overtime pay or bonuses?

This question is used to determine if you have any other income that can be utilized toward increasing the approval amount.

• How long have you been employed?

This question is used to weigh stability of your income. Individuals who jump careers every few years are considered to be a higher risk when it comes to loans than someone who has stayed at the same place of employment doing the same type of work for 24 months or longer.

Debt

• What is the minimum amount you pay toward all unsecured loans each month?

This question is used to determine the amount of disposable income a borrower has once all of their monthly financial obligations have been met. Unsecured debt applies to credit cards, personal loans, student loans, car payments or any other monthly payment currently being made to satisfy a debt.

• Do you have any debts in default or collection?

Your credit report will reveal the negatives, however, here is an opportunity to acknowledge extenuating circumstances for any negative debt. Not all negative items are a death sentence when it comes to a mortgage approval. This question is designed to help a loan officer assess your overall financial health,

Credit

Once a lender has pulled a borrower's credit they may have questions on items that exist on a credit report. The most common questions are to verify and respond to negative items that exist.

Money for Move In

Lenders want to validate available assets that can be applied toward down payments and closing costs when making a home purchase. The more available funds a borrower has to close on a home the less of a risk they are considered meaning that they are more likely to obtain a loan. The following are some of the more common questions that a lender will ask in regard to money for move in.

• Do you have a savings account?

• How much is in your savings account?

• Do you have an IRA or a 401K that you could access for additional funds?

• Do you have a family member that would be willing to provide you funds as a gift for down payment or closing costs?

Lenders questions will vary from one borrower to another based on the buyer's unique financial situation. However, this information can be utilized as a baseline guide for being prepared when applying for a mortgage.

Feds Changing Jumbo Mortgage Market

2011-05-20T14:11:00.000-07:00

It sounds like another round of bad news for the mortgage industry. The government has made it clear that no one is constitutionally entitled to a government-backed mortgage of up to $729,750, no matter where you live. Even in places where the cost of buying a house is far above the national average.

The recession has been tough on the jumbo mortgage loan market, loans for homes that are over $417,000. Investors stopped buying jumbo loans and the jumbo mortgage market virtually shut down overnight.

Homeowners who wanted to refinance to take advantage of historic low interest rates found they simply couldn't get anyone to give them a loan, particularly since home values were falling. Buyers purchasing high-cost homes found they had to put down as much as 30 or 40 percent in order to land financing.

In a dozen high-cost areas such as Manhattan and San Francisco, the government stepped in to back jumbo loans to $729,500. That helped bring down the cost of financing large loans for consumers. What many Realtors and mortgage lenders didn't understand is that the measure was temporary. Last year, it was given a one-year extension.

Now, the message is clear: If you want a jumbo loan, you'll have to get one from the private mortgage market. While the government will still back mortgages in high-cost areas, the magic number seems likely to drop to $625,500.

And, that means jumbo mortgages are going to be far more costly - if you can get them at all.

It shouldn't surprise anyone that the National Association of Realtors is up in arms. The Realtors are convinced that home values will drop in those areas once government-backed financing dries up. The Mortgage Bankers Association has also joined the fight, expecting that fewer homebuyers will be able to get the financing they need to close.

Will cutting back government financing hurt the housing industry? Maybe. The real problem is that the housing industry is still on life support, with the federal government supplying the dopamine.

Fannie Mae and Freddie Mac, the secondary mortgage market leaders, have been in conservatorship (basically, a special form of bankruptcy) for months. Together with FHA, these three entities are backing more than 90 percent of all mortgages. Fannie Mae, which just asked for another $6.5 billion to make up for mortgage losses, and Freddie Mac have cost taxpayers hundreds of billions of dollars.

Realtors say that home buying is anemic. Pending sales of existing homes have been up and down over the past few months. New home sales have been virtually nonexistent. This is the first spring real estate market since 2007 without a homebuyer tax credit, and while activity has picked up in some markets, home prices are still falling.

What the housing industry really needs is a country where jobs are being created and its citizens are going back to work. If you have a job, you can afford to buy a home and get a mortgage. It's far bigger bang for the buck than backing mortgages worth nearly a million dollars.

Ilyce R. Glink's latest book is "Buy, Close, Move In!" If you have questions, you can call her radio show toll-free at 800-972-8255 any Sunday, from 8 a.m. to 10 a.m. Contact Ilyce through her Web site, www.thinkglink.com.

Note: Article published by Ilyce R. Glink

Rate On 30-year Fixed Mortgage Falls To 4.63%; Fewer Foreclosures In April

2011-05-19T10:03:00.000-07:00

Fixed mortgage rates have fallen to their lowest levels of the year, giving Americans more incentive to buy homes or refinance their loans.

Freddie Mac said Thursday the average rate on the 30-year loan fell to 4.63 percent from 4.71. The average rate on the 15-year fixed mortgage slipped to 3.82 percent from 3.89 percent. Both are at their lowest points since December. It marked the fourth straight weekly decline.

Rates track the yield on the 10-year Treasury note, which fell close to its lowest level of the year this week.

Low mortgage rates could boost the struggling housing market, which has dragged on the economy. Home sales are far below healthy levels. Most homebuilders reported a drop in new orders in the first three months of the year, an indication of future activity.

Job worries and strict lending standards have kept potential buyers on the sidelines. And the high number of foreclosures is forcing home prices down, leaving some would-be buyers concerned that prices have yet to bottom out.

Fewer homeowners had their houses repossessed by banks in April than a year ago, foreclosure listing firm RealtyTrac Inc. said Thursday. But that's because it's taking lenders longer to take back homes already in the foreclosure process because of paperwork delays. Last fall, evidence surfaced that lenders pushed through foreclosures without properly reviewing each case.

The holdup threatens to push back a resolution to the foreclosure crisis and a meaningful recovery in housing.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage fell to 3.41 percent from 3.47 percent. The five-year adjustable-rate loan hit 3.25 percent last month, the lowest rate on records dating back to January 2005.

Note: Article originally written by Janna Herron of The Associated Press

Bankrupt Homeowners Shed Second Mortgages

2011-05-19T09:55:00.000-07:00

Stung by the crash of the housing market, some struggling homeowners are using a little known but increasingly popular provision of the bankruptcy code to eliminate second mortgages and avoid foreclosure.

Statistics are hard to come by, but bankruptcy lawyers say the provision has been used effectively on hundreds, if not thousands, of cases in the San Francisco Bay area during the past two years.

"It's a big thing in our valley," said James "Ike" Shulman, a San Jose bankruptcy lawyer. "But it's not widely known."

Shulman, co-founder of the National Association of Consumer Bankruptcy Attorneys, said he has helped a number of clients who have filed for personal bankruptcy use the law to hold on to their houses - including three last week.

Cathy Moran, a Mountain View bankruptcy lawyer, said one of her clients had a $132,000 second mortgage voided by the court.

"This is a really big-ticket issue that allows people to keep a home and conform the mortgage to something closer to real value," Moran said.

Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home.

But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.

When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments are required while the homeowner completes a repayment plan for other debts - which typically takes three to five years.

At that point, the second mortgage is eliminated.

Many of these second mortgages were granted during the housing bubble, when home prices were going in one direction only - up, up and up.

"A lot of these are loans that shouldn't have been made at all," said Henry Sommer, editor of Collier on Bankruptcy, a publication on bankruptcy law.

One of Shulman's clients, Veronica - who asked that her full name not be used - was struggling to keep the San Jose house she bought in 2005 for $612,000.

Her home's value has dropped to about $367,000 - less than her first mortgage of $489,000 - which allowed her to petition the bankruptcy court to set aside her $122,000 second mortgage. The court granted her motion.

She successfully completed her payment plan for other debts two months ago, and her second mortgage is now eliminated.

"It's wonderful," she said. "After almost six years, I am finally able to see the light at the end of the tunnel, and I'm so, so grateful."

Mortgage bankers don't like the practice.

"It's a troublesome phenomenon. It's one of those things that's just now developing and bubbling up," said Dustin Hobbs, spokesman for the California Mortgage Bankers Association. But there is little the mortgage industry can do, aside from seeking to change the law.

And there are no complaints from investors in first mortgages, like the pension and retirement funds represented by the Association of Mortgage Investors. "We think with the right controls, something like this to allow a responsible, distressed homeowner to reorganize their assets, liabilities and cash flows is a very pro-business proposition," said Chris Katopis, the association's executive director. "We disagree with what the mortgage bankers associations are saying on this."

"We're having great results using the rule," said Brette Evans, a San Jose bankruptcy lawyer. In one recent case, a small-business owner was able to hang on to her home by setting aside a $240,000 second mortgage, she said.

That put the borrower in "a safe zone" where she could work out a modification of her first mortgage, Evans said.

Note: Article originally written by Pete Carey of San Jose Mercury News

Federal anti-flipping rule waived through 2011 to keep homes selling

2011-05-17T17:04:00.000-07:00

The Federal Housing Administration announced back in February that it extended its anti-flipping waiver through 2011 to encourage the resale of foreclosed homes.

The rule prohibits FHA to issue a mortgage on a home owned by a seller for less than 90 days.

From the press release:

This action will permit buyers to continue to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales. It will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” said FHA Administratoin Commissioner David Stevens. “Today I can report that this policy change has been effective. Since the original waiver went into effect on last February, FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold within 90 days of acquisition.”

FHA research finds that in today’s market, acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days.

Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

Stevens added, “Because of past restrictions, FHA borrowers have often been shut out from buying affordable properties. This action enables our borrowers, especially first-time buyers, to take advantage of this opportunity and buy a home that has recently been rehabilitated. It will also help to move more foreclosed properties off the market and reduce the number of vacant homes in neighborhoods throughout this country.”

Knowing The Real Monthly Mortgage Payment A First Time Homebuyer Will Pay

2011-05-17T15:37:00.001-07:00

As a first time homebuyer, you will be exposed to hundreds or thousands of ads everyday; media stories, friends' advice, and online mortgage calculators that will provide you with partial information. All of these sources will lead you to believe that you can have a larger home loan balance with what seems to be a very low monthly payment. Or they will show you a monthly payment that seems extremely affordable for what you are looking for, trying to hook you to make the purchase.

The underlying truth though is that most of these monthly mortgage payments that you will come across are not completely accurate. Most of the super low mortgage payments that you see advertised are targeted to a specific homebuyer who has perfect A credit and usually do not include Property Taxes or Homeowners Insurance that you will also need to pay for each month.

Marketing departments are very smart and will show these low payments just to generate leads.

The marketing ploys usually have a small fine print that tells a different story. These super low payments will typically require extremely high credit scores in the high 800s and at least a 20% down payment.

If you put less than 20% down, your monthly payment could then also include mortgage insurance to be added to your payment. Look closely in the fine print, if you can locate it and you will see all the requirements to qualify for that payment and what type of loan program it is.

An advertisement does not know what your credit score is or if you plan on putting down a down payment.

Your monthly mortgage payment will typically include Principle and/or Interest payments, Property Taxes, Homeowners (Hazard) Insurance and possibly even Mortgage Insurance. It is important to talk to your loan officer and find out exactly what your TOTAL monthly payment will be and what will be included in that payment.

Keep in mind too, that some neighborhoods will require you to pay a Home Owners Association fee or other Community specific fees each month on top of your monthly mortgage payment. If you are used to renting, you also may not realize all the different utility expenses that you will need to pay as a homeowners instead of a renter.

In order to keep your overall monthly expenses in your comfort zone, it is very important to know your TRUE monthly payments and expenses. You don't want to buy your first home only to find that it is a financial burden. Buying your first home should be a great point in your life, not a financial nightmare.

Checks And Balances Before You Buy That Home!

2011-05-10T17:03:00.001-07:00

How would you know if the most beautiful community was ripe with crime? Would it make a difference if your “perfect place on earth” was targeted by burglars? Most people locate their dream home without performing proper checks on a neighborhood. There are many online tools that can be an invaluable starting point in finding your home.

Find out the latest Mortgage Rates

You can find valuable online calculators that will provide good insight into how much home and how much mortgage you can afford. While an online calculator may not provide the absolute bottom line, it will provide at-a-glance analysis of a homeowners’ monthly responsibility. Simply select the state, the type of loan you are interested in and the amount of the loan you’re in the market for.

Get Reports on Schools, City Statistics and Cost of Living

Want to learn more about the city where your future home is located? Ask your agent. They have access to salary calculators to determine how much you can expect to make in your line of work, get statistical reports on various cities near you; you can also learn more about the schools and school ratings, and compare the cost of living in different towns.

Sexual Predators in the Neighborhood

While most of us never want to think of such a horrendous possibility, everyone should perform this check.

1.Visit the FBI's web page at www.fbi.gov. Once there, select A to Z index located at top of page; then find the words Sex Offender Registry towards bottom and click on it. You will see a list of the 50 states and their sex offender registries. Click on the words "The National/State Sex Offender Public Website" if you want to use the FBI's list. You will need to agree to the terms of use.

2.Since you probably don’t have a name, you can do an Advanced Search; enter just the name of your town and the zip code. You will then be able to see a list of all the sex offenders in that town.

Crime Statistics for any Neighborhood

Most people have no idea about any negative aspects of a neighborhood, especially when it comes to crime. Performing a street-specific crime statistics search should be number one on your to-do list. There’s a website called Spotcrime.com where you’re able to search any neighborhood in all states to see what crimes have been reported.

1.Visit Crimespot.com and input any address; browse through any listings that have popped up.

When you’re about to invest in one of the most expensive things in your lifetime you should ensure it meets all your prerequisites.

Can The Self Employed Get A Mortgage Loan?

2011-05-09T17:30:00.001-07:00

When you work as a self employed worker sometimes it can be difficult to get approved for a mortgage loan. While the self employed worker is not viewed as an attractive home buyer, obtaining a loan is not impossible.

Traditionally, self employed workers were able to get a non-documentation loan but that was abolished when the sub-prime market tanked. Now everyone must prove they earn a living in order to get approved for a mortgage loan, so that will be your first step to prove steady self employed income.

• You’ll have to show a minimum of two to three years' tax statements or company accounts signed off by a qualified accountant and you'll be assessed on your profits

• Accountants use many legal loopholes to reduce your tax burden by reducing your stated profits but when applying for a mortgage loan, this may work against you because of the stated lower income.

• Make sure you have accounts paid on time. If you have good credit and a good credit report then that goes in your favor. If you can show that you’re a self employed worker who has steady profits and has managed to pay your bills on time, this will rate highly in your favor.

• You should have a healthy savings account to show that you have collateral and you’re responsible enough to save for your future.

If banks are still hesitating approval of your mortgage loan, try to get a loan from the smaller banks in your local area. Community banks and credit unions may be more willing to give you a loan.

The self employed group has grown over the past few years due to the quick rise in unemployment so banks understand the hiccups and underwriters are accustomed to the demand for mortgage loans.

And surprisingly, banks are already looking for a mortgage product to market to the self employed group.

10 Tips to Create the Illusion of More Space for Small Homes

2011-05-05T16:08:00.000-07:00

We all know by now we should de-clutter to make rooms appear larger but who wants to pack away that treasured antique furniture that dear ole grandmother gave you?

It might be time to try some decorating tips that will help you make rooms look larger and use your space wiser.

1.Go Vertical

Extend cabinets, wall units and bookshelves to the ceiling; especially the kitchen cabinets.

2.Go Lighter

Paint walls light or use pale colors which make the rooms look wider.

3.Go Brighter

Use recessed lighting, inexpensive wall sconces and standard tube-like skylights instead of table or floor lamps; light closer to the ceilings also widens a room.

4.Add a Splash of Wow! Dont Be Boring

Adding bold accents with varying patterns, prints and colors can deflect thoughts that a space is small. This is an area which youll want to experiment. And separating the walls of a small room into blocks of color can also add visual depth.

5.Utilize Wall Space

Place hooks and magnetic strips on walls in the kitchen and elsewhere and use them to hang pots, pans and other objects to off tables and counters. This emphasizes focus from smaller units to the walls.

6.Size Matters

Measure your space and furniture before any purchase. Couches designed to hug walls are a great way to open up a room, and armless couches and chairs can create the illusion of space. Floor cushions are a good alternative to create seating without adding more furniture and can be easily stored when not in use.

7.Watch Your Angles

Furniture that sticks out at the wrong angle in a small room can draw the eye and make it appear even smaller.

8.Make a Small Bathroom Appear Larger

Small bathroom design can be made to look larger with a few fast easy decorating tips. Enhance small bathroom space using pale, cool colors that reflect light; whites, pastels, and neutral colors to make the bathroom appear larger than it really is.

9.Small Dining Rooms

The easiest way to create more space in a small dining room is to downsize the table. A small dining room table, or one with removable leaves that can be stored away when not in use, will go a long way in making the room look more open and spacious.

10.Decorating for a Small Living/Family Room

It is one of the most frequently used rooms in the house, especially for purposes of entertaining and relaxing, so decorating a small living room to be warm and inviting yet still appear spacious is very important. Sometimes the most effective way to increase usable space is to simply reorganize the furniture. Get as many items off the floor as possible by repositioning them on shelves if possible.

There Is More To Assuming A Mortgage

2011-05-04T16:02:00.001-07:00

Many clients inquire about properties that are listed as having an "assumable mortgage"; if only it was that easy to take over a mortgage!

The concept of assuming a mortgage payment seems so appealing yet it’s not what it seems. There is a lot more to ‘assumable’ than that.

In a nutshell, an assumable mortgage is a mortgage where a buyer can take over the amount and terms and begin making mortgage payments based on the terms that have been agreed upon.

But nowadays, lenders require the assumer of a mortgage to qualify for the amount and interest rate of the mortgage, so you will still require a down payment (lenders will not finance 100% of the value of an assumable property) and a good credit score.

This can be accomplished by having the appropriate amount of equity built in to the property so that there is the equivalent of a down payment in the property or, you must still provide a down payment out of your own pocket.

With an assumable, you have to qualify for the original mortgage the property was purchased with, so it is not as simple as just taking it over.

Therefore, if you wanted to buy a particular property and you are satisfied with the interest rate and purchase price, your real estate agent would arrange for you to talk to a representative of the lender who holds the mortgage (Wells Fargo, Citibank, etc) about assuming the mortgage. They will take an application from you and assess your ability to carry that particular mortgage, and determine if you will require an additional down payment (by assessing the purchase price in relation to the market value of the home).

If interest rates have risen since the original mortgage was taken out by the seller, the buyer is the party that benefits the most from an assumable mortgage. However, most recently, the situation can be reverse: interest rates are lower than what they were when mortgages of a longer term were taken out.

So, in many cases, when you take in to consideration the pertinent factors when assessing a mortgage (principal, rate, and down payment required) there may not be any benefit for you to assume older mortgages when you consider the rate that your own bank or mortgage broker can obtain for you.

So with an assumable mortgage, you take over the term, current interest rate and payments from the seller, and the seller is liable to the lender for any default by you.

These are just a few of the factors to consider with an assumable mortgage.

What If You Could Buy A Home 50K Under Market

2011-05-03T16:35:00.000-07:00

With the unfortunate circumstances of foreclosures, home prices took a nosedive and left lenders with a huge inventory of homes. Some in pristine condition and many that became an eyesore, just waiting for anyone to take it off their hands. Those eyesores are available for sale at bottom dollar pricing.

You’re probably familiar with many of the acronyms including REO’s that banks are holding title to. These are homes that were foreclosed and were not sold at auction. These REOs are sitting there on the banks books waiting for the right owner at an unbelievable price.

Many of us have been looking at homes without real vision and seeing the potential the home may have. You can walk through a home where the appliances have been removed and copper pipes pulled out or perhaps even the walls have holes; but don’t turn and run just yet because a 203K Rehab loan could repair and upgrade all of that.

First of all, don’t let all the guidelines and paperwork scare you because there are some steps to take in order to secure a 203K Rehab loan; but they’re simple steps;

• Identify the property you’re interested in

• List specifically what must be done to the property and what you "want" to be done

• Give the items on your list an approximate estimate for the work to be done (get a contractor to provide some estimates and other general help)

• Submit the offer with your list

• After the offer is accepted contact a licensed contractor for an itemized estimate

• An FHA appraisal will be done and it will outline what absolutely must be done

• Revise and fine tune what will be done and we'll make a final FHA worksheet

• One closing and we are done!

The 203K Rehab loan is designed to allow homebuyers to purchase and rehab a home with a small down payment on a house and use their leverage to roll costs into the loan and still personalize with repairs and upgrades right from the start. It’s like starting off with a shell and customizing it. This rehab loan is definitely not for the homebuyer looking to move-in quickly, since any construction takes time to plan and complete. This is for the homebuyer that has a long-range plan.

Think of how much money is saved when you can get a deal on a home and then customize it to your liking.

And just because a home is labeled as a foreclosure doesn’t mean it’s gutted from the inside out. Many of these homes are in perfectly good shape with minor needs for repair. Here is a solution for finding your dream home and improving upon what you have.

Mortgage Approval After Bankruptcy

2011-04-28T16:19:00.001-07:00

Everyone assumes bankruptcy automatically means you bid farewell to credit and that’s not necessarily true; you can get approved for a mortgage after going through a bankruptcy but there will be conditions you need to meet.

First of all, anyone that files for bankruptcy needs to have a plan to restore their credit. This is a tool for you to restart your financial future yet many people let this opportunity slip away.

Yes, bankruptcy is damaging to your credit however, lenders look at this as a clean slate and you are really in a better position than most individuals because you can build up a new reputation. Keep in mind, there are many reasons people file for bankruptcy and creditors take this into consideration.

Bankruptcy often reduces credit scores by 100 to 150 points and if you have filed a Chapter 7, it will normally takes2 or 3 years to attain scores required to qualify for a new mortgage.
If you have filed a Chapter 13, you will not qualify for a mortgage until you fulfill all your scheduled payments; the newest bankruptcy laws prohibit debtors from obtaining credit during the payment phase, unless you can get court approval.
Individuals who file mortgage bankruptcy to stop foreclosure and later lose their property might not qualify for another home loan for at least 5 years. Foreclosed homeowners should consider investigating alternative finance options such as if a seller will carry or lease purchase option agreements.

There are government lending programs such as FHA that have more lenient credit guidelines to help you qualify for a mortgage, even with a prior bankruptcy. If you have a steady job with solid income and have been working to pay off debts lenders will definitely look at the “new you” as a reliable potential homeowner.

You can also use your current home, as well as other assets to use as equity to convince a lender that you should qualify; and always remember, the less money you want to borrow, the less risk you are to a lender so choose a moderately priced home to start with.

The real lesson here is that bankruptcy should not be taken lightly; you must be absolutely sure that it is the best option for you because your credit will take a few dings and you will have to work to show that you are once again credit worthy.

Scrutinize The Neighborhood Before You Buy

2011-04-27T16:41:00.000-07:00

It used to be a heck of a lot easier to tell a good neighborhood from a bad one. All you had to do was drive through the neighborhood, perform a quick check on nearby schools, do a crime check and keep an eye out for abandoned properties. If the schools were good and the homes well-kept, the neighborhood was a keeper.

But today, determining whether a neighborhood is good and will hold its value isn't so easy. The suburbs were once the Mecca of homebuyers with kids the white fence and a dog yet now the burbs outrank urban city centers in terms of poverty.

So how can you tell if you're buying into a neighborhood likely to hold its value until you're ready to sell? There are a few ways to properly scrutinize a neighborhood before you buy.

1.Most people have a clear idea of their dream home but they give little thought to the neighborhood. Start by defining what your dream neighborhood is like. Is it walkable? Can you walk to the downtown area? Do you want to live in a historic neighborhood? Do you want to be in an exciting college town or in a more sedate, family-oriented environment?

2.With property taxes being lowered many towns and cities have to cut back on the public services they offer. Parks, libraries and town police often get the ax first. Drive through a potential neighborhood, and then through the town, and look carefully for clues that the city is having financial trouble. Are the streets clean? Are the parks in good condition? Is the grass cut? Check the library as well. Have they had to cut their hours?

3.If you have kids, then the quality of local schools is a huge issue. Even if you don't have children local schools still matter simply because when it comes time to sell, your buyers may have kids. Research the local schools and think about attending a PTA meeting to talk with parents. You can get an ear full of the neighborhood pro’s and con’s from local parents.

4.Examine the clues right under your nose; do you see a barrage of For Sale signs? Are the surrounding businesses shutting down? These are signs that things might be on the decline.

5.How are the neighbors keeping up their homes? Take a stroll through the neighborhood; look at all the details like sidewalks, grass and trees. How’s the upkeep? Are decks being maintained; what about window coverings? All of these signs tell the story of the neighborhood and how people feel about where they live.

Small details are a reflection of the people living in our communities. When you’re about to invest in one of the most important purchases in your lifetime, you should scrutinize where you will be happy; why wait until after you move in to notice all the things you don’t like about the neighborhood?

HAMP Application Rejections Become More Transparent

2011-04-26T16:55:00.001-07:00

The success rates for the HAMP modifications have been extremely low and the program was best labeled a failure. While there are a few reasons for this disappointment Many servicers have improperly denied homeowners HAMP eligible loan modifications due to improper evaluation procedures, poorly trained employees or due to faulty data; but homeowners who’ve been rejected will now be able to question the validity of these denials.

A new HAMP appeals process will help borrowers understand why they were rejected for the program. This new test falls under the Dodd Frank Wall Street Reform and Consumer Protection Act. Here are some highlights to this new process;

• The HAMP appeals process gives you an opportunity to see what information was used to determine that you were ineligible for the HAMP program.

• Servicers must reveal up to 33 test factors on some mortgages.

• Borrowers have 30 days to dispute the accuracy of the disclosed data

As of Feb 1st, if you are not approved for a trial HAMP modification plan or a permanent HAMP loan modification, your servicer (this does not include Freddie Mac or Fannie Mae backed mortgages) is required to send you a Non-Approval Notice which explains the reason you were not approved and provide you with an opportunity to submit evidence that the information used in the evaluation was inaccurate.

These notices are required to disclose up to 33 key data factors as to why a homeowner has been rejected for the HAMP program. And once the appeal process has been started, the lender is required to provide reasons and justifications within very specific time frames.

Under the Dodd Frank Wall Street Reform and Consumer Protection Act, servicers are also required to supply guidance to you such as how to communicate with the servicer if you wish to dispute the reasons for the non-approval determination and where you can send your evidence.

But is the transparency just more hype because it looks more like a blessing in disguise. Won’t this add a heavy load to servicers who are already under water with mounds of paperwork? Borrowers cannot test the HAMP model's accuracy, and they will never be able to test their servicers' assumptions. Although borrowers now have an appeals process, the last word still lies with the servicer; there is no third party to settle any dispute.

Soon homeowners’ will be able to evaluate whether their situation might pass the HAMP test; the US Treasury is setting up a website for consumers to run their own practice HAMP tests.

This should give you a better outlook as to where you stand and how the servicer might view your paperwork.

Focus On The Listing Price

2011-04-25T17:23:00.000-07:00

When it comes to buying a home, most potential buyers will use the listing price when determining which homes to look at. Even though the price may be too high and most buyers probably won’t give it a second thought, keep in mind, there are always negotiations. No price is set in stone so if you find your dream home you should certainly try to bargain for a better price.

Sellers

If you set the correct price, you’ll notice a much faster sale. Many homeowners will argue this point with their realtor; you placed so much time and effort in your home and you have a set number in mind. However, setting the right listing price will attract more potential buyers to your property and you’ll also notice an increase in response from realtors, and receive more calls from prospects. The listing price is very important - and it can ultimately determine whether or not you sell your property or it remains on the market.

When you put your home up for sale, most activity will happen within the first few weeks. If you price your home right, you’ll notice immediate interest. There are always buyers looking for homes in a specific price range and waiting for new homes to be listed or homes to be reduced in price. Potential buyers could miss seeing your home completely if the price is too high.

Buyers

The list price greatly determines the search criteria for finding your home. Anticipating that many homes in today's market are overpriced with respect to their Fair Market Value, some real estate agents may extend the upper limit of the search by $10,000 or so to provide a better selection of homes for the buyer.

To determine the listing price of your home, you may consider having it appraised before you put it on the market. This way, you’ll know the full value of your home. You can sell it for market value or go a little under, although you should never attempt to go way over the value. In doing so, you’ll miss out on a lot of potential buyers.

The home market is very competitive these days, which is why you want your home to draw as much interest as possible. Keep in mind that realtors really have no control at all over the real estate market, only the plan behind marketing.

Realtors don’t determine the asking price - the market does.

If you follow your realtors’ advice you’ll set the listing price in the right area and have no problems selling your property.

Find The Note

2011-04-20T14:57:00.000-07:00

Roughly one of every three mortgages has been found to have a considerable legal discrepancy and this is most notably because a substantial amount of loans are bought, sold and assigned to a third-party.

Most homeowners look to the lender as the owner of the mortgage loan – Wrong!

Individual mortgages are often bundled into pools of similar mortgages and sold on the market as a mortgage backed security (MBS) or investment. After your mortgage loan closes and paperwork processed, your lender probably outsourced the job of managing your loan to another third party company called a SERVICER.

The nation’s four largest banks – JP Morgan Chase, Wells Fargo, Bank of America, and Citibank – are the largest mortgage servicers.

Mortgage servicers have a long list of administrative responsibilities, from collecting monthly payments, maintaining detailed accounting records, paying taxes and insurance premiums, and distributing payments to the investors. For this work, they receive a servicing fee.

The problem with many servicers is that they often fail to maintain proper records. And the fouled-up paperwork and other lack of legal compliance have resulted in a much higher rate of negotiated mortgage modifications.

Each time millions of mortgages are sold the paperwork should exchange hands to the new investors and new servicers; yet this rarely happens. This makes it all the more difficult to decipher the true holder of the mortgage.

So what does this mean for the Homeowner?

When lenders wish to foreclose on a homeowner, the law typically requires them to produce original, signed documents including the mortgage and loan note. While the mortgage documentation is on file at the local courthouse, the note is often lost or misplaced, particularly if the mortgage has been sold. The “missing note” has become a tool for those homeowners who face foreclosure.

Keep in mind, there are varying state laws so while a few states require foreclosure proceedings to go through a judge, there are states that leave it up to the homeowner to file motions to fight on their own. You must be knowledgeable in what to do, what to ask for and what to argue or you can count on running up legal bills for an attorney’s help. And if you’re losing your home, you should get the help of an attorney.

Chances are the lender or servicer cannot put their hands on that original note and any legal proceedings will have to be delayed until they do.

Be proactive; learn everything there is to know about where your money is going and whom are the responsible parties when it comes to your home. Never wait until the last minute to learn how to protect your home and your interests.

Factors To Help Sell Your Home Quicker

2011-04-19T15:32:00.000-07:00

The ideal home means different things to different people; but the most appealing home always will possess a clear and clean sense of style. Yet many of us allow our personal style to get in the way and that can interfere with selling your home. A few fixes can help you sell your home quicker.

Clutter Control:

Every room of the house should be organized so that potential buyers can easily walk through. It can be a headache and an extra burden but think about placing items in storage, especially out-of-season items.

Take a walk around your kitchen and ask yourself, what do you really need? Start by storing bulky appliances that you rarely use. They quickly take up lots of counter space that you want to render useful to buyers.

The bedroom should reveal an oasis however it often becomes a repository for heaps of clothing and portable tech gadgets. Everything has a place so if it doesn’t fit or it’s in the wrong room, move it or lose it.

What’s in a Room:

Did you know the number two reason people select a particular house is because of kitchen space? Eight out of ten home buyers who walk through a house remember what the kitchen looks like and what its benefits verses faults were. This leads to the question -- what is the most significant part of the kitchen? Choices include floors, appliances, lighting, but the part that stands out the most are the kitchen cabinets. It is the most dominant aspect of the kitchen, and the easiest way to create a "wow" factor. Everyone remembers the kitchen cabinets; it could be because of the color or stain, the design of the cabinet, or mostly because of the clean feel that a new kitchen cabinet provides.

Does Your Front Door say “Welcome”:

And finally, Curb Appeal really sells the house. Exterior features for new or existing homes will make your house say "welcome" when you return after work or when guests come to call.

Think of your home’s facade, lighting, landscaping, and exterior elevation to name a few; these items can easily customize a home when everyone else on the block seems a bit standard.

Give your home a different feel and stand out from the crowd.

Lenders' Two-Track Forclosure Process Under Fire

2011-04-15T14:36:00.001-07:00

Mortgage lenders call it "dual tracking," but for homeowners struggling to avoid foreclosure, it might go by another name: the double-cross.

Dual tracking refers to a common bank tactic. When a borrower in default seeks a loan modification, the institution often continues to pursue foreclosure at the same time.

Lenders contend that dual tracking simply protects their investment if the homeowner is unable to qualify for new loan terms. Mortgage servicers can lose money if they don't foreclose in a timely manner, and repossessions often are complicated and lengthy.

Regulators and consumer advocates say the practice lulls some homeowners into thinking they are no longer at risk of having their homes taken away. (VERY, VERY TRUE!!!)

Federal banking regulators issued settlements with major banks and home-loan servicers that would, among the many provisions, stop foreclosure once a homeowner is approved for a temporary mortgage modification. In ordering the changes, the regulators said they found "critical weaknesses" in the way the lenders handled foreclosures.

Some still feel the regulators didn't go far enough especially in regards to the subject of "dual tracking". A separate coalition of state attorneys general and federal agencies including the departments of Justice, Treasury and Housing and the Federal Trade Commission is still negotiating details of a foreclosure-system overhaul that could include a near-ban of the practice.

The demands by the attorneys general would prohibit lenders from starting the foreclosure process on a home if a borrower has submitted an application for a loan modification. The terms require that mortgage servicers provide homeowners a written list of any missing documentation from their modification package within 10 days of submission. Mortgage servicers would also be required to immediately notify a homeowner in writing of any new sale date if the foreclosure clock already begun when a borrower reaches out for a modification. If the loan modification is denied, then a mortgage servicer would be required to submit an affidavit in court summarizing all of the efforts to work with a borrower and the basis for denying a modification. In states such as California, where a court order isn't required to foreclose on a property, the mortgage servicer would be required to send that sworn statement directly to the borrower.

The Obama administration in effect banned dual tracking in most cases last summer under its signature foreclosure relief initiative program.

Most major banks service loans for investors who have set up specific rules governing how and when they must proceed with a foreclosure. If a bank doesn't follow those guidelines, if can lose money.

Furthermore, depending on the jurisdiction, certain states can set up strict timelines for when certain steps in a foreclosure must be taken. If those deadlines aren't met, duplicate costs can result.

Quick Recap:

What: Dual tracking is a common practice in which a lender continues to pursue foreclosure even though the homeowner is applying for a mortgage modification.

Why: Lenders say the practice protects their investment if a homeowner doesn't qualify for new loan terms. Consumer advocates say it discourages homeowners and leads to unintended foreclosures.

Limits: A coalition of federal regulators has ordered major banks and mortgage servicers to halt foreclosure when homeowners qualify for loan modifications.

Ban: A coalition led by state attorneys general has proposed prohibiting lenders from starting the foreclosure process if a borrower has applied for a loan modification.

Note: The full article written by Alejandro Lazo of the LA Times

Mortgage Rule Change Might Rule Out Buyers

2011-04-12T15:16:00.001-07:00

You may have seen reports that the federal government is proposing new mortgage finance rules under which only home purchasers who can afford a minimum 20% down payment on a conventional loan would get a shot at the best interest rates and terms. That's deeply sobering news for large numbers of prospective first-time and moderate-income buyers. But some of the other requirements that federal agencies and the Obama administration are proposing in the same plan could prove just as troublesome:

Strict mandatory debt-to-income limits. Under the proposal, to get the best mortgage rages, you would need to spend no more than 28% of your gross monthly income on housing-related expenses, and you couldn't have total monthly household debt that exceeds 36% of your income. There would be no flexibility, unlike in today's marketplace, in which Fannie Mae and Freddie Mac consider debt-to-income ratios along with other factors.

To refinance your existing mortgage and replace it with one carrying the best interest rate, you'd need no less than a 25% equity stake in you house to qualify. If you sought to take any additional cash out through a refi, you would need 30% equity. Today's typical requirements for conventional refi are nowhere near as strict.

Pristine credit standards. For example, If you were 60 days late on any credit account during the previous 24 months, you would be ineligible for a mortgage at the best terms.

These are all core features of what may be the most sweeping and controversial changes in decades for the housing and mortgage markets. The "qualified residential mortgage" proposals were released in march by banking, securities and housing regulators and the Dept of Housing and Urban Development. The agencies were required by the 2010 financial reform law to come up with new standards for low-risk conventional mortgages.

Under the law, loans that do not meet the strict QRM tests will be pushed into a less-favored, higher cost category: Banks and Wall Street securitizers would need to set aside 5% of loan balances to cover possible losses from defaults. This capital cost inevitably would be passed on to consumers.

Mortgage industry estimates of the interest rate differential between ultra-safe, QRM-qualifying loans and all others range from three quarters of a percentage point to 3 percentage points. In today's market, this would mean that mortgages that meet the federal agencies' stringent new standards might go for 5%. But all others - the vast majority of today's conventional loans - could cost from just under 6% to 7% and higher.

You can muster only a 10% down payment? Tough! Can't fit into the tight confines of the debt-to-income ratio rule?Payup!

The proposals are out for public comment through June 10 and probably won't be put into effect until mid-2012. The agencies' proposal exempts mortgages sold to Fannie and Freddie from the rule as long as both remain under federal conservatorship. FHA and VA mortgages would not be subject to QRM either.

Builders, consumer groups, banks and others are readying campaigns to persuade the regulators and Obama administration to back off some provisions. Michael Calhoun, president of the Center for Responsible Lending, says the proposal would make it much tougher for modest-income and minority consumers to afford a first home.

Jerry Howard, chief executive of the National Assn. of Home Builders, says the proposals have strayed far beyond Congress' intent, and they threaten to wreck any recovery in housing and force millions of Americans to rent rather than to own.

Note: This article originally published by Kenneth R Harney in the LA Times

Credit Scores Plunge In Short Sale

2011-04-11T13:36:00.000-07:00

Do I need to stop making payments for my bank to consider a short sale?

Lenders have different policies on short sales, which is when they agree to let a borrower sell a home for less than what is owed on the mortgage. But expect your credit scores to take a major hit, no matter whether you stop payments first.

A short sale typically will have the same effect on your credit scores a s foreclosure, according to Fair Isaac Corp., the company that created the leading credit score blows, from a missed mortgage payment to a foreclosure or a short sale with a deficiency balance (the difference between the home sale proceed and what you owe). some with FICO scores in the 780 range would lose 90 to 110 points with single skipped payment. A short sale or foreclosure would trim 140 to 160 points from that 780 score. (You can see the charts at Fair Isaac's Banking Analytics Blog: http://bankinganalyticsblog.fico.com/2011/03/research-looks-at-how-mortgage-delinquencies-affect-scores.html ). Your score will plummet that far whether or not you stop making payments.

You might be able to reduce the damage from a short sale if you can persuade the lender to report the deficiency balance to the credit bureaus. Short sales without a reported deficiency balance would trim 105 to 125 points from a 780 score, according to Fair Isaac. But lenders that have been cajoled into a short sale often aren't in the mood to grant you additional favors.

There are some advantages to a short sale over a foreclosure. One is that you can start the long road to credit recovery sooner because foreclosures usually take much longer than short sales. Then other good news: You can qualify for another mortgage faster. Lender typically will consider you for a home loan 2 years after a short sale, versus a wait of up to 7 years if you let the lender foreclose.

New Law To Require Home Carbon Monoxide Detectors

2011-04-11T13:24:00.001-07:00

California homeowners will be required to install carbon monoxide detectors starting in July 2011 under a bill signed Friday by Gov. Arnold Schwarzenegger that is aimed at preventing deaths and injuries caused by poisoning from the odorless, colorless gas.

Up to 40 California residents die each year from carbon monoxide poisoning, according to state Sen. Alan Lowenthal (D-Long Beach), whose legislation was signed by the gorvenor.

"SB 183 will help put an end to the senseless deaths and injuries Californians suffer due to accidental carbon monoxide poisoning every year," said Kevin Nida, president of the California State Firefighters' Assn.

The California Air Resources Board says an average of 30 to 40 "avoidable deaths" occur in California each year because of unintentional carbon monoxide poisoning. Lowenthal said there also are hundreds of "avoidable" emergency room visits and hospitalizations in the state each year.

The bill requires that alarm devices, which can cost less the $30, to be installed in existing single-family homes that have a fossil-fuel burning appliance, fireplace or attached garage, starting in mid-2011. All other residential units will have to have the detectors in place by Jan. 1, 2013.

In addition to the firefighters association, the legislation also was supported by the California Alarm Assn and Home Depot.

Choosing the Casual Mr. Fix-it over the Expert

2011-04-08T16:53:00.000-07:00

1 in 6 homeowners will hire an unlicensed contractor, with two-thirds believing it will save them money. Believe me, a penny saved is not always a penny earned.

The tragedy of hiring a casual laborer is that it can cost homeowners hundreds of times the money they saved, and worse, it can jeopardize their safety and nullify a warranty.

Many of these workers might not have current knowledge of building codes and many times the unlicensed contractor has not updated his or her education to know the latest requirements for your particular needs.

Handymen are hired to do odd jobs around the house that homeowners don't have the patience, skills or time to do. From fixing a leaky faucet to hanging an office shelf, handymen provide an affordable alternative for homeowners who don't want to hire an expensive specialized tradesmen or contractor to do the work.

Handymen are also commonly called in to tackle do-it-yourself projects, like assembling furniture or switching out light fixtures that seem too overwhelming for the homeowner to do.

By outsourcing small home improvement projects you can save a significant amount of time and energy however using a handyman that is not licensed or insured can put you at risk. If an uninsured handyman were to get hurt on your property while working, you or your homeowner’s insurance policy would be responsible for damages. And using an unlicensed handyman can makes things challenging to get fixed if something goes wrong. Unlike a licensed company you would be able to file a claim with their insurance company or through your state.

When homeowners look to save a buck, they often don't realize the project they thought was easy requires expertise; we’ve all heard the horrific stories for example a homeowner who attempted to do his own wiring rather than hire a licensed electrician.

• The homeowner made a series of mistakes, including connecting aluminum and copper wires of different gauges directly together without using a junction box. The wiring overheated and sparked a fire, and a state inspector ordered that the entire house be rewired. It cost nearly $20,000 to correct.

• A homeowner hired a handyman to build a carport onto his house. The handyman used materials that were too heavy and attached the carport only to the home's siding, not into the studs. The carport collapsed and crushed the homeowner's expensive car.

Your home is your castle! Homeowners should always hire a licensed and bonded contractor whenever the work involves a permit, codes, or has other community regulatory restrictions.
And you can always contact your state’s labor department to check on a contractor’s license and surety bond information.

Poppy Trail Landslide Repair Update

2011-04-07T16:07:00.000-07:00

A major milestone has been reached in the Poppy Trail landslide project with selection of Earth Construction and Mining (ECM) as contractor for the remediation work. Commencement of this construction phase is one of several elements of a settlement agreement approved in April 2010 for remediation of the landslide.

ECM will begin onsite work early next month, in April. The project will be completed by the end of 2011 inclusive of improvements to Poppy Trail Road and restoration of two equestrian trails that serve the community.

The property owner, California Joint Powers Insurance Authourity (CJPIA), contiues to be in close communication with City and the Community Association and welcomes questions. For more information please contact Andy Lazzaretto, CJPIA Project Manager, by phone (818-438-4995) or by email (andy@aclazz.com)

California Foreclosure Relief Opened To More Homeowners

2011-04-06T17:22:00.001-07:00

California homeowners who refinanced their properties for cash or took out home equity lines of credit will now be allowed to participate in parts of the state's $2 billion foreclosure relief initiative. Many peopole tapped their rising equity during the boom years, using their homes as ATM's to fuel spending. The California Housing Finance Agency had initially excluded people who used their home equity in such a manner from participating in its "Keep Your Home" initiative, which launched this year with federal funds reserved for the 2008 rescue of the financial system. But California's high unemployment rate caused the agency to reconsider its policy, agency Executive Director Steven Spears said in a statement. "In the two short months since the launch of these programs, we have collected information that has helped us identify areas of improvement to make the programs more effective, particularly given the continued high level of unemployment in California," he said. The California Housing Finance Agency will now allow people who refinanced or took out home equity lines of credit to participate in three of its four Keep Your Home programs. This includes the agency's biggest inititative, which allocates $875 million as temporary financial help to people who have seen their paychecks cut or have lost their jobs, providing as much as $3,000 a month for six months to cover home payments and associated costs. It also includes a plan that would give homeowners as much as $15,000 to help them get current on their mortgages. The third program provides moving assistance for people wh0 can't afford to remain in their homes. These same programs also are being expanded to include mortgages that were originated after Jan. 1, 2009, the agency said. Homeowners who previously applied to the program and were disqualified for that reason can reapply. Those who refinanced or took out a home equity loan will not be allowed to participate in the initiative's principal-reduction effort, its second-biggest and most controversial program. About $790 million is slated for that program, which would write down the value of an estimated 25,135 "underwater" mortgages, those in which the amount owed is more than what the property would bring in a sale.

How Eco-Fabulous Can Be Eco-Nomical

2011-04-05T17:10:00.000-07:00

Becoming eco friendly is the newest favorite pastime but while everyone has their own reasons for “going green” the underlying theme is green could be your wallet’s ally.

Everything from conserving water and energy to other essential environmentally conscious choices can put more money back in your pocket and homebuyers are considering these options when purchasing a home.

How much money could you be saving?

• Alternative powered homes like solar, wind or geo-thermal are easier to locate and much more affordable today. The initial costs of these systems can be high but when seeking a new home to buy consider streamlining your choices to include homes with alternative generated energy. A top energy saving item is the Owl Energy Monitor; this device shows you how much energy you use in your home and how much its costing you. Take for instance the solar energy systems. Many are portable systems that are utilized in high traffic areas of the home such as the family room. You could cut your energy usage in that room up to 40%. There are many other items that are surprisingly simple to install and again while the initial costs are quite high, looking for a home that is already comprised of these items can save you a bundle. Less money towards the utilities and more disposable income for you wallet.

• Indoor air quality can make a big impact on your medical expenses. Studies show that asthmatics and allergy sufferers have fewer to no breathing problems when using eco friendly materials like green flooring and low VOC paint materials. You can rid your home of most dust mites, allergens and sometimes mold just by disposing of the carpet and installing hard wood flooring. While searching for your new home you can look for greener components that will cost you less for maintenance and help keep your family healthy. A healthier home life means less money spent on medicines, doctor visits and absences from work.

• Traditional appliances have been outsourced with newer energy efficient models. Water heaters can account for 15% of your water bill and if more than 10 years old it will only work at 50% of its capacity. Toilets and shower heads, faucets and other energy efficient appliances that conserve water can be advantageous to a new home owner. While utility bills continue to increase everyone should look for ways to safeguard their money.

New home buyers can realize the positive effects of buying green with a little pre-planning. Looking for ways to save money before selecting your new home is a valid safeguard for future expenses. By seeking out those homes that already have green components installed, you’ll save a tremendous amount of time and money for years to come. And while many people believe going green is just too expensive and time-intensive the way to get around those concerns are by starting out small. Look for those items that will make the deal and save you lots of money in the long run.

Buying a Home with Great Resale Value

2011-03-31T16:55:00.001-07:00

Whether you want to purchase a home to live in for several years or to resell quickly, location will certainly play a role in its resale value. Chances are that you may not live in the same home your entire life, so location and resale value may be important considerations when purchasing a home.

The most important step in finding a home with resale value is choosing the right neighborhood. One of the first things you may want to consider when researching a neighborhood is the economic stability of the neighborhood.

A desirable area will:

Possess a good mixture of residential and commercial districts
Have jobs for future residents
Demonstrate consistent economic growth
Be supported by a strong local government

Another important factor to consider as you try to find the best neighborhoods is the quality of the local school system. Even if you don't have children, you should try to research the closest schools before purchasing a home. This provides a good criterion to factor in of the attitude of the neighborhood and the type of people you’ll be surrounded by. High scores can mean parents are fully invested in their local school system and their children and this translates into how they feel about their homes.

By placing a call to the local school district, you may be able to find out what type of funding area students receive, how well students have performed on standardized tests and whether or not the district will be opening or closing any schools in the foreseeable future. Regardless of where the home is located, the quality of the nearest schools will almost certainly be an important factor for potential buyers when you try to sell the home.

Beyond the schools and local government, there are a number of factors you may want to consider regarding the home's immediate surroundings. For instance, you may want to look for property in neighborhoods where most of the homes are similar in size and style. Additionally, the ideal location for a home is nearest the center, away from busy streets and bordering only other homes, as opposed to businesses, apartment complexes or schools.

Finally, you may want to think about the traffic patterns that surround the neighborhood and whether the street is used as a shortcut between two busy roads.

Though you may be looking for properties that lie in the middle of desirable neighborhoods, you should also consider how convenient the location is for a potential homeowner. The best homes will be located near all the essential businesses and have “walkability” - such as grocery stores, dry cleaners and banks.

In short, the ideal neighborhood will represent the best of worlds, offering residents both privacy and convenience.

Screening for Quality Tenants to Rent your Property

2011-03-30T17:21:00.001-07:00

One of the most stressful elements of managing your investment property is dealing with difficult tenants. Between killing your cash flow with late rental payments, and causing financial nightmares via the damages you continuously have to repair (and let’s not forget the small fortune you spend on evicting bad tenants); why do we go through all the trouble?

What most people don't realize is that the vast majority of tenant-related problems can be eliminated by simply avoiding bad tenants altogether with thorough screening. Here are a few tips to improve your screening process.

The most essential piece of the screening process is the application. Provide a thorough application to prospective tenants that include all the pertinent information you would like to know, within the legal limits of course. Make sure that the application is completely filled out, and that you have a copy of the applicant's valid driver's license and a second picture ID and check that the name and information on the ID matches that on the application.

Next, you'll have to investigate the applicant's financials. Request the past three months' pay stubs to be sure they can afford your rent. Call the applicant's employer to verify that they work there, that there are no problems related to the applicant, and that there's no reason to believe the applicant will be unemployed in the near future. Also, request their three most recent bank statements.

While this is not always required, the applicant should be willing to provide them; if not, then you have a pretty good reason to be wary. It is also important to check the applicant's credit and criminal history. A credit score above 600 is usually considered reasonable for a tenant, and you want to steer clear of anyone with a history of evictions or criminal behavior.

On the application, make sure you include a space for the applicant to provide information about previous rental engagements including landlord contact information and rental amount.

This is important so that you can call the previous landlords to inquire about the tenant. Use caution when dealing with contacts, as many applicants use their friends to pose as landlords and vouch for them. One good method of weeding these applicants out is to ask the "landlord" about the rent, quoting a price other than that provided by the applicant. If the person you are speaking to doesn't correct you, then they were probably not the landlord. Additionally, inquire as to whether or not the tenants were able to get their security deposit back or was it held because of damage. This will give you a good idea about how the prospective will treat your rental.

You should also have any and all parties residing in the rental complete an application.

If you adhere to these methods responsibly, selecting quality tenants for your properties should not be a problem.

You Still Need a Realtor to Buy Direct from the Builder

2011-03-28T16:23:00.001-07:00

It always seems simple to walk into a model home and deal directly with the builder but that’s not the best idea. More people are taken advantage of when alone than with a real estate agent. All the paperwork you’re required to sign, disclosures, clauses and most important releases.

When you sign a release you practically give up your rights; it could mean forfeiting your right to keep your deposit or setting the settlement date in stone for you but a contingency for the builder.

Every page you initial could be detrimental in the end if you are not represented professionally. Sure, there are laws and guidelines that say you are protected from predatory requirements – RESPA Laws – however if you don’t know how to apply those guidelines to your transaction how do you know if you’re being taken for thousands of dollars?

Many homebuilders offer incentives as a way to entice you to purchase their home however those incentives often mean you must use their in-house lenders and their title escrow companies; this is far from the truth because you can use whatever lender or title escrow company you choose and in the end, the builder cannot tie the incentives to a specific lender.

Are your discounts really discounts or are they embedded somewhere in your sales package? Often a builder will show you all the discounts and incentives they’re providing to you but the loan package is packed with excessive and useless fees that make up for all those discounts they’re giving you. This is why you need a realtor to accompany you for any real estate transaction. It may seem like a simple decision to walk into a model home and deal with the salesperson but it could cost you thousands of dollars.

That salesperson works solely for the builder and I bet you’ll sign an acknowledgement of this statement. They must disclose certain items to you but again they work solely for the builder and without professional representation you are on your own to learn the ropes.

For any real estate transaction take advantage of all the knowledge a real estate agent or broker has to offer. You’ll avoid many of the traps home builders have waiting for you.

Do I Really Need a Realtor

2011-03-16T17:00:00.000-07:00

Everyone is looking for ways to save money during this recession including DIY everything. And although times look bleak there are many buyers out there ready to purchase your home. Question is can you go it alone or handle everything yourself?

Many homeowners believe they can go it alone and find themselves looking for a professional to save them.

With the advice of a real estate agent you’ll have a much better chance of selling quickly; recession or not.

But there are several crucial reasons for using a real estate agent.

First off, a real estate agent is trained in keeping an eye on how the market is moving and responding to different circumstances. This will allow them to tell you the important information as it develops. If you were selling your property by yourself you would be on your own as far as figuring out what a recession is doing to the real estate market including competition in your own backyard and sales and trends.

Second and most important, a real estate agent knows all the legalities, requirements and guidelines the buyer and seller must adhere to. You have no idea how many legal forms you are responsible for. You wouldn’t want to get caught with a voided contract after laying out tons of cash because you forgot a key item, would you? How about getting stuck with a one-sided contract in favor of the buyer?

Additionally, in order to improve your odds you will want a real estate agent helping out with all marketing related tasks. For instance, your agent will be able to schedule open houses, send out flyers, add your home to multiple websites, call clients and other agents in the market, and much more. These are all marketing tasks that need to be done successfully, and during a recession it is much better to use a real estate agent.

Sure, there are many ways to save during this recession but holding back on professional services during the sale of your home is definitely not one you want to undertake.

California Foreclosure Update

2011-03-15T15:29:00.000-07:00

1. Foreclosure filings in California dropped to levels not seen since since late 2008 when governmental intervention temporary slowed the foreclosure filing process.

2. Notice of Default filings dropped 12.8 percent month-over-month and Notice of Trustee Sale filings fell 12.5 percent from the prior month.

3. The foreclosure filing percentage decreases are more moderate when adjusted on an average daily basis due to the fewer filing and trustee sale days in February with a 3.1 percent drop for Notice of Default filings and a 2.8 percent decline for Notice of Trustee Sale filings.

On a year-over-year basis foreclosure filings were down as well, with Notice of Default filings down 29.6 percent and Notice of Trustee Sale filings falling 17.0 percent from February 2010. Acivity on the courthouse steps slowed with fewer sales leading to a 24.5 percent decrease in sales Back to Bank and a 20.3 percent drop in properties purchased by Third Parties, typically investors. For the first time, Third Party investors saw a drop in the average Time to Resell a property, down 3.1 percent to 156 days.

Should You Consider Condo Living

2011-03-14T16:58:00.000-07:00

Purchasing a condo can be a great option for many buyers. Condos frequently feature desirable locations, minimal maintenance, and smaller price tags than single-family homes and home buyers today are considering a simpler lifestyle. But condo living, good or bad, can present unique challenges;

Pros

1. Amenities. In many condominium communities you'll find you have access to a clubhouse, pool, exercise facilities, concierge, or even door security. These great perks cost you nothing extra and are quite the draw for many buyers.

2. Cost. In many cases, you can find a condo in your preferred neighborhood for a cheaper price than a single family detached home. This can come in handy when parents want children to go to the best public schools in the area. They may not be able to afford the house around the corner, but they can afford the condo in a community.

3. Maintenance. Most condominiums require very little maintenance from their tenants. Yard work and the like are done and paid for through your monthly dues. Reserve funds are saved up by the condo association for larger periodic repairs, such as roof replacement and painting.

Cons

1. Monthly dues. While the condominium unit itself may come with a cheaper price tag, once you add in monthly dues or fees you could see yourself being priced out of the property. While monthly condo fees cover on-going maintenance and contributions to a reserve fund for small emergency repairs, condo associations may assess separate fees for unexpected expenses or to fund major property improvements like repaving.

2. Resale. There are fewer buyers looking for condos. Large families are generally on the hunt for a single family dwelling.

3. Limited Space in General. You may luck out and find a condo with a garage or storage units. If so, you are in the minority. If you have lots of things to store, and no extra space to put them, remember to add in a storage rental space into your monthly expenses before buying.

4. Less Privacy. You share a wall with your neighbors. You may even have neighbors above or below you. In this case, remember the noise factor.

5. Subletting. Did you know that a condo board can make it "illegal" for you to rent your unit out? Be sure to check out the rules before you buy, especially if you are considering using the property as a rental unit at some time.

Condos make ideal homes for singles and couples who lead busy lives and dont spend much time at home, but consider your lifestyleboth now and in a few yearsand make sure a condo really Is the right fit for you.

Buying Preforeclosures

2011-03-11T17:04:00.001-08:00

An often overlooked home buying strategy these days includes looking for pre-foreclosed properties. Pre-foreclosures are known as properties that have reached the final stages before they get repossessed or taken back by the lender or bank. The owner is still in complete control of the property or home, although the bank or lender will repossess soon if the owner doesn’t attempt to rectify the situation.

When buying real estate, there are several benefits to pre-foreclosures. Although there are several obvious ways to purchase a home, pre-foreclosure is a great option. Even with its benefits, many people miss out simply because they aren’t familiar with pre-foreclosures.

In most cases, the owner has no choice but to sell the house, and therefore will listen to just about any offer they receive. Due to this very reason, you can find pre foreclosures for sale at nearly 40% off market value. This is an ideal time to purchase, especially if you are looking to save a lot of money.

Along with the great pricing you receive, you’ll also have the luxury of dealing directly with the owner and the real estate agent - no third party banks involved, like with short sales and foreclosed properties.

This is a great advantage, with buyers being in total control of pre-foreclosure sales. In the event that the home owner decides to turn down your offer and cannot find another buyer, he will lose everything. Even if you offer the owner a small price, he will be able to make a little bit of money selling the home.

You can find pre-foreclosures that are up for sale pretty much the same way that you can find homes in which the bank already has control of. Ask your real estate agent or you can look in the local newspaper, or on the Internet. Once you have found a pre-foreclosure for sale, it’s up to you and the real estate agent to seal the deal and get the home of your dreams at a very affordable price.

When you compare foreclosed properties with pre-foreclosed properties, you’ll find that there is less competition involved with pre-foreclosures. Not only are pre-foreclosed homes a better option than a foreclosure but many times you can pay less than market value for the home and instantly reap the benefits of increased value.

Meet with a real estate agent and ask about pre-foreclosed properties and negotiations to get you in a home quickly.

Is It A Deal Or A Scam

2011-03-10T17:09:00.000-08:00

Many homeowners have been acting in a fit of desperation and not thoroughly checking out real estate facts, leading them into unaccommodating scams. Con artist have successfully duped homeowners time and time again from everything including Title fraud, Local and Overseas investments to Foreclosure frauds, just to name a few.

I Can Save Your Home!

There are plenty of sales pitches a scam artist rescuer will explore to get your home and money. I can save your home and your credit is a typical phrase to lure homeowners to sign over their title or get the mortgage payments sent directly to them.

In some cases, the "rescuer" will also try to collect a stiff fee before they assist the homeowner. In the worst cases, the "rescuer" may also obtain a second loan on the property, take the proceeds and leave town, or rent out the home -- forcing the current distressed resident to be evicted. And while the ownership may have been transferred to the "rescuer," the homeowner still owes the monthly mortgage payments to the bank.

And on the flip side, it's even more offensive when lenders who offer to "save" the troubled homeowner suggest refinancing their home with high fees, high interest rates and a new costly loan.
There is a simple resolution to stopping this abuse from a scam artist and that is talking to a real estate agent AND an attorney before you sign any documents.

Is that Overseas Investment too Good to be True?

Con artists utilize this real estate scam to play on your desire of getting something for very little - an easy investment. Investors are told to send investment checks, and initially they receive a small check in return, supposedly "proving" the system works. Then, their returns dwindle and no other checks are received in the mail. People tend to fall for the overseas angle because it is exotic-sounding and they think they are, in some way, taking advantage of a new discovery or resource others are not aware of. But, if you are not familiar with overseas investments or the real estate market, why take a chance on someone's word?

So what is the simple resolution to stop a con artist in their tracks before getting a hold of your money? Consult a reputable real estate agency or just call up a legal consultant. Do not use the con artists contacts use your yellow pages and call on your own!

Life after Bankruptcy and Qualifying for a Home

2011-02-24T17:08:00.000-08:00

Bankruptcy can help relieve you of your debts and stop harassing creditors from contacting you but have you thought about life after bankruptcy? Will you be able to qualify for a new home?

You can be approved for a new mortgage at a normal interest rate within 24 to 30 months after your discharge. If you can prove the bankruptcy was caused by medical reasons or a divorce you probably can be approved much sooner. But there are qualifications that you must meet to get a new mortgage and this all depends upon how you re-established yourself after the bankruptcy discharge.

Even if you dont meet all the qualifications you can still get a mortgage but it will come with a higher interest rate and a larger down payment. Lenders will be inquiring about your finances and looking to see if youve paid your bills on-time since the bankruptcy.

So How Much Credit is Enough?

If mortgaging a new home, it will take more than a bank card with a $500 limit to re-establish your credit. Begin by concentrating on the necessities and time will work miracles. Start establishing the following:

1. Bank checking and savings account
2. A secured credit card from a reputable institution
3. An auto loan

You will need at least 3 credit references since your bankruptcy.

Put Your Financial House in Order

It all starts with your money. Have you noticed that most people in dire financial straits seem to have everything? Large screen televisions, expensive appliances, fancy cars, etc? When you are discharged from bankruptcy you must cut expenses and stop throwing money away on useless things however the problem here lies with our mindset we believe everything we have is a necessity; the new wardrobe, the mini-mansion, the over-priced automobile; you may very well deserve these things but if you cant afford it you simply have to understand the obvious You Cant Afford It!

Did You Know

After your bankruptcy discharge you can re-build your credit score within 24 months up to a high 800? But this requires paying all bills on time and securing new credit responsibilities to show that youre ready.

I wish I could say that youll be automatically qualified but this all depends on what youve done since your bankruptcy and the lenders guidelines.

Things that will Kill a Mortgage Loan Application

Start anticipating a bumpy ride; I know this sounds negative but its best to be prepared and after a bankruptcy its not a walk in the park. There are twists and turns but it will prove to be well worth the hassle so never give up.

There are things that will likely kill or just delay your chances for a new mortgage;

1. Poor credit since bankruptcy
2. High debt to income ratio
3. Job instability
4. Tax liens or levies against your paycheck
5. Insufficient down payment

Reality hurts sometimes but when youve been given a second chance you should know you have to prove yourself all over again. The most important thing here is to know that you must take a hard look at how youre living and the work you must put into re-establishing your credit. This will improve your chances not only for a mortgage but living encumbered without the benefits of good credit.

New Homebuyers Save Bigger with a 15Yr Mortgage

2011-02-17T17:09:00.000-08:00

Did you know more homebuyers are choosing a 15-year mortgage over a 30-year mortgage than ever before? It’s not that difficult to understand why; Not only is now the best time to buy a new home but you get to become mortgage-free sooner.

15 year mortgage loans are offered at a lower interest rate; while the 30 year mortgage interest rates are steadily climbing, the 15 year mortgage interest rates have declined.

If you would take out a $200,000 15yr mortgage loan today with an interest rate of 4.75%, your monthly mortgage loan payments would be $1043.00; compare that to today’s 15 yr interest rate and you could take out that same $200,000 mortgage loan at 4.05% with monthly payments totaling approximately $1480;

Yes, it’s a few hundred dollars more to pay off your mortgage loan sooner and that’s a hefty monthly payment, but you get to shave off 15 years to being completely mortgage free; who says you have to spend that much? You could consider a smaller home or a different part of town to lower the price of the home. The important element here is in just 15 years, you will own your home free and clear.

OK, that idea looks fabulous, right? Keep in mind, qualifying for a 15yr mortgage loan means less debt-to-income ratios with more income. Why? Well, you’re telling the lender that you can afford more for your investment.

The 15yr home mortgage loan is especially good if you’re looking at your retirement options. Many retirees are unprepared today because of many payments their still responsible for. What’s more advantageous than being mortgage free? Just think, 50 years old and your mortgage is paid off. Today’s scenario is more like 65 years old and your mortgage is paid off, so that’s 15 years advantage you have to saving over a thousand dollars per month.

Now many potential new homebuyers still sit on the fence, not sure if renting or buying a home is the best decision for them; well, hurry up with that decision because the consensus is, mortgage interest rates will gradually climb throughout the year. Today’s 4.5 to 4.75% interest rate could hit 5±% by years-end.

The 15 year mortgage won’t fit everyone’s lifestyle, but it sure is worth considering. Don’t look at it as paying a mortgage, because it’s really making an investment in your future.