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Back in the day, marketing homes for sale involved a listing on the MLS, buying ad space in newspapers, displaying signs on site, and lighting scented candles for the open house. Now, there are countless avenues to gain exposure to buyers and sellers. Through social networks (which connect groups sharing common backgrounds and interests), you can reach a larger sphere of influence and extend your reach.

You’ll save time and trips by utilizing existing technology and groups. Here are a few of the basics — and their relevant ties to the real estate market:

Broadcast your home! When shopping for a home, you can see listing photos or even a virtual tour on an agent’s website. But now, realtors post videos of actual property walk-throughs on YouTube, giving buyers a direct, first-hand look at new construction developments that aren’t yet open to the public.

Twitter enables realtors to stay connected with clients. They “Tweet” (or “post”) short updates with home sale statistics, home improvement tips, and links to local events. And if you’re a buyer, Twitter is often the first place to hear about “Just Listed” properties or developer incentives.

Facebook enables realtors to post links to properties for sale or rent and to share ideas with clients and other industry professionals.

LinkedIn is a networking tool primarily used by professionals in the corporate world. As a buyer or seller, you can read real testimonials and find trusted referrals.

Zillow, as you know, offers a comprehensive list of homes for sale, both by agent and by owner, as well as neighborhood statistics and home sale trends. Zillow’s vast directory includes real estate professionals, useful articles, and frequent updates to help you stay tuned into the market.

Blogs give companies an immediate and direct opportunity to provide readers with breaking news, industry insight, and new media. Realtors discuss new developments and market trends. Financial experts blog about legislative changes, rates, new programs and other educational topics.

By combining traditional marketing methods with social networking, you can maximize your exposure for selling your property, connecting with real estate professionals, and finding real answers.

Do you want the best terms on a new mortgage? Do you need to refinance an existing mortgage – or apply for a loan modification? In all these cases, your FICO® credit score plays a key role in helping you qualify and get better terms.

So, can you do anything to raise that FICO® score? Yes! But, remember, it takes time to raise a credit score. In spite of some popular beliefs, nothing instantly boosts your credit score. In fact, some supposedly quick fixes will actually lower it.

Let’s look at some things that could raise your FICO® score:

1. Significantly reduce any high balances on credit card accounts. This is one of the fastest ways to potentially improve your FICO® score.
2. Correct any errors on your score’s underlying credit report. This is also a fast way to help your score. Click here to get your free FICO® score and credit report.
3. Pay your bills on time. This is one of the best ways to boost your credit score. If you’ve missed payments, get current and stay current. Your score goes up the longer you pay your bills on time.
4. Keep balances as low as you can on credit cards and other “revolving debt.” Occasionally use those credit cards you rarely carry, so the creditor doesn’t consider closing them. To get a good score, it isn’t necessary to maintain a balance on credit cards. So pay off your credit card balance in full every month, if you can.
5. Don’t move your debt around — pay it off! You’ll do more for your credit score by paying off the balance you owe rather than moving it to a new card.
6. Don’t close unused credit cards just to raise your score. This doesn’t really work.
7. Don’t open lots of new credit cards just to increase your available credit. This could actually hurt your score. Being conservative with credit is generally good for your score. So a better long-term strategy is to resist opening any new credit card unless you really need it.
8. If you’re starting out, don’t open lots of new card accounts too quickly. This makes you look riskier to lenders and also lowers your average account age – not good. Taking it slow and easy is the best way to build your credit score.
9. If you’re having trouble paying bills, get in touch with your creditors or see a credit counselor. These actions won’t instantly improve your score, but as you start to manage your credit and pay on time, your score will eventually go up. Get help finding a credit counselor. 

In Part 2, I’ll cover how to rate shop for a loan without hurting your score and a few more overall tips. In the meantime, get a complete education on credit scoring.  

Mortgage foreclosure rescue scams are everywhere.  Above is a video from the FTC about these rescue scams.  The video provides real stories like the one where a couple paid a  $500 deposit, $3000 soon after and the result? “They took my money and did nothing”.   About 2/3rds the way through the video, we learn who the FTC recommends.    Go to HopeNow.com or call 888-995-HOPE or 888-995-4673 the Homeowners Hope Hotline.

A couple of interesting tidbits: Look at the Google Results for “Foreclosure Rescue”. The FTC link comes in at #3, while an apparent for profit company comes in at #1.  This FTC page doesn’t even rank for the search term “Foreclosure”.

So how about YouTube?  The FTC did post this there under FTCVideos, but it only has 2,545 views.  A for profit site in this sector has over 13,000 views.

If you want to help this video get watched, feel free to add it, to promote it, link to it, etc.

Here’s the link:

Foreclosure Rescue Video

http://www.ftc.gov/multimedia/video/credit/mortgage/hope-now.shtm

After all, a scammed consumer is not going to be a great real estate consumer in the future. Once bitten, twice shy.

Why you should consider doing everything possible to AVOID foreclosure
There’s lots of talk in the media about homeowners who are “underwater,” owing more on their mortgage than their home is now worth. Some choose to “walk away” from the home and allow the lender to foreclose. This may seem to make sense – until you realize that foreclosure has severe financial and emotional consequences that last for years. The truth is, with all the foreclosure prevention options now available, people should consider foreclosure only as a very last resort. Here’s what happens in a foreclosure:

1. You lose all the money you’ve invested in your home – the down payment, what you’ve paid back on the principal, what you’ve spent on repairs and improvements.

2. You could wind up with a tax bill. When a lender sells your home for less than what you owe on the mortgage, the difference is called “forgiven debt.” To the IRS, that’s taxable income. Congress passed a law to relieve foreclosed owners of this burden, but there are conditions. Check with a tax attorney or accountant.

3. The lender could sue you. In some states “forgiven debt” is considered a loss the lender can sue you for.

4. You could have trouble finding a new home. It can be hard to find cash for a rental deposit, which could be double the usual amount because landlords are hesitant to take tenants with Credit problems.

5. A foreclosure is reported to credit bureaus and stays in your file up to seven years. A bad credit rating means higher interest rates on loans and credit cards, making future borrowing difficult to impossible.

6. A long wait to buy again. Fannie Mae just increased the time from foreclosure completion to approval for another mortgage from four to five years. Extenuating circumstances, like a job loss, can cut this to three years, the same waiting period as FHA mortgages.

7. Employment problems. A foreclosure can hurt your chance of getting a job if it involves money. Credit checks are typically required for money-related jobs from cashiers to accountants.

8. The emotional impact of leaving a home. You usually wind up in a new neighborhood, with new schools for the children.

I hope this makes clear why the benefits of foreclosure prevention far outweigh the consequences of allowing a foreclosure to happen.

Are you working at a non-depository financial institution?

Starting at :38

We will be providing a mechanism for putting non bank financial institutions out of everybody’s misery.

[Is Secretary Geithner smiling?]

There will be death panels enacted by this congress.
But they will be for non-bank financial institutions that will not be considered too big to die.
And I say that because we have this euphemism that we are going to be resolving these institutions. It has not been my experience that when someone says that they are going to resolve something, they kill it. We are talking about dissolution, not resolution.

We are talking about making it unpleasant for the entities…

Note: The underlining emphasis and [commentary] was mine of course.

I don’t know for sure what the future will hold, but it sure seems like the winds of change are starting to blow when it comes to how mortgages are originated.

Hat Tip Rob Chrisman (by far one of the smartest mortgage people I have ever followed) for sharing the video.

I am working on a deal that was originally with another lender as a purchase 203K, the other lender ended up dropping the ball to the point the borrower switched lenders in the 11th hour to close the loan on time as a regular FHA loan.

The borrower purchased the home and has started the renovation on his own, mainly demolition (I don’t recommend doing this prior to closing on a renovation loan).  So few lenders are actually doing these renovation loans….. he ended up back with the original lender trying to do the 203K loan as a refinance. 

While going through the process he came across some of my posts and blog on Zillow.com (thanks for the referral Zillow) and reached out to me.  Because he was so far along in the process I answered a few questions and coached him a little as to how to deal with the current lender to try and expedite his loan closing.  Three weeks go by and he is no closer to closing than he was when I spoke with him originally.  So he decided to apply with me.

I was walking through the project with him when I noticed the house was going to need to be painted and also knew that the proposed budget only had about $250 in it for minor painting.  I knew by looking at it that it was going to cost more than that!  I have to admit that I don’t go out and see every house I write a renovation loan on, although I do need to have a complete understanding of the project so I can spot potential hiccups and delays and address them up front.

Having done these loans for years I have a ton of experience with them and my customers get the benefit of that experience.  It is really tough to explain all the benefits of experience.  Much of what we have learned through experience is 2nd nature and you just do things differently. 

I have a three year old daughter and I am amazed almost moment to moment as I watch her develop.  It is the things that we take for granted I find the most interesting, the way she eats, gets dressed, walks up and down the stairs, climbs over under and on whatever gets in her way, and a zillion other things.  At some point we learn what works best.  We learn that walking around the table, although it may take a little longer than going over or under (or not), may be the most efficient way to get to the other side.

When working with an experienced lender and or experienced renovation lender their experience will make your experience much less stress full!

Below are some of the things I try and walk around:

1.      Self Help – These are almost always a recipe for disaster and I really discourage anyone from attempting to do these projects as self help

2.      Streamline Renovation – 203K streamline although less expensive by about $800 in costs, I have seen too many issues arise as a result of half the funds being disbursed upfront and contractors disappearing or demanding additional payment upfront to finish. 

3.      Cutting corners – eliminating $5,000-$15,000 from a project because you are spending more than you want.  The difference in your payment is usually minimal, and to go through a renovation project and settle for less than what you want tends to do nothing but generate regrets.  If you are going to do it…do it right!

4.      Hud Consultant - Make sure you are working with a good 203K consultant.  I have been working with AM Consults in Malden MA for well over a decade and am extremely hesitant to work with any other consultant.

5.      The Loan Officer – Choose a loan officer that has the experience actually writing these loans rather than the loan officer that just has access to the program.  The loans are more expensive than a standard loan so expect to pay a slightly higher premium for the loan, but don’t get taken advantage off.  I have seen on more than one occasion an LO charge a ridiculous amount for these loans…The Mind set being if the customer is willing to pay that amount I’ll figure out how to write the loan…They may figure it out but you don’t want to over pay to be a guinea pig (sorry animal lovers).

I got an e-mail yesterday asking: What is a 203K loan?  Every once in awhile I need to remember that I sometimes use acronyms and assume everyone knows what I am talking about.  The reality is…in many cases the acronyms do more to confuse folks than to clarify.  So I am going to take a step back and explain a little about the “203K” loan.

This loan program can be used for the purchase or refinance of a property that needs work.  It allows you to borrow the funds you need to purchase and renovate the property.  These loans are not new but took a back seat to other ways of financing the cost to renovate.  With property values no longer increasing by double digits, and with equity loans being capped at 70-80% of current values (rather than 100% you could get just a few years ago), the options for financing renovations are limited.  I started a thread on Zillow asking how folks are paying for home improvements.  Inquiring minds want to know! 

In addition to the FHA 203k program similar programs are offered by Fannie Mae and Freddie Mac.

Today, the Making Home Affordable Modifications report card for the month of August was released by the Treasury Department.

The report shows that loan servicers have extended offers for 571,354 trial modifications, and 360,165 homeowners have begun the process of modification.  In July, mortgage servicers committed to modify more than half a million mortgages by November 1, 2009.  These latest numbers show that they are on their way to meeting that goal. 

Most loans are now covered by the program.  More than 45 servicers have signed up for the Home Affordable Modification Program, including the 5 largest.  Loans covered by these servicers and loans owned or guaranteed by government-sponsored enterprises account for more than 85% of loans in the country. 

Page 2 of the report shows the trial modification activity by servicer, summarized below:

While progress has been made, still only 12 percent of U.S. homeowners eligible for loan modifications have had their mortgages reworked, while 19 percent of eligible borrowers were offered trial modifications, up from 9 and 15 percent in the previous report, respectively.

The government points out that the Home Affordable Modification Program has its limits.  When home values were increasing a few years ago, there were still hundreds of thousands of foreclosures.  So even if the program is a complete success, we should still expect some foreclosures to occur, because some borrowers do not qualify for the program, while others bought homes well beyond what they could afford and are unable to make the monthly payment even on a modified loan.

Visit the government’s official website to determine your potential eligibility in the Home Affordable Modification Program, or call 1-888-995-4673 to receive direct information and assistance in applying for the program and reach a HUD-approved housing counselor.

This was the name of the presentation I was lucky enough to attend today that was presented by Doug Duncan Vice President and Chief Economist for Fannie Mae.

I gleaned a couple of things from the presentation.  As always these are my understanding of his presentation and as he had in his presentation I would also like to add a 10 page disclosure essentially saying that I cannot be held accountable for any of these predictions…If they come true…I accept credit…If they don’t…I was never here and never made these predictions!

1. The economic models we use to predict what we expect to happen are pretty much useless since we have no historical data that is similar to what has occurred over the past two years!  This really supports my theory that no one has a clue about what to expect…Even the folks we think should!
2. The Fed is going to have to start talking about an exit strategy from the credit and MBS markets.  Oh boy…I can only see this adding to the volatility of the MBS Markets regardless of what they do.  Investors don’t like uncertainty. At some point they will have to say how they intend to get out…Investors will have to figure out how that will impact the markets.  I have serious concerns that the unknown will have many investors sitting on the sidelines trying to figure out the new rules of the game before they start playing the game!
3. Rates will be going up.  The conventional rate markets are being artificially held low…when that stops margins and risk factors will likely rise.  I think a better gauge of were rates will be is to look at the real Jumbo Market rates.  Those rates are being set by the market and may paint a more accurate picture of what rates will be adjusting too.
4. The recovery will be SLOWWWWWW.  The majority of Americans’ are way over leveraged and it will take time for this to get back to sustainable levels.

What this all means…I am really not sure…But at least I know folks that are much smarter than I aren’t really sure either!

One of the keys to having good credit scores is to stay way below your credit limits.  This is especially true around the time you are trying to secure a loan for a new home or trying to refinance.  Credit is tight enough in this market that you don’t need to ding yourself in the process.  A few months before you apply for a loan start cutting back your credit card usage substantially.  Ideally, you can even switch to all cash for a few months.  Don’t do this for too long, as in some cases, credit card issuers are starting to close down credit cards.

The average credit card utilization in the US is around 30%.  That means someone is using about $5700 in charges on an aggregate limit of $19,000.  People with fantastic scores are lowering this usage to about 5-10% or $1000-$1900 on a $19,000 combined limit.  This is a good tactic to follow, again, especially around the time you need a loan.

Also, don’t just focus on the aggregate limits.  You need to keep your utilization at 10% on all your individual cards.  If you have a card that is nearly maxed out, that’s the one to pay down first if you are getting ready to purchase a house.

photo credit: Jan Tonnesen