Reverse Mortgage Loans II

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Seniors wait for home value to rise
Pub Date: Mon, 21 Apr 2008 10:00:00 EST
Many people are trapped in this housing slump. Seniors who want to retire are having trouble liquidating their assets, as most of their investment is secured in their houses. Instead of lowering the selling price dramatically, seniors are putting their retirement plans on hold and holding onto their homes, waiting for the value to go up. For those who want to stay in their home, but cannot wait for the cash from the sale of the house, taking out a reverse mortgage loan can help. It will give you access to the equity that is tied up in your home. It is easy to qualify, you must be over 62 years old and own your home. 

Refinancing a reverse mortgage loan
Pub Date: Mon, 21 Apr 2008 10:00:00 EST
Even with a reverse mortgage, some seniors may feel like they are not receiving enough money. One way to access more money is to refinance an existing reverse mortgage loan. If you took out the original loan a few years ago, chances are your home has increased in value and you will qualify. Like applying for the original loan, certain factors are taken into consideration like the value of the home, interest rates, and the borrower’s age. Refinancing might not be a good idea though, if you took out a reverse mortgage loan recently and like many in this housing slump, your home has not risen in value.

FBI investigates more mortgage fraud cases
Pub Date: Thu, 17 Apr 2008 10:00:00 EST
Three months ago FBI officials said they were investigating 14 companies for possible fraud in connection with loans made to risky borrowers. They were also investigating insider trading violations and investments spun off of the risky loans. Now the FBI Director Robert Mueller is reporting a “tremendous surge” in mortgage fraud investigations and said is expected to keep growing. They are investigating an estimated 1,300 mortgage fraud cases, including 19 into sub-prime lending practices by US financial institutions. Sen. Barbara Mikulski, D-Md warned that if there is a “collapse in confidence” in lenders, that the economy could take another hit. Mueller also said that agents have had to shift from other areas like health care fraud to focus on mortgage lending practices.

Reverse mortgage like a second Social Security check
Pub Date: Thu, 17 Apr 2008 10:00:00 EST
Figures based on data from Golden Gateway Financial, report that the money seniors save from making mortgage payments, together with their monthly reverse mortgage checks will easily exceed the amount of their Social Security check. The data states that the average monthly payment of a reverse mortgage loan is $682.59 for seniors who are about 68.6 years old. For many seniors, this extra income can be considered a second Social Security check and a means to live a more comfortable retirement. It is not true that a reverse mortgage is great for everyone, nor is it true that it is bad for everyone. Everyone’s situation is different, and thus it is important to be educated on all possible financial options before making a decision.

Seniors struggle paying for mortgage and health care
Pub Date: Wed, 16 Apr 2008 10:00:00 EST
In an AARP study, 28% of seniors cited "Health or Disability" as a reason for looking into a reverse mortgage. Their worries are justified, as the need for health care increases as seniors get older. Unfortunately, the cost of health care continues to rise, and it becomes harder to pay for it as many go into a fixed income life. Some seniors who still make monthly mortgage payments often have to choose between paying their mortgage and other bills, and paying for necessary health care. For seniors who qualify, a reverse mortgage may be the solution for both problems. By taking out a reverse mortgage loan, seniors can pay for long-term care needs and remain in their home, with services they control. Another benefit is that they wouldn’t have to make their monthly mortgage payment, because the payments would be made to them.

Never owe more than property value with a reverse mortgage
Pub Date: Wed, 16 Apr 2008 10:00:00 EST
A great security provided by reverse mortgages to seniors is that the amount they owe will never exceed the value of their home. That is one great difference between a traditional mortgage and a reverse mortgage. In this dwindling housing market, many people have lost or are at danger of losing their home not only because they can’t afford the payments, but because they owe more than their house is worth. With a reverse mortgage, the bank takes the loss and can’t foreclose on the property, even if the size of the debt surpasses the value of the house. Although the owner’s equity diminishes while the amount of the loan increases, the owners can still live in the house as long as they are able to without having to pay a penny.

Short Sale a way to avoid foreclosure
Pub Date: Tue, 15 Apr 2008 10:00:00 EST
A short sale allows the homeowner to live in the home until it's sold - which helps the bank avoid costly foreclosure procedures and potentially bigger losses. The bank sets and pays the legal and real estate fees; the homeowner remains responsible for utilities and taxes. In a short sale, the bank accepts a lower price for the home than is owed on the mortgage. Short sales, have been used for a long time and they help a newbuyer get a home that just a couple of years ago cost a lot more. Once a purchase and sale agreement is struck, the deal has to be approved by the bank. The seller has to provide extensive financial information and a letter explaining their situation. Normally the lender wants to see a hardship letter, they want to know why they can't afford the mortgage. Once the bank is satisfied, the deal goes through.

Paying for long term care insurance on a fixed income
Pub Date: Tue, 15 Apr 2008 10:00:00 EST
Seniors reaching retirement age are often worried about how to pay for expenses if they cannot take care of themselves. Many of them also worry that they will become a burden on their children. Looking for solutions, seniors usually find the following options: long term care insurance policy and reverse mortgage. Long term care insurance can play a vital role in providing protection and peace of mind. A reverse mortgage loan can help provide the funds to purchase a long term care insurance policy, which would ensure seniors that their children would not have to pay out of pocket for their health expenses. Also, a reverse mortgage can be paid out to the seniors as a lump sum, monthly installments, or as a credit line. 
 

FINRA cautions homeowners about tapping into home equity
Pub Date: Mon, 14 Apr 2008 10:00:00 EST
Last week, there was an Investor Alert issued by the Financial Industry Regulatory Authority (FINRA). It cautions homeowners over the age of 60 to be wary of tapping into their home equity through reverse mortgages. The Alert urged homeowners to carefully weigh all of their options before trying to obtain additional income for their retirement years by means of a reverse mortgage loan. The Alert also warns them that the higher the promised return, the higher the risk, especially when approached by a financial professional to do a reverse mortgage in order to fund a particular investment. If you understand all the aspects and risks of a reverse mortgage, and want help to decide if it is the right product for you, we are available and ready to help.

Lenders tighten up financing
Pub Date: Fri, 11 Apr 2008 10:00:00 EST
Washington Mutual is expected to announce layoffs in their residential mortgage group just days after announcing that they have shut down their wholesale mortgage group. WaMu is just one more financial institution to fall as the dominos pick up steam. Bear Stearns announced their problems several weeks ago. For anyone living in South Beach, Miami the news is even worse. Local and national lending institutions have a long list of condo buildings where no financing will be given. This puts current homeowners and builders on the sidelines as they are stuck with their investment. Even the average homeowner who is selling is having problems finding buyers who are not being denied mortgages. There is too much cash and risk out on the street and the banks are afraid to extend themselves even more. All of this just exaberates the situation and puts everyone’s back against the wall. 

Common reverse mortgage concerns
Pub Date: Fri, 11 Apr 2008 10:00:00 EST
Most people in the market for a reverse mortgage loan ask the usual questions like: How much money will I get? How much are the fees? What is the interest rate? Other borrowers insist on getting fixed rate reverse mortgages. But as history shows, that might not be the best idea. The fixed rates insure the borrower of paying an interest rate way above the current adjustable rates. In other words, the borrower would still be paying more with a fixed rate than going through volatile markets with an adjustable rate. For borrowers who are determined to get the lowest cost reverse mortgage, it is important to review all parts and details that go into the loan. 

Small steps to help relieve homeowners
Pub Date: Thu, 10 Apr 2008 10:00:00 EST
There is a lot of criticism of how the Bush Administration is handling the current housing and mortgage crisis. Democrats are asking for a large federal housing aid package ($300 to $400 billion) to shore up the FHA to buy excess inventory. Their proposed plan would offer government insurance in refinanced mortgages, which would mean over one million homeowners could move into less costly loans. The Administration has yet to agree to this, but said it would use an existing FHA program “to enable more low- and moderate-income homeowners to refinance into government-insured mortgages with monthly payments they can afford.” It seems our government is more than willing to bailout investment banks and Wall Street, while the American public gets nothing in return for swallowing the bill.

Research lender before making financial decision
Pub Date: Thu, 10 Apr 2008 10:00:00 EST
If you search the web for a reverse mortgage lender you will find that there are many websites out there promising much but providing very little in terms of content. A reverse mortgage is a major decision because it will affect your future financial well being. If you’re looking into mortgages then you are already concerned that you don’t have enough cash for the future. The last thing you want to do is make the wrong decision and put yourself in a worse financial position. Make sure you check out anyone you decide to do business with. Check their license and the company they work for. Search the web for this person and their business. Check any state websites and the better business bureau. If someone is not looking at all of your re-finance options, then find someone else. They don’t have your best interest in mind. 

Washington Mutual and the mortgage brokers
Pub Date: Wed, 09 Apr 2008 10:00:00 EST
If you haven’t heard already, Washington Mutual’s wholesale mortgage department is out. Some people may focus on the number of jobs that have been lost. Other may focus on the number of people who just lost their loans with mortgage brokers they were working with. Some may focus on how this is going to affect investors but I focus on how this is going to affect the mortgage brokers. The banks are systematically putting mortgage brokers out of business. There is something to say about having a person you trust making sure you’re getting the best loan for the best closing costs. A good mortgage broker will protect his client and at the same time earn a living. I like working with my mortgage broker instead of deal with the banks directly. With the banks you just never know if what they are saying is true. They may promise a great interest rate with dollars towards closing but then there is always some hidden fee with nullifies the great deal. The mortgage service industry is losing their legs and at the end of the day it will only cost and hurt regular people like myself.

Reverse mortgage for your golden years
Pub Date: Tues, 08 Apr 2008 10:00:00 EST
If you are over the age of 62 and have equity in the home then consider a reverse mortgage to provide the extra cash you need for your golden years. A reverse mortgage is not the answer if you owe money on the home beyond the worth of the home. A reverse mortgage is expensive in terms of interest and closing costs. It works for many seniors who don’t have the income requirements to apply for a traditional re-finance or home equity line of credit. The prospect of not having to pay a mortgage makes a reverse mortgage look favorable, but this should not be the main reason for choosing a reverse mortgage over a traditional loan. When a traditional loan is out the question a reverse mortgage always looks better. Do your homework and compare the short term and long term costs of your mortgage choices. Consult with family and friends and find a lender that you can trust and will be honest with you.

Eager sellers may find success at auction
Pub Date: Tues, 08 Apr 2008 10:00:00 EST
Potential buyers who can afford buying a home during this down market are searching for homes in less traditional places, like auctions. Buyers are searching for the best possible deal and are very responsive to absolute auctions, which mean the owner agrees to sell for the best offer. They expect a good deal when they go to an auction and look for homes whose reserve, or lowest acceptable bid is at more than 50% below the home’s list price. Those who put their home on the auction block are usually eager sellers, or even banks, mortgage companies and homebuilders who are trying to unload excess inventory.

Ask to defer your mortgage payment
Pub Date: Mon, 07 Apr 2008 10:00:00 EST
If you're facing losing your home due to foreclosure and don’t qualify for a re-finance or home equity loan, the best thing to do is to talk with your lender. Let them know your situation and ask if they can defer your mortgage payment for a specified period of time. If you have been a good customer and can show you're trying, they will most likely work with you. Before you call make sure you have a list of all current debts and loans, current pay stubs that show your income, and try to show that you can afford the mortgage but unseen circumstances are making it hard in the short term. Show that by getting the deferment you can take care of those debts that are preventing you from making your mortgage payment. If you can show that you can afford the mortgage the banks will be more willing to work with you on short term solutions.

Mortgage life insurance can provide security
Pub Date: Mon, 07 Apr 2008 10:00:00 EST
In the midst of the housing and mortgage market meltdown, could any steps have been taken by borrowers to prevent them from losing their home? It’s hard to say, as everyone’s situation is different and many circumstances are out of their control. However, if a borrower has mortgage life insurance and falls critically ill or dies before the mortgage is completely paid off, the company will pay off the remaining balance. Most mortgage life insurance allows changes to the policy if necessary, for example, if money is taken from the loan to cover remodeling expenses. The policy is terminated if the value of the policy is paid out as a benefit.

Latest proposals to improve mortgage and housing industry
Pub Date: Fri, 04 Apr 2008 10:00:00 EST
In this falling housing market, have we reached the bottom yet? The Senate is still trying to stabilize the mortgage and housing industry with proposals, but some don’t believe it is enough to keep our economy from reaching rock bottom. The latest proposals from the Senate fall short of the changes advocated by many lawmakers. They are proposing to increase FHA loan limits by 16%. Also, they plan to increase down payment requirements from 3% to 3.5%. How exactly is that supposed to make people want to buy a home? Many lawmakers suggested decreasing down payments, but despite their pleas, the Senate plans to increase it. 
 

Pay for living expenses with a reverse mortgage loan
Pub Date: Thu, 03 Apr 2008 10:00:00 EST
A survey by Consumer Credit Counseling Service of Greater Atlanta, Inc., found that the main reason most homeowners who took out a reverse mortgage loan was to pay for living expenses. 15% used it for home repairs, 8% to provide care for dependents or pay medical bills, 7.23% to help pay property taxes and home insurance, and 6.25% took out a reverse mortgage loan because they were falling behind on monthly payments. A small number, only 3% of borrowers used the fund to take a vacation. Of the 213 homeowners surveyed, 79.4% are retired and the rest were either working part-time, full-time, or were looking for a job. 

Foreclosure Fraud Prevention Act passed unanimously
Pub Date: Thu, 03 Apr 2008 10:00:00 EST
The Foreclosure Fraud Prevention Act passed unanimously in the House yesterday. It would ensure that when homeowners sign a contract with a foreclosure rescue entity, that they are properly informed about their rights. In addition, it would also allow for a three day right of cancellation period. Violations to this act would be considered unfair and deceptive trade practices would be subject to penalties. Attorney General for Florida Bill McCollum is supporting this act, and is also protecting Florida homeowners from unscrupulous business practices by issuing a consumer advisory on mortgage fraud and foreclosure-related scams. He filed a lawsuit against three companies in Broward County for allegedly taking part in a foreclosure rescue scheme and his Mortgage Fraud Task Force is on the lookout for any type of fraudulent operations. 

There are many more organizations that can help you if or when you need it. Check out Reverse Mortgage Loans USA to access these sites and to see more.

Reverse Mortgage laws are varied
Pub Date: Tue, 01 Apr 2008 10:00:00 EST

Reverse Mortgage laws are varied, and though the borrower(s) uses their house as security, they still have certain responsibilities. For example, the property has to be kept fully insured and in proper state of repair and maintenance. In addition, all the property taxes, electricity and water charges must be paid. Since the home must be the borrower’s primary residence, renting would not be acceptable. Many tax issues have been clarified in the current Financial Bill. A proviso will be inserted in Section 47 of the Income Tax Act to clarify that the reverse mortgage loan will not be treated as a transfer. Another act will also be amended to provide for exemptions from tax on capital receipt, and to provide that disbursements are not treated as capital gain. It is still necessary to gain expert advice to see if a reverse mortgage loan is the right product for you.

Federal Reserve wants to have control over all financial institutions
Pub Date: Mon, 31 Mar 2008 10:00:00 EST 
Federal Reserve wants to have control over all financial institutions in the Unites States. Our legislators today will discuss the possibility of the privately owned, non federal government agency called the Federal Reserve to have this control. It makes me wonder if this whole collapse of the economy wasn’t planned for this precise moment. Isn’t is bad enough that this private bank controls our money supply and earns interest for every dollar they print. Isn’t it bad enough that our countries debt is directly related to the actions of the Federal Reverse? Isn’t it bad enough that the use of the word Federal in their private company name is a misnomer? I pray that our elected officials can see past their own pocketbooks and do the right thing.

Here is the whole movie Zeitgeist. Parts 2 and 3 reveal the Federal Reserve for what they are. Decide for yourself.
Zeitgeist

In crime with predatory lenders
Pub Date: Thu, 27 Mar 2008 10:00:00 EST

Was the Bush administration partners in crime with predatory lenders? In article written by former New York Governor Eliot Spitzer, light is shed on the Bush administration and their handling of the current housing crisis. Spitzer writes that they did nothing to protect American homeowners. He goes on to say that himself, along with attorney generals in other 29 states attempted to "fill the void left by the federal government." Together, they tried to enact laws aimed at curbing predatory lending practices, and even entered into settlements with many subprime lenders. But the Bush administration didn’t follow suit, instead they tried to prevent states from protecting their residents by promulgating "new rules that prevented states from enforcing any of their own consumer protection laws against national banks."

Read the article at:
http://www.straightgoods. ... m?REF=175

Seniors have lots of government and private agencies
Pub Date: Wed, 26 Mar 2008 10:00:00 EST 
Did you know that if you’re a senior you have lots of government and private agencies that you can turn to if you have a problem with abuse of fraud? Here are a few.

The National Committee for the Prevention of Elder Abuse (NCPEA) is an association of researchers, practitioners, educators, and advocates dedicated to protecting the safety, security, and dignity of America's most vulnerable citizens.

National Senior Citizens Law Center advocates before the courts, Congress and federal agencies to promote the independence and well-being of low-income elderly and disabled Americans.

The Elder Justice Coalition focuses on The Elder Justice Act. This act was introduced on March 29, 2007 in both the Senate and House. S. 1070, the Elder Justice Act was authored in the Senate by Sen. Orrin Hatch (R-UT) and co-authored by Senator Blanche Lincoln (D-AR) with original co-sponsors Senator Herb Kohl (D-WI) and Senator Gordon Smith (R-OR).

There are many more organizations that can help you if or when you need it. Check out Reverse Mortgage Loans USA to access these sites and to see more.

Government allowed financial institutions to do the wrong thing
Pub Date: Tue, 25 Mar 2008 10:00:00 EST

The mortgage industry has been around for a very long time. So why now do we have such overwhelming and blatant disregard for the public well being? So why now did so many large institutions take this opportunity to fund so many expensive bad loans? Is it a coincidence that most of these loans were given to minorities? Why does the government have no problem writing a $200 billion check to help the financial institutions but can’t write a single check to all those people who were duped into these bad mortgages?

Both the Federal and State governments allowed financial institutions to do the wrong thing because a lot of money was being made for everyone. Now the scam is out where is the outrage? People should be screaming, and money should be returned. Of course the criminals in this case will retire and the victims will suffer. Now the rest of us are left to pick up the tab.

Tap into the equity of your home
Pub Date: Mon, 24 Mar 2008 10:00:00 EST

If you are at least 62 years old and looking for a way to tap into the equity of your home you have several options. If your credit is strong and you have a good income then a traditional refinance or home equity loan product may work for you. These traditional products will most likely cost you less money in the long run for the money you borrow. If you don’t qualify for a traditional mortgage then look into a reverse mortgage. A reverse mortgage only looks at the equity you have. This option will provide you tax free cash plus will remove your responsibility to pay a mortgage. This type of mortgage is expensive but can provide you peace of mind in the long run. The last option you have is the Real Estate Appreciation Option from EquityKey. If you are healthy and have had no serious medical problems then a REAO is a great choice. If you qualify then EquityKey will give you up to 12% of the appraised value of your home as a cash payment for EquityKey to participate in the new equity of your home. Check out Reverse Mortgage Loans Usa for more details. This option will cost you nothing but the future appreciation of your home.

Real estate market begins to level out
Pub Date: Fri, 21 Mar 2008 10:00:00 EST

As we approach the end of the first quarter of the year we are seeing the real estate market begin to level out. Home prices are stabilizing and buyers are starting to commit. A lot more needs to happen but it is a start. Banks are finally responding to the Fed with lower mortgage interest rate at par. With the current prime rate at 4.75%, credit cards, lines of credit and variable rate mortgage payments are reduced. The low prime interest rate is helping people with extra cash at the end of the month. With the price of gas and milk at an all time high, the extra cash could not come at a better time. We may still need to wait until the end of the year before we see a full correction and for the economy to start growing again but at least it's a start.

Mortgage refinancing is more affordable today thanks to the Fed
Pub Date: Thu, 20 Mar 2008 10:00:00 EST

Mortgage refinancing is more affordable today thanks to the Fed. As the banks finally lower the par value interest rate on a 30 year fixed mortgage below 5.5%, more Americans can take advantage of refinancing. Many people still have mortgages in the 7% range as a result of high interest rates back in the middle to end of 2007. These lower rates also benefit reverse mortgages which are variable rate mortgages. It is hard to determine how long these rates will stay under 5.5% or if they will even go under 5%. With such fluctuations in the market place lately one thing is for sure, if you can get an interest rate under 5.5% at even par consider it.

Banks now own more of the US residential real estate than Americans
Pub Date: Mon, 17 Mar 2008 10:00:00 EST
Nationally, banks now own more of the country's residential real estate than Americans. Miami is probably the worst real estate market in the US, and possibly, the world. Foreclosures are up 600% from last year, and the market value of condos has plunged as much as 50%. Speculation and overbuilding can be to blame for pushing homeowners out of their homes. It added fuel to the fire of easy credit that overstretched buyers, and allowed them to purchase homes they couldn’t afford. One condo building boasts $60 million worth of mortgage defaults and in another, 20% of its units are in foreclosure. In Miami-Dade, between 2000 and 2006, frantic buying doubled the price of a home, even though incomes rose just 15%. Now what’s left are empty condo buildings and clusters of foreclosures on residential streets.

Wait for mortgage rates to drop before you consider refinancing
Pub Date: Thu, 13 Mar 2008 10:00:00 EST
If you’re waiting for mortgage rates to drop before you consider refinancing you’re not alone. Thousands of Americans who refinanced only 9 months ago are in a great position to drop 2 points off their current mortgage rate. It is all up to the banks and if they want to do the right thing and give Americans a chance to weather the storm. The Federal Reserve has printed $200 billion to help the bank reduce mortgage rates and the stock markets are having a great week. Bernanke will be holding another meeting on March 18th. Speculation is that Bernanke will announce another drop in the rates that the Feds control. Hopefully a few days after the March 18th announcement, the banks with drop the no point 30 year mortgage rate to 5% or 5.5%. At least that is what I am hoping.

Do not use the cash from a reverse mortgage for investment purposes
Pub Date: Wed, 12 Mar 2008 10:00:00 EST
Don’t use the cash from a reverse mortgage for investment purposes. Even though you don’t need to worry about paying a mortgage anymore, you do have the responsibility of paying your taxes, insurance, utilities, and maintenance. The idea of any reverse mortgage should be to have the cash you need to live in your home. If you are in good health and live in California, Florida, or New York, the Equity Key real estate appreciation option might be a better choice. Equity Key will give each qualified participant a lump sum payment between 12%-15% of the homes value. This money is not a loan and is never paid back. For that payment and for each participant, Equity Key gets to participate in 50% of the future appreciation of your home. This new program is helping seniors not only gain the cash they need today but in many cases still provides heirs an inheritance. The Equity Key product is a new way for seniors to live a quality life without the need to mortgage their home or future.

Researching reverse mortgage options and companies
Pub Date: Tue, 11 Mar 2008 10:00:00 EST
You’re looking at websites researching reverse mortgage options and companies. Fortunately you have found Reverse Mortgage Loans. If you take a little time on the web site you will see that we have tried to provide you the best information and tools so you can decide if a reverse mortgage is the right choice for you or your loved one. Use our home valuation tool so you can get an estimate of the worth of any home. Then use our loan calculators to get a glimpse of what you can expect with each type of loan based on that estimate. When you’re educated and ready to talk with someone we’re available and we want to help.

The good and the bad of the foreign home investor
Pub Date: Mon, 10 Mar 2008 10:00:00 EST
As the foreign dollar continues to be worth more and more everyday against the U.S. dollar, U.S. real estate becomes more attractive to the foreign investor. This is a double edge sword. On one hand these foreign investors can stimulate the economy by purchasing homes, paying taxes and living in our communities. On the other hand, how much foreign investment puts our country and neighborhoods at risk? With the economy as bad as it many people may only want to fix the short term problems without any regard of the future. Arguably this is how we got here. We should welcome foreign investment but help American’s participate in the housing market as well.

Home prices continue to fall thanks to foreclosures
Pub Date: Thu, 06 Mar 2008 10:00:00 EST 

As home prices continue to fall thanks to the record number of foreclosures, people who are trying to sell their home and stay clear of foreclosure are having a difficult time. Many homes that are for sale by homeowners are now at rock bottom. If these homeowners sell their homes for any less they will be upside down. It feels like a traffic jam where everyone is blocking the box. No one can move and there are more people waiting to do the same. Home prices are hitting critical mass for the banks. Banks are beginning to consider not paying the $67,000 to process a foreclosure because there is no way to recover the expense. Eventually the government will need to agree on real estate tax reform and make the taxes on a home affordable. Provide new homeowners the ability to purchase a home and provide current homeowners the ability to downgrade and upgrade. Until we are all willing to fix the tax issue the box will stay blocked.

Foreclosures plaguing the once booming real estate market
Pub Date: Wed, 05 Mar 2008 10:00:00 EST

With foreclosures plaguing the once booming real estate markets across the nation, the Senate is trying to pass a bill to prevent them. If passed, the 'Foreclosure Prevention Act' would allow bankruptcy judges to wipe out mortgage dues and provide billions for redoing abandoned properties. The Bush Administration benefits the plan to allow housing agencies to refinance faulty loans by issuing bonds that are free from taxes, but they see the senate bill as a bailout scheme, one that would benefit lenders and speculators. Some believe it would further muddle the market because lenders would hike up their charges to guard themselves against bankruptcy.

That would be a real stimulus to the economy
Pub Date: Wed, 27 Feb 2008 10:00:00 EST
As we all wait for our stimulus checks to come in the mail this summer, gas prices and mortgage rates continue to climb. More help could be provided to the average American if the President would concentrate on the real issues and not ask everyone to spend money they don’t have. Imagine if gas prices were at $1.50 a gallon. That would be a real stimulus to the economy. The prime rate is at 6% which is a low rate and is helping people with variable rate loans based on prime, but how about people with mortgages. Why can’t the President somehow get the banks to lower the mortgage rates and give people an opportunity to save on their mortgage payments? That would be a real stimulus to the economy.

Peak of bad mortgage loans were written in 2006 and early 2007
Pub Date: Mon, 25 Feb 2008 10:00:00 EST
According to data from Amherst Securities, the peak of bad mortgage loans were written in 2006 and early 2007. The lending standards began to get worse as 2005 came to a close and by 2007, lending standards were completely out the window. Because it takes an average of 15 months after the first missed payment for a homeowner to foreclose, and probably another month or two to auction the home, it is estimated that the foreclosures and auctions are about to hit will full force, and only get worse for another two and a half years, which would reflect the bad loans written in the past three years. Merrill Lynch’s report that "the worst housing financial crisis in decades is only going to get worse" seems to be more accurate than NAR projecting only a 1.2% decline in 2008. Merrill Lynch estimated a 15% drop in housing prices and a further 10 percent drop in 2009, while expecting more depreciation in 2010.

Tap into the equity of your home with a Reverse Mortgage
Pub Date: Fri, 15 Feb 2008 10:00:00 EST

A reverse mortgage can be a way for seniors over the age of 61 to tap into the equity of their homes in a tax free way. Not all of the equity will be available but it may not be necessary because a benefit of a reverse mortgage is that the senior will no longer have to make a monthly mortgage payment. The extra monthly cash flow plus the new tax free income can often compensate for not having access to the full amount of equity in the home. There are lots of things that must be discussed when choosing a financing option for your retirement so always consult a professional financial counselor or tax consultant. Your home is the most important investment you have and everyone needs to be careful when financing their home.

The upcoming recession has many people walking on eggshells
Pub Date: Thu, 14 Feb 2008 10:00:00 EST
The upcoming recession has many people walking on eggshells. As the value of homes decrease, the cost of living seems to be increasing. Unfortunately everything is getting more expensive, even for simple things like eggs and milk. The combination of the crashing housing market, rising unemployment rate, rising costs for goods and services, falling stock prices, and you get a recipe for an incredible disaster. With the exception of those who have enough income and enough savings, people are cutting back on spending. It’s like a chain reaction: many people are losing their jobs because companies can’t afford extra workers, as a result, some can’t afford their mortgages and end up losing their home.

Buyer Rebates can help you afford to buy a home
Pub Date: Tue, 12 Feb 2008 10:00:00 EST
If you are cash strapped for a down payment or willing to do some of the work a real estate agent traditionally does for buyers, then buyer rebates are for you. Many companies offer rebates to buyers if they purchase a home that is listed on the MLS. These companies are sharing a portion of their commission with you. The catch is that you’re required to do some of the work like driving yourself to appointments and in many cases finding the homes you want to see as well. Homekeys, a realtor in Florida, offers as much as 75% of their commission in rebates to those people who qualify. If you’re in the process of buying a house ask your Realtor if they offer buyer rebates and if they say no ask them why not.

More and more people are turning to real estate auctions
Pub Date: Thu, 07 Feb 2008 10:00:00 EST
You’re having a hard time selling your home and you don’t know what to do. You have tried For Sale By Owner products and have tried using the MLS. Because of the large amounts of inventory and foreclosures it is hard to get real estate agents to show your home, even if you have the best home at the best price in the neighborhood. So what can you do?

More and more people are turning to real estate auctions to sell their home fast. In a recent report by the National Auctioneers Association the real estate auction market climbed 5.3% in 2007, generating $58.4 billion. Buyers say that auctions give them confidence that they are paying a fair price for the property. Sellers should expect to sell the house for less then expected. In some cases as much as 40% less than the original asking price they used when they listed the home on the MLS. Sellers also need to get ready to pay commissions. In many cases sellers will pay as much as 10% in commissions on the sale of an auctioned home. This may be acceptable depending on your situation and the price you get at auction. Make sure you always use a licensed auctioneer that has a good track record for promoting and organizing real estate auctions.

Ethical behavior by real estate agents - Part II
Pub Date: Wed, 06 Feb 2008 10:00:00 EST

A response from an article by Michael Miller from the Daily Pilot

The entry and exit barriers in our industry are among the lowest in any industry. It is easy to get in and even easier to get out. And very few realtors have any skin in the game. Our industry has more part-timers and retirees that any other industry. These individuals are not committed to the long term prosperity of the industry. When the tide is high and easy money is to be made you will find them in herds but when the tide is low and they have to work hard for their so called “clients” they simply disappear. Most of these are there to make a quick buck and undoubtedly the means justify the ends. These individuals need to close in order to earn a commission and as such they have consistently manipulated the process to their advantage. We need to “professionalize” the realtors’ role. This in turn should result in a significantly better prepared realtor and among other things financially literate. I have met many agents that do not have the slightest idea about basic finances; and these are the first contact with the client.

Immigrants are very vulnerable. Would not you think that an agent could play an instrumental role in protecting these people? It boils down to morals and ethics. It has nothing to do with legality. It is about time we as an industry and individuals become "socially responsible".

Ethical behavior by real estate agents - Part I
Pub Date: Tue, 05 Feb 2008 10:00:00 EST
A response from an article by Michael Miller from the Daily Pilot

There is no doubt that many buyers- first time or otherwise- lack the fundamental knowledge of basic finance. However, it is the moral, ethical and legal responsibility of the so called experts in transacting real estate to protect the rights of the stakeholders involved in the process. Yes, the lending institutions failed by placing their own economic interest ahead of their own shareholders and the borrowers. These lending institutions are the same that irresponsibly provided financing to developers and contractors to overbuild our communities.

And, obviously, this same group provided the financing to many that should had never purchased to begin with. Bottom line, record number of foreclosures, record write-offs and hundreds of thousands employed in many industries associated with real estate will now join the ranks of the unemployed. Wow!

The industry system of "checks and balances" totally crashed or maybe it never existed to begin with. Our "instant gratification mentality" fueled by an exuberant amount of “greed” has destroyed the American dream and many of our communities. Ms. Elia Ceniceros is totally right. She said "There’s a lot of unscrupulous and unethical agents out there that may have done that to clients, but the problem is that when the client turns around and needs the agent to help them, the agent is no longer in the business." So true but why are we surprised?

Go To Part I of this Wiki