There seem to be no end in sight for the plight of homeowner, fearful of the loss of employment, weakened by the diminished value of their home, and now threatened by the possible loss of that home.
For the less optimistic among us, America will witness an unmanageble magnifiction in the amount of unemployed and homeless families as the seemingly out of control monstrocity, known as the economic crisis, continues its devastating shuffle across the nation. For the optimistic, the hope is that the monster will be caged, or at least harnessed, before more destruction ensues.
The realists tells us that there will be more pain before it is all over - they indicate that it should be at least another 12 months before there is any indication of a slowing of this monster's march of destruction.
According to Marcy Gordon, and Associated Press Business Writer in a report released this past week, "The nations banks lost $26.2 billion (with a"B") my emphasis. At the same time, according to Marcy Gordon," Regulators said there were 252 banks were in trouble at the end of 2008...", an increasee of 81 banks from the quarter immediately before. What is the cause of these troubles? They tell us its the housing and credit crises.
Christopher S. Rugaber, an Economics Writer for the Associated Press informed us this week that new home sales fell 10.2 percent in January, to a seasonally adjusted rate of 309,000; the worst, he reported, since 1963.
In the same report Mr Rugaber noted that "New jobless claims rose more than expected last week, and the number of Americans continuing to recieve unemployment benefits has topped 5.1 million...". "Fresh evidence" he said, "the recession is increasingly forcing employers to shed jobs."
How confident can homeowners be in the face of all this nauseous and unpalletable news reports? What should they do about the possible loss of employment, the actual loss of home value and even the (possible) loss of a home ? What are the homeowners options - We will look for answers in the next post.
Saturday, February 28, 2009
Wednesday, February 25, 2009
MORTGAGE FORECLOSURES: A Discussion
Had a discussion in the office with Rhonda today about the Mortgage Foreclosure dilema as it appears to be affecting homeowners in America today. I have blogged a bit on this topic in an attempt to clear up the confusion and misinformation in the minds of some of my readers.
Who is Rhonda? She is only the greatest person, with the clearest head for details, you will ever enjoy having a conversation with. Rhonda has been working in the Real Estate Mortgage industry for more than a quarter of a century now, and what she might have forgotten about originating, processing and underwriting Real Estate Mortgage Loans most will never learn (I will not even go into her competence with the Escrow process). For years now Rhonda and I have been using each other as sounding boards; bouncing ideas off each other as we discussed topics as far ranging as the Katrina disaster to the most recent movement of the Fed rate.
This morning Rhonda referred me to a piece by Diane Sawyer of ABCs Good Morning America in which she interviewed Jim Avila, the Law and Justice Correspondent for ABC. In his report Mr. Avila talked of a new development that is giving homeowners facing foreclosure a chance to hold on to their homes. "Produce the Note" is actually a document that homeowners are using to stall the mortgage foreclosure process against their homes. According to the report Lenders (Banks) are having diffilcuty producing the note the homeowner signed at the time they obtained their home loans mortgages. If the Bank cannot produce the note with the homeowners signature, judges will stall the process until the bank can produce the document - this can go on for months as the banks are finding that they now need to track their loans from close of escrow through bundling for sale as mortgage backed securities. This gives the homeowner time to find a new job or an additional job or whatever they may need to accumulate the necessary financing to save their homes from the auction block
According to Jim Avila, "Produce the Note" was started by a Florida lawyer named Chris Hoyer who has the information on a website he has set up for the purpose providing help to homeowners facing foreclosure. Here is the website www.consumerwarningnetwork.com - go check it out.
Thanks Rhondi
Who is Rhonda? She is only the greatest person, with the clearest head for details, you will ever enjoy having a conversation with. Rhonda has been working in the Real Estate Mortgage industry for more than a quarter of a century now, and what she might have forgotten about originating, processing and underwriting Real Estate Mortgage Loans most will never learn (I will not even go into her competence with the Escrow process). For years now Rhonda and I have been using each other as sounding boards; bouncing ideas off each other as we discussed topics as far ranging as the Katrina disaster to the most recent movement of the Fed rate.
This morning Rhonda referred me to a piece by Diane Sawyer of ABCs Good Morning America in which she interviewed Jim Avila, the Law and Justice Correspondent for ABC. In his report Mr. Avila talked of a new development that is giving homeowners facing foreclosure a chance to hold on to their homes. "Produce the Note" is actually a document that homeowners are using to stall the mortgage foreclosure process against their homes. According to the report Lenders (Banks) are having diffilcuty producing the note the homeowner signed at the time they obtained their home loans mortgages. If the Bank cannot produce the note with the homeowners signature, judges will stall the process until the bank can produce the document - this can go on for months as the banks are finding that they now need to track their loans from close of escrow through bundling for sale as mortgage backed securities. This gives the homeowner time to find a new job or an additional job or whatever they may need to accumulate the necessary financing to save their homes from the auction block
According to Jim Avila, "Produce the Note" was started by a Florida lawyer named Chris Hoyer who has the information on a website he has set up for the purpose providing help to homeowners facing foreclosure. Here is the website www.consumerwarningnetwork.com - go check it out.
Thanks Rhondi
Tuesday, February 24, 2009
LOAN MODIFICATION: A Wait & See Game - Part II
In my posting yesterday, I begun disscussing the prospects of homeowners in their attempts to get their Mortgage Loans modified and restructured. As I noted, some homeowners are of the opinion that things will work out for them once the President signs the bill in March.
At the end of that posting yesterday, I observed that there was a political aspect to the Stimulus
that needed to be factored into any determination as to what the final bill will be like that the President is to sign.
We are all aware that he has been making overtures to the Republican opposition in the Congress, in his effort to,one; bring a sense of biparatisanship to Washington, so that, two; he could move the country farther faster out of the devastating economic condition he found it in on January 22, 2009 following eight arduous years of Republican mismanagement.
It appears that the Republican opposition has decided that rather than being constructive, loosers that they are, would be obstructionist and make hard times harder for an already suffering public.
So, given whatever the pundits and "experts" postulate, until the bill is final as signed by the President, its not advisable to presume to "know" what the details are.
And remember, as I noted in my posting of 02/26/2009 there are certain tax consequences that even with a maximum $8000 refundable tax credit not everyone will be able to buy any home they want anywhere. A careful study of credible information now available will tell you that the program is directed primarily to housing that are located in local redevelopment and revitalization zone. Any casual look at where most foreclosure took place in any local jurisdiction will bear this out - it is in those areas that your $8000 tax credit will do you the most good - that is if you choose to move in those areas that may well be suffering from serious economic obsolescence (think you know where I'm going here?). Where have all the businesses gone...? To use a well known refrain.
Recalling again an earlier posting, 02/18/2009, it was noted that even the President said, that the " 'plan will not save every home' - in effect not everyone will qualify for loan modification..."
So lets continue to be hopeful as he, the President, that is, has asked us to be, while at the same understanding that you may quite likely not be one of those who can be helped.
At the end of that posting yesterday, I observed that there was a political aspect to the Stimulus
that needed to be factored into any determination as to what the final bill will be like that the President is to sign.
We are all aware that he has been making overtures to the Republican opposition in the Congress, in his effort to,one; bring a sense of biparatisanship to Washington, so that, two; he could move the country farther faster out of the devastating economic condition he found it in on January 22, 2009 following eight arduous years of Republican mismanagement.
It appears that the Republican opposition has decided that rather than being constructive, loosers that they are, would be obstructionist and make hard times harder for an already suffering public.
So, given whatever the pundits and "experts" postulate, until the bill is final as signed by the President, its not advisable to presume to "know" what the details are.
And remember, as I noted in my posting of 02/26/2009 there are certain tax consequences that even with a maximum $8000 refundable tax credit not everyone will be able to buy any home they want anywhere. A careful study of credible information now available will tell you that the program is directed primarily to housing that are located in local redevelopment and revitalization zone. Any casual look at where most foreclosure took place in any local jurisdiction will bear this out - it is in those areas that your $8000 tax credit will do you the most good - that is if you choose to move in those areas that may well be suffering from serious economic obsolescence (think you know where I'm going here?). Where have all the businesses gone...? To use a well known refrain.
Recalling again an earlier posting, 02/18/2009, it was noted that even the President said, that the " 'plan will not save every home' - in effect not everyone will qualify for loan modification..."
So lets continue to be hopeful as he, the President, that is, has asked us to be, while at the same understanding that you may quite likely not be one of those who can be helped.
Monday, February 23, 2009
LOAN MODIFICATION: A Wait & See Game
Spoke with a client today who was concerned that his lender is playing a waiting game with him. He wanted to know if he too, should wait until after the Obama Stimilus Plan comes into effect. He feels that because he is not behind on his mortgage, the lender is not treating his application for mortgage loan restructuring/modification with any sense of urgency.
It appears that homeowners all over are waiting for the same development - their faith seem to rest in the belief that the newly elected President will make things right for all and sundry. This may have some element of truth in it - but one needs to factor the politics of Washington into the mix, and that is something that most homeowners are failing to recognize. Tomorrow we will discuss the politics of the stimulus and its possible eventual effect on the homeowner trying to modify their mortgage.
It appears that homeowners all over are waiting for the same development - their faith seem to rest in the belief that the newly elected President will make things right for all and sundry. This may have some element of truth in it - but one needs to factor the politics of Washington into the mix, and that is something that most homeowners are failing to recognize. Tomorrow we will discuss the politics of the stimulus and its possible eventual effect on the homeowner trying to modify their mortgage.
Sunday, February 22, 2009
HOMEBUYERS & THE $8000 TAX CREDIT
I received a phone call last week in which the caller needed to know how the $8000 Tax Credit would affect her. Will it allow her to refinance her Home Mortgage with her Lender, will she qualify for the tax credit - should she wait until the Bill is signed by the President in March - what are her options.
These are some of the questions that are uppermost in the minds of most homeowners - they have a need to know how all the financial disbursment will impact them - what benefits could they accrue from this Stimulus Packet.
There are, obviously, lots of confusion here, which is not helpful to those who are dilligently and earnestly attempting to determine exactly what is happening. Most of the confusion comes from the so-called "experts" - the radio and tv talking heads - who use the air to opine and postulate their opinions as if they were facts. So, I informed my caller of the information I had to date and suggested she await the signing ot the Bill, which will then be law, which means that whatever is contained therein is final and could be relied on in making decisions going forward.
First Time Homebuyers Only
It is understood that even some wanted the benefit to go to all home buyers - the final draft, as it is to be signed by the President is to benefit only first time homebuyers -so that immediately disqualifies my caller - she may need to consider a Mortgage Loan Modification if she is upsidedown or simply, a refinance - if there is enough equity. There are other stipulations in the Bill.
* the homeowner must live in the home for a minimum of three years, otherwise the tax credit will be forfeited, and the IRS will want its monies back in full.
*to qualify for first time homebuyer, you must not have owned a home in the most recent past three years.
*the purchase must take place between January 1, 2009 and November 30, 2009. The benefit here for the taxpayer/homeowner, and its a big benefit, is that the Tax Credit is REFUNDABLE!!!! which is to say you can get the whole $8000 in a refund check. Here is how it works, because again, there are stipulations applied to your tax liability. It's not hard to explain, but it could be hard to understand, (did you get that? - did I confuse you?) Well, follow me a bit more and it will come clearer.
The Effect of the Tax Credit
Unlike a Tax Deduction which in effect is a reduction against earned income for tax purposes, the Tax Credit will be used to reduce your tax liability for tax purposes.
*If you owe $10,000 in taxes and apply for the $8,000 tax credit your tax bill is reduced to $2,000 and if you already paid $11,000 in payroll deductions or estimated tax payments, you will get a refund of $9,000 - $8,000 tax credit (which is NOT a loan) plus the $1,000 regular refund over-payment. Conversly if you owe $10,000 in taxes and you only paid $9,000 in payroll deductions, the difference of $1,000 will be paid from the Credit and you get a refund for $7,000.
Minimums and Maximums
Not everyone will benefit from this Tax Credit, even if they are first time buyers. Why?According to a report from Prudential California Realty, the bill reinstates last year's 2008 loan limits for FHA, Freddie Mac and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local median home price or $271,050 for FHA and $417,000 for Freddie and Fannie, with an overall maximim cap of $729,750.
The Credit is phased out to individuals with AGI 0f $75,000 to 95,000 and couples filing jointly from $150,000 to $170,000 - this then in an indication of not just how MUCH house you can buy to qualify, but in reality WHERE you should buy to quality....this we will discuss further in another posting.
These are some of the questions that are uppermost in the minds of most homeowners - they have a need to know how all the financial disbursment will impact them - what benefits could they accrue from this Stimulus Packet.
There are, obviously, lots of confusion here, which is not helpful to those who are dilligently and earnestly attempting to determine exactly what is happening. Most of the confusion comes from the so-called "experts" - the radio and tv talking heads - who use the air to opine and postulate their opinions as if they were facts. So, I informed my caller of the information I had to date and suggested she await the signing ot the Bill, which will then be law, which means that whatever is contained therein is final and could be relied on in making decisions going forward.
First Time Homebuyers Only
It is understood that even some wanted the benefit to go to all home buyers - the final draft, as it is to be signed by the President is to benefit only first time homebuyers -so that immediately disqualifies my caller - she may need to consider a Mortgage Loan Modification if she is upsidedown or simply, a refinance - if there is enough equity. There are other stipulations in the Bill.
* the homeowner must live in the home for a minimum of three years, otherwise the tax credit will be forfeited, and the IRS will want its monies back in full.
*to qualify for first time homebuyer, you must not have owned a home in the most recent past three years.
*the purchase must take place between January 1, 2009 and November 30, 2009. The benefit here for the taxpayer/homeowner, and its a big benefit, is that the Tax Credit is REFUNDABLE!!!! which is to say you can get the whole $8000 in a refund check. Here is how it works, because again, there are stipulations applied to your tax liability. It's not hard to explain, but it could be hard to understand, (did you get that? - did I confuse you?) Well, follow me a bit more and it will come clearer.
The Effect of the Tax Credit
Unlike a Tax Deduction which in effect is a reduction against earned income for tax purposes, the Tax Credit will be used to reduce your tax liability for tax purposes.
*If you owe $10,000 in taxes and apply for the $8,000 tax credit your tax bill is reduced to $2,000 and if you already paid $11,000 in payroll deductions or estimated tax payments, you will get a refund of $9,000 - $8,000 tax credit (which is NOT a loan) plus the $1,000 regular refund over-payment. Conversly if you owe $10,000 in taxes and you only paid $9,000 in payroll deductions, the difference of $1,000 will be paid from the Credit and you get a refund for $7,000.
Minimums and Maximums
Not everyone will benefit from this Tax Credit, even if they are first time buyers. Why?According to a report from Prudential California Realty, the bill reinstates last year's 2008 loan limits for FHA, Freddie Mac and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local median home price or $271,050 for FHA and $417,000 for Freddie and Fannie, with an overall maximim cap of $729,750.
The Credit is phased out to individuals with AGI 0f $75,000 to 95,000 and couples filing jointly from $150,000 to $170,000 - this then in an indication of not just how MUCH house you can buy to qualify, but in reality WHERE you should buy to quality....this we will discuss further in another posting.
Saturday, February 21, 2009
REAL ESTATE INVESTING: The Guru & The Teacher
The GURU
According to Merriam-Webster a Guru; (Hindi-Sanskrit) is"...one who is an acknowledged leader...intellectual guide in matters of fundamental concern.." Such a person is an "acknowledged leader" and such a person can guide you intellectually in matters of "fundamental concern."
Recently I have been discussing the gurus of the Real Estate Investment industry - the so called acknowledged leaders of the business. These are the people who will invite you by email or regular mail to attend local seminars they sponsor, explicitly to "reveal secrets" they have discovered - "secrets" they have been given exclusively by some mysterious individual, that they now have a burning desire to share with you. Once you are in possession of these "secrets", you will become wealthy - retire in style - travel the world - visit exotic places, etc., etc. The
"secret" always revolve around some aspect of real estate investing - and each guru has his or her own niche. They will invite you to webinars where another guru - guest - speaker will "discuss" portions of their "secret" with you, after which you are encouraged to purchase his package of "secrets." This is after you have more than likely paid for your guru's package of "secrets", paid for his 3 , 4-day or weeklong Bootcamp, and anything from 1 month to 12 months of followup mentoring to ensure you got all aspects the "secrets" right. After spending thousands upon thousands of hard-earned, and in these days scarce dollars, chasing the "secret"dream of becoming real estate millionaires many people come to the realization that the only ones getting wealthy in real estate are the gurus hawking their "secrets" to the unsuspecting. Very few benefit from the "secrets" of the gurus - many are disillusioned by the experience of chasing illusive "secrets" - yet, all is not lost!
The TEACHER
Returning to the wisdom of Merriam-Webster, we learn that the Teacher is "...one whose occupation is to instruct..." To instruct, again according to Merriam-Webster is "...to give knowledge." This then, is what Teachers do - they impart knowledge, they do not harangue,or do they cajole - hyperbole is not a part of their art. The Teacher will teach according to a structured plan that will bring the student along to achieve certain educational goals. Upon attainment of these goals, the student will be in a position to benefit financially from the knowledge they acquired from the Teacher's course of instructions.
For those seriously interested in Real Estate Investments forget the gurus and think about teachers - in future blogs I will discuss opportunities for the serious real estate investor to acquire the knowledge they will need to be successful in their endeavour.
According to Merriam-Webster a Guru; (Hindi-Sanskrit) is"...one who is an acknowledged leader...intellectual guide in matters of fundamental concern.." Such a person is an "acknowledged leader" and such a person can guide you intellectually in matters of "fundamental concern."
Recently I have been discussing the gurus of the Real Estate Investment industry - the so called acknowledged leaders of the business. These are the people who will invite you by email or regular mail to attend local seminars they sponsor, explicitly to "reveal secrets" they have discovered - "secrets" they have been given exclusively by some mysterious individual, that they now have a burning desire to share with you. Once you are in possession of these "secrets", you will become wealthy - retire in style - travel the world - visit exotic places, etc., etc. The
"secret" always revolve around some aspect of real estate investing - and each guru has his or her own niche. They will invite you to webinars where another guru - guest - speaker will "discuss" portions of their "secret" with you, after which you are encouraged to purchase his package of "secrets." This is after you have more than likely paid for your guru's package of "secrets", paid for his 3 , 4-day or weeklong Bootcamp, and anything from 1 month to 12 months of followup mentoring to ensure you got all aspects the "secrets" right. After spending thousands upon thousands of hard-earned, and in these days scarce dollars, chasing the "secret"dream of becoming real estate millionaires many people come to the realization that the only ones getting wealthy in real estate are the gurus hawking their "secrets" to the unsuspecting. Very few benefit from the "secrets" of the gurus - many are disillusioned by the experience of chasing illusive "secrets" - yet, all is not lost!
The TEACHER
Returning to the wisdom of Merriam-Webster, we learn that the Teacher is "...one whose occupation is to instruct..." To instruct, again according to Merriam-Webster is "...to give knowledge." This then, is what Teachers do - they impart knowledge, they do not harangue,or do they cajole - hyperbole is not a part of their art. The Teacher will teach according to a structured plan that will bring the student along to achieve certain educational goals. Upon attainment of these goals, the student will be in a position to benefit financially from the knowledge they acquired from the Teacher's course of instructions.
For those seriously interested in Real Estate Investments forget the gurus and think about teachers - in future blogs I will discuss opportunities for the serious real estate investor to acquire the knowledge they will need to be successful in their endeavour.
Friday, February 20, 2009
REAL ESTATE INVESTING:The "Secret" of Making Millions
I promised in my last posting that I would discuss the gurus' "secret " to making millions in Real Estate Investing.
In that post I noted and accepted that most millionaires have made their wealth in Real Estate. This is still a fact, except, that there is now a new cadre of millionaires who are amassing great wealth selling to captive audiences, "secrets" to becoming wealthy in real estate investing.
Ordinary people wanting to climb out of the daily drudge of 9 to 5 jobs, and excited about the possibility that in a few short months they would be accumulating millions, are pumped up in day-long seminars by agitated speakers relating stories of rag to riches accomplishments, and the "secrets" they uncovered on their way to riches and wealth. Challenging their audience to buy this newly discovered "secret ", to follow the same path to wealth and financial independence, these gurus apply well worn and well know cliches
of the day.
These audiences are challenged to be like the speaker or continue to be loosers. As this captive audience of hopefuls are being harangued and psyched by the speaker, their able assistants are in the back of the room setting up credit card equipment, and the packages supposedly containing the "secrets" to wealth. You are supposed to feel guilty or a lesser person if you were to walk through the door without stopping to slide your plastic.
Those who purchase the material find that the "secret", is not enough to realize their dreams of becoming wealthy. Not to worry - the seminar organizer has seen that far ahead, and the hopeful millionaires are now invited and encouraged to participate in a weekend or weeklong Bootcamp to learn strategies with the experts, one that is held somewhere out of State, and which now costs a few more thousand dollars - following the Bootcamp there is yet another level you must go, to secure more "secrets". Hopeful millionaires are encouraged to sign up for one-on-one tutoring with the Master him(her)self for as long as a year - this now should get you to where you need to be, as your quest for wealth and financial independence has now morphed into an odyssey for "secrets".
My next posting will discuss how to spot the difference between the teacher and the millionaire "guru".
In that post I noted and accepted that most millionaires have made their wealth in Real Estate. This is still a fact, except, that there is now a new cadre of millionaires who are amassing great wealth selling to captive audiences, "secrets" to becoming wealthy in real estate investing.
Ordinary people wanting to climb out of the daily drudge of 9 to 5 jobs, and excited about the possibility that in a few short months they would be accumulating millions, are pumped up in day-long seminars by agitated speakers relating stories of rag to riches accomplishments, and the "secrets" they uncovered on their way to riches and wealth. Challenging their audience to buy this newly discovered "secret ", to follow the same path to wealth and financial independence, these gurus apply well worn and well know cliches
of the day.These audiences are challenged to be like the speaker or continue to be loosers. As this captive audience of hopefuls are being harangued and psyched by the speaker, their able assistants are in the back of the room setting up credit card equipment, and the packages supposedly containing the "secrets" to wealth. You are supposed to feel guilty or a lesser person if you were to walk through the door without stopping to slide your plastic.
Those who purchase the material find that the "secret", is not enough to realize their dreams of becoming wealthy. Not to worry - the seminar organizer has seen that far ahead, and the hopeful millionaires are now invited and encouraged to participate in a weekend or weeklong Bootcamp to learn strategies with the experts, one that is held somewhere out of State, and which now costs a few more thousand dollars - following the Bootcamp there is yet another level you must go, to secure more "secrets". Hopeful millionaires are encouraged to sign up for one-on-one tutoring with the Master him(her)self for as long as a year - this now should get you to where you need to be, as your quest for wealth and financial independence has now morphed into an odyssey for "secrets".
My next posting will discuss how to spot the difference between the teacher and the millionaire "guru".
Thursday, February 19, 2009
REAL ESTATE INVESTING:What's In It - Who's In It
It is universally known and accepted that the greatest potential for wealth - anywhere in the world, lies in the ability to control real estate - land and the bounties it possess have been the cause of marriage as well as mayhem - throughout world history the need for more and more territority has been the cause of wars between princes and principalities seeking to increase the wealth in their treasuries.
Today, it is said that at least 7 out of every 10 millionaires have accumulated their wealth by way of real estate. And given the historic levels of foreclosures in the real estate market today - the opportunity for real estate investors is greater than it has ever been in a very,very long time.
From the bowels of this financial debacle has emerged the carpetbaggers and self-proclaimed gurus of the real estate investment business. These "experts" promote themselves as having all the answers to getting wealthy investing in real estate. From the unlearned, and uninitiated these "gurus" make mega bucks selling investment programs on CDs,Seminars,Boothcamps and One on One Tutoring; each a step up to another level enabling these carpetbaggers to solicit even more monies from a "pumped up" audience seeking to become the next Donald Trump.
In my next blog I will discuss how these "gurus" make their millions in real estate selling the "secret" to making "millions" in Real Estate Investing - secrets which only they have.
Today, it is said that at least 7 out of every 10 millionaires have accumulated their wealth by way of real estate. And given the historic levels of foreclosures in the real estate market today - the opportunity for real estate investors is greater than it has ever been in a very,very long time.
From the bowels of this financial debacle has emerged the carpetbaggers and self-proclaimed gurus of the real estate investment business. These "experts" promote themselves as having all the answers to getting wealthy investing in real estate. From the unlearned, and uninitiated these "gurus" make mega bucks selling investment programs on CDs,Seminars,Boothcamps and One on One Tutoring; each a step up to another level enabling these carpetbaggers to solicit even more monies from a "pumped up" audience seeking to become the next Donald Trump.
In my next blog I will discuss how these "gurus" make their millions in real estate selling the "secret" to making "millions" in Real Estate Investing - secrets which only they have.
Wednesday, February 18, 2009
HOME LOAN MORTGAGES:The $75 Billion Plan-Not For Everyone
As he announced his $75 Billion bail out plan for homeowners, President Obama informed America that the "plan will not save every home" - in effect not everyone will qualify for loan modification - not every home will escape the foreclosure block. The Plan, as it appears to be set up, does not require the participation of anyone - not the Lender, not the Homeowner.
The $75 Billion Home Stability Initiative, instead, provides a vehicle of incentives, on the one part, for Lenders to cut monthly payments to an estimated 4 million homeowners on the verge of foreclosure. The other part is set to assist homeowners whose homes have lost value - their mortgages should be owned or guaranteed by Fannie Mae or Freddie Mac. In this latter scenario, it is seen that some 5 million homeowners could benefit as the Plan would allow for the absortion of some $200 million in losses by each of the two companies using funds set aside by Congress in 2008.
Economy.com tells us that 13.8 million or almost 27% of 52 million homeowners with mortgages owe more (on their mortgages) than their homes are worth..." It is expected that homeowners, whose loans exceed their properties' value by more than 5%, may experience difficulties getting the help they are seeking from their Lender.
Investors holding certain toxic mortgage-backed securities, who make monies from interest payments, may not be too willing to cooperate, and this could be key to preventing many foreclosures. Could this be something the President was thinking about?
The $75 Billion Home Stability Initiative, instead, provides a vehicle of incentives, on the one part, for Lenders to cut monthly payments to an estimated 4 million homeowners on the verge of foreclosure. The other part is set to assist homeowners whose homes have lost value - their mortgages should be owned or guaranteed by Fannie Mae or Freddie Mac. In this latter scenario, it is seen that some 5 million homeowners could benefit as the Plan would allow for the absortion of some $200 million in losses by each of the two companies using funds set aside by Congress in 2008.
Economy.com tells us that 13.8 million or almost 27% of 52 million homeowners with mortgages owe more (on their mortgages) than their homes are worth..." It is expected that homeowners, whose loans exceed their properties' value by more than 5%, may experience difficulties getting the help they are seeking from their Lender.
Investors holding certain toxic mortgage-backed securities, who make monies from interest payments, may not be too willing to cooperate, and this could be key to preventing many foreclosures. Could this be something the President was thinking about?
Tuesday, February 17, 2009
HOME LOAN MORTGAGE:The Homeowners Dilema
Indications are that the pace of foreclosures across the nation should be slowing in the not too distant future - some say before this year, 2009, is ended.
The recent actions of JP Morgan-Chase and Citigroup, to impose moratoriums on home foreclosures, is a cause for hopeful anticipating by homeowners , facing mortgage issues, nationwide. The hope is that other banks will follow the lead of these two and likewise institute moratoriums, if even with some nudging from the federal government.
With some 10,000 families a day, according to some estimates, losing their homes; and with only $50 billion slated to buy up those troubled mortgage-backed securities, it is yet to be determined if the hopes of homeowners are justified, albeit the promises of the President.
What happens when the moratorium ends - what will the banks want, what will they be demanding - how severe will be their guidelines for restructuring and modifying the mortgage loan.
Job security, the uncertainty of continued employment, limited and dwindling financial resources are serious concerns of homeowners, and are not helpful when applying for mortgage loan modifications. This is crushing to the hopes of the homeowner. Staying in their homes is priority number one. Homeowners are encouraged to immediately seek mortgage loan modification at the earliest indication that there may be some future negataive impact on their income or financial assets. Banks are more inclined to work with homeowners who have good prospects, and who could demonstrate the ability to eventually pay off their mortgage. This, then, is the best way forward.
The recent actions of JP Morgan-Chase and Citigroup, to impose moratoriums on home foreclosures, is a cause for hopeful anticipating by homeowners , facing mortgage issues, nationwide. The hope is that other banks will follow the lead of these two and likewise institute moratoriums, if even with some nudging from the federal government.
With some 10,000 families a day, according to some estimates, losing their homes; and with only $50 billion slated to buy up those troubled mortgage-backed securities, it is yet to be determined if the hopes of homeowners are justified, albeit the promises of the President.
What happens when the moratorium ends - what will the banks want, what will they be demanding - how severe will be their guidelines for restructuring and modifying the mortgage loan.
Job security, the uncertainty of continued employment, limited and dwindling financial resources are serious concerns of homeowners, and are not helpful when applying for mortgage loan modifications. This is crushing to the hopes of the homeowner. Staying in their homes is priority number one. Homeowners are encouraged to immediately seek mortgage loan modification at the earliest indication that there may be some future negataive impact on their income or financial assets. Banks are more inclined to work with homeowners who have good prospects, and who could demonstrate the ability to eventually pay off their mortgage. This, then, is the best way forward.
Monday, February 16, 2009
HOME LOAN MORTGAGES:How Helpful Are The Banks
President Obama is signing the signing the 787 billion-dollar (stimulus) package of investment and tax cuts tomorrow to the delight and satisfaction of millions across the nation;among them are homeowners,businessowners and banks.
Wall Street,which last year got a jumbo portion of financing from taxpayer's monies is expecting an additional infusion of cash from this current package, so too, are the auto makers and the Banks,which themselves already got some cash.
The prevailing feeling on Main Street is that help is on the way - with the additional cash the Banks are receiving, homeowners are less likely to loose their homes to foreclosure. In fact,only recently, Citigroup and JP Morgan-Chase along with Mortgage Finance giants Freddie Mac and Fannie Mae announced the imposition of moritoriums on home foreclosures.
This sentiment was reinforced over the weeekend when, in a nationally televised interview, Senior Obama adviser, David Axelrod informed us that the President would on Wednesday of this week, announce a plan that is aimed at stemming foreclosures and provide immediate help to homeowners who are "right on the edge" of foreclosure, and ultimately help in "raising home values that are plummeting."
That same day House Financial Services Chairman, Barney Frank (D.-Mass) told us on a competing national network, that $50 billion (for the program)would not be enough. The Congressman went on to say, however, that he "...in fairness...won't know that for a while.." He continued "...we will begin (the process),..if in fact,by the time we've used $50 billion, it turns out we can use more,then I believe the Congress would be responsive..."
Meanwhile Mr. Axelrod was indicating, in his interview, that the $50 billion mortgage bailout could double to $100 billion.
Is this music to the ears of Banks, or is it? Think for a moment what these bankers are discussing in their boardrooms as they sip their frappucino. Think of the glee they must feel as they tee off at their local country club - all that money coming their way.
Why? Tell me now - would these very unpopular people, overburdened with nonperforming assets make it a priority to assist homeowners with the restructuring and modification of their mortgage loans, when they know the Federal Government is initiating plans to bail them out.
Obviously the most troubled of these banks are the ones with the most troubled assets - it follows they not only expect to recieve the first of the bail out monies, but the most of it - can you understand then why it is in their best interest to hold on to as much of the bad paper for as long as they can? Can you now understand why some of them refuse to assist the homeowner who is seeking relief -telling them that unless they have missed payments , help is not possible.
As he fulfills his promise to use government to assist struggling homeowners avoid foreclosure, it will be interesting to see how the President deal with the concerns of the Main Street and the collusions of Wall Street.
Wall Street,which last year got a jumbo portion of financing from taxpayer's monies is expecting an additional infusion of cash from this current package, so too, are the auto makers and the Banks,which themselves already got some cash.
The prevailing feeling on Main Street is that help is on the way - with the additional cash the Banks are receiving, homeowners are less likely to loose their homes to foreclosure. In fact,only recently, Citigroup and JP Morgan-Chase along with Mortgage Finance giants Freddie Mac and Fannie Mae announced the imposition of moritoriums on home foreclosures.
This sentiment was reinforced over the weeekend when, in a nationally televised interview, Senior Obama adviser, David Axelrod informed us that the President would on Wednesday of this week, announce a plan that is aimed at stemming foreclosures and provide immediate help to homeowners who are "right on the edge" of foreclosure, and ultimately help in "raising home values that are plummeting."
That same day House Financial Services Chairman, Barney Frank (D.-Mass) told us on a competing national network, that $50 billion (for the program)would not be enough. The Congressman went on to say, however, that he "...in fairness...won't know that for a while.." He continued "...we will begin (the process),..if in fact,by the time we've used $50 billion, it turns out we can use more,then I believe the Congress would be responsive..."
Meanwhile Mr. Axelrod was indicating, in his interview, that the $50 billion mortgage bailout could double to $100 billion.
Is this music to the ears of Banks, or is it? Think for a moment what these bankers are discussing in their boardrooms as they sip their frappucino. Think of the glee they must feel as they tee off at their local country club - all that money coming their way.
Why? Tell me now - would these very unpopular people, overburdened with nonperforming assets make it a priority to assist homeowners with the restructuring and modification of their mortgage loans, when they know the Federal Government is initiating plans to bail them out.
Obviously the most troubled of these banks are the ones with the most troubled assets - it follows they not only expect to recieve the first of the bail out monies, but the most of it - can you understand then why it is in their best interest to hold on to as much of the bad paper for as long as they can? Can you now understand why some of them refuse to assist the homeowner who is seeking relief -telling them that unless they have missed payments , help is not possible.
As he fulfills his promise to use government to assist struggling homeowners avoid foreclosure, it will be interesting to see how the President deal with the concerns of the Main Street and the collusions of Wall Street.
Sunday, February 15, 2009
MORTGAGE HOME LOANS:The Modification Mystery
Late last week the US Congress passed President Obama's Stimulus Package which he is supposed to sign on Tuesday, following the President's Day holiday. According to those who claim to know,this will now make it easier for the Obama Adminidtration to begin to turn the US and by extension,the world's economy around.
However,it seems,no one will go on record to say when the economy will turn around, or indeed,even if it will - thus, there is no time line or even a time horizon,to use the nomenclature of the recent past administration. nevertheless, the general concensus on main street is; the hope that it should happen in a twelve to eighteen months.
While we all continue to wait and hope across America, and as we discuss the pros and cons of the historic passage of this Bill and what it will mean for us,homes continue to be lost to foreclosure action,jobs continue to be lost to austerity and even businesses continue to close their doors because of the impact of the recesssion,even as States struggle to provide necessary services and balance their Budgets.
As home values correspondingly continue their downward spiral,homeowners must decide, now, what they should do about their mortgages. Should they seek to modify and restructure,should they consider a short sale accomodation with their Lender/Bank and a potential Buyer,or should they simply,as others have done,just walk away from their homes.
Added in the mix is the confusion homeowners are finding in the modification messages that bombard them daily on TV, the Radio and the Mail,by sundry services proclaiming they have the right solution for the homeowners' mortgage dilemma.
Why should the homeowner pay for this service - should they even pay at all?Is this something the already struggling can do for themselves? How honest is this provider? Are they in it only to make a buck,or do they genuinely feel the homeowner's pain? What about the Lender/Bank - how concerned are they about the homeowner's plight? What effort are they making to facilitate the homeowner who is applying directly to them for assistance to restructure and modify their mortgage loan.
It has been reliably reported that some Lender/Banks have been refusing to consider the applications of homeowners if they are not behind on their mortgage payments, and even then there is procrastination and foot-dragging on their part.Should we now believe that homeowners,victims already, of the system and the economic downturn that was created,should deliberately wreck their good credit profile in order to get the attention of the Lender/Banks that actually placed them in this awful loan?
The alternative the homeowner has is to pay some high-priced lawyer to represent them in their effort to get the attention of the Lender/Bank to acceed to the applications of the homeowner seeking home mortgage relief.
As this is going on,more jobs are being lost,more homes are lost and more "for sale" signs appear on your neighbor's' lawn down the street....and the beat goes on...
However,it seems,no one will go on record to say when the economy will turn around, or indeed,even if it will - thus, there is no time line or even a time horizon,to use the nomenclature of the recent past administration. nevertheless, the general concensus on main street is; the hope that it should happen in a twelve to eighteen months.
While we all continue to wait and hope across America, and as we discuss the pros and cons of the historic passage of this Bill and what it will mean for us,homes continue to be lost to foreclosure action,jobs continue to be lost to austerity and even businesses continue to close their doors because of the impact of the recesssion,even as States struggle to provide necessary services and balance their Budgets.
As home values correspondingly continue their downward spiral,homeowners must decide, now, what they should do about their mortgages. Should they seek to modify and restructure,should they consider a short sale accomodation with their Lender/Bank and a potential Buyer,or should they simply,as others have done,just walk away from their homes.
Added in the mix is the confusion homeowners are finding in the modification messages that bombard them daily on TV, the Radio and the Mail,by sundry services proclaiming they have the right solution for the homeowners' mortgage dilemma.
Why should the homeowner pay for this service - should they even pay at all?Is this something the already struggling can do for themselves? How honest is this provider? Are they in it only to make a buck,or do they genuinely feel the homeowner's pain? What about the Lender/Bank - how concerned are they about the homeowner's plight? What effort are they making to facilitate the homeowner who is applying directly to them for assistance to restructure and modify their mortgage loan.
It has been reliably reported that some Lender/Banks have been refusing to consider the applications of homeowners if they are not behind on their mortgage payments, and even then there is procrastination and foot-dragging on their part.Should we now believe that homeowners,victims already, of the system and the economic downturn that was created,should deliberately wreck their good credit profile in order to get the attention of the Lender/Banks that actually placed them in this awful loan?
The alternative the homeowner has is to pay some high-priced lawyer to represent them in their effort to get the attention of the Lender/Bank to acceed to the applications of the homeowner seeking home mortgage relief.
As this is going on,more jobs are being lost,more homes are lost and more "for sale" signs appear on your neighbor's' lawn down the street....and the beat goes on...
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