Foreclosures Tips

Tips to Preventing Foreclosure on your Virginia Home

“If a person defaults on a loan repayment to a lending institution, say two or more, then the institution earns the right to foreclose on the property for which the loan was intended to cover; this in an attempt to get compensation for the value of the debt outstanding. The lending institution gets their compensation either by auction, or an immediate sale to an interested investor.”

The purchase of a house or piece of land is a big achievement; and not one that comes easily. Persons who have never owned a home, may champion the cause for acquiring one- to keep as a nest-egg, or maybe for the pride of leaving it for their own kids. Whatever your goals are, owning a home is a smart investment and you should try to protect this investment at all costs.

These are the reasons why a person should avoid having the lender foreclose on their property:

1. In a foreclosure, the homeowner will never be compensated the full value of the house. Therefore he or she might never recoup the funds to buy another one.
2. Foreclosure will leave bad scores on a person’s credit rating. This is not a good thing, and affects the potential of getting new loans, credit cards or even employment.
3. When foreclosure imminent, the tenants are forced to move out right away. They have no time to prepare, and they have no say in when and how the house is sold.

Tips to Prevent Foreclosure

If two or more of the reasons above concerned you, it may be safe to assume that you would like to know how to prevent such misfortune. Here are some tips to prevent foreclosure.

1. Try to buy your house without borrowing from a bank or other such lender. Every person who has bills to pay would have given serious thought to what they should save or invest in for future “rainy days”. Home ownership is a good first thought. But if a person does not have all the money now, this does not mean they should go borrowing from a financial institution. Try asking for help from a friend, a family member, or a co-worker. They would more likely be lenient with repayments. Make sure that this individual is someone you can trust for confidentiality.
2. Refinance your loan or mortgage. There are smaller lending companies who would be willing to meet with you to discuss paying of your debts. Unless you have an expectation of money coming in shortly that would be able to pay this new debt, this would just serve to complicate the situation further.
3. Resolve to keep up with your payments. If you are a borrower this is simply the best way to avoid foreclosure. Watch your monthly expenditure, and find the ways that you can cut back on non-important expenses.
4. Want to sell your house? Foreclosure does not pay you what you’d like. Real estate agencies might not get your house sold. Why not try real estate investors or cash buyers / home buyers?  

 Are you a homeowner in the Virginia Peninsula cities of Newport News, Hampton, and the Hampton Roads, or maybe the Tidewater cities of Virginia Beach, Norfolk, Suffolk and Portsmouth? If you are trying to sell your home quickly to avoid the risk of foreclosure then you might want to talk to these people! (Help me sell my Newport News home, now!)

There are real estate investors in Virginia at this moment who have been paying instant cash for homes being sold in this state. Look out for them putting up signs at Virginia Beach, Hampton, Newport News, Norfolk, Portsmouth and all over! When you see them, go over and talk to them or click on this link: Community HomeSolvers await!

New Research Shows Houseplants Improve Indoor Air Quality

If you thought houseplants had gone the way of shag carpets and lava lamps, new research may give you reason to reconsider. The new research, some of which comes from NASA, has confirmed what many of us have long suspected — that plants can play a significant role in reducing indoor air pollution.

The Wall Street Journal reports that NASA recently explored the utility of plants for purifying air in space environments. This, in turn, led to a team of researchers from the University of Georgia and other universities around the world to look into the potential health benefits of plants in the home. What they discovered should have us all heading to the nearest nursery.

Plants, researchers found, work tirelessly to purify the air around them –– a process researchers call “phytoremediation”. And with the air in modern homes and offices becoming increasingly toxic, there couldn’t be a better time for the humble houseplant to come back into fashion.

In recent years, more and more has become known of the potential dangers of indoor air pollutants. Common indoor air pollutants include particulate matter, like dust and pollen, and gaseous pollutants emitted from paints, carpets and aerosol cans. Concentrations of these pollutants can be up to five times higher indoors than out. And considering that about 90% of our time is spent indoors, the quality of air inside our homes is something we all need to be taking seriously.

Strangely enough, some of the most common and effective green home improvements may actually be contributing to indoor air pollution. Researchers say energy efficiency measures like insulation and weatherproofing can increase the potential risks of air pollutants by effectively sealing off their leakage to the outside. Risks are also higher in large commercial spaces, such as big office buildings, that do not have operable windows for ventilation. Mechanical ventilation units that exchange stale indoor air with fresh air from outside are common in these buildings, but are expensive and often extraneous in homes. Enter the houseplant –– an inexpensive, readily available and environmentally-friendly alternative.

Plants clean the air in two ways: by absorbing pollutants through pores found on leaves, and by metabolizing contaminants through tiny microorganisms living in the soil. In one study conducted in an office environment, potted plants were able to reduce dangerous VOCs (volatile organic compounds) by almost 75% and dust by 20%.

“Potted plants can provide an efficient, self-regulating, low-cost, sustainable bioremediation system for indoor air pollution,” says Margaret Burchett of the University of Technology in Sydney. One or two plants placed on an office desk or a handful spread throughout a home can play a significant role in reducing indoor pollutants.

Some institutions are already taking action. Planners of the Henry Ford West Bloomfield Hospital in Michigan have filled the atrium of the new facility with hundreds of live plants to generate oxygen and filter contaminants.

While all plants are helpful in cleaning our air, not all houseplants are created equal. Researchers claim that certain plants (English ivy, asparagus fern, and variegated wax plant among them) are much better at filtering harmful contaminants than others. Some stores, like Lowe’s and Home Depot, have even begun labeling the most effective air-cleaning plants with special tags.

In addition to identifying the plant varieties best suited for indoor air cleansing, researchers at the University of Georgia aim to develop a simple test kit for homeowners to periodically check the quality of air in their homes. Some enterprising scientists have even begun to market air-filtering products that make dual use of live plants and electric fan technology. The Andrea Air Filter, a sleek and simple plant-assisted air filtration device, has already sold thousands of units.

Just in the nick of time, the houseplant is making a much-need return to our homes.

How to Deal With Foreclosure Aftereffects?

You will find very few people choosing foreclosures voluntarily. The inability of a person to pay back mortgage installments often creates a foreclosure situation. Now, there can be various reasons why a borrower falls behind paying the monthly payments. As a result, a borrower has to face the severe aftereffects of foreclosure.

A sudden job transfer, job loss or medical emergencies are few of the situations which can occur at any point of time. However, a good understanding of the ill-effects of a foreclosure may help you plan out the finances in an advanced way so that you will never require facing the dreadful reality.

Given below are some important steps which will help you to deal with the foreclosure aftereffects.

 Inform and talk to your lender

It is not only the borrower that wants to avoid foreclosures, the lender even do not want such situations to appear either. A lending institution makes money off the interest that you pay as your mortgage installments. And if it forecloses, the lender will not be achieving the interest. Therefore, most lenders shall be willing to assist you to keep your mortgage installments moving.

The right way to get help from your lender will be to let them know about your situation. If you face trouble making your payments them tell them directly. You will be losing all trust and the credibility if you wait for long and then go way behind on the payments.

 Repayment plan

If you are facing trouble paying the mortgage payments on the scheduled time, then talk to the lender about repayments.  A repayment plan can prove handy if you miss out the payments due to an urgent situation. Few lenders can allow you to pay off all the missed payments over 2 to 3 months on request.  So, it’s better to ask for assistance.

If your mortgage lender is flexible enough then he or she will be willing to rework all the mortgage terms so as to lessen the monthly payments. The lender can also lengthen the schedule of amortization.  Doing this, you can even roll on with the missed payments and get back paying off your payments at a low rate of interest.  Such an initiative can actually work to make paying the mortgages possible even during the financial difficulties.

Hard money loan

This might be an unpopular option but can prove to be a saving grace.  The hard money loans don’t include best terms.  In fact, these loans include higher rates of interest and a lot of fees along with it. However, these kinds of loans can offer you time which you require in order to sell out your home before your lender chooses to foreclose it.

Seek Crisis lines

Foreclosure aftereffects can be severe for a person facing financial hardship, displacement and bad credit situation. Dealing with this depression and anxiety can really be challenging.  Self-defeating thoughts may even lead to numerous physical symptoms.  Asking for assistance to improve the quality of life can be the best way to deal with the foreclosure aftereffects

Choosing The Right Credit Repair Company

Credit repair may seem impossible if you are buried in debt. But it is possible. Credit repair is not magic. It’s not an overnight process. It takes time. It requires efforts on your part. Credit repair is legal and permitted by law. Credit repair does not mean that your credit will be restored to perfect status. In almost all cases, you can get some improvement in your credit score. Patience is key to credit repair. If you are successful at credit repair, you will be able to get a credit card, home loan, auto loan, refinance, etc., at better interest rates.

Choosing the right credit repair company is very important. The credit repair company should be licensed and legitimate. Check with the Better Business Bureau. The company should be experienced. You can even do a search of the company over the internet. Find out about the range of services they provide. Credit repair is more than just sending out letters to creditors. Before you select one company, ask them about their fee policy.

Credit repair companies are governed by the Credit Repair Organizations Act (is actually Title IV of The Consumer Credit Protection Act. Section 401 states, however, it can be referred to as “Credit Repair Organizations Act”.), which ensure that prospective buyers credit repair services from credit repair organizations are provided with the information necessary to make an informed decision. It intends to protect the public from unfair or deceptive advertising and business practices by credit repair organizations. It enumerates prohibited practices, required disclosures, contract requirements, liability, and penalties for non-compliance and procedure to report non-compliance. The statute was signed by the President on September 30, 1996.

Like with everything else in life, it is most important that you are comfortable dealing with the credit repair company. So choose one you are comfortable with 

Have Problems Paying Your Mortgage? Call Your Lender To Help You Out

With so many American homes going into foreclosure, it should be of no surprise that lenders are willing to go the extra mile to help you keep your home. However, you must act right away. The sooner you act, the better chance you have of keeping your home from going into foreclosure.

 Problems – Start With Your Lender

If you notice you’re having issues or will be, you need to speak with your mortgage lender. Stop procrastinating and make this phone call. They won’t judge you or yell at you for getting into trouble; it happens. Mortgage lenders make their money by your monthly payments; if you don’t make it and they have to foreclose, they lose money. It’s in their best interest to find ways to help you salvage your credit and keep you in your home.

If you wait too long, you make it harder for the lender to get you help. If the lender hasn’t heard from you after three months of no payments, the company will have to start the foreclosure process. Make sure you take the necessary steps to keep your home from entering the foreclosure process; not just for your home but for your credit too.

Before You Call The Lender

The first thing you need to realize before you call the lender is to swallow that pride and resign yourself to realize you need help. Give the lender the reasons why you are unable to make the payments and be truthful about it. You want to make a good impression so you need to answer as truthfully as you can to the questions being asked.

Six Ways Your Lender Can Help You

There are six ways that your lender can help you but it’s based on each person’s unique situation. These six ways include:

• Bankruptcy
• Debt counseling
• Deed in lieu of foreclosure
• Grace period
• Payment forbearance
• Sell the home

 Bankruptcy should be used only as the last resort since it can negatively affect your credit (usually up to 10 years). Bear in mind that bankruptcies are much harder to come by due to recently passed laws.

Debt counseling is usually offered when all the debt you have has fallen behind, not just the mortgage. Spending and structured repayment plans are typically designed to help you get back on your feet.

Grace periods are given to homeowners so they can wrangle with the problems on their own. However, if you don’t stay in touch with your lender during this time, they will start the foreclosure process.

Deed in lieu of foreclosure means you voluntarily return the home to the lender. However, you’ll still need to pay back the difference on what you paid for the home and what it was sold for. There are not many lenders who accept this arrangement.

Payment forbearance is when you have a bit of equity in your home, which allows you to rework the loan in order for lower monthly payment for a specific amount of time. Any past due amount could be added into a new loan.

Sell the home is an option for people who just don’t want the home any longer or have problems so serious that it cannot be resolved. The idea with selling the home is to sell it while paying off the mortgage balance and any back debt owed, keeping the home from going into foreclosure.

Four Questions Lenders Tend To Ask

 Question 1 – Why did you fall behind?

All too often good people get into bad troubles. Make sure you’re honest about why you fell behind such as losing your job, an unexpected medical expense, higher homeowners’ insurance and taxes, etc. Don’t embellish.
 
Question 2 – What is your current income?

Make sure you include all income that comes into your home; don’t forget to add in your savings and benefits.
 
Question 3 – What are your other debt obligations/expenses?

Make sure to list only the essential financial obligations such as student loans, child support, utilities, credit payments, etc.

Question 4 – What are you doing to fix the issue?

Make sure you brainstorm some ideas to help you fix your problems for the short-term and long-term. Be truthful if you think the situation is hopeless. Since foreclosure can ruin your credit for at least 10 years, it doesn’t hurt to explore all the possibilities.

Discover Why Short Sales Are Becoming Popular Choice To Stop Foreclosure

Homeowners who are facing foreclosure will use the short sale method to stop it from occurring and ruining their credit entirely. This especially true of homeowners where interest rates on their loans skyrocket, either doubling and/or tripling their house payment with them unable to afford the home any longer. Real estate investors also like short sales because of the deep discounts they receive from them.

Sellers will negotiate a short sale with their lender, who may require the seller to explain why they are unable to make the normal monthly payments. Not too long ago, home foreclosures rose because the 2004-2005 adjustable rate mortgages that were written were resetting. The problem with short sales is that they are complicated and are likely to stay complicated with lenders having to deal with them. Those homeowners who used the equity in their home while the real estate prices were inflated are now feeling the pain.

How Lenders Work In Short Sales

Lenders understand that home repossession is costly; after all, they have to spend tens of thousands of dollars to deal with the home including the maintenance, refurbishing, marketing and selling the home. The only issue is that there are no guarantees that they’ll be able to recoup their losses, not like they can from a short sale.

Lenders want physical proof that the homeowner is unable to pay their monthly bills and actually needs relief from the home payment. Homeowners and lenders see short sales as the last resort before the foreclosure or bankruptcy processes.

While lenders don’t want to hold onto problem properties, they certainly don’t want to lose the home for very low prices.

How Sellers See Short Sales

What seller wouldn’t want to get the most out of their house? They certainly don’t desire to sell their home for a lot less than the home’s market value or less than what they initially purchased it for. This situation could turn dire if an unforeseen event takes place that generates a financial hardship for the homeowner. For instance, they lost a job, are diagnosed with long-term illness or have a sudden rise in living expenses. These are just three of the reasons that homeowners see themselves in a cash-strapped situation.

Some sellers are lucky enough to convince the lender to do a short sale as the best way to handle the problem but there is a downside they must understand. That is… some lenders may claim the forgiven debt as a loss on the company’s taxes and give the seller a 1099 form for that amount.

A Look At Foreclosures

Remember that in 2004-2005, there were millions of loans written for adjustable rate mortgages, many of them resetting in 2007,2008 & 2009. As a direct result, short sales also rose. Lenders have differing views on how to handle foreclosures and short sales workouts.

More and more short sales are taking place and anybody who has completed short sales understands, it’s rough ride for the sellers who are already feeling topsy turvy. However, if you understand what short sales are all about, you can opt to go this route to avoid foreclosure.

About The Author:

EJ Harris is one Managing Partners at Community HomeSolver, which is a home buying company for “Sell House”.  Harris has many interesting articles written on this very topic. People expect to find all kinds of interesting data when they are trying to find out how to sell their home or sell their house. Yet, it’s not always what they are searching for even when they type in “How To Sell Your Home”, “Privately Sell Your Home” or “Sell Homes Online”.  You may not get everything you want from this article but you’ll be surprised by what you do learn about “Sell House”, “Sale Home” even if you made a mistake in spelling while searching for a particular topic such as “hpw to sale your hom fast” or “seling yur home quicly”.

Community HomeSolvers buy homes and houses in and around areas of Williamsburg, VA. We Buy Houses in Newport News, Hampton, Norfolk, Virginia Beach, Portsmouth and Chesapeake! We are also now seeking homes in and around Richmond, Henrico, Chester, Chesterfield,  Highland Springs, Colonial Heights

What You Need To Know About Credit Repair After foreclosure

Foreclosure is very serious. It hurts your credit score and makes it harder to buy a house or rent in the future.

Your credit will get affected if you go through foreclosure or give your lender a deed in lieu of foreclosure or if you go in for a short sale. A foreclosure or deed in lieu of foreclosure can result in a loss of up to 300 points on your FICO score. So if your FICO score was 700, it could go down to 400. A short sale will result in a loss of 80 to 100 points. This means a short sale with a previous FICO of 680 will see it fall to 580 to 600.

Foreclosure is a public record. A foreclosure and delinquent payments will show up on your credit report. It will remain for up to seven years. It can be very difficult if not impossible depending on the reason for the foreclosure for you to obtain credit once foreclosure shows up in your credit report. Under federal law, you have a right to have an explanation entered into your credit report and you should do so if there were extenuating circumstances which caused the foreclosure.

Credit repair may seem impossible if you are buried in debt. But it is possible. Credit repair is not magic. It’s not an overnight process. It takes time. It requires efforts on your part. Credit repair is legal and permitted by law. Credit repair does not mean that your credit will be restored to perfect status. In almost all cases, you can get some improvement in your credit score. Patience is key to credit repair. If you are successful at credit repair, you will be able to get a credit card, home loan, auto loan, refinance, etc., at better interest rates.

A credit report is a history of how you pay your financial obligations. When you borrow money or apply for credit for the first time, your credit report is created and is updated on regular basis. Your lenders will send the credit reporting agencies or credit reporting agencies specific and factual information about their financial relationship with you on regular basis. This information includes when you opened up your account, whether you make your payments on time, whether you missed one or more payments, etc.

The credit reporting agencies receive this information directly from the lenders and retain it to help other lenders make decisions about granting you credit. Your credit report contains all the information received from your lenders and provides a picture of your financial health. All lenders will request the credit reporting agencies for your credit report whenever you apply for a loan or credit. Your credit report helps them determine the risk factor involved in providing credit to you.

You have the right to review your files and to be told whether the information has been given to anyone. You also have the right to have the information contained in your credit report explained to you and to make copies of that information. A credit reporting agency is not allowed to require you to sign a waiver or release before you can see your file.

Foreclosure MIGHT be the better option for you.

For most homeowners, bankruptcy is often the last resort to prevent foreclosure. If you are facing foreclosure, consider the other options before thinking of bankruptcy. Filing for bankruptcy can have a disastrous affect on your credit. In fact foreclosure might be the lesser of the two evils.

When you file for bankruptcy, you loose all control over your finances. A court appointed bankruptcy will administer all your financial activities. The bankruptcy trustee will take over all your non-exempt assets and sell them to pay off your creditors. Bankruptcy will discharge most of your debts. But some debts are non-dischargeable. The most common types of non-dischargeable debts are

• Certain types of tax claims,
• Debts not set forth by the debtor on the lists and schedules the debtor must file with the court,
• Debts for spousal or child support or alimony,
• Debts for willful and malicious injuries to person or property,
• Debts to governmental units for fines and penalties,
• Debts for most government funded or guaranteed educational loans or benefit overpayments,
• Debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated,
• Debts owed to certain tax-advantaged retirement plans, and
• Debts for certain condominium or cooperative housing fees.

When you file for bankruptcy, all your assets except the exempt properties become the property of the bankruptcy trustee. The Bankruptcy Code defines “property” very broadly as all legal and equitable interests of the debtor and any property that is community property of the debtor and his spouse.  Even the property that you select as exempt property is property of the estate until the exemption claims are confirmed. The exempt properties are necessary for your fresh start. The exemption claims are confirmed before the creditors are allowed to participate in the distribution of the non-exempt property.

Bankruptcy filing includes costs payable to the government in the form of bankruptcy fees. Besides bankruptcy fees, you may also have to pay attorneys fees if you hire an attorney. While the overall bankruptcy process is simple, it may get complex at times and it is best to hire an attorney to do the work for you. Bankruptcy proceedings must be filed in a federal court having jurisdiction over your place of residence. State courts cannot hear bankruptcy petitions. Bankruptcy is governed by federal laws.

Bankruptcy is a legal procedure for dealing with the debt problems of individuals and businesses and discharges financial obligations. This procedure is covered under Title 11 of the United States Code (the Bankruptcy Code). The vast majority of cases are filed under the two main chapters of the Bankruptcy Code, which are Chapter 7 and Chapter 13.

Chapter 7 is the more common form of bankruptcy filing. A filing under chapter 7 is called liquidation. It is a kind of liquidation proceeding in which the debtor is allowed to keep aside exempt property whereas a trustee appointed by the court collects his non-exempt assets, sells them and pays off the creditors through the sale proceeds.

Chapter 13 bankruptcy proceeding allows the individual debtor to pay down his debts, either the entire amount or a part of it, with the help of a payment plan under the supervision of the court. Debtors filing this chapter can keep their assets with them while they follow the plan or after they have paid off the required portion of debt. It involves the rehabilitation of the debtor to allow him or her to use future earnings to pay off creditors.

Chapter 7 bankruptcy dissolves all debt and absolves you of the responsibility to pay it. Chapter 13 bankruptcy will reorganize your debt and creates a payment plan.

Choice of these plans is never easy. In fact it is not easy to decide whether foreclosure is worse than bankruptcy! It is always advisable to consult an attorney with your specific problems.

Act Now To Stop Foreclosure And Save Your Home

The biggest mistake you can commit when you fall behind on your mortgage payments is to wait too long to tell your lender what is going on. It’s never too late to do anything but to prevent foreclosure, it is better to be proactive than reactive.

Acting fast is very important. It is extremely important to contact your lender as early as possible, after you find yourself unable to make your loan payments. Most of the major lenders have programs for mortgage modification, forbearance, or other remedies that can help you prevent foreclosure. More than half the people who go into foreclosure never respond to letters from the lenders, nor contact the lenders. Your options become limited as time passes by. Contact your lender immediately and tell the lender about your situation. Once you contact your lender, they can allow payment delays, mortgage modification, and come up with new repayment plans, or they may negotiate a lump-sum payment.

When it comes to preventing foreclosure, every minute counts. Early contact – within the first 15 days of missing a payment – is critical in saving homeowners from the devastation of foreclosure. More than half of those in foreclosure did not call for help when they fell behind in their mortgage payments. Do not hesitate to contact you lender. There is nothing to fear about or be embarrassed.

You can get emotional or fear contacting the lender when you face foreclosure. But you must contact the lender. You are not alone. There is nothing to be embarrassed about missing a mortgage payment.

Remember your loan servicer – who you get your monthly statements from may be different from the one who actually owns your loan. If you are not sure whom to contact, call the number on the statement and they will advise you.

Explain your situation to the lender. Once the lender appreciates the situation, he may come up with a workable suggestion. Remember, all this time his aim would be the same as yours – you are able to pay and the house remains in your hands. This can be done by increasing the number of installments which you were required to pay. This will ease the situation for your and lender’s money also remains the same. In fact, as a simple calculation may tell, the lender gains financially. Depending on your situation and the status of your mortgage, there may be different options available to you including

• restructuring

• refinancing

• selling your home

• deed in lieu of foreclosure

Be honest about your situation, so they can help you find the right solution. Lenders usually offer a variety of solutions for people who have fallen behind on their mortgages including temporarily reducing or waiving payments, setting up short-term repayment plans to help you make up the deficit, adding the unpaid balance to the principal of your loan and increasing your payments slightly to cover the extra amount, refinancing the debt, arranging a repayment plan or modifying the loan by adjusting the interest rate or extending the terms to make it more affordable. These options are discussed in detail in the following chapters.

However, if your situation is really bad, the lender may even agree to make other concessions. For example, the lender may be willing take less money in settlement of your dues. Once the lender realizes that the situation of the borrower has become very unviable, it is time for the lender to retrieve whatever possible from a potentially bad situation.

If the lender feels that the only way of saving the situation is to reduce the financial burden on the homeowner, the lender may also agree to reduce the interest.

The lenders have even been known to reduce the principal. It all depends on what sort situation the borrower finds himself in. It goes without saying that the lender will not be happy to do this, but then again, he has to reassess the circumstances and then decide.

 If you cannot keep your home, your lender can work with you to avoid foreclosure and reduce the negative effect on your credit reputation. For example, the lender can permit a qualified buyer to take over your mortgage debt and pay the mortgage payments, even if the mortgage is non-assumable. As a result, you may be able to sell your property and avoid foreclosure.

Don’t just sign your home away and walk out. Negotiate. Whatever be your situation, never ever enter into any deal without consulting an attorney. Never make an impulse decision. Your instincts will drive you to make quick decisions in order to resolve defaults as soon as possible. Before taking any decision, weigh the pros and cons.

US Unemployment Over 10% as Housing Tax Credit Passes Congress

By Chris McLaughlin

Tax credit

It’s here!  The U.S. House of Representatives has just voted (403-12) to extend and expand the homebuyer tax credit, and it’s on its way to the President for his signature…he’s expected to sign it today.  Not only does it extend the tax credit, but it expands it.  The items carried over until April 30, 2010 are:  Amount of Credit ($8000 or $4000 married, filing separate) and Definition for Eligibility (May not have had an interest in a principal residence for 3 years prior to purchase).  The items added to the credit, from December 1 to April 30 are, for current homeowners:  Amount of Credit ($6500 or $3250 married, filing separate); Effective Date (Date of Enactment); Definition for Eligibility (Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years); Termination of Credit (Purchases after April 30, 2010); Binding Contract Rule (So long as a written binding contract to purchase is in effect on April 30, 2010, the p
urchaser will have until July 1, 2010 to close); Income Limits ($125,000 – single $225,000 – married Additional $20,000 phase out); Limitation on Cost of Purchased Home ($800,000 Effective Date of Enactment); Purchase by a Dependent (Ineligible Effective Date of Enactment); Antifraud Rule (Purchaser must attach documentation of purchase to tax return).

Unemployment over 10%

According to the long-awaited report from the Labor Department, in October unemployment rose to 10.2% for the first time since 1983 – much worse than expected.  There was a net loss of 190,000 jobs in October, an improvement from a revised estimate of 219,000 job losses in September, but far worse than the 175,000 jobs forecast by economists surveyed by Briefing.com.  This is the 22nd straight month of job losses.  The Obama administration estimated last month that 640,000 jobs were created or saved by the federal stimulus package passed earlier this year but, while that makes good politics, it’s nothing compared to the 7.3 million jobs that have been lost by the economy since the start of 2008.  Today’s report comes one day after Congress voted to extend unemployment benefits by up to 20 weeks.

There are now a record 5.6 million people who have been unemployed for six months or longer, as the average time an unemployed person has been out of a job hit 26.9 weeks. According to a survey of top forecasters by the National Association of Business Economics last month, the consensus estimate among economists was that unemployment would hit a high of 10% in the final three months of this year and the first quarter of 2010.  But get this – the five economists with the most bearish forecasts had expected unemployment to rise to 10.2% in the fourth quarter of this year before hitting 10.5% in the first half of next year.

Short sales don’t hurt credit scores

Sarah Davies, vice president of VantageScore, at the Loan Modifications Conference now underway in Dallas, Texas, says restructuring plans on a mortgage, whether in the form a forbearance, modification or short sale, have a relatively insignificant effect on the consumer’s credit score.  VantageScore measures the generic consumer’s credit score and his or her likelihood of slipping into 90-plus day delinquencies on a scale of 501 to 990. If a servicer reduces a consumer’s original loan amount from 10-to-30%, the consumer’s credit score is only increased by three to 18 points, depending upon the consumer’s initial standing. Borrowers in the top-tier of credit scores, averaging an 862, receive only a three-point increase. Lower tier borrowers, in the 625 range, can receive an 18-point jump.  The credit score increases because the total amount of debt owed is reduced, and the borrower becomes inherently more reliable, Davies said.  However, foreclosure and bankruptcy c
an more severely affect the consumer’s credit score. If a borrower, who maintains good credit, is foreclosed, his or her credit score can decrease by as much as 140 points. Bankruptcy for someone in good credit standing results in a reduction of 365 points from the consumer’s credit and a mark on the file for seven to sometimes 10 years, Davies said.

Mortgages rates drop

Freddie Mac said the average rate for a 30-year fixed-rate mortgage (FRM) was 4.98% with an average 0.7 point, down from an average 5.03% the previous week. One year ago, the average rate for a 30-year FRM was 5.88%.  It said the average rate for a 15-year FRM was 4.4% with an average 0.6 point, down from 4.46% the previous week. A year ago, the rate was 5.88%. Freddie said the five-year Treasury-indexed adjustable-rate mortgage (ARM) was 4.35% this week, with an average 0.6 point, down from last week’s 4.42%. The one-year Treasury-indexed ARM averaged 4.47% with an average 0.5 point, down from last week when it averaged 4.57%. At this time last year, the 1-year ARM averaged 5.25%.  Bankrate.com’s survey of major US banks and thrifts put the 30-year FRM 5.35% with a 0.31 point, even with the previous week. A year ago, Bankrate.com’s survey was 6.44%. It says the 15-year FRM is 4.72%, down from $4.74% in the previous week.  Bankrate.com put the five-year ARM 4.64% this w
eek, even with the previous week.

Commercial and Multifamily Mortgage Originations Remain Low

According to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations,  commercial and multifamily mortgage loan originations for the third quarter of 2009 were 12 percent lower than during the second quarter of 2009, and 54 percent lower than during the same period last year.  The 54 percent overall decrease in commercial/multifamily lending activity during the third quarter was driven by year over year decreases in originations for all property types.  When compared to the third quarter of 2008, the decrease included a 62 percent decrease in loans for retail properties, a 59 percent decrease in loans for health care properties, a 58 percent decrease in loans for industrial properties, a 56 percent decrease in loans for office properties, a 46 percent decrease in hotel property loans, and a 40 percent decrease in multifamily property loans.

Now on to our real estate investing educational arena…

Friday File – More Real Estate Humor

Ahhh…Autumn weekends. Chances are you might be out and about with family or friends, visiting fall festivals or simply cruising around the countryside searching for your next short sale. Whatever the weekend has in store, it’s sure to be just a little bit better if you start it with a smile on your face. To help, here’s our newest Friday File to help you make the most of government lingo and double-speak.

Filibuster = a well known stalling technique that allows government officials to read (at least partially) the bill before voting or, when used as a “sister” to the “dust buster”… a way of collecting (for the record) official sounding statements to eliminate personal responsibility in order to stay on the safe side for the next election.

Sustainable Communities – once put together, you have no hope of respite. They keep going and going and going…

War On = We need funding fast so declare a war in order to enact the emergency funding mechanism rather than go through the normal debate and votes…ie, the war on drugs, the war on poverty, etc…

Biosolid Fuel = Recycled sewage

Consumer = American citizen

Taxpayer = American citizen

Voter = American citizen

American Citizen = Endangered species being overtaken
by “citizens” (small case).

Competitive = Lowest bidder wins.

Satisfactory = It barely passes but with any luck, won’t kill the end user.

Revenue Enhancement = For us silly not you! We are going to raise your taxes till you squeal.

Change = Retroactive, future and present modification of the entire economy, healthcare system, tax structure and political system.

Double-Think = Modern day media literacy

See you at the top!

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