This site is growing in popularity here in the North East.  I am curious what everyone thinks of this site and their experiences in closing transactions with the properties listed on the site, 

Also, what other auction websites are you using?

All comments, as always, very much appreciated!

 

 

 

Short refinances should be the norm.  They keep the homeowner in their home AND they reduce losses for the lender AND they improve the economy since home ownership stimulates economic growth.

A short refinance keeps the homeowner in their home, thus reducing the supply of homes on the market .  Short sales result in the homeowner losing their home; the loss of the American dream and creates economic disaster for everyone.

A short refinance entails the current lender or lenders forgiving debt based upon the current market value of the home.  The homeowner then refinances the remaining debt into a new mortgage.  For example, a home is currently appraised at $200,000.  The homeowner owes $275,000.  95% of the current value is $190,000.  The difference between $190,000 and $275,000 is $85,000.  The current lender(s) forgive the $85,000, enabling the homeowner to refinance the remaining $190,000 into a new mortgage.

As you can see, a short sale does the SAME action as a short refinance: a forgiveness of debt, BUT with a short sale, a stranger buys the home and the homeowner loses their home AND the supply of homes increases.  Lenders suffer larger losses, as well, with a short sale since they are typically sold for less than 95% of current value.  A short refinance keeps the homeowner in their home.

Now, we could take this one step further and SAVE the lenders their losses by doing the following along with a short refinance.  We could place a silent 2^nd mortgage on the home after the refinance to allow the former lender(s) to salvage their loss upon any sale of the property in the future.  In this way, it is a win-win-win for both the homeowner, the lender and the economy.

So, I as I have been asking myself for years now, who came up with the SHORT SALE transaction idea and ignored the OBVIOUS benefits of the SHORT REFINANCE transaction?  Homeowners have been told to be late on their mortgages to obtain loan modifications, which have failed miserably.  The homeowner then becomes so far behind, even if they hear of a short refinance, it then is too late.  Short refinances are not discussed in the media and the lenders do not speak about short refinances.  WHY?  Short refinances are available and the BEST option for everyone's sake.

Is it too late for short refinances to now be the norm?  NO!  It is never too late, but no one is listening.  I have gone to our senator and approached other politicians.  They all love the idea, but no one has made it their platform.

I will keep promoting this until someone does listen AND enacts this better solution to KEEP HOMEOWNERS IN THEIR HOMES AND START TO BRING THIS ECONOMY BACK!

A bend in the road is not the end of the road, unless you fail to make the turn.: Author unknown

Yes! The real estate market has a lot of bends for us to go through, but the road continues with those of us who do not quit!

Let's keep turning down the road and help every seller and buyer we can! 

Baseball season has begun and the talk has begun as well about the drinking at stadiums across the country.  Not only is the discussion on excessive drinking, but it is also focused on the types of drinks being sold dependent upon where you sit.

At Fenway, the bleacher seats are $28.  Here they sell beer. In the better seats, like the box seats, top shelf liquor is offered, like Absolute vodka, along with beer and other beverages.

The "bleacher people" feel they should be offered the top shelf drinks as well.  They feel they are being "discriminated" against and one is assuming they cannot afford the top shelf liquor since they are in the bleacher seats.

Is it a case of discrimination or simply wishing to make the higher priced ticket buyers feel they are receiving a "bang for their buck" by allowing for perks like top shelf liquor?

And more importantly, the conversation should be focused on the amount of liquor being overly consumed by the attendees at the sporting events.  Personnel are being criticized for not "shutting guests off when they have had one too many".  Stadium personnel are not acting like licensed bartenders and watching the purchaser closely prior to allowing the purchase of an alcoholic beverage.

So, I suggest having "drink coupons" attached to each ticket to the sporting event.  Perhaps 3 drink coupons per individual.  Yes, this will lead to some abusing the system and selling their drink coupons within the stadium.  BUT, I think it will help with the excessive drinking problem.  And some help is better than doing nothing.  And, yes, the owners of the stadiums will be reluctant to curb the drinking, since, after all, they are making $$$.  But at what cost?  Drinking and driving do NOT mix and we all should do what we can to avoid a potentially tragic result of the excessive drinking.

What are your thoughts?

This new mortgage will affect every American looking to mortgage a home. And the impact will be felt by all of us.

Regulators are deciding the future of down payments. For those who have minimal down payments, FHA will become the norm. 

The new mortgage: QRM: Qualified Residential Mortgage has yet to be defined in detail, but, basically, it will be the new mortgage which will require a defined minimum down payment.  Some proponents are advocating as high as 30%.  If a borrower does not have this minimal down, there will be limited non-QRMs available at higher rates. 

Thus, there will be an increase of mortgages at FHA, which currently offers mortgages at 3.5% down and reasonable rates.  The downfall of FHA is the 1% upfront mortgage insurance, which is financed into the loan and the monthly mortgage insurance which is paid every month for 5 years and until the LTV reaches 78% (for loans greater than 15 years) and paid monthly on loans 15 years or less when the LTV reaches 78% regardless of how long the payments have been made.

FHA may be gearing up for this by increasing their mortgage insurance rates by .25% effective with all new loans on April 18, 2011.  Even the 15 year FHA loans, which were exempt from monthly mortgage insurance with LTV's less than 90%, will have monthly insurance.

So, let's compare FHA payments based on a $200,000 loan at 4.75 for 30 years:

Prior to October 2010: P&I and mortgage insurance: $1146.31

After October 2010: P&I and mortgage insurance: $1205.23:   Increase of $58.92/month

After April 2011: P&I and mortgage insurance: $1247.31:  Increase of $42.08/month        

In less than a year, the increase due to mortgage insurance is: $101.00/month!

Proponents of QRM wish to see the originating company to maintain 5% of every loan on their books for the duration of the loan.  To have so-called "skin in the game", proponents believe the originating company will "care more" about underwriting the loan and will think twice before closing on a loan.  The opponents see this as a large negative for the consumer.  A non-QRM will have higher rates, thus greasing the lining of lenders and hurting the consumer and the housing market. If an originating firm must keep 5% of the loan and it is a non-QRM, the lender will wish to have a higher return for the higher risk. 

The 5% retention requirement will also negatively impact the smaller lenders who will not be able to stay in business with limited capital.  How many loans can a small lender hold for the duration of the loan?  Thus, an already high unemployment rate will grow worse with the closure of all the small lenders.

In 2009, 47% of homebuyers placed less than 10% down on homes.  Imagine what this new QRM will do to the housing market!

Mortgage insurance companies are against the QRM, since they are in business to insure homes with down payments of less than 20%.  If the regulators enact a 20% or more down payment requirement for a QRM, non-FHA mortgage insurance companies will no longer be required. 

April 21 is the deadline to define a QRM, but that date will probably be moved to a later date since this is a big decision for the mortgage industry.

The mortgage crisis is causing many changes.  Some are for the better, but this one needs to be reviewed and analyzed CLOSELY by regulators BEFORE they implement, since it may further negatively affect the real estate industry.

Stay tuned!

Yes!  It is possible! An agent was filling in for an open house for a fellow agent who was out of town.  She went into the WRONG house on the street.  She entered the wrong home through the side door and made herself comfortable.  She laid out her open house flyers and her cards and went around the house to make sure everything looked good.  Thankfully, no one was home!  Imagine her surprise and that of the occupant whom she may have surprised if there was someone home!!!

When did she realize her mistake? She had an appointment with a client who wanted to see the home.  When this client did not show up, she called the client asking where he was.  He told her he was at the house!  The agent said I am here and asked what house number he was at and he told her the correct house number per the MLS listing.  Realizing she was at the wrong house, she quickly left.

Moral of the story?  Make sure you cross check the house number with the listing BEFORE you enter!   Makes for a good story though!!

Using infra-red and bar code technology, you will be using your cell phone to charge your purchases.  Plastic cards are going the way of the dinosaur. I believe this is a GREAT step forward.  Benefits: All your cards in one convenient spot.  Quick reporting at your fingertips.  Reduced processing costs at credit card companies (will they pass on any savings?: Let's think positive!)

The pitfalls?  Lose or damage your phone and lose a lot.  Can we truly eliminate the plastic?  I believe there will always be some plastic available for those who are not technology savvy.  Not everyone has cell phones and I believe there will always be those who do not wish to have cell phones.  Even if the credit card companies offer a free cell phone for just using it for credit purposes, there will be consumers who choose to continue using plastic.

Another pitfall? Too easy to spend money!

Click on this link to read more:

http://money.cnn.com/2011/01/24/pf/end_of_credit_cards/index.htm

Title issues are rampant! Foreclosures not executed correctly, sloppy mortgage recordings, trying to determine who owns the mortgage all contribute to delays in title clearance.

The solution?  It would be in everyone's BEST interest that as soon as a home is marketed, the title be searched and resolved.   This will lead to FASTER closings.   As far as the cost of doing this, the lender holding the mortgage(s) would be best served since a delay in the closing just adds to their lost interest per day by not being able to collect their payoffs.  Time is money!  The money the lender(s) lose by delays in title clearance far outweighs the cost of searching and clearing the title.  While this is being done, the property is being marketed. 

So, listing agents, present the idea to the asset manager in control of the property.  Being pro-active is good for all parties!

 

 

The deficit panel is reviewing the “mortgage interest deduction”. This deduction saves homeowners $134 BILLION in taxes. By modifying the deduction over time, the government’s plan is to reduce the deficit, accordingly. But what about the homeowner impact??!! Wall Street Journal News 11/11/10 on this subject: What implication does this have on the homeowner? 1) The real estate market will further suffer! The financial benefit of owning vs. renting is the interest tax deduction. By eliminating it, or significantly modify it, will cause consumers to continue to rent. 2) Less available consumer dollars for spending. The tax deduction saves $$, thus allowing consumers to spend and GROW the economy: thus creating and maintaining jobs for all of us. The proponents of the plan say: 1) This deduction favors the upper class. 2) Most people use the standard deduction: why should homeowners be able to itemize, thus allowing for greater deductions than the standard. 3) We will be able to significantly reduce the national deficit. It is not just the upper class who owns homes. Especially with the pummeled prices in the real estate market, the doors have been opened for all classes to purchase lower priced homes. Homeowners should be “rewarded” from their government for helping the real estate market by purchasing a home. Home purchase increases consumer spending in many areas. This plan has been discussed since President Bush was in office. It has now resurfaced with this administration. This is NOT a good way to reduce the deficit. Especially now! The real estate market is suffering enough. This idea will certainly deliver a death blow to the real estate market.

100,000 points.  Sign of passion over this business? Perhaps I just love blogging? Enjoy receiving comments?   Look forward to the next client who finds me because of Active Rain? Or my intense desire to see us recover from this economic recession and see homeowner's STAY in their homes vs. suffer foreclosures or short sales?

 

I have blogged a lot about keeping the homeowner in their home and I am still passionate about developing a plan to do just that.

In summary, I propose

•1)      implementing new common sense underwriting guidelines for the loans which are eligible for refinance, but the subordinating lender refuses to subordinate or any refinance which "makes common sense" for other logical reasons.  In cases where "common sense" underwriting does not prevail, mortgage insurance is placed on the subordinate lien to make the 2^nd lien holder feel comfortable to agree to the subordination.

•2)      forbearance of debt (not elimination) for the amount of the mortgage in excess of 95% of current market value for those borrowers which can demonstrate a hardship.  Why should a stranger be allowed to buy a home at a price the current owner can afford?   Forbearance of debt is better than selling the home, leading to large lender losses, deteriorating/unkept properties, and attorney fees.

•3)      allowing a streamline rate & term refinance for anyone. The FHA streamline rate & term program would be used.  This program includes placing mortgage insurance on the new loan.  For those who do not qualify due to poor credit as a result of applying for a loan modification or for any hardship reason, they too should be allowed to rate & term streamline refinance through the FHA program with mortgage insurance.

•4)      allowing a re-entry into home ownership for those borrowers who fell victim to the mortgage crisis and were not allowed any of these remedies.  FHA guidelines, which would include home buying education, can be developed which would allow for re-entry of the former homeowner. Currently, there are 10-15% less home buyers in the market due to foreclosures or short sales.  They must wait 4 years until they may qualify again.  Some of  these buyers should wait 4 years, but the former homeowners who suffered due to job loss  and were not allowed a loan modification should be allowed re-entry sooner than 4 years.

 

In order for this economy to recover, the homeowner MUST STAY IN THEIR HOME.  Please pass on this blog to anyone who may have a connection to leaders in the government or lending industry to implement any of these proposals.

Homeowners everywhere will THANK YOU!