BluefoxOutlook

The Crazy Lady Who Wouldn't Leave. Vancouver WA Real Estate

Fri, 20 Nov 2009 15:59:07 -0600

Timely chronicle for sellers on how not to behave when buyers come to tour your listing.

Via Mark Hall Vancouver Washington Real Estate (Elite Realty NW - Keller Williams, Vancouver Washington):

The Crazy Lady Who Wouldn't Leave. Vancouver WA Real Estate

At the doorstep I gave my customary door knock and courtesy ring. It is a habit that I picked up during my first weeks as a realtor®. I always knock and ring the doorbell before I unlock the door. Unfortunately, I didn't have a chance to use the key because the seller opened the door and invited us in!

"Have you shown this house before?" she asked.

"Uh... No." I answered.

"Then you won't mind if I show you around." she said as she ushered us through the door and started her tour. She proceeded to take us through the cluttered house at a pace that would make snails looks like track stars. "This is the bedroom...this is another bedroom... this is the kitchen...this is..."

My clients peeked into a bathroom during her explanation of the second bedroom and were swiftly reprimanded for moving too quickly and asked to "pay attention."

My clients were annoyed and they completely checked out. There wasn't anything that anybody could have said that would have convinced them to consider buying that house. During the remaining home tours, they kept referring to it as the "Crazy Lady's House."

The sad part is that the home would have been perfect for them. The right size and layout. The right neighborhood and school district. The yard that they dreamed of. The problem is that they just can't get past the fact that it was the "Crazy Lady's House."

With that said, let me share a few thoughts with the sellers out there:

1. Most good realtors have toured thousands of homes in their careers.

2. You don't need to show them where the kitchen is, or point out the great room, or let them know that the bonus room could be used as an office, or a bedroom, or a den, or a... well you get the picture.

3. You make the buyer VERY uncomfortable and your presence will probably cause them to cross your home off of their list.

4. Listen to your agent when they talk to you about pricing, when they make suggestions about staging and de-cluttering your home, when they tell you how to successfully sell your home, and when they tell you to leave during buyer visits. You hired them for a reason. Take advantage of their expertise.

5. You don't want to be known as the owner of the "Crazy Person's House!" That would mean that the crazy person is you!

When you choose us to handle your Vancouver WA real estate needs, you choose a team of realtors® who care about you and your family. Buying or selling a home is always more enjoyable when you work with professionals who will listen to your needs and who will work together with you to achieve your objective. We are very familiar with all types a real estate in Clark County and we specialize in Vancouver, Ridgefield and Battle Ground. We are also very experienced with new home and custom home construction having assisted several local builders in selling new neighborhoods in the Vancouver Washington area. Additionally, we have helped numerous families build their own Vancouver WA dream homes. We are dedicated to helping you make intelligent, informed decisions and to providing you with exceptional service. Go to www.ernw.org for more information. See our video here. The Crazy Lady Who Wouldn't Leave. Vancouver WA Real Estate

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.

Expanded tax credit enticing - Henderson mortgage applicants be advised

Fri, 20 Nov 2009 00:05:58 -0600

The drama is over for Las Vegas valley's - including Summerlin, Southern Highlands, Green Valley, North Las Vegas, Anthem and Mountain's Edge - residents. The first-time home buyer tax credit has been extended because many considered it a strong demand booster for the ailing housing market and more of the same is needed at least for the time being. In fact, it was expanded to include the move-up buyer as well, a factor that should further power the demand side. Let's look at a few of the more appealing aspects a move-up buyer can enjoy with the up to $6,500 tax credit.

The contract deadline is April 30, 2010, preferably with the mortgage already approved and ready to go, and closing needs to happen by June 30. That's the time line.

The move-up, or repeat, buyer is one who has owned and lived in the same property five consecutive years of eight years before the purchase date. He can buy a home that is less expensive than the existing one.

Single taxpayer income limit is set at $125,000 and married taxpayers filing jointly are at $225,000.

The new home has to be the buyer's primary residence. The legislation says nothing about the old home, so it can become a rental or a second home. Selling it now for a reasonable price in Las Vegas would probably be tough, therefore hanging onto it for a spell would make sense. The new house's price ceiling is pegged at $800,000.

Just about any type of a home will qualify. Existing and new construction single-family houses, condominiums, townhouses, manufactured and mobile homes and even boats that are used as principal residences. Investment property and vacation homes are out of luck here.

These are the highlights of the program and may bring Las Vegas homeowners something they can work with. Especially useful can be the provision that the old home does not have to be sold to qualify for the tax credit. An excellent website that will offer further details can be accessed here: http://www.federalhousingtaxcredit.com/

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Mortgage lenders rated lower by loan applicants

Tue, 17 Nov 2009 17:45:38 -0600

The housing debacle in Las Vegas and throughout the country is testing consumers' patience in a major way. Real estate values have eroded without mercy in many areas, to the tune of double digit percentages. Some Southern Nevada - featuring Summerlin, Mountains Edge, Henderson, North Las Vegas, Pahrump, Southern Highlands and Anthem - communities have seen drops in the 50 to 60% range. Many homeowners here and elsewhere, as a result of that, find themselves underwater, meaning the underlying mortgage is higher than the property's value. The foreclosure epidemic hasn't let up yet, either. There really isn't much to write home about.

Those applying for a mortgage loan nowadays have run into their own set of issues, largely thanks to the unstable housing market.

To approve and close a mortgage took 30 days in 2008, but this year that time span has grown to almost 47 days, asserts J.D. Power and Associates in its recent study. That is a serious jump and Las Vegas mortgage borrowers certainly can identify with it. Main reason is the added scrutiny every home loan application now receives. Mortgage providers continue walking on thin ice and are doing everything to avoid approving loans that may not work out. A half inch mortgage file can balloon into a 2-inch thick stack after all the supporting documents the nit-picking underwriter requests are in. That kind of stuff can test any applicant's staying power.

Also, home loan firms seem to have shifted some resources away from origination to deal with foreclosures, short sales and mortgage modifications. And what not. It obviously will slow down the already lengthy process even further. So, when J.D. Power comes and asks How did it go?, the consumers will first take a deep breath and then happily let it all out.

There is a way, however, to keep mortgage applicants more or less happy. It has been tested time and again and it works. It's called communication. Home loan originators, and even real estate agents, could include a brief explanation about the current thorny state of the market and the potential challenges it may present early on in the process and that would help prepare them for the journey to a satisfying closing. And a new home.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

JUST WHAT IS IT THAT REAL ESTATE LICENSEES DO?? Part I.

Tue, 17 Nov 2009 00:37:39 -0600

Solid review of what real estate agents have to do while working with home buyers and sellers. It's plenty more than many had figured.

Via Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate:

JUST WHAT IS IT THAT REAL ESTATE LICENSEES DO?? Part I.

"YOUR MISSION, SHOULD YOU CHOOSE TO ACCEPT IT . . . " is to manage the orderly transfer of real property from a seller to a buyer. The average consumer doesn't understand a fraction of what we do to help them accomplish their goal.

SELLERS. Home sellers are presented a simple-to-complex marketing plan by listing agents prior to listing the property for sale. The listing agent promises to perform a series of showing, advertising activities geared to receiving contract offers.

BUYERS. Buyers are assisted in their home search by agent(s) who helps to locate, tour properties for sale, write and negotiate the contract and arranging for settlement services.

Sounds easy doesn't it? Actually it is, in the hands of experienced listing and buyers agents and if nothing unusual occurs.

THE MOST HELPFUL AND LEAST UNDERSTOOD PART OF LISTING AND SELLING REAL PROPERTY is the complex and institutionalized systems which include the brokerages employing the licensed agents and brokers, the Multiple List Systems that make the homes for sale information available to licensees and now to the public, the board approved forms that provide consumer protections,

Achieving the consumer's goal of selling or buying real property requires the services of a variety of service providers in addition to the real estate licensee. Achieving the orderly transfer of real property from a seller to a buyer requires services of vendors that perform critical tasks to help the consumer achieve their goal. The vendors include but are not limited to: mortgage providers, home inspectors, termite/radon inspectors, appraisers, title services which include or are managed by attorneys.

WOW! How do we keep up with all of these tasks that are necessary to get to the settlement table? I'm going to disclose a secret that will help many consumers understand how things can go so smoothly and the consumer's goal of selling and buying real estate is achieved.

IT'S ALL IN THE CONTRACT!

That's right. IT'S ALL IN THE CONTRACT!

Getting to the settlement table begins with the selection of an experienced listing or buyer's agent who will MANAGE THE CONTRACT OF SALE.   To demonstrate the importance of understanding contract management, below are the titles included in a typical Contract of Sale.

Description of Real Property

Price and Financing

Deed of Trust

Deposit

Down Payment

Settlement

Equipment, Maintenance and Condition

Utilities

Personal Property and Fixtures

Financing Terms

Appraisal

Purchasers Representations

Access to Property

Termite Inspection

Repairs

Damage and Loss

Title

Possession Date

Fees

Broker's Fee

Adjustments

Attorney's Fees

Performance

Default

Assignability

Definitions

Void Contract

Warranty

Listing agents and Buyers agents must not only understand the meaning and execution of each of these titles, they should help the seller or buyer understand the meaning of all parts of the contract that apply to their particular transaction.

Next: What Real Estate Licensees Do Not Do.

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Mortgage lender "walkaways" the latest scheme - Las Vegas mortgage borrowers take note

Thu, 12 Nov 2009 22:59:45 -0600

The real estate meltdown that continues to churn on has already seen some vein-popping scenarios concocted by many mortgage banks seeking to take advantage of homeowners facing foreclosure. And new ones keep surfacing. One of the latest creations could be called a home loan provider "walkaway", because that's what it really looks like.

When a mortgage lender executes a foreclosure the normal route is to take possession of the property in question and then decide what to do next. Now many of them have begun leaving the property in the former homeowner's name after the foreclosure, basically the exact opposite of what was done before. This is bound to happen when the home has liens attached to it that would cost a good chunk of money to clear. And most of all when the property is underwater, since now the mortgage provider cannot sell it at break-even basis, much less at a profit.

They are in essence forcing ex-homeowners to at least deal with taxes, possibly also with HOA dues and any code violation penalties for as long as possible. People who have already gone through the trauma of a foreclosure now may have to defend themselves against these collection efforts. That while they are living elsewhere and trying to put their lives back together.

Las Vegas valley - with communities like Summerlin, Henderson, Southern Highlands, Anthem, Mountains Edge, Green Valley and North Las Vegas - mortgage borrowers are especially vulnerable to this type of enterprise. Foreclosure rate here is still high and housing values have plunged leaving thousands upon thousands severely underwater. This of course applies to any region in the country, but those mortgage borrowers most at risk live in the hard-hit areas.

At least one state, Ohio, has enacted new laws that will address this obvious abuse mortgage lenders try to administer on unsuspecting homeowners in distress. Nevada, Arizona, California and Florida, the top four in foreclosures, ought for sure to keep a vigilant eye on this type of development and possibly stiffen up their existing laws. Preferably act before it becomes a meaningful problem.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

FAQ's On The New Tax Credit Programs For Homebuyers

Thu, 12 Nov 2009 00:01:13 -0600

Solid info on the new home buyer tax credit program from Gary. Check it out.

Via Gary Woltal - Associate Broker REALTOR® Dallas Ft. Worth (Keller Williams Realty):

Much has been written on the extension of the first time homebuyer tax credit and the credit for existing homeowners. A few frequently asked questions with answers to go along with all of that:

Question: Existing homeowner credit: Must the new house cost more than the old house?

Answer: No. Thus, for example, individuals who move from a high cost area to a lower cost area who meet all eligibility requirements will qualify for the $6500 credit.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

Question: I am a first time homebuyer but was not within the prior income limits at the time I entered into my contract to purchase on October 30, 2009. I will be covered, however, by the new income limits. If the new rules have been signed into law by the time I go to settlement, will I be eligible for a credit?

Answer: Yes. The new income limitations go into effect as soon as the President has signed the bill.

The income limit and other eligibility rules will look to your status as of the date of purchase,

which is the settlement date. So if the new rules have been signed when you go to settlement,

you should be eligible for the credit (or a portion of the credit if you're within the phase-out

range).

Question: I am an eligible existing homeowner. I have a fair amount of equity in my home. I have found a home with a non-negotiable price of $825,000. Will I be able to use any of the $6500 tax credit?

Answer: No. The $800,000 cap on the cost of the purchased home is firm at $800,000. Any amount

above $800,000 makes the home ineligible for any portion of the credit. The $800,000 is an

absolute ceiling.

Question: I owned my home for 10 years, but sold it two years ago year and have been renting since. If I purchase a home, will I be eligible for the $6500 tax credit if I meet all the other eligibility tests?

Answer: Yes. Because you lived in the home for more than 5 consecutive years of the previous 8, you

will qualify for the $6500 credit. For example, Say John and his wife bought a home in 2000

and lived there until 2008 when he got a divorce. Whether John has been renting or bought in

the interim, he WOULD INDEED be eligible for the credit because he owned a home and

occupied it as his principal residence for 5 consecutive years out of the last 8 years. The

keyword here is "consecutive." As long as he lived in that house for 5 years straight what he

did since 3 years doesn't impact eligibility.

Question: I am an eligible first-time homebuyer. I entered into a contract to purchase on November 1, 2009. Do I have to go to closing before December 1? How does the extension date affect me?

Answer: You do not have to close before December 1. Once the legislation has been signed, it will be as

if the Nov 30 date had never existed. Therefore, so long as the contract settles before April 30

(or July 1, worst case), the purchaser will be eligible for the credit.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Southern Nevada - Las Vegas, Henderson, Summerlin - housing stats on the mend in October

Tue, 10 Nov 2009 16:47:41 -0600

Las Vegas real estate has recently been the punching bag of many industry observers and for a good reason. Mortgage foreclosure rate here is still reaching for the moon, housing inventory remains high and the economic picture is painted in dark colors. True, mortgage rates are enticing and home prices have plunged and have together provided some hope, but a lot more needs to happen for it to reach the "normal".

What's encouraging is that the vital signs are slowly improving, with emphasis on the word slowly.

As was reported by GLVAR, or Greater Las Vegas Association of Realtors, 3,535 single-family houses were closed in October, logging a nice 5.3% boost from September. This actually translates into a 30.1% jump from a year ago, a strong show of progress. As a note of caution is the fact that much of the demand still comes from first-time buyers and opportunistic investors. They are almost exclusively feasting on the lower end of the price scale.

Southern Nevada - including Mountains Edge, Anthem, Green Valley, North Las Vegas and Southern Highlands - median home values labored higher to $139,100, a $1,100 advantage over September. It's not much but Sin City gladly takes anything at this point. The price curve is in essence trying to establish some kind of a steady course upward, taking one small step at a time. On the sobering side, it is still down 26.8% from last year.

The housing inventory in Las Vegas continues to hover above the psychologically important barrier of 20,000. In October it in fact grew a little, to 20,998, amounting to an about 1% rise. As GLVAR states, a large share of this is pending a sale in some form, which is good, leaving only 8,000 or so listings without a contract. Nevertheless, this statistic has remained stubbornly high for months on end and needs to come down for a chance to spawn a sustainable recovery.

The word optimism is slowly returning to the vocabulary of many Southern Nevada real estate observers. Much more needs to be done but it's good get a taste of it anyway.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Mortgage Insurance Companies - losses increase concerns

Mon, 09 Nov 2009 22:10:54 -0600

A vital part of the housing industry but largely forgotten during this mayhem. Richard fills us in.

Via Richard Smith Mortgages Home Loans FHA TN GA AL (American Acceptance Mortgage, Inc):

Mortgage insurance company losses are a mounting concern for the industry.
A concern that has not received much coverage in the media, nor in Congress. These companies have taken a beating in the market downturn.

Mortgage insurance enables home buyer to purchase with less than a 20% down payment. For FHA loans, the home buyer purchases government mortgage insurance from HUD. For conventional loans, the home buyer purchases private mortgage insurance.

Several companies offer mortgage insurance. All have taken heavy losses and as a result have tightened their lending guidelines. In many cases the MI companies have tightened their guidelines more than Fannie Mae and Freddie Mac have.

In other words, Fannie or Freddie might allow a loan to be, if the borrower can obtain mortgage insurance. But if the mortgage insurance is not availabie, then the loan cannot be made. Even though Fannie and Freddie guidelines would have allowed it.

Mortgage insurance is critical to home affordability and to the housind market.

Mortgage insurance is in trouble.

Standard and Poor's is looking closely at the larger mortgage insurance companies. This look may mean a credit rating downgrade.

The impact - higher premiums, tighter guidelines, less approved loans. It may be that Congress needs to look into what can be done to support this industry that is so vital to the continued housing recovery.

In an earlier post I suggested a twist on the home buyer tax credit that might have provided a boost to the struggling mortgage insurance industry, and might have actually helped create new home buyers. Both of these issues remain unaddressed.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Southern Highlands - Las Vegas NV - mortgage recipients have new foreclosure defense weapon

Sat, 07 Nov 2009 22:25:46 -0600

Southern Nevada - with communities of Henderson, Anthem, Summerlin, Green Valley, Silverado Ranch and Mountains Edge - is in the very eye of the tornado when it comes to real estate markets sucked into its furious spin. Home loan foreclosures here are now as commonly talked about as the weather. Many homeowners have given up on trying to hang on to their properties while some are tenaciously seeking solutions to stay on. The latter have several avenues to explore, either directly through their mortgage lenders or then with assistance from a legal counsel.

Now they have a new weapon to deploy. It's called the retro appraisal.

It simply is an appraisal that is based on a past date. It could be three years ago, or five years ago. Normally appraisals are done for the present to be part of a mortgage application, vouching for the collateral's value.

Lawyers representing Las Vegas homeowners in mortgage foreclosure cases, foreclosure mediations and home loan modifications can now rely on these retro appraisals. The basic argument is that lenders were approving loans back in the day using inflated appraisals, largely ignoring any risk management protocols they may have had in place. As the infamous bubble was gathering steam the goal generally was to close mortgage loans as soon as possible for maximum profit and then sell them off to investors. The housing market was piping hot and everybody wanted to make the most of it.

A rather high number, put at 70%, of appraisals for mortgages were plenty overstated between 2005 and 2007, says Retro Appraisals, a firm that has created the back-looking valuation method. "The historical revised real estate appraisal is extremely helpful to a borrower or his or her counsel when seeking to modify a mortgage, defend against a foreclosure or take part in a court-ordered mediation," explains the company's co-founder.

This instrument can be truly effective in the more severely affected housing markets like Las Vegas and much of Arizona, California and Florida. The bubble really galloped out of control in them, artificially pushing up prices that then in many cases became the official appraisals for mortgages. If employed properly, it can be a useful bargaining tool.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Home loan modifications turn creative - Las Vegas mortgage borrowers could benefit

Thu, 05 Nov 2009 20:22:31 -0600

Mortgage lenders and servicers have generally been going at a snail's pace, or slower, in modifying homeowners' loans. Many applications to do so have been actually declined for a variety of reasons. Some borrowers have just plain given up on the process due to all the hoops they have to jump through and still not get anything meaningful done. And all the well-meaning government programs introduced so far have produced at best mixed results.

A major mortgage provider, Wells Fargo, is doing something different now. It is taking the lead in home loan mods by taking in the so called Pick-A-Pay mortgages, an option ARM product it inherited with the recent Wachovia purchase, from distressed borrowers and replacing them with interest-only paper with due dates possibly as far down the road as 6 to 10 years.

The plan also includes the much sought-after mortgage principal reduction that every home owner who is underwater can appreciate. According to Wells Fargo its modifications to date have resulted in about $2 billion worth of balance cutbacks, averaging roughly $46,000 per loan. From what it looks like is that the bank is offering to reduce the underwater portion by about half. Let's say a home has a loan balance of $400,000 and is now worth only $200,000, Wells Fargo would propose a new interest-only mortgage amount at $300,000.

Las Vegas valley - including Summerlin, Henderson, Southern Highlands, Anthem, Mountains Edge and Green Valley - home owners who are currently on Wells Fargo mortgages could benefit from this. It's predictable that it is mainly targeting the most-ravaged real estate markets where being underwater is very common. Las Vegas certainly qualifies here. This could also inspire other mortgage lenders to come up with similar modification programs.

People are increasingly walking strategically away from their home loans which has obviously influenced Wells Fargo's decision makers. It clearly makes decent sense to give up half of the negative equity than the whole thing when a foreclosure sale is the other option. Every home owner isn't going to buy into this plan because it can still leave them on the hook for years to come. Most-affected Las Vegas residents, for instance, are likely looking at years in double digits before their home values recover to match their mortgage balances, provided the economy here gets back on its feet soon.

The healing of the housing market, in Las Vegas and nationwide, will come. Although it could be painfully slow. Wells Fargo is evidently betting that it is doing that within ten years and it could be right. Everyone would be happy to hoist a cold pint for that.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas mortgage defaults increasingly strategic - mortgage walkaways rise among wealthy

Tue, 03 Nov 2009 17:12:41 -0600

The real estate market has been cruel, to be perfectly honest, to homeowners across the country. Housing values in many cities and regions have dropped so far and fast that it's sometimes hard to keep track of it all. Much less understand how the utter devastation is possible. But that is the cold reality every homeowner is faced with today.

Southern Nevada - with communities like Las Vegas, Summerlin, Henderson, Southern Highlands, Anthem, Green Valley and Mountains Edge - has absorbed some of the most severe blows of them all to its real estate prices. In the same boat are at least Arizona, California and Florida. Industry observers are talking about values often dipping below replacement cost. With that type of erosion comes another grim problem; dragging scores of mortgage borrowers underwater on their homes.

Many Las Vegas homeowners are increasingly thinking of walking away from the obligation. The more they are upside down, or underwater, the more likely it is that they'll do just that. It's hard to consider moral responsibility that much any more when in-the-red numbers are typed in six figures.

What's noteworthy is that the well-off are now more liable to execute a strategic walkaway from a mortgage than others. Experian, the credit firm, and Oliver Wyman, a management consulting shop, have conducted a study on this and it proves the intriguing trend. The reasons of course are many, although the availability of money is not one of them.

Perhaps some of these mortgage borrowers feel that Wall Street operators are largely responsible for the real estate fiasco and their own current troubles and this is payback time. Wall Street banks and investment firms created the subprime home loan products, packaged a multitude of loans into complicated mortgage-backed securities for sale to investors and colluded with bond rating agencies to hype the bonds' potential. Many of them are now surviving on taxpayer largesse, but are still reluctant to help homeowners in distress.

Also, these people probably have the confidence in their ability to recover in a reasonable time frame from any damage to their credit. They often have a decent knowledge base of how credit works. They are fairly secure in their employment even in this down economy and in case a job loss is inevitable have predictably put away a sizable safety fund to draw from for months.

That well-to-do homeowners are more apt to pull off a strategic mortgage default is in some ways unsurprising. In pure monetary terms they usually are underwater the most, like when a $1.2 mil mini mansion in Las Vegas loses 50% of its value, that's $600Ks. That's a bundle.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

How Much Is My House Worth?

Mon, 02 Nov 2009 20:46:02 -0600

Here is a solid take by Alex on home price development during bubbles and so on. Good read.

Via Alex Silberman (Keller Williams):

As it frequently happens when I’m at a party, the subject of occupation comes up and when people discover I’m a realtor, the conversation usually gets very personal because people immediately want to know from an insider how they’ve been affected.

This weekend was no exception. We were at an excellent Halloween party (no you don’t get pictures of my costume) and the subject of a particular market came up. Although it seemed as if different price ranges were talking, the question was the same: What is my house worth and when will I get my money?

How should someone who is contemplating the value of their home feel?

As always, it depends when one bought, and when they are thinking of selling. If someone bought their home in 2001, they enjoyed six unrealistic and unsustainable years of 10-20% appreciation, while traditional appreciation had been closer to 4-5% per year.

Let’s compare a hypothetical 25% loss of value between 2007 to today with what reality should have been. Yes, I’m using a post bubble lens but bubbles are only real for brief periods, and that’s the best lens we have.

If a $500K house were bought in 2001 and appreciated 12% yearly until 2007 then depreciated 25% from 2007 to today, the house would be worth just over $764K. On the other hand, if that house appreciated a consistent and mere 5% (boy doesn’t that sound good), that house would be worth less than $739K!

Yeah, I know it hurts, and it’s not politically prudent to tell you, but you shouldn’t be complaining. That $45K was monopoly money you get to keep.

If you bought that same house in 2006 for $881K, then things are a bit different for you as it will take you four years (at 4% appreciation) to get back there. The good news for you is that get back there you will, if you don’t need to sell sooner.

Many have genuinely suffered over the economic downturn in the past year and a half, but many also are still enjoying the benefit of the crazy price climb.

The financial crisis has been a bitter pill to many people, but we shouldn’t be quick to forget the honey we’re still tasting.

You know where to send your hate mail.

Alex

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Using your mortgage and real estate blog to enhance existing relationships - a response to Bob's challenge

Fri, 30 Oct 2009 18:09:01 -0500

When I launched a monthly Las Vegas email mortgage and housing newsletter a few years ago the main challenge was to produce articles with solid content for my past customers and those who had signed up for it. The plan was to have four articles in each issue. To write in the last week of every month four of them just for this purpose seemed like a lot. But around that time I joined ActiveRain and began blogging here and soon enough this great big light bulb goes on in my head. Why not use recent mortgage and real estate posts from AR for this newsletter. The material is fresh and broad and many recipients probably are happy to receive a short collection of the best I have to offer once a month. And voila.

Nowadays the newsletter starts with an update on mortgage interest rates, something that I don't blog about at AR. So three spots are now left for genuine AR posts. Every so often I fiddle with what type of a lineup will be presented for the next several months, so that's how the interest rate roundup sneaked in there. Moreover, each blog gets only the first two paragraphs pasted on the newsletter and then there is a link below that takes the reader to my AR blog for the rest of the material. The idea is to keep the newsletter rather short and to the point.

Since I am a mortgage consultant these blogs in the newsletter cover the home loan market on a national scale, but I also include material on the real estate sector. Being in Las Vegas local housing will certainly get its share of attention. The mortgage topic earns at least one blog, sometimes two, per issue. It depends on what had happened in the last few weeks. Then the others are on the real estate side, one for sure about how Las Vegas housing stats turned out the previous month. This way the presentation is more or less balanced. These blogs are always from the past two or three weeks, so the info is current. That's what clients expect.

Here are examples of the blogs that were included in my past email newsletters:

October 2009

- Southern Nevada existing housing stats down a bit in August
- Fed to continue buying mortgage securities into 2010
- Las Vegas real estate prices slow to recover?

September 2009

- Las Vegas resale real estate numbers remain steady in July
- Home buyers beware - walkable neighborhoods command higher prices
- Sin City real estate among most affordable again

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Subprime home loans are back - Las Vegas mortgage borrowers go FHA

Thu, 29 Oct 2009 18:23:28 -0500

Mortgage loans that were labeled subprime just a few years ago were partly responsible for the notorious real estate bubble. When it burst and let all the air out, the subprime product quickly disappeared from the bloodied scene. Many housing observers warmed up their fingers over keyboards and wrote all these tearful obituaries, believing it would be gone for good. But guess what? It's now back.

This much-criticized mortgage segment has adopted a new backer, however. Subprime used to be pretty much exclusively conventional lenders' territory, until the recent thermonuclear event. With their exit a new player emerged to fill the void, Ginnie Mae, a wholly-owned government corporation created within HUD. Ginnie Mae is another adorable name in the mortgage arena, besides Fannie Mae and Freddie Mac.

Ginnie Mae operates a little differently from its above-mentioned and better-known sister agencies. It guarantees investors timely payment of interest and principal on MBS, or mortgage-backed securities, supported by federally insured loans, meaning FHA, and federally guaranteed loans, in this case VA. The majority of its guarantees go to these two organizations. Ginnie Mae is not in the business of buying or selling loans or issuing MBS.

According to the Federal Reserve Bank of San Francisco, FHA mortgage lending has skyrocketed in the last several months, achieved with the Ginnie Mae's guarantees. In 2006 subprime paper accounted for about 20% of all home loans. Then its market share plunged to near zero and now it is climbing back up again. San Francisco Fed asserts that today mortgage borrowers nationwide with FICO scores under 660 command slightly over 20% of the market. In short, it's back to where it was only three years ago. That raises some eyebrows. And rightfully so.

FHA has flirted with trouble lately as mortgage loan losses are mounting. Sinking property values have a lot to do with this, as are the lenient underwriting guidelines FHA uses, in other words subprime lending, and the generally weak economy. As of right now it looks as if it doesn't need a government bailout, feared by many. If home prices stabilize soon across the board, it'll be safe.

Las Vegas valley - including communities of Mountains Edge, Summerlin, Anthem, Henderson, Southern Highlands, Green Valley and North Las Vegas - has benefited greatly from FHA mortgages. Especially first-time home buyers have been using them and the nice tax credit to provide demand in an otherwise sluggish market. Without FHA the light at the end of the tunnel for Southern Nevada housing market would be just a tiny speck

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Reestablishing Your Credit To Get A Mortgage Loan

Wed, 28 Oct 2009 23:34:02 -0500

Take a look at John's excellent post about reestablishing credit. Well worth your time.

Via John Jones (Keller Williams Elite, Dallas/Park Cities):

REESTABLISHING YOUR CREDIT TO GET A MORTGAGE LOAN - DALLAS, TEXAS HOMES AND REAL ESTATE

Despite the various reasons why people may find themselves in a financial bind that damages their credit rating, the major obstacle that stops most from rebuilding their credit is lack of knowledge regarding how credit scoring works and what specific steps should be taken to ensure a quicker recovery.

The popular myth is that once a person's credit score is damaged from late payments, collections, a bankruptcy or even a foreclosure, those issues must be resolved or removed from their credit report or they face a seven year curse of bad credit.

It's almost like the old tale about breaking a mirror - once the damage is done, the only thing that can remove the curse is to wait around for the seven years of bad luck to pass.

This myth ends up becoming a self-fufilling prophecy because doing nothing instead of taking proactive steps to rebuild credit will often guarantee a prolonged period of bad credit. And when it comes to qualifying for a mortgage loan, lenders are usually forgiving of past mistakes if a new track record of responsible credit history can be established after the fact. And that is true even in today's new reality of tighter mortgage qualification guidelines.

In many cases, a person who encounters a major setback such as a repossession or bankruptcy may be able to qualify for a mortgage in as little as two years.   In other cases of minor credit issues, such as sporatic late payments and/or collections, the wait time to qualify for a mortgage might even be less than a year, depending on the overall situation.

In cases where a home loan applicant has experienced past credit issues, a mortgage lender will typically want to see THREE things before they will consider approving them for a loan:

An explanation and sometimes documentation of the reason for the bad credit and some type of assurance that this resulted from circumstances that are not likely to recur. Some oversimplified examples of this would include a job loss, a divorce or ending of a relationship, an illness or injury, a death in the immediate family or some other type of event that most everyone experiences at some point in life that results in a financial hardship. Even an admission of irresponsibility with regards to past finances may be acceptable, provided the applicant has since demonstrated the ability to manage their finances properly.

A twelve month history of on-time payments on at least three accounts, preferrably accounts that report the payment history to the credit bureaus. This usually also includes a satisfactory rental or mortgage payment history for the last 12 months. This is a MANDITORY MINIMUM REQUIREMENT to obtain most types of mortgages. It is also the one thing that most consumers aren't aware of that keeps them from qualifying for a home loan for a much longer period of time after experiencing a financial setback that adversely affects their credit rating. Many assume that since bad credit lingers on their report for seven years, it may take that long before they can qualify for a mortgage. The secret is knowing how to obtain credit with a bad credit rating.

Proof that the applicant has sufficient resources to afford the monthly mortgage payment and that they will likely be able to pay on time each month. Of course, this is something required of all home loan applicants regardless of past credit history. This boils down to character, capacity and capital, known as the "three C's of underwriting". Character can be summed up to a person's overall credit and payment history, capacity is their ability to repay (income and stability of employment) and capital is both the down payment (equity) and the amount of money they will have left over after closing. Every loan has specific requirements for each of these, and a strength in one area may help to overcome a weakness in another, depending on the overall picture.

So the real question is "How does a person with bad credit go about obtaining credit in the first place?" Well that's actually easier than most people think. Secured loans and secured credit cards are a form of credit that can be obtained by virtually anyone, regardless of past credit history.

What is secured credit? It's basically any type of credit that is secured with collateral (in this case, CASH). Most banks and nearly every credit union offers secured credit cards, but very few actually promote this service.

A secured credit card usually requires a minimum security deposit of $300-$500 dollars, which is held as collateral for repayment of any balance incurred on the card. The credit limit is usually equal to the amount of the deposit. In other words, a fully functional, major credit card that reports to all three credit bureaus can be obtained by nearly anyone by simply putting up a cash deposit in a savings account with a bank or credit union that offers this service.

And in addition to secured credit cards, many of these institutions offer secured installment loans as well.

But why on earth would someone put up a $300 deposit to obtain a credit card with a limit of $300? Doesn't it make more sense to just spend the cash and avoid credit entirely? Well, normally it would. But the purpose of obtaining a secured credit card isn't to actually borrow money, it's to reestablish a solid credit history.

Unfortunately the credit bureaus can only generate a credit score based on data that's reported to them by creditors, not on other factors such as income, employment or a person's ability to save money. And paying bills such as insurance, utilities and rent do not usually help one's credit score since these companies rarely report the payment history to the credit bureaus.

So unless there's something to report, the bad credit from the past is the only thing the credit bureaus have to consider. And that's where people get into a pickle with credit once they've had a setback and have closed all of their past accounts. The secured credit card is the catalyst that helps to actually rebuild the credit score.

Having said all of this about credit repair and restoration, I would not recommend someone buy a home that isn't financially ready for the challenge. Owning a home isn't like renting, it requires a steady supply of time and money to own and maintain a home. There is no maintenance man to call when the toilet overflows at 4AM or the air conditioner stops working in August.

Rebuilding credit is very important, but rebuilding and reestablishing overall financial health, including building up a six to twelve month reserve of cash, should be top priority for anyone who has experienced a financial setback.

IF YOU HAVE HAD A PERSONAL FINANCIAL AND/OR CREDIT SETBACK AND WOULD LIKE MORE INFORMATION ON THE RIGHT STEPS TO TAKE TO REBUILD YOUR CREDIT, PLEASE CALL OR EMAIL ME TO SET UP A CONSULTATION.  I WORK WITH A NETWORK OF LENDERS THAT SPECIALIZE IN CONSULTING WITH CREDIT-CHALLENGED CLIENTS THAT NEED SOME FREE GUIDANCE ON WHAT STEPS TO TAKE TO QUALIFY FOR A HOME LOAN AS QUICKLY AS POSSIBLE.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas real estate values rise thanks to Washington

Mon, 26 Oct 2009 19:00:21 -0500

Housing prices have been in a free fall in most sectors of the nation for a long while, much longer than any real estate expert had predicted. When mortgage financing is hard to come by and supply far outpaces demand that's usually what will follow. The weak economy is also a major contributor to this. Lately, though, prices have begun to stabilize across the colorful map.

Southern Nevada - Las Vegas, Henderson, Green Valley, Summerlin, Southern Highlands, Pahrump, Mountains Edge and Mesquite among its communities - is a good example of that. The lower end of the marketplace is rather busy here as investors and first-time home buyers do their thing and pick up bargain properties. The statistics are somewhat slanted because of the proportionally high impact of this particular segment. The mid-range and upper end in Las Vegas are still quite soft due to lack of demand, as expected, and difficulties in securing home loan approvals.

In a housing study Goldman Sachs just published it says that home prices have been nationally steered higher by 5% on average on account of government incentives and interventions.The number can be debated until mouths foam, but the fact right now is that Washington is largely making the housing market what it is. Mortgage money is kept affordable by the Fed buying just about everything that has a mortgage bond stamp on it. Then there are all these home loan modification and rescue plans, with eye-catching acronyms, that most consumers are liable to lose track of. But regardless, they at least slow down the supply of homes being foreclosed and dropped on the already saturated marketplace. The first-time home buyer tax credit has given a nice boost to the demand side. And by the way, it looks as if a similar program will come out of Congress in a little bit to replace it.

Las Vegas metropolitan area - as are many other markets throughout - is still grappling with many challenges in the mortgage and real estate arenas. It would be in much worse shape, though, without Uncle Sam's charity and efforts. Eventually it has to stand on its own again, and it will. It's already taking some wobbly steps using crutches toward that goal, but obviously needs more time to fully recover.

Photo by RyanGWU82

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

HOME INSPECTIONS PROTECT HOME BUYERS - THEY ALSO PROTECT SELLERS AND AGENTS!

Sat, 24 Oct 2009 16:02:51 -0500

This step in the home buying process is really a must. Lenn goes over all the vitals here, so take heed.

Via Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate:

HOME INSPECTIONS PROTECT HOME BUYERS - THEY ALSO PROTECT SELLERS AND AGENTS!

Probably the single most important step a home buyer can take as a part of the home purchase process is the home inspection. No one can guarantee the condition of a resale home. Therefore, the home buyer should understand that

1. You, a home buyer, cannot rely on the seller for information about the condition of the home they are offering for sale.

2. Buyers can protect themselves with a home inspection.

3. Some states go farther than others in providing protections for home buyers with required seller Property Condition Disclosure, while other states follow the "caveat emptor" rule which requires that the "buyer beware".

PROTECT YOURSELF WITH A HOME INSPECTION

We, as your agent, will do our very best, based on our experience with hundreds of home sold, to make you aware of potential problems with appliances; heating/cooling, interiors, exteriors and things we can see. However, a trained home inspector will not only test the mechanicals and appliances in a house, they will also inspect the structure, materials and condition of the components of a property. Cosmetics are not a part of a home inspection.

A good home inspector will examine the house from top to bottom. Most inspections in Maryland and Virginia will evaluate the physical condition: structure, construction, and mechanical systems. They will identify items that need to be repaired or replaced. They will also give you an estimate of useful life of the roof, appliances, mechanicals and any other equipment included with the home purchase.

You have negotiated all price, terms and conditions of the home purchase and now you want the home inspected. Good. Let's walk through a home inspection. At this point, a successful home inspection should be a contingency, meaning that, if the home inspection reveals serious defects, the home buyer can void the contract and be refunded their earnest money deposit. If the buyer decides to negotiate with the seller for repairs or compensation for defects, that stage requires that the buyer and seller negotiate repairs or agree to void the contract. So, the home inspection is a very important aspect of buying a home. A home warranty is not a substitute for a home inspection. Most home warranty policies do not protect for pre-existing conditions.

WALK THROUGH A TYPICAL HOME INSPECTION
STRUCTURE
The home inspector will look for structural integrity, They will evaluate the quality of construction and materials used.

EXTERIOR
A thorough inspection of the roof should reveal any past or present leaks. The exterior finishing will be inspected for cracked bricks, loose siding, improper grading and anything else suitable for your purchase.

INTERIOR
The interior will be observed for signs of movement. A good home inspector will look for signs of unusual cracking, separating, shifting in the house.

MECHANICALS
The heating and air conditioning will be tested, temperature permitting, and since this is an expensive appliance, the inspector may recommend servicing of the unit if it appears that the present owners have neglected this important duty.

APPLIANCES
All kitchen appliances will be run through their cycle to make sure that they function properly. The refrigerator will be tested for temperature and seals. The range, microwave, disposer will all be run to make sure they know what to do.

PLUMBING
All bathrooms, kitchen, laundry, exterior plumbing will be tested and inspected. This task has become very important since builders have been downgrading building materials for several years to compensate for escalating land costs.

ELECTRICAL
All visible wiring, panel boxes, fixtures, switches, outlets will be tested for operating condition and safety. Often we find home owner repairs will be the most hazardous. If the homeowner did not obtain a permit and have work inspected, it may be defective and dangerous. A good home inspector spends a lot of time looking at electrical components of a house.

WHAT HAPPENS AFTER THE HOME INSPECTION??
If the home inspector finds serious problems such as structural defects, you will have to make a decision as to whether or not to go through with the purchase. If the home inspection shows defects that are repairable or replaceable, your agent will write an addendum requesting the repairs to be made by the seller prior to settlement. The seller may agree, refuse or negotiate a cash settlement to compensate you for the defects found.

You and your agent will decide on the best way to handle any defects found. The important thing is that you are an EMPOWERED HOME BUYER when you know the good AND the not so good about a home.

Your Buyer's Agent may recommend local home inspectors or you can find home inspectors trained and certified by the American Society of Home Inspectors, ASHI.com.

* * * * * * * * * *

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-mail.

"NEVER A FEE TO BUYERS"

Maryland and Northern Virginia Real Estate homes for sale HERE - Search Homes for Sale in Maryland and Northern Virginia.

Contact us to tour homes, 800-711-7988.

For your copy of the Homefinders.com home buyers relocation package, just give me a call. Whether you're moving to Maryland or Northern Virginia from out of the area or just across county. We can help.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Mortgage foreclosure will affect credit score, but how much?

Thu, 22 Oct 2009 22:19:54 -0500

The home loan and real estate markets we are currently slogging through are unprecedented in their severity. The last time something similar happened was so long ago that few are still here to remember it. As a result millions of people are unable to make their home loan payments and subsequently will have their credit damaged. Three basic events can lead to that.

In short sale the mortgage lender agrees to let the homeowner sell the property for less than the underlying loan balance. Deed in lieu means that the borrower gives the deed, or keys, to the home loan provider before it starts foreclosure action. And then there is the foreclosure itself. All three will slam the homeowner's credit generally up to seven years. By how much depends largely on how many other accounts are in distress.

These guidelines evolved gradually during "normal" housing market conditions. At times when there weren't millions of borrowers in trouble with their mortgage payments. But today things are different. The real estate scene is uniquely clobbered, bringing along with it a historic price adjustment, too. One that was actually badly needed to better reflect a sustainable value structure.

What FICO, the most widely used credit standard, does is use its computer model to predict future borrower behavior, in other words assess risk. FICO score, say, eight years ago was able to lay out a rather representative picture of a mortgage borrower. But from about 2007 onward a totally new class of a credit applicant was introduced to be rated. An unusually large segment of today's homeowners who in some shape have defaulted, or will default, on their mortgage have had a decent to excellent credit rating up until this meltdown. Keeping that in mind, their current FICO score would not be as accurate a predictor employing the standard model. Once the economy improves and most of them will obviously recover financially and become good credit risks once again, they'd still be carrying for years dings to their credit.

Las Vegas valley - with localities like Mountains Edge, Summerlin, Henderson, Southern Highlands, Anthem, North Las Vegas and Green Valley - has its share of homeowners who fall under this category. Real estate upturn here in Southern Nevada - and throughout the nation - will be undeniably delayed because many home loan applicants just can't get approved due to FICO's slow update policy. But there is hope.

The mortgage industry still has those with the spirit of entrepreneurship. Some scattered portfolio lenders are already underwriting mortgages for borrowers with recent foreclosure on their record. They keep the loans in their own books since Fannie Mae and Freddie Mac won't touch them. And it's foreseeable that more will start doing that as they realize what untapped market it is.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Buyers are speaking, are sellers listening?

Tue, 20 Oct 2009 15:32:34 -0500

The Green concept is becoming more important to both home buyers and sellers, for obvious reasons. Read more about that here from Terrylynn.

Via Terrylynn Fisher, Realtor Realtor Alphabet Soup on request (Diablo Realty - BuyStageSell.com):

Buyers are speaking, are sellers listening?

Recently I did a consultation with a real estate client about what they should do to improve their home so that a few years from now when they sell, they can maximize their equity. The subject often goes to the fact that people do upgrades just to sell and they could actually be enjoying the upgrades while they live there. I happen to agree that they should enjoy their improvements themselves while they live there, but taking that a step further, to environmentally friendly upgrades and improvements this gets to be an easier answer, don't you think?

When deciding which new furnace to put in would you chose a 80% or 90% efficient furnace? What is the cost difference, a few hundred dollars? It sounds like a no brainer, right? The future costs of running the furnace and air conditioner are escalating to the point that the more efficient unit will start saving you money NOW...and often you get rebates for installing them.

But do buyers really look to that to make a decision on a house to buy? The NAR 2008 Profile of Home Buyers and Sellers gives you the answer. When asked, buyers stated that 43% feel it is VERY IMPORTANT to consider heating and cooling costs when buying a home. 26% feel it is important to have energy efficient appliances. Sellers may not think buyers actually think that far, but more and more they do because it affects their pocketbook. This economic downturn in my opinion has taught us to be concerned about where our money goes and think ahead.

I know my buyers these days are asking the hard questions about the home and how much the utility bills are. When showing a buyer recently, we saw about 7 homes on a very hot California afternoon. One home (the one they put an offer on later), was cool when we walked through the door with no air conditioning on. It had new doors and windows and it turns out R30 upgraded insulation in the attic. We could FEEL the difference. What did that do to their decision, well first off it was a stark and dramatic comparison to all the other homes and the money they would have to spend on them to bring them up to this level, second it actually told them that the owner of this home had taken care to make it nice and keep it nice for themselves. It made a difference to their feeling of confidence about what they were buying. I couldn't make this up, it actually unfolded in their thought process and decision making.

So, my advice about making energy efficient improvements, like new windows and doors, added insulation, and furnace and air conditioning units is ABSOLUTELY, it will save you money now and possibly be a determining factor for a buyer when you go to sell later on.

DRE # 615420
LGLS CP and GREEN Realtor, EcoBroker...thoughts from the field.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Mortgage securities rating agency Moody's and the whole system under fire

Mon, 19 Oct 2009 21:26:38 -0500

Mortgage-backed securities, or MBS, played a pivotal part in the recent galloping real estate market and in its eventual and memorable collapse. These bonds get rated based on risk before they are offered for sale so that potential investors - pension funds, university endowments, international investors, among others - know what they are fiddling with. Moody's is one of the top three in U.S. to do that, the others being Fitch Ratings and Standard & Poor's.

When Moody's was spun off from Dun & Bradstreet early in the decade, the long-time corporate philosophy of honest and quality ratings was supplanted with a more pro-business one. In essence it would now pay more attention to the bottom line than accurate mortgage and other bond ratings. It needed to keep its market share, and possibly even increase it regardless of the means. That looks like a dangerous shift in corporate strategy. And it was.

Writing countless AAA ratings for mortgage bond issues - and also doing packaging of securities - earned Moody's superb fees. Later on many of the issues were rated no more than junk. The ratings were based on mathematical models that were far from accurate and often hopelessly out of date. Perhaps so by design. Anyhow, life was good. Not only for Moody's but the other players as well. Global investors trusted their advice, liked the yields and were writing checks left and right. And then the unthinkable happened. A thermonuclear event blew up the mortgage industry.

Another aspect about the mortgage bond rating regimen that skews its results is how the agencies are compensated. For decades now Wall Street itself has been paying the fees, the same investment firms that benefit from top ratings - no matter how erroneous - when marketing their products. That smells of a major conflict of interest. How objective can a rating be when it's done this way? Not very. Decades ago, before the new setup was approved it was the investors who plunked down cash for the ratings. That makes much more sense and should be considered for revival.

Government regulation - currently through Securities and Exchange Commission (SEC) - of this particular segment needs to be carefully assessed and preferably tightened. The big investors were badly scorched in this recent home loan and real estate meltdown. They formed the backbone of the secondary mortgage market here and they are needed there again. But to convince them to return requires new procedures and rules that would assure them the securities they are considering are thoroughly and competently researched and then rated accordingly. After all, the Fed, having largely replaced the no-show investors to keep the secondary mortgage market alive and liquid, can only do it for so long.

_______________________________________________________________________________

Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas short sales can sting homeowners later on

Thu, 15 Oct 2009 16:02:46 -0500

Mortgage banks have been pushed between the rock and the hard place in today's reeling real estate market. They are trying to make the right moves to keep their bleeding books from totally blowing up during this perfect storm as more and more home loans go bad. To deal with that, they generally look at three basic options; a mortgage loan modification, a short sale or then the foreclosure, the infamous word that has been in the media a lot lately.

Southern Nevada - with communities like Henderson, Boulder City, Summerlin, Mountains Edge, Southern Highlands, North Las Vegas and Green Valley - homeowners are increasingly finding themselves underwater, meaning that their mortgage balance is higher than the underlying property's value. Many have been able to convince their home loan providers to go for a short sale, whereby the bank will accept a sale that is for less than the mortgage balance. If so, once the deal is closed - it can take months by the way - the homeowner usually thinks the nightmare is finally over.

After all, at some point - normally soon after the settlement - the mortgage loan company sends the homeowner an IRS form 1099C spelling out that the debt has been canceled. The law requires that any canceled debt over $600 must be so reported to IRS and the borrower. And since this is his principal residence he's not obligated to pay income tax on the canceled debt. All this appears reassuring enough.

But the pain may not be over after all for the homeowner.

When the mortgage firm agreed to the short sale, did it also include in writing that it was fully releasing the borrower from the debt? If it did not, things can turn rather nauseating from the settlement on out. What is happening at increasing frequency now is that many home loan companies are selling their real estate debts to collection outfits that then come after the unsuspecting borrowers. All of a sudden a major problem seemingly solved turns into another bad dream.

Obviously mortgage lenders interpret the situation so that they can come after the difference if they didn't explicitly and in writing agree to a complete release. While the homeowners believe the IRS form settles the issue in their favor. Who is right? Hard to say off hand at this stage. The courts are going to have to make a conclusive ruling on short sales and the debt forgiveness.

So, Las Vegas mortgage borrowers who enter into a short sale agreement without a written release from the bank run the risk of being chased for the remaining liability. Historically it has rarely happened, but today things appear to be heading into a different direction.

Photo by tomsaint11

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

15 Year versus 30 Year Mortgage: Give this a thought

Wed, 14 Oct 2009 18:40:18 -0500

Here is an eye-opening take on these two popular mortgage products. Makes you reconsider which one will work best for you.

Via Tim McIntyre (Coldwell Banker Residential Brokerage):

Graph A

It is a common misconception among borrowers that a 15-year mortgage is a better use of their money than a 30-year mortgage, but for the disciplined borrower, that is not necessarily true. Take the example illustrated in Graph A.

At the end of 15 years (180 months), the borrower with the 15-year mortgage, will have paid off his mortgage in full. At the end of the same period, however, the borrower with the 30-year mortgage will still owe $217,677. On the surface, it appears that the 15-year borrower is in a much better financial position.

But let's look a little closer. The 15-year borrower has been paying $676 more every month than the 30-year borrower. If the 30-year borrower were to invest that same $676 and, over the long term, earn an average of 10% interest, at the end of 15 years (180 months) that investment would be worth $280,207. Taking this into account, the 30-year borrower, who still owes $217, 677, actually comes out $62,529 ahead of the 15-year borrower.

Graph B

Now, let's look at the second 15 years to see the true opportunity cost of the 15-year mortgage. Let us assume that the 15-year borrower begins investing the entire $2,572 he has been spending on his mortgage payment and the 30-year borrower continues making his mortgage payment and investing $676.06 a month. In Graph B you can see that by the time the 30-year borrower pays off his mortgage his investment account will be valued at $1,528,225 while the 15-year borrower's account will be valued at $1,066,130. Due to the 15 years of missed investment opportunity the 15-year borrower ends up missing out on a potential $462,995 in growth.

This article was written by one of the Mortgage Bankers I work with, Robert Reilley of Vision Mortgage. You can visit Robert's website by clicking here.

I know many people have different opinions regarding paying off a mortgage as quickly as you can afford, or using the above strategy. I wanted to share with you that I believe that the above strategy is a real option, and it's something that makes sense.

Everybody's situation is different, and everyone feels differently about the mortgage interest deduction. It's important, though, to consider all of the options you have available when making a decision about your financial future. I'm always available to talk to you about your situation, and your options. Right now, 10% would be a really great return, and returns fluctuate, so the above information is just an example of what is possible. For a complete discussion, give me a call.
Tim McIntyre, GRI
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Visit my website at www.timsellshomes.com.

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Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

MBA, NAR and NAHB push hard for tax credit expansion, yes expansion

Tue, 13 Oct 2009 16:56:21 -0500

Affordable mortgage money and in many areas really mouth-watering prices are helping the real estate market out, but it needs much more than that in this frustrating economic environment. The famous up to $8,000 tax credit, it is due to expire at the end of November, for first-time home buyers did boost sales a degree or two. Still, the housing sector keeps on drifting along without too much purpose.

Mortgage Bankers Association, or MBA, National Association of Realtors, or NAR, and National Home Builders Association, or NAHB, are the heavy hitters on the real estate scene who now are twisting arms in Washington to get the soon-to-expire tax credit expanded. Not just extended but broadened. What they have in mind, as the main points, is to hike the credit up to $15,000, include all buyers and do away with income limits. Their lobbying efforts have so far spurred 20 or so different bills, more are probably on the way, in Congress to address the issue. That's a big surprise. Everybody and his nephew obviously wants to get credit for doing something for the doubtful and besieged voter.

The real estate market could truly use such an expansion. The demand side is still quite soft and this would give prospects some more incentive to begin chipping away at the high inventory of homes for sale out there. Housing is a key component of the whole economy and it needs to get healthier to give the much anticipated recovery a strong leg to stand on.

Besides, the government has so far - for the most part - been pouring gazillions on irresponsible Wall Street operators to keep them afloat while largely ignoring the average consumer. Despite the taxpayer charity mortgage lenders inexcusably continue to drag their feet in doing timely home loan modifications, expediting short sales and helping out otherwise. It's about time that more focus is shifted toward the consumer. With the right length of carrot he'll step forward and start lifting housing out of the gutter.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Remodeling Your Home? Think Like an Investor!

Mon, 12 Oct 2009 16:33:43 -0500

Solid information on the topic from Mike. Think like an investor and come out ahead of the game.

Via Mike Hogan, MBA, EcoBroker (Pioneer Realty):

Walk in to any big box home improvement store and you'll be faced with tons of magazines about remodeling your kitchen...your bath... your garage... your whatever they think they can make money on. Seriously....if you're considering remodeling your home...think like an investor.

Most of us remodel our home because we want something more modern, more comfortable, more functional or just more appealing to our friends. But remodeling has an big financial impact on the values of our homes. There are tons of national magazines touting return on various remodeling projects. Typically- they tell you kitchens and baths bring the biggest return. In fact...usually they say the average bath remodel will cost somewhere around $5,000 but the value added is about $5,800. It looks great on paper...wow a 16% return in just a few weeks. Let's start rolling!!

But what you don't understand is that magazine is trying to sell ads to home improvement product companies who obviously want you to take on that expensive remodel project.

So how do you think like an investor when deciding where to spend money in your home?

Bring Your Home Up to Par

When investors look for a home- they look for the ugliest home on the block. Then they bring it up to standard with the rest of the neighborhood. They don't over-renovate because they know that making the house toooo nice wont add to the incremental value.

The lesson for homeowners...look for improvements where your home is below standard. And bring it up to standard. Don't overspend with the hopes of recouping that cost when you sell.If youre in a neighborhood of four bed two bath homes...and your home only has one bath...spending to add that second bath makes a lot of sense.

Restoring

There are many cases where your home is in an older neighborhood that is seeing a resurgence. Investing in modern touches such as Paperstone countertops or dual flush toilets can make your home appeal to a whole new crowd. This is especially true in Urban historic areas that are experiencing an influx of young hip buyers looking for luxury at affordable prices.

The Numbers

Another way to look at remodeling from an investor standpoint is to analyze the potential returns of your project compared to your desires. If that new kitchen is going to cost you $30,000 but will add $20,000 in value... then you just got your shiny new kitchen for a net cost of only $10,000. The question you have to ask yourself is...is this kitchen really worth an extra $10,000 in costs for you? If that answer is yes...then go for it!

Check with your REALTOR

One thing investors have learned... a good REALTOR is worth their weight in gold. Notice I said GOOD. Investors rely on their REALTOR to help them understand a neighborhoods standards. What improvements will add value and which one will not.

Even if you're not considering selling anytime soon- a REALTOR is always ready to start a new relationship and will gladly share their knowledge of the neighborhood and give you advice on which remodeling projects make the most sense. With the help of an experienced real estate agent, you can make much better investments in your home. And the great thing about these investments...you get to enjoy them every day. Happy Remodeling!

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006

Las Vegas real estate numbers show small improvements in September

Sat, 10 Oct 2009 18:36:44 -0500

Southern Nevada - accommodating communities like Anthem, Summerlin, Henderson, Mountains Edge, North Las Vegas, Southern Highlands and Pahrump - resale housing segment took a cautious step forward in September, after going the other way in August. A curious trend might be developing, actually so predicted by some industry experts, where the real estate market will find the bottom and then will bounce along there for some time. Despite very attractive mortgage money and truly appealing home prices that may be all it can do for now, as the economy remains weak and unemployment is pushing deeper into double digits.

For September there were 3,358 single-family residences sold, so reported by GLVAR, the Greater Las Vegas Association of Realtors. That amounts to a nice 4% improvement from August and a solid 20.7% jump from the same month last year. The buyer base is rather narrow, though. It's dominated pretty much by the first-time homeowner and the investor, both of whom aim at the lower end of the price scale.

Las Vegas single-family inventory dipped by less than 1%, a marginal change. It settled at 20,801 and continues to find the road ahead rocky while seeking to breach through the 20,000 mark.

The median price here in Southern Nevada took a turn up in September, going to $138,000, or 1.8% increase. That's perhaps the best news in the report. After losing ground little by little over the last few months it's now showing some backbone. Maybe, just maybe?

Las Vegas homeowners and real estate observers clearly can do nothing about it if riding along the bumpy bottom is the only choice they have. It, however, always beats sliding south on the slippery slope that has been the norm for too long. The wish on everyone's lips must be that the uncomfortable journey is reasonably short.

Photo by wjklos.

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Provided by:

Esko Kiuru
Mortgage Consultant, Father, Golfer, Skier, Beer Aficionado

www.eskokiuru.com - complete mortgage platform
www.BluefoxToday.com - syndicated mortgage and real estate blog

esko@eskokiuru.com
My cell: 702-499-1006