I know that lenders have just agreed for a 30 day freeze on foreclosures. Sounds nice.

The real issue is the responsive of the lenders and their servicers to what is happening on the ground. If it helps one family out and enables them to work out with their lender an opportunity to stay in their home, then I am all for it.

The bigger issue is that many lenders are either so overwhelmed, or because the servicers are so removed, they are unaware to real values and issues pertaining to the properties they are involved in. Case in point, one 2 family that I listed that was in foreclosure and the only exit strategy was a short sale. The property was in significant disrepair, tenants who let their animals run wild, work that needed to be done, in an area that was challenged.

Our first buyer was ready, willing and able. Wanted to move in and do the work, but due to the excesive time it took to get the 2 lenders to agree to a price had to move in a different direction. We found another buyer, but the market took a slight downturn, and for a few thousand dollars the lender refused the offer.

Now, here sits a vacant house. One which is waiting for auction, didn't get winterized (wait till they see the damage that caused). At this point they'll be lucky to get half of what was offered previously. It's time for lenders to take in to account what the eyes on the ground are seeing, and negotiate when necessary. Adding on additional debt to the current homeowners while property values are declining may not be doing them a favor. I know it sounds cliche, but sometimes you have to take a step back to make two steps forward.

The economic stimulas package has passed through the house and is heading to the President's desk. More important than rebate checks, we can be seeing a raise in FHA limits. Over the past 7 years, FHA has lost market share because the limits in our market of NYC would be easily surpassed. This raise is long overdue, and while I don't see it causing a rise in home prices, it should help stabilize some housing prices. Couple this with lower rates, and guess what, now is an incredible time to buy, acquire, and invest in real estate - especially in markets like Staten Island where values are at levels unseen in years.

If you would like to discuss how this could benefit you further, contact me at 718 981 3400.

Just wondering how many times have you heard...

 "I want a house in a good neighborhood, at a good price..."

"I'm looking for a deal..."

"Yeah, but last year my neighbor got..."

"I know, but if they really want to sell they'll sell it to me (XXXX dollars below market)..."

"I'm only qualified for ____ but I really want ____. Maybe you can find it for me...."

"Just email me everything you got...."

"I know my property is worth more..." (Even though the facts say it isn't)

 "My cousin bought a house just like that for 100K less.... (in 1999)"

Do you have anything you'd like to add??

Yesterday, there was an article in the Staten Island Advance www.silive.com, that discussed a recent ruling which homeowners prevailed in staving off the foreclosure. The article went on to mention that the homeowners could not make it the first year before falling behind. While they would of qualified for a traditional home loan (presumably FHA) they instead were "improperly pushed" in to a high interest subprime loan.

The judge ruled that the homeowner could be entitled to reimbursement for fees, payments and the mortgage my be unenforceable. Unenforceable?

This is not to say that there were not some mortgage brokers who were "pushing" certain products, but in fairness there were plenty of homeowners "pushing" for those same products. If they fell behind in year 1 - wouldn't that be before the first reset anyway? And they did agree to borrow money - shouldn't they have to pay that back, like 97% of other homeowners are doing on a monthly basis?

It's not that I don't feel for these people, and others like them. I do. In some cases, and this may be one, they were doing business with people more interested in their bottomline than their relationship. But there have been many instances in which homeowners made decisions, that in hindsight, were incorrect or miscalculated. Simply saying that homeowners are relieved of their obligation could have significant after effects and make it more difficult for millions of others to own their own home. I'm sure that's not what we want to see happen.  

Buyers make sure you review what you are signing. You will have a payment in there, if you can't pay it, then say something. And don't sign. Don't worry about your down payment. It will be easier to litigate that, then trying to fight the foreclosure.

From begrudingly cutting rates 25bps just a few months ago, the Fed has dropped rates 125bps in a week. With the Fed Funds down to 3%, the Fed has reacted aggressively to a slowdown that went from credit, to housing, to the economy as a whole. While this will be helpful to those with equity lines, and looking to refinance, these lower rates will not have the complete desired effect with out a raise in the FHA limits to atleast Frannie and Freddie Mac limits. There has not been a raise in the FHA limits for 2 years, and let's face it - the time has come.

This is an update on my previous post of "When Houses Sit..." To recap - this weekend I received an offer on a new construction 2 family for a first time home buyer. The house had been sitting on the market for over 18 months, and the builders had already let go of higher offers when they thought they could get more. My offer included builder incentives and transfer tax. Needless to say, when I personally presented the offer on Sunday they were not overly excited...

Today I met with the builders again. Their first reaction was typical and expected - GET ME MORE... But after allowing them to vent and explain their position, I could help them assess the market. Each month that property sits vacant costs them $xxx dollars. We can save that money by having these qualified buyers, with a reputable lender, and motivated to move in. Let's not forget your money is not in that house, not any more, but in the property you will buy now with that money - at an extreme discount!

So, with getting a little movement on the buyers side (having explained to them at the offer that unless you offer full price, you can expect a counter), the builders agreed to our reduced offer with concessions, as long as we got the transaction closed before an extra payment is made on their end (can do with the help of our lender).

Now, let's get that transaction moving so we can close in 30 days. While I'm at it, I better find another opportunity for that builder to invest in...

I had the distinct pleasure of working with a referral customer this weekend. We had spent some time together at the end of last year, but with her husband involved in contracting and the slow down in the marketplace they were too nervous to own a home at this time.

This week, with rates dropping and some inventory that my office had reduced, I reached out and found their dream of home ownership had been re-ignited. We spent time together on Saturday viewing some new construction, and newly renovated homes and found something that will work for their growing family. With some builder incentives that had been discussed as options we put an offer on paper and I personnally presented the offer this morning.

Here's where it gets interesting. The builders are still thinking about it. I know them, and understand their thinking - "I SHOULD GET MORE... I REJECTED A HIGHER OFFER LAST YEAR... MAYBE I CAN JUST CALL ONE OF THE OTHER INTERESTED BUYERS..."

Bottom line, the house for various reasons, has been on the market for 18 months. This offer, while lower than previous offers is fair, and the buyers are motivated. Sometimes it pays to move on. A vacant house that sits costs, either in interest payments or opportunity costs (and there is tremendous opportunity out there). It's just ironic as they say get me any offer, what they really mean is get me any offer that I REALLY want. I will meet with them tomorrow and go over what their cost may be to wait another 2, 3 or 4 months with this home. Because 3 months from now, today's offer will be worth so much more...

Why do I get the feeling that I've seen this before? The Fed makes the surprising move to cut 3/4 of a point mid session. What do they see that we haven't yet? Has the market gotten that much worse, or does the Fed think that it's previous measured response was not having the desired effect?

I know the pundits are calling for recession. The politicians are calling for a soft landing. (When was the last time there ever was a soft landing?) The issue here isn't mortgage rates, but consumer spending. As evidence of the major retailers at Christmas, people are spending less. For consumers who already have too much debt, or had a late payment on any of their credit cards, will this really help - or are they still going to have their rates raised (even if they've been current on that specific card?) When the prices of basic necessities of food, energy and health insurance premiums rise, of course we are going to see a slow down in other spending. So should we:

•  take on more debt
• figure out how to slow down or decelerate the prices of these core items
• or work on improving the income opportunities for the average family?

There was an interesting feature in Sunday's New York Times on commuting in NYC. This week they focused on Staten Island transit, the SIRR and the Ferry.

There is a tradeoff in Staten Island. More house and property for the money, but a commute to Manhattan that could create challenges for the city worker. But, what we do have, in terms of train service (while not enough) and ferry is highly efficient. On time, reliable and factored in, creates comfort and balance in the city commuter.

If you drive and get stuck on the Verrazano Bridge during the morning rush, you're probably not happy camper. But if you can use the ferry, which has undergone a tremendous renovation, you'll find it to be a relaxing 25 mintues to downtown NYC. And it's free -- where else does this city give you a free rid?

I'm interested in following the rest of the series, to see about commutes from the rest of the city. Staten Island has a reputation (well deserved) for it's traffic and infrastructure. Part of that has to do with poor planning, which is being addressed. The other part has to do with us, expecting the commute to be something it is not and not accepting it for what it is and using what we can to make the commute the best we can. Atleast, that's what these riders had done.

 Interesting...

The impression of Staten Island as the "forgotten borough," is continuing to fade. With Mayor Bloomberg remarking in his State of the City Address about the efforts of a transformed St. George, Staten Island is taking a large step forward. 

But let's take it a step further. The water front on the North Shore offer a postcard view of NYC and the Verrazano. St. George, Stapleton, New Brighton these areas need the mixed use - high rise buildings that helped turn Williamsburg and Greenpoint from industrial wastlelands to some of the most vibrant areas of the city. With out that development, Staten Island risks losing a tremendous opportunity to introduce the Island to a new market of young professionals and further stimulate the local economy. 

Here's one thing we need from the city. The 421A tax abatement extended past July of this year for new condo development in this area. These abatements offer tremendous incentives for new buyers. The tax revenues that will be gained through local spending will far outweigh any reduction the city is taking through the abatement.

But we can not ask without doing ourself. It's in our best interest, as Islanders, for the North Shore to succeed. As new business starts to move in, we need to support it. There is a tendency on the island to think development is bad. The problem is not development, it's poorly planned development. While community concerns must take precedence, common sense must prevail. Here's to the opportunity to develop the last bit of waterfron property facing NYC!