Treasury Secretary Henry Paulson announced details on the Monday.
Under the plan, which is part of the Emergency Economic Stabilization Act signed into law Oct. 3, the Treasury Department will buy $250 billion in preferred stock in the nation's financial institutions. The hope is that the capital injection will restore confidence in banks and encourage them to lend more freely.
The plan is separate from the $700 billion Troubled Asset Relief Program, whereby the Treasury Department will buy distressed loans and securities from banks.
Paulson announced Oct. 14 that nine of the nation's largest banks had agreed to accept $125 billion through the capital purchase program. Since then, the Treasury Department has gotten "indications of interest from a broad group of banks of all sizes" about the remaining $125 billion, Paulson said.
"Today, we are laying out a streamlined, systematic process for all banks wishing to access this program," he said.
To take part, banks should look for an application form on the Web site of their primary regulator. Terms will be the same for all institutions that apply before the Nov. 14 deadline, and regulators will use a standardized process to review all applications.
All transactions will be publicly announced within 48 hours of execution. Applications that are withdrawn or denied will not be announced.
"Sufficient capital has been allocated so that all qualifying banks can participate," Paulson said. "Let me be clear that this program is not being implemented on a first-come-first-served basis."
Paulson called the plan "an investment, not an expenditure" for the public. "There is no reason to expect this program will cost taxpayers anything. They will not only own shares that should be paid back with reasonable return, but also will receive warrants for common shares."
Participating banks will accept restrictions on executive compensation, including a ban on golden parachutes.
Reuters Consumer mood hits 8-month high in September: survey Friday September 12, 10:30 am ET By Steven C. Johnson
NEW YORK (Reuters) - Consumer confidence soared unexpectedly to an eight-month high in September as lower fuel prices soothed inflation fears and made Americans more hopeful about the economy, a survey showed on Friday.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index of confidence jumped to 73.1 in September, the highest since January, from 63.0 in August, for the biggest monthly jump since January 2004.
September's reading was well above economists' median expectation of 64.0, according to a Reuters poll.
The sunnier mood can be traced mostly to lower prices at the gas pump and consumers' one-year inflation expectations plunged to 3.6 percent, matching February's low, from 4.8 percent last month, according to the survey.
According to the survey, only two extraordinary events in the past quarter century have prompted such a steep one-month decline in inflation expectations: Hurricane Katrina in 2005 and the September 11, 2001 attacks on the United States.
"We were anticipating that lower energy prices would boost consumer sentiment but that the deteriorating job market would hold it down, but it appears that more consumers benefit from lower energy prices," said Gary Thayer, senior economist at Wachovia Securities in St. Louis.
On Wall Street, stocks were steady at lower levels as investors focused on the fate of investment bank Lehman Brothers (NYSE:LEH - News) as fears mount about its ability to survive.
U.S. government bonds pared gains after the stronger-than-expected sentiment reading while the dollar trimmed losses against the euro.
However, consumers still see inflation rising at a faster clip than they did a year ago, when the one-year inflation outlook stood at 3.1 percent.
The report's five-year inflation expectation fell more modestly to 2.9 percent, from 3.2 percent in August.
Also encouraging, the report's index of current conditions rose to 76.5, from 71.0 in August, while the index of consumer expectations jumped to 70.9 from 57.9 in August, the largest monthly jump in that reading since March 1991.
While expectations have brightened, U.S. households remain defensive when it comes to spending, and the report said nine in 10 consumers think the economy is in recession.
"Consumers still voiced cautious expectations for job and income growth, and indicated no change in their spending plans," survey director Richard Curtain said.
Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto, noted that "consumer sentiment tends to be quite volatile," adding that consumers will remain "value-driven in their spending activity."
The report did show, however, that for the first time in 20 months, more consumers expected the pace of economic growth to increase over the next year than to decrease.
"At best, the data represent the first tentative indication of a rebound in consumer spending in early 2009," Curtain said.
Location: Woodridge Priced to sell charming Colonial in well kept woodridge community with 3BD, 1.5 BA, HWF, FP, breakfast nook, library/den, window filled formal dining room and living room. This home also features a walkout finished basement with build-in bookcases, washer and dryer and a great backyard with a 1 car garage and plenty of space for your summer barbecuing. Property is offered As Is.
The federal department of Housing and Urban Development plans to unveil proposed changes to the American mortgage application process and real estate settlement system. The changes are the end-product of HUD's five-year effort to streamline mortgage disclosures, promote comparison shopping by loan applicants, and stamp out eleventh-hour surprises at closings, where fees come in much higher than initial estimates. The changes are designed to overhaul the current, much-criticized "Good Faith Estimates" (or GFE) disclosures and the "HUD-1" closing procedures.
Among the key changes are:
1. Transformation of the GFE into a consumer education and shopping tool. The GFE will now explain to an applicant how a particular loan works, how high monthly payments could rise, disclose any potential fees such as prepayment penalties, and provide information about escrow items.
2. New, strict limits on how much settlement charges can depart from the Good Faith Estimate stage within three days of the loan application to the HUD-1 closing stage.
3. The Good Faith Estimate and the HUD-1 forms are aligned with each for easy comparison, with similar categories and graphic displays of loan origination charges and settlement cost items on both.
4. All fees paid to mortgage brokers by a lender in connection with the interest rate charged to the consumer must now be disclosed and listed on the Good Faith Estimate as a "credit to the borrower."
5. All settlement agents will be required to "read aloud" a new "closing script" to mortgage borrowers which walks consumers through the various charges on the revised HUD-1, and whether/why they differ from earlier estimates. The script requires the settlement agent to explain the loan terms and mechanics as stated in the mortgage note.
This is a highly-coveted prospecting technique that will have astronomical effects on your listing inventory.
Unmotivated real estate sellers can be risky business. You can work ten, twelve, fifteen hours, and not get paid until 3, 6 or 9 months later-if the house sells at all. And when your own mortgage is due at the end of the month, can you afford to wait that long to get paid?
I didn't think so.
See, motivated buyers and sellers make the most profitable real estate deals. Commitment is critical.
Also, you can waste a lot of time and energy with a seller who wants to sell above market value and isn't up front with you about it.
Imagine this scenario: You have a buyer make an offer on a house you represent. To make sure it's accepted, the buyer offers the asking price, expecting the seller to embrace the offer with open arms. But, your client doesn't. In fact, he's disappointed because he really wants to sell for quite a bit more than he's asking and is willing to play the waiting game.
From 2001 to 2006, sellers obtained multiple offers and high selling prices-the result of years of healthy real estate appreciation. This year is different. While it's true that in most areas prices aren't dropping, they aren't rising at nearly last year's pace either. Unfortunately, some sellers are still pricing their homes for last year's market. And if that is the case, you need to find out up front if you are dealing with a client who's unreasonable in his expectations.
See, sometimes we get so desperate (like when the mortgage payment is due) that we neglect to qualify a lead. We accept sellers who may want to play games. Unreasonable games.
The key component to profitably working with sellers is to disqualify rigorously. Remember, we're looking for those who have a time-frame of at least 60 days or less. You can't really afford to wait any longer than that.
Use these four questions and you can rapidly single-out the unreasonable sellers and move on to those who are motivated and reasonable.
Why are you selling? Your first order of business as a buyer is to find out the seller's motivation
When do you need to be out of your home? Timing is everything.
What did you pay? When the homeowners moved into their house and how much they paid for it are matters of public record, so it's futile for sellers to try to withhold this information.
How much do you owe on the home? Ask this question directly and listen to or watch the response. Someone who balks is a red flag. Someone who is honest may turn out to be an asset. Also, seller financing for those who own their home outright might be an option they may be interested in to help sell the home.
The concept of trading homes temporarily for vacations has long existed, but now it's being adapted to the slumping real-estate market as people scout for ways to unshackle themselves from their property. The number of people doing this is still relatively small, but it has popped up from virtually nothing in recent years.
Fans say swapping is suited to the current down market, where people are extra nervous about buying a new house before selling their old home. Searching for a swap is much like using a dating service: The odds can be good but the goods can be odd.
Experts say it's probably best not to get involved with someone who owes more money on their house than what it is worth because they could have a tough time getting financing. OnlineHouseTrading.com recommends that both clients use one title company that knows not to complete the deal "until everyone signs off." Daniel Westbrook, the co-founder of the company says, "The scariest thing that could happen is that you buy someone else's house and they don't buy yours."
Both sides of a swap transaction typically close simultaneously taking away the risk of being saddled with two mortgages at once, or of having to borrow more after purchasing a new home because your old house didn't sell for as much as you thought it would. If there are homes of unequal value, one buyer provides the cash or gets a mortgage to make up the difference experts say.
I found this interesting and thought I would share.
Creative Tactics to Sell Your Home
By Douglas Trattner, FrontDoor.com | Published: 1/14/2008
Roberta Murphy's realty office was having an impossible time selling a breathtaking five-bedroom, five-bath Mediterranean in Encinitas, Calif. Despite sweeping vistas of the Pacific, not to mention a guest suite, five fireplaces and over 5,000 square feet of living space, no buyer was prepared to pony up the $2 million asking price.
That is, until the seller decided to toss in a shiny red Ferrari.
"In the current housing market, home sellers are resorting to more creative sales tactics because buyers are sitting on the fence," Murphy says.
As an agent with Villa Sotheby's International Realty in San Diego, Murphy has witnessed a rise in creative tactics sellers are employing to attract buyers. But not everyone can afford to toss in a sports car, trip to Hawaii or fancy furniture. Sellers desperate to unload slow movers should re-evaluate their listing price and consider these strategies.
Upgrade
"When you have a glut of inventory, your house really has to shine above the competition," says Adam Kaufman, a Cleveland-based agent with over $400 million in real estate sales. Buyers in today's market know they can be very particular. As a seller, Kaufman explains, you have to make a stellar first impression.
Kaufman strongly advises that sellers replace dated carpeting, strip wallpaper, install granite countertops and upgrade to stainless steel appliances.
"If a buyer walks through the front door and is dissatisfied in any way, he or she is off to the next house," Kaufman warns.
Stage That Home
"Sellers need to understand that the way we live in our home is not the way we sell our home," says Karen Hirschberg, a home stager in Chagrin Falls, Ohio.
When Hirschberg is called in to help sell a house, she tells her clients to emulate a model home. With a model home, she says, everything from the landscaping to the interior is picture perfect and designed to attract the widest pool of buyers.
The first step in any home-staging is a thorough de-cluttering. Sellers should purge the house of all personal belongings, family photos and countertop appliances. Furniture should be rearranged so as to make the room appear larger. "Space sells," she says.
If the family has already moved -- and taken the furniture with them -- Hirschberg suggests calling in a stager to furnish the home. "People have trouble connecting with an empty house," she says.
Curb Appeal
"People make assumptions about the interior of a house based on the exterior," Hirschberg says.
Try these easy strategies for enhanced curb appeal:
Power wash the house
Lay a fresh cover of mulch in the flower beds
Paint the front door
Replace the address numbers
Ancient Chinese Secret
"Feng shui is something that sellers are beginning to appreciate more and more as a technique to sell their home. Especially within the Asian community," says Beverly Hills-based agent Joyce Rey.
If a house isn't selling, some believe the fault lies in a shortage of Qi (chee), or energy flow. Bringing in a feng shui expert to evaluate the home and make modifications to the placement and arrangement of items within is said to improve the odds of a speedy sale.
Going, Going, Gone
"Home auctions were all but nonexistent a few years ago, but they are more widely available now," says Roberta Murphy.
While a house auction is indeed a reliable way to sell a house quickly, there is no guarantee the seller will be pleased with the price. Also, warns Murphy, buyers are subject to home auction fees that can be as high as 8 percent of the sale price. And limited disclosure statements can be potentially disastrous
Realtors® Report Shows It's What's Outside That Counts
Many buyers judge a house by its exterior, or so it seems from the results of the 2007 Remodeling Cost vs. Value Report. Three of the four projects with the highest national percentage of costs recouped this year were exterior upgrades.
The most profitable project on the national level was upscale siding replacement, recouping 88 percent of costs upon resale. Wood deck additions and wood window replacements also returned more than 80 percent of costs. On a national average, the only interior project to return more than 80 percent of remodeling costs for 2007 was a minor kitchen remodel
NAR President Dick Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif. explains, "The results of this year's Cost vs. Value report underscore the importance of curb appeal in the buyer's eye," He goes on to say, "Realtors® know what attracts buyers in their local markets and can help your house put its best façade forward, so to speak - it's another way Realtors® add value to the real estate transaction."
Gaylord explained that the resale value of any given remodeling project depends on a variety of factors. "When considering a remodeling project, particularly with an eye toward resale, it's important to evaluate your home's current condition, how the project will change the existing space in your home, as well as how your remodeled home will compare to other homes in your community," said Gaylord.
Roughly two-thirds of a home's annual energy use sends nearly four tons of greenhouse gases into the air each month. Here are a few tips for cheaper and greener heating:
•1. Seal the leaks - Heat loss is one of the biggest obstacles.
•2. Spread the heat - A well-positioned, slow-rotating fan can help ensure that heat doesn't just drift up to your ceiling but spreads throughout your room.
•3. Heat Wisely - Throw on your favorite sweater and turn your thermostat down a few degrees.
•4. Cover your glass - Installing clear plastic barriers or storm windows can cut heat loss by 25% to 50%.
•5. Cuddle up - The more people in your home the hotter it is!
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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