Homes & Money Newsletter 4th Quart. 2008

The debates are done, the election is over, and on January 20, 2009, Barack Obama will be inaugurated as President of the United States. No matter where you fall in the political spectrum, no one knows for sure exactly what this will mean to the future of our country. With this in mind, let's put all politics aside, and take a closer look at Obama's plan for our future. And since a home is still the biggest, most important investment you'll ever make, we'll focus the limited space of this short article on Obama's basic housing measures.

More Economic Stimulus - Since trouble in the economy won't wait until January 20th, plans for another economic stimulus package are already in the works, so we might even see this happen, in one form or another, before Obama takes office.

Obama has also discussed a housing stimulus as well, to stem the tide of foreclosures, including a temporary 90-day freeze on foreclosures, as well as measures to address the demand side of the housing issue. This package includes $25 billion in state fiscal relief, which Mortgage Law Central says will help avoid "painful property tax increases."

Obama also wants to "aggressively and comprehensively" implement the recently-passed rescue plan and the Hope for Homeowners Act. This means the Treasury, HUD, Fannie Mae and Freddie Mac, and all of the banks and loan servicers who benefit from the rescue bill will continue to coordinate broad mortgage restructurings and loan modifications for struggling homeowners. No one knows for sure exactly how this will be implemented or what it even looks like yet, but we'll keep you updated as the details are released.

Reformed Bankruptcy Laws - Obama has promised to repeal the 2005 bankruptcy bill. A controversial measure, this will allow judges to alter mortgage terms during a bankruptcy, providing more protection for struggling homeowners.

New Mortgage Interest Tax Credit - Obama is expected to create a 10% universal mortgage interest credit for those who don't currently itemize. This means about $500 in savings for 10 million American homeowners.

Protection Against Mortgage Fraud and Predatory Lending - During the campaign, Obama blamed the financial crisis on lax government regulations, so look for tougher regulations, new criminal penalties for mortgage fraud violators, more funding for enforcement programs, more detailed loan disclosure laws, new counseling programs and other consumer protections, including a new Home Obligation Made Explicit (HOME) score (kind of like a new APR calculation) to help borrowers better understand and compare mortgage costs during the mortgage process.

This will go a long way in protecting new home buyers from the opportunists that have given good mortgage professionals like us a bad name in the last few years. And since so much of our business depends on referrals from satisfied clients, the good news is a lot of these people are now out of business. We hope that any new measures introduced by the Obama administration will help keep a new breed of copycats from invading our industry as the real estate market begins to change for the better in 2009 and beyond. From now until the end of the year, you can expect volatility to continue in the financial and credit markets. This means mortgage rates, too, so if you or anyone you know is looking to buy or refinance a home, give us a call. We monitor the performance of mortgage-backed securities on a daily basis, which allows our clients to capitalize on changes that will help lock in the best rate for their individual goals and needs. Also, if you'd like to discuss any of these or other changes that could affect your mortgage, don't hesitate to give us a call.

According to the National Association of Child Care Resource and Referral Agencies, full-time child care can reach up to $14,000 a year for a single infant. And while child care is the last thing you want to be cheap about, there are a few proven and practical ways to limit your costs, which can really help in today's tough economy.

Let Uncle Sam Chip In - Working parents can claim up to $3,000 for one child and up to $6,000 for two or more children on their 2008 income taxes for qualified child care expenses. Ask your tax professional about the Child and Dependent Care Credit to see if you qualify for this valuable credit.

It's important to note that this credit can be reduced if you have a dependent-care flexible spending account (FSA) through your employer. These special accounts allow employees to set aside pretax dollars up to $5,000 for qualified expenses. Find out if your employer offers this program and discuss the benefits of each option with your tax preparer. If you need a referral to a qualified tax professional you can trust, don't hesitate to give us a call.

Don't Discount Your Employer - Be sure to ask your employer about any other child care programs it might offer. It's not uncommon for companies to negotiate discounts in your area that can offset expenses and travel time. Also, find out if your employer offers flex time or telecommuting, even on a short-term or part-time basis.

Schedule for Success and Savings - For many couples, a simple change in schedule can cut down on the amount of child care you need each week. While having one spouse work the day shift and the other work the night shift might eliminate child care altogether, this could be very stressful on your relationship. But what if you just altered your schedules slightly? For example, if one spouse works from 7 am to 3 pm and the other works 10 am to 6 pm, this would cut down on child care and might not affect your time together as much. For couples who work together or even close together, working the same schedule could be more beneficial to child care costs and your marriage.

The right school program combined with the right work schedule can significantly reduce your child care needs. Some public schools offer pre-kindergarten programs, often for free, and many schools also offer before- and after-school care for older children at much lower rates than child care professionals.

Share with Friends And Family - While finding a relative to help out would be ideal, hiring a nanny with a few relatives or a few good friends is also a great option. This will allow you to share the cost of child care and pay less individually for each child.

This is a foolproof way to make a PERFECT prime rib. Paramount to this venture is that you follow the directions to the tee.

- 1 standing rib roast of either prime or choice quality (size will depend on the number of guests - consult your butcher on this)
- Herbs d' Provence
- Extra virgin olive oil
- Kosher salt and freshly ground black pepper

In a bowl, mix together the ingredients for the marinade. Allow the rib roast to come to room temperature. In order to make it happen with a piece of meat this size, you must take it out of the refrigerator from the moment you wake up the morning of.

Preheat oven to 375 degrees.

Brush the top of the roast with olive oil and season with salt, pepper and Herbs d' Provence.

Put roast in oven and leave alone for one hour.

At the end of the hour turn off heat but DO NOT OPEN THE OVEN DOOR.

When guests arrive or whenever it's appropriate, turn the oven back on to 375 degrees. From the time you turn oven back on, roast 35 minutes for rare, 40 minutes for medium rare, 45 minutes for medium and 50 minutes for well done.

Note: the roast must sit for at least 2 hours before turning the oven back on. It can, however, sit longer.

Allow roast to rest for 15-20 minutes before serving.

Gift cards have become extremely popular. In fact, the variety of cards offered and the sheer convenience of these little plastic gems have created a new global culture of gift-giving that few could ever have anticipated. The National Retailers Federation estimates that a total of $97 billion in gift cards - $26.3 billion during the holidays alone - were purchased in the US last year. This year, however, experts say that this hassle-free holiday gift may have met its match: a tough economy.

Earlier this year, when Sharper Image declared bankruptcy, nearly $20 million in gift cards were instantly voided, forcing shoppers to suddenly reconsider the merits of the gift card. Remember, unlike banks accounts, gift cards are not protected by the FDIC or anyone, and there is no guarantee that you can redeem the value of the card if a company goes under. And with other major retailers filing for bankruptcy protection recently (Circuit City, Mervyns, and Linens-N-Things, to name a few) giving gift cards this year could be as risky as playing the stock market.

The good news is, with US retail sales expected to shrink this holiday season, retailers will be working hard to get their share of your holiday budget, no matter how large or small. This means major sales and deals that could make going to the mall this year a much better option than simply handing out gift cards anyway. Because of these deals, what a $50 gift card would have purchased last year could turn into a much more valuable and memorable gift for everyone on your list.

Either way, if you receive any gift cards this year, or you still have a few you haven't used yet, be sure to redeem them right away.

With home prices on the decline, some homeowners may be tempted to renovate their home to make it more desirable or valuable to potential buyers. But there are certain renovations that can actually decrease the value of your home - even in an up market.

If you're trying to sell your home in the next 6 to 18 months, be extremely discerning about your choices, get advice from an expert real estate agent and appraiser before you begin any major renovations, and avoid these costly projects in today's buyers' market:

An in-ground swimming pool or hot tub - In certain parts of the country, yes, a pool or hot tub can increase your home's value. But, for many potential buyers with young children, these items are a true liability and will only decrease your home's value - not to mention the built-in maintenance and energy expenses that come along with them. If you're looking to sell your home in today's tougher market, you simply can't afford to isolate a large number of potential buyers.

New additions - Of course, home additions add valuable square footage, but one false move and your addition can be an eyesore that could hurt your home's value, even when the market turns. A well-designed new addition is time-consuming and expensive and needs to be properly planned and executed. If you're looking to sell your home anytime soon, save yourself the hassle. With just a portion of what it would cost to add a new wing, you could upgrade your kitchen cabinets, appliances, and counter tops and get far more bang for your buck.

Conversions - Yes, with so much competition, it's important that your home stands out from the crowd, but following today's trends could cost you big tomorrow. Right now, space for a home office or a recreation room might be trendy, but converting a den or your garage into one can be a costly mistake. A good real estate agent can achieve the same effect by defining a space through staging. If you want to upgrade your garage, a new door is much cheaper and adds valuable curb appeal.

Facts and Figures
Companies with Unusual Perks

Chesapeake Energy Corp. - Employees can earn their scuba diving certificates on the company's tab on-site at Chesapeake's Olympic-sized pool.

Amgen Biotechnical Company - This company provides an in-house florist, photo developer and a cafeteria that fixes up family-sized meals to bring home.

Sprint - Sprint buys houses that are available for employee purchase. If an employee buys a Sprint home, Sprint will give them back 2% of the sale price.

Microsoft - As a part of the company's campus expansion, employees are allowed to design their own work stations. For example, the Zune team has a deejay booth in their meeting room.

eBay - Stressful day? eBay's office in San Francisco offers a room filled with yoga mats, pillows, and meditation music so employees can take a break from a hectic day in the office.

Healthways - The company's headquarters provides walking trails, easy-to-locate stairways and bikes for rent to their employees to stay active and exercise.

General Mills - Employees returning from maternity leave are phased back to work on a part-time basis for eight weeks to help ease the transition.

Camden Property Trust - Employees who live in one of the firm's 180 apartment complexes, receive a 20% discount on their rent.

EOG Resources - This company will match their employees' contributions to charities dollar-for-dollar, up to $60,000.

Google - Google employees receive $1,000 towards their purchase of a hybrid or electric car.