Real estate and other stuff

WE'RE FROM THE GOVERNMENT AND WE'RE HERE TO HELP. . . 

ALL WE WANT IS YOUR MONEY AND YOUR HOME!! 

* * * * HARD CORE REAL ESTATE TALK * * * *

The new Fannie Mae program to "help" home owners in trouble is, IMO, the biggest fraud to come from the government in recent memory and there have been, IMO, a serial bombardment of government perpetrated frauds on the American home owner in the past year.   

Trademarked the Deed For Lease, or D4L, a reading of the guidelines for this program along with the concomitant Deed In Lieu of foreclosure guidelines, the bottom line of the result of these programs, whether intended or not is:  THE HOME OWNER LOSES THE HOME. 

                      

"Honey, did the government agree to help us keep our home?"

"Not exactly Dear, but the government says that they might agree to take our home and let us rent it for a year.  They'll let us know after a credit review, but there are a few things. . . . . "

NOT ALL BORROWERS WILL BE ELIGIBLE.  The guidelines require that the borrowers (home owner) agree to certain occupancy rules, not unreasonable on first reading.  However, some of the details will limit elegibility, such as: 

1. Marketable title is able to be conveyed (a title insurance policy is required).
2. If there are subordinate liens secured against the subject, lien releases can be obtained.

1. Everyone has title insurance, don't they??  Sounds simple enough, right?  Perhaps, perhaps not.  Title insurance policies are always a condition of a mortgage loan.  However, they are optional for a borrower.  Over the years, I have spoken with many home owners who did not obtain title insurance for their property, often at the advice of their agent.  Go figure. 

2.  What might that subordinate lien be?  

• Subordinate Lien:  Subordinate-loan. mortgage whose priority is below that of another mortgage, like a second or third mortgage or a home-equity loan.

Could it be a HELOC or simple Second Trust?  During the years that FannieMae pushed, yes pushed and purchased the Alt-A loan and the numerous Sub-Prime loans, a plethora of subordinate liens were created and used.  Often created at the time of purchase or later through subsequent borrowing against equity or refinance.  The funding sources, often private investors, made these loans and recorded a proper lien in good faith based on the qualifications of the borrower at the time.  Second Trust Notes are a commodity.  They are traded, discounted, bundled and traded again and again.  Sooner or later, someone is going to want to collect on that note.  What's the incentive for the second trust holder to release?  Recent experiences with Short Sales would indicate that second trust holders are becoming quite recalcitrant when asked to release a second trust note. 

Second mortgage:  A mortgage obtained by a home owner for a loan against equity or in excess of market value (often up to 125% of market value).  The second, or third mortgage is subordinate to the first or primary mortgage.

WHY DID FANNIE MAE MAKE RELEASE OF ANY SUBORDINATE LIENS A CONDITION OF THE D4L (Deed For Lease)?  Is this condition of the D4L the usual "government guideline glitch" tossed in to decrease the numbers of borrowers who would qualify?  Or, is it simply a reflection of the "guideline stew" that can usualy be used to describe any of the government program to help home owners in trouble that have been promulgated in the past two years?   

WHY ARE HOME OWNERS IN TROUBLE ALWAYS SUBJECT TO LOSS OF THEIR HOME?  The American home owner isn't looking for a handout ala TARP, created to help banks in trouble to the tune of about a $Trillion Dollars, give or take a few $Billion Dollars. 

TARP:  Troubled Asset Relief Program (TARP) Information.   The operative word to describe TARP is "Relief".  Where is the "relief" for the troubled American Home Owner???  The banks qualifying for TARP got into trouble by trading in securities that were primarily backed by sub-prime mortgages, often mortgages that should not have been written.  The mortgage instruments were then bundled, converted to marketable securities, MBS,and sold to investors in the USA and around the world.  Investors clamored for more, more, more of these wonderful securities.  Fannie Mae and mortgage investors created more and more and more such instruments secured by the primary residences of American Home Owners.   

O.K.  SO WE GET IT.  The government was there to help the Wall Street and Main Street banks that invested in and sold the MBSs to the tune of multi-Billions of Dollars of tax payer money. 

FAST FORWARD TO 2009 and THE FANNIE MAE, HUD and any government program to help distressed American Home Owners.  The one theme that is pervasive is that THE HOME OWNER LOSES THEIR HOME.

MORTGAGE MODIFICATION IS A JOKE.   The programs designed by HUD and Fannie Mae may do one of several things. 

• They may REFINANCE your loan to a lower interest rate.  The home owner still owes far more than the market value of the home and will probably not be able to sell for many, many years. 
• They may MODIFY your loan to a lower monthly payment.  The home owner still owes far more than the market value of the home and will probably not be able to sell for many, many years.

Is it any wonder that, to date, the government programs to "help"the American Home Owners have failed?

THE INSIDIOUS NEGATIVE EQUITY.  The only true mortgage modification that would help the American Home Owner would be a REDUCTION OF THE PRINCIPLE BALANCE of THE MORTGAGE.  Is there any government backed, financed, promulgated or regulated program to reduce the principle balance of mortgage loans secured by home owned by distressed home owners??  NO.

The government now says, through Fannie Mae, that if you own a home that is not FHA, VA, etc. financed or insured, the government may take your home and rent it back to you for 12 months.  No doubt the government will find some way of spending more tax money to create a new program to market these "assets" that were formally HOMES.

For folks who hold the opinion that the American Home Owner doesn't deserve any help to keep their home, after all, they signed a contract, didn't they, it's an opinion that has my respect.  However, what was the opinion of the same folks when the government gave Wall Street and the Big Banks a $Trillion Dollars or more???  Oh, I forgot.  The government didn't ask for our opinion.  That was the biggest "cram down" in history.  I propose that a "cram down" for American Home Owners is long overdue.

One thing for sure.  I believe that the American Home Owner would be a better partner in saving the American economy than the average Wall Street Investment Bank or Big Bank.  The American Home Owners will again become a consumer.  They will buy and sell real estate.  They will go to the mall.  They will take vacation.  They will help the national economy.  What did the Wall Street Gangs do with the $Trillions of tax money handed to them through TARP? 

Later.

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

 

 

 and have a few thousand bucks to invest.  But is Detroit the place to invest your money? Sure you may have never heard of such low home prices.  Yes homes in your country or state may be much higher.  In fact they may be hundred of thousands of dollars higher.  But just because a home is $500 or $1000 or $10,000 doesn't mean it is a bargain.

• What will be your return on investment?
• what will be your downside?
• what will it cost to bring up to code or to saleable condition?
• what is Detroit and rental market like?
• what will it take for your investment to be worth more money?
• what are local professional investors doing in the City of Detroit.

I myself would not buy investment homes in the City of Detroit.  I would put my families or friend's money there either.  I don't know of any investors that have done well in the City of Detroit.  In the suburbs yes, but not in the city. 

I have to be a little more specific why not to buy in Detroit

1. poor school system in the city of Detroit.  Nobody will want to move to Detroit from the suburbs because the school system is so bad and unsafe for their kids. 
2. High crime statistics
3. High home and car insurance rates
4. Poor city services in my opinion
5. high property taxes - they could be as high as $3000 for that $500 property - hard to get the high property taxes reduced.
6. Detroit is unfriendly for investors and property managers - hard to evict and landlord is responsible for people leaving cars or dumping garbage or leaving personal property to be removed.  have to board up the house when vacant.
7. when home is vacant very likely the furnace, the copper plumbing, and the hot water heater will be stolen.  Anything valuable has a chance of "walking"  how will an out of town investor know when the tenant is gone?
8. too many great investment homes in the suburbs which will give a better return on investment.  Sure not $500 but you'll still have a home intact when it is vacant 

My advice buy in a city that the homes will increase in value quicker.  Call me if you want to know what makes a good investment home.

May life treat you and your family well today. 

Russ Ravary your Metro Detroit real estate agent

     

Metro Detroit real estate and relocation information website

Oakland County Lake front homes and Livingston County waterfront real estate information website

I have been to Nebraska State Conventions, National Association of REALTORS® Conventions, CRS Sellabrations®, and Prudential's Conventions. I was on the committee that plans the Nebraska REALTORS® Convention for several years and Chaired the Committee in 2001. (Nebraska hosts over 800 REALTORS® at their convention. The cost of the convention is figured in our Association dues and is free to the members who pre-register and attend.)

As with most things in life, it's up to you to find value in attending a convention. You get to choose how to spend your time. I will tell you how I plan ahead for conventions and how I have made the most of my time at them.

First you select the convention you want to attend. If you sign up early you can usually save lots of money. You can also save money by watching the airline fares and buying your ticket when rates are down. Another way to save money is to find a quality hotel near the convention hotel. I like to attend with REALTOR® girl friends and share the cost of the room. Besides it's more fun when you have someone to laugh with.

When I get the schedule for the convention I go through it with a fine tooth comb. I like to use a highlighter and select the classes, instructors, WCR and CRS meetings, meals, and parties that most interest me. I seek advise from seasoned REALTORS® so I don't miss out on anything exceptional. For instance, seasoned REALTORS® know the best parties and how to get a ticket, like certain banks or CRS parties at National Convention. They know the extraordinary instructors and popular classes to take. If they have been to that city they will coach you on touristy stuff.

After I select the events that most interest me I sit down with my calendar and see how many of them I can fit into it. Some things will conflict and I will have to choose. It's so much easier to plan this ahead of time! If I am visiting a new city, I plan tourist time. When I went to Washington DC for the first time I planned a couple extra days to see the city. I usually take a kazillion photos. Okay, now you need to add camera and batteries to your list of things to take.

Watch for some classes that may be offered prior to the scheduled convention dates. Often a one or two day course for CRS is offered in advance of the convention. These cost extra, in my opinion, because they are worth it. If you are interested in getting your CRS designation you may want to plan to go early and attend these classes. Again, this takes planning ahead!

There are many things to do that are included in your convention registration fee. Conventions offer generous vendors displaying their wares, offering expert advise and giving away hundreds, if not thousands, of dollars worth of prizes in drawings. TAKE LOTS OF BUSINESS CARDS! Drop them in the fishbowls/baskets for the drawings. You can't win if you don't enter! My cousin/real estate partner, Marlene, won a television while at the CRS Sellabration®  in Hawaii in 2008!

I have found conventions useful in quality and selection of classes. You will find free/included courses on technology, forclosures, buyers, sellers, you name it, it can probably be found. Here's the link for the National Convention. Check it out!

To get the most out of networking at convention, I plan a small gift with my business card to pass out to REALTORS® that I personally meet. One year I took a Dumdum sucker and put a tag on it that said something like, "Don't be a Dumdum, call Donna with your referrals" and my card was attached. Another time I had a friend make fishing flies and my note said, "Cast your referrals to Donna". Go to lunches, meetings, classes and always sit with people you don't know. Meet new people and pass out your cards. Tell them about your business and ask about theirs. Meeting new people with similar interests is fun! Networking brings you business. Referrals are great! It's awesome to send referrals to people you have met!

CONVENTION TRIPS ARE TAX DEDUCTABLE! TALK TO YOUR TAX GUY!

Most important Things to take with you:

• COMFORTABLE SHOES FOR WALKING!
• CAMERA & BATTERIES
• A COUPLE HUNDRED BUSINESS CARDS

Yes there is value in attending a convention.

It takes some planning ahead and using your plan once you get there.

"I am never too busy for you or your referrals!"  

Donna J Stephens, CRS, GRI

Prudential Ambassador Real Estate, 13340 California Street Omaha, NE 68154

 (402) 598-5117

Debt to income ratio maximums are being changed for FHA effective today.  All loans with Debt Ratios that exceed 50% must fund by 11/30/2009.  These loans must also be locked by November 1st.  If they do not fund, no lock extensions will be granted. 

The debt to income ratio is the percentage of the borrowers gross income that goes towards their mortgage payment and other debts.  In the past, we were able to close FHA loans with ratios at 55% and higher, rarely over 60%.

I urge you to contact your loan officer and find out what their policy is.  This is also going to cause another wave of applicants with higher ratios scrambling to close by 11/30 regardless of whether they are a first time home buyer or not.  Some banks may allow you to go a few days past the deadline, but not mine.

I also heard that Conventional debt to income ratios are going to be limited to 45% regardless of down payment in December.  Right now, with 20% down on a Conventional loans we can exceed 55% with strong credit.

I hate to be the bearer of bad news, but I rather be the first one out to notify my AR friends.

As always, please feel free to contact me with comments or questions regarding this post.

 

 

Melissa Kulikoff
Texas Loan Officer

Residential Lending Services
cell: 210-849-9030
email: melissa@mkulikoff.com
For Home Loan Information