Wednesday, November 30, 2011

Buying Real Estate Foreclosures

When looking for a home for you and your family you will come across all kinds of deals, bargains, and so-called values along the way. If price is a very tangible object for you and your real estate investment then you might seriously want to consider the value of foreclosures. If you are hoping to invest in real estate in order to turn a profit then you may also wish to consider these properties that are often sold well below the ordinary value of the property because they are in varying degrees of disrepair.

Foreclosures are properties that have been taken back by the lenders because the previous owners were unable to continue making payments on the property. Being that these homes were often owned by those in financial distress and may have been empty for some time before being sold, chances are that the foreclosure homes being sold at any given time are in some degree of disrepair. The shabbiness of many of these properties is one of the factors that keeps the prices down. Another is the fact that the lenders are essentially attempting to recoup their investment in the property. For this reason they are often willing to take less than the value of the property if that is what is owed on the property.

Why are these properties often in a state of disrepair? Truthfully, there are many reasons but the primary culprit in this situation is money. Obviously the owners of the home were struggling to make the payments or the home would not be in the state of foreclosure. If the notes on the property were difficult to begin with it makes perfect sense that other issues such as leaking roofs, shabby carpeting, or plumbing maintenance would take a distant second in priority to making the house payment.

At the same time, there are those who are bitter about loosing their homes. As sad as the situation may be some add insult to injury by damaging these properties intentionally. These homeowners feel they have nothing left to loose and if they cannot have their property hole then the lenders should not as well. While this is by no means the way to go there are very many who choose this path over other options.

The fact is that their loss in these situations is actually your gain. The damage they do to the property is often not terribly expensive to repair though it can be quite bothersome. Your willingness to do the work in order to create a beautiful home for you and your family or as an investment can often translate to big savings at the closing table or when negotiating the price of the property. Foreclosures can allow families to buy larger homes in better neighborhoods than they would ordinarily be able to afford. They can also provide a fabulous kick-start to a property investment portfolio.

Despite common claims and Internet advertisements, you do not need to buy a list in order to find foreclosed real estate in your area. You simply need to procure the services of a competent realtor and let him or her know that your intentions are to purchase a foreclosed property or some other property that is selling well below market value. You might be amazed at the wealth of information and assistance your realtor can provide not only in finding excellent foreclosures but also when it comes to procuring financing for some of the more creatively damaged foreclosures you may run across at insane bargain prices.

Wednesday, November 23, 2011

The Disconnect Between FHA And Their Product!

From the moment that FHA announced their dramatic increase in monthly MI that the streamlines would slow down. When you can lower your rate by over 1% but your payment does not move, what's the point of streamlining? That doesn't even take into account the 5% Net Tangible benefit that is required to even be able to streamline. I honestly think the FHA has no clue how their changes can effect the consumer. If your goal was to slow down streamlines to build up the reserves again, fine. Just admit that was your goal and not that streamlines would be fine it is just the Lenders not approving them. Seriously? We can only approve them based of the guidelines you provided to us. Hum....anyway, check out this video discussing this further.

I have an idea that would help those that had their FHA loans prior to the MI change. Streamline with the current MI factors they had prior to the streamline. New FHA loans would still be on the new rates and streamlines of people already on the new MI factors would not be effected. This will allow us to lower the rates and payments to many more homeowners and give them hope.

Tuesday, November 22, 2011

Mortgage Market Guide Vol. 9 Issue 47

Last Week in Review: There was more negative news out of Europe and some positive economic news here in the US. But how did home loan rates fare?

They say it takes two to tango.... And Stocks and Bonds continue to battle for investing dollars and trade in seesaw fashion. What's causing this dance in the markets? Read on for details.

First, there was more pessimistic news out of Europe last week, as German leader Angela Merkel said that Europe is going through its toughest times since World War II, plagued by political unrest and a severe debt crisis. Reports showed there was a slowing in manufacturing to the point where recession fears have now gripped Europe.

Here lies another enormous problem for Europe: One way--and probably the biggest way--to lower government deficits, is to grow your way out and elevate Gross Domestic Product (GDP). However, many of the Southern Europe economies are on the brink of recession, which will make lowering the deficit through economic growth impossible.

So what does all of this mean for home loan rates here in the United States?

The problems in Europe should continue to support the US Dollar and US Bonds (including Mortgage Bonds, on which home loan rates are based) to some degree, as investors will view our Bonds as a safe haven for their money. Yet, if we continue to see better-than-expected economic data here like we did last week, this will offset the continued uncertainty surrounding the European crisis. And this is part of the reason that the Bond markets and home loan rates saw limited gains last week.

Some of the good news last week included tamer than expected wholesale inflation in the form of the Producer Price Index (PPI) and improved New York Manufacturing. Also, as you can see from the chart, the year-over-year headline Consumer Price Index (CPI) was down from the previous reading, which is good news for people concerned about inflation. However, the closely watched Core CPI rose by 0.1%, and though this was inline with estimates, it did push the year-over-year rate to 2.1% from 2%...a touch above the Fed's comfort zone.

The bottom line is that home loan rates are still near historic lows, which means now remains a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients

Forecast for the Week: There will be plenty of news to gobble up before the Thanksgiving holiday, with reports on the housing market, the state of the economy, inflation, consumer sentiment, and more.

This Thursday, all capital markets will be closed in observance of Thanksgiving, and Friday will be a shortened session. But we'll still see a cornucopia of economic indicators reported in just three days:

  • Existing Home Sales will be released on Monday. The report comes after last week's positive reports on Housing Starts and Building Permits, which signaled a glimmer of hope to the battered housing sector.
  • The second read on Gross Domestic Product (GDP) for the 3rd Quarter will be delivered on Tuesday. The initial reading showed a somewhat healthy 2.5% increase. Also, look for the Durable Goods Report on Wednesday, which gives us a read on big-ticket items and a sense of how the economy is doing.
  • The Consumer Sentiment Index will be released on Wednesday just in time for traders to square up positions ahead of the long holiday weekend.
  • Also released on Wednesday will be the Fed's favorite gauge on inflation, the Core Personal Consumption Expenditure, as well as Personal Incomes and Spending.
  • Finally, this week Initial Jobless Claims will be delivered on Wednesday rather than Thursday due to the Thanksgiving holiday. Claims have been below 400,000 for the previous three weeks, signaling that there may be a light at the end of the tunnel in the Labor markets.

In addition to those reports, the Fed's Federal Open Market Committee meeting minutes from November 2nd could have some surprises when released at 2 pm ET on Tuesday. Last week, the New York Fed leader William Dudley said that it would make sense for the Fed to begin purchasing Mortgage Backed Securities. The minutes could reveal if the members discussed the topic.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

View: Planning to do some shopping on Black Friday? Be sure to check out these tips first.

Black Friday Do’s and Don’ts: These tips will help you get the best deals as you do your holiday shopping -- even if you don't plan on braving the stores the day after Thanksgiving.

By Cameron Huddleston,

Black Friday - the day after Thanksgiving that traditionally signals the beginning of the holiday shopping season because stores offer deep discounts that draw large, deal-hungry crowds - is just a couple of days away. Are you ready?

If you're a Black Friday pro who lines up outside stores every year before the crack of dawn to nab bargains, you're probably already planning your strategy - and we can help.

If you savor your sleep and sanity, you're probably not even thinking about stepping in a store November 25. But keep in mind that you don't have to brave the crowds to take advantage of Black Friday sales.

These Black Friday do's and don'ts will help you score the best deals - whether you want to shop from home in your pajamas or venture out to the stores (perhaps in something other than PJs).

DON'T rely solely on leaked ads to plan your Black Friday strategy. Plenty of Web sites specialize in publishing Black Friday ads before they appear on retailers' Web sites or in newspapers. You can use these leaked ads as a starting point for planning your purchases, but realize that you're reading gossip, says Dan de Grandpre, CEO of, one of our favorite deal sites. Inevitably, some of the information in leaked ads is wrong, he says. Most legitimate ads aren't published until the Sunday before Black Friday.

DO expect some Black Friday sales to start on Thursday. Many retailers will start offering discounts online on Thanksgiving day. And some, such as Amazon, will offer Black Friday deals several days before November 25 -- so hot items may sell out before the big shopping day after Thanksgiving.

DON'T assume the best deals are in the stores. It's a tradition for a lot of people to get up at the crack of dawn and camp out in front of stores to scoop up deals. But de Grandpre says a lot of doorbusters (those deeply discounted items retailers use to get consumers in the door early Friday) will be available online, too -- especially on big-ticket products. And if an Apple product is on your gift list, you'll probably find it for less online (at, or than at an Apple store -- and you may escape sales tax on your purchase.

DO brave the crowds if you're trying to snag an extremely limited item . You have a better chance of getting the deal if you go to the store - and are first in line. Keep in mind, though, that items that are marked down dramatically are cheap items to begin with - not top-selling, name-brand products, de Grandpre says.

DON'T do all your holiday shopping on Black Friday. Consider the Friday after Thanksgiving as one of several days to find deals. The best deals on apparel usually appear on Cyber Monday (November 28 this year), when retailers discount items online. Toys will be cheaper the first two weeks of December when Walmart and Amazon go to war with each other to offer the lowest prices and clear out inventory before Christmas, de Grandpre says. And the best deals on name-brand TVs and luxury items can be found in early December, too.

DO check return policies. Some retailers tighten their policies around the holidays. Some charge restocking fees if you bring an item back. And some won't let you exchange items that were manufactured specifically for Black Friday (to be sold at a low price). So be sure to ask each store what its policy is, and hang on to your receipts.

DON'T spring for extended warranties on big-ticket items. There's a good chance that a salesperson will try to talk you into paying extra for an extended warranty if you purchase a big-ticket item on Black Friday. That's because revenue from extended warranties helps make up for lost profits on discounted items. Typically, you'll pay 10% to 20% more for an item to extend a one-year manufacturer's warranty through the fifth year of ownership. But most major appliances do not break down within the extended-warranty period. Plus, you might already be covered if you use your credit card to purchase an item (see What You Need to Know About Warranties).

AND FINALLY … DON'T wait until the week before Christmas to shop. Retailers often raise prices because supplies are limited and they know that last-minute shoppers will pay more to purchase all the items on their gift lists.

Reprinted with permission. All Contents ©2011 The Kiplinger Washington Editors.

Tuesday, November 15, 2011

Bonuses For Fannie and Freddie Execs? Sure, Why Not!

Bonuses For Fannie and Freddie Execs? Sure, Why Not!

Oboma keeps saying he is trying to "trim the fat" on spending that can help the budget. Hum, how about NOT giving bonuses to the executives of Fannie Mae and Freddie Mac? They are currently in the hole over $168 Million and WHO thinks it is a good idea we give them and other top level executives $10 Million in bonuses right now? Talk about a bail out that nobody is talking about.

Monday, November 14, 2011

Mortgage Market Guide Vol. 9 Issue 46

Last Week in Review: The Bond markets may have been closed Friday for Veterans Day, but there was plenty of news before then to keep the volatility churning.

"Should I stay or should I go now?" The Clash. And last week, Greece's Prime Minister George Papandreou announced his resignation, a move seen as a way for new government to step in and implement the Euro rescue plan, thereby securing the financing necessary for Greece to avoid default. But that's not the only news story making headlines last week. Read on for the details...and what they could mean for home loan rates.

The European crisis that has been lingering for 18 months continues to develop…and it's not over yet. Lucas Papademos was named as interim Prime Minister of Greece. During his eight years with Greece's Central Bank, he helped the country achieve very strong economic growth rates. But let's not cue the sunset, happy music, and production credits just yet. Greece continues to be a very volatile situation, and continued uncertainty could once again push investors back into the US Dollar and US Bonds...helping home loan rates in the process.

In addition, as the soap opera in Greece continues, eyes have turned squarely towards Italy, whose Bonds yields have spiked on growing concern it is the next Greece. Italy is not in the same dire situation as Greece yet, but their economy is far larger--the world's 7th largest, in fact--and a debt crisis in that region will be much more difficult to contain. To add to the Italian uncertainty, Italy's Prime Minister Silvio Berlusconi is under heavy pressure to resign for a variety of scandalous reasons.

Here at home, another story to watch came on the words from Fed Chairman Ben Bernanke, who stated that the Fed has "considerable latitude" to choose its long-term inflation goal. Although Bernanke didn't elaborate on specifics, the gist of his comment is that the Fed may tolerate higher inflation for a period of time in an attempt to help the economy recover and improve the employment sector.

Remember, the Fed is charged with a dual mandate of (1) controlling inflation as well as (2) supporting job creation. While inflation remains close to the Fed's target range, unemployment is nowhere near where the Fed would want to see it, which is between 5% and 6%. So it appears the Fed may make decisions in the future to improve employment, possibly at the slight expense to inflation.

This is important because inflation is the archenemy of Bonds and home loan rates. So any increase in inflation could negatively impact home loan rates.

The bottom line is that now remains a great time to purchase or refinance a home, as home loan rates are still near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week: A slew of reports are ahead, with news on inflation, manufacturing, retail sales and more.

The markets continue to be volatile, though home loan rates are still near historic lows. As always, I'll be monitoring this situation closely.

The economic calendar was extremely light last week, but look out this week! The markets are set for a slew of reports that will give us a look at the economy across many sectors.

  • Manufacturing news from the Empire State Index (on Tuesday) and Industrial Production (on Wednesday) will be closely watched this week for any signs of a pickup.
  • After his comment last week, Fed Chairman Bernanke will be listening with both ears for any increase in inflation when the Consumer Price Index (CPI) and Producer Price Index (PPI) are released. Look for the PPI report to be released Tuesday, followed by the CPI report on Wednesday.
  • Also on Tuesday, we will see how the consumer is holding up when the Retail Sales report is released.
  • Rounding out the week, Initial Jobless Claims will be delivered on Thursday. Last week's report fell below the 400,000 level, which is a good sign but one week doesn't make a pattern.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

View: The flu is nothing to sneeze at. Learn how you can stay up-to-date on outbreaks near you.

It's that time of year when we turn our attention to the winter season. While there are many things to look forward to such as the holidays, many of us--including you, your clients, or your friends--may also start to worry about the flu. And the cost of the season is nothing to sneeze at! Did you know that Americans spend approximately $4 Billion on over-the-counter cold and flu remedies? That's not even factoring in how much time and productivity is lost on sick-time in the workplace, or co-pays for doctor visits and prescriptions.

But now there's a way you can stay up-to-date on the latest flu information in your area.

The "Flu Near You" Website

The Children's Hospital Boston has partnered with the American Public Health Association and the Skoll Global Threats Fund to bring you the "Flu Near You" website.

On this site, any individual living in the United States who is 13 years of age or older can register to complete brief weekly surveys that may help all of us learn more about the flu. When a case is reported, the map registers a "pin" in the map-and you can even click on that pin to learn more about the symptoms or severity of the case!

Now You Can:

  • See flu activity in your area at the regional or state level
  • Explore flu trends around the world with Google Flu trends
  • Use the "Flu Vaccine Finder" to locate nearby locations offering flu shots or nasal spray flu vaccine
  • Receive customized email disease alerts at your location
  • Learn more about flu news, information, and resources at
  • Check out local public health links
  • Browse the Disease Daily to discover summaries of important outbreaks and expanded coverage through the Outbreaks 101 news section

The site is completely free to use. And the information on the site will be available to public health officials, researchers, disaster planning organizations and anyone else who may find this information useful. So consider registering and using this site today

Want More Local Health Information?

In addition to the Flu Near You map, the Children's Hospital Boston also administers a Healthmap that features information about other health concerns or outbreaks in your community and around the world.

So if you're concerned about the upcoming flu season or other health concerns, take a few minutes to check out the Flu Near You map and the Healthmap.

You may even want to consider passing the information on to your friends, family members, or even your clients.

Tuesday, November 8, 2011

Mortgage Market Guide Vol. 9 Issue 45

Last Week in Review: The volatility out of Europe continued, along with the arrival of Friday's Jobs Report for October.

Forecast for the Week: It's a quiet week when it comes to economic reports, plus the Bond Market is closed Friday for Veterans Day.

View: Don't miss these special deals in honor of America's veterans.

Click here to read the full Mortgage Market Guide