Not only underwriting, but a Wall Street and GSE problem

In other posts, I have written about many causes of mortgage and financial market meltdown, but this press release from Senator Isakson seems to narrow on the correct fix - modify the intent of the Dodd-Frank QRM provisions, but not just because of underwriting problems.

http://isakson.senate.gov/press/2011/062211QRM.html

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Subdivision Ladder

Wouldn't it be nice for a subdivision to purchase one or two ladders and allow the residents to borrow it when needed?  That eliminates the purchase of many ladders and storage at the home (which normally won't have the space to store it).

So many times, I have shown homes with 12' or higher chandeliers in their foyers and the normal comment is "Wow, how will I change the bulbs?  I'll have to buy a 12' ladder to change the bulbs."

Wouldn't it be so much better to act as a neighborhood and buy one ladder to share it as you need it?

Note:  My guess is that we will not cooperate to get the ladder back to its proper place in a timely manor.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

NCRC helps homeowners in mortgage trouble

The National Community Reinvestment Coalition (NCRC) helps those in need of mortgage modification by offering counseling and advice - so don't wait until the last minute, seek help now and get to know the steps to go through and what to do.

Source:  http://www.ncrc.org/component/k2/item/536-hcn-offers-assistance-to-dc-residents

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Mortgage Assistance Relief Services (MARS) Rule Disclosures

7-18-2011:  More updates and new stories about relaxation of rule for real estate gents under MARS - http://www.mortgageorb.com/e107_plugins/content/content.php?content.9178

7-16-2011:  Many of the provision of the MARS rule is no longer applicable to real estate agents.  The power of National Association of Realtors' lobbying efforts?  Or just a "kindler or gentler" US Government and Administration?   Source:  http://www.ccireports.com/company/newsarticle.asp?ArtID=147533

MARS became effective December 29, 2010

In response to the mortgage crisis, government and private sector programs have been initiated to assist distressed homeowners. In March 2009, the Obama Administration launched the Making Home Affordable (MHA) program and the MHA’s Home Affordable Modification Program (HAMP), through which the government provides mortgage owners and servicers with financial incentives to modify and refinance loans.


Among other things, the proposed rule included provisions that would:

1. Prohibit MARS providers from making false or misleading claims;
2. Mandate that providers disclose certain information about their services;
3. Bar the collection of advance fees for the provision of MARS, except in certain circumstances for attorneys who collect them in connection with preparing or filing documents in bankruptcy, court, or administrative proceedings;
4. Prohibit anyone from providing substantial assistance or support to another they know or consciously avoid knowing is engaged in a violation of the rule; and
5. Impose record keeping and compliance requirements.

Under the program, The Federal Trade Commission (FTC) requires that the advertising short sales need to "clearly and prominently" disclose two things:

"(...Your company/broker name...) is not associated with the government, and our service is not approved by the government or your lender";

and

"Even if you accept this offer &use our service, your lender may not agree to change your loan."


Source:  http://realtytimes.com/rtpages/20110607_disclosure.htm

Source:  http://www.ftc.gov/os/fedreg/2010/december/R911003mars.pdf

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Cobb County Codes & Ordinances - Some Common Violations

There are laws (codes and ordinances) that all local cities and counties legislate to try and protect the enjoyment of property that may seem intrusive, but are designed to balance lifestyles and freedom from harm.

These are the codes & ordinances for Cobb County:  Complete Cobb County Code


Some of the most common code enforcement topics are: 

• Dead Trees
• Dwelling Unit
• Door-To-Door Solicitations
• Exterior Attachments
• Fences/Walls
• Grass and Weeds
• Garbage Collection
• Group Home
• Gutters and Shutters
• Home Business
• In-Home Day Care
• Junk Cars
• Leash Law
• Livestock and poultry
• Outside Storage Limitations
• Parking
• Personal Vehicle Sales
• Temporary Signs
• Windows and Exterior Doors
• Yard Sales

Link to Common Cobb County Code Violations in Subdivisions 


References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Cspan's segment on Proposed Mortgage Rules and Debt Resolution

If you have 35 minutes to spare, watch this Cspan segment on causes of mortgage meltdown & upcoming new mortgage rules.

The proposed new mortgage rules for 20% down payment will be implemented in future and eventually the US Government may get out of most mortgage lending. Right now, Fannie, Freddie, FHA, and VA are over 90% of the loans being created.  That may revere itself over the next few years and as a result, fewer borrowers qualifying for a loan.

There are some good calls about what actually caused the mortgage problems. 

Source:http://www.c-spanvideo.org/program/DebtRes

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Bankruptcy News

Hello readers - as usual, as I hear of new Bankruptcy news I will update this blog post.

Some say consumer bankruptcies are on the rise (in 2006 there were less than 600,000 filed; last year (2010) there were 1.4 million, and this year (2011) is on pace to top 1.6 million). The rules to make bankruptcy filing more difficult were instituted in 2006, but that hasn't stopped the growth due to severe economic forces.

According to Page 30A of the Atlanta Business Chronicle, November 12-18, 2010, 1.2 million bankruptcies were filed in 2010 (up 11% from 2009) and 43,016 were business bankruptcies and that number was down about 6%.

Per the 8-5-2010 WSJ (Page A2), Georgia had 6 of the top 10 counties in the US for filing bankruptcies - Only about a quarter of them file Chapter 13 (restructuring) and almost 75aa% filed for Chapter 7 (complete) bankruptcy.

Regardless of whose numbers are accurate, it is distressing to see so many bankruptcy filings

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Commercial Mortgage Backed Securities – (CMBS)

Apparently, Atlanta had the highest number of CMBS loans in March 2011 and led the nation for troubled CMBS loans.  A little less than 10% of all CMBS in the US missed payment in March 2011.  The dilemma seems to be that many CMBS are nearing maturity on older properties with lots of vacancies and cash flow (i.e., ability to repay loans) are serious issues to prevent refinancing to repair, improve or refinance debt to lower rates.

Source:  (Atlanta Business Chronicle – 4/8-14/2011)

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

RESPA - Real Estate Settlement & Procedures Act

HUD requires that loan originators provide borrowers with a standard Good Faith Estimate that clearly discloses loan terms and closing costs and provide borrowers with a new HUD-1 settlement statement. New RESPA regulations were published November 17, 2008 and are scheduled to take full effect on January 1, 2010. The "New RESPA Rule FAQs" were comprised from industry questions and are posted to facilitate implementation of these new requirements.

Source:  http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/rmra/res/respa_hm

However, as disclosed from my earlier BLOG post, the passage of the Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB).  One of their new responsibilities, once they are formally in place,is to integrate the Truth In Lending Disclosure form with the Good Faith Estimate (GFE) disclosure forms.

Source: http://abirenews.blogspot.com/2011/05/new-mortgage-disclosure-documents-from.html

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Mortgage Loan Guidance and Information - HUD Settlement Cost Booklet

In accordance with Real Estate Settlement Procedures Act (RESPA) laws, you are supposed to get this HUD settlement cost booklet within 3 days of loan application - http://portal.hud.gov/hudportal/documents/huddoc?id=SETTLMENTBOOKDEC_15REVISED.pdf

The booklet outlines what to expect when considering purchasing a home including

• if it's right for you; what you an afford; 
• some of the inspections to perform; 
• shopping for a loan and evaluating the different types of loans; 
• selecting a lender; 
• closing attorney; 
• what to expect from the Good Faith Estimate (GFE); and 
• an excellent detailed discussion of the HUD-1 Settlement Statement.

Don't wait to make a loan application to receive and read this booklet - glance through it when you consider buying a home. 

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Will the new Qualified Residential Mortgage (QRM) criteria solve or create more problems?

During the mid 2000's housing boom, did lenders produce lot of crappy loans - yes.  Is the QRM a solution to crappy loans - yes, in a way - But isn't it like taking a chainsaw to the table to slice a loaf of bread?

Basically, when the new QRM definition hits the street, any non-Government backed loan will require lenders to keep or holdback 5% or more of the loan amount in case the loan goes south.

Sounds like a reasonable request so lenders don't get too loose with loans.  The down sides are this will (a) restrict the amount of money the lender will then have to loan out; (b) will require even more stringent financing qualifications which will (c) further restrict the number of loans approved, and thereby (d) reducing real estate sales in an already depressed real estate market.

FHA, VA, USDA (rural properties), Fannie Mae and Freddie Mac (currently government owned) will be exempt from the 5% "holdback" risk retention regulations of Dodd-Frank.

All other loans will need to require 20% or higher down payments and Debt-To-Income ratios of 28/36 or better or they face the 5% holdback.

You now, alot of people, including "elected" US Senators, are griping about this - so what problems does it solve and which ones does it create?

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Reading into $100 Down HUD homes

Per the Mortgagee Letter 2011-19, if Buyer are purchasing HUD properties (i.e., homes that were foreclosed under an FHA loan), and placing $100 down, then the Buyer can roll the UFMIP (Up Front Mortgage Insurance Premium) into the loan provided the total amount of the loan plus the UFMIP doesn't exceed 100% of the "as-is" (i.e., FHA appraisal amount).

Reading between the lines tells me they are willing to settle for less than the asking price since they are allowing for the UFMIP charge of currently 1% of the loan (http://abirenews.blogspot.com/2010/09/changes-to-fha-up-front-annual-mortgage.html) and net of the $100 down payment, to be rolled into the loan up to a certain level.

Source:  http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/11-19ml.pdf

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

New Mortgage Settlement Disclosure Documents from the CFPB - Pick one!

Part of the Dodd-Frank bill gave the Consumer Financial Protection Bureau the assignment of combining the Truth In Lending (TIL) statement with the Good Faith Estimate (GFE) by July 2012.

2-21-2012: Here are the latest versions of the new Settlement Disclosure form for home buyers who apply for mortgages (Butternut and Hemlock - great names huh - Hemlock relates to death - terrific!) - http://www.consumerfinance.gov/knowbeforeyouowe/

Note:  I wonder when people pay cash for properties, will this form be used to identify non-loan related expenditures and protect "cash" consumers with competitive disclosure details?

Source:  http://www.dsnews.com/articles/new-mortgage-disclosure-form-to-help-safeguard-against-default-cfpb-2011-05-18

Source:  http://www.mortgagenewsdaily.com/05182011_gfe_til_combined.asp

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Georgia HB 1055 – Seniors say goodbye to Georgia Income Taxes

Georgia HB 1055 – May 2010

New law begins a phase out of Georgia’s income tax on retirement income beginning in 2012 and eliminates taxes entirely by 2016 ($65K, $100K; $200K; and all income in 2016 and beyond).  Qualifications include taxpayer being 65 or older during any time within the year.

Evidently, under current law, seniors who were 62 or older could exclude up to $35K of income before being levied Georgia income tax.

So what about those who are 62-65?  Are they under the current law and still have to pay Georgia income taxes over $35,000 annual income?  Probably!

Source:  http://www.georgia.gov/00/press/detail/0,2668,78006749_157126503_159410187,00.html

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Current Mortgage Loan Delinquencies by Loan Type

According to calculatedriskblog, about 4 million loans are seriously delinquent : about 75% are Prime or Subprime loans, but FHA delinquencies more than doubled in 4 years.  Even though the number of Prime and Subprime loan delinquencies have fallen, the number of serious delinquencies of Prime and Subprime loans are huge!

Thanks to calculatedriskblog for disclosing and analyzing this...

Source:  http://www.calculatedriskblog.com/2011/05/mortgage-delinquencies-by-loan-type.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+CalculatedRisk+%28Calculated+Risk%29

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

FHA loans may require a 5% down payment

US House Republicans are kicking around a proposal to raise the minimum down payment on FHA loans to 5% and may drop the maximum loan balance to about $625K. This action may reduce the number of FHA loans, but will tend to increase the performance by requiring "greater" investment by the Buyer. It all depends on which end of the argument you sit, but there's alot of heat against this by the Realtor community.

Source:  http://therealdeal.com/newyork/articles/house-republicans-make-moves-to-curtail-fha-backed-loans

Source: http://www.washingtonpost.com/business/economy/gop-proposes-increase-in-fha-down-payments/2011/05/23/AF3NX69G_story.html

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Mortgage servicers were being investigated back in 2009

May 2011-05-23

Mortgage servicers (many from large US Banks participating under the TARP) were being sued for abuses or practices that resulted in excessive fees or improper foreclosure practices (WSJ 8-6-2009).  (NOTE:  Even though legal actions had started in 2009, the US Congress/Administration/50 State Attorney Generals are just wrapping up some challenges and investigations and are in the process of negotiating a “final settlement” – from $5 B to $20B - with the largest of loan servicers.)

$50 B of the 700 B TARP funds were applicable under the HAMP program that pays Mortgage loan servicers for loan modifications if the homeowner maintains payments for at least three (3) months and payments are made to servicers after the three month time period.  Servicers generally earn ½ to 1% of the loan balance each year and lower balances mean lower profits.  Servicers normally earn more from late fees or by foreclosing on a property, but not on loan modification.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Broker gets sales commission even though homes don't sell

Is this legal? - Normally, it all depends on you contract, but in most every case here in Georgia....

YES - it's legal!  In fact, it's contractual per the signed Georgia Association of Realtor's *(GAR) contract mot all agents in Georgia use to negotiate the purchase and  sale of residential real estate properties.

Source:  http://www.miamiherald.com/2011/05/02/2210428/court-says-broker-entitled-to.html


References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

More US Congressional legislation to help home builders

To quote a former US President..."Here you go again"....more US Congressional meddling in the housing market and at what price?

The following legislation was proposed in the US House of Representatives in May 2011.  Don't know how far it will go, but the National Association of Home Builders (http://www.nahb.org/page.aspx/category/sectionID=1831) is in favor of it:

Home Construction Lending Regulatory Improvement Act of 2011, H.R. 1755 for AD&C or acquisition, development and construction loans. Source:  Link to article addressing the proposed legislation

Basically, it allows financial institutions to (a) exceed it's financing limits for projects near or that will be completed; (b) ban the use of foreclosures when performing an appraisal and using an arbitrary value when the project is finished; and (c) prevents regulators from interfering with lenders to stop loans in trouble but still making payments under original terms and conditions.

Is this an example of "too small to fail, but too big in the aggregate to succeed?"

Nevertheless, even though new home sales have jumped (just clearing out some backlog) new home construction is down about 25% from this time last year - http://lansner.ocregister.com/2011/05/17/really-more-bad-news-from-nations-builders/110155/

Builder confidence is pretty low and not rising any time soon - http://realtytimes.com/rtpages/20110518_confidence.htm

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

HUD or FHA News

This post will be updated from time to time - so check back in on a regular basis.


5-18-2011:  Check out all HUD (i.e., FHA loan foreclosed) properties on HUD's property sale website - http://www.hudhomestore.com/ - To submit offers, find a registered HUD home Buyer's Agent...like me!

3-8-2011:  FHA backed about $208 billion (up from $85 billion in 2007) in mortgage loans with a delinquency rate of about 25%.

As of 2010, Shaun Donovan is the Housing and Urban Development (HUD) Secretary.

HUD's website is:  http://portal.hud.gov/portal/page/portal/HUD

FHA's related link is:  http://www.hud.gov/offices/hsg/hsgabout.cfm

8-26-2010:  HUD has a program which only requires $100 down payment as long as the purchaser pays full price on a home and uses FHA financing.  Other programs exist - like Good Neighbor (where a police officer, EMT, or teacher live in a house) which is located in their district or high crime area - they can buy it at 50% of price.  Check out all the programs at HUDPEMCO's website.

8-24-2010:  As of June 2010, only 8.3% of FHA loans were delinquent 90 days or more  - this is down from January's peak of 9.4%.

Also, beginning in October, FHA will raise lower the up-front MIP charge from 2.25% to 1%, but raise the monthly MIP fee from 0.55% to 0.90%.

The number of home purchase mortgages are rising to almost 50% of the total purchases, while their reserves for losses are shrinking fast.  Another round of price declines will take a heavy toll on the reserves.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Home Warranties

A Home Warranty is really "home maintenance" insurance policy. 

Home Warranty Companies "issue" home warranty policies.

These specialized "insurers" charge an annual fee for the "coverage", and offer service call "deductibles" where authorized, screened contractors are dispatched to resolve household maintenance issues upon your request. Each company offers at least one type of coverage that normally offers repairs for HVAC, water heaters, electrical or plumbing issues.

Note: If you can fix or troubleshoot the obvious (a GFCI outlet trips & press the reset button or a simple $15 toilet tank repair), you can save a $50+ service call. Otherwise, call your home warranty provider and get a professional to help you.

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SOME HOME WARRANTY COMPANY WEBSITES

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NOTE: There may be other home warranty service providers, but I have only seen warranty plans from these companies.







2-10 - HOME WARRANTY INFORMATION

AMERICAN HOMESHIELD - HOME WARRANTY INFORMATION

Buyer's Protection Group (Formerely Land America) - HOME WARRANTY INFORMATION

FIRST AMERICAN- HOME WARRANTY INFORMATION

Old Republic - HOME WARRANTY INFORMATION

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http://www.prnewswire.com/news-releases/home-warranties-protect-homeowners-during-extreme-weather-attract-buyers-in-competitive-real-estate-market-118901959.html

According to many home warranty providers, the highest rate of homeowner claims encompasses water heaters, furnaces and central-air conditioning, while major appliances covered by a home warranty generally start to require servicing at five years of age. Since home systems and large or built-in appliances are acquired during a home sale, there are many unknowns, such as how things previously have been used and maintained.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Where can you find HUD foreclosures? - Right here!

You can use this website to find available HUD (FHA foreclosed) properties: 

http://www.hudhomestore.com

Be sure to check out the Property Condition (i.e.,short form inspection) Report (PCR) and if the property is IE (Insured with Escrows) or not.  If IE, then FHA financing can be used, but you must have the repairs financed into the FHA loan. If the status is UI (Un Insured), then FHA financing can't be used.

If you find a property here and have any questions or wish to make an offer, let me know. I am a registered Exclusive Buyer Broker for all HUD foreclosures in Georgia.

Let me explain the process of buying a foreclosure and answer your questions.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Lenders are delaying foreclosures in several states

4-28-2011: This delay in foreclosure action is expected to slow the foreclosure process on existing distressed homes, thereby prolonging the economic recovery and putting continued downward pressure on housing prices.

Basically, due to lack of thorough attorney review, Robo signatures, and lack of good accounting to track true ownership of properties that have been foreclosed, many lenders (including Wells Fargo, Bank of America, Chase, and others) have stopped the foreclosure process.  Some people have gone as far as suing the lender, even though they haven't made a payment in months or years.

In Florida, the average number of days it takes to foreclose is 573 (as opposed to 423 days in 2009).  Nationwide, the number of day is 478 (v. 361 in 2009).

The immediate results is mass confusion and delaying the inevitable.  If people could afford to pay the monthly payments, they would.  Since they can't pay, they face foreclosure from the lender who has ownership of the property a secured by the property (i.e., your lender who owns the mortgage note).  But what if the lender who is collecting your mortgage payment doesn't own the mortgage note?
Another result in delaying the inevitable foreclosure process will be to slow down the rate of foreclosure sales.  Once the vast majority of foreclosures are sold,  home prices should become stabilized and have room to grow.  To keep the stream of foreclosures steady, through these delays, then the "cleansing" process never has a chance to eliminate the backlog of foreclosures and falling home prices.

http://www.examiner.com/real-estate-in-st-petersburg/the-latest-action-and-inaction-on-foreclosure-fraud

http://www.examiner.com/real-estate-in-st-petersburg/real-estate-investors-beware

http://www.examiner.com/real-estate-in-st-petersburg/real-estate-investors-beware

10-6-10:  I saw in today's WSJ that the loan servicing arms of the major lenders are holding up foreclosures - which doesn't make sense for the servicer since they need to continue to send payments to investors - unless there's good reason - that makes no sense now unless someone is challenging the legitimacy of ownership and threatens a lawsuit.


References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Prompt Decision for Qualification for Short Sale Act (HR 6311)

This House Resolution (i.e., bill) (was originally introduced in 2010) has been reintroduced in the 112th Congress.  The legislation proposes to amend the Truth in Lending Act and provide for "automatic approval of short sale proposal (i.e., package that include an Executed Purchase and Sale Contact between Buyer(s) and Homeowner(s)) if more than 45 days had expired "after" the loan servicer receives the package and doesn't render a decision.  This is designed to improve the process for approving short sales of real estate and would prevent extended delays (sometimes over 6 months).

Since short sales now range from 10-15% of all real estate transactions, and show no signs of disappearing anytime soon, this legislation has some traction.

Time will tell if this legislation gets any traction, but based lobbying efforts by the lenders and the legal profession and on recent changes in the law (especially the SAFE Act) that prohibit Real Estate Agents from negotiating short sales with lenders, I wouldn't hold my breath.

The Act amends the Truth in Lending Act to consider approved a mortgagor's written request to a mortgage loan servicer for a short sale of a dwelling or residential real property if the mortgagor has not received, within 45 days after the servicer's receipt of the request, a written notification of whether the request has been approved, specified changes are required, that such request has been approved subject to specified changes, or that additional information is required for such a determination, such request shall be considered to have been approved by the servicer.

Here's an excerpt from the Bill:  "(a) Requirement- Except as provided in subsection (b) and notwithstanding any other provision of law or of any contract, including a contract between a servicer of a residential mortgage loan and a securitization vehicle or other investment vehicle, if the mortgagor under a residential mortgage loan submits to the servicer of the mortgage loan a written request for a short sale of the dwelling or residential real property that is subject to the mortgage, deed or trust, or other security interest that secures the mortgage loan, and all information required by the servicer in connection with such a request (including a copy of an executed contract between the owner of the dwelling or property and the prospective buyer that is subject to approval by the servicer), and the mortgagor does not receive from the servicer, before the expiration of the 45-day period beginning upon receipt by the servicer of such request and information, a written notification of whether such request has been approved, that such request has been approved subject to specified changes, or that additional information is required for such a determination, such request shall be considered to have been approved by the servicer."

Note of caution:  Since many loan servicers have repeatedly told borrowers they have not received paperwork and had to resubmit pills of paperwork, or another form or updated forms, then when will the loan servicer actually technically "receive" all "required" information?

Prompt Decision for Qualification for Short Sale Act (HR 6311)

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Financial System Breakdown & Foreclosure Blame - who gets what? Wall Street & Regulators

Plenty of blame to go around including high risk lending, regulatory failures, inflated credit ratings, and investment bank abuses.

2-22-2012:  Bloomberg objects to blaming the US Government housing policies as the "major" cause of mortgage crisis.  The greatest blame apparently goes to wall street.  Source:  http://www.cjr.org/the_audit/bloomberg_takes_on_the_big_lie.php

The recent US Senate report on what caused the financial system meltdown has arrived and there is plenty of blame to go around.  My main question:

Who will wind up paying for the mistakes beside the taxpayer and common US resident, regardless if employed or not. 

The official title of the US Senate Investigative Committee Report is

WALL STREET AND THE FINANCIAL CRISIS: Anatomy of a Financial Collapse
MAJORITY AND MINORITY STAFF REPORT - PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

Get it here:
http://www.levin.senate.gov/imo/media/doc/supporting/2011/PSI_WallStreetCrisis_041311.pdf

Note:  Once you read this 650 page report, dive into Atlas Shrugged by Ayn Rand - that's a good read too.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Appraisal News

This blog post will be updated with other appraisal related news from time to time.

2-23-2012:  Sellers are now getting pre listing appraisals to see what the appraiser may think the house is worth and then compare the results with their listing agent so the home isn't underpriced. 
Source:  http://www.prweb.com/releases/2011/11/prweb8969795.htm

2-20-2012:  Gone are the days of banks telling appraisers "what price they need to hit", or are they?  Higher costs for appraisals - appraisal management companies owned by some banks - and unfamiliar appraisers evaluating property values - all part of the attempt by US Government for more "fairness", to be more transparent and less influential by banks? Right! Source:  http://seattletimes.nwsource.com/html/realestate/2017336010_harney29.html

2-19-2012:  As of September 2011 report, about 1/3 of all appraisals weren't hitting their sales price - what's happening today?  Source: http://www.smartmoney.com/spend/real-estate/how-appraisals-are-derailing-home-sales-1320357466034/

1-20-2012:  Appraisers must use foreclosures/distressed sales at times when warranted to value properties and hold their allegiance to lenders and protect their investment - not the Sellers' or Buyers' interests.  Source:  http://realtormag.realtor.org/daily-news/2012/01/20/appraisers-dont-blame-us

9-10-11:  Besides these suggested ways to fight a low appraisal (if you get that far into a deal), you can offer the seller (reluctant to drop his price) to pay for an appraisal, from an appraiser acceptable to the lender, to show that their price is too high, especially if it's been on the market a while and nobody has bid on it.  The seller, in this case not a bank, sometimes needs a 3rd party to compare recent sales.  I've done it and it makes the process a little smoother.  Source:  http://rismedia.com/2011-09-07/five-ways-to-fight-a-low-appraisal/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Rismedia+%28RISMedia+Real+Estate+News%29

9-5-2011:  Ways to fight your appraisal are listed in this article, but would you really want to buy a house that is priced higher than the appraisal value?  Unless your crystal ball is working properly, you might reconsider.  Source:  http://www.upi.com/Business_News/Real-Estate/2011/09/05/Five-Ways-to-Fight-a-Low-Appraisal/9321315243322/

9-1-2011:  New appraisal guidelines for new conventional loans (i.e., those purchased by Fannie Mae and Freddie Mac) will require special codes for appraisers; property conditions will be rated on a scale of 1 to 6;  and more detailed interior/exterior information from real estate agents about the property.  These and other changes became effective today, September 1, 2011.  Source:  http://www.boston.com/realestate/news/articles/2011/09/01/changes_in_home_appraisals_raise_concerns/

8-26-2011:  Appraisals are still coming in below purchase prices. This causes additional sluggishness in market, but it is what it is...at least depending on the subjectivity of each appraiser. I'm not sure of the percentage of homes in the Atlanta area that have come in below appraisal, but I do know of several homes purchased that were never appraised, but sold for cash.  Prices were so low, investors felt confident in value. Source:  http://www.homebuyinginstitute.com/news/appraisal-below-purchase-178/

6-19-2011:  Apparently all the rules for commercial property appraisals are loose, and dependent on lenders demands for comparables, when trying to reach a appraisal value mainly due to lack of sufficient recent sales and comparables - some appraisers are going back years (which 3-6 months prior sales are typical on Residential real estate).  But commercial real estate is a whole new animal than residential!   Source:  http://www.startribune.com/business/124099969.html

4-18-2011: Hey, what's going on in the world of home appraisers? Does the mortgage mafia have a contract out on them?  Are they being squeezed out by real estate agents performing Broker Price Opinions (BPOs) (http://www.startribune.com/business/118548204.html)  or the lending institutions either using more "electronic appraisals" (see my blogpost link at bottom) or due to large banks owning a controlling interest in Appraisal Management Companies (AMCs)?

One interesting article on attack on appraiser income => http://www.bostonherald.com/business/real_estate/view/20110417lenders_still_making_big_money_on_home_appraisals/srvc=home&position=recent%20

Another interesting story about the appraisal industry => http://ezinearticles.com/?Who-Owns-the-Appraisal-Management-Companies?&id=3727433

I understand since the advent of the Home Valuation Code of Conduct (HVCC), deigned to correct abuses of large banks "influencing" the outcomes of appraisals by making them go through Appraisal Management Companies, and it subsequent "corrections" that appraisers may still be busy, but they are not getting paid for their work in many cases.

And to top it all off, some big US banks may also own these warehousing firms they can use for their appraisals - can you say "conflict of interest" or "screw HVCC"?

Now there are some unscrupulous lender and appraiser that try to force a deal to happen, just a there are appraisers who are not familiar with the specific, limited geographic market of houses - each one resulting in bad decisions - accepting bad loans o rejecting good ones.

See my blogpost on Electronic Appraisals too => http://abirenews.blogspot.com/2011/02/electronic-house-appraisals.html

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Tax Credit for retrofits for energy improvements

Commercial buildings now account for 20% of the energy used in US.

President Obama would like to see energy efficiency of commercial buildings improved by 20% by 2020 and has called on Congress to propose tax deduction for commercial building upgrade/improvements and wants the Department of Energy to guarantee loans for the energy efficiency upgrades at commercial properties, schools and hospitals...

Building Owners and Managers Association (BOMA) has challenged its members to reduce energy consumption 30% by 2030.

So we are back again at old familiar territory - allowing the federal government to dictate what is and isn't an energy efficient improvement and how much companies receive in tax credits or eventual funding credits.  And the production of new energy including oil production and nuclear energy remains dormant until the next person realizes the futility of the 1970's approach to energy efficiency didn't work either.


Source:  Atlanta Business Chronicle, 2/11-17/2011, Page 18A.


References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Summech CDC (SCDC) Provides Affordable Housing to Quaified Home Buyers

Provides comprehensive counseling and affordable housing in Atlanta metro area (where some residents earn less than 80% of the Area Median Income).

SCDC is a non-profit community-driven housing development organization founded in 1989, whose mission is to provide affordable housing to promote home ownership and to encourage economic development in the Mechanicsville community in the City of Atlanta. SCDC housing counseling services are targeted to potential home buyers throughout the City of Atlanta, which includes Fulton County, and a small portion of Dekalb County. SCDC provides opportunities through several programs including:

Paving the Way, Fill in the Gaps and the Youth Economic Empowerment Program. Paving the Way is the agency‟s housing counseling program that provides home buyer education, financial literacy, pre-purchase, delinquency/default, and non-delinquency post-purchase counseling. During Fiscal Year 2009, Summech served 214 clients.

Summech is one of the Founding Partners of the Metro Atlanta Community Development Corporation (MACDC) and has collaborated with the Atlanta Housing Authority (AHA) to develop low cost housing.

SUMMECH is a Community Housing Development Organization (CHDO) with the City of Atlanta and the State of Georgia.

Website: http://www.summechcdc.com/

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

HomeSafe Georgia - "free" loans to help Georgia Homeowners in trouble?

HomeSafe Georgia will provide "bridge" mortgage assistance (from the US Treasury's Hardest Hit Fund) to unemployed Georgians or those who have seen a dramatic decrease in their income due to national economic conditions.

Sounds like they will make you a "one-time" temporary short term (bridge) 0% loan for up to 18 months that is forgiven at a rate of 20% each year for 5 years to allow you to pay any back mortgage payments.

Website for help:  https://www.homesafegeorgia.com/

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Report on Subprime Mortgages by US Senate

The Senate Permanent Subcommittee on Investigations is to release a report soon on securities firms  who bet for and against subprime mortgages by creating Collateralized debt obligations (CDOs) (i.e., investment baked by pool of mortgage bonds) of subprime loans and selling them as stellar investments (with the help of the top 3 US rating agencies) to some and to others saying they were "crap" and betting against them --- all the while making fees on both sides of the coin.


One such "investment vehicle" (i.e., like the pinto-explosive).

The humor (if you can call it that) to all this is that everyone who conceived and carried out this sham on the investment world are probably still living and employed in the investment world.

I would categorize the investment community two ways - dumb and dumber!

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

So what did the Democrats do in 111th Congress?

According to a summary in the Wall Street Journal, the following bills were passed in the 111th Congress ending 1-20-2011:

• Health Care
• Economic Stimulus
• Wall Street Regulations
• Lilly Ledbetter Fair Pay Act
• Credit Cards
• Tobacco Regulations
• 2 Supreme Court Confirmations
• Cash for Clunkers
• Don't Ask, Don't Tell
• Tax Deal
• Food Safety
• Nuclear Arms Treaty
• 9-11 First Responders

Any comments?

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Average Homeownership Expenses Homeowners need to Consider

I was asked by a prospective homeowner...'In addition to my mortgage payment, what expenses do I expect to have when I purchase a home?'

With the costs of home ownership in mind, I drafted a simple spreadsheet of basic household expenses to provide homeowners. This may help some first time home buyers put the "real costs" of home ownership into perspective.

Spreadsheet of some household related expenses @  www.abuyeragent.com/Home-Costs.htm

Let me know your thoughts of these and other expenses I need to include in this list:
 
Rent v. buy information @ http://www.nytimes.com/interactive/business/buy-rent-calculator.html

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Georgia Department of Community Affairs – Georgia Housing Finance Authority

Georgia Department of Community Affairs – Georgia Housing Finance Authority provides comprehensive counseling for Housing needs)

The Georgia Department of Community Affairs (DCA), created in 1977 to serve as an advocate for local governments, merged with the Georgia Housing and Finance Authority (GHFA) and the in 1996. Today, the DCA operates a host of state and federal grant programs; serves as the state‟s lead agency in housing finance and development; promulgates building codes to be adopted by local governments; provides comprehensive planning, technical and research assistance to local governments; and serves as the lead agency for the state‟s solid waste reduction efforts. In Fiscal Year 2009, GHFA provided comprehensive housing counseling services to about 4,200 Georgia clients and through its network of housing counseling agencies, funded and served 14,374 clients.

Website: http://www.dca.state.ga.us/

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

FHA 203K (Rehab Mortgage Loan) Program

This loan program basically allows the home buyer to use FHA financing to buy and repair/rehab residential real property through pre-approved repair contractors.  Many stipulations exist but the program has worked well for many people get a home at a good value and fix it up.

Update 2-18-2012:  Two types of FHA 203K programs exist: 

Streamline 203K (minor repairs from $5-35K) and Standard 203K (rehab major repairs to new or existing home)

Source:  http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203kmenu

Source:  http://www.ukiahdailyjournal.com/community/ci_19904109

Original post material:

Source: 203K Program

http://www.hud.gov/offices/adm/hudclips/forms/files/92700.pdf - 203(k) and Streamlined (k)
U.S. Department of Housing Maximum Mortgage Worksheet

HUD Mortgagee Letter 2005-50 - List of eligible work items/improvements

Helpful areas of information about 203K loans:

- http://www.hud.gov/offices/hsg/sfh/203k/203kmenu.cfm

- http://www.hud.gov/offices/hsg/sfh/events/021711203k.pdf

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Obama vetoes bill to stop electronic signatures...for now

Interstate Recognition of Notarizations Act of 2009 - Requires state and federal courts to accept documents of many different kinds that are notarized by people or computer in other states.

This is an attempt to slow the process down to ensure people aren't caught up in the eviction process earlier than they could have or without merit.

The Bureau of Consumer Financial Protection has jurisdiction in this decision, but doesn't become effective until summer of 2011 (but dollars to donuts that Elizabeth Warren is coordinating rules and guidelines).

http://www.govtrack.us/congress/bill.xpd?bill=h111-3808

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Billion$$$ for the Neighborhood Stabilization Program

Here we go again...Another Federal program designed to redevelop foreclosed & abandoned properties in blighted areas. Is it successful?

Even though some communities have bought, renovated them and sold foreclosed homes to low income buyers, or have demolished some blighted areas, there have been some communities that received promise of grants who haven't done much at all with the available funds.

There are some local and state officials who are unable to use the federal funds due to the constantly changing program guidelines and rules to use the money. A recent AP article stated that only 38% of the money has been "obligated" or dedicated ---- backed up by a legal contract for the property. The funds have to be obligated by September 2010 or the money will be taken back by the Feds (and probably spent somewhere else instead of paying off debt or just reducing the budget by that amount).

NOTE: Fat chance for reducing the debt according to Jamie Dupree's blog about where the unobligated money "really" goes. - http://wsbradio.com/blogs/jamie_dupree/2010/04/unspent-federal-money.html

Examples of problems include Boyton Beach, Florida where $11,000 of the $3 million grant has been spent. The local governments are not establishing relationships with the banks before sophisticated "private sector" investors are buying up properties before the local government officials can even bid on them...

Wait, government too slow for the free market? No!

3-17-2011:  House of Representatives - H.R. 861 (Elimination of Unallocated Release of NSP Funds) was rejected...so in other words, Congress didn't agree to release these funds back to the US Treasury, but to go ahead and allocate them.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

FHA loan immediately after a short sale?

Can I get an FHA loan just after I sell my home through short sale? Well, maybe...

But would you want a loan right away after going through that process.

http://www.hud.gov/utilities/intercept.cfm?/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/09-52ml.pdf

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

HUD Homes for $1 - well, maybe, but not to you!

Neither an individual nor an investor can purchase a HUD home for $1.  And even though individuals who use FHA and are owner occupants can buy HUD homes for $100 down ( ) or certain qualified public servant home buyers can buy homes for 50% of full asking price from HUD, they can't buy a HUD foreclosure for $1.

HUD's program provides for local Government Agencies to partner with non-profit organizations to buy FHA foreclosed properties that have been unsold for about 6 months.  Or in other words, nobody else wants them because of property condition and other factors that make the property non marketable. 

http://www.hud.gov/offices/hsg/sfh/reo/goodn/dhmabout.cfm

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Freddie Mac videos on homeowners handling foreclosures and distressed sales

http://www.mortgagenewsdaily.com/03212011_freddie_mac.asp

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Georgia SB 346 - Property Values used to Calculate Property Taxes

After researching the effective date of SB 346, it appears that that Section 5-2 provision (using no higher than purchase price as property value) and most of the rest of the Bill becomes effective 1-1-2011. (SB 346 history and Bill at Georgia General Assembly website - http://www1.legis.ga.gov/legis/2009_10/search/sb346.htm)

As a side note, the following link states that Part XIII and Part VI of SB346 shall become effective upon approval by the Governor (signed 6-4-2010) or upon it becoming law w/o such approval (I think if Governor didn't sign or veto, it then automatically becomes law in Georgia) ; assume (effective) for tax year 2010; all other provisions become effective January 1, 2011; http://www.gaptp.com/docs/SB346.pdf

I welcome any clarification to these findings.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Buying a HUD Foreclosure for $100 down?

Yes - you can buy an FHA foreclosed (HUD) home with $100 down...

But you must use FHA financing; the total estimated repairs don't need to be under $5,000 (i.e., FHA insurable) as long as FHA financing is used; and you must be an owner occupant.

Unfortunately, Good Neighbor Next Door properties are ineligible for the $100 down.

See details here - http://www.hudpemco.com/100%20Down%20Payment%20Incentive.pdf

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Lease Purchase of Real Estate in Atlanta Metro Area

A quick summary on Lease Purchase Agreements

As an Exclusive Buyer Agent, I frown upon lease/purchase agreements for two reasons.  One, very few wind up closing, giving the Seller a large lump sum option payment.  Another, the home buyer is not going to be in a strong negotiating/bargaining position for any lease/purchase.

But if a home Buyer really wants to buy a house and is otherwise unable to proceed with mortgage financing to purchase a house and needs time to be in a better financial position to purchase a house (for credit repair; short on down payment; owns a primary residence; plans to move without selling, etc), then the Buyer and Seller may agree to a rental period with subsequent property purchase.  In other words, a lease/purchase of a home.

Typically this involves:

• Rental to Buyer over 12 month period, agreeing to a sales price of the house 12 months from now;
• Large non-refundable down payment by the Buyer (Seller keeps it if house sale doesn't close, or used as down payment if it closes);
• Portion of the "inflated" rent to be applied toward the purchase price of the home (refundable?);
• Basic responsibilities of the Buyer and Seller including responsibilities for insurance, utilities, repair to and maintenance of the house, compliance with subdivision HOA CCRs, etc,;
• Length of lease term is long enough to obtain financing
• Provisions where Seller receives monthly payments and Non refundable fee, yet fails to make mortgage payments and home forecloses before Lease-Purchase expires and home is to go to closing;
• Consult with Real Estate Attorney to draft and review contract regarding any other local, state, national Lease/Purchase laws in effect.

        

NOTE: Since the ultimate success or failure relies on the relative bargaining strength of all the parties and the Buyer's ability to qualify as both a tenant and purchaser, this is not the complete list of factors to consider for all Lease/Purchase Agreements that would fit each individual situation.  Use it as a guideline.  Add or change concerns to fit your specific situation.

Lease Purchase Contracts - Factors Buyers & Sellers Consider
Topic	Buyer	Seller
Buyer qualification	Not only do you need qualify as a renter with a credit and reference check, but also you must qualify (income, credit score, amount for DP,etc,) for a mortgage loan at the time of purchase.	Require tenant to complete a credit application from a vendor who investigates credit and get prequalification from a lender who will be working with Buyer throughout the process.
Lease Agreement	Long enough term to obtain financing; what level & type of insurance will you need (Seller has homeowners/renters coverage); if responsible for utilities, put in your name so you control payments & provide proof of payment to Seller; and if you pay for repairs/improvements, outline how will they are treated by Seller (credit toward purchase price or off lease payment).  Protect or reduce responsibilities before purchase.	Responsibility for utilities, repairs, and maintenance and ask for proof of payment; Frequency & access of visits during lease; Levels of insurance required by tenant and Seller.
Monthly Lease Payments	Competitive, low and apply as much as possible toward Purchase Price.	Enough to cover current mortgage payment and any projected repair if possible (difference can be applied to purchase price if closed), otherwise, it's there for repairs.
Security Deposit	Normal on rentals; should be refundable regardless whether you plan to use it toward down payment or not unless it covers legitimate repairs; and document move in and move out condition with Landlord.	Make it refundable after lease expiration net of repairs but after review property condition if property doesn't close.
Option money	Make it tied to down payment; have money held in an escrow account and not Seller's hands; and don't make it "non-refundable" unless you can close.	Make non-refundable right away; you can apply toward price, but only if purchase closes.
Purchase Agreement	Protect your up front option dollars if possible; make it non-refundable if only Buyer default and can't fulfill closing; and be sure to incorporate regular Purchase and Lease Purchase contract contingencies.	Obtain the non-refundable option money as quick as possible; make fewest purchase contingencies; shortest due diligence possible; and limit any contract extensions.
Purchase Price	Make it close to current prices or future trends if prices are falling and a better price may be down the road.	Make it as high as possible to cover loan amount and desired return not related to current market prices.

Article by Atlanta Real Estate Investors Association about Lease Purchase contracts as alternatives to the buy & flip - http://atlantareia.com/articles/the-fair-leasepurchase-an-investor%E2%80%99s-perfect-hybrid/?utm_source=feed>burner&utm_medium=twitter&utm_campaign=Feed%3A+AtlantaREIA+%28Atlanta+REIA.com+Automatic+Updates+%26+Announcements%29


References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them.  I welcome any or all comments that would help others.

Flood Insurance - Take it or leave it?

2-20-2012:  Flood insurance rates are rising and will be a shock to some homeowners unprepared to be required to get flood insurance.  Changes in drainage and construction around your neighborhood may cause changes in how water collects or disipates on your property.  New flood designations will go into effect as of October 2012.  Source:  http://mdjonline.com/view/full_story/16433354/article-Residents-assess-need-for-insurance-against-flooding?instance=secondary_story_left_column

12-14-2011:  Well, the Federal Flood Insurance Program is on life support for now and Congress is still talking about elimination of the Federal Flood Insurance Program...what do you think ought to happen about a program that resulted in about $11 Billion in losses in 2011?  Source:  http://www.upi.com/Business_News/Real-Estate/2011/12/14/Will-Record-Flood-Losses-Save-or-Drown-Flood-Insurance/3201323876248/

Do you think the Federal Government should be insuring US households with insurance it charges people, or should it be privatized or partially privatized?

9-16-2011:  Currently, the National Flood Insurance Program (NFIP) is set to expire 9-30-2011 (but don't count on it).  Also, due to past & recent storms and close to $20 billion shortfall in National Flood Insurance Program resources, there are separate bills in the US Congress proposing increases to flood insurance premiums from 15-20%. 
Source:  http://www.retradio.com/shows/2011/09/16/national-flood-insurance/

9-15-11:  Some estimates of flood insurance premiums from floodsmart.gov - http://www.floodsmart.gov/floodsmart/pages/residential_coverage/policy_rates.jsp

9-15-11:  Less than 10% of people who were flooded in the path of Hurricane Irene carried flood insurance.  This article also has other good insurance suggestions including an annual review of your policy with your insurance agent.  Source: http://realtytimes.com/rtpages/20110915_residents.htm

5-23-2011:  Another Cspan Washington Journal segment on National Flood Insurance Program.  I found it interesting to learn that "every" real property in the United States is in a flood zone, just some don't require flood insurance. Cspan Washington Journal discussion about flood insurance 5-23-2011

5-10-2011:  Operation Watershed by the Army Corps of Engineers for 2011

Update 3-28-2011: National Flood Insurance Program (NFIP) established in 1968, is a Federally backed insurance program that insures homeowners who (a) are located in a flood zone who (b) have a Federally backed loan - which nowadays is about 100% of loans issued.  That makes me ask the question: Now that Fannie and Freddie are owned by the US Government, can they require homeowners to purchase flood insurance?

Note:  Watch the Cspan Washington Journal 3-28-2011 program for a nice 40 minute summary - http://www.c-spanvideo.org/program/NationalFlood)

Given the recent floods in Georgia and around the country, is flood insurance on your radar?

Many people are now considering flood insurance for their homes.

The Federal emergency Management Agency (FEMA) is charged with the task of maintaining, and constantly revises, National flood maps. I understand that if any portion of your land is connected to a flood area/zone, then your property is suspect and may require flood insurance by your lender no matter what stage your loan is in. (Yes, lenders are made aware of changes and may suddenly require you to order flood insurance). If you don't have a mortgage, then you should consider monitoring your property's flood zone/area status.

Your current lender may refer you to, or be able to order a Flood Certification from a company that reviews your property on the FEMA flood maps. FEMA posts a list of Flood Certification companies FEMA's list of flood certification companies or members of the National Flood Determination Association NFDA - http://www.fema.gov/business/nfip/fzone1.shtm

The flood reviews are ordered by lenders for new or refinance loans and typically cost around $20.

I understand that the average National Flood Insurance Policy costs about $350 per year (even though this is heavily subsidized by the Federal Government). If the actual structure of your residence lies anywhere in a flood zone/area, your lender will require flood insurance. Before an amount is determined, you may need to get an elevation survey to determine how much of the dwelling is located with the flood zone/area, which may cost a few hundred dollars.

Search here to find your property in the FEMA flood maps - http://msc.fema.gov/webapp/wcs/stores/servlet/FemaWelcomeView?storeId=10001&catalogId=10001&langId=-1

Please post the experiences you or others you know who have encountered the flood insurance issue.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Want to find/change natural gas provider in Georgia?

This is the website of the Georgia Public Service Commission with respect to gas marketers including recent prices and consumer tips. - http://www.psc.state.ga.us/gas/pricecard.asp

I am not necessarily recommending Walton EMC, but Clark Howard and others have mentioned their rates being very competitive, but I don't know how their customer service and billing issues are rated.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Reverse Mortgages

Update 1-20-2012:  According to this reply from an online real estate attorney, most of the reverse mortgages are non-recourse loans (e.g., they can't go after you for negative equity).  But you should verify that before signing up for a reverse mortgage.  Source:  http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2012/01/ask_a_real_estate_pro_walking.html

Update 1-20-2012:  Reverse mortgages, once recently almost vanished, are coming back - please be careful to read and understand all pros and cons and seek help when you evaluate reverse mortgages.  Source:  http://online.wsj.com/article/SB10001424052970204542404577158990079313270.html?mod=djemRealEstate_h

6-25-2011:  Apparently, Wells Fargo is another lender (including Bank of America) that is getting out of reverse mortgages - Mainly due from falling property values and therefore the lender is unsure of total payout, whether or not it's supported by the final property value.  Note:  Funny how they protect their payout but some lenders can issue very risky loans when the Federal Government is there to buy them up.

5-23-2011: Visit the National Reverse Mortgage Loan Association for more information about reverse mortgages.

Note:  Reference to the NRMLA website in no way indicates my support or recommendation but for information purposes only.
 
4-28-2011: National Foundation for Credit Counseling (NFCC) is offering counseling for those homeowners who have reverse mortgages. NFCC's toll-free number (1-866-363-2227) is for homeowners to work with counselors on delinquent real estate taxes, property insurance, or any concern such as special assessments HOA fees, and others.

Source:  http://realtytimes.com/rtpages/20110428_free.htm

The new Consumer Financial Protection  Bureau (http://www.consumerfinance.gov/)  will now oversee reverse mortgage industry.

Most reverse mortgages are made under the Home Equity Conversion Mortgage (HECM) program since its inception in 1988.  They work this way:  a borrower who is at least 62 years of age and has paid most or all of their mortgage, receives regular monthly payments as advances against their equity.  They usually give better cash flow to those who are aged and need more cash to pay for living expenses.

It was once thought that reverse mortgage were safe for older people, but recent news regarding the AARP suing HUD for potential reverse mortgage foreclosure has raised some concerns - http://www.mortgagenewsdaily.com/03092011_reverse_mortgages.asp

Recently, Bank of America has stated their intent to get out of reverse mortgage loans because they are not profitable. (Especially under the current market of declining real estate values.)

Some advocates recommend reverse mortgages as a final option since it would make the individual's government assistance (including Medicare and harder time funding long term medical care.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Tax Allocation Districts (TADs)

TADs (redevelopment projects built with funds paid back from municipal and school property taxes resulting from improvements) used to pop up during the real estate boom years to purchase blighted areas of the city landscape and develop mixed use residential and commercial properties.

But since the recent real estate meltdown, TADs were almost FADs....a thing that came and went....but not so fast.

It appears that the Perry-Bolton TAD (sight of the government project housing in Perry Homes) is back on track since the Atlanta City Council approved the issuance of $35 million in bonds for 3 commercial and residential projects.  1,500 single and multi-family housing; Moores Mill Village shopping center; and Community center with library are among some of the planned projects.

Source:  Atlanta Business Chronicle, 2-25 to 3-3, 2011, 3A.

Note: Ask Alex Rodriguez (NY Yankees) about the benefits of TADs involving property taxes.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Settlements for Inept Mortgage Practices

There is a detailed 27 page proposal ("code of conduct") by states attorney generals and some federal agencies to settle apparent bad practices by mortgage servicers.  The specifics include specific loan modification time lines; the freeze foreclosure action once a loan modification application is received; limits on bank fees charged to delinquent borrowers; and improved tracking to get away from using the MERS (Mortgage Electronic Registration System) that causes problems of identity of who owns the loan.

Another effort by the Obama Administration is to hold large banks responsible to "write-down" up to $20 Billion (of the $744 Billion more than their homes are worth) of mortgage loan balances as a penalty for sloppy mortgage practices. There is a belief that a large single settlement may avoid several smaller suits from several federal agencies would tie up the banks in courts for years.

Note of interest:  Loans that went through foreclosure in January 2011 were delinquent for an average of 507 days.

Source:  WSJ, 3/5-6/2011, B1 and 2-25-2011

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Inheriting Real Estate

Here's a good question I caught on Clark Howard show yesterday while Ilyce Glink was hosting:

"Do you have to refinance the loan on a house you have inherited?"

I think it all depends .....on whether the bank wants to proceed with any action.

There is normally a "Due on Sale" clause where the loan may get called in once the property changes hands/ownership.  Typically, the filing of the Death Notice in public records may trigger notification to the lender that a death occurred.

My gut reaction is that if there is alot of equity in a property, or it has the potential for higher and better use resulting in a great price, then the lender may take action to demand full payment (where you would have to sell, refinance or lose the house) or they take the property.

I suggest you consult with a real estate attorney since there may be other local, state, or federal rules of property transfer and notice (not to mention homeowner's insurance and property taxes) that may be affected.

Overall, if taxes and insurance are escrowed by the lender and you can continue to make the payments, I guess it's up to the bank. 

Here is a link to a North Carolina Real Estate planning blog that mentions a Federal law (12 USC § 1701j-3(d)) that outlines exemptions from lenders invoking the Due on Sale clause for inheritance.

http://www.ncestateplanningblog.com/2009/01/articles/real-property/i-inherited-a-house-do-i-have-to-refinance-the-mortgage/

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Tax breaks for state and local real estate development

The November 1, 2010 ruling by the Georgia Supreme Court ruled the tax breaks granted by the Fulton County Development Authority for development projects on local government were unconstitutional subsidies.

Now Cobb County has come along to offer tax breaks for a developer to develop part of the Hidden Forest subdivision into mixed use residential and retail space.  Cobb Developer - Lynwood Development Group -Tax Break

The General Assembly also passed a constitutional law allowing school taxes to be used for development projects.

Source: Atlanta Business Chronicle 11/5-11/2011.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Radon

Well, I have learned a bit more about Radon Gas testing. I am aware that Radon gas (I've been told caused by decaying granite under the earth's surface) does exist everywhere on the planet at various levels, has been linked to cancer, and if found at a certain level, the EPA recommends mitigation (i.e., continuous removal). I recently was informed that gas levels vary with atmospheric pressures during the day and between days. I understand that a test over 2 or more days detects highs and lows and takes an average over that time period.

Information about Radon Gas testing and services can be found at both EPA Guide to Radon Gas and the Georgia Department of Community Affairs website. You can actually order a $6.50 test kit to test for Radon gas at your home and I believe the results are tested by UGA labs. However, other independent labs exist that are setup for performing tests like Pro Lab. Many home inspectors can provide testing and independent laboratory review.

Tests can be performed using charcoal canisters or electronic devices and performed by professional home inspectors can run from $100-200. Minimum test periods of 48 hours will give enough swings in levels to identify variance in levels.

If you choose to mitigate the radon gas, then you can seek contractors from http://www.radongas.org/ or http://www.nrsb.org/. For the "do it yourselfer", you could also try to install systems yourself (I recommend a professional help you) through Radon Gas kits.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Bank of America Legacy Asset Servicing

In response to investigations into major bank mortgage loan servicing problems, Bank of America has decided to form a department (Legacy Asset Servicing) to ensure the existing 1.3 million delinquent loans are monitored to ensure they are properly administered and deal with any repurchase of bad loans.

Note:  12 million performing loans are being handled by Bank of America.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Does the new Dodd-Frank bill affect small mortgage companies?

Apparently the new Federal law requires a "compliance person" to oversee mortgages to ensure they are in compliance with Federal laws.  So some smaller lenders are merging together to form larger mortgage units.

Is this reverse engineering to force development of bigger (i.e., TOO big to fail") lenders?

But I think the comment in the Chronicle's article of banks having a hard time competing with non-bank lenders because they have alot more variety of businesses to focus on gives me a chuckle - when did any bank ever concern themselves with "too much business" (making money)?

Source:  Atlanta Business Chronicle Page A16 2-25 thru 3-3, 2011.

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

What happens when the bank forecloses on a renter?

Protecting Tenants at Foreclosure Act of 2009 (signed by President Obama May 20, 2009.)

This legislation provided that leases would survive a foreclosure -- meaning the tenant could stay at least until the end of the lease, and that month-to-month tenants would be entitled to 90 days' notice before having to move out (this notice period is longer than any state's non-foreclosure notice period, a real boon to tenants).

An exception was carved out for the buyer who intends to live on the property -- this buyer may terminate a lease with 90 days' notice.

Source: http://www.nolo.com/legal-encyclopedia/article-30064.html

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

HUD Counselors & Resources for Residents and Communities of Georgia, Inc. (RRC)

Provides comprehensive counseling for housing needs in Atlanta metro area.

6-10-2011:  If you will, or have problems meeting your mortgage...

Avoid foreclosure - check out the HUD Housing Counseling Agencies located in GEORGIA - http://www.hud.gov/offices/hsg/sfh/hcc/fc/index.cfm?&webListAction=search&searchstate=GA&filterSvc=dfc

If you need 2 avoid foreclosure, contact a HUD Housing Counselor = There is NO fee - (800) 569-4287
http://portal.hud.gov/hudportal/HUD?src=/i_want_to/talk_to_a_housing_counselor


RRC is a non-profit community development corporation founded in 1989 with the initial mission of revitalizing the Reynoldstown community of Atlanta. RRC creates sustainable communities through knowledge sharing, community building, housing, and economic opportunities. RRC began providing homeownership counseling services to low-income clients as a community-based partner of the United Way Individual Development Account program beginning in 1999. In 2006, RRC formally established its HomeOwnership Center, which provides homebuyer education and counseling, financial fitness education, post-purchase education, foreclosure prevention counseling, and a rescue loan fund to clients from throughout the metro Atlanta area. During Fiscal Year 2009, the RRC counseled 1,121 clients.

Website:  http://www.rrc.reynoldstown.org/

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.

Cobb SPLOST 2011 - Vote NO!

Look at these 4 year SPLOST 2011 Plans -  Do you see any details in the SPLOST 2011 plans to give you an idea if the projects are necessary or just "wants"?  Are they too general or just right for your taste? 

The Marietta Daily Journal stated (1-9-2011, 5B) that we may have to pay more if the Cobb SPLOST isn't approved.  Per House Bill 277 that was passed last year (thanks Republican schmucks), if we don't pass the continuation of penny sales tax, we might pay more for state road projects.  Is this the only choice we have?  Sounds like a law can be changed....and what state road projects are necessary?  Will the 21 Regional Roundtable members come up with a list of "only" absolutely necessary projects for the ten years starting in 2012? - Probably not.

I don't object to a sales tax for "repairs" of roads and buildings. I do believe there are bridges needing repairs, roads and buildings in need of repair, but I don't believe Cobb has sufficiently identified details of just what expenditures are planned and they are not disclosed properly.

One example of another Government Waste of SPLOST Dollars in Cobb County - The New Superior Court Building in Cobb County

Bullet resistant drywall - that's good if guns ever get past the high paid security on the first level and through the rest of the building...c'mon, is it really necessary?  Hope there was a sufficient break on insurance coverage costs to pay for it!

80-85% of the construction debris was recycled - oh really, how does scrap pieces of drywall and other debris get recycled - and into what?  If that was a major accomplishment, did it save the taxpayers lots of money?

Two goals of the new courthouse were to reduce energy costs by 15% and water costs by 40%...why not turn off a few lights and pout bricks in toilet tanks or just shut off a bathroom or two, or turn the thermostat up in the summer and you get some savings.  These are noble goals but did you have to build another courthouse to achieve these savings?  Isn't the mere fact you are using more energy efficient materials going to give you energy savings and only 15%?  Why not 25%?
Over 25-30 years, cost savings (water - electric - HVAC) will be significant - yeah, if it lasts that long!  And will we need to wait that long?  There's alot of updates, modifications, and repairs in that same 25-30 year period.

Oh and Juvenile and Magistrate Courts are supposed to move into the old courthouse, but no money is left for that move - so that cost is buried in the 2011 SPLOST proposal on March 15, 2011 - gotcha!

When will the Cobb voters demand more details and specifics before tax money is spent - maybe never?

References to products and services are not a specific endorsement, but the user must perform their due diligence and investigate whether the product or service is right for them. I welcome any or all comments that would help others.