Mortgage Anyone? To Dream The Impossible Dream?

Hi Everyone,

   Welcome to another Sizzling Summer Friday!

   Unless you've been living under a rock for the past few years (or you just don't follow the Real Estate Lending market, but if you didn't, I guess you wouldn't be reading this), you know that mortgages and lending has been tight and more stringent as opposed to the pre-housing bubble days.

   In a recent CNN Money article from Les Christie ("Secrets to getting a mortgage with so-so credit"), Christie concurs and says that, "Getting a mortgage can be tough these days -- even people with near-perfect credit have been rejected for loans". Christie points to a conference in which Fed Chairman Ben Bernanke said lending standards for mortgages have tightened so considerably that "the bottom third of people who might have qualified for a prime mortgage in terms of, say, FICO scores a few years ago -- cannot qualify today."

   Is there money to lend? Christie quotes the acting commissioner for the U.S. Department of Housing and Urban Development (HUD), Bob Ryan, who said that mortgage money "is flowing, it's stable, it's tightened from the boom years, but it's there.". "The belief is that you can't get a mortgage at all -- but you can," says Keith Gumbinger, of the mortgage information provider HSH Associates.".

   Christie writes about a loan officer who had a client with a 700 FICO a couple million dollars in assets, and he wanted to refinance. He was rejected! Apparently, his report showed an investment property he could not (housing bust), and had to do a short sale, and that blemish "resulted in an automatic rejection of his refinance application."

   So, are things really that bad?

   "Depends on who you ask", says Brian Willingham, a Loan Officer with FitzGerald Financial Group.

   "Lending has gotten a bad rap lately", adds Christopher A. Potter, a Loan Officer at GuardHill Financial.
  
   "Basically, these days you actually have to be able to afford what you want to buy (and disclose your true income on your tax returns).", says Willingham. Potter adds that now banks, "want to see that you can actually afford it. This is just common sense and will benefit all in the long run.". He also said that it's, "not that difficult assuming that you qualify.", and that people are so used to easy credit standards ("It used to be that all you needed was a pulse to get a loan.", adds Potter).

   Nicole Tucker, a Licensed Texas Real Estate Consultant, says that even though the requirements are tighter that several years ago, "it is not difficult to get a mortgage if a borrower has verifiable and steady employment and decent credit. You do not have to have stellar credit." Willingham continues this point, and agrees that for people with "sufficient, stable income it's a lot of paperwork but it's not "hard" to get a loan.", but adds that if your credit is "poor" and "you don't have a stable work history and stable income, it could be pretty difficult."

   So, on that note - less-than-stellar credit - is FHA still an option?

   In the article from Christie, he quotes Gumbinger as saying that "The FHA is just about as free and easy as it was in the go-go days,". Christie says that the standards are, "flexible and aimed at making mortgage borrowing easier, especially for working-class Americans.". Potter agrees, and says that the "FHA is extremely flexible with credit issues and there are plenty of lenders with "common sense underwriting". Melanie Roussell, a spokeswoman for the FHA, explained that "the agency is willing to overlook a blemish on a credit report -- even a big one -- if other factors are favorable", as written by Christie.

   Tips? Pointers?

   Paul McFadden of The Legacy Group, tells us that the most important thing is "to have all your documentation in order (income and asset information) along with a flexible attitude if letters of explanation need to be written." He summarizes the process as follows; "A borrower needs to work with a great team that would include a loan officer and possibly a realtor to make sure they are approved and their loan closes."

   Have you tried applying for a mortgage? Before or After the Housing Bubble? How was your experience?

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Have a Great Weekend, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #mortgage #loan #credit #refinance #FHA #FICO #HUD #LoanOfficer #RealEstate

Homeowners Unite! How Can We All Save Money?

Hi Folks,

   Happy Mid-Week to you.

   If you're a homeowner, I don't need to tell you how expensive it can be! Every time you turn around there is another expense coming at you, whether it is a break-fix or plain old fashioned preventative maintenance. It is expensive. Recently, Beth Braverman wrote an article for Money Magazine (on CNN Money), titled, "3 ways to save on home costs", which aimed at sketching some broad strokes for homeowners to take.

   For the purpose of our story, we are going to take her 3 sub-topics out of order, and we'll leave the biggest one for last.

   In the article, Braverman suggests to, "Trim the cost of borrowing", and she discusses the extremely low mortgage rates as an example. She suggests that you refinance at the lower rates, but to request a, "good-faith estimate" before you apply, to permit you to lower the closing costs. Jonathan Steele, a RN in Pennsylvania, suggests that you, "Get a 30 year loan and pay off your house in 15 or less", and cautions that you should, "Make sure the loan allows early pay off with out penalty.".

   The second sub-topic that Braverman discusses is that you should "Get a deal on furniture", and shares some tips from Furniture industry author Kimberly Causey, as follows: "When sales slow in the summer, many mom-and-pop shops will make deals to move inventory, says Causey. Ask for 20% off, and don't settle for less than 10%. Gently used floor models can go for 25% off."

   Now, as I mentioned in the beginning, the 3rd sub-topic has the most potential and ways in which homeowners can save, and Braverman refers to this one as, "Negotiate on repairs and upkeep", and from her angle, she says that contractors are, "still facing a slumping real estate market", and "will strike a deal to get your business."

   When posing the question of how homeowners can save costs, a majority of the replies were related to this specific sub-topic. Interestingly, one of the most popular suggestions was in favor of using a "programmable thermostat". Jonathan Steele says that he has had his for over 18 years, and that he owns two houses, and the tenants he has who "refuse" to use these have, "twice the heating bill we have by simply automating the heat turn down when we are gone in the day and asleep at night.". Dianne Martz, co-founder and principal of Sustainable Life Solutions LLC, says that installing and using a programmable thermostat, "can reduce your heating and cooling bill by 10%.", and says that if you already have one, to be sure it's programmed to "turn itself down or off when you're sleeping or at work or school.".

   Timothy G. Wiedman, D.B.A. Division of Economics and Business at Doane College in Crete, Nebraska, also calls the programmable thermostat, "The most cost-effective thing" that he ever did, and adds the following summary: "Believe it or not, that thermostat paid for itself in two months; and over its life, it literally saved thousands of dollars on our winter gas bills."

   A few other tips that were provided to us were regarding the hygienic quest we call, "washing our clothes". Steele says that he bought a front loading washer, which was, "twice the cost of a traditional washing machine". He says that the savings "were in the water", and adds that "when you pay for water coming in, you may also pay for the quantity of sewage going out in some municipality. So saving on the water used can be a double savings." An additional tip comes from Pablo Solomon, an Artist and Designer, who suggests to, "Put up a clothesline", since it is "really" inexpensive, and says that if your neighborhood prohibits clotheslines, "fight the board and get the rule changed."

   So what does it all boil down to?

   Mandy Williams, Author of, "What I Learned About Life When My Husband Got Fired!", suggests, "Thinking Before Spending", which she admits is, "A very basic concept", but says that we are all "guilty of "mindless" purchases that we do without thinking. And definitely without considering the total amount spent over time". She suggests a very simple tip; to , such as "merely to write down everything you spend money on for a week.", using what she calls "Green Sheets". Williams says, "You Are Never to Old or Young to Budget", which she admits is an "Obvious concept", but, "rarely remembered when at the time money is being spent."

   I hope these tips have been helpful. Can you also provide some helpful tips to your fellow readers here?

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Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #homeowners #mortgage #refinance #thermostat

Independence Day Makes Me Thankful

Hello Folks,

   As you are well aware, today is Independence Day. What does it mean? It symbolizes our freedom and independence as a sovereign nation. It is a day that gave birth to America, the friend of nations, the protector of nations, and unfortunately, those two defining factors of our great country also show a weakness to the remainder of the world.

   Why is that? Being a friend, a protector, and a helper to other nations as opposed to being an invader or an internal oppressor of our own people, shows to the civilized world that we are a great country with great intentions and actions, but to the savage parts of the world, this differs from the way they run their countries, so it makes us look "weak" in their eyes.

   How do I feel about that? Let these savage ones continue to look at us through their sadly distorted eyes, and focus on what we have been doing for 230+ years; providing a wonderful land of opportunity where each person writes the script of their own lives, and does not have that script thrust upon them with Gulags and mysterious prisons and death penalties if you look at someone the wrong way (vs. actually deserving capital punishment for pre-meditated murder!).

   My family originated in Romania, and my Grandparents came to this country, learned the language and spoke perfect English and assimilated into society, built families, and achieved their very own piece of the American dream...an important lesson for the immigrants of today. I thank God every day that I was born in the USA, and I am proud to be an American, not only today, but every single day of my life !!

Have a wonderful Holiday !
Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

Was The Increase In Pending Homes Sales A Surprise?

Hi Folks,

   Glad we could all get together again this Friday...the first day of July !

   Well, the figures were just released for Pending Homes Sales, "A forward-looking indicator based on contract signings" (per the National Association of Realtors®, or NAR), and per the NAR, "Pending home sales rose strongly in May with all regions experiencing gains from a year ago, pointing to higher housing activity in the second half of the year". To be exact, the numbers rose 8.2% from April, and 13.4% from May 2010. Was this a surprise, or was it expected...and what does it really mean?

   "Of course these figures were expected", says Galen Ward, CEO of Estately.com. Jim Kinney, a Vice President of Luxury Home Sales with Baird Warner says that the uptick in the pending numbers, "was no surprise to us as this is the prime seasonality to see an upturn--no upturn in May would be indeed very glum.". "Mays sales numbers are only representative of the "national market" (if there is such a thing) and we all now that real estate is local", per Greg Cook, a First Time Home Buyer Specialist".

   Ward says that the "The First-Time Homebuyer Credit" expired on April 30 of last year, so, "most buyers scrambled to get their offers in prior to May 1.", and Cook says that until we, "move beyond the inflated sales numbers of last years first time home buyer tax credit, we cant really tell if were better or worse year-over-year.", and adds that, "Once we move beyond those numbers (after June) the comparisons become more relevant and we might have a clearer picture of the health of our market."

   Ward extends this and adds the following comment; "Saying this year-over-year comparison is a signal of a rebounding market is akin to rewarding yourself for weighing less this May than you did last year when you were nine months pregnant."

   What does this mean? Where do we go from here?

   Lawrence Yun, NAR chief economist, said, “If banks would simply return to normal sound underwriting standards and begin lending to more creditworthy borrowers, we’d get a much faster recovery in the housing sector.”, and cautioned that job creation is critical to a solid recovery, since, "The job market has sputtered recently, and because variations in local job creation impact housing demand, markets will recover unevenly around the country".

   What are your thoughts? Is a key piece of the puzzle beyond job creation missing?

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Have a Great Weekend, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog: http://blogging.lease2buy.com
HomeRun Homes Websites: http://www.lease2buy.com and http://www.homerunhomes.com

TAGS: #PendingHomesSales #Realtor #NAR #jobmarket #realestate

From Foreclosure To Eviction...Why So Long?

Hi Everyone,

   Welcome back!

   A major trend that is (sadly) happening all around us is the foreclosure process, which entails a long and drawn-out process which usually ends in the eviction of the current homeowners...or not!

   Today, let's focus on the "or not!", and see what is really going on out there.

   A recent CNN story written by Les Christie, titled, "Squatter Nation: 5 years with no mortgage payment", examined this in detail, and said that Nationwide, "it takes an average of 565 days to foreclose on borrowers in default from their first missed payments to the final auction. In New York, the average is 800 days". One such example of "Squatters", as they are referred to, is a Florida couple, that, "have not made a mortgage payment in nearly five years -- but they continue to live in their five-bedroom West Palm Beach, Fla. home.". I find that absolutely incredible !

   As incredible as it may sound, this is not a new trend, says Patrick Hohman of Louisville, KY, who says that when his dad was a little boy, "they lived in their foreclosed home from 1933 to 1937. Due to the volume of foreclosures in the 1930s, they stayed in the home for 4 years before being put on the street."

   Lesley A. Hoenig, a bankruptcy attorney practicing in Michigan, says that "the foreclosure process can take an insanely long time in some cases, especially if the owner has filed chapter 13 to catch up.", and that, "Ultimately, the lender may eventually kick the person out (Likely if the person isn't making any effort to get the loan modified or catch up)", and adds that, "until the number of foreclosures die down, people are going to be able to spend up to two or three years in their house before getting kicked out".

   Hoenig thinks that the main reason people manage to stay in their house is, "because lenders aren't really itching to have vacant houses in their inventory.". Marc S Hyman JD, a Licensed Real Estate Agent in Santa Barbara CA, says basically the same thing; "The last thing a bank wants to do in this market is actually take possession of a home so banks are letting the foreclosure process drag out as much as possible.", he says, adding, "During a normal market banks foreclose quickly in order to get their "investment" back as soon as possible and put it back to work."

   The reason Hyman provides is that in this market, "a bank does not want to own a home that it will need to maintain and insure. The bank will become responsible if anyone gets hurt while on the property. Furthermore a bank will not be able to sell the house quickly. Banks are looking at any solution that does not mean taking back the house.".

   Hyman does say, though, that once it does complete the foreclosure, "it does quickly evict tenants in order to avoid the legal obligations of being a landlord eg timely repairs, insurance coverage etc.". Referring back to the Christie piece from CNN, one such "Squatter" says that, "Living in this foreclosure limbo is "Hell,"", and adds, "I feel like I'm locked in a box. I work for a financial organization and if this came out, it could cost me my job."

   Ultimately, Hyman offers up this interesting point, and perhaps something for everyone to chew on; "The squatters are getting a longer break than in the past but it will come to an end.", and says that, "The sad thing is that the squatters are spending everything they are saving while living rent free. If they did not have the squatter mentality they would be saving the money and looking to buy somewhere else with the windfall they are getting by squatting."

   Hyman makes a very good point. We need to realize that a lot of these "Squatters" are families (with children), who had been working hard for years to pay on time, until hardships arose with the Economic downturn. It does not make it right, but it's quite possible that this category of folks would never have imagined being in the foreclosure process and being a "Squatter". It seems as if the whole definition of everything we believe(d) in has taken a 180-degree turn. Tough Times!

   What are your thoughts on this hot topic?

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #foreclosure #eviction #squatter #mortgage #foreclosureprocess #RealEstate

Should We Fear The Qualified Residential Mortgage Definition?

Hi Folks,

   Welcome back, and hope your weekend was great !

   There has been a humongous amount of buzz surrounding section 941 of the Dodd-Frank Act ("Wall Street Reform and Consumer Protection Act of 2010"), which requires, per the National Association of Realtors (NAR) website (Realtor.org), that lenders "securitize mortgage loans to retain 5% of the credit risk unless the mortgage is a qualified residential mortgage or is otherwise exempt (for example, FHA mortgages are also exempt)".

   Why is this so scary?

   The QRM definition is of extraordinary importance because it will determine the types of mortgages that will be generally available for borrowers for the foreseeable future. We look back at the NAR website, which says that the rule, "would (a) drive borrowers to FHA if they do not have 20% down or (b) mean those who couldn’t put 20% down would have to pay up to 3 percentage points more for a loan (for example, 8% mortgage vs. 5% mortgage) or not qualify at all. Even a 10% downpayment QRM would have a negative impact on FHA and the markets."

   Let's get a little bit more granular on this, namely, how this affects new buyers and sellers looking to refinance their homes. This is very important.

   Melanie J. McLane, a Real Estate Speaker and Trainer, says that stats from her trade organization, the NAR, indicates, "two striking things: 1) it will take the average buyer 16 years to save a 20% down payment, vs a 5%; and 2) the risk to the lender going from 95% LTV to 80% LTV is only 6/10 of one percent (less risky).". "The majority of home buyers do not have 20% to put down. Sellers are enlightened to offer creative financing due to low equity, a new attitude may emerge: "if I am about to lose my credit and home, of course you can take over my payments, forget saving 20% for down payment" What you may have as an end result is a nation of people taking over existing loans in lieu of obtaining new financing.", says Dean Wegner, a Mortgage Originator in Scottsdale, Arizona.

   Jeffrey R. Kershner, Managing Broker/Principal with an Illinois Real Estate Company, takes an even granular approach, and says that for a person making "the median household income in Illinois of just over $53,000", that it will take them "9.24 years to save up for a required $40,000 down payment on a $200,000 house; that is with saving 10% after taxes per year. This will greatly increase the age by which first time buyers can enter the market and will adversely affect the middle class."

   Substantial problems for new buyers, which would change the entire market.

   For existing homeowners, per an article by Jon Prior on Housingwire.com, "an overwhelming percentage of homeowners located in states hardest hit by the housing downturn would be shut out of refinancing their mortgage because they do not meet equity standards under the proposed risk-retention rule", according to a study from consumer and industry groups. The story says that a white paper submitted to regulators, "showed existing homeowners would be harmed as well", since, "A borrower must hold 25% equity in the home in order to refinance into a QRM loan and at least 30% equity for a QRM cash-out refinance loan, according to the current proposal."

   Where does this have it's biggest impact? In the story from Prior, he cites data from CoreLogic that, "showed the five states most impacted by the proposed equity requirements are Nevada, Arizona, Georgia, Florida and Michigan.", and says that home values dropped so much in these areas that the study "found two out of three homeowners in these states would not have the necessary 25% equity to refinance. The study also found six out of 10 would not be able to move out of the home and put 20% down on a new QRM." In Michigan, the study showed 64% of Michigan homeowners do not meet the 25% equity requirement, 66% in Florida, 65% in Georgia, 72% in Arizona, and the big one...Nevada...where 83% of homeowners, "do not have 25% equity in their home and would not be able – even if they had never missed a payment – to refinance into a lower-rate QRM loan."

   Prior summarizes that, "In effect, the proposed QRM would penalize families who have played by the rules, scraped each month to pay their bills, kept their credit clean, and saved for a modest down payment," according to the study.

   McLane feels that this is all due to that fact that we are, "over correcting from the early 2000’s when anyone with a pulse got a mortgage to an extreme on the other end now, where you can have perfect credit and offer up your first born child, and they still say either “no” or “maybe, we have to verify something else”. The banks are terrified of examiners, unknown parts of Dodd-Frank, etc.". Wegner feels that this is, "just another step backward for housing and adding to more years of recovery. We understand that risk prevention is critical for lenders going forward but knee-jerk reactions like this without fully understanding the implications are only going to hinder housing."

   Suggestions? Wegner says that the real estate market needs, "expansion in the buyer pool to open more doors to prospective home buyers", and he suggests that they should focus on, "expanding programs to self employed borrowers", since, "1 in 3 Americans is defined as "self-employed" for underwriting purposes and therefore can not purchase a home." He rhetorically asks, "What if they allowed them to go "stated" with 50% down, 750 fico's, primary residence and single family only.", and says that this would easily boost housing 10%.

   What are your thoughts? What would you suggest if you were able to chat with Regulators?

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #QRM #NAR #QualifiedResidentialMortgage #FHA # mortgage

5 Rules and 8 Factors

Hi Folks,
   The "Dog Days" of Summer are upon us, and the humidity is coming (take cover !!). Some folks might look at the odd title of this story and scratch their head, but I will explain.

   There were two very recent stories that intertwined quite well, regarding the new playing field of Real Estate, coupled with some old-school things that should not be overlooked.

   In the story, "5 New Rules of Real Estate", by Ilyce Glink for CBS MoneyWatch and on Yahoo Real Estate, the Author names these rules as follows: "R.I.P., Big Housing Price Jumps", "Mortgage Lenders: Just Not That into You", "The Best Deals Are in New Places", "Investing? Focus on Income", and "Time to Think Medium Term ... at Minimum". In summary, the days of huge jumps in prices are gone, lenders are lending in super-risk -averse mode, properties in areas that are not overloaded with foreclosures will be good deals, buy and rent some foreclosure properties for income, and a 7-10 year plan is important when buying a property in this market.

   The other story, "8 Factors That Devalue a Good Home", written by Janet Fowler, and which appeared in the Yahoo Financially Fit section, brings up some important points for sellers looking to get out from under their home. As mentioned by Glink, "Homeowners are desperate for the housing market to rebound -- especially the more than 25 percent who are underwater with their homes".

   Fowler mentioned the old "Location" adage, warns about "Good Renovations Gone Bad" (shoddy DIY work), overly creative customization (pink walls?), and unappealing curb appeal (keep the outside of the home neat!). Rounding out the 8 factors are, "Pets Gone Wild" (carpet damage, etc), "Not-So-Nice Neighborhood" (Crime), a Sinister Reputation (a murder in the house), or, "Frightful Foreclosures". This last one is really important, especially in today's housing market. As Fowler says, "Many buyers are leery of purchasing foreclosures that are being sold on an "as-is" basis.", and she adds that the fear is that, "the home could be a money pit or require a huge amount of repairs before being move-in ready.". She advises that it is crucial that you get a home inspection so that you know, "exactly what you're getting into."

   Glink comments that she does not believe there has ever, "been a better time to buy a home" saying that 30-year fixed-rate mortgages, "can be had for less than 5 percent". She also says that it seems, "everyone wants the real estate market to get better", including those hit the hardest...Realtors, Builders, Appraisers, and Homeowners themselves.

   What are your thoughts on these suggestions and overviews?

Have a Great Weekend, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #realestate #mortgagelender #foreclosureproperties #realtor #builder #appraiser

Realtors And Existing Homes...What It All Means

Hi Everyone,

   I might be shot on the spot for this, but perhaps I won't be...when we think of Realtors, we often think of the Realtors that sell Existing homes...in other words...ones that are already built and are not new construction. If we go with that thought, seeing the clout that Realtors have in the Housing market, we realize how important an indicator the "Existing Homes Sales" figures are (released by the National Association of Realtors®, or "NAR").

   The figures for May were just released, and sales dropped 3.8% from April, but 15.3% from a year ago (when the tax credit deadline was approaching). The figures are the "completed transactions that include single-family, townhomes, condominiums and co-ops", per the NAR.

   "There is still lots of pain in many US markets. Foreclosures and short sales, declining prices and tougher lending standards are prohibiting new buyers from getting in the market", says Barak Dunayer, founder of Barak Realty in New York City. He points to some bright spots, such as properties priced below $100,000, along with some "deeply discounted properties" scooped up by investors. He does offer some hope in his local market, and says that in some areas, as in the case of NY City, "the sales of certain properties in specific submarkets have been robust and even back to 2006-2007 levels.", and reminds us of a very valuable lesson: "As real estate is a local market NOT a national market, one must look closely at local market conditions prior to making sound buying and selling decisions."

   This is some sound advice. On Wednesday, the FHFA Monthly House Price Index will be released, followed by the New Residential Sales figures for May on Thursday. What do you think will be the result of those two releases? We'd love to hear your opinion.

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #Realtor #housingmarket #existinghomes

What Happened To Residential Construction In Our Country?

Hi Folks,

   Welcome back !

   As you may be aware, late last week the May 2011 figures for New Residential Construction were released, and we'd like to take a look at these figures today, which are broken down into 3 components; Building Permits, Housing Starts, and Housing Completions.

   Building Permits for privately-owned housing units were up 8.7% from April, and 5.2% above May 2010, while Single-family authorizations were 2.5% above April. Housing Starts for privately-owned housing was up 3.5% from April, but down 3.4% from May 2010, with single-family housing starts 3.7% above April. The last piece of the equation was Housing Completions, with Privately-owned Up 0.4% from April, but down 22.5% from May 2010.

   "Perhaps my type of perspective on these numbers is interesting", says Bo Hammond, VP of Sales for the Coastal Lumber Company, which supplies raw material for housing attributes, mouldings, flooring, and cabinetry, and advises that his perspective is from a "practical sense".

   Hammond says that we are, "overbuilt from a residential construction standpoint, and the allure of home ownership has faded for those wage earners who historically would have been buying their first house and starting families." He continues to say that the affect on jobs of the recent recession has, "fundamentally changed the perspective of the emerging generation that are getting out of school and deciding to live at home, rent, get married, etc."

   Hammond says that uncertainty in jobs, home values, and financial security has essentially "tabled a normal progression that would encourage behavior that would have building permits and residential construction increasing.", but says, "In lieu of this, remodeling and multi-family construction have been the larger positive influences, but those combined are volatile and don't have the ability to impact GDP like healthy residential construction had 5-7 years ago."

   "I would just reinforce that the market for new homes is extremely competitive right now. This is a great time to buy due to the affordability of homes and interest rates.", says Michael F. Dillon, Jr., Executive Director of the Builders Association of Northern Nevada, who also reminds us that, "Homeowners will still receive a great tax incentive to buy a home and build equity."

   What do you think of the recent numbers? What would you attribute the huge dip on Building completions from just one year ago? We'd love to hear your take on things.

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #residentialconstruction #remodeling #taxincentive

The Connection Between The Producer Price Index And Housing

Hi Folks,
   As another week draws to a close, we take a look at an indicator that we have not discussed here, and that is the Producer Price Index (PPI), which basically looks at goods in varying stages of production. The Producer Price Index for finished goods rose 0.2% in May (following increases of 0.8% in April and 0.7% in March), so it appears things are headed in the right direction, however, what does this mean for the Housing Market?

   "On the surface the Housing Market should have the potential of having a large impact on PPI since it represents a large portion of the U.S. economic engine", says Lynn Grantham of St. Johns, FL. Grantham points to the "lack of strength in the Housing Market since 2008", and says that the remaining inventory of unsold homes, "including the large number of foreclosed properties that lenders are still sitting on should translate into a dampening impact on the PPI."

   Another point, which was raised by Barry of Alvic Management, is that higher producer prices, "increase the cost of construction materials and should slow new construction, which may make existing homes more valuable because it's harder to recreate them."

   What is your view on this index? How inter-related is it to the Housing Market and the Real Estate Industry? We'd love to hear your opinion.

Have a Great Weekend, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #PPI #realestate #foreclosed #construction

Real Estate Snapshot Of Long Island and New York City

Good Morning,

   Welcome back !

   Today, on a personal note, I was born and raised in Queens, NY (Howard Beach), and currently reside in Long Island, NY. My business has no physical boundaries, as our website covers every state and multiple countries around the world, however, as a homeowner and a local business owner, I like to keep my finger on the pulse of the housing market in this part of the world. Today, I'd like to focus on the Long Island and New York City markets, and I spoke with some local folks for their perspective on how things are going. I can tell you this;

   There has been a, "A marked upswing in the past couple of months, contrary to local newspaper articles", according to Janet M. Maffucci, an agent with Netter Real Estate in West Islip (an office of approximately 40 agents). Maffucci bolsters her claim with the yard stick of "sides", which she explains as parts of a transaction. She explains "sides" as follows: "For instance, if I get the Buyer for an "in-house" Listing (belongs to someone else in the office), that would be 2 "sides" for Netter RE because my office brought the Buyer AND its our Listing. Sometimes you just Sell an outside Real Estates Listing, so we would then have just 1 "side" of that transaction. So all together, we add up all these "sides" of transactions that the Sales Agents are involved in on a daily basis.". As for quantity, at the "height" of the Market in 2005-2006, Maffucci tells us she had, "40 sides on the "board" at any given time", but in the, "depths of the Market crash", she says, "we dipped into single digits". Maffucci proudly says that they are back up to 39 sides for the past few weeks, to which she concludes, as a, "definite upswing in the Real Estate Market".

   In terms of pricing and value, Erik Reilly, a Broker Associate with REMAX Shores in Oceanside, weighed in and said that he believes that, "Long Island values have come in for a "soft landing" however affordability has never been better.". Reilly says that with the low interest rates are with "prices down 20-25%" that there has, "never been a better time to buy for the long term." he does caution that Values may come down some more when interest rates rise or if more "distressed inventory (REO and short sales) puts downward pressure on values", but still believes that the cost of owning right now, "has never been better.". To the people who say, "you can't get a mortgage these days", Reilly says that this is incorrect, and adds that you can get a mortgage with a job and "decent credit".

   Lori Beldiny, an Associate Real Estate Broker with Coldwell Banker in Suffolk Country, says that as an active Associate Broker for 20 years, she has seen "many types of Markets". Beldiny says that currently, "our climate is strained with the negative press from media and challenges of our lending community.". She reminds us that last year at this time, the Government offered a $7,000 Tax advantage, which she says, "created a positive atmosphere for buyers who were actively looking but became real instead of tire kickers." As for today, as far as the Spring is concerned, it is, "opening up to a slow start.", and she points to the the "weather and lack of confidence" for the reasons. Beldiny says, however, that Realtors realize the timing now is "awesome", and that, "Money is cheap to borrow and supply of homes keeping prices at all time low's."

   In terms of our neighbors to the West (8 million + !), inventory is tight, says Jennifer A. Chiongbian, SVP & Licensed Associate Broker with Rutenberg Realty in New York City. Chiongbian says that, "extremely tight inventory has left prospective renters left with no choice but to pay higher prices and left with almost nothing to choose from.". As an example of how tight the inventory is, she say that Manhattan is, "already known to have an average of a 1% vacancy rate; at times a bit higher, at times slightly bit lower.", and says that currently, "we are boasting a .69% vacancy rate" (which, she adds, spans data from 39,000 buildings from 96th St. to Battery Park; which is considered prime Manhattan area). In contrast, she tells us that at this same time last year, they were averaging .98% total vacancy. Her prediction; "The peak summer rental months are just beginning, and from what I can see out there, there will be no respite from this rental gouging until September, so hang onto your hats!"

   Based on the "on-the-front-lines" information that was provided above, things don't seem as bad as the media would like us to believe. Are you a local Long Island or New York City Realtor or Investor? What's your take on our market? We'd love to hear from you.

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #longisland #NYC #realestate

Caveats For First Time Homebuyers

Good Morning,

   Hope you had a nice weekend, and enthralled to have you back with me again today!

   "First Time Homebuyers can be the most fun to work with of any client.", says Realtor Dawn Ohnstad, a Realtor with Coldwell Banker Burnet in Wayzata MN, who says that first time homebuyers are, "excited, they want to learn, they ask great questions and once they have selected an agent, they operate as a team member. It makes our job fun!". David Mawyer of the CSSNMawyer Realty Group, says that first time home buyers want to be, "treated with honesty and respect. Regardless of the down payment amount or the price of the home, they are making a significant investment and want to insure that it is a good one."

   This brings us to our topic, of course, which is regarding some Caveats, or tips/warnings, from some Real Estate Professionals.

   Kris Bickell of the Website of Housebuying-tips.com, says that the best advice for new homebuyers is to get, "a good realtor, good mortgage broker, and good home inspector.". Ohnstad suggests that one of the first things they should do is to identify an experienced, reputable loan officer who will, "take the time to meet with them face to face, educate them about their various loan product options and provide a letter of pre-approval." Mawyer also concurs that the it is very important to select the Right Realtor and Lender, who will, "put the buyer’s interest ahead of their own interest". Mawyer says that this will require some homework/research by the potential buyer (asking for references, ask questions about honesty, integrity, and consistency, etc.). He warns that buyers should look out for pressure, as this should be viewed as a “red flag”."

   Mawyer says that it is important to, "Be honest about your requirements", and to assess what is important in the decision (size of the home? location? features? price?), and adds that the buyer should feel free to ask questions.

   Bickell says that she had an unfortunate incident when buying her home since her Realtors ended up being "lazy", since they, "don't make nearly as much money from home buyers". Ohnstad says that it is important to caution them about going to open houses and talking with lots of listing agents. She says that if they happen to find the house that is right for them, "that listing agent will be doing all they can in the interest of the seller.", and says, "This happens quite often, and I wish I could let them all know, that we Realtors prefer to be brought into the equation to represent a buyer sooner, not later." Ohnstad adds that, "Our negotiation power on behalf of our buyer is diminished significantly when all the cards have already been shown to the other side. Any questions they may have, can be answered by their own Buyers' Representative and since the commission is already being paid by the seller, there is simply no down side to getting a pro on their team early." Ohnstad also cautions that First Time Buyers think that good Realtors who have been in the business a long time, "do not want to work on the small transactions.", but she says this is not true, and that, "A good agent wants to work with any qualified buyer who has been pre- approved by a lender and is ready to begin the process."

   When it comes to the home inspector, Bickell says that hers was, "referred by the Realtors, and really didn't do a good job.", but, "Not just because he was referred, but because he missed a lot.". Ultimately, Bickell says that they ended up having to sue him later because he missed a big electrical problem. Due to the issues she experienced during the process, Bickell started her website, "to share the lessons I learned the hard way."

   Onto another caveat; Mawyer suggest that you choose the right search engine, and says that, "If the first time buyer wants to find a home on the Internet, make sure that the search engine being used provides “real time” access to the live database", since, "finding homes that are no longer available for sale can be a major frustration for the first time home buyer." Seems like a great time to plug my website? (Yes - HomeRun Homes, the Classified Ads/Search Engine for Rent to Own Homes.

   These Pros have provided some fantastic tips. Is there anything that should be added to this? We would love to hear from you!

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #firsttimehomebuyer #realtor #mortgagebroker #openhouse #homeinspector

Housing Factors Contributing to Market Direction

Hi Folks,

   Hope you've had an outstanding week.

   Today, I'd like to share a very interesting and very informative story that I came across that fits perfectly within the framework of our discussions here on our Blog. The story, which was written by Ruth Simon and Jessica Silver-Greenberg for the Wall Street Journal (and appeared on Yahoo Real Estate), is titled, "Why It's Time To Buy".

   The story discusses what it calls the, "five-year national housing bust", and discusses some positive signs, short-term concerns, long-term concerns, a 5-Year Outlook, and touches on the topic of Renting vs. Buying.

   Among the positive signs that were cited are the 50-year lows that mortgage rates have dropped to, as well as the affordability of homes. They also referred to the inventory of homes as, "A historic glut of homes", that has created a buyer's market. They did point to the fact that changes are coming, and mentioned a reference from Moody's Analytics that says the number of distressed sales will begin to fall in 2013 (and prices will increase). Additionally, Home Building is at "standstill" (lower chance of inventory/supply getting worse), and they also cited "Household Formation" (a Demographic Indicator) is on the rise, which promises, as they say, "to take a bite out of the glut in coming years."

   When looking at the overall movement of the Housing Market, the short-term looks bleak, as the authors point to Weak Job growth, the fact that Foreclosure sales encompass the lion's share of market, and that Home Prices will fall more in the coming months, per some Economists. For the longer term, they point to the positives of home ownership, such as the ability to deduct the mortgage interest on your taxes, and well as the ability to decorate, paint, and change anything that you want on your own home, "without having to clear it with a landlord." They added to this a, "5-Year Outlook", that points to the coming era of post-foreclosure overload (after the majority of the foreclosure-related inventory), has been cleared, and as housing economists say, "the traditional drivers of the housing market—demographics, affordability, loan availability, employment and psychology—should take over."

Some of the more specific factors they names that will make or break local markets over the next few years, were as follows:

* Household formation is on the rise, per Moodys, and is projected to increase from 950,000 in 2010 to approx 1.2 million over the next decade.

* Higher demand for second homes, per Moodys, should begin, "sopping up excess inventory in much of the country over the next two years"

* Economic Conditions - "Rising incomes and increased employment tend to give more would-be buyers confidence and buying power."

* Mortgage financing is available for people with good credit, but, "nearly impossible" for people who do not meet the lending guidelines.

* Another interesting point that was mentioned was that, "higher down-payment standards are locking some would-be buyers out of the market.", and they pointed to a recent survey by Zelman Associates that showed that, "Just 35% of renters have the minimum 3.5% down payment needed for an FHA loan on the median-priced home in their market"

   As for the "Renting Vs. Buying" question that many people have pondered, the authors stated that, "Renting is still cheaper than buying in most markets, but rising rents and falling house prices mean that, in some areas, this won't be the case for long.". They said that according to Moody's Analytics, Buying a home is already cheaper than renting in Chicago, Cleveland, Detroit and Orlando, Fla., and that for markets such as Dallas, Las Vegas and Sacramento", "the equation is likely to soon turn in favor of homeownership if current trends persist,"

   One very practical suggestion mentioned was as follows: to compare rental prices for similar properties", and to, "wait until the monthly outlays, including taxes and insurance, are equal." and additionally, they said, "You also could factor in the tax savings of owning, which would make buying more attractive even if the gross monthly outlay is slightly higher."

   In light of the Economic & Housing Market Analysis information, coupled with the Rent to Own perspective that we try to bring to you, this story was a direct hit for you...whether you're a homeowner, home seller, a realtor, or real estate investor. What are your thoughts and comments on this story?

Have a Great Weekend, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #Foreclosure #mortgagerates #realestateinvestor #rentalprices #renttoown #WallStreet

Top 10 Legal Real Estate Terms You Must Know

Hi Folks,

   Welcome to Wednesday. Can someone pass me a cold beverage? All kidding aside, it's hot out there folks, so take precautions, wear light colors, drink plenty of fluids, etc.

   As a Buyer of a home, a Seller of a Home, a Real Estate Investor, a Real Estate Agent, etc, there are some terms you need to know before you step into a deal. We have provided a concise list of the most important terms that we need to know.

   The list is not in any specific priority order, as they are all quite important. Always remember to consult a local Real Estate Attorney before getting involved in any and all types of Real Estate arrangements.

1. Quitclaim Deed - This is a document that is used to, "clear up issues involving possible multiple owners of a property", per Sophie Martin, MBA, from the UNM School of Law, who says that with this special form of deed, "someone who might have an interest in your property agrees to hand it over to you."

2. Fee Simple Absolute - Per Martin, this is the, "best and most common ownership of property: full right to possess the property now and into the future."

3. Tenancy in Common - "When you and a partner (or partners) go in on a piece of land, you each own a portion of the whole which you can will or sell to others.", per Martin. Additionally, it means that, "each owner has a fee simple title to his or her share and that title can be sold or willed to someone else.", says Rick Snow, Broker/Owner of First Choice Realty. Snow adds that Joint tenancy commonly has, "rights of survivorship", where multiple parties may own property together and, "if one dies the remaining owners absorb the deceased parties share."

4. Title insurance - Snow describes Title Insurance as, "indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens." Basically, a form of protection.

5. Escrow - "An arrangement made under contractual provisions between transacting parties, whereby an independent trusted third party receives and disburses money and/or documents for the transacting parties", as defined by Snow.

6. Default - Defined by Snow as, "the failure to comply with some aspect of the contract and either seller or buyer can find themselves in default under the provisions of the contract. Remedies to the non defaulting party should be spelled put on the contract."

7. Easement - A "permission to cross someone else's land.", which is referred to as the proper definition, per Mike Arman, a Real estate salesman and Mortgage Broker for over 20 years. Arman says that the easement holder does NOT own the land, "and cannot cut so much as one blade of grass without the owner's permission.". He also says that they cannot be unilaterally revoked or blocked (Arman says, "next stop is court."). Arman says he *specifically* suggest, "NOT purchasing ANY property which relies on easements or a chain of easements for access". Sophie Martin adds that the most common easements are held by utility companies.

8. Flood Zone - Deemed quite important, per Arman, who says that you need to be, "1,000% sure of the flood zone your prospective property is in - homeowners insurance does not cover flooding, and flood insurance will be expensive and WILL be required by your lender.". Arman says flood insurance comes from NFIP, "which is administered by FEMA (of Katrina fame), which is now a division of DHS".

9. Subject to availability of suitable financing - This is "Hand written on the contract for purchase and sale", says Arman, who says that this phrase can, "save the buyer's good faith deposit if suitable financing is not available - and the buyer defines "suitable financing", so it can also be used as an "out"". Arman says, however, that the problem is that, "sometimes decent financing simply is NOT available - and 99.9999% of buyers go looking for financing AFTER they've signed the contract and put up a (big) deposit. Lenders often won't waste their precious time on pre-approvals, come back when you've signed a contract so we know you are serious." Additionally, he adds, "Bingo - someone is going to be out five or ten grand when they can't get a loan because of a credit bureau error from 1937."

10. AS IS. - As described by Timothy G. Wiedman, D.B.A. Division of Economics & Business Doane College in Crete, Nebraska, "In an era of bank foreclosures and generally falling prices for real estate of all types, many properties are being sold "as is."". Wiedman says that Buyers should view the term as a, "warning to be cautious, and property being sold "as is" should be professionally inspected _before any commitments are made." He points to a a court case that can provide guidance, which is "Prudential Insurance Company of America v. Jefferson Associates, Ltd." which, he says, went to the Texas Supreme Court in 1995. Wiedman says that "When property is sold "as is," the buyer _may_ get a great deal. On the other hand, the buyer may later discover defects that will be expensive to correct -- and have _no_ ability to recover damages from the seller."

   I hope these terms have been helpful. I cannot stress this point enough: Always remember to consult a local Real Estate Attorney before getting involved in any and all types of Real Estate arrangements. Do you have any important Real Estate Legal Terms to add to this list? we'd love to hear from you.

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com

TAGS: #realestateinvestor #legal #Deed #titleinsurance

Selling a Home via Rent to Own

Hi Folks,

   Glad to welcome you back.

   We have some great topics ahead this week, and since we are headed into the summer, we wanted to make you aware once again of the invitation that we extended back in early April.

   In the interest of making this a "Non" Sales Pitch offer, I do recognize the fact that it can be taken by many as a sales pitch. On the flip side, if you read this carefully, you'll see that it is not (and is actually pretty cool!).

   Occasionally, we have more Buyers than Sellers of Rent to Own Homes placing Ads, and that creates a gap in favor of one type of Ad vs. another type of Ad. That being said, we currently have a temporarily disproportionate amount of Homes Wanted Ads (Buyers) vs Homes Available Ads (Sellers), and we would like to close that gap.

   In order to do so, we are extending to you, the readers of this Blog, an opportunity to list your Rent to Own Home for a period of 3-Months, at no charge (normally $16.99 for 3-Months). No entering credit card info, no payments...just listing your home. I'm going to run this offer through the end of June, or once the gap is closed...whichever comes first.

How Do You Get your Free 3-Month Ad listing your Home?

STEP 1:
Send an E-mail to me at homebuyer@lease2buy.com with the Subject; "BLOG - MY HOME FOR RENT TO OWN"

STEP 2:
We'll set up a Username and Password for you so you can log in, create your Ad, upload photos, etc.


So, To Recap...

The benefit for you - a free Ad listing your home.
The benefit for me - closing the gap between types of Ads as mentioned above.

I look forward to receiving your E-mails and seeing your homes on our website,

Have a Great Week, and Happy Rent-to-Owning !
Regards,
Rob Eisenstein
HomeRun Homes Blog http://blogging.lease2buy.com
HomeRun Homes Website http://www.lease2buy.com