Mortgages and Real Estate
Is 'default, then rent' the new American Dream - or sign of a bottom?
Headlines in the mainstream media are often notorious for getting it wrong. But in the case of the recent Wall Street Journal story about how renting is the "new American Dream," the questionable premise could be suggesting that the real estate market is finally approaching a bottom. First, some historical backstory. On Aug. 13, 1979, BusinessWeek ran the now infamous headline "The Death of Equities," proclaiming that "The masses long ago switched from stocks to investments having higher yields and more protection from inflation. Now the pension funds -- the market's last hope -- have won permission to quit stocks and bonds for real estate, futures, gold, and even diamonds. The death of equities looks like an almost permanent condition -- reversible someday, but not soon."
That article marked, almost exactly, the bottom in the stock market -- and the beginning of a 20-year long bull run that would provide investors with the highest rate of return in U.S. history. In other words, the BusinessWeek piece couldn't have been more wrong, but actually offered some value as a contrarian indicator.
Property taxes too high and outdated? Don't wait, appeal
Why wait?That's the question more and more homeowners are reportedly asking themselves nowadays as they try to deal with property taxes on their homes that no longer represent anything remotely resembling reality.
The Baltimore Sun newspaper tells the story of one man who bought a house for $165,000 last spring, but the state's tax assessment on the property, made two years before his purchase, values the home at $268,000.
But rather than wait it out till the next official reassessment, the man in question opted to do something that many people probably don't even know they can do: He appealed the assessment.
In Maryland alone, says the Sun, so-called petitions for review have skyrocketed from a little more than 5,000 last year to more than 15,000 this year.
There is even limited but growing on-line help for those wanting to appeal their property taxes. ValueAppeal, which is based in Washington state, offers appeal help for a nominal fee. Currently, the site offers help for three states but plans to expand.
Bankers win the war, 'distressed' homeowners left on hook
Guess those mortgage bankers showed Congress who's the boss ... They are!Only a day after the Mortgage Bankers Association fired off a stern letter of warning to Congressional leaders about attempts to change foreclosure bankruptcy laws to ease the plight of those facing foreclosure and help end the still threatening housing crisis, the House of 'Who The Heck Are We Representatives?" shot the proposal dead.
But make no mistake about it, the House may have been holding the gun, but the mortgage bankers provided the ammunition.
Layaway your vacation home? Give me a break!
Whatever happened to the idea that if you can't afford something, you don't buy it? Didn't living above our means get us into this recessionary mess in the first place? No, I'm not an anti-credit card fanatic; I just believe in paying them off each month. What I don't believe in is layaway. If you can't afford it today, why do you think you can afford it piecemeal or at all? So this item got my ire: We are now being encouraged to use an installment payment plan to pay for our vacations. The writer in Realty Times says: Retailers are doing it, so why not vacation rental owners? Easy answer dude: Buying a washing machine may be a necessary expense and one you have to make on layaway. But taking a vacation, and I like to get away as much as the next guy, just isn't. Vacations are luxuries and in these times, luxuries are what we give up first.
Bankers say no way to proposed mortgage bankruptcy changes
It's war!The Mortgage Bankers Association has just fired off a letter to Congressional leaders opposing in no uncertain terms the expected introduction of a so-called mortgage bankruptcy "cram-down" amendment to the Wall Street Reform and Consumer Protection Act. The amendment will be put forth by Representative John Conyers, Democrat from Michigan.
Many economists believe -- as do I-- that the only real way to put the brakes on foreclosures is to allow bankruptcy judges, in certain cases, the flexibility to not only reduce mortgage interest payments but also the actual principal of the loan. They already can do this for second vacation-type homes (meaning, oddly, the rich can take advantage of this should they face foreclosure on their second property) but , under current law, cannot touch the principal on primary mortgages.
Foreclosures way down, but does that equal good news?
Is this what we have finally been waiting for? Really good news about foreclosures. My guess is, don't get too excited by any short term "trends"--- but, that said, the latest news from RealtyTrac just out today is encouraging.Foreclosure filings decreased again in November, down almost 8% from the previous month. That marks the fourth month in a row that was the case.
Of course, there is still plenty of bad news because the foreclosure rate is up an enormous 18% from a year ago this time.
Right now, the RealtyTrac report reveals that one in every 417 households got a foreclosure notice last month alone.
Baltimore project provides housing, education for young homeless people
At a time when many adults are being forced out of their homes because they can't make their mortgage payments, there is some good news coming out of Baltimore for some young people.
Construction is under way there on something called Restoration Gardens. The aim: To provide housing for homeless people between 18 and 24.
Forbes smacks down Florida, land of the overpriced home
If the retirees and sun lovers living in Florida were looking for some positive news this winter, the good people at Forbes aren't going to help. The magazine just came out with its list of places with the most overpriced homes in the U.S. and, as you can imagine, Florida tops the list. Washington turns up heat on banks to bring down mortgage payments
They've been summoned.The big banks and mortgage lenders that hold the key to loan modifications have been summoned to Washington for what is supposed to be some heavy duty arm twisting to get them to put pedal to the metal and bring down mortgage payments at a much faster rate.
Among the institutions ordered to D.C., are Bank of America and Citigroup.
But there have been many attempts to get the banks to stop their foot dragging and nothing has really seemed to work.
Seniors housing: Let's make a deal!
Note to seniors seeking independent- or assisted-living communities: No time like the present.With occupancy rates down and rent growth slowing, some private-pay (non-government) senior-housing companies are dangling tasty carrots to get potential renters off the fence and into their communities.
Among the incentives are $500 discounts on the first month's rent or half off the community fees -- nonrefundable "administrative" costs that typically equal one month's rent, or several thousand dollars at some facilities.
A little too late for me, Treasury to help streamline real estate short sales
This year it's with no small sense of embarrassment that I had to unload a commercial property as a "short sale." I hasten to underscore that I'm by no means a big-time real estate investor, despite how the first line reads.
To make a long story short, for 10 years, I had been renting studio space for my small production company, but was convinced to buy a place when my previous lease had expired. Instead of tossing away thousands of dollars a year on rent, the new place would be an investment. In theory.
Of course I had no idea the economy would collapse as severely as it did, so due to a wide variety of problems including an increasingly expensive renovation process, I had no choice but to unload the property during some of the worst economic conditions imaginable. In the end, I resorted to a short sale (selling the property for less than the mortgage balance due).
Son launches Web site to sell mom's home
He can't offer a vacation in the Bahamas or jacuzzis and other fancy upgrades.
Instead, California entrepreneur Christopher Laird Simmons is offering a virtual emotional plea , and hoping people would buy into it and snag his mom's Colonial Missouri home.
buymymomshouse.com is a one of its kind Web site that gives buyers a tour of the house, its history and the story of the family who dwelled in it. You won't get any freebies here, but a tale that probably would resonate with many in these tough economic times.
"My mother is on a fixed income, has no retirement income other than social security, and needs to sell this house to live on for the rest of her life, literally," Simmons writes.
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Interest Rates
| Type | Current | APR |
|---|---|---|
| 30 yr fixed mtg | 5.07% | 5.20% |
| 5/1 ARM | 4.19% | 3.77% |
| $30K HELOC | 5.19% | 0.00% |
| 36 month new car loan | 6.70% | 0.00% |
| 1 yr CD | 1.51% | 1.52% |
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