Forget about overhauling the kitchen or redoing the bathroom. The fix-ups that pay off the most are often the simpler and more mundane, says Diane Saatchi, senior vice president at the Corcoran Group in New York.
Her specialty is selling high-end properties in the Hamptons. She recommends that sellers focus their improvements on small exterior changes rather than big-ticket projects inside the home. "Make the outside of the house look really great so that people fall in love between getting out of the car and the front door," Saatchi says.
That includes repainting the trim and adding new hardware, manicuring trees and shrubs, replacing old siding and replacing windows that aren’t energy efficient.
Nationally, returns for all major home-improvement projects are fetching 70 cents on the dollar, according to a Remodeling magazine’s survey of real-estate professionals conducted late last year. That's down from 80 cents in 2004.
Source: The Wall Street Journal, M.P. McQueen
Tuesday, May 20, 2008
Saturday, May 3, 2008
Foreclosure "Rescue" Scam May Be Busted
WASHINGTON, D.C. - The Federal Trade Commission has charged Foreclosure Solutions, LLC and Timothy A. Buckley with operating a nationwide mortgage foreclosure “rescue” scam that charged consumers as much as $1,200 to save their homes from foreclosure but failed to do so. The FTC seeks to bar them from further law violations and make them forfeit their ill-gotten gains.
According to the FTC’s complaint, the defendants market their services through direct mail to consumers named in court records of foreclosure actions and through Internet Web sites, including www.program10.com and www.foreclosuresolutionsusa.net. Through the direct mail solicitations, the defendants warn that consumers could lose their home within 10 days, and they promise that they can stop foreclosure proceedings. In one of their letters they claim a 93 percent success rate.
Consumers who call a toll-free number are told that the defendants will provide an attorney and a case manager to help them avoid foreclosure, the complaint alleges. The defendants allegedly state that they have helped thousands of others, and they promise to guarantee in writing that they will save each consumer’s home. In some instances, consumers are permitted to pay about half the fee up-front and the balance within 30 days for an extra $50.
The defendants allegedly send a representative to the consumer’s home to close the sale and collect the up-front fee. In the agreement they require consumers to sign, they attempt to disclaim their guarantee that they will save the consumers’ homes, stating that they will work faithfully but not guarantee the success of their efforts. The defendants also provide consumers with a money-back guarantee, promising a refund if the consumer follows their instructions to save money and avoid lender phone calls. They also require consumers to sign a power of attorney form, authorizing them to represent the consumer in the foreclosure action.
In addition, the complaint alleges that the defendants instruct consumers to open a savings account and to deposit, every month until further notice from the defendants, the consumer’s monthly mortgage payment plus an additional 25 to 35 percent. They claim that the extra payment will be used to negotiate with the lender to reinstate the loan. After consumers have paid for the services, the defendants often don’t answer or return their calls. In otherinstances, the defendants’ representatives allegedly tell consumers that they are working on a solution, that they need more information from the consumer, or that no solution can be found.
According to the complaint, the defendants hire attorneys to respond to the foreclosure complaints filed against consumers. In many instances, the attorneys file the same form response to every complaint, usually without investigating consumers’ individual circumstances that might identify defenses or counterclaims unique to particular consumers. In many instances, the defendants do not stop foreclosure or save consumers’ homes, and many consumers who have contracted for their services lose their homes to foreclosure.
Consumers who stop foreclosure through their own efforts sometimes learn that their lenders offer the same settlement terms regardless of whether the consumers negotiate on their own or through the defendants. Others learn that their lenders will negotiate only with them and not with the defendants.
The Ohio-based defendants are charged with falsely representing that they will stop foreclosure in all or virtually all instances, in violation of the FTC Act.
The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Ohio, Eastern Division.
Source: National Realty News
According to the FTC’s complaint, the defendants market their services through direct mail to consumers named in court records of foreclosure actions and through Internet Web sites, including www.program10.com and www.foreclosuresolutionsusa.net. Through the direct mail solicitations, the defendants warn that consumers could lose their home within 10 days, and they promise that they can stop foreclosure proceedings. In one of their letters they claim a 93 percent success rate.
Consumers who call a toll-free number are told that the defendants will provide an attorney and a case manager to help them avoid foreclosure, the complaint alleges. The defendants allegedly state that they have helped thousands of others, and they promise to guarantee in writing that they will save each consumer’s home. In some instances, consumers are permitted to pay about half the fee up-front and the balance within 30 days for an extra $50.
The defendants allegedly send a representative to the consumer’s home to close the sale and collect the up-front fee. In the agreement they require consumers to sign, they attempt to disclaim their guarantee that they will save the consumers’ homes, stating that they will work faithfully but not guarantee the success of their efforts. The defendants also provide consumers with a money-back guarantee, promising a refund if the consumer follows their instructions to save money and avoid lender phone calls. They also require consumers to sign a power of attorney form, authorizing them to represent the consumer in the foreclosure action.
In addition, the complaint alleges that the defendants instruct consumers to open a savings account and to deposit, every month until further notice from the defendants, the consumer’s monthly mortgage payment plus an additional 25 to 35 percent. They claim that the extra payment will be used to negotiate with the lender to reinstate the loan. After consumers have paid for the services, the defendants often don’t answer or return their calls. In otherinstances, the defendants’ representatives allegedly tell consumers that they are working on a solution, that they need more information from the consumer, or that no solution can be found.
According to the complaint, the defendants hire attorneys to respond to the foreclosure complaints filed against consumers. In many instances, the attorneys file the same form response to every complaint, usually without investigating consumers’ individual circumstances that might identify defenses or counterclaims unique to particular consumers. In many instances, the defendants do not stop foreclosure or save consumers’ homes, and many consumers who have contracted for their services lose their homes to foreclosure.
Consumers who stop foreclosure through their own efforts sometimes learn that their lenders offer the same settlement terms regardless of whether the consumers negotiate on their own or through the defendants. Others learn that their lenders will negotiate only with them and not with the defendants.
The Ohio-based defendants are charged with falsely representing that they will stop foreclosure in all or virtually all instances, in violation of the FTC Act.
The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Ohio, Eastern Division.
Source: National Realty News
Friday, April 11, 2008
FHA Loans Can Ease Mortgage Dilemmas
Potential home buyers may be hesitant as they start their hunt in today's market, but many quickly discover that their market is full of choices, sellers are becoming more willing to negotiate, and interest rates are still low.
That's not to say there will be no setbacks. The hard part may come when they go shopping for a mortgage.
Minnesota Mortgage Association President Tim Bendel said 100 percent financing has all but disappeared. He advises borrowers with good credit scores seeking a conventional loan to come to the table with at least a 5 percent down payment.
Borrowers with credit scores below 700 may need a more significant 20 percent down payment. But there is help on that front.
The answer for some buyers is a Federal Housing Administration (FHA) loan. Credit scores count less with FHA loans; the more important factor is whether the potential borrower has paid other bills on time, says Todd Johnson, CEO of Edina Realty Mortgage.
FHA's government-backed loans require only 3 percent down and allow cosigners and gifts for down payments.
Source: Star-Tribune, Kara McGuire
That's not to say there will be no setbacks. The hard part may come when they go shopping for a mortgage.
Minnesota Mortgage Association President Tim Bendel said 100 percent financing has all but disappeared. He advises borrowers with good credit scores seeking a conventional loan to come to the table with at least a 5 percent down payment.
Borrowers with credit scores below 700 may need a more significant 20 percent down payment. But there is help on that front.
The answer for some buyers is a Federal Housing Administration (FHA) loan. Credit scores count less with FHA loans; the more important factor is whether the potential borrower has paid other bills on time, says Todd Johnson, CEO of Edina Realty Mortgage.
FHA's government-backed loans require only 3 percent down and allow cosigners and gifts for down payments.
Source: Star-Tribune, Kara McGuire
Wednesday, March 26, 2008
Home Sales Rise
Existing-Home Sales Rise in FebruarySales of existing homes increased in February and remain within a fairly stable range, according to the NATIONAL ASSOCIATION OF REALTORS®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007.
The sales pace has been in a fairly narrow range since last September.Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”
The national median existing-home price for all housing types was $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets.
Source: NAR
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007.
The sales pace has been in a fairly narrow range since last September.Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”
The national median existing-home price for all housing types was $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets.
Source: NAR
Wednesday, March 5, 2008
Mortgage Relief Provision
IRS Explains Mortgage Relief Provision
The IRS has released IR-2008-17 to alert taxpayers how to comply with the new mortgage cancellation tax relief provisions enacted at the end of last year.
Borrowers who had some portion of their mortgage debt forgiven in 2007 should receive a Form 1099C from the lender identifying the amount of forgiven debt.
The borrower/taxpayer will file a newly-created form to report to the IRS that the debt relief was for a qualified mortgage.
The new form, Form 982, and instructions are available at the IRS website, http://www.irs.gov/.
The mortgage relief provision applies to debt forgiven in 2007, no matter when the mortgage was entered into. The most frequent circumstances in which there is a debt forgiveness is on foreclosure, short sale or mortgage workout or reformation agreed to with the lender.
Source: TBR Newsletter
The IRS has released IR-2008-17 to alert taxpayers how to comply with the new mortgage cancellation tax relief provisions enacted at the end of last year.
Borrowers who had some portion of their mortgage debt forgiven in 2007 should receive a Form 1099C from the lender identifying the amount of forgiven debt.
The borrower/taxpayer will file a newly-created form to report to the IRS that the debt relief was for a qualified mortgage.
The new form, Form 982, and instructions are available at the IRS website, http://www.irs.gov/.
The mortgage relief provision applies to debt forgiven in 2007, no matter when the mortgage was entered into. The most frequent circumstances in which there is a debt forgiveness is on foreclosure, short sale or mortgage workout or reformation agreed to with the lender.
Source: TBR Newsletter
Thursday, February 21, 2008
Buying Bank Owned Properties
There is a lot of interest in buying bank owned properties these days. A lot of information, some good and some bad, is floating around about the subject. Often the information offered is for sale, with the promise that you can make a lot of money with little effort once you know “the secret formula”. The fact is that there are no secrets, and making money requires effort.
What’s an REO?
REO stands for “Real Estate Owned”. These are properties that have gone through foreclosure and are now owned by the bank or mortgage company. This is not the same as a property up for foreclosure auction. When buying a property during a foreclosure auction, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. On top of all that, you will receive the property “as is”. That could include existing liens and even current occupants that need to be evicted. A REO, by contrast, is a much “cleaner” and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. In some cases, the bank will see to the removal of tax liens, evict occupants and generally prepare for the issuance of a title insurance policy to the buyer at closing. Do be aware that REO’s may be exempt from normal disclosure requirements.
Is it a bargain?
It’s commonly assumed that any REO must be a bargain and an opportunity for easy money. This simply isn’t true. You have to be very careful about buying a REO if your intent is to make money off it. While it’s true that the bank is typically anxious to sell it quickly, they are also strongly motivated to get as much as they can for it. When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs and remodeling needed to prepare the house for resale. Bargains with money making potential exist and many people do very well buying foreclosures.
Ready to make an offer?
Most banks have a REO department. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS. Since banks almost always sell REO properties “as is”, you’ll want to be sure to have your Realtor include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it. As with making any offer on real estate, you’ll make your offer more attractive when you include documentation of your ability to pay, such as a pre-approval letter from a lender or verification of available funds. Most REO require such documentation submitted with the initial offer. After you’ve made your offer, you can expect the bank to make a counter offer. Then, it will be up to you to decide whether to accept their counter or reply to the counter offer. Realize, you will be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends. It is not unusual for the process to take days or even weeks. Additionally, recognize that your offer may compete with other offers from other buyers. You may be asked to bring your “highest and best” offer in order to have your offer accepted. Time is of the essence when attempting to purchase REO properties.
What’s an REO?
REO stands for “Real Estate Owned”. These are properties that have gone through foreclosure and are now owned by the bank or mortgage company. This is not the same as a property up for foreclosure auction. When buying a property during a foreclosure auction, you must pay at least the loan balance plus any interest and other fees accumulated during the foreclosure process. You must also be prepared to pay with cash in hand. On top of all that, you will receive the property “as is”. That could include existing liens and even current occupants that need to be evicted. A REO, by contrast, is a much “cleaner” and attractive transaction. The REO property did not find a buyer during foreclosure auction. The bank now owns it. In some cases, the bank will see to the removal of tax liens, evict occupants and generally prepare for the issuance of a title insurance policy to the buyer at closing. Do be aware that REO’s may be exempt from normal disclosure requirements.
Is it a bargain?
It’s commonly assumed that any REO must be a bargain and an opportunity for easy money. This simply isn’t true. You have to be very careful about buying a REO if your intent is to make money off it. While it’s true that the bank is typically anxious to sell it quickly, they are also strongly motivated to get as much as they can for it. When considering the value of a REO, you need to look closely at comparable sales in the neighborhood and be sure to take into account the time and cost of any repairs and remodeling needed to prepare the house for resale. Bargains with money making potential exist and many people do very well buying foreclosures.
Ready to make an offer?
Most banks have a REO department. Typically the REO department will use a listing agent to get their REO properties listed on the local MLS. Since banks almost always sell REO properties “as is”, you’ll want to be sure to have your Realtor include an inspection contingency in your offer that gives you time to check for hidden damage and terminate the offer if you find it. As with making any offer on real estate, you’ll make your offer more attractive when you include documentation of your ability to pay, such as a pre-approval letter from a lender or verification of available funds. Most REO require such documentation submitted with the initial offer. After you’ve made your offer, you can expect the bank to make a counter offer. Then, it will be up to you to decide whether to accept their counter or reply to the counter offer. Realize, you will be dealing with a process that probably involves multiple people at the bank, and they don’t work evenings or weekends. It is not unusual for the process to take days or even weeks. Additionally, recognize that your offer may compete with other offers from other buyers. You may be asked to bring your “highest and best” offer in order to have your offer accepted. Time is of the essence when attempting to purchase REO properties.
Tuesday, February 5, 2008
Is IT So Bad?
News from the Chief Economist for the National Mortgage Bankers Association, Doug Duncan
.
Following are the bullet points that he made regarding the current housing/mortgage issues:
The foreclosure problem in this country is really a story about seven states.
The biggest foreclosure problem is in Michigan, Ohio, and Indiana. These are predominantly manufacturing states.
Since 2001 Michigan has lost 300,000+ jobs.
The other four states are California, Florida, Arizona, and Nevada. In each of these states there has been a significant overbuilding. 25% of the foreclosures in these states are on properties that are held by investors who were speculating.
California and Florida have been hit very hard.
35% of the homes in the USA do not have a mortgage.
98% of the mortgages in the USA are performing.
Only 9% of ALL these mortgages are sub-prime.
75% of all sub-prime mortgages are performing.
In the other 43 states, foreclosures have fallen in 2007 from 2006.
Source: Toledo Board of Realtors newsletter
.
Following are the bullet points that he made regarding the current housing/mortgage issues:
The foreclosure problem in this country is really a story about seven states.
The biggest foreclosure problem is in Michigan, Ohio, and Indiana. These are predominantly manufacturing states.
Since 2001 Michigan has lost 300,000+ jobs.
The other four states are California, Florida, Arizona, and Nevada. In each of these states there has been a significant overbuilding. 25% of the foreclosures in these states are on properties that are held by investors who were speculating.
California and Florida have been hit very hard.
35% of the homes in the USA do not have a mortgage.
98% of the mortgages in the USA are performing.
Only 9% of ALL these mortgages are sub-prime.
75% of all sub-prime mortgages are performing.
In the other 43 states, foreclosures have fallen in 2007 from 2006.
Source: Toledo Board of Realtors newsletter
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