That's according to Forbes magazine, which sees us bouncing back big.
Cut and paste link below to view article:
http://www.sptimes.com/2007/07/25/news_pf/Business/No_1_spot_to_buy_a_ho.shtml
Tuesday, February 5, 2008
Friday, January 4, 2008
SUBPRIME ARM LOAN RATES
SUBPRIME ARM LOAN RATES
Almost half of subprime ARM loans are concentrated in a handful of states, which are expected to suffer increasing foreclosures as the loans reset to higher rates.
For the full story, visit http://www.usatoday.com/money/economy/housing/2008-01-03-real-estate-2008_N.htm
The following is a list of states with the highest percentage of the nation's subprime ARMs:
California 17.3%
Florida 12.3%
Texas 5.7%
Illinois 4.9%
Michigan 3.6%
New York 3.5%
Georgia 3.3%
Maryland 2.9%
New Jersey 2.7%
Pennsylvania 2.7%
Washington 2.6%
Virginia 2.4%
Almost half of subprime ARM loans are concentrated in a handful of states, which are expected to suffer increasing foreclosures as the loans reset to higher rates.
For the full story, visit http://www.usatoday.com/money/economy/housing/2008-01-03-real-estate-2008_N.htm
The following is a list of states with the highest percentage of the nation's subprime ARMs:
California 17.3%
Florida 12.3%
Texas 5.7%
Illinois 4.9%
Michigan 3.6%
New York 3.5%
Georgia 3.3%
Maryland 2.9%
New Jersey 2.7%
Pennsylvania 2.7%
Washington 2.6%
Virginia 2.4%
Homeowners Be Prepared & Know Your Options!
Make Sure You Check Your Documents
Nearly 2 million homeowners have subprime, adjustable-rate mortgages (ARMs) that will reset before July 2010.
But there are many exclusions to the program. In addition, millions of borrowers with prime ARMs aren't eligible. Neither are most of those with exotic adjustable-rate loans that let them pay only the interest portion or even less each month.
Dan Przewlocki is one of them. He refinanced his home outside Detroit in 2004, so he doesn't qualify for the rescue plan. Przewlocki, 52, got what's called an option-ARM. It lets him choose among payment options each month. The less he pays, the more the principal balance grows.
He's been paying the highest option and hasn't missed one payment. Yet his rate has been rising nearly every month, catapulting Przewlocki's monthly payment to $2,700 from $1,200 initially.
Washington Mutual, his lender, won't refinance the $310,000 loan because the home's value has sunk below the value of the loan, to $250,000, Przewlocki said.
He works in an auto maintenance plant and looks for handyman jobs and temporary work at Kelly Services. But his house payments eat up nearly 70% of his gross income. And Przewlocki, a tech sergeant in the Air Force reserves, knows he'll fall behind on his payments once he's deployed to the Middle East this year.
"If the mortgage company wants to take the house," he says, "the keys are going to be on the kitchen table."
Sara Gaugl, a spokeswoman for Washington Mutual, says the amount of Przewlocki's loan and the current value of his house "put him out of scope for a refinance under WaMu's credit guidelines. However, we will continue to work with Mr. Przewlocki to determine if there are other options available to him."
If you're in a similar situation, or think you might be soon:
•Contact your lender as soon as you know your payment will be late. If you want free credit counseling, you can also call the
Homeownership Preservation Foundation at 888-995-HOPE (888-995-4673).
If you can't renegotiate the terms of your loan, and your home is worth less than you owe, consider a "short sale": If your lender approves, you can sell your property at an agreed upon price, and your lender will forgive the remaining balance on your mortgage.
That's much better than wrecking your credit with a foreclosure. And under a law signed by President Bush last month, sellers no longer have to pay taxes on the amount of the forgiven debt. The law is retroactive to Jan. 1, 2007, and is scheduled to expire at the end of 2009.
- Dig out your mortgage documents and triple-check what kind of loan you have. Specifically, you want to know whether it has an adjustable interest rate, how often the rate can rise and the maximum it can rise to. Is there a penalty for paying off the loan early? If so, when does the penalty expire?
Nearly 2 million homeowners have subprime, adjustable-rate mortgages (ARMs) that will reset before July 2010.
- The average borrower will see monthly payments jump by about $350, to $1,550. Already, one in five homeowners with a subprime ARM was behind at least one payment at the end of the third quarter, according to the Mortgage Bankers Association.
- Last month, Treasury Secretary Henry Paulson announced a deal with lenders that would help thousands of homeowners with subprime ARMs. Under the plan, homeowners who got their loans between Jan. 1, 2005, and July 31, 2007, would either be put on a fast-track program to refinance their loan to a fixed-rate mortgage at a lower rate, or have their rate frozen for five years.
But there are many exclusions to the program. In addition, millions of borrowers with prime ARMs aren't eligible. Neither are most of those with exotic adjustable-rate loans that let them pay only the interest portion or even less each month.
Dan Przewlocki is one of them. He refinanced his home outside Detroit in 2004, so he doesn't qualify for the rescue plan. Przewlocki, 52, got what's called an option-ARM. It lets him choose among payment options each month. The less he pays, the more the principal balance grows.
He's been paying the highest option and hasn't missed one payment. Yet his rate has been rising nearly every month, catapulting Przewlocki's monthly payment to $2,700 from $1,200 initially.
Washington Mutual, his lender, won't refinance the $310,000 loan because the home's value has sunk below the value of the loan, to $250,000, Przewlocki said.
He works in an auto maintenance plant and looks for handyman jobs and temporary work at Kelly Services. But his house payments eat up nearly 70% of his gross income. And Przewlocki, a tech sergeant in the Air Force reserves, knows he'll fall behind on his payments once he's deployed to the Middle East this year.
"If the mortgage company wants to take the house," he says, "the keys are going to be on the kitchen table."
Sara Gaugl, a spokeswoman for Washington Mutual, says the amount of Przewlocki's loan and the current value of his house "put him out of scope for a refinance under WaMu's credit guidelines. However, we will continue to work with Mr. Przewlocki to determine if there are other options available to him."
If you're in a similar situation, or think you might be soon:
•Contact your lender as soon as you know your payment will be late. If you want free credit counseling, you can also call the
Homeownership Preservation Foundation at 888-995-HOPE (888-995-4673).
If you can't renegotiate the terms of your loan, and your home is worth less than you owe, consider a "short sale": If your lender approves, you can sell your property at an agreed upon price, and your lender will forgive the remaining balance on your mortgage.
That's much better than wrecking your credit with a foreclosure. And under a law signed by President Bush last month, sellers no longer have to pay taxes on the amount of the forgiven debt. The law is retroactive to Jan. 1, 2007, and is scheduled to expire at the end of 2009.
Fed Auctions
The Federal Reserve announced today that it is increasing the amount of money available to banks through the new auction process it created to ease the nation's severe credit squeeze. The Fed again pledged to continue the auctions "for as long as necessary."
This announcement from the Fed came after today’s release of a government report showing that the jobless rate shot to a two-year high of 5% in December, raising concerns about a possible recession. The worry is that a severe slump in housing, soaring energy prices and the credit crisis that hit in August will combine to push the country into a full-blown downturn.
The Fed’s auction announcement indicates to analysts that the process it began in December (after efforts to inject funds into the banking system through direct loans to banks had not been as successful as hoped) has been successful in providing a source of loans for cash-strapped banks.
The amount offered at each of the next two auctions will be increased from $20 billion to $30 billion. Those two auctions will be Jan. 14 and Jan. 28. In a brief statement, the Fed said that it planned to continue to conduct the auctions every two weeks "for as long as necessary to address elevated pressures in short-term funding markets."
Amidst the negative speculations that the US economy is heading straight for a recession, the Fed continues to take slow steps. Despite the three less-than-exciting key rate cuts since September, analysts predict that the December jobless report increased the likelihood that the Fed will CONTINUE cutting interest rates as a way of boosting economic growth.
Stephanie Stanina
This announcement from the Fed came after today’s release of a government report showing that the jobless rate shot to a two-year high of 5% in December, raising concerns about a possible recession. The worry is that a severe slump in housing, soaring energy prices and the credit crisis that hit in August will combine to push the country into a full-blown downturn.
The Fed’s auction announcement indicates to analysts that the process it began in December (after efforts to inject funds into the banking system through direct loans to banks had not been as successful as hoped) has been successful in providing a source of loans for cash-strapped banks.
The amount offered at each of the next two auctions will be increased from $20 billion to $30 billion. Those two auctions will be Jan. 14 and Jan. 28. In a brief statement, the Fed said that it planned to continue to conduct the auctions every two weeks "for as long as necessary to address elevated pressures in short-term funding markets."
Amidst the negative speculations that the US economy is heading straight for a recession, the Fed continues to take slow steps. Despite the three less-than-exciting key rate cuts since September, analysts predict that the December jobless report increased the likelihood that the Fed will CONTINUE cutting interest rates as a way of boosting economic growth.
Stephanie Stanina
Friday, December 7, 2007
What The Mortgage Bailout Means To You
provided by BusinessWeek Online
On Dec. 6, Treasury Secretary Henry Paulson, with the support of President George W. Bush, unveiled a plan to aid certain homeowners who face the prospect of higher mortgage rates in the next few years. Paulson worked with banks and other mortgage companies to develop the initiative, and thanked them for their involvement. "We have worked through an evolving process to help minimize the impact of the housing downturn on homeowners, neighborhoods and the U.S. economy," he said. While the plan is ambitious and is designed to bring stability to the shaken economy, it will affect only a narrow slice of homeowners in the U.S. "This is not a silver bullet," said Paulson. Here are some answers to questions you may have.
Can you get your mortgage payments lowered because of the bailout?
It depends. If you've got an adjustable-rate mortgage, you may qualify under certain conditions. If you've got a standard mortgage with a fixed interest rate, you're not affected.
Which adjustable-rate mortgage holders are affected?
Only a small group. To qualify, you need to have received your loan sometime between Jan. 1, 2005 and July 31, 2007, and you need to be facing a reset of your interest rate sometime between Jan. 1, 2008 and July 31, 2010. If you're within this range, you may be eligible to have your interest rate frozen, so you can keep your current, lower rate for five years.
Who qualifies within that range?
The bailout is really designed for homeowners who could run into trouble if their mortgage payments are raised sharply and face the prospect of losing their homes. If you're well enough off that you can afford the higher mortgage payments after a reset, you won't qualify. And if you're in bad enough shape that you can't handle the current low interest rate, you won't qualify. For example, if you've already fallen behind on your mortgage payments, you're not eligible for the rate freeze.
Do you need to live in your home to qualify?
Yes. The plan excludes people who don't live in the homes for which they have mortgages so that speculators can't benefit.
Why is there going to be a bailout?
Bush, Paulson, and the Administration are concerned about the fallout from the housing slump. If many people fall behind on their mortgages and have to give up their houses, there will be a series of negative repercussions. First, tens of thousands of Americans could be forced to leave their homes. They would lose whatever equity they had. Consumer spending more broadly would likely slow, hurting the economy overall. In addition, home prices could fall even more quickly than they are now. That could hurt consumer confidence well beyond those people directly affected.
Is the bailout going to be enough?
It depends on your definition of enough. The deal will add some stability to the housing market, but it won't stop all the problems in the troubled sector. The same day Bush unveiled his plan, the Mortgage Bankers Assn. said that foreclosures had reached a record high in the third quarter. The share of mortgages that have entered foreclosure hit 0.78% in the quarter, up from the previous high of 0.65% set in the previous quarter. At the same time, delinquencies for all mortgages rose to 5.59%, from 5.12%, in the second quarter. None of the people who are delinquent or facing foreclosure will be helped by the plan.
The deal almost certainly won't stop the decline in housing prices. Investors are betting that there will be double-digit declines in home prices in nine of 10 major markets over the next year. The only exception is Chicago, and there the estimate is for a 5.6% drop in home prices.
So why not go further?
Some Democrats are criticizing the Bush Administration on that exact point. Senator Hillary Clinton (D.-N.Y.), among others, is arguing for a more ambitious approach, including at least a seven-year freeze on interest rates.
Who stands in the way of such an effort?
Investors in mortgages and mortgage-backed securities. If homeowners are going to pay less on their mortgages than originally planned, then somebody is going to lose money. These aren't just fat cats on Wall Street—although many such firms have invested in these securities—they're also pension funds for teachers, firemen, and police, as well as mutual funds whose clients include all sorts of individual investors. They probably even include homeowners who are facing the prospect of higher payments on their adjustable-rate mortgages.
On Dec. 6, Treasury Secretary Henry Paulson, with the support of President George W. Bush, unveiled a plan to aid certain homeowners who face the prospect of higher mortgage rates in the next few years. Paulson worked with banks and other mortgage companies to develop the initiative, and thanked them for their involvement. "We have worked through an evolving process to help minimize the impact of the housing downturn on homeowners, neighborhoods and the U.S. economy," he said. While the plan is ambitious and is designed to bring stability to the shaken economy, it will affect only a narrow slice of homeowners in the U.S. "This is not a silver bullet," said Paulson. Here are some answers to questions you may have.
Can you get your mortgage payments lowered because of the bailout?
It depends. If you've got an adjustable-rate mortgage, you may qualify under certain conditions. If you've got a standard mortgage with a fixed interest rate, you're not affected.
Which adjustable-rate mortgage holders are affected?
Only a small group. To qualify, you need to have received your loan sometime between Jan. 1, 2005 and July 31, 2007, and you need to be facing a reset of your interest rate sometime between Jan. 1, 2008 and July 31, 2010. If you're within this range, you may be eligible to have your interest rate frozen, so you can keep your current, lower rate for five years.
Who qualifies within that range?
The bailout is really designed for homeowners who could run into trouble if their mortgage payments are raised sharply and face the prospect of losing their homes. If you're well enough off that you can afford the higher mortgage payments after a reset, you won't qualify. And if you're in bad enough shape that you can't handle the current low interest rate, you won't qualify. For example, if you've already fallen behind on your mortgage payments, you're not eligible for the rate freeze.
Do you need to live in your home to qualify?
Yes. The plan excludes people who don't live in the homes for which they have mortgages so that speculators can't benefit.
Why is there going to be a bailout?
Bush, Paulson, and the Administration are concerned about the fallout from the housing slump. If many people fall behind on their mortgages and have to give up their houses, there will be a series of negative repercussions. First, tens of thousands of Americans could be forced to leave their homes. They would lose whatever equity they had. Consumer spending more broadly would likely slow, hurting the economy overall. In addition, home prices could fall even more quickly than they are now. That could hurt consumer confidence well beyond those people directly affected.
Is the bailout going to be enough?
It depends on your definition of enough. The deal will add some stability to the housing market, but it won't stop all the problems in the troubled sector. The same day Bush unveiled his plan, the Mortgage Bankers Assn. said that foreclosures had reached a record high in the third quarter. The share of mortgages that have entered foreclosure hit 0.78% in the quarter, up from the previous high of 0.65% set in the previous quarter. At the same time, delinquencies for all mortgages rose to 5.59%, from 5.12%, in the second quarter. None of the people who are delinquent or facing foreclosure will be helped by the plan.
The deal almost certainly won't stop the decline in housing prices. Investors are betting that there will be double-digit declines in home prices in nine of 10 major markets over the next year. The only exception is Chicago, and there the estimate is for a 5.6% drop in home prices.
So why not go further?
Some Democrats are criticizing the Bush Administration on that exact point. Senator Hillary Clinton (D.-N.Y.), among others, is arguing for a more ambitious approach, including at least a seven-year freeze on interest rates.
Who stands in the way of such an effort?
Investors in mortgages and mortgage-backed securities. If homeowners are going to pay less on their mortgages than originally planned, then somebody is going to lose money. These aren't just fat cats on Wall Street—although many such firms have invested in these securities—they're also pension funds for teachers, firemen, and police, as well as mutual funds whose clients include all sorts of individual investors. They probably even include homeowners who are facing the prospect of higher payments on their adjustable-rate mortgages.
Thursday, December 6, 2007
Getting Creative To Get It Sold
Question adapted from Inman News
Selling home by lottery may be illegal
Q: Since the Florida real estate market is down, I would like to sell my Florida property on a "lottery" system. My idea is to sell it with an ad that says: "Own this home (furnished) for only $500." I would sell 400 tickets, but each entry must be accompanied with an essay of 100 words on a subject such as "What life means to me." The essays would be read by three responsible people, and they will select the best essay as the winner. Do you see any problem with this idea?
A: Unfortunately, selling a house by lottery is illegal in almost all states. Some states allow lotteries of homes, but these lotteries are generally organized by churches where the proceeds of the sale benefit the charitable organization. For further details on what is permitted, please contact the state of Florida.
We sympathize with the many homeowners who are frustrated by the current market and looking for creative ways to get their property sold. No one understands the plight of the seller better than professionals who earn a living from buying and selling real estate.
Professional plug: listing a property with a licensed Realtor is going to be your best bet to getting the home sold. Realtors have networks and more time and resources to devote to getting your property SOLD...and that's our honest opinion!
However, if you are so entirely strapped by your mortgage that you can not afford the listing fees of a professional Realtor, we do not advise using the "discount" real estate companies - you'll probably get more accomplished doing it yourself.
If you are a “FSBO” we recommend using the internet to its fullest potential! A yard sign may attract those passing through your neighborhood, but an internet posting will be seen by buyers world-wide.
82% of buyers are looking at Realtor.com and other similar real estate sites as their FIRST source of research. You can also try ebay, or Craig's list.
http://pages.ebay.com/realestate/
http://tampa.craigslist.org/rfs/
Selling home by lottery may be illegal
Q: Since the Florida real estate market is down, I would like to sell my Florida property on a "lottery" system. My idea is to sell it with an ad that says: "Own this home (furnished) for only $500." I would sell 400 tickets, but each entry must be accompanied with an essay of 100 words on a subject such as "What life means to me." The essays would be read by three responsible people, and they will select the best essay as the winner. Do you see any problem with this idea?
A: Unfortunately, selling a house by lottery is illegal in almost all states. Some states allow lotteries of homes, but these lotteries are generally organized by churches where the proceeds of the sale benefit the charitable organization. For further details on what is permitted, please contact the state of Florida.
We sympathize with the many homeowners who are frustrated by the current market and looking for creative ways to get their property sold. No one understands the plight of the seller better than professionals who earn a living from buying and selling real estate.
Professional plug: listing a property with a licensed Realtor is going to be your best bet to getting the home sold. Realtors have networks and more time and resources to devote to getting your property SOLD...and that's our honest opinion!
However, if you are so entirely strapped by your mortgage that you can not afford the listing fees of a professional Realtor, we do not advise using the "discount" real estate companies - you'll probably get more accomplished doing it yourself.
If you are a “FSBO” we recommend using the internet to its fullest potential! A yard sign may attract those passing through your neighborhood, but an internet posting will be seen by buyers world-wide.
82% of buyers are looking at Realtor.com and other similar real estate sites as their FIRST source of research. You can also try ebay, or Craig's list.
http://pages.ebay.com/realestate/
http://tampa.craigslist.org/rfs/
Wednesday, November 28, 2007
Tampa Bay: Among Areas with Largest Price Decreases
Areas With the Largest Forecasted Price Decreases
First of all, consulting a Realtor can help you understand what the current market value for your property is - and also what price it would take to get it SOLD. Second, the predictability for the next 5 years is similar to stocks and bonds. Over the long haul housing (like stocks and bonds) follows a natural set of economic fundamentals.
ORLANDO
June 2007: $522,000
Five-year projection: $343,000
Percent decrease: -34.2%
MIAMI
June 2007: $759,000
Five-year projection: $514,000
Percent decrease: -32.2%
EAST BAY, CA
June 2007: $1,562,000
Five-year projection: $1,078,000
Percent decrease: -31.0%
TAMPA, FL
June 2007: $444,000
Five-year projection: $320,000
Percent decrease: -28.0%
BALTIMORE
June 2007: $565,000
Five-year projection: $408,000
Percent decrease: -27.8%
by Stephanie Stanina
For the millions of Americans who became caught up in the crazy "seller's market" of yesteryear, the harsh reality of ARMs and adjustable rates is starting to take its toll. Familiar stories of buyers stretching to purchase a home outside their means, or of investors who can't give away their impulse-buy Gulf-front condo, have created the hottest 'buyers market' in years.
Glass 1/2 Empty: This means I need to reduce my price if I want to get it sold.
Glass 1/2 Full: When I purchase another property, I'm going to get a "STEAL!"
Buyers take note!
Glass 1/2 Full: When I purchase another property, I'm going to get a "STEAL!"
Buyers take note!
Despite the dismal forecasts and negative media hype; no one can really predict real estate's future. The season of out-of-control property values didn't make sense, and this desperate slump only adds to the confusion. Homeowners are left without a security blanket: how can one make reasonable plans for the future without knowing what one of their biggest investment is worth?
Well...
First of all, consulting a Realtor can help you understand what the current market value for your property is - and also what price it would take to get it SOLD. Second, the predictability for the next 5 years is similar to stocks and bonds. Over the long haul housing (like stocks and bonds) follows a natural set of economic fundamentals.
And Third: realize that no matter how low prices may seem at this point, this too soon shall pass. As with any "peak and valley" financial situation - and we're in the middle of a serious 'blue light special' - the fundamentals to a market's ebb and flow will eventually help us see a turnaround.
Buyers take note: the season of "sale" won't last forever!
Sellers: you can start to breath again.
WHY THE DRAMATIC DIP?
Easy money. According to Fortune's Shawn Tully, the 40-year-low interest rates that prevailed from 2003 to 2005 brought a flood of investors into the market. Lax lending standards allowed subprime borrowers, in other words practically anyone who could afford to rent, could afford to buy. Demand increased and prices kept going up.
In 2005 when the Feds started to cool the party off, banks weren't ready to go home. Creative lending continued the crazy mortgage trends like keeping prices low for the first two years -- but only resulted in foreclosure on year 3. Combine the extraordinary foreclosure rate with the sub prime meltdown and the disappearance of the "bargain rates" that started the entire boom - and here we are.
Here's Fortune's forecast for the value of an upscale home (one that sells for double the local median price) in five years. According to Fortune's calculations, prices in most markets will fall by double digits over the next five years.
ORLANDO
June 2007: $522,000
Five-year projection: $343,000
Percent decrease: -34.2%
MIAMI
June 2007: $759,000
Five-year projection: $514,000
Percent decrease: -32.2%
EAST BAY, CA
June 2007: $1,562,000
Five-year projection: $1,078,000
Percent decrease: -31.0%
TAMPA, FL
June 2007: $444,000
Five-year projection: $320,000
Percent decrease: -28.0%
BALTIMORE
June 2007: $565,000
Five-year projection: $408,000
Percent decrease: -27.8%
by Stephanie Stanina
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