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.

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/

Tampa Bay: Among Areas with Largest Price Decreases

Areas With the Largest Forecasted Price Decreases

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!

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

11 Reasons To List During The Holidays

The Top 11 Reasons You Should List During The Holidays

11. By selling now, you may have an opportunity to be a non-contingent buyer during the spring, when many more houses are on the market for LESS money! This will allow you to sell high and buy low.

10. You can sell now for more money and we will provide for a delayed closing or extended occupancy until early next year—this means that you can enjoy your holidays at home.

9. Even though your house will be on the market, you still have he option to restrict showings during the 6 or 7 days around the holidays—we will work around your preferences.

8. January is traditionally the month for employees to begin new jobs. Since transferees cannot wait until spring to buy, you need to be on the market during the holidays to capture those potential buyers!

7. Some people MUST BUY before the end of the year for tax reasons.

6. Buyers have more time to look for a home during the holidays than they might during a working week.

5. Buyers are more emotional during the holidays, so they are more likely to pay your price.

4. Houses show better when decorated (subtly) for the holiday season.

3. Since the supply of listings will dramatically in crease in January, there will be less demand for your particular home. Less demand = less money for you!

2. Serious buyers have fewer houses to choose from during the holidays and less competition = more money for you!

The NUMBER ONE Reaon Why You Should List Now

1. People who look for homnes during the holidays are more serious buyers! This means you'll waste less time with "lookey-loo's" who aren't really wanting to buy NOW.

In The News: Public Awareness Campaign

Realtors are constantly working to educate their clients on the benefits of buying real estate as a means of building long-term wealth.

Unfortunately, the media has served as significant head-wind in getting this message across to consumers on a POSITIVE note.

To counter the negative feedback surrounding the real estate industry, the National Association of Realtors (NAR) is helping local REALTOR® associations across the country explain the "real facts" behind the real estate market in their area.

With a series of print ads targeting potential home buyers, NAR is the national level helping-hand working to educate consumers about the long-term value of purchasing real estate. The ads also aim to provide insight on the local real estate markets; this is anticipated to enable buyers to make better informed decisions about purchasing a home - aka: one of the biggest investments a person can make.

NAR notes that a full-page ad will run in USA Today on November 2 and November 9, 2007. Local versions of the USA Today ad will run in select markets nationwide on November 4 and November 11, 2007.

In The News: Mortgage Reform Bill

Daily Real Estate News November 7, 2007
House Committee Passes Mortgage Reform Bill

The U.S. House Financial Services Committee approved legislation on Tuesday creating new consumer protection standards in the mortgage industry.The bill drafted by Rep. Barney Frank (D-Mass.) would:

• Ban lenders from making loans that borrowers don't have the ability to repay.
  
• Prohibit lenders from steering home owners into refinanced mortgages that don't provide any benefit.
  
• Make Wall Street banks that package mortgage securities into investments liable for violations of lending laws
  
• Create a nationwide licensing system for mortgage brokers and bank loan officers.The bill now moves to the full House. Similar legislation was introduced in May by Sen. Charles Schumer (D-N.Y.), but has been stalled in the Senate.

Source: The Associated Press, Alan Zibel (11/06/2007)

Today's News: Intense special session results in tax agreement

http://www.baynews9.com/content/36/2007/10/30/298938.html?title=Intense+special+session+results+in+tax+agreement

TALLAHASSEE (Bay News 9) -- Monday night, state lawmakers passed a constitutional amendment to cut property taxes. The agreement came after the House reluctantly passed a take-it-or-leave-it compromise that the Senate offered.

This means a property tax relief plan awaits Florida voters when they go to the polls on

January 29th.

According to House Majority Leader, Rep Adam Hasner (R-Delray Beach), the House property tax plan would:

1. preserve Save Our Homes
2. provide additional homestead exemption relief to those who need tax relief the most such as recent homebuyers
3. allow for the "portability" of accumulated Save Our Homes benefits
4. add vital protections to business and non-homesteaded properties that are currently unshielded from unexpected and substantial assessment increases
   

The Proposal

The plan summary follows: The refined property tax plan includes three key additions:

• portability of accumulated Save Our Homes (SOH) benefits
• a guaranteed SOH benefit for all homestead properties
• and a five percent assessment cap for all business, commercial and non-homestead property.

Additionally:

The plan eliminates the "lock-in effect" of Save Our Homes by allowing portability of accumulated Save Our Homes (SOH) benefits.

Homeowners could transfer the SOH benefit to a new homestead anywhere in Florida within two years of leaving a former homestead. Portability is not limited within a county or any other jurisdiction.

• If "upsizing" to a home of equal or greater just value, the homestead owner could transfer 100 percent of the SOH benefit to the new homestead, up to a $1 million transferred benefit.
• If "downsizing" to a home with a lower just value, the homestead owner could transfer a SOH benefit that protects the same percentage of value as it did the former homestead, up to a $1 million benefit.
• The provision is retroactive to 2007, so those who sold and established a new homestead in 2007 would be eligible to transfer the benefit from the former homestead.

Enhanced Exemption

The plan accelerates "Save Our Homes" savings by providing a "Guaranteed Save Our Homes" Benefit - an enhanced homestead exemption - so all homestead owners could enjoy meaningful SOH savings without having to wait years for those savings to accrue.

This benefit targets greater relief for those homestead owners who currently have the least tax protection - such as new homebuyers that are paying two to three times the neighbors for the same value home.

So, for the would-be buyers who feel stuck in their home because they can't afford to pay more in taxes, or the buyers who are delaying a second home purchase because they don't want to get killed by non-homestead taxes, or even for the buyer who wants to downsized in a waterfront condo, but doesn't want to lose 25 years of accumulated tax shelter - THIS IS GREAT NEWS!

Just Say "No" To Seasonal Decor Overload!

A recent article on Yahoo.com relayed the “tricks and treats” to combining Halloween merriment with selling a home. As noted, some buyers may not appreciate the festive décor when looking for their new home.

For example, a broker for Prudential Douglas Elliman, Ms. Teplitzky who mostly sells homes in Manhattan's high-end market relayed a story about a particular apartment which had been listed since the end of August 2006. She convinced her Upper East Side clients to clear out excess furniture in the 1,200-square-foot, two-bedroom/two-bathroom unit to make it more appealing to buyers.

However, instead of less clutter, she found fake witches, cadavers and pumpkins on the floor, as well as "things that make noise and surprise you," scattered around. “Every room in the apartment -- including the kitchen and bathrooms -- oozed Halloween decorations.”
While Halloween can be great fun for some, those who do not identify with the holiday could find it annoying and distracting.

If nothing else, too many decorations can make it difficult to maneuver through the home, creating a “We didn't see the property; we only saw the decorations,” scenario and potentially loosing the opportunity. Ms. Teplitzky did ask her clients to limit the ghoulish decorations, but they were offended and refused. She explained that they kept the Halloween décor up for all of October, and reportedly the apartment sat on the market a month longer than it should have. It did finally close in December.

This “decoration overload” is not limited to Halloween paraphernalia – it can be a culprit come November and December, too!

Considering the “traditional” holiday season also includes Thanksgiving and Christmas – two more ways to bombard the home with seasonal items – those who don’t feel the same sense of spirit, or who don’t participate in particular holidays, may not appreciate the handiwork.
This doesn’t mean you have to outlaw holiday décor all together when your home is on the market, just be sensitive to the perception of your potential buyer(s).

With the sluggish housing market, there are already plenty of roadblocks to getting your home sold. Making sure holiday decorations aren't a deal breaker is relatively simple by comparison.
Some tips for holiday decorating: opt for a neutral “autumn theme” instead of “Halloween Horror” fest or a “Turkey, Turkey everywhere!” motif. Same sense of modest seasonal decorating goes for December: appreciate our culturally diverse society and realize that some might not understand the holiday, while others may find it offensive.

You CAN use your holiday enthusiasm to your advantage!

• Use trick or treating as an opportunity to talk up your home – as more potential buyers will likely be coming by your home to trick-or-treat than a month of open houses will bring.
  
• Use your creativity to design holiday-themed flyers highlighting the property’s top selling point.
  
• Host a holiday open house to suit your traditions and level of seasonal spirit.
  

Get your neighborhood involved! Even if they’re not buying, they might know someone who is.

• Invite the block over for a “recipe-swap” Pot-Luck Party just in time for Turkey Day.
• Host the next Neighborhood Watch meeting at your place and include a festive theme.
• Get the families involved with a holiday cookie decorating party.
• Pick a weekend and hold a neighborhood Toys-For-Tots drive. Announce it with a season-themed flyer, and provide your favorite holiday refreshments for those who come by.

Bottom line: be creative! A holiday “Open House” in any fashion will showcase your property, without over-saturating the home in decorations until the New Year.

By Stephanie Stanina

New Real Estate Report = Good News?

According to an article at Quicken Loans © the “Sales of new, single-family homes bounced back in September after hitting a seven-year low in August, as reported by the U.S. Census Bureau and the Department of Housing and Urban Development.”

Unfortunately the excess inventory is still a huge problem for both new construction and resale homes. Sellers can’t necessarily compete with builder incentives and are nearly forced to sell their home for thousands less than they would like…

However, if you’re looking to buy – the options are plenty: Buyers are being courted by builders offering significant incentives, unheard-of upgrade packages, and homes at “below cost” pricing.
Helping to keep the industry chugging along: long-term interest rates are still relatively low; the availability of FHA loans which require a smaller down payment, and the relative ease for qualified buyers to still get a home loan – we’re not talking 2004 here, but the options are definitely there.

The U.S, Census Bureau’s “good news” is indeed tempered by overproduction and a selling surplus: homeowners looking for relief from their adjusted ARM’s, investors trying to salvage a buck from a poor investment decision, and builders hoping to just break even.

Many Realtors had hoped that the recent Federal Reserve cut would spur real estate activity in the local markets, bringing more buyers to the table – especially in areas like California and Florida. However, yesterday's monthly Existing Home Sales report, issued by the National Association of Realtors, showed that September sales of previously owned homes fell 8 percent as compared to August.

Can we really blame everything on a lackluster market and the approaching holiday season? With tax time around the corner, one might argue that NOW is the best time to buy! But, consumers have Christmas presents, not condos, on their mind – so we wait to see what 2008 will bring.

With the Federal Reserve closely watching housing's affect on the economy, the real question is: how will the Fed interpret the all of this conflicting information?



By: Stephanie Stanina

Looking For A Deal: Tampa, FL

The latest reports all seem to agree: if you're searching for property in Tampa, luck is on your side.

One of the biggest reasons the "steals" are in Tampa all relate to a simple supply and demand equation. Too many listed homes for sale, and not enough buyers means that if you're looking for that "perfect price" you've got the upper hand in the Sunshine State.Want all-new appliances or $20,000 knocked off the asking price before you sign? Chances are, sellers in Tampa will be willing to comply.

The same can be said for Minneapolis, Miami and Kansas City, Mo. All three, like Tampa, currently favor buyers, thanks to an overabundance of supply and low sales rates.The easiest way to judge our list is to examine the area's housing supply vs. demand.

A good measurement for sales price to inventory ratio?

Take the current rate of sales and figure out how long it would take to burn off the excess inventory at that rate.If that measure is low, houses are selling quickly. If it's high, houses are waiting on the market and prices can often be bargained down.To determine which of the country's real-estate markets most benefit buyers, we looked at data from Moody's Economy.com and the National Association of Realtors. We tracked excess inventory and the change in sales rate over the past year to gauge the relative tightening or loosening of the market. Then a measure of price stability was applied to prevent the list from being a rundown of sinking ships.

Do Not Call List

Do Not Call listings to expire in 2008
By JENNIFER C. KERR, Associated Press

The cherished dinner hour void of telemarketers could vanish next year for millions of people when phone numbers begin dropping off the national Do Not Call list.
The Federal Trade Commission, which oversees the list, says there is a simple fix. But some lawmakers think it is a hassle to expect people to re-register their phone numbers every five years.

Numbers placed on the registry, begun in June 2003, are valid for five years. For the millions of people who signed onto the list in its early days, their numbers will automatically drop off beginning next June if they do not enroll again.

"It is incredibly quick and easy to do," Lydia Parnes, director of the FTC's bureau of consumer protection, said in an interview with The Associated Press this week. "It was so easy for people to sign up in the first instance. It will be just as easy for them to re-up."

But Rep. Mike Doyle, D-Pa., says people should not be forced to re-register to keep telemarketers at bay. Doyle introduced legislation this week, with bipartisan support, to make registrations permanent.

"When someone takes the time and effort to say 'I don't want these kinds of calls coming into my house,' they shouldn't have to keep a calendar to find out when they have to re-up to keep this nuisance from happening," Doyle said in an interview.

The FTC built the five-year expiration date into the program to account for changes, such as people who move and switch their phone number, Parnes said.

Doyle, however, points out that the list is purged each month of numbers that have been disconnected and reassigned to new customers.

People can register their home and cell phone numbers or file complaints at http://www.donotcall.gov or by calling 1-888-382-1222.

The registry prohibits telemarketers from calling phone numbers on the list. Companies face fines of up to $11,000 for each violation.

Organizations engaged in charitable, political or survey work are exempt. Companies that have an established business relationship with a customer also may call for up to 18 months after the last purchase, payment or delivery.

In the first week of the program, people signed up 18 million numbers. The registry now has more than 149 million phone numbers.

"I think it's fantastic," said Bonnie Darling of Arlington, Va. Darling placed her name on the list this year after being flooded with calls from roofing companies, chimney sweeps and construction businesses. She has not heard from those companies in months.
Darling is not worried about the five-year expiration. She said she expects it to be just as easy to register as it was a couple months ago.

The FTC plans a consumer education program next spring on the re-registration process.
While polls have shown consumers reporting far fewer unwanted phone calls, some telemarketers continue to violate the law.

Since the registry began, the government has filed cases against more than 30 companies, resulting in $8.8 million in civil penalties and $8.6 million in redress to consumers and forfeitures.

Most of the penalties were paid by satellite television provider DirecTV Inc., as part of the largest settlement in the program's history.

DirecTV agreed to pay $5.3 million in December 2005 to settle charges that it and several telemarketing companies it hired had called numbers on the list. The company said then that it had stopped working with those telemarketers and taken steps to avoid calling numbers on the list.

Telemarketers are required to pay an annual subscription fee to access the FTC list so those numbers can be blocked from their dial-out programs. The companies also must update their own calling lists every 31 days to ensure there are no numbers from the registry on them.
The annual subscription fee for the list costs $62 for each area code, with a maximum cost of $17,050 for access to all U.S. numbers on the list.

The FTC reported this year that 6,824 companies and other entities paid $21.7 million in fees to access the database in fiscal year 2006. All told, 15,218 entities have paid $59 million in fees to access the database since the program's inception.

Most of the fees charged by the government are used to support the Do Not Call program.
___
On the Net:
Information on the House bill, H.R. 3541, can be found at http://thomas.loc.gov/
If you're searching for property in Tampa, luck is on your side. Too man