Four senators are putting their muscle behind a new housing bill intended to prohibit lenders operating in the U.S. from foreclosing on home owners without first having discussed reasonable modification options with the borrowers.
The bill, called the Preserving Homes and Communities Act is being sponsored by Rhode Island Senator Jack Reed, Illinois Senator Dick Durbin, Jeff Merkley of Oregon and Sheldon Whitehouse of Rhode Island.
Under this bill, lenders will be forced to the negotiating table under the threat of stiff fines and other legal penalties.
All lenders will be required to perform what the bill terms as a "net present value" test for all seriously delinquent borrowers. The test would be a financial analysis weighing the benefits of a modification of loan terms against the benefits of foreclosure.
For borrowers who do not fit into this program, the bill would create a multi-billion national fund for states to make loans or grants in order to prevent foreclosures.
The senators' rationale behind the creation of this bill is that they are frustrated with the slow pace of current loan modification programs and feel that they are not keeping up with the record numbers of foreclosures this year.
"Voluntary efforts to keep families in their homes have failed," said Durbin. "This bill will force lenders to modify qualified mortgages rather than letting them move quickly to foreclosure, which destroys households and neighborhoods."
The act will also set up a mortgage payment assistance program to provide money to state housing agencies to assist people who have lost income and face the prospect of foreclosure.
The most significant aspect of this bill would be to create "mandatory mediation" requirements forcing lenders to allow some mediation efforts between them and their borrowers before being able to file foreclosures against home owners.
The Friendly Real Estate Broker loves real estate questions and inquiries. Baseball trivia is welcome also.
Showing posts with label Homes for Sale. Show all posts
Showing posts with label Homes for Sale. Show all posts
Wednesday, October 7, 2009
Tuesday, September 29, 2009
Why the First Time Homebuyer's Tax Credit will be Extended (or why it won't)
As anyone buying or selling a home knows, the government will give you a tax credit of 10 percent of the home's purchase price up to $8,000, provided neither you nor your spouse has owned a home in the past three years. Your new digs have to be your primary residence for three years, and you can't make more than $75,000 a year (double that if there's two of you).
This incentive was launched by the government earlier this year and is set to expire Nov. 30. But if the real estate and construction industries have their way, the program will go on life support until at least next year and perhaps indefinitely. Several members of Congress have drafted or voiced support for bills calling for extensions or expansions of the initiative. One version, introduced in the Senate by Georgia Republican John Isakson, would extend the program through 2010, raise the credit to $15,000, and be available to all homebuyers, regardless of current housing status or income level. Senate Banking Committee Chairman Christopher Dodd has voiced his support, as has Senate Majority Leader Harry Reid. (It’s worth noting that Reid hails from Nevada, a state that’s been especially hard hit by the real estate crisis.)
Critics say this has artificially inflated home sales. By the National Association of Realtors numbers, of the roughly 1.5mil homes sold nationwide since the inception of the credit, 350,000 of them were purchased using the tax credit. Yet that's only part of the story. Those 350,000 homebuyers allowed at least another 350,000 homesellers to move up into another home. This is a very good thing.
Mark my words, if legislation is passed extending this credit to all buyers there will be massive rush to purchase real estate. Homeowners who have been on the fence about selling will rush to the market,and the true recovery can begin.
When housing leads you into a recession, it can also lead you into recovery. Let's hope the legislators can see the light and extend the First Time Homebuyer's Tax Credit, and extend it to all homebuyers.
The Friendly Real Estate Broker loves real estate questions and challenges from the public. Baseball trivia is welcome also.
This incentive was launched by the government earlier this year and is set to expire Nov. 30. But if the real estate and construction industries have their way, the program will go on life support until at least next year and perhaps indefinitely. Several members of Congress have drafted or voiced support for bills calling for extensions or expansions of the initiative. One version, introduced in the Senate by Georgia Republican John Isakson, would extend the program through 2010, raise the credit to $15,000, and be available to all homebuyers, regardless of current housing status or income level. Senate Banking Committee Chairman Christopher Dodd has voiced his support, as has Senate Majority Leader Harry Reid. (It’s worth noting that Reid hails from Nevada, a state that’s been especially hard hit by the real estate crisis.)
Critics say this has artificially inflated home sales. By the National Association of Realtors numbers, of the roughly 1.5mil homes sold nationwide since the inception of the credit, 350,000 of them were purchased using the tax credit. Yet that's only part of the story. Those 350,000 homebuyers allowed at least another 350,000 homesellers to move up into another home. This is a very good thing.
Mark my words, if legislation is passed extending this credit to all buyers there will be massive rush to purchase real estate. Homeowners who have been on the fence about selling will rush to the market,and the true recovery can begin.
When housing leads you into a recession, it can also lead you into recovery. Let's hope the legislators can see the light and extend the First Time Homebuyer's Tax Credit, and extend it to all homebuyers.
The Friendly Real Estate Broker loves real estate questions and challenges from the public. Baseball trivia is welcome also.
Million Dollar Homes Regaining their Luster
To view our million dollar homes, please visit www.YankeeNewEngland.com.
The Friendly Real Estate Broker loves real estate questions and challenges from the public. Baseball trivia is welcome also.
The Friendly Real Estate Broker loves real estate questions and challenges from the public. Baseball trivia is welcome also.
Yes, We Have no Lockboxes
Most who have found themselves out looking for a new house have found themselves watching a Realtor struggle with opening a real estate lockbox. Lockboxes are those little metal boxes with ABC combinations holding the keys to the house.
When we list property, we dont use lockboxes. Matter of fact, we don't even own one.
Lockboxes are a security risk to the property. They signal a lazy real estate listing agent. Far worse, they also allow practically anyone to enter the home, or in the case of cancelled showings of a home, make it nearly impossible for homeowners to know if someone was in their house or not.
The listing agent who uses lockboxes is really saying to the owner: I'll list your house for sale, but don't expect me to show it every time someone wants to see it. A practical question a homeowner could ask at this point is; since you will be the listing agent and the contract says you are going to sell the house, how are you going to sell it if you're not there? and how would a buyer's agent seeing the house for the first time know every aspect of this house?
These are practical questions. During the listing of a home, we learn virtually everything there is to know about a house. How old is the water heater, when was the hardwood refinished, where are the exact property lines; the list is nearly endless. It's not even practical to think an agent showing the house to their buyer clients would know any of these things. The buyer ends up leaving the property with more questions than answers and a sale never takes place.
Another common scenario is for the buyer's agent to no-show or cancel showings. Of course the listing agent doesnt know that because there is a lockbox on the door, they werent there, and its no big deal to them if the buyers agent showed up or not.
We attend every single showing of our client's homes. Other agents always state to me, "that must be very inconvenient". It's not nearly as incovenient as having your home on the market for sale. And by not using lockboxes and being available to answer all questions about a property, the goal is to make sure it's on the market for a minimum time and the sale is made.
The Friendly Real Estate Broker loves real estate questions and challenges from the public. Baseball trivia is welcome also.
When we list property, we dont use lockboxes. Matter of fact, we don't even own one.
Lockboxes are a security risk to the property. They signal a lazy real estate listing agent. Far worse, they also allow practically anyone to enter the home, or in the case of cancelled showings of a home, make it nearly impossible for homeowners to know if someone was in their house or not.
The listing agent who uses lockboxes is really saying to the owner: I'll list your house for sale, but don't expect me to show it every time someone wants to see it. A practical question a homeowner could ask at this point is; since you will be the listing agent and the contract says you are going to sell the house, how are you going to sell it if you're not there? and how would a buyer's agent seeing the house for the first time know every aspect of this house?
These are practical questions. During the listing of a home, we learn virtually everything there is to know about a house. How old is the water heater, when was the hardwood refinished, where are the exact property lines; the list is nearly endless. It's not even practical to think an agent showing the house to their buyer clients would know any of these things. The buyer ends up leaving the property with more questions than answers and a sale never takes place.
Another common scenario is for the buyer's agent to no-show or cancel showings. Of course the listing agent doesnt know that because there is a lockbox on the door, they werent there, and its no big deal to them if the buyers agent showed up or not.
We attend every single showing of our client's homes. Other agents always state to me, "that must be very inconvenient". It's not nearly as incovenient as having your home on the market for sale. And by not using lockboxes and being available to answer all questions about a property, the goal is to make sure it's on the market for a minimum time and the sale is made.
The Friendly Real Estate Broker loves real estate questions and challenges from the public. Baseball trivia is welcome also.
Wednesday, September 9, 2009
Regular People are Buying Real Estate (again)
The hardest part of a real estate slump is when it starts, there's no official notification, and when its coming to an end, no one tells you that either. You have to figure that one out yourself.
That's because real estate isn't just local, it's also very personal. Real estate is an area where perception truly is reality and frankly I'm seeing regular people's perception right now as though it's a darn good time to buy real estate.
Here's two classic examples we just brokered. A senior couple wants to simplify and downsize so we list their home for sale for 199K. It sells for 185K (typical in Litchfield County at 93% of list price). At first glance, you might argue they are taking a big hit. Yet the home they purchased listed at 205K, and closed at 183K. It is worth noting that real estate isnt always just about the numbers, at least regular people dont view it that way. In this case, these regular folks got the home they really wanted, got rid of the house they no longer wanted and even managed to make a few thousand dollars along the way. Sounds like a square deal to me.
The next scenario involves specific markets. Seller has a very upscale property in a resistantly strong market (primarily due to outstanding schools) so they are able to sell within 40 days at 96% of listing price and closed at 785K. Since the kids are now out of high school, they move to a more rural area not more than 5 miles away, choosing a property that we researched and were able to close on a property at 562K which was listed at 625K. This is the classic case of selling high and buying low.
Two very different scenarios, each with equally satisfactory results.
That's because real estate isn't just local, it's also very personal. Real estate is an area where perception truly is reality and frankly I'm seeing regular people's perception right now as though it's a darn good time to buy real estate.
Here's two classic examples we just brokered. A senior couple wants to simplify and downsize so we list their home for sale for 199K. It sells for 185K (typical in Litchfield County at 93% of list price). At first glance, you might argue they are taking a big hit. Yet the home they purchased listed at 205K, and closed at 183K. It is worth noting that real estate isnt always just about the numbers, at least regular people dont view it that way. In this case, these regular folks got the home they really wanted, got rid of the house they no longer wanted and even managed to make a few thousand dollars along the way. Sounds like a square deal to me.
The next scenario involves specific markets. Seller has a very upscale property in a resistantly strong market (primarily due to outstanding schools) so they are able to sell within 40 days at 96% of listing price and closed at 785K. Since the kids are now out of high school, they move to a more rural area not more than 5 miles away, choosing a property that we researched and were able to close on a property at 562K which was listed at 625K. This is the classic case of selling high and buying low.
Two very different scenarios, each with equally satisfactory results.
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