Galveston Texas Real Estate

Separating "VALUE" From "SALEABILITY"

An error commonly made by sellers when pricing their homes is that they fail to distinguish value from saleability.  The value of a home references the factors related to the property to cause it to be worth more or less than other properties.  Saleability references the factors related to the property that cause it to be more or less salable than the competition.

Some factors that create value are : Location, Location, Location.  If you're in a more desirable location, you'll get more money than a similar house in a less desirable location.  Examples of more desirable locations would be lake front, wooded or park view lots.  Less desirable would be homes that back up to the sewage treatment plant, a busy highway or the ugliest house on the block.

The number of bedrooms and baths, square footage of living area, a basement (whether finished or unfinished) and garage size are examples of amenities that will get a seller more money for than other properties that are lacking in those areas.  Generally, more is better.  Except in the case of cockroaches, weeds and repairs that need to be done.

Many sellers incorrectly believe that components of a house may add value.  A new roof is a good example.  The seller believes that because they just spent $8500 on a new roof that the home will be worth more, but this is not the case.  It will make the home more salable, but it adds little value, if any.  Why is this?  Because buyers expect homes to have a roof in good condition.  If the roof is in poor condition, the buyer will de-value the home because they anticipate having that expenditure in the near future, but they will not add value because it is new.  

This would also apply  to updating a kitchen, bathroom, carpeting, new furnace or hot water heater.  Buyers expect these items to be functional.  They make the home more salable.  Some appraisers I've spoken to add only 40% of the cost of additions to the home such as for a fence or finished basement.

"My house has all these upgrades!  We have six panel doors, extra plush carpeting and top notch appliances."  So sorry you paid more for these features when the home was built, but its unlikely you'll recoup the extra cost when you sell.  You might get a little more than your neighbors who don't have these features, but primarily, it just makes the home more salable.

One caveat:  if you're in an area where all your competition has those benefits, you should, too.  That's what buyers expect in homes in that area.  If you have six panel doors, but most homes in your area don't, buyers will not pay you much more, because it's not an expectation.

So when determining your asking price, make a list of all the features and benefits that your home has to offer.  Then, consult with your agent to determine if those features/benefits add value or make the home more salable.  It will save you from having to make a series of price reductions later.  

Tim McColly contributed to this post.

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Steve Roake is a Broker for McColly Real Estate in Shorewood, IL.  Steve serves the real estate needs of buyers and sellers in Shorewood, Plainfield, Joliet, Crest Hill, Romeoville, Bolingbrook, Oswego, Minooka, New Lenox, Manhattan and NW Will County.

View listings for free www.roakehomes.com.  Nationally recognized, easy to use search interface. 

Specializing in Shorewood IL Real Estate

THE THIRD WAVE: Look who is going into foreclosure NOW!!!

There is going to be a Congressional hearing in the next day or so to evaluate the results of TARP on financial institutions and on the housing market...wonder what they will find out?---and what they will tell us???

I have heard rumors that some of the banks used their funds that were designated to help out the homeowners, to pay off their "bailout" money. One of the contingencies of the bailout was that the banks would remain under the microscope of the government as long as they owed the Tarp money. Some financial institutions paid off the "loans" in order to escape the scrutiny of the government!

Meanwhile, the next wave of foreclosures is starting--this time it's the homeowner who has never had financial problems during the Great Recession....Until now!

 

 

 

FIRST WAVE: The homeowner who put nothing down on their home, had no job but was the "protected" class who the government insisted become homeowners at all costs. Below, I have included the NY Times article from 1999 regarding the Clinton administration taking the idea of home ownership for the poor: 

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html

SECOND WAVE: The homeowner who was caught off guard, trades people who lost their jobs/businesses because of the crash, the "pink slipped" financial workers,  the real estate agents who were left with no income because of the housing bust. 

THE THIRD WAVE: The middle class and upper-middle class small business owners who lost revenue from the recession. This would include restaurants, shops, specialty manufacturing,

The housing recession (or depression, depending upon from where you are looking at it!) has not abated--it has not ended and it has in fact become worse.

This time, the people who are being foreclosed upon are those who had no problem in the past with their finances; even in the recession, these homeowners were able to go forward without much harm from the downturn. They still had their jobs,  were paying their bills on time and the possible loss of their home was so far out of the realm of reality that it never came to mind for them.

Now, the middle class and the upper middle class are under duress---they are suffering from the long drawn out financial messes caused by the initial crash of the real estate market. The Third Wave is made up of the Baby Boomers trying to retire and can't; the new level of financial or Wall Street worker who is considered "excess baggage", and all the businesses associated with a thriving real estate market. This next wave of foreclosures is sure to be the final nail in the coffin of the real estate market as we know it.

Today, Congress is meeting to hear the bad news about the failed attempts to rescue the housing market and ultimately the whole financial system of the US. The hearing is a review of the results of TARP, the $872 Billion bailout of the banks and the financial institutions that started the whole problem in the first place though their packaging of the bad loans with good in order to sell them as "Good" investments!!

TARP Failed ( What we know of as the "big bank bailout' that was put into effect after the failure of Lehman Bros)

HAMP Failed (Instituted in 2009, It helped fewer than 200,000 homeowners stay in their homes through mortgage modifications).

WILL WE HEAR WHAT THE TRUTH IS ABOUT WHAT THE EFFECTS OF "TARP" HAS HAD ON HOUSING IN THIS HEARING?. WILL THERE BE ANOTHER ATTEMPT TO MANIPULATE THE HOUSING MARKET OR WILL THERE BE A CAPITULATION  OF THE GOVERNMENT TO LET THE HOUSING MARKET JUST REPAIR ON IT'S OWN???

 

 

 

 

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                                     **ALL INFORMATION AND CONTENT IN THIS BLOG IS ORIGINAL TO PAULA I. HATHAWAY

 

Paula I. Hathaway, Senior Vice President, Prudential Douglas Elliman

Southamtpon Village Real Estate Specialist since 1995;  Also Specializes in North Sea, Noyac, Water Mill and Bridgehampton, New York

Diamond , Gold and Chairman's Circle Awards; Top Producer since 2005

 

Click here to see my Hampton's website to see all my listings; please email me or call me for all your real estate needs in Southampton, Bridgehampton and Watermill:

http://www.prudentialelliman.com/paulahathaway

http://www.hathawayhamptonhomes.com

http://www.realestateshows.com/576624

http://www.realestateshows.com/576620

I've worked with a lot of distressed homeowners in the past few years, and they all have one thing in common.  They all waited until the last minute to try to save their homes.  It breaks my heart when distressed homeowners call with the hope that I can perform some sort of magic that will ultimately help them either save their home or they think I can sell their home for what they owe.  The truth is, most call minutes before foreclosure.  If I could offer them advice early on,  it would look something like this:

• If you're a two income family and one income is lost - take inventory.  How long can you survive on one income?  Be totally honest with yourself.
• Do you have enough money set aside to give you time to formulate a plan if a new job isn't found right away?  How long is that?  A month, three months, six months, a year, longer?  The answer to that is important.  Missed payments hurt your credit report more than a short sale or deed in lieu of foreclosure.  Do everything you can to continue with the house payments.
  
• When did you buy your house, and how much did you pay for it?  Do you have a second?  How close is your balance to the current city/county assessment?  Over, under?
• Are you upside-down, or under water?  If so, how much?  If a short sale becomes inevitable you're better off to pay off the first mortgage first.  They might become an advocate to help you work with the second.  I had one help negotiate with the second position because they were paid in full.
• If you had a lower payment, could you make it?  A loan modification may be possible, but know up front that it's a lot of work, and you may not qualify.  Keep making payments, and have a backup plan.
• Before selling your house becomes a necessity what else could you live without?  TV, second or third car, gym membership, weekly spa treatments, expensive vacations, etc.  It's amazing how much money just slips through your fingers.  Little stuff can add up to more than you think.
• Make a commitment to make the hard choices.  If selling your house becomes a necessity make sure everyone responsible for the mortgage payments is in agreement.  One partner can derail contract after contract.
• Call an attorney long before your cash reserves run out.  Get legal advice about short sales, deed in lieu and foreclosure.
• Call a qualified distressed real estate professional.  Interview agents to find out if they have worked with people in your situation.  A lot of agents are "certified experts" who have never done a short sale or worked through a deed in lieu or talked with a homeowner on the verge of foreclosure. 
• Set reassessment dates to determine if drastic action is going to take placee, and if so, when?  If things turn around in three months you're ahead of the game.  You've eliminated unnecessary expenses, learned how to live on one income and you've learned a mountain of things that might help another friend or family member in the future.
• If your situation doesn't turnaround you're ready for the worst.

Your client needs a reality check.  I can't overemphasize the absolute necessity of personal honesty during this process. Too many distressed homeowners want to ignore the potential problems until the problems are right on top of them.  It's too late for many at that point.  It's far better to be prepared and not need to make drastic changes than to deny the possibilities and then try to scramble at the last moment in a futile effort.

 

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Give me a call for all your real estate needs, and let's make something amazing happen. 

Mike Cooper @ Cornerstone Business Group, Inc., 888-722-6029

Real Estate Sales and Property Management

 

(Disclaimer:  All grammatical mistakes, punctuation breakdowns and misspellings are purely for your amusement and entertainment.  Feel free to cackle.)

Back in August of last year, I published a post called 6 Reasons why your house won't sell.  It garnered an unbelievable (at least unbelievable for ME) 192 comments, after being viewed 8667 times, and having 7,934 people "click" on it.  That means that 2.4% of the people who viewed the post, were moved enough to leave a comment behind.

The average, at least for me, has been less than half of that return... more like sightly under 1%.  It was also "reblogged" by an astonishing 47 Rainers to share with their readers.

Soon after posting, a local Realtor publication contacted me, having found the article on Active Rain, and asked if they could publish the article, with my byline, of course.  As you might imagine, I said "yes", and picked-up 438 copies of that issue (my mother loved them).  So I thought it might be time to review and revive that post, and let the "next generation" of readers have their shot at it:

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7 Reasons why your property won't sell

1. Your property won't sell because your photos are "less than impressive". The vast majority of home buyers start their search for a home on the Internet, so your property had better look fantastic in print. Not just nice, it has to look downright fabulous.  Today an internet view is the same as a 'virtual showing'... if your house gets past that, then they might (just might) make an appointment to see it in person... You should really consider that your SECOND showing. Today's online viewers are expecting good quality photos (and lots of them...the picture below... taken from Google Maps... is completely unacceptable.  That's a $500,000 listing, take a moment and your digital camera and force your agent to go earn their commission), a virtual tour, maybe even a floor plan, and they need to be high-quality, or don't bother.

2. Your property won't sell because it's overpriced. It's important to be as objective as you possibly can.  Look at the home as though you were a "buyer"... if necessary, make an appointment with your Realtor to view other properties that are priced comparably to yours.  Be brutally objective.  Given the other options on the market (and yes, you DO have to include short sales and foreclosures on your list... your potential buyers are!), would YOU buy your home, over the others that are currently available on the market?

If the answer is "NO", (and try to be as honest as you can) well then you have your work cut out for you, don't you?  You either have to "update" your home to meet or beat the competition...(that might mean an updated bathroom or kitchen, or neutralizing some decorating... remove that old wallpaper that was there when you bought the house or lower your price to adjust for it.  if you can't afford to sell it for the price, that you KNOW it should sell for, this may not be the right market for you to sell.  Consider taking it off-market.

3. Your property won't sell because it shows badly. This could mean almost anything... from the 60 pound Rottweiler, barking and drooling at the potential buyers from behind the safety of the flimsiest child-gate, to the lingering smell of 30-years of smoking.  Maybe the carpeting shows traffic-pattern wear, or your windows allow in slightly more than daylight.  All things that aren't visible from the internet, but whoa.... once you get inside the house... they show up, like a cat-urine-soaked-shag carpet on a 95 degree day in New Orleans!

4. Your property won't sell because you're invisible. Today's buyer comes from the internet, almost exclusively.  Have you (or your agent) simply plopped the property on the MLS, and started praying?  Are you on all the websites...(Trulia, Zillow, Craig's List, Google Base, etc...) all the places that buyers are searching?  If not, you need to be, now! Don't try to be a secret, in today's electronic world.  You want to be found, and the sooner the better.

5. Your property won't sell because your listing is tired and stale on the market. Okay... yes, you overpriced your home initially when you first came on the market a year and a half ago.  But since then you have reduced your price almost monthly, constantly chasing the market down. Now, finally you're truly priced where you believe should be, but your listing (not your house) has become tired and stale.  Everyone who is looking for your type of property (ie: 3br/1.1 bath) in your area has already seen the listing online, or in person and they remember that there was "something" about it that they didn't like... but what they don't remember is... what they didn't like.... was the price.   Time to take the listing off market.  Let it cool off (3-6 months), and bring it back on fresh in the Spring.  Yeah, you'll have 6 mos. worth of holding-costs... but you'll more than make up for it in your purchase price.

btw... Resist the temptation to bring the house back on at a higher price, than when you left the market.  Just "don't do it"!

6. Your property won't sell because your house won't appraise. The house looks great... you've finally gotten someone to bring you a bid on your slightly over-priced, but beautiful pied-a-terre.  But the bank appraiser says it's worth $20,000 less than your buyer has agreed to pay.  Heavy sigh... bite the bullet.... negotiate with them.   If you have to drop the price $20,000 to make it work.... "make it work"... chances are, anybody else trying to buy your house will run into the same problem. If you're not willing to negotiate the difference, you may find yourself with no buyer, and accepting a lower offer somewhere down the line.

7. Your property won't sell because it's unavailable to show. You have a baby, and a 1-year old.  And they need their naps.  So you've told your Realtor in no-uncertain-terms, that you'll only allow showings between 9:00a.m - Noon, and then again from 2:30-5:30 p.m.  And no showings on Saturday or Sundays.  "After all", you've told him "we still live here.. it's our home!".  Well guess what?  They can't buy it, if they can't see it.  As good as your online photos are, they're no substitute for an in-person visit. "If they really want to see it, they'll reschedule", you're already answering as you read this.  Nonsense!  What they'll do, is they'll just move on to the next property in line (there are dozens like yours available) and maybe they'll buy that one instead.  Once you put your property on the market it stops being your "home", and has become your "product".  And you want your product to be seen by as large a buying audience as possible.

So, there you have it.  Stick around another year and half.  Who knows, maybe by August of 2013, I'll have EIGHT reasons why your property won't sell!

ALAN MAY, Realtor®
Specializing in Evanston Real Estate and North Shore Real Estate
Coldwell Banker Residential Real Estate, 2929 Central Street, Evanston, IL 60201
847.425.3779      Cell: 847.924.3313      Email: Almay@aol.com

Evanston Real Estate & North Shore Real Estate

 

Three Little Words That Work!!

(1)The three little words are: 'Hold On, Please...'

Saying this, while putting down your phone and walking off (instead of hanging-up immediately) would make each telemarketing call so much more time-consuming that boiler room sales would grind to a halt.
 
Then when you eventually hear the phone company's 'beep-beep-beep' tone, you know it's time to go back and hang up your handset, which has efficiently completed its task.

These three little words will help eliminate telephone soliciting..

(2) Do you ever get those annoying phone calls with no one on the other
end?

This is a telemarketing technique where a machine makes phone calls and records the time of day when a person answers the phone.
 
This technique is used to determine the best time of day for a 'real' sales person to call back and get someone at home.
 
What you can do after answering, if you notice there is no one there, is to immediately start hitting your # button on the phone, 6 or 7 times as quickly as possible. This confuses the machine that dialed the call, and it kicks your number out of their system. Gosh, what a shame not to have your name in their system any longer!!!

 (3) Junk Mail Help:

When you get 'ads' enclosed with your phone or utility bill, return these 'ads'
with your payment. Let the sending companies throw their own junk mail away.
 
When you get those 'pre-approved' letters in the mail for everything from credit cards to 2nd mortgages and similar type junk, do not throw away the return envelope.

Most of these come with postage-paid return envelopes, right? It costs them more than
the regular 41 cents postage, 'IF' and when they receive them back.
 
It costs them nothing if you throw them away! The postage was around 50 cents before the last increase and it is according to the weight. In that case, why not get rid of some of your other junk mail and put it in these cool little, postage-paid return envelopes.

One of Andy Rooney 's (60 minutes) ideas.

Send an ad for your local chimney cleaner to American Express. Send a pizza coupon to Citibank. If you didn't get anything else that day, then just send them their blank application back!

If you want to remain anonymous, just make sure your name isn't onanything you send them.. You can even send the envelope back empty if you want to just to keep them guessing! It still costs them 41 cents.

The banks and credit card companies are currently getting a lot of their own junk back in the mail, but folks, we need to OVERWHELM them. Let's let them
know what it's like to get lots of junk mail, and best of all they're paying for it...Twice!
 
Let's help keep our postal service busy since they are saying that e-mail is cutting into their business profits, and that's why they need to increase postage costs again. You
get the idea!

If enough people follow these tips, it will work ---- I have been doing this for years, and I get very little junk mail anymore.

Buying or selling real estate in Los Angeles can be an overwhelming process.  Contact Jane Peters, Los Angeles realtor specializing in absentee owners, out-of-town buyers, and those who need that extra attention, in order to make the transaction a smooth, trouble-free, and fun experience.

Search Los Angeles Homes for Sale.

In random order, I present to you seven different ways in which a home inspection report can be used by parties to a real estate transaction for advantage and benefit.

1.  Buyers can consider the reported conditions of the home's systems to determine their ability to afford to maintain the property.  A home with a 12 year old water heater, an 18 year old furnace and a 25 year old composite shingled roof is going to need some costly investments in the near future.

2.  Buyers can sometimes use information regarding undisclosed defects to negotiate the seller's action to repair the defect(s) or adjust the asking price for the home.

3.  Sellers can obtain a home inspection and use the report to disclose known defects to potential buyers.

4.  Sellers can obtain a home inspection and use the report to identify and correct significant defects that could interfere with a buyer's desire to submit a contract to buy the property.

5.  Buyers can use the inspection report as a "punch list" or "to do list" for maintaining the property after purchase.

6.  Buyers/Sellers can use the report to communicate to contractors the nature of the defect(s) to obtain estimates for repair or to arrange for repairs or replacements.

7.  Buyers can sometimes use the inspection report as a means to withdraw from the contracted agreement to purchase the home when certain types of undisclosed defects are reported.

Buyers and sellers should consider obtaining inspection reports only from professional full-time home inspectors.  Inspection reports generated by builders or contractors are often used by them as marketing tools and a means to generate business for maintenance and repairs and do not always represent the actual conditions of the property.

James H. Bushart, CMI

www.missourihomeinspection.com

314-803-2167

 

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. 

This proposal will, no doubt, be met with opposition by banking and mortgage lending groups.  It is, however, currently favored to be supported in the House. 

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Copyright 2009 - Claudette Millette, President, TheBuyersCounsel - 800-392-1446  - E-mail    

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Is The FDIC Killing Short Sales?

As some of you already know, I blogged recently about being interviewed recently by our local NBC news affiliate.  To read the blog, click here.  Basically, IndyMac Bank (now OneWest Bank), is holding one of my clients hostage, demanding a $75k promissory note, or they will proceed to foreclosure.  For the life of me, I couldn't figure out why they were doing this.  The BPO came in at the contract price of $275k, with a net to IndyMac of $241k.  What advantage could there possibly be for them to proceed to foreclosure?

Yesterday, I figured it out.  You see, IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009.  Guess who the investors are behind OneWest?  George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire).  

Now, listen to the deal they got from the FDIC....

Basically, they purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts).  They purchased all current HELOCS at 58% of Par Value!!!

Next, in order to "sweeten the pot", the FDIC stepped in and guaranteed the following:  For any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss.  The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that OneWest paid for the loan.  Let's use my clients situation as an example:

Loan Amount is $478,000, plus 6 months of missed payments, for a grand total of $485,200

OneWest pays $334,600 for the loan

We have an all cash offer of $241,000, net to OneWest.

So, let's do the math, shall we?  The net loss, according to the FDIC formula is the ORIGINAL LOAN AMOUNT minus the amount of the offer.  In this case, $485,200-$241,000, or $244,200.  Next, the FDIC, according to their Loss Share Agreement, writes a check to OneWest for 80% of the so-called "net loss".  So, in this case, OneWest gets a check from Uncle Sam for $195,360 (.80 X $244,200).

Add the $195,360 to the sales price of $241,000, and you get a grand total of $436,360.  Remember, OneWest paid $334,600 for the loan.  So, OneWest puts $101,760 in their pocket, thanks to the FDIC.  Folks, that is over $100k of our hard-earned tax dollars!

So, you ask...Why does this program hurt short sales?  Because, our brilliant government offers this SAME PROGRAM FOR FORECLOSURES!  The only difference is, the government picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO's, upkeep, utilities/maintenance, legal fees, etc.)

So, If I'm OneWest, why would I want to waste my time negotiating through a Short Sale, when I can make the same amount of money (if not more) by just letting it go to foreclosure?  And we wonder why nobody can get a Loan Modification?  Why would OneWest approve a loan modification for this guy, when they can foreclose and make over $100k?  And, to add injury to insult, they have held this loan for 6 months!  Not a bad ROI, huh?

What infuriates me the most is that in my particular case mentioned above, they have the guts to hold my client hostage for a $75k promissory note, after they are already making more than $100k on the sale!!! This is his primary residence, 1st Position loan, and OneWest has NO RECOURSE!  Imagine if they could make $100k, then get a deficiency judgement!  Talk about making some big bucks!

Can you say "GREED"?

The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC.  Some of them include:  Bank of America (go figure), CitiMortgage, Wells Fargo, etc.  

This entire agreement between the FDIC and OneWest can be found here, on the FDIC website.  It's all there, for the world to see!  They have it all layed out.  All of the formulas, worksheets, etc.  

Now, it's up to us to bring it to the attention of our elected officials and the media.  Enough is Enough!

UPDATE 9/18/09:  I JUST READ AN AWESOME ARTICLE ON THIS, THAT GOES INTO WAY MORE DETAIL THAN MY BLOG ABOVE.  TAKE THE TIME TO READ IT WHEN YOU GET A CHANCE! CLICK HERE TO READ IT.

Wait, it gets better...The FDIC just announced that it needs to start borrowing money from the U.S. Treasure in order to replenish it's deposit insurance fund (the same fund being used to pay all of these banks in the Loss Share Agreements).  Go Figure!  Click Here to read it.

 

 

 

THIS IS SIMPLY ADDING INSULT TO INJURY TO THE AMERICAN ECONOMY!

FHA ADVISES:

The new audit shows that even without any new measures, the reserves will rebound to the required level within two or three years largely as the result of the recovery in the housing market, Stevens said. This calculation is based on projections of future home prices, interest rates and the volume and credit quality of FHA's business.

GOOD GRIEF!  This will effectively put FHA insured financing on hold for TWO OR THREE YEARS.   

JUST WHAT IS FHA DOING THESE DAYS??

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September 18, 2009

HUD ANNOUNCES $300 MILLION IN RECOVERY ACT GRANTS TO CREATE GREEN PUBLIC HOUSING
Grants will increase energy efficiency, reduce costs of public housing while creating green jobs

DENVER - U.S. Department of Housing and Urban Development Secretary Shaun Donovan announced $300 million in Recovery Act competitive grants today that will allow 36 public housing authorities across the U.S. to utilize green materials and technology to create public housing that conserves energy and encourages more healthy lifestyles. (See list below.) 

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September 3, 2009

WASHINGTON - U.S. Department of Housing and Urban Development Secretary Donovan today announced that HUD is awarding $96 million in grants to 15 public housing authorities across the country to make substantial improvements to thousands of public housing units nationwide (see below for full list of grantees).

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OTHER THINGS HUD HAS BEEN DOING.  SEE Table of Grants HERE                        

EXAMPLE: 

CA	LOS ANGELES COUNTY	$8,080,528
CERRITOS
CA	LYNWOOD	$422,882
CA	MADERA	$260,115
CA	MARIN COUNTY	$431,056
CA	MERCED	$336,919
CA	MILPITAS CITY	$157,293
CA	MISSION VIEJO	$132,793

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IS THERE A PLAN IN THE GOVERNMENT OF THE UNITED STATES OF AMERICA TO TOTALLY WRECK THE AMERICAN HOUSING INDUSTRY to a point where it will not recover and that the government can take over everything, absolutely everything? 

Without the ability to issue FHA insured mortgage loans, many mortgage companies will simply shut their doors because far too many home buyers across the country will not qualify for conventional loans.  There are already severe constraints on mortgage companies by denying loan officers the ability to order appraisals giving more and more power to "third party" appraisal management companies.  It appears that any employee of a mortgage company whose income is commission based cannot have anything to do with the appraisal process.  Performance based income is honorable and enables employers to share profits with employees, thereby giving commission based employees an opportunity to earn more for harder, smarter production.

Mortgage companies and real estate companies have been commission based for 100 years.  Where are mortgage companies going to get the capital to finance salary based staffing?  Banks are not lending money.  IS HUD GOING TO FINANCE MORTGAGE COMPANIES?  HA!

Many otherwise qualified home buyers will not be able to find a home for themselves and/or their families because the bar for conventional financing is so high that the qualifying process and appraisal processes hava narrowed the buying pool.

IF FHA GOES DOWN, I PREDICT THAT A SIGNIFICANT DROP IN HOME VALUES WILL FOLLOW, thereby further diminishing the wealth of the American citizens. 

As home values continue to decline, more and more home owners will be trapped by negative equity in homes that no longer provide a viable home or real estate investment for their families.  That means more SHORT SALES and more FORECLOSURES.  Trapping American home owners in real estate is not the answer.  We have a transient employment market and the ability to buy and sell real estate is critical to the success of the American economy. 

THE BIG QUESTION IS:  FHA is scheduled to be below the mandated minimum capitalization by October 1, 2009.  Since FHA refuses to increase the insurance premium to cover the risk of newly insured loans. 

WHAT IS THE PLAN?  One thing for sure. . . . waiting for 2 or 3 years for the insurance fund to recover WILL NOT WORK.

                                                   

       "Mary, didn't you and John plan to sell your home and retire to Florida this year?"

           "We can't now.  We have lost our nest egg.  Our home isn't worth enough now. 

We may have to move in with our daughter and her family."