Mirabal's Mind

AT&T suspends iPhone 4 pre-orders - Apple 2.0 - Fortune Tech

2010-06-16T12:21:00.000-04:00

People complain that they are broke and got no money, but due to the overwhelming demand for the new iPhone, AT&T suspends iPhone 4 pre-orders -

Housing's Double Dip: Numbers Tell How Bad It Is

2010-06-08T15:05:00.002-04:00

While this might be bad for some this is actually good for investors. Read full article now...Here

Fannie asks for another $8.4 billion - May. 10, 2010

2010-05-10T13:00:00.000-04:00

Just went you though it was all good. Fannie asks for another $8.4 billion were is this leading?

With Dubai's Debt Settlement on Shaky Ground, S&P Cuts DP World Rating

2010-04-09T13:47:00.000-04:00

With Dubai's Debt Settlement on Shaky Ground, S&P Cuts DP World Rating
Dubai does everything big, and that includes its debt -- all $60 billion of it.

Apple: 300,000 iPads sold

2010-04-05T12:16:00.000-04:00

This is Crazy! In this touch time people are spending money like this: Apple: 300,000 iPads sold

Spurt of Home Buying as End of Tax Credit Looms

2010-03-30T12:42:00.000-04:00

Spurt of Home Buying as End of Tax Credit Looms

Obama announces expanded foreclosure prevention plan

2010-03-26T10:05:00.000-04:00

Obama announces expanded foreclosure prevention plan

BofA to Start Reducing Mortgage Principal - CNBC

2010-03-24T08:52:00.000-04:00

BofA to Start Reducing Mortgage Principal

Home Sales Prices Tumble

2010-01-06T01:10:00.001-05:00

The National Association of Realtors said its seasonally adjusted index of sales agreements fell 16 percent from October to a November reading of 96. It was the first decline following nine straight months of gains and the lowest reading since June. The drop was far larger than the 2 percent expected from economists surveyed by Thomson Reuters, and analysts were surprised. "This was bound to happen at some point, although not by this much," wrote a startled Jennifer Lee, senior economist with BMO Capital Markets. "Gulp," she added. "It will be at least early spring before we see notable gains in sales activity as homebuyers respond to the recently extended and expanded tax credit," Lawrence Yun, the Realtors' chief economist, said in a statement.

Read The Full Story

Illegal Flipping or Lender Seasoning

2009-12-23T02:23:00.000-05:00

I found this article and I couldn't put it better myself.
by Bill Bronchick

There has been a lot of negative press and misinformation lately about double-closings. Many people have been indicted recently under what the press has labeled "Property Flipping Scams." Misinformed lenders, real estate agents and title companies will tell you that double-closings are now illegal. In fact, they are nothing of the sort.

A double closing is simply two back-to-back closings wherein the proceeds from the second closing is used to fund the first closing. Both closings are done in escrow so that the "middleman" can buy and resell a property for profit without using any of his own cash. The middleman profits because he buys the property below market and resells it for market price. This process has been done tens of thousands of times over the last 100 years - legally, ethically and PROFITABLY!

The so-called "illegal property-flipping schemes" work as follows: unscrupulous investors buy cheap, run-down properties in mostly low-income neighborhoods. They do shoddy renovations to the properties and sell them to unsophisticated buyers at inflated prices. In most cases, the investor, appraiser and mortgage broker conspire by submitting fraudulent loan documents and a bogus appraisal. The end result is a buyer that paid too much for a house and cannot afford the loan. Since many of these loans are insured by the Federal Housing Authority (FHA), the government authorities have investigated this practice and arrested many of the parties involved.

Despite the negative press, neither flipping nor double-closings are illegal. The activities described above simply amount to loan fraud, nothing more. Newspapers have inappropriately reported the activity as illegal "property flipping," rather than simply "loan fraud." So, whenever you hear a real estate agent or mortgage broker say, "flipping is illegal", you know they are misinformed. The misunderstanding of the flipping business has not been without consequence. Many title and escrow companies simply will not do a double-closing. Fortunately, there's many that still do double closings, but they are also keeping a close eye on potential fraud (as they should).

Some lenders have placed "seasoning" requirements on the seller's ownership. If the seller has not owned the property for at least six months, the lender will assume that the deal is fishy and refuse to fund the buyer's loan. This may be a problem if you bought a property cheap and are reselling it quickly for a profit (the good, old American way!). This should not be confused with LAW - it is simply an underwriting guideline for some lenders. Of course, guidelines are just that - by going up the chain of command, you can generally get approval from loan underwriting by showing the property is being resold for a higher price because either it was purchased in a distress situation (e.g., foreclosure) or that substantial repairs were made. Keep good records of your repairs to show to the lender.

If the buyer is getting an FHA insured loan, there is no way around the "seasoning" issue. FHA regulations prohibit the funding of a purchase where the seller has not owned the property for at least 90 days, NO EXCEPTIONS. This generally should not be a problem in a fix-and-flip situation, since it will likely take you 90 days by the time you acquire, rehab and sell. But, if you are planning on buying the property and reselling it in a double-closing, the end-buyer CANNOT go with an FHA loan.

Always Remain in Control of Your Deals!
A smart investor should stay on top of the process and anticipate these issues. If you are buying a property and reselling it quickly, particularly in a double closing situation, you must anticipate this problem and deal with it. Let the buyer, his real estate agent and his lender know that there may be a seasoning issue. If you stay in control of the loan process and steer your buyers to a mortgage company that doesn't have a hang-up with double-closings, then seasoning won't become an issue. Generally speaking, only FHA and subprime lenders have the "seasoning hang up" - FNMA underwriting guidelines do not prohibit funding a purchase money loan where the seller has not owned the property for a minimum period of time.

If you do get into a last-minute jam in a double-closing situation, there is a solution, which is called a "reverse assignment". You simply assign your contract with the end-buyer back to the owner and step out of the deal. Your "consideration" for doing so, is the profit you would have otherwise made. This consideration can be documented in writing and secured by a lien on the owner's property to be paid to you at closing.

Selling Your Home On Your Own – Examples Of Problems And Solutions

2009-11-06T23:51:00.000-05:00

What can go wrong? About a gazillion things, but this is true if you’re working with a broker, too. A broker is probably more experienced than you, and may well have confronted and solved your problem on a previous home sale. If you can stay calm and think under stressful conditions, you can be your own problem solver without the need for a broker. Plus, there is no guarantee the broker will get it right.

A longer list of possible problems from real life are for a later article. I will include a couple here just to help you size up your willingness to cope on your own.

Problem One

You have a contract with a buyer, but the buyer gets cold feet.

Solution

Be calm, matter of fact, and pleasant. Encourage your buyer to open up and tell you what’s in the way. “I don’t want you to buy our home if it’s not right for you, but you seemed to really like the house (condo/townhouse/whatever), and now you’re not sure you should go forward. What’s changed? What’s troubling you?”

If they level with you, you have a shot at helping them overcome their objections and solve their issues. You may even find they’ve misunderstood something. If so, correct information may be all that’s needed.

However, if this approach doesn’t work, and the buyer no longer wants to buy, let them go and move on. As long as the buyer wants to buy and the seller wants to sell, most problems can be sorted through. If one of them changes his mind, it’s over. (You can probably sue for “specific performance” under the contract, but do you really want your property off the market while you deal with that?)

Problem Two

Your buyer has made an inspection by a home inspection firm a contingency of the contract. The home inspector comes up with a laundry list of items to be repaired or replaced. Your buyer requests that they all be done prior to settlement.

Solution

Don’t let your ego get in the way. It’s not personal. It’s real estate, and big bucks are involved. Take a deep breath. Go over the list. How much money is really needed to make the repairs? Can you do any of it yourself? Call a plumber, carpenter, roofer, electrician, or whatever trades you need and get a ballpark idea. If the result looks reasonable, get closer estimates and agree to have the work done.

If it’s too expensive, explain to the buyer that the price of the home takes into account the condition. If the repairs are too expensive, can you and the buyer agree to “split the difference?” That is, can you do some items on the list and not do others because (you will explain to your buyer) the home was priced accordingly, but you are willing to compromise if he is.

If the repairs are too time consuming (the trades can’t take care of it before scheduled settlement), you are going to have to give it some thought. Can you agree to provide a sum of money to the buyer at settlement with which he can have the repairs made?

The key to coming up with solutions to the particular problem is to stay calm and thoughtful. The buyer is not your enemy. With any luck you can work out a win/win solution.

By: Raynor

Also Posted at: Article Directory: http://www.articledashboard.com

5 Simple Steps to Attract Wealth and Abundance!

2009-11-04T16:50:00.002-05:00

It will astound you that in order to be truly happy in your life

you must realize that you are not to get anything outside of yourself, you are to become AWARE(a state of mind) that everything you shall ever desire is within you. Your responsibility is to discover, develop and unleash that power within you for a more fulfilled life.

There is a need for you to create money, for whatever reason, maybe you are in debt, maybe you want to enjoy financial freedom

, maybe you are a single mom working two jobs trying to make ends meet or maybe you just want change your life and do what you want, when you want. You want to pay for your education or you have brilliant and passionate ideas in your mind which will be given power by wealth.

Whatever the problem may be I will help you plant the seed of acquiring a wealth mindset. I have extensively studied the holy books of creating wealth and I will humbly distill their wisdom in five steps.

1. What and why- Fix in your mind the exact amount that you desire to acquire. Make sure you know the reason why, and make sure the reason is powerful and arouses your emotions. It could be anything from contribution to the community or supporting your family.

2. Raise your vibration- Your current results are determined from the vibration your body is in. To improve your results you must raise your body's vibration (emotional state). You do this by feeling good about the benefits received by the achievement of your desire. The more you do this, the more you remain in the flow of abundance and great good in your Life.

3. Get around success- In order to rapidly program your mind for success, you must be around success. Personal Development Guru Tony Robbins keeps mentioning that success leaves clues, so you must feed your head with books, audios, videos, seminars and face to face meetings as much as possible with successful people in your profession or interest.

4. Take Action- This is the master key which will enable you to acquire riches! You don't have to work or toil too hard just take actions based on inspiration. You will suddenly gain hunches and inspirations which you must act on or write down immediately. This is the only effective method whereby great men and women have acquired great wealth.

5. Let Go and Let God- You do not need to know the complete pathway to your goal or desires, just take small baby steps at a time, as you keep doing that more steps will be revealed to you through your Higher Self. These are astounding statements but if you take the time and effort to research the greatest men and women on the planet they never knew how they were going to exactly reach their goal. They just knew they were going to do it.

Do not be fooled by the simplicity of these steps, they might be simple but are not easy, it takes some amount of dedication and persistence to implement the ideas contained in this article but once you do it as a matter of habit, unprecedented abundance will flow into your life. If you doubt these statements, study all the wise ones who have followed these steps. I will name three and you should check out their books or google the names, Napoleon Hill, Wallace Wattles and Bob Proctor. Wealth or anything in life is acquired through a state of mind.

By:Aungeer

This author is an expert in Personal Development and Self Improvement. He is a passionate believer in the goodness and vast potential of humankind. His mission on earth is to help others to discover and unleash their own potential.

Private Lending is Real Estate Investor First Choice For Money

2009-11-01T23:57:00.003-05:00

With the state of the current global financial market the importance of using private lending has greatly increased. In fact, there are a lot of investors who view private lending as an economically viable way of supporting their real estate transactions. There are actually numerous reasons for this.

Less Paperwork

There is a minimal amount of paperwork involved in using private lending. In fact, the only documents that you will need are the promissory note, an insurance binder that lists the private lender as the mortgagee and the mortgage.

Cost Effective and Easy

Another advantage to using private lending is that it is both a cost effective and simple procedure. There aren't any other costs involved with the deal other than the closing fees that you have to pay for buying the property and then for such things as recording fees, title insurance, and hazard insurance. Of course, it is important to assess the properties values before considering private lending because the title research will need to be recorded with your mortgage.

Low Fees

You will not have to pay high bank fees whenever you use private lending. Other costs will be kept low as well because the procedures will be kept as simple as possible. These are just some of the reasons why private lending is so cheap.

Quick Approval

Private lending is both quick and efficient. This means that it will easily meet the demands of borrowers who are bound by time limits. It also will give you an edge in global competition in order to make real estate investments a lot more viable.

There are also a lot of reasons why private lending has gained importance in the commercial real estate industry. These reasons include:

• There is less land available for development and more regulatory measures in place that have made it more difficult to develop this land.

• It is important to have the loan approved quickly in order to maintain the project's economic viability.

• There is a lot of red tape that makes it a very slow process for loans to be processed by financial institutions.

Conclusion

There are a lot of developers who need quick finance options for real estate development today. These developers need to consider bridge loans because they will give you time to sort out any issues and yet meet your timeline. Once bridge loans approach their maturity borrowers will approach banks in order to refinance their loan into a conventional, long term financing solution.

Whenever you use private lending the lenders will look at the project's loan-to-value as well as your assets and experience. They will look at your credit history and any credit problems that you have had. Potential foreclosure is also considered because this or deed-in-lieu of foreclosure are the lender's only recourse if you default.

You should also know that private lending is less affected by repeated market fluctuations. This is why they are looked upon favorably even when the stock market is fluctuating.

http://www.articlesbase.com/real-estate-articles/private-lending-is-real-estate-investor-first-choice-for-money-1403404.html

Rental Property Secrets

2009-10-27T13:24:00.001-04:00

By: Crazy Cabinet Guy

As a rental property owner, I am always looking for ways to maximize the rental income and keep my units marketable without having to do any major renovations. I am always keeping my eye out for potential properties that I can buy, and easily rent out that will cover the mortgage and a little more. That being said, one of the biggest mistakes that I see other landlords and rental property owners make is that they are reluctant to or just flat out won’t put any money into their properties because they don’t think they will see a return for that investment. When I tell some of my counterparts that I put new kitchens and bathrooms into all of my rental units they think I am nuts. To quote one of my friends who has some properties, “Why would you spend $4,000 on an apartment that is just going to get destroyed by the next people that rent it?”. To answer his question, I thought I would write this article.

First, let’s think about the mathematics behind it. Granted each market or city is going to have a different result, but for where I live in the Philadelphia area this holds true. By doing a little research and finding comparable apartments in your market, you can find out what the magic number is. What are the three features that are going to stick out about any apartment? The condition of the rugs, the bathrooms, and the kitchens. If any of these items look worn or beat up, it is going to be harder to rent and you won’t be able to get as much for it… that is just a fact of life. So let’s say you spend $3,000 to upgrade the kitchen and bathroom(s). Yes, it is possible to spend that little on upgrades and I will show you how later on. Assuming the rest of your unit/building is in good condition, that $3,000 investment can produce an extra $200 a month in rent for me per unit. At $200 a month, you made your investment back in just over a year and you are now making more money per unit. Think about it. If a prospective renter is looking at two apartments: one with a dated kitchen and one with a modern kitchen and bathroom, which one is he/she going to choose? Not only that, but a nicer apartment is going to command a higher rent which in turn brings in a higher income renter who is less likely to abuse and destroy the apartment.

For some of you, I am sure that $3,000 to renovate a kitchen and bathroom(s) probably made you chuckle. If you are still shopping at the big box stores for your supplies, then you have a reason to laugh. To update both the kitchen and the bathroom in an apartment using their cabinets could easily cost you double if not triple. After doing a lot of research, I found a source for cabinets that saves me at least 30-40% per apartment. I started buying my cabinets on-line. If you do a search for RTA Kitchen Cabinets, you will find my secret. Not only are they cheaper, but they are also made of stronger materials and easier to assemble and install. By buying cabinets on-line, direct from the importer/manufacturer you can get them much cheaper because they don’t have the high overhead cost of a retail store. I have been using them for years now in my apartments, and you wouldn’t be able to tell the difference if you put them side-by-side with store bought or store ordered cabinets. The biggest benefit is that you don’t have to wait 6-7 weeks for cabinets like you do if you go to Home Depot or Lowes. These are delivered straight to your office or property in around 2 weeks.

So the next time you are trying to figure out why you empty units, or the guy across the street is renting his units for hundreds more, take a look at your kitchens and bathrooms. I simple upgrade will not only get you a quick return on your investment, but it will also continue to generate more revenue for years to come.

Provided by ArticleGOLD: Articles Directory - Article Directory

About the Article Author

I was able to save thousands on my kitchen cabinets. Find out my secrets.... you to can save thousands on kitchen cabinets and bathroom vanities by following these easy steps

Housing Prices one way to go but only Down!

2009-10-23T11:48:00.000-04:00

According to the 10-City Composite Index of house prices released by real estate market data provider Altos Research, house prices declined 0.5% in September and 1.1% during the third quarter. The index is a measure of home prices based on summaries of metrics associated with active residential property listings. After bottoming out at $470,017 in January, it gradually increased to $509,030 in July before again declining and was $503,401 in September. Of the 26 markets Altos Research examines, asking prices increased in only five, including Los Angeles, which experienced a 1.5% increase, the largest of the 26 markets. Phoenix had the largest monthly decrease of 3.7%. Inventory also declined in 23 of 26 markets. All of the 26 markets except San Francisco had a median days-on-market of 100 or more in September. Miami had the slowest inventory turnover rate at 251 days. Altos said prices are likely to continue showing modest declines throughout the seasonally weak fall and w inter months of 2009, and that this year’s downturn would likely have been worse were it not for historically low mortgage rates and the first-time home buyer tax credit.

Private Lending with Your IRA

2009-10-21T11:38:00.003-04:00

You can invest through your IRA with a truly self directed IRA. This method of investing is not well known because no one receives a commission when you invest this way. Therefore, there is no motivation for anyone in the financial services business to educate, advocate or recommend something they can't make money on.

More and more people are asking us about investing in real estate with their IRA.

We think private lending through your IRA is a great way to earn strong returns and capture fantastic tax benefits!

So, here are a few things to consider as you learn about investing in your IRA.

You can invest funds with us from your Traditional and Roth IRAs, many people do.

You will need to open an account with a “Third Party Administrator” (TPA), which acts as custodian of your account - investing the funds as you direct them to do.

If you already have an IRA you will transfer funds from your existing account likely held by a conventional brokerage firm to whichever TPA you choose.

When you conduct a real estate or private lending transaction in your IRA, you will fill out a few very simple forms provided by the TPA to direct the investment.

The TPA, acting as custodian of your account, will also sign all official documents on your behalf.

There are many, but here are several companies you might consider using as a Third Party Administrators:

Equity Trust Company www.TrustETC.com
Entrust Administration www.EnTrustAdmin.com
Pensco Trust Company www.Pensco.com
Guidant Financial www.GuidantFinancial.com

Come to our Free Seminar to Learn More.

A. B. Home Buyers LLC, is not an investment advisor, and is not qualified to provide advice on IRA rules, regulations, or eligibility requirements. Please consult with your tax and investment advisors. We are not affiliated with any of the companies listed and only provide them for informational purposes.

U.S. Treasury set to finalize home "short sales" plan

2009-10-09T10:18:00.000-04:00

Source: Yahoo News

NEW YORK (Reuters) – The U.S. Treasury will soon finalize a plan to expand its incentives for mortgage companies to include "short sales" as a way to stem a rising tide of foreclosures, according to a Treasury spokeswoman.
"Short sales," or sales of homes for less than the balance on existing mortgages, are seen as a key way to supplement other efforts such as loan modifications to steady housing. Unlike most modifications, "short sales" eliminate the problem of negative equity that has become a big reason for defaults as home prices have plunged.

The incentives, first announced in May, would expand the government's Home Affordable Modification Program that has seen limited success in lowering payments for hundreds of thousands of homeowners deemed eligible. Just 12 percent of homeowners eligible have had their loans reworked, leaving millions more foreclosures to come, the Treasury said on September 9.

More short sales may alleviate fears that a raft of "shadow supply," or foreclosures in the pipeline, will flood the market and deal a blow to the nascent rebound in housing seen over the U.S. summer months, analysts said. The overhang of supply is currently about 7 million units, or 135 percent of a year's of existing home sales, according to Amherst Securities Group.

"What they are trying to do is move some of these foreclosures in the pipeline, and bring them to a resolution before (foreclosure) happens," said Lisa Marquis Jackson, a vice president at Irvine, California-based John Burns Real Estate Consulting. "12 percent of these being modified isn't enough to clean these up."

Realtors express frustrations with banks when trying to negotiate a short sale, which can take four to five months to complete, according to John Burns consultants. Buyers often walk away from sales because banks are slow to respond, or balk at the offer.

The Treasury will use up to $10 billion from a previously announced $50 billion pool of mortgage modification funds for payments to address lender concerns that home prices will continue falling in high-cost areas.

Incentives will be calculated on recent declines of local home prices and average home prices in these markets, the Treasury said in May. They would add to other incentives that servicers can receive for reducing loan payments. In May, the Treasury proposed lenders would receive a $1,000 payment for allowing the owner to sell the house for less than the amount owed on the mortgage, and accepting the proceeds as full repayment. They can also receive $1,000 for accepting a similar deed-in-lieu transaction, in which the deed is simply transferred to the lender instead of going through a costly foreclosure.

Borrowers who agree to short sales or deed-in-lieu deals can received up to $1,500 in closing costs. Treasury also said it will pay second lien holders up to $1,000 to relinquish their claims in such transactions.
"Presumably, the Treasury is trying to help facilitate a transaction that will result in less loss to the lender than in the case of a foreclosure," John Burns consultants said in a research note dated Oct 1 alerting clients of an impending Treasury announcement.

(Additional reporting by Emily Kaiser and David Lawder in Washington; Editing by Diane Craft)

Overlooked FHA Loan Ideal for Foreclosure Buyers

2009-10-07T10:20:00.001-04:00

I didn’t write this article just wanted to post it and past it to all of you as A. B. Home Buyers had used this program with some of our buyers.

Hidden away in the deep recesses of the federal government is a one-shot financing plan which will allow you to not only buy foreclosures but also to pay for repairs and upgrades.

The FHA's 203(k) program has been on the books for decades but over time it's been rarely used. That's changed recently, in part because the program is ideal for many foreclosure buyers.

How It Works
With the 203(k) program you get financing to purchase or refinance an existing home (it has to be at least a year old) plus additional dollars to fix it. Since the government doesn't want you to take that extra money and just go to Vegas, it provides the construction money in draws as the repair work is completed after closing.

This program, of course, works perfectly for foreclosure buyers because it covers both the cost of acquisition as well as the expenses that may be required to improve the property's condition.

Unfortunately, the 203(k) plan does not work perfectly for everyone.

Details
In basic terms there are three groups of foreclosure buyers: Those who want residential property for themselves, those looking for investment real estate and those who want both. Two of these three groups are possible users of the 203(k) program.

Yes, you can use 203(k) financing to purchase a home which you will use as a personal residence.
Yes, you can use 203(k) financing to purchase a home with one to four units, provided that you physically occupy one of the units as your personal residence.
No, you cannot use a 203(k) to acquire or refinance a pure investment property, one you do not use as a personal residence. Investors have been banned from the program since 1996.

Why would you want FHA 203(k) financing?

Those after-closing draws and inspections represent additional work for lenders, thus you can expect to pay somewhat higher fees. That said, the 203(k) program is still a good deal because it's far cheaper to get acquisition and construction money in one loan rather than two. This is because there's a single settlement and thus only one set of closing costs, one set of taxes, one origination fee, etc.

The 203(k) program also comes with attractive terms. For instance, HUD says you can get financing equal to the "as-is" value or the purchase price of the property before rehabilitation, whichever is less, plus the estimated cost of rehabilitation. Alternatively, you can get a loan equal to 110 percent of the "after-improved" value of the property.

Lastly, the 203(k) program is an FHA loan. That means no prepayment penalties and no surprise rate increases. You'll need to fully document income, debts and assets, but that's a low barrier for anyone who pays taxes and has financial records.

Limits
To come up with the right loan amount you need to know the value of the property and you need to have a good sense of what the improvements will cost. Not all improvements can be financed under the program and the maximum available for repairs in $35,000.

“Luxury items and improvements are not eligible as cost rehabilitation,” says HUD. “However, the homeowner can use the 203(k) program to finance such items as painting, room additions, decks and other items even if the home does not need any other improvements. All health, safety and energy conservation items must be addressed prior to completing general home improvements.” Keep in mind that your contractor has to be HUD certified and approved.

Bring Back Investors
In 1996, when investors were banned from the program, HUD explained that its “restrictions are in response to audit findings issued by the Office of the Inspector General and are in effect until further notice.”

“A lot of things have changed in 13 years,” said Jim Saccacio, chairman and CEO at RealtyTrac.com, the nation's leading source of foreclosure listings and data. “One of the most important is this: We're overwhelmed with a vast inventory of foreclosed homes. It is this inventory which makes it impossible for local home values to rise. We need to get more buyers into the marketplace and for this reason HUD's investor restrictions need to be reconsidered.”

Why should HUD open the 203(k) program so investors can pick up foreclosed properties? One very good reason is to reduce HUD's overall marketplace risk.

HUD has insured loans for millions of properties. Anything which reduces the foreclosure inventory can help increase the value of all properties, including those with FHA insured loans. Allowing more investors into the market generally increases demand and hopefully stabilizes or even grows local home prices. In the event of foreclosure HUD benefits because with higher market values insurance claims will be smaller.

In other words, the reason to broaden the 203(k) program is not because HUD suddenly has a warm tingly feeling when investors need mortgage insurance, rather the reason is self-interest: HUD can cut its costs and liabilities by getting more investors into the marketplace.

“Ten years ago, certain lenders and nonprofits stigmatized the 203(k) program by using the program for fraudulent purposes,” says the Treasury Department in a just-issued report. Well, yes, certain lenders and nonprofits did just that — but investors are not lenders or nonprofits. We're blaming the wrong folks.

Rather than restrict an entire program to investors because of the misdeeds of a few lenders and nonprofits back at the dawn of time, why not do a better job underwriting loans? That could solve the creepy program of “stigmatized” loan applications. Or, why not restrict lenders and nonprofits since they — not investors — were responsible for the moratorium in the first place?

It's time that the 1996 investor “moratorium” comes to an end. Times have changed — and so should HUD.

For more information regarding 203(k) speak with local FHA lenders before considering a real estate purchase. Be sure to work with an experienced 203(k) lender, one who can help with the complexity of draws and inspections after closing. Also, if possible, get practical ideas and information from local borrowers who have recently used the 203(k) program.

Please call our office with any questions and for properties available.
____________________
Source: Peter G. Miller is syndicated in more than 100 newspapers and operates the consumer real estate site, OurBroker.com.

Home Affordable Mods Come to FHA

2009-09-30T14:00:00.000-04:00

Do you have a FHA mortgage on your home and wish you could participate in the Home Affordable Loan Modification program?

Up until now, you couldn’t…but that’s changed!

Of course you still have to meet the same requirements to get into the program (see our President Obama’s Home Affordable Loan Modification article for more info), but according to Housingwire.com.

A new workout program, FHA-Home Affordable Modification Program (FHA-HAMP), should be operational by August 15, HUD secretary Shaun Donovan said. “Tens of thousands of FHA borrowers will now be able to modify their mortgages in the same manner as so many others who are taking advantage of the Administration’s Making Home Affordable program,” Donovan said in a statement Thursday.

The program permanently reduces the borrower’s monthly payment through a partial claim, which defers the repayment of mortgage principal through an interest-free subordinate mortgage that is not due until the first mortgage is paid off.

FHA-HAMP allows lenders to advance funds on the borrower’s behalf, to pay down the loan by up to 30% of the unpaid principal balance and deferring these amounts in a partial claim.
The program calls for a three-month trial period during which borrowers will be expected to make payments of the amount of the future modification. Only once the borrower remains current on all payments under the trial period, the mortgage can be considered for modification.

As part of the HAMP program, FHA said it will pay incentives up to $1,250 to loan servicers that modify FHA-insured loans under the program.

So if you’ve got a hardship and are in default or imminent default, call your servicer after August 15th and see if you’re eligible.

Source: Truth in Foreclosure

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Capital Gains or Cash Flow?

2009-09-21T15:12:00.001-04:00

Not so very long ago the rage of the day was investing for capital gains and future appreciation with very little consideration given to cash flow. In fact, many so-called real estate “investors” were more than willing to buy high with the hope of selling even higher while carrying a negative cash flow all the way. Debt was viewed as only a temporary situation likely to be rapidly resolved as soon as the property sold…and properties were selling in record numbers at record prices. Unfortunately, the tide changed (as it is prone to do) and by 2009, the vast majority of “investors” that purchased exclusively with capital gains in mind are now crying the blues. It’s not limited to real estate investors; the stock market dropped by over 50 percent at the low while home prices plummeted by a third.

On the other hand, those investors that invested for cash flow are in a much better position since rents have not experienced such a dramatic decline. They are able to sit out the financial storm while collecting a steady stream of earnings each and every month or even purchasing additional properties via short sales at bargain basement prices. Remember, rentals are not the only way to invest for cash flow; flips, lease and even owner finance all present the potential for cash flow but the basic idea is always the same….make sure you buy low enough to generate cash flow and keep a little “buffer” just for emergencies.

So, is there a time to invest exclusively for capital gains without regard to cash? Perhaps. Like any investment, if you have additional money to burn and can afford to support the property during any downturns it is possible to generate major returns. However, always be aware of the inherent risk of a property unable to “pay for itself” while still generating a profit.

The bigger question is why settle for a high risk endeavor when there are so many short sale properties that are able to generate substantial cash flow for the taking? If you are still stuck in the capital gains only mindset try out these quick tips:

1. Crunch the numbers. We have said it time and time again –know the numbers for each and every property. Buy right and selling is simple but even if faced with a delay, the property is able to generate enough cash flow to pay for itself and put a little extra in your pocket for the trouble. Learn to do the math…

2. Use a “worst case” cash flow example and a “best case” cash flow combined with capital gains scenario.

3. Improve or purchase currently owned properties. Not only are there plenty of properties to chose from but labor is less expensive thanks in part to extremely competitive bids among contractors. Increase the earning potential of properties to enhance long term capital gains while continuing to college cash flow.

4. Don’t be afraid to sell. Cash is still king and another important source of cash flow that can be used to finance or expand your present forms of property.

5. Calculate your cash flow from assets independent from “earned income” or work. It is more important than ever not to risk your entire financial future solely upon your job.

By: Chris McLaughlin
http://www.shortsalesriches.com/

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Warren Buffet on real estate

2009-09-18T00:26:00.002-04:00

Warren Buffett says that the economy "hasn't gotten worse" but also hasn't
"gotten much better" over the past three months.  Nonetheless,he doesn't expect
a 'double-dip' recession and sees significant improvement in residential real estate.
Buffett says that based on a number of indicators, including data from Berkshire
Hathaway companies, "we have not bounced -- but we've quit going down."  He also
sees "important" signs of life for housing: "I think we're certainly—we’re through the
worst of it in residential real estate in all probability. And-- and-- and the reason
is we're building a lot fewer houses and we're-- and we're forming households, so that
solves itself over time.  Doesn't do it in a day or a week, but it solves itself.
So we're further on that."

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$8000 tax credit: boon or bust?

2009-09-17T10:00:00.000-04:00

As many as 40 percent of all home buyers this year will qualify for the $8,000 tax credit for first-time home buyers, and it’s on track to cost the government $15 billion, more than twice the amount that was projected when Congress passed the stimulus bill in February. But there’s another problem brewing: can the housing market even function without it? Some Analysts say the credit is directly responsible for several hundred thousand home sales, and the National Association of Realtors wants Congress to expand the program to $15,000 and extend the timeframe at least through next summer.

The price tag on that plan: $50 billion to $100 billion. Skeptics argue that most of the money is going to people who would have bought a home anyway, and that unless it is allowed to expire on schedule in late November, the tax credit is likely to become one more expensive government program that refuses to die. Economists are split on the merits of another round of government help, but as a real estate broker I can say without a doubt that it is one of the few stimulus plans that actually work in getting our economy moving again.

By: Chris McLaughlin

Mortgages down, interest rates up

2009-09-16T17:00:00.001-04:00

The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending September 11, 2009, including an adjustment for the Labor Day holiday. The Market Composite Index, a measure of mortgage loan application volume, decreased 8.6% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 18.3% compared with the previous week and decreased 18.7% compared with the same week one year earlier. The Refinance Index, also adjusted for the holiday, decreased 7.4% from the previous week and the seasonally adjusted Purchase Index decreased 10.3% to from one week earlier.

The survey also measured interest rates: The average contract interest rate for 30-year fixed-rate mortgages increased to 5.08% from 5.02%, with points decreasing to 0.98 from 1.23 (including the origination fee) for 80% loan-to-value (LTV) ratio loans. The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.41% from 4.45%, with points decreasing to 1.12 from 1.13 (including the origination fee) for 80% LTV loans. The average contract interest rate for one-year ARMs decreased to 6.61% from 6.69%, with points increasing to 0.20 from 0.19 (including the origination fee) for 80% LTV loans.

By: Chris McLaughlin

What Difference Does a Few Years Make?

2009-08-14T12:02:00.002-04:00

For those that are young enough not to clearly remember the early 70's a quick trip down memory lane can serve an important purpose...it demonstrates what a difference a few years can make and why it is important to find passive sources of income early in life.

Bill Downey, an expert in commodities, recently published a quick spotlight that focused on prices as of August 15, 1971...just a few days short of 29 years from today.

Average cost of a new house was $25,250 versus $190,000 today (from a high of over $260,000 just two years ago). If you had purchased ten average priced BRAND NEW homes (with a mortgage payment of less than $275 each!), rented them out and allowed the mortgage to cover the expenses, today you would hold nearly $2 million dollars of real estate free and clear...and still be able to collect rents for as long as desired!

Average annual income was $10,600 versus $38,000 today. Notice, earning power has not kept pace with inflation. In fact, experts agree the average worker has lost purchasing power each and every year for nearly 30 years.

Average monthly rent $150 versus $820 today. Of course, rents for brand new homes would have been higher but imagine, even with a "high" mortgage of $275 for each house, you would still generate more monthly income from ten houses than the average employee working full-time...before paying off the mortgages!

Those of you who are older, take just a few minutes to imagine how different your life would be today if you had purchased a few average little homes 29 years ago. If you don't have at least 2 million dollars sitting safely in a retirement account while continuing to generate a monthly income, ask yourself why? On the other hand, those of you who are young should consider this...the United States entered a period of high inflation and rapidly escalating prices in the late 70's and early 80's yet it dwarfs the amount of spending taking place in the past six months of the current economic decline.

Money creation expands the supply of money and eventually leads to inflationary pressures - to date, that has been adjusted and dealt with but experts agree, the amount of new money creation currently in existence is unlike any in the history of the United States. If you make one investment in life then simply allow it to pay for itself, it could easily create a retirement income or source of revenue for you and your children well into the future....even as unemployment and actual wages shrink.

Anyone that had the foresight to invest in real estate during the early 70's would enjoy an additional $5,000 to $6,000 per month while having access to nearly $2 million dollars in their real estate portfolio. Instead, most Americans trusted their hard earned dollars to 401k accounts, savings bonds and other "trusted" sources that have left them high and dry when they needed it most. Here is a simple recipe for success...buy now, allow it to pay for itself and forget you even own it then reap the rewards in your old age. It's a time tested method that has led millions of average Americans just like you down the road to wealth. Consider this...the federal deficit is an estimated 2 Trillion for this year alone...with trillion dollar deficits projected for the next decade!

See you at the top!

Chris McLaughlin
http://www.shortsalesriches.com

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Is There Light At The End Of The Tunnel?

2009-08-13T07:30:00.003-04:00

Is the end of recession is in sight?

According to the Blue Chip Economic Indicators survey of private economists, about 90% of the respondents believe the recession would end by the end of the third quarter of this year. However, economists were not so sure about the speed and timing of economic growth. Recent data from the government shows that economic output contracted at 1% in the second quarter after a drop of 6.4% in the first quarter. "Debate now centers on the speed, strength and durability of the recovery," the survey said.

Over 66% of the respondents said they expect the economy to go through a "U-shaped" recovery, while 17% said the economy would grow for some time only to falter again, before the long-term growth sets in. The second half of 2009 will see some economic growth on account of inventory liquidation, improvement in consumer spending, and investments by individuals. The survey respondents expressed pessimism on employment outlook. About 70% said the jobless rate will not drop below 7% until the second half of 2012 or later.

Bad loans continue to threaten the financial system

A report released by the Congressional Oversight Panel, which monitors the $700 billion bailout of the financial sector, says that toxic loans threaten to de-stabilize the financial sector. "If the economy worsens...then defaults will rise and the troubled assets will continue to deteriorate in value," the report says. "If the losses are severe enough, some financial institutions may be forced to cease operations." The panel, which comprises 5 members, is chaired by Harvard University Professor Elizabeth Warren.

The report says many of the Obama administration's efforts towards ensuring financial stability - such as infusion of new capital for banks, scrutiny of capital ratios, and "stress-testing" of large financial firms - are working. "These steps have ... allowed the banks to take significant losses while building reserves," the panel wrote in the draft report. "Nonetheless, financial stability remains at risk if the underlying problem of toxic assets remains unresolved." The report refers to the dangers faced by small and regional banks which are particularly vulnerable. Regional and smaller banks hold greater numbers of commercial real estate loans, "which pose a potential threat of high defaults." The report says the capital adequacy of small banks to bear losses hasn't been tested by the government.

Vayron Mirabal
A. B. Home Buyers LLC
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