Jerry's shared items in Google Reader

Ready for the Electric Car Era?

2009-02-16T16:37:15Z

With new technologies and Uncle Sam’s incentives, battery-powered autos are getting cheaper and easier to find in U.S. market.

A Slew of Tax Easings Is on the Way

2009-02-16T16:36:56Z

Obama's tax breaks and a lot more easings are on the way to enactment.

Stimulus Package Helps, But Recession Won't End in '09

2009-02-16T16:36:52Z

Government's multipronged effort will take time to heal economy's ills.

Is your Mortgage “Expert” Keeping up with Industry Changes?

2009-01-25T00:53:00Z

Changes in mortgage guidelines are occurring at a record pace. Many in the industry are not keeping up, causing painful lessons for consumers.

BLOOMFIELD, MI – Most consumers have come to believe all that matters in getting a mortgage is shopping for the lowest rate & closing costs. Every lender is the same, their expertise & experience mean nothing.

Sadly, this past week three homebuyers found out differently, the hard way.

They all had the same story – after being pre-approved by their lender, they had found a house, signed a purchase contract, applied for a mortgage with their lender, and halfway through the transaction, had their mortgage application rejected.

Each lender also had the same story - they claimed a recent change in mortgage guidelines was the reason for their rejection.

I got involved as they were each referred to me, to somehow save their transactions.

The sad fact was that in each case, the guideline change the lender blamed had actually occurred months ago, not recently, and I could do nothing for their transactions. I did email them proof that the guideline changes had occurred months before and recommended they confront their lenders for a return of their application fees.

Why do these things happen? Don’t all lenders follow the same guidelines? Isn’t getting a mortgage the same everywhere?

From early 2002 until April, 2007 getting a mortgage was very easy as mortgage guidelines were extremely loose. Many lenders joked that if a consumer had a pulse, they could get them a mortgage. People of all backgrounds, with no experience, jumped into the mortgage business for the easy money.

Then the Mortgage Meltdown hit, followed by the Real Estate Bubble popping, the Credit Crunch and the Recession we’re in now.

Today, mortgage guidelines are very different than they were April, 2007. Subprime, Zero Down, No Doc, Stated Income, Option ARM, are all gone along with loose mortgage guidelines.

Many mortgage people that got into the business after 2001 are struggling to adjust to the new lending environment. They’re used to just asking questions about FICO scores, income and assets. They don’t know how to ANALYZE a transaction to even ask the right questions to avoid nasty surprises, much less keep up on industry guideline changes.

Many of them claim to be experts by citing their time in the business, number of completed transactions or their ability to deliver the “best” price. I don’t see how any of that type of “expertise” helped the three homebuyers who got rejected this past week and had their home purchase dreams shattered.

Michigan passed a law April, 2008 requiring all loan originators (except those at federally charted banks) to pass a test by April 1, 2009. The test is heavily weighted with questions on federal & state lending regulations and underwriting guidelines. Many are failing it or are avoiding taking it until the last possible moment.

So, if you’re looking for a mortgage to buy a home or refinance, maybe you should be searching for more than just the lowest rate and fees. Maybe you should be asking loan originators what their credentials are and for proof they’ve passed the state test.

FNMA Wears Flip-Flops! Recants Two Earlier Guideline Changes

2009-02-14T21:11:00Z

Lending is loosening at the top as FNMA tries to put a floor under the housing market

BLOOMFIELD, MI – Happy Valentines Day to Hallmark. Retail sales should have a tiny spike as many Americans will be buying cards, candy and dinners today.

Last week, FNMA announced two changes to their guidelines – they announced appraisal waivers are back and the raising of their limit on the number of mortgages from 4 back to 10.

What’s interesting is that FNMA is just recanting earlier changes they made meant to reduce risk on the mortgages it buys.

Both of these changes are designed to put a bottom under the housing market, but in two different ways.

Appraisal Waivers
The announcement about bringing back appraisal waivers, is meant to allow homeowners a better chance of refinancing to lower their interest rate & payment. Lower payments it is hoped, will lead to fewer foreclosures. Fewer foreclosures will mean a smaller supply of houses on the market, which should eventually stabilize housing values.

As part of the Automated Underwriting System (AUS) process, an Automated Valuation Model (AVM), similar to Zillow, will be accesses to determine a value. No cashout will be allowed, but borrowers will be allowed to roll in closing costs and prepaid escrow amounts.

The only question is how much variance will FNMA allow, between the AVM value and the stated value input in the system? It makes no sense to worry about the AVM value at all. FNMA already holds the mortgage and if the homeowner’s payment is being lowered, it just increases the likelihood of on-time mortgage payments.

I think we’ll see some more changes on this in the near future.

Limitation on Number of Mortgages held by a Borrower
Previously, FNMA had lowered the number of mortgages it would allow a borrower to have from 10 to 4.

With this announcement raising the limit back to 10, FNMA has acknowledged that real estate investors will be needed to absorb some of the supply of houses on the market.

All the families being foreclosed on can’t get another mortgage for at least three years due to credit damage. Real estate investors are now being encouraged to buy more houses to rent to these families. Many of these investors will eventually sell many of these houses to the families renting them.

The requirements are tougher than they used to be, but this is great news for those with a desire to move some of their money out of the anemic stock market and diversify into real estate. Also, anything that lowers the supply of houses will stop the fall in housing values.

The best news about all this is that lending is starting to loosen. Not due to bailout funds, but due to common sense. Let’s hope that trend continues.

Three Health Insurance Mistakes to Avoid

2009-02-01T14:07:34Z

Don't pay more than you have to if you have a high-deductible plan and health savings account.

Who Uses Social Networks?

2009-02-01T14:07:32Z

Companies may change their social network marketing tactics if they better understand who is out there. Did you know adults make up a majority of users?

Career Trends for 2009

2009-02-01T14:07:28Z

As layoffs soar, some industries are poised to add more jobs.

Is This the Next Incredible Buying Opportunity?

2009-01-31T13:00:38Z

This reliable guide is in plain sight.

This Is Why Buffett's Buying Stocks

2009-01-31T13:00:54Z

They're cheap. Enough said.

The Greatest Buying Opportunity of our Lifetimes?

2009-01-31T17:59:00Z

A record drop in home prices combined with record low mortgage rates, may result in 2009 being the best time to buy a home since the Great Depression.

BLOOMFIELD, MI – With record drops in home prices (from their peaks) combined with record low interest rates, 2009 may go down in history as the best time to buy real estate in our lifetimes.

Of course, many real estate agents ALWAYS say it’s a great time to buy real estate as their income depends on selling homes. But, The Housing Affordability Index (HAI) chart here supports their claims this time. It shows that nationally, this is the best time to buy a home since 1971, when this data started being tracked. The index takes into account housing prices, mortgage rates and wage income to determine affordability for first time buyers with no home to sell.

The experts who publish the Case-Shiller Index are predicting that housing prices will continue to fall in 2009. So many home buyers may be tempted to wait until housing prices bottom out before buying.

Two challenges with that line of thinking:

1.) Wages are expected to also fall due to rising unemployment. As more and more workers are laid off, people will compete for the fewer remaining jobs, allowing employers to lower wages. Mortgage rates will also increase at some point in response to all the bailout money the government is spending. Both of these factors work against the benefits of falling housing prices. So, there’s no way to predict where the index will go in the future.
2.) Timing the bottom of the housing market is almost impossible. Did you know when the housing market peaked? None of the experts did. So, it’s safe to assume no one’s going to be able to predict the bottom of the market until AFTER it’s rebounded.

So, what should a potential home buyer do?

The best advice I can give a buyer is to make sure YOU know your budget and don’t spend every penny of savings to get into a home. Then forget about timing the market and go buy a home. Just be careful.

I’m always amazed that buyers come to me and are perfectly willing to let ME to tell them what THEY can AFFORD! Folks, you should know your budget way BETTER than me! All I, or any mortgage person, can do is tell you the MAXIMUM amount of trouble we can get you into. The industry methods of determining your maximum amount, don’t even take into account how many children you have! It’s common sense the more children you have the tighter your budget. Homebuyers should determine a maximum monthly housing payment (including property taxes & insurance) their budget can comfortably support, BEFORE talking to a mortgage person. If you feel you need help determining a solid budget, there are plenty of nonprofit organizations waiting to help you.

With the uncertain job markets, the lending industry is requiring more homebuyers to have emergency reserves to qualify for a mortgage. Again, some common sense is needed here. Buying a home and living paycheck-to-paycheck is a recipe for disaster! Unexpected things go wrong with homes all the time and cost money to fix. If you buy a foreclosed home, you buy it as-is. The greatest home inspector in the world can’t catch everything, nor should they be expected to. Likewise, the best home warranty won’t cover everything. So make sure you have some savings to fall back on if something breaks or if there’s a job layoff.

Nothing’s sadder in real estate than to see a foreclosed property get foreclosed on again.

Today’s real estate market offers great opportunities. Homebuyers need to hire the best qualified real estate agent and mortgage professional they can find, to help them minimize their chances of becoming another foreclosure statistic and instead, properly take advantage of the chance of a lifetime.

Hold Off on Your IRA Distribution

2008-12-19T04:51:47Z

Don't take your required payout yet because the government might change the rules for 2008.

University of Michigan to buy former Pfizer Inc. site

2008-12-18T17:16:00Z

The University of Michigan will buy the 2 million-square-foot former Pfizer Inc. campus in Ann Arbor for $108 million, said Jesse Bernstein, president of the Ann Arbor Chamber of Commerce.

Conference committee fails to vote on health insurance bills

2008-12-18T18:59:00Z

The Michigan House-Senate Conference Committee charged with negotiating a compromise set of bills to address problems within the individual health insurance market scheduled a meeting at 9 a.m. Thursday and recessed it without taking a vote.

How Recessions Work

2010-05-23T14:00:00Z

What goes up must come down: Periodic recessions are a natural part of any nation's economic cycle. Who decides when the economy is in recession and on what grounds?

Health Tip: Warning Signs for Ovarian Cancer (HealthDay)

2008-12-06T04:47:47Z

HealthDay - (HealthDay News) -- The symptoms of ovarian cancer -- a form of cancer that's often life-threatening -- can mimic symptoms of other conditions. So it's best to have them evaluated by a doctor.

Macomb County slashes spending to make up for deficit

2008-12-12T04:31:00Z

Wage freezes for non-union workers, ongoing employee attrition and possible union contract concessions of up to $10 million are on the table for the Macomb County Commission seeks to eliminate the last $20 million deficit in its 2009 budget.

Big 3 bailout talks collapse over union wages

2008-12-12T04:07:00Z

A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

Auto suppliers join hearings for auto industry aid

2008-11-17T21:32:00Z

Auto supplier leaders will join the Detroit 3 chiefs in Washington, D.C. this week to push for emergency federal aid to the automotive industry.

Auto-aid plan prospects dim in partisan stalemate

2008-11-17T20:18:00Z

Prospects dimmed Monday for enactment of a $25 billion bailout for the faltering auto industry before year's end, as congressional Democrats and the Bush administration headed for a stalemate over the plan.