Real Estate Information Archive

"Dumbed Down" Transcript:

We're gonna keep this short and sweet, but don't misenterpret the length for poor quality. What I'm about to say regarding your mortgage could save you THOUSANDS:

In a world of uncertainty, 2 things ARE certain:

1. Toy Story 3 premieres this Friday.

2. Many people are getting mortgage refinances even though they have negative equity.

In this week's episode Jeremy Larkin talks about "how" people with no equity, even 2nd mortgages are getting refinances. I know what you are saying - "WHAT? You mean I can refinance my home even if I owe too much on it?"

MAYBE. It depends on if it's a Freddie Mac or Fannie Mae loan. Watch the video to learn more. This has recently come to my attention by way of some precious chat time with my one of my favorite Mortgage Professionals - Blake Bench of First Colony Mortgage.

On the Toy Story note, the Larkin Group has got to rednezvous with Star Command...AND grow their Facebook fan base to 200 members. If we hit that mark by the end of tomorrow, we will be drawing for a $50.00 Toy Story 3 Ticket package!

How do you do this? Just visit our facebook page: http://www.facebook.com/pages/Saint-George-UT/The-Larkin-Group/84042546052  Check the page out. If you like it and feel like we are sharing an important or authentic message, click "like." If you dont' like it? Well then don't - it's your call!

THEN simply click on the "suggest to friends" tab on the left and follow instructions.

Until then, here is a link to Blake's full video report on refinancing your potentially underwater mortgage: Southern Utah Home Loans

The average US citizen looks at NAR (National Association of Realtors) as nothing more than another lobbying group that spends its' days and nights telling buyers that every day is the "right time to buy."

What people (this includes Realtors themselves) don't realize is that they are doing a CRITICAL work for the country in getting legistation passed that benefits us all. So what did they do this time? Nothing besides creating an opportunity for 1st-time home buyers to get $8000.00 of FREE MONEY from the government!

Yes, FREE, so long as you hold the home for at least 3 years. That is pretty easy since I am counseling ALL of my clients to buy for the long-term.

Many thanks to one of my lending partners, Blake Bench of Countrywide Home Loans, for this timely breakdown of how the latest ("latest implying one of MANY bailouts...) multi-GAZILLION dollar (gazillion with a "g") bailout legislation.

This sign is posted on the doors of Congress....

The information is not only timely, but downright critical to not only those of us either working in the industry, or trying to buy or sell real estate right, but the greater populiation at large. Until we get the real estate markets more healthy, there will be major financial pain worldwide.

The only thing most of us hear about the bailout package is that GM and others want taxpayers to pick up the tab on a few million transmissions.....good to know, but not relevant to real estate. Here it is:

• Tax Credit: The tax credit for first time home buyers has gone up from $7,500 to $8,000. I also understand that this new amount doesn't have to be repaid. I have been helping buyers see that they could use this money to repay a gift from a relative. Maybe then they can come up with a down payment. (I wish that they had passed the $15,000 credit for any homebuyer but sometimes when you wish upon a star your dreams don't come true.) I have to add the disclaimer for all buyers to talk to their accountant or tax advisor about this since I am not licensed to give that type of advice.  Here is a breakdown of the tax credit:

Still not making sense? Here is a step-by-step explanation: 2009 Tax Credit Explained

• Help for struggling home owners: Many borrowers from the last few years put nothing down or very little down toward the purchase of their home. With home values now lower many are upside down and can't refinance. New legislation may allow them to refinance with LTV's up to 105% of the homes current value if they have stayed current on their payments. I am going to call all of my database and see if I can help them lower their payments.
• Modifications: Billions of dollars are set aside to help people modify their loans without refinancing. They do not have to have missed payments to qualify for this.
• Keeping Interest Rates Low: Bear in mind that current interest rates are "artificial" in nature and WILL NOT stay this low for ever. (This subject merits its' own discussion) These "artificial" rates are part of the government's plan to "prop up" the ailing economy. Treasury and Federal Reserve will continue to purchase Fannie Mae and Freddie Mac mortgage-backed securities to ensure stability and liquidity. The Treasury will also provide up to $200 billion in capital to ensure that Fannie Mae and Freddie Mac can continue to stabilize markets and hold mortgage rates down

Departing from Blake's starter course on the bailout, let me add the following advice: Make sure you completely understand the rules, regulations and consequences (good and bad) of things like tax credits and local "grants" for home buyers.

In the meantime, chime in with any key information or ideas you have on this bailout business!

Am I the only person who has been asking this: "What in the world does this $700 billion bailout MEAN?!?!?"

I have been patiently waiting for some kind of summary that actually makes sense (and that a lowly Realtor can understand) on this $700 Billion bailout deal. The National Association of Realtors released a fairly concise (2 pages) summary this morning which can be found at the link below:

(click here) Summary of Rescue Bill 

I am not even going to TRY to explain it all in this post, but I would be more than happy to discuss it in the comments area below, or by phone.

I think the real key idea for the real estate world is that the bill had provisions for the Government to buy "troubled" loans from the banks, which would in turn give the banks short term cash to #1 - stay in business so Buyer can #2 - continue to get loans. 

The Government would, in turn, be able to not only renegotiate interest rates with troubled borrowers, but potentially LOWER their princpal balances based on current market values. That is a bizarre thought, isn't it?

SOME IMPORTANT QUESTIONS:

1. Should troubled homeowners be able to get loan balances lowered while those who aren't in trouble don't? What do you think?

2. Is all this stalling just so McCain & Obama can avoid looking like idiots if the bill fails and they are elected President?

3. Does Nancy Pelosi just generally tick you off every  time she opens her mouth, or does she bring back warm memories of your childhood when your mother scolded you for using a cuss word?

What I do know is this: I SHUDDER to think of a world where credit was no longer available. At first I was prone to only think of home loans and credit cards, but now I realize that this would extend to student loans and more...YIKES! 

AT THE SAME TIME, we continue to see Buyers obtain financing for home purchases without jumping through (in my perspective) too many proverbial hoops, so it is hard for me to really believe that credit is on the brink of totally drying up.

Stay tuned......