Real Estate Information Archive

So in case you've been living in a cave or as Castaway on a far-away island, you're very aware that the US Housing Market crashed big time in the past few years. There have been many, many arguments over "why" this foreclosure crisis is the way that it is.

Some have blamed Lenders, others Real Estate Agents, many the government, and of course many feel is was just our good old fashioned American "greed" that caused the markets to puff up like the Goodyear Blimp. 

Did banks prey on unwitting consumers, or did households “overreach” and borrow more than they could afford? Economists at the University of Arkansas recently completed a study to answer that very question.

So what did they find? While they do NOT excuse the behavior of banks and other predatory industry idiots, they found that the #1 cause of the foreclosure crisis was that CONSUMERS JUST PLAIN OVER-REACHED in their borrowing. Here is a link to the full report: University of Arkansas Foreclosure Study

I'm not surprised. I happen to know a little bit about consumers since I AM ONE!

What you can AFFORD vs. what you QUALIFY FOR

That is the real question of the day, and the two are very different. Understanding the difference, will make the difference in being a happy, contented homeowner pursuing the American dream, and one who is facing the pains - financial and social, of foreclosure.

Here is a fantastic video clip by one of my favorite Mortgage Professionals in the world, (Blake Bench of First Colony Mortgage), on how to avoid that very same over-reaching. Check it out!

Click on this link:  How Much Can I Qualify For?

Lesson? Know what you can really afford, not just what some online mortgage calculator says you qualify for, then stay within that affordable range on your next home purchase!

Feel free to contact me directly with questions - larkin@gostgeorge.com, or shoot Blake Bench an email: blakeb@firstcolonymortgage.com

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!