December 29, 2008

More Perfect Unions

More Perfect Unions

Brokerage firms weigh the benefits of acquisitions and contractions

By Marcie Geffner

It’s no secret that a sharp decline in home sales has triggered a wave of consolidation that has swept through California’s real estate brokerage companies. With statewide sales at just 366,720 in April, there simply isn’t enough demand to keep nearly 175,000 REALTORS® busy.

The closure of realty companies and offices may sound like more bad news for an industry that’s already under siege, but consolidation isn’t all bad. Some practitioners have greeted an office closure as an incentive to reinvent their business.

Chuck Knapp, owner and general manager of Century 21 Desert Rock in Hesperia, is a case in point. The firm, which has 55 full-time agents, closed one of its three offices in February. The office was closed because the outlying locale hadn’t experienced the sales growth Knapp and his wife, broker/owner Hanna Knapp, had expected three years earlier.

Read the rest of this story: http://www.car.org/newsstand/crem/forbrokersandmanagers2/march2008/moreperfectunions/

Borrowers look for mortgage modification

By Marcie Geffner • Bankrate.com

Homeowners who can't afford their mortgage payments can get a better deal from their lender. But the process is complicated and potentially onerous, and concessions are offered only to borrowers who earn neither too much nor too little income to meet the lender's guidelines.

"If they can afford to pay, they should pay. If they can't afford to pay, we need to make sure they have a fighting chance to make the new payments and pay back the loan over the long term," says Thomas Kelly, a spokesman for J.P. Morgan Chase, which also owns the Washington Mutual, or WaMu, and EMC brands.

Payment must be affordable, but also pay off loan

An "affordable" payment typically is defined as a targeted percentage of the borrower's monthly gross income. Thirty-eight percent is common, though some lenders use a lower or higher figure, usually between 31 percent and 41 percent. The new payment must be sufficient to pay off the loan, sometimes with the term extended to 40 years or some of the principal deferred until the loan is refinanced or the home is sold.

Read the rest of this story: http://www.bankrate.com/brm/news/mtg/20081211-getting-mortgage-modification-a1.asp?prodtype=mtg

Death by a thousand price cuts

By Marcie Geffner • Bankrate.com

It's the worst-case scenario for home sellers: To endure price cut after price cut until their houses become stigmatized and hungry buyers smell blood. But how can you avoid this unpleasant scenario in today's troubled housing markets? The answer, experts suggest, is to put your home on the market at the right price, and if it doesn't sell quickly, cut the price deep and fast, so you won't be caught in a downward spiral of price reductions.

Not surprisingly, few sellers want to hear that advice. They'd rather price their homes aggressively and then hope buyers will take the bait. But testing the market simply isn't a good strategy with home prices depressed, sales at a slower pace in many markets and buyers on the hunt for good deals, says Mark Reitman, Chicago sales manager for real estate brokerage Redfin in Schaumburg, Ill.

Buyers today are "looking at every aspect in so much more detail and trying to find out how they can get a lower price," he says.

Read the rest of this story: http://www.bankrate.com/brm/news/mtg/20081211-getting-mortgage-modification-a1.asp?prodtype=mtg

Mortgage rates near record lows

Low mortgage rates entice home buyers and spur refinancing.

By Marcie Geffner - LendingTree.com

It's true: Interest rates on home loans have fallen to new lows for this year. In fact, rates have declined so dramatically that many homeowners are taking advantage of the opportunity to lock in a low fixed rate on a new mortgage.

“Today’s rates are some of the best we’ve seen all year, so for those borrowers looking to purchase a home or refinance a mortgage, now is the time to take action,” says LendingTree Chief Economist Cameron Findlay.

Rates have dropped largely due to the federal government's latest billion-dollar initiatives to support small-business and consumer lending. The government's programs were intended to lower the cost and increase the availability of home mortgages. So far, they appeared to have worked brilliantly, at least as far as mortgage interest rates are concerned.

Treasury Secretary Henry Paulson, who announced the government's initiatives last week, said in a statement that nothing was more important to a housing recovery than the availability of home loans.

How you can benefit from low mortgage rates

Low mortgage rates can benefit both home buyers and homeowners, especially if they have at least moderately good credit and a small down payment or some equity in their home.

● Home buyers can take advantage of low mortgage rates to qualify for a mortgage, make lower monthly payments or borrow more money.

● Homeowners who refinance can lower their monthly payments or trade out of an adjustable-rate mortgage (ARM) into a loan with a fixed rate. Rates on 30-year fixed-rate loans have fallen as low as 5.5 percent for some borrowers.

“For those who have an adjustable-rate mortgage and a reset in the near future, now would be a great time to lock in a fixed-rate loan. Peace of mind and lower monthly payments should be great incentives to help these borrowers make the switch and find a loan they can afford," Findlay explains.

Interest rates change daily and it's impossible to predict how long today's low rates may last. That means borrowers who've waited to buy a home or refinance might not want to wait any longer.

“Last week's drop in rates is proving to be a great opportunity for consumers who were on the fence,” says Findlay. “Shop around and make sure you do your homework. If you are a borrower in good standing who wants to refinance, the ball's in your court.”

© 2008 LendingTree, LLC. This story, "Mortgage rates near record lows," is reprinted by the author with written permission of LendingTree, LLC.

New program streamlines mortgage modifications

New mortgage modification program offers a faster, simpler way for homeowners to get more affordable mortgage payments.

By Marcie Geffner - LendingTree.com

The federal government has introduced a new mortgage modification program to simplify and streamline the process of modifying some homeowners’ mortgages so they will be able to afford their monthly mortgage payments.

The new program is "a bold attempt to move quickly in defining a nationwide program that can quickly and easily reach many of these troubled borrowers, thereby stabilizing those families and the communities and neighborhoods in which they live," said James B. Lockhart, director of the Federal Housing Finance Agency (FHFA), a regulatory arm of the federal government, in Washington, D.C.

This new mortgage modification program might be a good fit for you if:

● your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac;

● you’ve missed at least three mortgage payments;

● your home is your primary residence;

● you haven't filed for bankruptcy;

● you've experienced a hardship or change in your financial circumstances; and

● you want to keep your home.

The streamlined mortgage modification program uses a simplified "fast-track" method to modify your mortgage so your monthly payments won't be more than 38 percent of your gross monthly income. Your payment could be reduced by lowering your interest rate, lengthening the term of your loan or deferring payment of interest or part of your loan balance. The total amount that you owe on your mortgage won't be reduced through this modification program.

You don't need to have a high credit score or equity in your home to qualify for the streamlined mortgage modification program.

To find out whether this mortgage modification program will fit your situation, call your loan servicer and be prepared to provide information about your monthly income. The telephone number for your loan servicer should be on your monthly mortgage statement.

If the streamlined mortgage modification program doesn't fit your situation, your loan servicer may try to find another way to make your mortgage payments more affordable for you through a customized process.

The program was put together by Fannie Mae, Freddie Mac, Hope Now, the U.S. Treasury, the Federal Housing Administration, the FHFA and a group of loan servicers. Guidelines for servicers to implement the program are expected to be available by Dec. 15, 2008.

© 2008 LendingTree, LLC. This story, "New program streamlines mortgage modifications," is reprinted by the author with written permission of LendingTree, LLC.

Avoiding negative equity

By Marcie Geffner - LendingTree.com

If you're thinking about buying a home, you may be concerned about the prospect of negative equity.

Also referred to as being "underwater" or "upside-down," negative equity occurs when you owe more on your mortgage than your home is worth. While this situation isn't desirable, there are strategies you can use to try to avoid it when you buy a home.

Technically, negative equity is when your loan balance is more than the current value of your home. For example, if you owed $130,000 on your mortgage, but your home was worth only $120,000, you would owe $10,000 more than your home's value. That $10,000 would be negative equity.

Negative equity isn't new. On the contrary, housing markets and home prices historically have been cyclical over long periods of time, and homeowners collectively have experienced negative equity throughout these cycles. When house prices rise, equity naturally expands; and when house prices fall, equity naturally shrinks. That's the nature of housing markets, and given that nature, temporary dips in equity can be expected to occur.

Negative equity has been more common in the current housing cycle because many people bought their home with a small or zero down payment or an interest-only or payment-option mortgage. In fact, more than 7.5 million U.S. homeowners were underwater on their mortgage and another 2.1 million had less than 5 percent equity in their home at the end of September 2008, according to a study by First American Corelogic, a real estate research firm.

Negative equity, or being underwater on your mortgage is a potentially dangerous financial situation because you may have greater difficulty refinancing your mortgage or selling your home.

Yet there are strategies that can help you maximize your equity and make it more likely that you’ll be able to avoid being underwater on your mortgage.

Here are five strategies to consider when buying a home:

● Shop for a home that's a good value for your area, so you'll be less likely to end up underwater if home values fall further.

● Make a hefty down payment, so you'll be starting out as a homeowner with an equity cushion in case home prices fall.

● Choose a traditional fixed-rate or adjustable-rate mortgage, so you'll be adding to your equity every time you make your monthly mortgage payment.

● If you opt for an interest-only or payment-option loan, pay more than the minimum payment each month, so you might be able to build some equity over time and avoid having negative equity.

● Take a long-term view of homeownership. The longer you plan to own your home, the better positioned you'll be to ride out any dips in home values and the possibility of having negative equity.

© 2008 LendingTree, LLC. This story, "Avoiding negative equity," is reprinted by the author with written permission of LendingTree.

November 13, 2008

Housing hints for President-elect Obama

By Marcie Geffner, INMAN NEWS
Wednesday, November 12, 2008

Dear President-elect Obama,

Strong housing markets and financially stable homeowners are crucial to the well-being of the U.S. economy. With that in mind, I hope you'll support policies that will strengthen the nation's housing markets and polish off the tarnish that clings to homeownership today.

Here are nine suggestions:

1. Create jobs. There is a plain and direct connection between employment and healthy housing markets. People who feel secure about their financial situation can form new households, get married, have children, buy homes and rent apartments. People who are out of work lose their homes and are forced to bunk in with their families and friends. The creation of more good high-paying jobs is the best way to strength the housing markets and national economy.

Read the rest of this story: http://www.inman.com/buyers-sellers/columnists/marciegeffner/housing-hints-president-elect-obama

Government offers Hope for Homeowners

New loan program allows homeowners to refinance mortgages
By Marcie Geffner - LendingTree.com
November 2, 2008

The federal government has introduced a new mortgage program for homeowners who are having difficulty making their mortgage payments. The program, called “Hope for Homeowners,” is another option for struggling homeowners who want to refinance their mortgage into a fixed-rate loan that they can afford.

The Hope for Homeowners program might be a good choice for you if:

● Your home is your primary and only residence.
● You don't own any other residential property.
● You obtained your mortgage on or before Jan. 1, 2008.
● You've made at least six payments on your mortgage.
● You're financially unable to make any future mortgage payments without help.
● As of March 2008, your monthly mortgage payment (including principal, interest, property taxes and homeowner's insurance) was more than 31 percent of your monthly income.

If you qualified for the Hope for Homeowners program, your original mortgage would be refinanced into a new 30-year fixed-rate mortgage with an interest rate that would be negotiated between you and your new lender. The maximum amount of your new loan would be $550,440.

A key advantage of the Hope for Homeowners program is that your current lender must waive any prepayment penalties and late payment fees that you owe and forgive a portion of your existing mortgage.

For example, suppose your home were worth $100,000, but you owed $120,000 on your mortgage. Through the Hope for Homeowners program, you could get a new mortgage for $90,000, mortgage payments that you could afford and 10 percent equity in your property. Your current lender would write off the additional $30,000 that you owed.

There are a few tradeoffs: Your new loan would require mortgage insurance. You would have to share your initial equity and any future appreciation in your home's value with the government, which might give part of that amount back to your original lender to make up for the loss on your loan. And you wouldn't be allowed to take out a second mortgage for at least five years, except for necessary repairs to your home.

To get started, you can call your lender or loan servicer, contact a new lender of your choice that's approved by the Federal Housing Administration (FHA) or ask a housing counselor to help you work through the process. You can find a list of FHA-approved lenders at www.fha.gov, and you can find out more about the Hope for Homeowners program at www.hud.gov/hopeforhomeowners.

© 2008 LendingTree, LLC. This story, "Government offers Hope for Homeowners," is reprinted by the author with written permission of LendingTree, LLC.

Buyers rule autumn housing markets

By Marcie Geffner, Cyberhomes Contributor
November 04, 2008

No one likes to negotiate from a position of weakness. Yet that’s the challenge most home sellers faced in U.S. housing markets in September: More homes were for sale, prices were lower and homes remained on the market for months at a stretch before they were sold.

Yet just as one condo owner’s ceiling is another condo owner’s floor, those same market conditions added up to good news for home buyers. Competition, pricing pressure and delay worked in their favor.

Read the rest of this story: http://www.cyberhomes.com/content/news/08-11-04/Buyers_rule_autumn_housing_markets?ReturnURL=%2fcontent%2fnews%2f

Unemployment could knock out housing

By Marcie Geffner, Tuesday, October 28, 2008

First, subprime mortgages exploded and home prices crashed. Then, the financial markets fell apart. Will unemployment be the proverbial next shoe to drop on the already weakened U.S. housing markets? If so, the implications for real estate will be profound indeed.

Historically, employment and home sales have been inextricably linked: People who had good jobs with steady paychecks bought homes while people whose income wasn't reliable weren't given home loans. Strong employment was a good indicator of future home sales while rising unemployment was an equally sure sign of fewer home sales on the horizon.

Read the rest of this story: http://www.inman.com/buyers-sellers/columnists/marciegeffner/unemployment-could-knock-out-housing

October 10, 2008

States offer foreclosure rescue loans

By Marcie Geffner • Bankrate.com

Homeowners who need to refinance a burdensome mortgage may be heartened to hear that more U.S. states may soon offer home loan refinancing programs similar to those already available from the federal government and at least nine states. The existing programs are limited in scope, but do give some homeowners another option to avoid foreclosure.

So far, Connecticut, Delaware, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio and Pennsylvania have set up refinancing programs, according to "Defaulting on the Dream: States Respond to America's Foreclosure Crisis," a study published by the Pew Center on the States, a research organization in Washington, D.C. Collectively, these states have committed at least $450 million to help homeowners refinance loans they couldn't afford or take out short-term emergency loans to tide themselves over during temporary financial difficulties.

Read the rest of this story: http://www.bankrate.com/brm/news/mtg/20081002-state-foreclosure-loans-a1.asp?prodtype=mtg

U.S. government may buy mortgages

Proposed bailout plan intended to protect economy.

By Marcie Geffner - LendingTree.com September 24, 2008

Top officials in the federal government have been working on a new plan to strengthen the country's financial system.

The plan would allow the U.S. government to buy mortgage-backed securities and other assets from banks and financial institutions. The U.S. Treasury would then be able to sell those assets or keep them as investments. The goal of the bailout plan is to protect the nation's economy.

Treasury Secretary Henry M. Paulson, Federal Reserve Chairman Ben Bernanke and members of Congress have been working on the plan this week. The plan needs approval from Congress and the President's signature to go forward.

The plan would be cheaper than other alternatives and would "fundamentally and comprehensively" address the root causes of the stress in the financial system, Paulson explained in a statement.

“When the financial system works as it should, money and capital flow to and from households and businesses to pay for home loans, school loans and investments that create jobs,” he said.

What the plan means for borrowers
The plan isn't designed to bolster home prices or help homeowners who can't afford their mortgage payments. Rather, it’s intended to unfreeze the financial sector, which could indirectly strengthen the housing markets over time. If that happened, homeowners would benefit.

The plan also could affect interest rates that borrowers pay on mortgages and other consumer loans, but right now it's difficult to predict what the effect on interest rates will be. The government's purchases of mortgages and other financial assets might make interest rates lower. But the government will need to borrow a lot of money to put the plan into effect, and that could push interest rates higher.

Given that uncertainty, borrowers should focus on their own personal financial situation.

As always, it’s important to:

● Educate yourself about loans and loan products.
● Figure out how much you can afford to borrow.
● Consider your own short- and long-term goals.
● Shop around for a loan that meets your needs.
● Read your loan documents before you sign them.

© 2008 LendingTree, LLC. This story, "U.S. Government May Buy Mortgages," is reprinted by the author with written permission of LendingTree, LLC.

The state of foreclosure prevention

BY MARCIE GEFFNER, THURSDAY, OCTOBER 9, 2008.
Inman News

Homeowners who can't afford their mortgage payments may not find much in the way of rescue or relief in the U.S. government's $700 billion bailout of the financial markets.

But while the feds have fearfully sat on their hands and watched a severe credit crunch turn into a major crisis, a number of states have introduced their own foreclosure prevention programs, as detailed in "Defaulting on the Dream: States Respond to America's Foreclosure Crisis," a report by the Washington, D.C.-based Pew Center on the States.

"The jury is still out about whether and to what extent (these approaches) will be effective. Still, several states among those hardest hit by foreclosures also have been among the most assertive in trying to address the problem," the Pew study stated.

Read the rest of this story: http://www.inman.com/buyers-sellers/columnists/marciegeffner/the-state-foreclosure-prevention

Better credit can save cash

Improving your credit - and paying your bills on time - can save you money.

By Marcie Geffner - LendingTree.com

Want to save an easy $105 this year? If you’re an average consumer, that’s how much you could cut your annual finance charges if you improved your credit score by just 30 points, according to a new survey released by the Consumer Federation of America (CFA) and Washington Mutual Bank.

Boosting your credit score by a mere 30 out of several hundred points might be much easier than you’d think it would be. According to the survey, these five strategies may be among your easiest opportunities for improvement:

● Pay all of your bills on time and in full every month.

● Don’t max out, or get close to maxing out, the limits on your credit cards or revolving credit accounts.

● Pay off your debts, rather than transferring your balances from one account to another.

● Don’t open multiple new credit accounts all at one time or in rapid succession.

● Check your credit report annually and take action to correct any mistakes that might have been made.

The survey also found that in some ways consumers have become better-informed about credit scores in recent years. But in other ways, consumers still harbor misconceptions and misunderstandings.

With that in mind, here are a few important points to remember:

● Your credit score is based on your history of using credit and paying your debts. Your personal characteristics such as your income, age, marital status, home state, education or ethnicity have no effect on your credit history or credit score.

● You can improve your credit score by using credit responsibly. For example, your credit score can increase if you pay off a large credit-card balance, but decrease if you make a late payment on a credit-card or max out your limit on a credit-card.

● You’re legally entitled to a free look at your credit report (but not your credit score) once each year. If you also want to find out your score, you’ll have to pay a small fee. An exception occurs if you’ve been turned down for a mortgage loan or credit-card. In that case, you’re entitled to a free credit score as well.

The bottom line is that the more you know about credit, the better prepared you’ll be to use credit wisely--and that can be easier on your wallet.

© 2008 LendingTree, LLC. This story, "Better credit can save cash," is reprinted by the author with written permission of LendingTree, LLC.

September 23, 2008

First-time home buyer tax credit not what it seems

By Marcie Geffner - Bankrate.com

If you're planning to buy a home in the next 10 months, you may be eager to take advantage of the federal government's latest effort to jump-start the nation's moribund housing markets: A tax credit of up to $7,500 for certain home buyers.

The credit may appear to be an attractive opportunity, but you should be sure you read the fine print before you elect to claim it on your federal tax return.

"The big story is that it is not a credit. It is a loan, and you are going to have to pay it back, so you'd better make sure that you have the money," says John W. Roth, senior tax analyst at CCH Group, a Riverwoods, Ill.-based company that provides tax software, services and information.

Read the rest of this story: http://www.bankrate.com/brm/news/mtg/20080918-homebuyer-tax-credit-a1.asp?prodtype=mtg

Same-sex couples denied property tax perks

By Marcie Geffner - Bankrate.com

Most married couples take their special tax benefits as property owners for granted. But gay and lesbian couples who tie the knot in California or Massachusetts may not be able to take full advantage of certain property-related tax breaks because federal law doesn't recognize their marriages.

California and Massachusetts now consider so-called "same-sex" marriages to be equivalent to traditional, now so-called "opposite sex," marriages. However, federal agencies, such as the Internal Revenue Service, must take their cue from the 1996 Defense of Marriage Act, or DOMA, according to John W. Roth, a senior tax analyst with tax-software provider CHH Group. DOMA stipulates that only a marriage between a man and a woman is valid in the U.S.

Read the rest of this story: http://www.bankrate.com/brm/news/mtg/20080904-same-sex-marriages-a1.asp?prodtype=mtg

What appraisers really do

Home buyers, sellers may be surprised to find out the truth about the appraiser’s loyalty

By Marcie Geffner, Cyberhomes Contributor

An appraiser is one of the most important people in a home-buying transaction. Yet few home buyers or sellers understand the facts about who appraisers are or what they do.

The most common misperception is that the appraiser represents the home buyer. That mistaken idea is understandable since the buyer typically pays for the appraisal. But in fact, appraisers are hired by lenders, and appraisals typically are done not to make sure the buyer doesn’t overpay for the home, but to assure the lender that the home won’t be mortgaged for more than a certain percentage of its value.

“Home buyers generally are not my clientele, and that’s the case with most appraisers,” explains Sara Goodwin, a certified real estate appraiser with Ashcroft & Associates, an appraisal firm in Vancouver, Wash. “For the majority of appraisers, lenders are the clients.”

Read the rest of this story: http://www.cyberhomes.com/readingroom.aspx?article=homeappraisal

Copyright 2008. Marcie Geffner. All rights reserved.

September 3, 2008

McCain keeps hands off housing

Perspective: Candidate advocates market transparency, accountability
By Marcie Geffner, Inman News

Real estate professionals who turn to John McCain's Web site for information about his housing policy may be disappointed to discover there's not much there to examine. But the omission of specific plans and programs may be less of an oversight on the candidate's part and more of a statement in and of itself as to his views.

The presumptive Republican nominee in this year's presidential election has spoken out about the housing crisis and established parameters for the steps he believes the federal government should and shouldn't take in response. He's also announced one specific housing program that he'd try to enact if elected.

McCain addressed the "devastating impact" of the housing crisis on U.S. financial markets and household budgets in a March 27 statement that recapped a day-earlier speech on the crisis. The candidate acknowledged a responsibility to help "deserving" homeowners who were in danger of losing their home and expressed his commitment to consider "any and all proposals" that would accomplish that goal. But he also emphasized that any government intervention should be limited in scope and aim to prevent a recurrence of the crisis.
Read the rest of this story:
http://www.inman.com/buyers-sellers/columnists/marciegeffner/mccain-keeps-hands-housing

Obama's housing plan is long on rhetoric

Perspective: Candidate proposes $10 billion to aid foreclosure victims

By Marcie Geffner, Inman News

As Democratic delegates and power brokers prepare in Denver, Colo., for the political party's presidential convention that begins tonight, real estate and mortgage professionals and homeowners may be curious about likely nominee Barack Obama's housing proposals.

The candidate's three-page housing policy statement doesn't say how many houses Obama owns (one), but offers plenty of speculation about the causes of the housing crisis, tons of rhetoric about the value of home ownership and a broad overview of the programs he supports. The statement offers some general insights into Obama's perspective on housing, but includes hardly any meaningful details about how his plans would be implemented.

Dubbed "Protecting Homeownership and Cracking Down on Mortgage Fraud," the plan aims to "crack down on fraudulent brokers and lenders," "make sure home buyers have honest and complete information about their mortgage options" and expand a tax credit for all "middle-class homeowners," according to the candidate's Web site.

Read the rest of this story:
http://www.inman.com/buyers-sellers/columnists/marciegeffner/obamas-housing-plan-long-rhetoric

Housing Bill To Aid Homeowners, Home Buyers

By Marcie Geffner - LendingTree.com

The federal government is poised to enact a major housing bill that aims to assist first-time home buyers, homeowners who need to refinance their mortgage and an assortment of housing-related companies.

The House of Representatives has already passed the 694-page bill, which is now being heard in the Senate. President Bush has said he will sign the bill, which could be on his desk within a few days.

The details won't be official until the ink dries on the President's signature, but here's a summary of several key points:

FHA refinancing program
A new FHA loan program would be established to help struggling homeowners refinance their mortgage with a new 30-year, fixed-rate FHA loan.

To qualify, the homeowner must:

-- have an existing mortgage originated before Jan. 1, 2008,
-- be unable to afford the payments on that mortgage,
have a mortgage debt-to-income ratio of at least 31 percent (or potentially higher),
-- live in the home and
-- meet a number of other requirements.

The homeowner's current lender would have to agree to reduce the amount owed on the existing mortgage to no more than 90 percent of the home's current market value.

Borrowers who want to apply for this program should first contact their current mortgage servicer and then an FHA-approved lender. Borrowers will have to pay a monthly premium for FHA mortgage insurance, be reasonably able to afford the payments on the new mortgage and share a portion of future appreciation in the value of the home with the FHA.

First-time home buyer tax credit
Home buyers who purchased a home on or after April 9, 2008, or before July 1, 2009, and had not owned a home during the previous three years would be eligible for a federal income tax credit of up to $7,500. The credit would have to be repaid over a 15-year-period and would be phased out for taxpayers whose adjusted gross income exceeds $75,000 (single filers) or $150,000 (joint tax return).

Higher loan limits
The maximum loan limit for FHA-backed loans would be increased to 115 percent of the local-area median home price. The maximum loan limit for loans that could be purchased by Fannie Mae and Freddie Mac would be set permanently at $625,500. The Department of Veterans Affairs loan limit also would be increased.

New Fannie Mae, Freddie Mac regulator
A new federal regulator would be created to oversee Fannie Mae and Freddie Mac. The government's thinking is that a new tougher regulator would enhance Wall Street's confidence in the two government-sponsored mortgage companies. That could indirectly result in lower mortgage interest rates, which would be an added benefit for home-loan borrowers.

© 2008 LendingTree, LLC. This story, "Housing Bill To Aid Homeowners, Home Buyers," is reprinted by the author with written permission of LendingTree, LLC.

Downpayment assistance bites the dust

By Marcie Geffner • Bankrate.com

A countdown clock on a Web site operated by Nehemiah Corp. of America is ticking off the days, hours, minutes and seconds until a new government ban will terminate virtually all seller-funded down payment assistance programs in the United States. But the clock may be stopped, now that a bill has been introduced in Congress that would reverse the ban.

The clock will tick off its last second Oct. 1, the last day when homebuyers will be able to use seller-funded down payment assistance with any mortgage backed by the Federal Housing Administration, or FHA, a division of the U.S. Department of Housing and Urban Development, known as HUD.

Read the rest of this story:
http://www.bankrate.com/brm/news/mortgages/20080821-down-payment-assistance-a1.asp?prodtype=mtg

How To Deal with a Low-Ball Offer

Don’t get mad. Get smart. Negotiation and patience can turn that disappointing offer into a better deal.

By Marcie Geffner, Cyberhomes Contributor

Weak housing markets embolden bargain-minded homebuyers to offer much less than the seller’s asking price. While there is no agreed-upon definition of a lowball offer, any price that’s discounted enough to provoke the seller’s wrath may well qualify for that distinction.

Conventional wisdom says sellers shouldn’t bother to deliver a civil counteroffer to buyers who present a lowball offer because they may prove excessively demanding or miserably difficult to work with during the transaction.

But that approach might not be so wise if your home has been on the market for a while and hasn’t attracted other bidders.

Read the rest of this story:
http://www.cyberhomes.com/readingroom.aspx?article=lowballoffer

How To Sell a Vacant House

You’ve moved out, but can’t afford to rent a houseful of furniture: tips to better your odds of a quick sale

By Marcie Geffner, Cyberhomes Contributor

Houses may be vacant for any number of reasons: Some owners have moved to a new home that better suits their needs. Others have gotten married, gone through a divorce or relocated to take a new job. Sadly, some homes are vacant because the owner has died.

Regardless of the reason, a vacant house can be a real turnoff for buyers and, consequently, more difficult to sell than a house that’s occupied.

Read the rest of this story:
http://www.cyberhomes.com/readingroom.aspx?article=vacanthouse

Hiring a Home Stager

By Marcie Geffner

Every home, no matter how luxurious or well-kept it may be, can benefit from at least a few improvements before it's put on the market to be sold. Though not every home that needs to be staged also needs the services of a professional stager, a professional can help you de-clutter your home and highlight its best features in a way that will make the home more attractive and appealing to prospective buyers.

"Most people love their own home," says Dan Eason, president of Energized Seller, a Web site that helps home sellers improve their home's marketability. "Your home might look great to you and your friends. But selling your home isn't about you or what you like, it's about the home buyer and what that buyer wants. Buyers don't want clutter, disorganization, disrepair, wild colors or crowdedness. They want a home where they can easily imagine themselves living."

Read the rest of this story:
http://energizedseller.com/gralarticles/gralarticles/archive/2008/08/13/how-to-basics-hiring-a-home-stager.aspx

August 19, 2008

The Pros and Cons of Price Cuts

By Marcie Geffner - Cyberhomes Contributor

Home sellers hate price cuts and with good reason: Every dollar that’s knocked off the sales price is a dollar less in the seller’s pocket when the sale closes. But sometimes, a price cut is the best option, as unpalatable as it may be.

There’s no absolute rule for timing a reduction in your asking price, but some experts suggest two to four weeks as a good guideline, depending on how fast comparable homes have sold in your market and how quickly you need to sell.

If your home has been on the market for a while without a decent offer, you’ll have to choose a tactic:
- reduce your asking price
- wait for more buyers
- make major improvements
- take your home off the market.

Read the rest of this story:
http://www.cyberhomes.com/readingroom.aspx?article=homeaskingprice

Where's My Office?!

By Marcie Geffner - California Real Estate

Pam Spoo thought she’d seen everything in her 30-plus years in real estate. But even she was surprised and shocked when she learned that her brokerage company, Robert Weil Associates in Long Beach, was about to close its doors for good.

"In the first week of December, we got the news that the company was going to be closing," Spoo recalls. "We knew business was slow, but I did not understand what it costs to keep an office open."

Spoo’s experience is instructive for others who may face a similar situation. She and her business partner Mary Klingensmith acted quickly to make sure their own business would suffer as little disruption as possible. Within weeks, they’d landed at Coldwell Banker Coastal Alliance in Alamitos Heights.

Read the rest of this story:
http://www.car.org/newsstand/crem/current-issue/august2008/where'smyoffice/

Housing bill no panacea

By Marcie Geffner - Inman News

The Housing and Economic Recovery Act of 2008, signed by President Bush July 30, contains a hodge-podge of new programs, protections and perks for homeowners, home buyers and housing-related companies. But considerable doubt remains as to whether the law will do much to change the current dynamics of the nation's housing markets, which are still mired in misfired mortgages and depressed home sales. The bill may turn out to be not so much too little, too late, but rather misdirected, riddled with loopholes and subject to unintended consequences.

Let's take some of the homeowner and home buyer items for a spin:

Read the rest of this story:
http://www.inman.com/buyers-sellers/columnists/marciegeffner/housing-bill-no-panacea

August 3, 2008

Better Credit Can Save Cash

By Marcie Geffner - LendingTree.com

Want to save an easy $105 this year? If you’re an average consumer, that’s how much you could cut your annual finance charges if you improved your credit score by just 30 points, according to a new survey released by the Consumer Federation of America (CFA) and Washington Mutual Bank.

Boosting your credit score by a mere 30 out of several hundred points might be much easier than you’d think it would be. According to the survey, these five strategies may be among your easiest opportunities for improvement:

● Pay all of your bills on time and in full every month.
● Don’t max out, or get close to maxing out, the limits on your credit cards or revolving credit accounts.
● Pay off your debts, rather than transferring your balances from one account to another.
● Don’t open multiple new credit accounts all at one time or in rapid succession.
● Check your credit report annually and take action to correct any mistakes that might have been made.

The survey also found that in some ways consumers have become better-informed about credit scores in recent years. But in other ways, consumers still harbor misconceptions and misunderstandings.

With that in mind, here are a few important points to remember:

● Your credit score is based on your history of using credit and paying your debts. Your personal characteristics such as your income, age, marital status, home state, education or ethnicity have no effect on your credit history or credit score.
● You can improve your credit score by using credit responsibly. For example, your credit score can increase if you pay off a large credit-card balance, but decrease if you make a late payment on a credit-card or max out your limit on a credit-card.
● You’re legally entitled to a free look at your credit report (but not your credit score) once each year. If you also want to find out your score, you’ll have to pay a small fee. An exception occurs if you’ve been turned down for a mortgage loan or credit-card. In that case, you’re entitled to a free credit score as well.

The bottom line is that the more you know about credit, the better prepared you’ll be to use credit wisely--and that can be easier on your wallet.

© 2008 LendingTree, LLC. This story, "Better credit can save cash," is reprinted by the author with written permission of LendingTree, LLC.

The Puzzle of Home Price Indexes

By Marcie Geffner - Bankrate

U.S. home prices declined 15.3 percent, 8 percent or 4.6 percent from April 2007 to April 2008, according to Standard & Poor's, the National Association of Realtors and the U.S. government, respectively.

If you're puzzled by that sentence, you're not alone. Home price measures have been front and center this year as home values have fallen across the country, but amid all the uproar, very little attention has been paid to the startling discrepancies among these three measurements of house prices or the implications of this conundrum for home buyers and sellers.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080724-home-price-measures-a1.asp

Foreclosures hurt condo owners

By Marcie Geffner - Bankrate

When too many condominium owners lose their units to foreclosure, condo associations feel the financial pain. That's bad news for homeowners and real estate investors who depend on these associations to take care of building maintenance, property insurance, utilities, landscaping and other amenities that are shared in common.

While most owners pay their association dues as they are obligated to do, a rising number have fallen behind for various reasons. The problem isn't insignificant: Approximately 24 million housing units are governed by some 300,800 homeowner associations in the United States, according to the Community Associations Institute, or CAI, a nonprofit organization of homeowner association managers in Alexandria, Va.

"If you've been foreclosed on and you have a lien against your home or (if you're in financial trouble due to) general economic conditions and you aren't able to pay your assessments, that creates some major problems for the association," says CAI spokesman Frank Rathbun.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080807-condo-foreclosures-a1.asp?prodtype=mtg

Breaks for big loans

By Marcie Geffner - Bankrate

Homeowners and homebuyers who live in expensive housing markets may be pleased to learn that the federal government recently increased the size of mortgages that Fannie Mae and Freddie Mac can purchase and the Federal Housing Administration (FHA) can insure. The higher loan limits are expected to help people in high-cost housing markets buy homes and refinance existing mortgages, though the extent of such aid won't be assured until the new programs are put into place.

The higher loan limits were part of the economic stimulus package that President Bush signed into law in February. At that time, the loan limit for Fannie Mae and Freddie Mac was $417,000 in high-cost markets, except for Alaska, Guam, Hawaii and the U.S. Virgin Islands, where the limit was $625,000. The new limits will be based on a percentage of the median home price in each county and could be as high as $729,750 in some areas.

Read the rest of this story:
http://www.kypost.com/content/middleblue2/story.aspx?content_id=c6024199-cfed-49e1-a5d6-d53942386f76

July 17, 2008

The bad business of 'Friends of Angelo'

By Marcie Geffner - Inman News

Quick quiz: Which mortgage company chieftain took home $140 million in compensation last year while the company he founded lost $704 million?

If you said Angelo R. Mozilo, CEO of Countrywide Financial Corp., take a bow. And add a couple of gold stars if you knew Mozilo's pay was comprised of more than $120 million from exercised stock options and more than $22 million in other compensation, according to a Reuters' report based on the mortgage company's year-end filing with the Securities and Exchange Commission.

Set aside the stock options, and the astonishing disconnect between Mozilo's star-quality compensation and the company's horrific performance could nonetheless suggest why Mozilo decided it was OK to arrange some special insider deals on home mortgages for an assortment of people dubbed "Friends of Angelo." Yet while this disconnect may serve as an ego-booster and explanation, it's by no means an acceptable excuse for Mozilo's sorry moral judgment and misuse of his own position within the company.

Read the rest of this story: http://www.inman.com/buyers-sellers/columnists/marciegeffner/the-bad-business-friends-angelo

Mortgage approval made easy

By Marcie Geffner • Bankrate.com

Whether you're buying a home or refinancing an existing home loan, you'll soon find out that lenders today are a picky and demanding bunch when it comes to loan approvals. Even well-qualified borrowers are expected to jump through some pretty high hoops to qualify for financing.

But fear not: These tips and suggestions can help you make the best possible impression on the lender of your choice.

Just as job-hunters may wonder what top employers want to see on a resume, prospective borrowers may be curious about what lenders look for on a loan application.

Read the rest of this story: http://www.bankrate.com/brm/news/mtg/20080710-mortgage-requirements-a1.asp

What to ask before you list your home

By Marcie Geffner - Cyberhomes Contributor

Real estate agents aren’t all alike. Here’s help to figure out which one you should hire.

Home sellers are understandably concerned about the asking price at which they’ll list their home for sale and the commission they’ll have to pay the real estate agent when the sale closes. But selecting an agent just because he or she promised you a high price or low commission may be “the single biggest mistake a seller makes,” warns Jean Bourne-Pirovic, an assistant manager at Long & Foster Real Estate in Silver Springs, Md.

With that in mind, here are some questions you should ask before you sign a listing agreement with a real estate agent:

Ask: What is your marketing plan for my home? Which websites will my home be displayed on? Which newspapers will my home be advertised in and how frequently? How many open houses will you hold for other brokers and the public? Will my house be included on your office tour of new listings? If I haven’t received any offers for my home after 30 days, what else will you do?

Why? Many agents cut back on advertising in slow markets, and some won’t do much beyond placing your home in the local multiple-listing service (MLS). That’s why you should “try to negotiate for a higher level of marketing commitment,” suggests Bruce Hahn, president of the American Homeowners Foundation, a nonprofit organization in Arlington, Va., that educates consumers about residential real estate. “Get the marketing plan in writing and incorporate it by reference into the listing agreement. That way, there won’t be misunderstandings as to whether the Realtor has been meeting [your] marketing expectations,” Hahn says.

Ask: How long have you been in the business? Which professional certifications or designations have you earned? What sets you and your company apart from the other agents and brokers in the area? What is your negotiating style?

Why? Good agents continue their education throughout their careers and negotiate with their colleagues in a professional manner. “The last thing a seller needs in this market is a rookie with a GED who got lucky and passed the real estate exam on the third try,” Hahn says.

Ask: What are your business hours? Are you accessible at other times? How will you keep me informed?

Why? Successful agents want to build long-term business relationships. Consequently, they understand that “it’s critical for [you] to feel comfortable throughout the process,” Bourne-Pirovic explains. An agent who is accessible and prepared to stay in touch with you may make all the difference in how happy you’ll be with his or her services, especially if your home isn’t easily sold right away.

Ask: How many homes have you listed in this neighborhood and nearby neighborhoods this year? How many of those did you sell? How many were comparable in size and condition to mine?

Why? Successful agents don’t just list homes, they sell homes. An agent who is active in your local market should be knowledgeable about the market and help you find ready, willing and able buyers who want to purchase a home such as yours.

Copyright 2008 Marcie Geffner. All rights reserved. This article may not be reprinted or used in any way without permission of the copyright holder.

July 4, 2008

A dozen ways to get a down payment

By Marcie Geffner - Bankrate.com

Not long ago, no-down payment loans were the height of fashion for homebuyers. But now that lenders have tightened their standards, borrowers once again are expected to "put some skin in the game," to use the industry's favorite catchphrase. That "skin" refers to the borrower's own cash, and it means down payments are definitely back in style.

The chief advantage of a down payment today is simply the ability to qualify for a loan, since only a handful of so-called "zero-down" loan programs still exist. Yet down payments have other benefits, too.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080703-down-payment-help-a1.asp

Fed holds interest rates steady

By Marcie Geffner – LendingTree.com

The Federal Reserve decided last week to keep its key interest rate unchanged at 2 percent. That’s good news for home buyers and homeowners who feared an increase in the benchmark federal-funds rate might trigger higher interest rates on home loans.

The Fed held steady because it is trying to balance the different pressures on the U.S. economy. On the one hand, the Fed suggested in its statement, the economy has been strong enough to continue growing and withstand the current risks. But on the other hand, the Fed statement noted, "the upside risks to inflation and inflation expectations have increased" and "uncertainty about the inflation outlook remains high." Inflation, which refers to higher prices, is one of the Fed’s chief concerns.

The Fed doesn’t directly set the interest rates that borrowers pay on home mortgages, auto loans or credit cards. But the Fed’s actions indirectly affect the rates that lenders charge on those loan products. Nonetheless, interest rates that you’ll pay on your loans could change even though the Fed decided to hold to its current course and neither raise nor lower its key rate.

Homeowners who have an adjustable-rate mortgage (ARM) should be especially diligent about the outlook for higher interest rates. Find out when your ARM will reset and how much your monthly payments might increase at that time. If you’re concerned about the risk of even higher payments in the future, you might want to refinance your ARM with a fixed-rate mortgage.

If you’re shopping for a home or want to refinance your current mortgage, be sure to discuss the interest rate outlook with your loan officer.

The bottom line for borrowers is that higher interest rates on home loans may still be on the horizon despite the Fed’s inaction this week.

© 1998 - 2008 LendingTree, LLC. All rights reserved. This story, "Fed holds interest rates steady," is reprinted by the author with written permission of LendingTree, LLC.

FHASecure program expanded

By Marcie Geffner - Lending Tree.com

The Federal Housing Administration (FHA) has announced an expansion of its FHASecure loan program, which is designed to help homeowners who can't afford the monthly payments on their existing subprime adjustable-rate mortgage (ARM).

The FHASecure program allows borrowers to use an FHA loan to refinance a subprime ARM if the original lender agrees to reduce the amount the homeowner owes as an alternative to foreclosure. The lender may require a separate loan for repayment of the "gap" between the amount owed and the reduced amount. Homeowners who have used the FHASecure program were able to cut their mortgage payments by $400 a month on average, according to the FHA.

The expanded program is scheduled to take effect in July 2008 and will be open to:

● Borrowers who were late on three monthly mortgage payments, either consecutively or three times in the previous 12 months. A loan-to-value (LTV) ratio of 90 percent is required. (The LTV ratio is applied to the refinance and based on a new appraisal prepared by an FHA-approved appraiser.)

● Borrowers who were late on only two monthly mortgage payments, either consecutively or twice in the previous 12 months. An LTV ratio of 97 percent is required.

Like all FHA-insured loans, the FHASecure program requires mortgage insurance, which is paid for by the borrower and protects the lender in case the borrower defaults on the loan. The expanded FHASecure program will give borrowers who are more creditworthy a price break on their mortgage insurance.

Homeowners who want to refinance a subprime ARM or other type of loan, but don't meet the FHASecure guidelines may be able to utilize another FHA loan program or obtain a non-FHA loan.

The FHA is a federal government agency within the U.S. Department of Housing and Urban Development. The agency has helped 220,000 borrowers refinance their mortgages since September 2007 and plans to stretch that figure to 500,000 borrowers by the end of 2008.

© 1998 - 2008 LendingTree, LLC. All rights reserved. This story, "FHASecure program expanded," is reprinted by the author with the permission of Lending Tree.

Is your real estate blog a lawsuit magnet?

By Marcie Geffner - Inman News

Real estate blogging is long overdue for a few good lawsuits.

While free speech and fair use are legitimate and important legal concepts, what goes on in the blogosphere is all too often well beyond what's permissible. Bloggers may be guilty of libel, defamation, copyright infringement, invasion of privacy and a number of other crimes. Whether individual cases have merit is a matter for the courts to decide, but the risks of liability present a clear warning for real estate bloggers who operate in ignorance or disregard of the laws that govern free speech and fair use.

Read the rest of this story:
http://www.inman.com/buyers-sellers/columnists/marciegeffner/is-your-blog-a-lawsuit-magnet

June 25, 2008

Rediscovering the American Dream

By Marcie Geffner - Inman News

Home ownership has enjoyed a well-deserved reputation as a crucial component of the so-called "American Dream." But for many people, home ownership is now perceived more as a nightmare than an essential element of the (admittedly somewhat mythical) "good life" that could be attained in the United States. Whether that negative perception is based on valid fears or little more than irrational overreactions to today's market correction, it's nonetheless a paradigm shift that should be of concern to anyone whose livelihood depends on real estate.

Read the rest of this story:
http://www.inman.com/buyers-sellers/columnists/marciegeffner/rediscovering-american-dream

June 24, 2008

When will YOUR housing market recover?

By Marcie Geffner - Bankrate.com

Pundits love to make predictions as to when home prices will stabilize in U.S. housing markets. But even well-respected forecasters and analysts may disagree, and even if a forecast proves true nationally, your local market may behave in a wildly different way. This disconnect between broad-stroke forecasts and small-scale local markets presents quite a puzzle for homebuyers and home sellers, who need to make major financial decisions on the basis of facts, not fiction.

Two examples nicely illustrate the divergent opinions of respected economists, some of whom suggest a housing rebound is just around the corner and others of whom say a recovery could take years just to get started.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080603-housing-indicators-a1.asp?prodtype=mtg

REALTOR® Rescue Squad

By Marcie Geffner - California Real Estate

REALTORS® who want to learn more about short sales might take a few tips from Doug Fowler, a manager at Coldwell Banker Brokers of the Valley in Napa.

A dozen sales agents in three of the firm’s four offices attended Fowler’s internal training sessions on short sales, and seven or eight of the participants later banded together in an informal group that aims to help homeowners explore alternatives to foreclosure.

“We trained pretty much everybody [in our offices],” Fowler recalls. “Some people yearned for more and wanted to have a support network and exchange of ideas, so that was the genesis of putting together what we called the ‘rescue squad.’”

Read the rest of this story:
http://www.car.org/index.php?id=Mzg1MjU

Is Your Business REO-Ready?

By Marcie Geffner - California Real Estate

While no one is happy to hear sad stories about homeowners who’ve lost their home in foreclosure, the hard truth is that foreclosures can be an excellent business for real estate salespeople who have the expertise, cash flow, and professional demeanor to sell bank-owned properties.

The incidence of foreclosure has soared so quickly that many lenders are overwhelmed by the number of “real estate-owned” or “REO” properties they have on their books, according to Vicki Carpenter, director of training at Coldwell Banker ABR in Menifee.

“Banks have a very high inventory” of REOs and “the floodgates have just started to open,” Carpenter says.

Read the rest of this story:
http://www.car.org/index.php?id=Mzg1MjU

Fence-sitters waiting for the bottom may miss it

By Marcie Geffner - California Real Estate

It’s a common condition in today’s housing markets: Buyers appear to be glued to the proverbial procrastinator’s fence and their hesitancy creates plenty of work, but generates no income for REALTORS®, month after commission-less month.

“What we are finding is fence-sitters,” says Pat “Ziggy” Zicarelli, owner of Style Realty in Tarzana. “Young people, single people, divorced people who need to buy properties are saying, ‘I like that property; however, I’ll wait until the prices come down more.’

Read the rest of this story:
http://www.car.org/index.php?id=Mzg1MTc

June 13, 2008

Survey finds tougher loan requirements

By Marcie Geffner - LendingTree.com

It's no secret that banks have raised the bar for borrowers who want to get a new home loan. The fact is that today's requirements may be significantly more challenging, regardless of whether you want to buy a home, refinance your current mortgage or take out a home equity loan or line of credit.

Yet these tougher requirements definitely don't mean that you won't be able to get a loan. Plenty of borrowers have obtained new loans this year on good terms and often at historically low interest rates.

Banks tighten across the board Lenders use the phrase "tighter credit standards" to describe their own tougher requirements. And indeed, most banks have tightened their credit standards this year.

A recent Federal Reserve survey of senior loan officers found that 62 percent of the banks surveyed had tightened their standards for prime residential mortgages, and even higher percentages had tightened their standards for non-traditional and subprime home loans, and home equity lines of credit. None of the banks that were surveyed had loosened credit standards for these types of home loans.

Documents may help you qualify To obtain a loan today, you'll probably have to jump just a little higher than you would have had to a year ago. You'll probably have to fill out more paperwork, and you'll probably be asked to hand over more documents, such as W-2 forms, paycheck stubs and income tax returns, to demonstrate your creditworthiness.

To qualify for a loan at a favorable interest rate and on favorable terms, you'll also need an acceptable credit score, and the lender likely will require an acceptable appraisal of the home. You may have more loan choices if your employment has been steady for several years, your credit is unblemished, and you are able to make a larger down payment to buy a home or you have some equity in your current home if you want to refinance.

Tighter credit standards mean it's important to shop around and compare loan offers. You may even be pleasantly surprised to find out you're better qualified for a loan than you thought you were.

The bottom line is that tighter credit standards should be a welcome trend in home loans. That may seem counterintuitive, but the fact is that tougher requirements protect borrowers as well as lenders and help to ensure that you're financially able to make the monthly payments on your new loan. Always be sure to read your loans documents before you sign them and ask questions about any aspect of your loan that you don't understand.

© 2008 LendingTree, LLC. This story, "Survey finds tougher loan requirements," is reprinted by the author with the written permission of LendingTree, LLC.

Rates dip on big mortgages

By Marcie Geffner - LendingTree.com

Interest rates on so-called "jumbo-conforming mortgages" have dipped significantly in recent weeks. The new lower rates should make these larger loans more affordable for people who live in high-cost housing markets and can meet the qualifications to get this type of loan.

Jumbo-conforming loans were created in February, when the federal government raised the loan limits on mortgages that can be purchased by Fannie Mae and Freddie Mac, two government-sponsored corporations that buy packages of securitized mortgages from lenders. The loan limit used to be $417,000 even in most of the nation’s high-cost housing markets, but was raised to as much as $729,750 in some counties. To find maximum loan limits in your county, you can download Fannie Mae’s Jumbo-Conforming Loan Limit Look-Up table.

Initially, interest rates on jumbo-conforming loans remained stubbornly higher than rates on smaller conforming loans. But the interest-rate gap has narrowed considerably now that Fannie Mae has decided to price the larger loans in line with the smaller ones.

As a result, you may be able to get a significantly lower interest rate on a larger loan today, even if you live in an expensive housing market. And a lower interest rate means you may be able to borrow more money than you otherwise could have to buy a home or refinance your current mortgage.

Lenders still have tougher requirements to qualify for jumbo-conforming loans. These requirements include:

• A sizable down payment, which may be advantageous since it creates equity in your home and eliminates the need for mortgage insurance.
• Plenty of equity, which is especially important if you want to refinance an existing jumbo mortgage with a conforming jumbo.
• A strong credit score.
• The ability and willingness to document your income and assets.

You may be among the chief beneficiaries of the lower interest rates on jumbo-conforming loans if you want to buy a home in an expensive housing market and can make a substantial down payment or if you want to refinance an existing jumbo mortgage and have plenty of equity.

If a jumbo-conforming loan might meet your needs, you probably should act quickly because these loans still face an uncertain future. Jumbo-conforming loans haven’t been seasoned in the marketplace, and the higher loan limits are set to expire at the end of this year, unless the federal government extends the sunset date or makes the new higher limits permanent.

© 2008 LendingTree, LLC. This story, Rates dip on big mortgages, is reprinted by the author with written permission of LendingTree, LLC.

June 6, 2008

After VOWs, what next?

Marcie Geffner - Inman News

The U.S. Justice Department and National Association of Realtors have at last settled their long-running dispute over the competitiveness of virtual office Web sites. The settlement is good news for real estate, but VOW innovations may yet play out in surprising ways that neither the DOJ or NAR could have anticipated, and the settlement itself still leaves plenty of intriguing questions to ponder.

In case anyone's still confused, a VOW is a Web site that functions like a "virtual" real estate brokerage office in the narrow sense that registered users can use the Web site to access just about the entire MLS database of for-sale homes. Only selected information that's protected for business or privacy reasons is excluded. These Web sites enjoyed some popularity as new innovations some years ago. But the extended controversy over their use and allegations of anti-competitive practices stalled the VOW revolution in its early days.

The settlement involves wins, losses and compromises on both sides:

Read the rest of this story:
http://www.inman.com/opinion/guest-perspective/2008/06/3/after-vows-what-next

What To Know About FHA Loans

By Marcie Geffner - Bankrate.com

It's a common misconception, but in fact, the FHA is not a lender. Nor does the FHA give people money to buy a home or set interest rates on home loans. Rather, the FHA, or Federal Housing Administration, is a federal government agency that offers mortgage insurance on loans originated by lenders that are approved by the agency. This insurance protects the lender in case the borrower defaults on the loan.

The FHA was set up in 1934 after the Great Depression and is a division of the U.S. Department of Housing and Urban Development, or HUD. FHA-insured loans enjoyed decades of popularity, but then fell out of favor during the recent housing boom in part because lenders began to offer subprime loans that had artificially low initial interest rates and monthly payments. These subprime loans have since proved disastrous. As a result, lenders have tightened their credit standards and borrowers have flocked to the comparative safety and familiarity of FHA-insured loans.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080605-FHA-loan-basics-a1.asp

May 23, 2008

Improve your financial fitness

By Marcie Geffner - LendingTree.com

Did you know financial fitness can save your life?

Well, maybe not literally. But being well informed about money can reduce stress and help you live a healthier and happier life. Here are three tips to get you started:

Did you know? The U.S. has one of the lowest personal savings rates among the world’s economically developed countries. In February 2008, people in the U.S. saved only 0.3 percent of their disposable income, on average, according to the U.S. Department of Economic Analysis.

Saving money is crucial to financial well-being. Savings can help you cope with a financial emergency, make a major purchase and even get ready for retirement.

Saving is easier if you start early and make a habit of it. One good practice is to sign up for an automatic savings plan that deducts money from your paycheck or checking account and sets it aside before you have a chance to spend it. Stash your savings in a savings account, certificate of deposit (CD), investment account or retirement account to meet your future needs.

Did you know? Nearly 40 percent of adults have a budget and keep close track of how much they spend on food, housing, entertainment and other categories, according to a survey conducted
for the nonprofit National Foundation for Credit Counseling.

Approximately half of the adults surveyed said they had a good idea of how much they spend or tried to stay within certain limits. Seven percent had no idea and no set limits.

A budget is an important tool to plan and track how much you’re spending and saving each month. To make a budget, start with your monthly income and then allocate specific amounts for each expense. Try to set aside at least 10 percent for savings and no more than 30 percent for housing, 25 percent for living expenses and 15 percent for transportation.

Did you know? Nearly 70 percent of young adults have a credit card and 64 percent worry about their debts at least occasionally, according to a survey conducted for the National Endowment for Financial Education.

Paying credit card bills and other debts on time is essential because a history of on-time payments strengthens your credit score, which measures your creditworthiness. It’s much better to build your credit record slowly and patiently than to take on more credit cards than you can handle or spend more than you can repay.

© 1998 - 2008 LendingTree, LLC. All rights reserved. This story, Improve your financial fitness, is reprinted by the author with written permission of LendingTree.

Real estate should rethink affordable housing

By Marcie Geffner - Inman News

There's no doubt that the current mortgage crisis has caused a lot of pain. Lenders and investors have lost their shirts. Realtors and mortgage brokers have lost their livelihoods. And home buyers, many of them first-timers or minorities, have lost their homes.

But will the lessons of toxic mortgages, blind-eyed regulators, irrational borrowers and inflated appraisals be learned this time? Or will the problems again repeat themselves and will the pain that so many have endured come again to naught?

One absolutely vital lesson that simply must be learned to turn this crisis into new opportunities is that the affordability of housing, whether it is owned or rented, should be a higher public policy priority than the rate of home ownership. That means affordable housing should be part of the solution to the current crisis.

Read the rest of this story:
http://www.inman.com/opinion/guest-perspective/2008/05/19/real-estate-should-rethink-affordable-housing

Property taxes trip up naive homebuyers

By Marcie Geffner - Bankrate.com

Longtime homeowners may be willing to accept property taxes as an unavoidable fact of life, but homeownership newbies could be surprised or even shocked to discover just how costly these annual government assessments can be.

Homebuyers need to plan ahead for property taxes, which can easily amount to thousands of dollars each year. Yet it's not always easy to figure out how much to budget for this expense.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080508-property-tax-a1.asp?prodtype=mtg

May 19, 2008

Conforming-jumbo loans still playing hard to get

By Marcie Geffner and Holden Lewis - Bankrate.com

Higher loan limits, set by the federal government as part of an economic stimulus package early this year, were supposed to make jumbo loans more affordable in expensive housing markets. Rates finally have come down on these so-called "jumbo conforming" mortgages, though these loans likely will remain hard to get for most borrowers.

Jumbo-conforming loans range in size from $417,000 to nearly $730,000 and are especially important in expensive housing markets. A small condominium or modest first home can cost upward of $500,000 in markets such as Los Angeles, San Francisco, Alexandria, Va., New York and other costly locales.

Depending on the buyer's credit score, the appraised value of the home and the condition of the real estate market in the area, there are three types of jumbo-conforming loans to consider.

Read the rest of this story:
http://www.bankrate.com/brm/news/mortgages/20080515-jumbo-loan-rate-lower-a1.asp

May 14, 2008

How To Buy Short-Sale Properties

By Marcie Geffner - HomeVestors.com

Weak housing markets create new golden opportunities for property investors. One classic opportunity is a "short sale," so-called because the owner has agreed to sell the property for less than he or she owes on the first and possibly second mortgages. The seller usually intends to leave the lender "short" on the sale, and that's why the lender's approval is required for such sales to close.

Here are some tips for investors who want to purchase short-sale properties:

Get to know the sellers. A successful short sale typically is predicated on the seller's financial hardship, which is the impetus for the lender's approval of the deal. Savvy buyers look for sellers who are behind on one or more of their mortgage payments and who aren't in a strong enough financial position to catch up the payments they've missed.

Read the rest of this story:
http://www.homevestors.com/inthenews/investor_newsletter.php?id=255

May 9, 2008

Fed cuts key interest rate

By Marcie Geffner - LendingTree.com

As expected, the Federal Reserve has trimmed a key bank interest rate by one-quarter of a percentage point from 2.25 percent to just 2 percent. The Fed has now lowered the federal funds rate 3 percentage points in the last seven months.

In its statement, the Fed noted that turmoil in the financial markets, tougher requirements for new loans and weak housing markets have put pressure on the U.S. economy.

"Tight credit conditions and the deepening housing contraction are likely to weigh on economic growth over the next few quarters," the Fed said.

One of the Fed’s primary objectives is to protect the U.S. economy from inflation. That means the Fed has to find a balance between lower interest rates and higher prices. This week’s statement said the Fed would "continue to monitor inflation developments carefully."

The Fed doesn’t directly control interest rates on home loans, credit cards or other consumer debts. But this week’s rate cut could still be a positive development for many borrowers since the Fed’s actions can indirectly influence the interest rates on some loans.

The Fed’s previous rate cuts were especially welcome for borrowers who were facing resets on adjustable-rate mortgages (ARMs) tied to certain indices. Interest rates on ARMs often are tied to the U.S. Treasury or the London Interbank Offer Rate (Libor) rate, both of which have dropped this year.

As an indirect result of the Fed’s rate cuts, some ARM adjustments and resets have been much smaller and less painful for borrowers than they otherwise would have been. The savings due to smaller ARM rate adjustments could amount to hundreds of dollars a month for some homeowners.

The Fed’s rate cuts also influence the prime rate, which is the rate banks offer their best customers. This means short-term interest rates on home equity lines of credit, ARMs tied to the prime rate, auto loans, and some credit cards may move lower as well.

© 1998 - 2008 LendingTree, LLC. All rights reserved. This story, Fed cuts key interest rate, is reprinted by the author with written permission of LendingTree.

May 6, 2008

House Offers: How Low Can You Go?

By Marcie Geffner - Bankrate.com

Homebuyers are looking for a steal; home sellers are looking for an out, and homebuilders and banks are selling homes at cut-rate prices. Combined, these conditions have triggered a wave of lowball offers to buy homes in distressed U.S. housing markets.

Conventional wisdom claims that lowball offers don't work. Homebuyers are warned not to "insult" sellers, who are counseled not to counter offers from "disrespectful" buyers. Real estate salespeople are stuck in middle, oftentimes unwilling to engage in prolonged negotiations that might not earn commissions.

But conventional wisdom doesn't always hold true. With a severe slowdown in sales, some experts now offer new advice.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080501-lowball-offers-a1.asp

May 2, 2008

Judges should have say in mortgage modifications

By Marcie Geffner - Inman News

The Mortgage Bankers Association recently fought off federal legislation that would have allowed bankruptcy judges to modify residential mortgages. The MBA's victory was a huge success for lenders, but an unfortunate loss for homeowners who have declared bankruptcy.

Lenders had good reason to dislike the proposal, which would have shifted some of the power over mortgages from lenders' loss-mitigation departments to bankruptcy judges, who might have imposed modifications that the lenders wouldn't have liked.

Read the rest of this story:
http://www.inman.com/opinion/guest-perspective/2008/05/1/judges-should-have-say-in-mortgage-modifications

April 25, 2008

Why housing is cyclical

By Marcie Geffner - Bankrate.com

It's no secret that the U.S. housing market is cyclical and in the midst of yet another painful correction. The causes and characteristics of these cycles vary, at least in some respects, but the implications for homebuyers, home sellers and homeowners remain remarkably reliable as the cycles roll by.

Housing cycles aren't all alike, yet over long periods of time a basic pattern can be discerned, says Mark Dotzour, chief economist of the Real Estate Center at Texas A&M University.

A cycle doesn't really have a start or a stop, but to pick a point at random, we might say that a housing cycle "starts" when economic activity heats up and interest rates rise. Higher interest rates make housing less affordable, so demand decreases and home prices fall.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080417-housing-cycles-a1.asp

April 24, 2008

Making sense of house prices

By Marcie Geffner – LendingTree.com

It’s no secret that home prices have declined in many U.S. towns and cities. Indeed, the downward trend has been the subject of numerous newspaper headlines, not to mention plenty of cocktail party small talk, water-cooler chitchat and neighborhood gossip.

Yet home prices aren’t just a subject of idle conversation. If you want to buy a home, prices determine which homes you can afford. Or if you already own a home, your home’s value affects whether you can refinance your mortgage, take out a home equity loan or line of credit, or stop paying for mortgage insurance.

Equity is king
Your home’s value is a component of your equity, which is the difference between the value and the amount you owe, often expressed as a percentage. For example, if you borrowed $270,000 to buy a $300,000 home, your equity at the time of purchase would be $30,000, or 10 percent. If the value of your home dropped, your equity would shrink as well. The more equity you have, the easier it should be for you to qualify for a loan, refinance an existing loan or sell your home, if need be.

Unfortunately, much of the readily available information about home prices can be confusing or misleading, which makes it harder to get a true picture of home values in your area. For example, national and local median home prices are widely reported, but don’t necessarily reflect the value of an individual house.

Online information can be confusing
Many people check Web sites that estimate home values to make sense of prices. Online price estimates can be interesting; however, keep in mind that they may not be based on enough accurate data to give a true picture of how much a specific home is worth. For those reasons, national trends and online estimates may be better used as a point of reference than relied on to make major financial decisions.

A REALTOR® can help
If you’re looking for good information about home prices in your area, ask a local REALTOR to prepare a comparative market analysis, or "CMA." A CMA should be based on recent sales prices of homes that are similar in size, location and condition to your home or the home you want to buy. Now that’s data you can count on.

© 2008 LendingTree, LLC. All rights reserved. This story, "Making sense of house prices," is reprinted by the author with permission of LendingTree.

April 14, 2008

Foreclosure crisis hits rental housing

By Marcie Geffner - Bankrate.com

It's no secret that the nation's subprime mortgage meltdown, spike in foreclosures and fall in home prices have affected legions of homebuyers, home sellers and homeowners. But what may be surprising is that the turmoil in today's U.S. housing markets has important implications for renters as well.

"There is some pickup in demand, but there is also a pickup in supply -- both new apartments that are being built and also units shifting from owner to renter," says Mark Obrinsky, chief economist of the National Multi Housing Council, or NMHC, an apartment industry trade group.

Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080403_rental_foreclosure_a1.asp

April 9, 2008

Downpayment Assistance Should Be Ended, Not Mended

Marcie Geffner - Inman News

When all else fails, why not sue the federal government?

That's the card Nehemiah Corp. and AmeriDream have played, perhaps to defend their very existence as two of the largest downpayment assistance organizations in the United States. Yet while these organizations and their 180-plus brethren have helped many people buy a home, their business model has been suspect since the start and today's weakened housing markets would be better off without their inflationary intervention.

Downpayment assistance programs funnel "donations" from builders and home sellers to buyers, who use the "gifts" as all or part of their downpayment. The amount of money at stake isn't nominal: AmeriDream alone has given more than $726 million, in chunks of $3,600 on average, to more than 200,000 home buyers since 1999, according to the lawsuit.

Read the rest of this story:
http://www.inman.com/opinion/guest-perspective/2008/04/7/downpayment-assistance-should-be-ended-not-mended

April 7, 2008

Documents are new reality for borrowers

By Marcie Geffner - LendingTree.com

If you recently applied for a new home loan, you might be surprised at the large number of documents your lender will expect you to hand over before your loan is approved.

In 2005, 2006 and 2007, many mortgages required only limited documentation. But today, lenders have begun to reinstate traditional "full doc" requirements. The fact is that lenders have become pickier about who can qualify for a loan, and more documentation is part of that trend. Even if you submitted very few documents when you obtained your current mortgage, you’ll likely be asked for a stack of documents if you want to refinance now.

Documentation isn’t just paperwork. Lenders actually use your documents to verify the information on your loan application and make an assessment of your financial situation. Some of the documents you’ll be asked for include W-2 forms and paycheck stubs. These show that you earn enough income to make the payments on your new mortgage.

If you’re self-employed, you might be asked for financial statements to support your earnings or net worth. You may also be asked to produce bank account statements to demonstrate that you have enough cash for your down payment, if you’re buying a home, and closing costs.

Be sure to keep copies of all of your documents for your own records. Lenders also rely on documentation to spot possible cases of loan fraud. That’s another reason why your lender may become suspicious and set aside your file if you refuse to provide the required documents.

Some borrowers think the loan process is annoying or intrusive. But documentation serves a reasonable purpose and typically can’t be avoided unless you’re willing to accept a much higher interest rate. The payback for your cooperation should be a speedier and more definitive thumbs up or thumbs down on your new loan.

© 2008 LendingTree, LLC. All rights reserved. This story, "Documents Are New Reality for Borrowers," is reprinted by the author with permission of LendingTree.

April 1, 2008

Borrowers flock to FHA loans

By Marcie Geffner - LendingTree.com

FHA loans, which are backed by the Federal Housing Administration (FHA), are enjoying a resurgence in today’s tighter lending climate.

FHA loans have been out of favor in recent years, but are especially popular today because they typically have easier qualification requirements than non-governmental loans and require only a small down payment or very little equity. An FHA loan also may have a lower interest rate than would be offered on a comparable loan that wasn’t backed by the U.S. government.

What is the FHA?
The FHA doesn’t actually make loans. Instead, this agency offers a guarantee that reimburses your lender if you don’t pay back your loan. You’ll have to pay small upfront and monthly fees for that protection, but a lower interest rate might offset the extra expense.

An FHA loan can be used to buy a home or refinance an existing mortgage. Traditionally, the agency has been seen as an alternative for lower-income borrowers or borrowers with shaky credit histories. But now even well-to-do borrowers in affluent housing markets are opting for FHA loans.

The maximum loan amounts, called "limits," that applied to FHA loans used to be relatively low compared with home prices, but recently were raised to significantly higher levels. The new limits range from $271,050 in inexpensive housing markets to $729,750 in high-cost markets. The uppermost limit used to be just $362,790 even in the nation’s most costly cities.

You can find out the new limit for your county on the FHA’s web site, www.fhaoutreach.com. The web site has two search functions: One uses an interactive map, and the other is a form with pull-down menus. If you’re planning to relocate, you can download a county-by-county chart of all the FHA loan limits across the country.

The new FHA loan limits will expire at the end of this year, unless Congress extends them. That means you’ll need to act soon if you want to lock in the benefits of a bigger-than-usual FHA mortgage.

© 2008 LendingTree, LLC. All rights reserved. This story, "Borrowers Flock to FHA Loans," is reprinted by the author with permission of LendingTree.

March 31, 2008

New mortgage form a grand idea

By Marcie Geffner - Inman News
It's easy to complain about government paperwork, but sometimes something as seemingly simple as a new form can be worth much more than the paper it's printed on. Such is the new standardized and borrower-friendly Good Faith Estimate that has been proposed by the U.S. Department of Housing and Urban Development.
Read the rest of this story:
http://www.inman.com/opinion/guest-perspective/2008/03/27/new-mortgage-form-a-grand-idea

March 26, 2008

Can Fed rate cut benefit borrowers?

By Marcie Geffner - LendingTree.com

The Federal Reserve made a substantial cut in a key interest rate Tuesday, March 18. The federal funds rate was lowered three-quarters of one percent, referred to as "75 basis points," from an already-low 3 percent to just 2.25 percent.

The rate cut may be good news for borrowers, even though the Fed’s decision doesn’t directly reduce interest rates on consumer or home loans. Instead, the rate cut can influence short-term interest rates on home equity lines of credit, adjustable-rate mortgages tied to the prime rate, car loans and credit cards. Longer-term loans like 30-year fixed-rate mortgages are less likely to benefit from the Fed’s rate cut.

The Fed decided to cut the interest rate due to slower growth in the economy and consumer spending, softer job markets and "considerable stress" in the financial markets.

The lower rate should "promote moderate growth over time" and "mitigate the risks to economic activity," the Fed said in a statement. "The tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters," the Fed observed.

Inflation is also a concern. Price increases are expected to "moderate" this year, but the outlook for inflation has become more uncertain and will need to be carefully monitored, the Fed said.

Copyright 1998 - 2008 LendingTree, LLC. All rights reserved. This story, "Can Fed Rate Cut Benefit Borrowers?" is reprinted by the author with permission from LendingTree.

March 24, 2008

Overseas Buyers Stake Claim in California Real Estate

A new pond is emerging in which to fish for home buyers--overseas.
As home sales have stalled and home prices have slumped in Southern California, realty agents have geared up to help sellers tap into an international market of property buyers.
Some local agents have adapted their websites for foreign buyers by adding multiple language translation options. Others have joined professional organizations to give themselves an international reach. One local agent has even offered to reimburse buyer travel expenses should a sale close.
Read the rest of this story:
International real estate on the Internet:

March 21, 2008

Should bankruptcy courts modify mortgages?

By Marcie Geffner - Bankrate.com
Federal bankruptcy courts currently offer only scant relief to homeowners who can't afford to pay their mortgages. That could change, if supporters of legislation that would allow bankruptcy judges to modify mortgages can muster enough votes in Congress to override a threatened presidential veto.
Giving bankruptcy courts the authority to modify home loans would be a palatable way to accommodate both borrowers and lenders, says Jack Williams, a bankruptcy professor at Georgia State University College of Law. Borrowers would "get to keep a major asset with significant upside potential" and avoid the emotional wound of losing their homes, while lenders would be placed in "a position based on the fair market value of the property," which would be better than a foreclosure, Williams says.
Read the rest of this story:
http://www.bankrate.com/brm/news/mtg/20080320_bankruptcy_mortgage_relief_a1.asp?prodtype=mtg