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Showing posts from December, 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.

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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, sometime…

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 …

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, s…

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 …

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, …

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Reporter. Writer. Editor. Book reviewer. Part English major. Part MBA. Often at the beach. Always on a deadline.