Is the real estate market getting better? If you listen to the National Association of REALTORS chief economist, Lawrence Yun, we are past the bottom of the market, and the rest of the year looks great for the real estate market. Well, I am waiting for the numbers to turn around. It is good to be positive, but that positivity should have SOME basis. Its like saying gas prices won't get any higher, and they will be coming down the rest of the year. The new catch phrase in the real estate establishment is "all real estate is local". You don't look at the national weather; you look at the local weather- duh. While the the official REALTOR news seems to, somehow, indicate some other result, local stats indicate we are still in a down market. Sellers are going to have to come to grips with d... 05/26/2008

                                                          The kitchen is the most used place in the home. So the way it's set up has a huge impact on the floorplan of the house. The most critical aspect of the kitchen is what we call a work triangle, which is created by the refrigerator, the oven and the sink. What the designer relies on, primarily, is the distance created by these three points on the work triangle.  This can translate into the difference between a great kitchen design and a lousy one. If the distances between these points are too small the kitchen is cramped and might pose some hazards; if they're too wide you'll feel like you have to go to the store to get the ingredients back to the stove.  It's been said that homebuilders feel that the best distance between these po... 05/25/2008

                                 What in the world are you going to do when you get turned down for your loan? Well, there might be several options available to you. Just because the lender denied your loan it doesn't necessarily mean that your chances of obtaining a loan have been flushed down the toilet. You should always ask the lender to give you the exact details of why you were turned down for the loan. It might be something that you can remedy so that the loan might be resubmitted to the underwriter for reconsideration and eventually approved. Usually, if the lender isn't willing to help you solve the problem, or if the problem just can't be corrected, you'll most likely get a written statement declaring that your application for credit has been denied, with the reasons for the d... 05/25/2008

                                      We all know the drill. There are just too many shysters and hucksters out there who get their jollies off on preying on anybody and every body, whatever their reasons may be, and usually it's because the poor borrower doesn't have enough good credit or enough income to qualify for a normal mortgage loan. Let's refer to this shyster as the "BAD DEBT LENDER" who says that he'll make the loan with 'no money down', and will refinance the poor borrower's house and finance the cost of a loan into the mortgage amount. Can you believe that the cost of the loan could actually be equivalent to a huge number of points added to the loan in order to close on a desperate borrower. How about 10 or 15 points added to the cost of the total loan amount ? Good grief !... 05/25/2008

                                             Mortgage brokers do exactly what their title says, they broker loans for lenders to the borrowers. Mortgage brokers traditionally work what we refer to as the the wholesale lender, and they work as many of these wholesale lenders as possible in the process of trying to obtain the cheapest money. What the mortgage broker actually does is present the wholesaler's price to the borrower to which the mortgage broker also adds their own fees in the form of fees for originating the loan, fees for any additional discount points that they might work into the loan for the borrower. and other miscellaneous fees. Can you identify some of those miscellaneous fees? Wholesaler's usually don't have the kind of overhead that a mortgage broker will have to run... 05/25/2008

                                A mortgage banker is, and may actually be, a separate company completely unaffiliated with any other company, thing or any entity which is perceived or known or inferred to have its own distinct existence (living or nonliving) for the purpose of originating loans. :-) This is a thing which, by the nature of it's own existence, needs to have enough of it's own capital to buy, sell and service the loans it makes. This very fact alone is a determining factor as to whether or not investors in the secondary mortgage market will have anything to do with it (help me with this one, loan pros). Also, because of this fact the mortgage banker usually has some kind of a connection with another source of money like a bank (duh), a credit union, an insurance company or... 05/25/2008

                                                 What in the heck is the margin? The margin is a fixed percentage and a constant amount that is added to the index (see last post) to determine what an interest rate will be for the next period of an adjustable rate mortgage, or as an example, in one year. Most of the ARM margins vary somewhere between two and three percentage points. Lets use an example of 2.25 % for the purposes of this discussion. Using an initial rate of 7.50% with the One Year Treasuries Securities Index (see last post), if you add the margin of 2.25% you have a new adjustable rate of 9.75%. Check with the lender to see what the margin is. What else can you think of that should be considered when addressing the margins application to the loan? 05/25/2008

                                                          Lender's have had to have some kind of way to determine what the rates are going to be for adjustable rate mortgages. We could say that rates are determined by the costs of Milk Duds or Junior Mints at the candy counter at the theater. If that were the case, no one could afford a loan. :-) The reality of the matter is that the rate is based on what we call an Index. What we perceive to be the most common form of index in the United States is the index of the United States Treasury Securities . One examp-le is what we refer to as the One Year Treasuries Securities Index. This is essentially a digest of the rates on one year treasury securities adjusted to a constant maturity level, or the date upon which the financial obligation h... 05/25/2008

                                I wanted to provide you with a list of what I believe might be some of the important factors that cause lenders to set their interest rates the way that they do. I discussed these factors with clients, customers and colleagues in days gone by. Feel free to add anything to the list that you believe should be included. 1. Market Rates. 2. Local competition. 3. Competition within your region. 4. The feelings lenders have about the direction that the rates are going to  move. 5. The amount of insurance they have to cover their losses. 6. Whether or not they need the business. 7. If they're making money. 8. If they're losing money 9. If they like your hair. 10. How lucky they think thay can get with the rate. Don't take all of the above too seriously. I know t... 05/25/2008

                                                     It's simple ! You just pay more discount points in order to get a lower interest rate. Most lenders seem to agree that there is no absolute as to what to consider the costs to be in the final analysis. The rule of thumb is that 1 point (1 %) is equal to a one-eighth (0.125%) of a percentile drop in the rate. Checking with the different lenders is a good idea to see what the competition standards are for the moment. You might find that the costs are much less, depending on the level of competition between the lenders. For example, a lender might lay this on your borrower: 10% with 1 + 0 (1% origination fee + 0 discount points) 9.875% with 1 + 0.25 9.750% with 1 + 1.00 9.625% with 1 + 1.75 9.500% with 1 + 2.25 The math is a collection o... 05/25/2008

                                                         Here are twenty reason to eliminate junk mail. Works for me ! How about you ? 1. The benefit of reducing negative environmental impact is nearly incalculable. 2. Labor costs would be reduced. 3. Excessive and uncompromising storage requirements would be eliminated from bulk. 4. Trash collections would be lighter on community sanitation efforts 5. Landfills less overflowing. 6. Keep trees in the forest. More than 100 million trees are destroyed each year to produce junk mail. 42% of timber harvested nationwide becomes pulpwood for paper. 7. Reduce global warming. The world's temperate forests absorb 2 billion tons of carbon annually. Creating and shipping junk mail produces more greenhouse gas emissions than 2.8 million cars. 8. Sa... 05/25/2008

                                                 When a buyer doesn't have all of the cash that they need to close, after they've coughed up the downpayment and other loan expenses, the seller might want to come to the rescue and make up the difference. Can this be helpful to the buyer? Can it be more helpful than reducing the price of the loan for the same amount as the contribution? There are limits as to the amount of money that the seller may contribute to the closing costs of the loan. When those limits are exceeded the amount of the loan can be cut back. Seller contributions can also affect maximum loan amounts for FHA loans. Can the seller hurt the buyer with a closing contribution? What are your experiences with seller contributions and how have seller contributions impacted clo... 05/18/2008

                                             I'm not an appraiser, although I've prepared a few CMA's and BPO's pro bono on napkins for pals at Starbuck's. Appraisers consider what they call the comparable sale method to be the most reliable means of calculating and estimating the capitalization rate which is the rate of return which a property is supposed to give back or return to the owner after their investment. The appraiser has to be in possession of reliable, decent, passable sales data to derive at what is considered to be a direct capitalization rate for the subject property. The capitalization rate is derived by analyzing the incomes and the sales prices of properties that have been sold. The formula for determing the capitalization rate is achieved by dividing the income of a ... 05/18/2008

                                                       Well, in a nutshell, when a foreclosed property doesn't sell for enough money to pay off the foreclosed mortgage, which could also be a result of declining property value since the mortgage was taken out, we end up with what we call a deficit, or shortfall in lender terminology, which is a difference between the foreclosure sale proceeds and the amount that the borrower in default still owes the lender, a deficiency. When this happens, the court might award the lender a judgement against the debtor for the difference or the amount of the deficiency. This is what we call a deficiency judgement. There are cases where the states place restrictions on the rights of the lenders to pursue or obtain deficiency judgements against the borrow... 05/18/2008

                                                    Nobody's forcing you to adhere to any religious principals or denomination here. What we are faced with is the legal right to get your property back after the foreclosure sale. This is what we call post-sale redemption, or the statutory right of redemption. Following the foreclosure sale, the debtor, or former mortgagor, is given an additional amount of time to redeem or save their property. What the debtor has to do in this case, in order to get the property back, is pay the person that purchased the property the full amount that they paid for the property at the foreclosure sale plus all of the accumulated interest that's added up since the time of the sale. This is the legal right to redeem the property after the sale. We call this ... 05/18/2008

                                                 In some states, throughout our great land, a defaulting borrower doesn't have the right to reinstate or cure their loan once the home has been foreclosed. What the borrower does have is the legal right we refer to as the equitable right of redemption, which is the right to redeem the property by paying off the entire outstanding loan balance, not just the delinquint payments, which include all of the costs incurred as a result of the foreclosure. Equitable redemption satisfies the debt which is owed, ends the lenders interest in the property, and stops the foreclosure process. But remember, in a judicial foreclosure, equitable redemption must take place before the sheriff or foreclosure sale. This may be the only chance you have to redeem... 05/18/2008

                                                          Where not talkin' about fast cars and cheetas. When a motgage defaults, when the borrower fails to repay the loan or by trashing the covenants in the mortgage, the mortgagee (the lender) can contact the mortgagor (the borrower) and demand that the entire outstanding, unpaid loan balance, and not just the delinquint payments, have to be paid off.  NOW !!! The only alternative to this demand is the lenders demand to FORECLOSE ! What we call this action on the part of the lender is acceleration, which means that the due date of the loan is moved up to the present time and speeds of the repayment of the outstanding balance of the loan which is in default.  What give the mortgagee the right to make this demand is a provision written i... 05/18/2008

                                           Most appraisers try to be as objective as possible when arriving at a conclusion that sets the value for the property. This is what we all refer to as the appraiser's opinion of value. If a low appraisal ticks your client off and you think that the appraiser screwed up and made a boo-boo can you appeal his or her decision? You betcha! There's a doggone good chance that with the proper documentation you can get that appraisal increased, and maybe even to the figure that the buyer and seller originally settled on. Time is an important thing to deal with here, because the sooner your seller or buyer balks on the low appraisal, and the sooner you act on it, the better. As soon as the property has been inspected get in touch with the underwriter or... 05/18/2008

                                                      I thought that I might share a few thoughts with you about foreclosure. Sudden and unexpected changes in our lives can really create a hardship. Anything that prevents you from making your mortgage payment could have serious consequences later. Here are a few of the warning signs to look out for: 1. Losing your job or a cut in pay or hours 2. A major injury or illness 3. Separation and/or divorce 4. Death of your spouse Make sure that you have an emergency hatch ready to open and escape through if hard times strike. Be prepared ! Can you think of other important items that your clients should be aware of when discussing the avoidance or the possibility of foreclosure? 05/18/2008

                                                    ESP's Not Clairvoyance Here ! It's Economic Stimulus Payment We Sho' Nuff Ain't Mind Readers, So Tell Us : How Ya Gonna Spend That Big Fat Economic Stimulus Payment ??? This Is a Free-For-All Here, so Let It All Hang Out ! A new lawnmower, health club membership, paint job or tires for the car, new suit, shoes, hairdo, lunch for the office, summer camp for the kids, hat for your mother-in-law ? How ya gonna spend all that dough ? Stimulate the Economy and Yourself ? Is Anybody Sending the Money Back Because They Believe That This Is Just A Way For Government Leaders, Who've Looted America, To Launder The Money ? Let's Hear It Rain Cadets !!! The Check's In the Mail !!! 05/18/2008