Anonymous Poem

I USED to have a comfort zone where I knew I couldn't fail. The same four walls of busy work were really more like a jail. I longed so much to do the things I'd never done before. But I stayed inside my comfort zone and paced the same old floor.  I said it didn't matter that I wasn't doing much. I said I didn't care for things like diamonds or furs and such.  I claimed to be so busy with the things inside my zone. But deep inside I longed for something special of my own.  I couldn't let my life go by just watching others win. I held my breath and stepped outside to let the change begin.

Bank of America Short Sales Made Easier?

Bank of America just announced a change in its short sale program that may make Bank of America short sales just a little easier.
Until today, if Bank of America short sales were entered in Equator and then a buyer walked, the whole short sale process would have to start all over again. Even if the new buyer made exactly the same offer, the process had to start all over again.


This week, finally Bank of America, decided this was unnecessary. Now the original transaction will continue with just the buyer substitution. This may not work in all cases depending on the actual investor on the loan. Still it's a definite step in the right direction and should help to alleviate the pressure and the wait when a buyer walks as they sometimes do during the Bank of America short sales process.
Originally published at Bank of America Short Sales Made Easier.

Short sale fraud plagues the housing market - Jul. 14, 2011

Short sale fraud plagues the housing market - Jul. 14, 2011

.

Summer is almost here. Whatever plans you have in store, we hope it will be a fun time for you and your family! If there's anything we can do for you this season, call or email us anytime

Jeff Marsack
Mortgage Loan Officer
Great Lakes Mortgage Funding
Phone: 586-330-9167 
Fax: 866-700-7688
License: 136883
jeff@glmf.com
http://www.jeffmarsack.com/                                                   

Let Jeff and Crystal know that Kim Hammonds and "The Advantage" Group referred you and get a FREE Home Warranty on your new home you purchase with us and finance with Jeff and Crystal!

5 Reasons you should Consider Selling Now

5 Reasons You Should Consider Selling Now

If you plan on moving anytime in 2011, you should strongly consider selling your house now rather than waiting. Here are five reasons why:
1.) This is when your house will get the most exposure
The spring, and particularly the month of May, is when most buyers enter the real estate market. This surge of buyers dramatically increases the exposure for your house . The best chance of getting quality offers (perhaps even multiple offers) is RIGHT NOW!
2.) Foreclosures and short sales will increase in about 90 days
The good news is that the number of people paying their mortgage on time is increasing. This will lead to less distressed property sales later this year and throughout 2012. The not-so-good news is that there is still a large inventory of existing foreclosures and short sales that will still be coming to market.
As an example, LPS reported in their latest Mortgage Monitor that:
There are still twice as many loans going 90+ days delinquent as are starting foreclosure
There are almost three times the number of foreclosure starts as there are foreclosure sales
Distressed property inventory levels are almost 45 times the rate of monthly foreclosure sales
This means that there is a backlog of properties which will start coming to the market in about 90 days as banks clear up their paperwork challenges. These properties sell at dramatic discounts. They will be your competition. Both Fannie Mae and Freddie Mac have recently discussed the magnitude of this challenge.
3.) Interest rates have risen over the last six months
Interest rates have stabilized recently. However, in the last six months, interest rates have climbed over 1/2%. Every time the rates increase 1/4%, approximately 250,000 buyers are eliminated from qualifying for a mortgage. In an environment of volatile rates, waiting could mean that there will be fewer buyers eligible to purchase your house. It also could mean that you will pay a higher rate on the next home you buy.
4.) Qualifying for a mortgage is about to get even more difficult.
Besides increasing rates, there are other factors that will hinder a buyer’s ability to qualify for a mortgage as we move forward. Lending standards have been getting tighter over the last year. And as the government debates the new proposed guidelines (QRM), banks are gearing up for even more stringent standards.
Morgan Stanley recently stated:
“Recent developments in issues such as GSE reform, Dodd-Frank securitization rules, and foreclosure settlement issues suggest a tighter and more expensive environment for mortgage credit.”
This may impact any potential purchaser for your property and may also impact your next purchase.
5.) It’s time to get on with your life
Probably the most important reason to sell is so you can get on with your life. You placed your home on the market for a reason. Do not allow a less-than-stellar housing market prevent you from reaching your goals as an individual or as a family. Think about the reasons you decided to move in the first place. Are these reasons still important to you? If you have to take less than you were originally hoping to get for your house, your family has a question to ask each other: Is the dollar difference in sales price worth putting off our plans? Only you and your family know the answer to that question.
Bottom Line
If you plan to sell this year, the reasons above prove that selling now makes more sense than waiting to later in the year. Sit with a real estate professional in your area today to fully understand your best option.

By: Len and Lesile Marma

May 2011

Pruning tips to maintain your curb appeal

Know when to prune in your garden to maintain healthy, good-looking and long-lasting plants.

By Kathleen Huddy of Good Housekeeping

© Jack Hollingsworth/Corbis

Although the type of pruner can make a gardener's life easier, when to prune is just as important in creating a vibrant, colorful garden.
The Good Housekeeping Research Institute acquired gardening tips from the experts: horticulturalists, gardening associations and master gardeners. Here is a simple guide for when to prune in your garden to create healthy, good-looking and long-lasting plants, according to Susan Gruber, Briggs & Stratton Yard Smarts horticulturalist:
Early spring (March-April)
Plant type: Ornamental grasses.
Task: Cut as close to the ground as possible.
Tip: Tying the tops before cutting makes the job fast and easy.


Plant type: Semiwoody perennials (butterfly bush, Russian sage).
Task: Cut back to about 4 inches to produce strong new stems and the best flower display.
Tip: May be cut back any time during the winter.

Plant type: Broad-leaved evergreens (boxwood, holly firethorn).
Task: Prune out stems with winter-injured foliage.
Tip: Wait until later in the spring to shear or hedge the plant so new growth will cover cut tips quickly.

Plant type: Summer-flowering trees, shrubs and vines; hydrangeas and roses.
Task: Remove dead, damaged or crowded stems; shape or reduce size if desired.
Tip: Summer flower buds develop on new growth. Spring fertilization and adequate moisture in the summer will maximize the number and size of summer blooms. 

Spring/early summer (May-June)
Plant type: Spring-flowering shrubs (forsythias, rhododendrons, lilacs).
Task: Prune for shaping or size control following the "prune after flowering" rule. These plants form buds for next year's flowers during the summer. Pruning after midsummer will cut off flower buds.
Tip: Deadheading — remove fading flowers — benefits plants such as rhododendrons and lilacs by preventing seed formation and directing growth into flower buds for next spring. Thinning multistemmed shrubs by removing several of the oldest stems each year will maintain size and keep plants blooming vigorously on new stems. If any of these plants are overgrown, cut down to 3 or 4 inches for a fresh start. This technique, called "rejuvenation," is a drastic procedure for problem plants growing too vigorously in full sun and is not for the timid gardener.

Plant type: Evergreen shrubs (yews, junipers, boxwoods).
Task: Hedging and shaping if desired or thinning to reduce size.
Tip: Cut just as growth begins so new growth covers cut tips. Each job should include some inner thinning of the bush to ensure the outside layer of foliage doesn't become very thick, resulting in a thin shell of dense foliage that is attractive to insects.


Midsummer/fall (July-November)
Plant type: Flowering perennials and annuals.Task: Deadheading extends flowering or promotes a second flush of flowers. After the frost in your area, when perennials and annuals have died, cut them down and mulch the area well for next year's growth.
Tip: Do not deadhead if dried flowers or seeds are attractive or desirable for propagation. During this time, woody plants will not produce callus, the tissue that covers pruning wounds. Fungal spores, bacteria and insects are all abundant and can find a foothold in an open wound.

Winter (December-February)
Plant type: Deciduous and evergreen trees, crab apples and other pest-prone plants.
Task: Remove any dead, damaged or hazardous limbs. Prune limbs that interfere with walkways and structures. Remove crossed or rubbing limbs. Prune out suckers.
Tip: Winter is a great time to prune; insect and disease pressure is minimized and the plant architecture is visible.

Steve Hutton, president of Conard-Pyle Co., a plant wholesaler based in West Grove, Pa., offers some simple advice on pruning roses.

When forsythia just starts to bloom is the time to prune back the canes of your conventional garden roses such as hybrid teas, grandifloras and floribundas. In most cases, they should be cut leaving no more than 12 inches of the old canes. Also prune out any light, twiggy growth from the base of the plant. This creates a stronger plant with lots of blooms from the first flush of spring."
Raymond Evison, renowned clematis breeder, says that twisting and holding the clematis like a ponytail helps make pruning of the plant easier and faster.

On a busy schedule and want to be reminded when to prune specific plants?
The website gardening123.com allows you to customize your plant care. By creating a free account, you will receive personalized plant-care information based on your geographic area. In addition, your account will allow you to:

• Create a personalized journal of the plants you grow.
• Receive monthly care reminders for your plants.
• Create your own garden designs.
• Receive monthly e-mail newsletters with seasonal tips.

It takes time to enter all the plants in your garden, but then you are ready to go.

Why Owning a Home Rocks

by Carla Hill - Tue, Mar 29, 2011

Provided by

 

Homeownership has been part of the American Dream for centuries, and it's no wonder why. It rocks.
First, owning a home is an investment. No, it's not a sure-fire way to get rich-quick. It is a long-term investment. Over the course of many years, even through times of economic upheaval, you can build wealth over time.
 
An average appreciation rate during normal times is around 6.5 percent a year. That means if you buy a home for $100,000, in just ten years you will have a home that could feasibly sell for around $174,000.
During that time you build equity, as well. Equity is the value of your property minus what you owe. So even if you still owe $60,000 on your home after 10 years, you will now have $114,000 in equity. Many homeowners use this equity to take out loans to use for home improvement projects, such as adding on new additions.
 
Owning a home also comes with less tangible benefits. Studies have shown that it creates a sense of community, motivating community involvement. And family stability is manifested through higher graduation rates and lower crime rates.
 
When you own a home, you take control of the creation of your surroundings. You can paint, make updates, and style the home to your liking -- all things not possible with most rentals.
 
You have even further stability when you have a fixed-rate mortgage. A fixed-rate means your rate will never increase. This means you will know the cost of your mortgage for the life of the loan. There won't be any surprises, which is what caught many homeowners off guard during the sub-prime mess. And there aren't any worries about the cost of rent going up each year. You can budget for life!
 
Don't forget about those great tax breaks, such as deducting your mortgage interest, and tax credits, such as money back for making energy efficient upgrades!
 
And of course, just think of all the fun times you can have with your family and friends. Memories will be made that will last a lifetime! Today's Local Market Conditions Report

FHA concessions on seller concessions?

3 percent ceiling is likely 'off the table'
By Ken Harney
Inman News™
March 01, 2011
There's some good news brewing at the U.S. Housing and Urban Development Department that could save thousands of home sales in the months ahead. The final details aren't fully nailed down and a formal announcement is still more than a month away, but I can tell you about a broad outline taking shape that isn't likely to change.
It's all about seller concessions.
Last year the Federal Housing Administration announced that it intends to slash maximum seller contributions from 6 percent to 3 percent for purchasers using FHA-insured mortgages. Seller concessions or contributions are essential lubricants that make large numbers of FHA-financed home sales flow smoothly to closing. They make otherwise unaffordable deals doable.
Say you're negotiating on a house and the seller absolutely insists on getting a price of $150,000. Perhaps the buyer has struggled to come up with down-payment money and won't have the additional cash resources to pay for the settlement and loan origination expenses, which average about 4 to 5 percent in your area.
Under long-standing FHA rules, your seller is allowed to contribute money from the sale proceeds to help with your closing costs. A 6 percent contributions cap -- the current rule -- allows your seller to put as much as $9,000 into the pot, which would be more than enough to handle your closing costs and prepaids.
But a 3 percent ceiling -- the one HUD proposed last year -- would reduce that to $4,500, leaving you short and endangering the entire deal. A 3 percent cap would also make FHA's standard the same as what's typical in the conventional loan market, where both Fannie Mae and Freddie Mac permit nothing beyond that limit.
After hearing complaints from builders, REALTORS® and lenders, HUD is now planning to adopt a more nuanced approach. A formal notice is expected sometime in April, with the changes taking effect this summer.
The core of the policy revision: flexibility. Rather than an across-the-board 3 percent ceiling on all FHA mortgages, the new policy would permit higher seller contributions -- probably between 4 and 5 percent -- on smaller loan balances. Meanwhile, the 3 percent cap would be mandatory on all loan amounts above some yet-to-be-specified limit.
Alternatively, a dollar ceiling on all seller concessions might be available, such as a maximum of $6,000. On the smallest-balance mortgages, the dollar total permitted might even hit 6 percent. Loans on newly constructed houses, where abuses have been reported when builders use concessions to support artificially high sale prices, could have special restrictions.
Whatever the final version turns out to be, the net result should be much better for home sellers, buyers and real estate professionals than last year's threatened 3 percent cap for everybody. This would especially be the case in hundreds of local real estate markets where FHA is the main support for first-time and moderate-income home purchasers.
For example, in the seven Southeast states where Memphis-based Crye-Leike REALTORS® is a major player, FHA loans are used by 50 percent of all purchasers, according to Steve A. Brown, executive vice president. The key attractions, he said, are FHA's low down payments, relatively generous credit requirements and the 6 percent seller concessions limit.
"FHA is what's keeping us alive," Brown told me in an interview. "If they do a 3 percent across-the-board limit, that would knock out a lot of our sales. But if they go with some graduated deal tied into lower-priced homes, then we should be alright."
The average home price in the Memphis area is about $115,000; the average starter home is $85,000, according to Brown. He figures that a 4.5 percent cap on seller concessions would cover closing costs in most transactions, but a 3 percent limit would be a disaster.
"This economy is pretty darn fragile," he said. "People haven't had a raise in three years, prices keep going up on gas and food, plus you've got all those fixed fees" -- attorney costs, title insurance, loan origination and underwriting, among others -- "and none of them has gone down."
In the Minneapolis-St. Paul area, the situation is similar: FHA loans account for 35 percent to 45 percent of all transactions, according to John Anderson, broker at Twin Oaks Realty. The average home price is $163,000 -- somewhat lower for FHA transactions -- and settlement costs average about 4.5 percent.
"Ninety percent of our buyers are asking sellers to pay closing costs and prepaids," said Anderson. "This is a tight economy, and you can't turn to parents and grandparents any more for gift money because they're worried about their own" pension fund shortfalls and depleted savings accounts.
Many brokers agree with FHA that 6 percent contributions may be excessive in higher-end transactions; they top out above $43,000 in the most expensive housing markets. Brokers also concede that there have been abuses and games played in the past that have increased FHA's insurance fund losses.
An example: Say a prospective buyer wants a house that's listed for $100,000. The seller agrees to make a maximum $6,000 contribution to the closing costs but insists that the final selling price be adjusted up to $106,000.
But now the house has to appraise at $106,000, or FHA will be insuring a loan with an artificially inflated price with little or no borrower equity -- making it a prime candidate for future default and insurance claims. FHA says it holds appraisers and lenders responsible for sniffing out such frauds, but officials acknowledge they can't catch them all.
Will a tightened seller concessions policy put a better damper on such abuses? I have no doubt that a mandatory 3 percent cap for all higher-balance mortgages and loans on some new construction would limit the damage in dollar terms.
A graduated system for average-sized and low-balance loans might limit risks as well, while still allowing most home sales to get to closing. A set dollar limit for concessions -- say it's $6,000, hypothetically -- might also provide a flexible way to lower risk while still allowing the lowest-balance loans to enjoy seller contributions up to 6 percent.
In the meantime, the good news is that the widely feared, draconian 3 percent limit appears to be off the table. Something more flexible is coming that might just balance FHA's legitimate needs to safeguard its insurance fund while accommodating home sellers' and buyers' legitimate needs for affordable housing with agreeable financing terms.
Ken Harney writes an award-winning, nationally syndicated column, "The Nation's Housing," and is the author of two books on real estate and mortgage finance.

Three Tips for Selling

Buying A Short Sale

Even after foreclosure, debt collectors still pursue borrowers for repayment

Have you ever said to yourself, "I'm just going to walk away from this house and let the bank have it back." The truth is you certainly can walk away, but know that liabilities &  long term consequences will follow you.  Contact me for a better plan.

Brian J. O' Connor / Detroit News Finance Editor

A grim echo of the housing bust is building for Michigan homeowners who've lost their homes to foreclosure or sold them in short sales. Without even knowing it, they could end up owing tens of thousands of dollars in mounting debts under a previously unenforced provision of the state's foreclosure law.
 

Until a few years ago, when someone lost a home to foreclosure in Michigan, the owner walked away embarrassed and financially battered, but owing nothing more onthe property.

Now, because of dropping property values, mortgage lenders are engineering foreclosures so they can pursue a borrower for the unpaid balance of a home loan for years to come. With added fees and interest, this phantom debt — called a "mortgage deficiency" — could swell to become more than the homeowner paid for the property.

"It's a huge problem," said Julia Gordon, senior policy counsel at the Center for Responsible Lending in Washington. "This is the last thing anyone needs." There are no figures to show how many Michigan homeowners could be liable for deficiencies, but foreclosure rates suggest there will be plenty.

Since 2006, the number of foreclosures in Michigan has more than doubled to nearly 136,000 last year, and the state has recorded nearly 500,000 filings for homes in or near foreclosure. As a result, property values in southeast Michigan have plummeted. Home prices dropped 34 percent during the past decade and recently hit their lowest point since the summer of 1994. Before the real estate meltdown, few lenders ever pursued borrowers for mortgage deficiencies, said bankruptcy attorney Stuart Gold of Southfield. "We used to see it maybe once a year or very infrequently," Gold said. "In the last two years it's become more and more prevalent."

Values sink under water

Before the recession, foreclosed homes in most cases were worth enough that banks could recoup the amount they were owed plus legal costs, if not more. At the county sheriff's foreclosure auction, lenders would bid the amount they were owed on the mortgage, then sell the property, and banker and homeowner could move on.
But now that many homes in the region are worth far less than their mortgages, lenders aren't bidding what's owed. They enter bids for the current value of the home or, sometimes, even less. Under state law, the lenders can then pursue the homeowner for the shortfall between what was owed and what the lender got when the home was sold, plus legal fees and interest.

Lenders have up to six years to sue for the bad debt and, once they obtain a judgment, can pursue the borrower for 10 years. If they still haven't collected, they can renew the judgment for another decade, repeating the process indefinitely.

During that time, interest can build on the debt at the default rate stated in the original mortgage. That's usually four or five percentage points above the original mortgage rate, so a deficiency on even a low 6-percent loan would be charged 10 percent or 11 percent interest, doubling the cost of the debt in as little as six and a half years.

"The whole situation has gotten kind of crazy," said bankruptcy attorney Mike Greiner of Warren's Financial Law Group. "I have one or two clients a month who are being sued on the first mortgage, and it's usually a large number, $50,000, $60,000 or $70,000. It's quite a shock because the client's attitude is, 'I gave the house back to the bank.'"

Short sales not excluded

These unseen debts also are cropping up on short sales, where the bank approves the sale of a home for less than the amount owed.   But just because the bank OKs the sale and releases its lien on the property doesn't mean it can't sue for the balance, said Dan Lievois, a short-sale expert and chief executive of Devon Title Agency in Troy.

"There are a lot of folks walking around now who don't understand that in three or four years they're going to wake up and have letters coming in from debt collectors," Lievois said. "That's what's sad."
The only way out for the homeowner is to get a specific release on the amount owed, Lievois said. Often in short sales, the deficiency is negotiated down and paid off by having the seller take on a new unsecured loan for the amount owed.

"In instances where the consumer didn't get that waiver of the deficiency," he said, "they have to understand that the lender has the right to sell that debt or collect on it, and do whatever they want with that asset."
This, consumer experts say, is where the real trouble can start.

In the past two decades, a robust business has grown up around the buying and selling of old consumer debt, from years-old credit card balances to long-forgotten traffic tickets and library fines.
Collection agencies buy the debt for pennies on the dollar, then try to track down the debtor with threats of legal action and damage to credit scores. Often, the debt may not even be legally owed because it's beyond the statute of limitations, which is six years in Michigan.

Now, mortgage lenders can start selling their deficiencies to make up some of their loan losses, unleashing debt collectors who may wait years to file suit — well after foreclosed homeowners have rebuilt their financial lives and have assets that can be pursued for collection.
"There are certain lenders that know borrowers will become viable for collection down the road," Lievois said.

The best way for borrowers to avoid the problem is to get a release from the lender in a short sale or, in the case of a foreclosure, file for bankruptcy. If they file soon after a foreclosure, when they have few assets, they can wipe out the debt entirely in a Chapter 7 bankruptcy. But if they wait until a collector shows up years later, they might have to pay some of the debt under a Chapter 13 bankruptcy, or may not qualify for bankruptcy at all. "You can garnish their wages or you can seize property," said Greiner, the bankruptcy attorney. "You can go after people for their assets. "It's like a big iceberg out there. We haven't even seen the beginning of it yet."

If you're considering doing a short sale on your home, be sure you choose a real estate agent that is well aware of all the "down the road" implications to you and your family. 

I utilize the knowledge and negotiation power of a real estate attorney to ensure that this never happens to our clients. This service is provided free of charge to our clients also. Call me today, and I'll guide you through this process.

Increasing Seller's Property Value

Provided by

 

Understand first of all that there IS a difference between price and value. Price is the amount you are asking for the property. Value is buyer perceived, and this perception of value is influenced by many factors such as location, features, condition, comparison to other purchase option, etc. By attending to details that can have a positive impact on the value, sellers can significantly increase their chance of attracting qualified buyers willing to pay the asking price.

Some tips to achieve a positive impact on value are:

• Perceived size impacts value, even more so than actual square footage. Open floor plans make a room feel bigger than larger spaces with smaller rooms. Showing property that is furniture free, or at reduced clutter, helps to make the space feel bigger.
• Vacancy increases sale-ability. Property is easier to show and easier to sell, and quicker to take possession of when it is vacant at the time it is offered for sale. Evidence of problems to take possession of the property -- such as encroachments, or tenants who wont allow buyer tours -- negatively impact value. Vacancy also helps the buyer walk through the property imagining ownership. Sellers should remove personal trinkets and family pictures as well as being conveniently absent during a buyer tour.
• Cosmetics are important.
  • Fresh paint will always add more value than it costs.
  • Clean or new carpet/flooring adds more value than it costs.
  • Landscaping adds more value than it costs. At the very minimum, make the entrance area neat.
  • If you can, add some colorful flowers and new sod.
• Take care of the obvious! The spot on the ceiling from the roof leak takes thousands of dollars from the perceived value and the offer price.
• Condition affects value. Do a seller's home inspection to identify and fix the problem BEFORE closing. No point holding up your check a few extra days; plus a failed buyer's inspection could cost you the sale. Buyers will often bargain down your asking price to accomodate for property condition and repairs.
• If you can, remodel/update the kitchen and master bathroom. These two areas have a big impact on home buying decisions.
• Strategic renovations impact value and your bottom line. Don't spend more money to renovate the place than you can recapture in value on the sales price.

How Much Can You Afford?

Start out with a budget so you can determine your price range

By LendingTree

If you're like many first-time homebuyers, chances are you've been spending your weekends driving around visiting open houses and new model homes. This is a great way to get a feel for what you want. The problem is that what you want isn't always what you should get.
Before you start touring homes for sale, it's important to start off with a budget so you know how much you can afford to spend. Knowing what mortgage payment you can handle will also help you narrow the field so you don't waste precious time touring homes that are out of your reach.

Where to begin

The key factor in figuring how much home you can afford is your debt-to-income ratio. This is the figure lenders use to determine how much mortgage debt you can handle, and thus the maximum loan amount you will be offered. The ratio is based on how much personal debt you are carrying in relation to how much you earn, and it's expressed as a percentage.

The ideal ratio

Mortgage lenders generally use a ratio of 36 percent as the guideline for how high your debt-to-income ratio should be. A ratio above 36 percent is seen as risky, and the lender will likely either deny the loan or charge a higher interest rate. Another good guideline is that no more than 28 percent of your gross monthly income goes to housing expenses.

Doing the math

First, figure out how much total debt you (and your spouse, if applicable) can carry with a 36 percent ratio. To do this, multiply your monthly gross income (your total income before taxes and other expenses such as health care) by .36. For example, if your gross income is $6,500:
Next, add up all your family's fixed monthly debt expenses, such as car payments, your minimum credit card payments, student loans and any other regular debt payments. (Include monthly child support, but not bills such as groceries or utilities.)
*Your minimum credit card payment is not your total balance every month. It is your required minimum payment -- usually between two and three percent of the outstanding balance.
To continue with the above example, let's assume your total monthly debt payments come to $750. You would then subtract $750 from your total allowable monthly debt payments to calculate your maximum monthly mortgage payment:
In this example, the most you could afford for a home would be $1,590 per month. And keep in mind that this number includes private mortgage insurance, homeowner's insurance and property taxes. To determine the price of home you can afford based on this amount, use a home affordability calculator.

Exceptions to the 36 percent rule

In regions with higher home prices, it may be hard to stay within the 36 percent guideline. There are lenders that allow a debt-to-income ratio as high as 45 percent. In addition, some mortgage programs, such as Federal Housing Authority mortgages and Veterans Administration mortgages, allow a ratio higher than 36 percent. But keep in mind that a higher ratio may increase your interest rate, so you may be better off in the long run with a less expensive home. It's also important to try to pay down as much debt as possible before you begin looking for a mortgage, as that can help lower your debt-to-income ratio.

4 Bedrooms for the Price of 4 Wheels

By: Diane Tuman, Zillow Content Manager | January 25, 2011

It’s hard to imagine a home selling for the price of a car, but nonetheless, some home prices in some sections of the country are now comparable to prices of luxury cars. And, no, we’re not talking about Bentley’s and Rolls-Royce’s, we’re talking about Acura’s and Hyundai’s and cars that are purchased and accessible by many Americans.
Some of the homes are distressed sales — no surprise there — but some are simply low-priced homes that need a new owner. All of them appear to have good bones, but need lots of TLC. Take a look at 10 homes with four bedrooms or more, that are selling for the price of four wheels in places throughout the U.S.:

1. South Bend, IN Home For Sale — $49,000 | Price per sq ft: $27
Original list price – $89,900 (2009)
717 Forest Ave, South Bend, IN 46616
Listing description: Upstairs had been used as an apartment with a kitchen, full bath, 3 bedrooms, living room and has a separate entry. The main level has a living room, dining room, 2 bedrooms, kitchen, full bath and a laundry room. The basement is entered by a Bilco door and contains the mechanicals.

Comparably priced car: 2010 Acura RL (MSRP $46,830 – $54,250)
> See South Bend real estate
> See South Bend home values

2. Florence, AZ Home for Sale — $34,900 | Price per sq ft: $14
Original list price — $148,900 (June, 2010)
23803 N Bridle Way, Florence, AZ 85132
Listing description: This home has never been lived in and does not have the certificate of occupancy with Pinal County. This will need to be cleared with the county before moving in. Carpet and ceramic tile flooring, breakfast bar, fireplace, spacious rooms. Bank of America Home Loan Pre-Qualification required on all offers. Free appraisal and credit report if financed through Bank of America.

Comparably priced car: 2011 Hyundai Genesis (MSRP $33,000 – $43,000)
> See more Florence real estate
> See Florence home values

3. Baytown, TX Home for Sale — $49,900 | Price per sq ft: $39
Original list price — $54,900 (Nov. 2010)
607 Lloyd Ln, Baytown, TX 77521
Listing description: Traditional brick/wood 1-story home. This home features 4 bedrooms, 1 bath, patio and shed.

Comparably priced car: 2011 BMW 3 Series Coupe (MSRP $36,700 – $50,150)
> See more Baytown real estate
> See Baytown home values

4. Aurora, IA Home for Sale — $47,500 | Price per sq ft: $34
Original list price — $48,500 (August, 2010)
209 York St, Aurora, IA 50607
Listing description: Looking for a bigger house, need more bedrooms, then this might be the house for you! Edge of town feeling, large yard, most of the work of updating this has been done for you. More than a Drive-by, CALL TODAY.

Comparably priced car: 2011 Ford Shelby GT500 Coupe ($48,645)
>
5. Detroit, MI Home for Sale — $32,000 | Price per sq ft: $16
Original list price — $28,000 (Aug. 2010)
16260 Wildemere St, Detroit, MI 48221
Listing description: Great value in this well-maintained brick 5-bedroom home with great design appeal. Arched porch & doorways and plaster ceilings inside. Big fireplace with wood mantle. Five livable bedrooms plus a part-finished basement with workshop. Lots of storage area throughout. All appliances included & efficient steam heat. Fenced garden area off Florida room. Located near U of D-Mercy & M-10. Easy appointments to show – reasonable notice requested. Won’t last long.

Comparably priced car: 2011 GMC Acadia SL FWD (MSRP $31,840)
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6. Rocky Mount, NC Home for Sale — $33,900 | Price per sq ft: $12
Original list price — $77,900 (Sept. 2010)
331 S Grace St, Rocky Mount, NC 27804
Listing description: Prequalified/proof of funds required with offer. Sold as is. Vinyl siding, hardwood floors, master bedroom up or down.

Comparably priced car: 2010 Volvo V70 3.2 (MSRP $33,550)
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7. Taunton, MN Home for Sale — $37,500 | Price per sq ft: $21
Original list price: $42,000 (August 2010)
303 N Garfield St, Taunton, MN 56291
Listing description: 2 story home, 4 bedrooms, 2 bath. Some updates have been done. Home to be sold “as is, where is.” All information and sizes are approximate.
Comparably priced car: 2010 Chevrolet Tahoe LS 2WD (MSRP $37,280)
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8. Rochester, NY Home for Sale — $30,000 | Price per sq ft: $15
Original list price: $34,900 (Sept. 2009)
109 Maryland St, Rochester, NY 14613
Listing description: Great Investment Opportunity! Property rented on a month to month basis at $750 plus utilities. Property can easily be converted back to a 2 family home. Huge potential! Needs some TLC.
Comparably priced car: 2010 Ford Escape Hybrid FWD (MSRP $29,860)
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9. Akron, OH Home for Sale – $45,000 | Price per sq ft: $33
Original list price: $50,000 (July 2010)
1114 Herberich Ave, Akron, OH 44301
Listing description: Great investment property. Current renters have been here for 20 years. Rental income $650/month. Siding and roof replaced about 4 years ago. First floor features living room that has wide archway leading to the dining room, kitchen, and breakfast room. Second floor has 3 bedrooms and large bathroom. Third floor is finished and used as a 4th bedroom. There is a full basement and a single car detached garage.
Comparably priced car: 2010 Cadillac CTS Sport Wagon 3.6L Performance AWD (MSRP $45,265)
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10. Cheboygan, MI Home for Sale – $34,500 | Price per sq ft: $14
Original list price: $49,500 (Nov. 2010)
220 Duncan Ave, Cheboygan, MI 49721
Listing description: Turn of the century home with 4 bedrooms, detached 2 car garage, formal dining room, hardwood floors and a great location close to downtown.
Comparably priced car: 2010 Toyota Highlander Hybrid Base 4X4 (MSRP $34,900)

This Month In Real Estate (US) February 2011

A little music to break things up!!! Céline Dion - Taking Chances - Enjoy!!

4 Renovations That Will Devalue Your Home

Money Crashers
Friday, January 21, 2011

Most homeowners think that all renovations or home improvement project ideas will increase the value of their property. After all, who wouldn't love a super-deluxe kitchen, or a bathroom fancy enough to be in a five-star spa? Sure, we'd all love that. But the problem is that most people don't want to pay extra for someone else's pet project when it comes to buying a home.

 
Homeowners should of course invest in renovations that are going to make them happy and improve quality of life. It is "home" after all! But if you're going to be putting your home on the market any time soon or are in the business of flipping houses, certain upgrades could end up doing you more harm than good.
If you think you might be selling your home sooner than later, here are four improvements to avoid:

1. Over-the-Top Kitchen Renovations
You may love gourmet cooking, so a $30,000 kitchen upgrade might be just to your liking. But this could be a turnoff for potential buyers who aren't crazy about cooking. To them, the restaurant-sized stainless-steel stove, kitchen island and fridge just seem excessive, and they're not going to want to pay for them. Instead, they'll pass on your home and end up buying one with a regular kitchen.
 
Take a look at some kitchen remodeling ideas on a budget. You can still enjoy an upgraded kitchen without going overboard and compromising the value of your home. In fact, remodeling a kitchen for less than $1,000 is definitely a possibility.

2. Over-the-Top Bathroom Renovations
That ultra-deep jacuzzi tub and custom Kohler 360-degree shower you just installed might make your mornings a blast. But to budget or eco-minded buyers, all that water use is going to be a serious drawback. As with your kitchen, keep your bathroom remodeling ideas modest if you think you'll be putting your home on the market any time soon.

3. A Pool or Hot Tub
Yes, a pool addition can add significant value to your home (11 percent on average in the Southwest, but only 6 percent in the Midwest where the swimming season is much shorter). If it's above-ground, though, then knock 2 percent of your home's purchase price, since they're less appealing than in-ground pools. The problem is that pools are polarizing. There are constant swimming pool costs ($1,500 on average per year) and they require a lot of maintenance.
They're also a liability, especially for families with young children, and could affect your homeowners insurance coverage. Pools will limit how many people want to buy your home, so keep that in mind before you have one installed (or consider buying a home with an existing pool).
 
4. Overly Specialized Rooms
So, you just tore down the garage (which you never used) and built a four-season sunroom which resembles an English manor conservatory. You're thrilled, but your potential buyers are going to be rolling their eyes. Where are they going to park the car and store the lawn mower and all their kids' sport equipment? Installing nontraditional customized rooms (like indoor basketball courts or a basement music studio) is great if you're going to be in your home for awhile. But potential buyers are likely to see this as a waste of space, and a project (and expense) they'll have to deal with if they buy your home.

Final Word
We all want to live in a home that reflects our tastes and interests, and our homes should be exactly how we want them to be. Just keep in mind that if you plan to sell your home in the near future, those upgrades and expensive renovations might end up devaluing the home you're trying to sell for top dollar.

The tax benefits of homeownership

Real Estate Tax Talk By Stephen Fishman
Inman News™
February 04, 2011

Q: How can real estate agents be a resource for buyers on tax issues, such as the tax benefits of buying vs. renting?

A: Unless a real estate broker or agent is a bona fide tax professional -- for example, has an MBA or other specialized training in taxation -- he or she should not give clients detailed tax advice. As a real estate professional, you are licensed to help your clients buy real estate -- not serve as their professional tax adviser.
If you give tax advice and it turns out to be wrong, it could cost the client a bundle of money, and leave you with a lawsuit for malpractice.

If a client does ask you for tax advice, and you give it, a good practice is to have the client sign a statement providing that he or she has not relied on your advice and that the transaction is contingent on the approval of the client's tax or legal counsel.

That said, the tax benefits of real estate ownership are something every buyer should understand. You need to understand them as well.

When it comes to the tax benefits of renting vs. buying, the benefits of buying are many, while there are few or no tax benefits for renting. This simple fact can help get renters motivated to take the plunge into homeownership.

The tax benefits of buying a home include:

Home mortgage interest deduction: The interest paid on a mortgage or mortgages of up to $1 million for a principal residence and/or second home is deductible as an itemized deduction. In the early years of a home loan most of the payments consist of interest, so this deduction is particularly substantial during the first years of homeownership.

Depending on the state a buyer lives in and his or her tax bracket, this deduction can reduce the cost of borrowing by one-third or more.

Home equity loan deduction: Homeowners can borrow up to $100,000 against the equity in their home and deduct the interest as an itemized deduction. The money can be used for any purpose, such as paying off high-interest credit card debt. In contract, the interest on credit card debt is not deductible.

Property tax deduction: Homeowners also get to deduct from their federal income taxes the state and local property taxes they pay on their home. This is another itemized deduction that renters don't get.

Deductible homebuying expenses: Various closing costs ordinarily involved in a home purchase are also deductible as itemized deductions, including loan origination fees (points), prorated interest on a new loan, and prorated property taxes paid at settlement.

$250,000/$500,000 home-sale exclusion: Perhaps the greatest tax benefit of owning a home comes when a person sells it at a profit. Homeowners who lived in their home for two of the prior five years prior to its sale need pay no income tax on a substantial amount of their profit -- $250,000 for single homeowners and $500,000 for married homeowners who file jointly. This exclusion can be used once every 24 months.

14 days of free rental income: Another little known tax benefit of owning a home is that the owner can rent it out for up to 14 days during the year and pay no tax at all on the rental income. In contrast, a renter who sublets his or her rental must pay income tax on all the rental income he or she earns.
Tax benefits of renting:

The only tax benefit that a renter can qualify for by virtue of being a renter is the home office deduction. This is a business deduction available to renters who own a business and have a home office they use regularly and exclusively for business purposes.

Some employees can qualify for this deduction as well. The deduction is limited to the amount of profit earned from the business each year. If a renter pays a lot of rent, this deduction can be substantial. Homeowners who are in business and have a home office can also qualify for the deduction.

Of course, the value of the tax benefits of buying a home depends on the state the buyer lives in and his or her tax bracket. Buyers who live in high tax states like New York or California get the most benefit.
This is why the blanket statement "it's always better to buy than rent" is not always true. It all depends on the buyer's individual circumstances.

You should encourage prospective buyers to run the numbers. There are some excellent websites you can refer clients to that have online calculators they can use to compare the costs of renting vs. buying a home.
A good rent vs. buy tool can be found on the Smart Money Magazine website: http://www.smartmoney.com/personal-finance/real-estate/to-rent-or-to-buy-9687/.

Freddie Mac also has a good online calculator: http://www.freddiemac.com/corporate/buyown/english/calcs_tools/.

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including "Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants," "Deduct It," "Working as an Independent Contractor," and "Working with Independent Contractors." He welcomes your questions for this weekly column.

February Home Maintenance Checklist

The transition between winter and spring is the time to get a jump on moisture damage and heat loss, make quick work of organizing storage areas and work in some garden prep before spring.

By Marilyn Lewis of MSN Real Estate

 

Don’t let winter slip away without using the cold, wet weather to help you detect where your home is leaking water and heat, giving you a chance to seal it up tight and develop a wish list for energy-saving improvements. Your first order of business inside your home is to make sure no water is getting in.
Carefully check every spot where condensation or water could enter your living areas and storage spaces. Take along a pad of paper and a pencil and take detailed notes as you scrutinize ceilings, under the roof, under the eaves and along window and door frames and ventilation seals. Be particularly careful to check under toilets, sinks, tubs and showers. Use a flashlight to check the crawl space or basement walls and floors and the underside of the first-story floor. You’re looking for visible moisture and for stains caused by moisture. When you find something, the remedy will depend on the source of the leak. You may just need to recaulk around a tub or window, or you may need to call a plumber to replace a leaking fixture.

Here are some other tasks to tackle inside your home this month:

Change the shower curtain. While you’re checking for leaks in the bathroom, see if the shower curtain needs replacing. Damp shower curtains can grow unhealthy mold and mildew and contribute to mold problems in the tub and shower, so swap yours out periodically and make sure to open and air out the shower enclosure when you’re done bathing.

Batten down the hatches. Find and seal energy leaks. Grab a pad and pencil to note any spots that you can’t address right away. Arm yourself with a tube of caulk to fill small cracks and a spray can of insulating foam sealer for larger gaps. Tour your home feeling for cold air entering through cracks in chimneys and window and door frames, and cracks around appliance vents, electrical and plumbing fixtures and furnace ducts. Remedies might include adding weatherstripping to a door frame or applying fresh caulk to window frames.

Bing: Search & decide Spring home-maintenance tips Identify toxic mold Check for water leaks in your home

Run the numbers. Get an idea of how much energy a home the size of yours typically uses by entering detailed information about your dwelling into the Home Energy Saver tool. The tool lets you calculate your home’s energy use. It also lets you estimate the energy savings from a variety of improvements, such as adding insulation, replacing windows and purchasing high-efficiency appliances. Experts from the Energy Department, the Environmental Protection Agency and other state and federal agencies collaborate in sponsoring the site.

Conduct a home energy audit. If you’ve sealed the obvious leaks and your home is still inefficient, you’ll get more detailed information from a professional energy audit. The auditor can recommend energy-saving improvements and point out those that will most improve efficiency. Learn more about energy audits and how to find a professional auditor at the Energy Department’s Energy Savers site. Auditors use a blower door test, a thermographic scan and, occasionally, a perfluorocarbon tracer gas air-infiltration measurement technique to learn how weather-tight your home is. Tips: Check a contractor’s references thoroughly and check for complaints at the Better Business Bureau and your state attorney general’s consumer protection office (find your attorney general through the National Association of Attorneys General). The Energy Department advises finding a contractor who uses a calibrated blower door and who does thermographic inspections. Expect to pay roughly $300 to $500. In some cities, utility companies or government agencies do the work or help with the fees. For example, in Austin, Texas, the city utility performs and subsidizes audits so homeowners pay only $50 or $150, depending on the type of audit. Austin screens and recommends contractors, too. 

Clean out storage areas. Get a head start on spring cleaning by attacking a cluttered storage space. Whether you go after the garage, attic, laundry room or garden shed, your home benefits when you get rid of rusting tools, leaking fluids and household chemicals. Start by taking everything out of the space and piling it up outside. Clean the empty space, then go through the items, trying to let go of everything you haven’t used in the last year. Make four piles: stuff to keep, trash, donations and recycling, and hazardous waste. Open paint cans to dry the paint completely before disposing. Recycle batteries so the lead they contain doesn’t contaminate ground water. Rules for disposal vary by locale. Call your waste-disposal company or the county landfill to learn where and how to dispose of hazardous waste.

Get a fire extinguisher. Better yet, get several. Buy fire extinguishers for each type of fire you might encounter at home and place them where you’ll need them. For example, use the A-B-C class for living areas and in workshops and garages. For the kitchen, get a specialized extinguisher capable of putting out class B (grease) and C (electrical) fires. For living and sleeping areas and fireplaces, get a multipurpose A-B-C that also works on fires consuming wood, cloth, trash and paper. (Read “9 tips to be prepared and stay safe in home emergencies.”) Inspect extinguishers regularly to ensure the gauges read 100%. The city of Renton, Wash., explains how to purchase, use and service and where to place residential fire extinguishers.

Outside

February is a transitional month in much of the U.S. Winter storms may continue to cause damage to home exteriors and landscaping, but spring is in sight and you can begin working in the garden to prepare for warmer weather.
Check for storm damage. While you’re outside, walk around the house looking for missing or damaged siding and shingles. Remove fallen branches and storm debris from around the house.

 

Clean the gutters. It’s easier to scoop up the leaves and debris in your gutters when the stuff is wet, so pull out your ladder and clean the gutters after a soaking rain. You should do this at least twice a year, but may need to do it monthly if your home is surrounded by trees. For more information, see “Gutter cleaning and care.”

Mulch garden beds. By the end of the month, the ground has thawed in many parts of the country and it’s time to start warding off weeds. If you didn’t mulch in early winter, now is the time to add a layer to discourage weeds.

Prune ornamental grasses. Clean up pampas grass and other ornamental grasses by cutting them in early spring, before new green shoots get tall. Cut the old grass about 2 to 4 inches above the new green shoots. Wear gloves and use a chain saw on big, unwieldy pampas grasses. Tackle others with pruning shears or hedge clippers. Cut straight across the top of the clump and rake away the dead stalks to clean up the plant.

Try corn gluten meal on weedy garden paths. Corn gluten meal, a yellow powder or pellet, is used in livestock feed but it also is an organic “pre-emergent” weed control. You’ll find it in garden supply or agricultural supply stores. Spread it on garden paths (find inspiration for garden paths from this slide show on 16 beautiful garden paths) or beds where you do not want seeds to take root. Read label directions for correct application. Corn gluten meal stops seeds from forming roots when they are germinating. It also contains nitrogen that feeds the established plants in your garden. Apply it early in the season: If you wait until weeds have sprouted, it will be ineffective. Avoid using it on beds where you have seeded ornamentals or where you are counting on plants to self-seed from last year. Learn more at Iowa State University’s Department of Horticulture Corn Gluten Meal Research Page.

Common Foreclosure Misconceptions:

"An attorney told me all I have to do is file Chapter 13 Bankruptcy to stop the foreclosure”
Yes, Chapter 13 temporarily stalls the foreclosure proceedings: however it is only a temporary solution! You will have to endure fees, court appearances, and a bankruptcy on your record, and still have to make your house payments along with compiled arrears and fees. Be sure to ask the attorney these questions.

"The bank has been really helpful and they're helping me solve this. I don't need additional help"
Yes, you need to be talking to the bank, the worst thing you can do is ignore them. However, the bank does not have your best interests in mind, they have their interests in mind. They want to get paid ASAP or they want to take your house. If you don't have someone on your side, you may end up losing your home even faster.

“I can work out an affordable payment plan or forbearance with the bank”
The bank's plan is seldom reasonable and your payments will increase significantly by as much as hundreds or even thousands of dollars.

“The bank won’t kick me out because my husband and I have medical disabilities and 6 kids living in the house”
Unfortunately, the bank only cares about collecting their debt regardless of your situation. Harsh reality is once the house goes to Auction, the sheriff will eventually come and order you and your family to vacate the property.

“I owe too much on my house so if I sold my house with a Realtor® I would have to pay thousands of $$ in commissions and closing costs. I can’t sell my house, it’s not an option, I don’t have the money”
NOT TRUE.  In a short Sale, the lender pays all costs and commissions.   Working with an experienced Realtor who is a Foreclosure Specialist, and has a working relationship with banks, and is willing to negotiate on your behalf, can overcome these problems. We have been negotiating short sales since 2005 and there is no costs to the seller.  Contact us today to learn more at (586) 421-1598. 

“The bank said that I can do a DEED in LIEU and not have a foreclosure on my record”
Don’t let the bank fool you. Your credit report and personal record will read “Deed In Lieu”, which is a VOLUNTARY FORECLOSURE (this is just as bad on your credit as a full foreclosure). This only benefits the bank (saves them money)

“It’s too late, I can’t do anything, it’s no use trying”
Nothing is farther from the truth! Until the sheriff kicks you out, there are always options!

We hope this clears up any misconceptions you may have had about the foreclosure process. Don't be depressed, there is plenty of hope and lots of options. We can help you navigate the process so you can start over again. If you have additional questions, feel free to contact me at (586) 421-1598.

Fannie and Freddie's Big Foreclosure Backlog

•  Friday January 28, 2011, 8:08 am EST

Fannie Mae (fnma.ob.OB) and Freddie Mac (fmcc.ob.OB) are trying to sell their huge backlog of foreclosed homes in an orderly way to avoid flooding the market and depressing prices. As foreclosures mount, though, analysts say the companies may be forced to reconsider that approach.

The government-controlled mortgage companies' inventory of foreclosed residential property has quadrupled in three years and now stands at a record $24 billion. The number of properties they own has increased fivefold to nearly 242,000, representing roughly a third of all repossessed homes in the U.S. And the total keeps growing as they take possession of homes faster than they can sell them. In the first nine months of 2010 Fannie and Freddie took in 319,243 foreclosed properties and disposed of 210,105. At the same time, U.S. housing prices have been falling. In the most recent reading, the S&P/Case-Shiller index of home values in 20 cities fell 1.6 percent in November from the previous year, the biggest 12-month decrease since December 2009.

Officials at Fannie and Freddie say they are committed to an approach consistent with their mission as backstops for the housing market. They have been trying to stabilize neighborhoods by selling homes at prices close to market levels and giving preference to buyers who plan to live in the homes rather than investors who might rent them out or try immediately to resell them. Fannie and Freddie are also investing in some properties, spending millions on maintenance to make them competitive with other homes on the market in their neighborhoods. "We don't want a reduced value to initiate a quick sale," says David Wendling, senior director of REO (real estate owned) sales at Freddie Mac. "The focus has always been on supporting neighborhood values."

Of the 74,621 properties Freddie Mac sold in the first nine months of 2010, 67 percent went to buyers who intended to occupy them, according to company data. At Fannie Mae, about 80 percent of sales are to owner-occupants, says company spokeswoman Amy Bonitatibus. "We don't hold anything back that is available to be sold," says Jane Severn, director of REO disposition at Fannie Mae. "We're doing the opposite, pushing our homes out to the market as soon as we can."

Some real estate analysts say the companies will have to find a way to dispose of properties more quickly. The number of homes subject to a foreclosure filing may rise by 20 percent this year, up from a record 2.87 million properties in 2010, RealtyTrac, an Irvine (Calif.) data company, predicts. The market currently can absorb about a million foreclosures a year, the Mortgage Bankers Assn. estimates. Fannie and Freddie themselves estimate in regulatory filings that it will take "a number of years" to bring their foreclosure inventory down to pre-2008 levels.

As their holdings of unsold homes increase, Fannie and Freddie eventually will need to drop prices and turn to investors, analysts predict. "I think they're just (postponing) the inevitable," says Michael Slaughter, a partner at New Providence Capital, a Dallas-based private lender. "If they don't start with a systematic distribution of these properties to investors who have cash today and will buy them at the right price, they're going to end up selling the entire portfolio to Goldman Sachs (NYSE:GS - News) or BlackRock (NYSE:BLK - News) at a tenth of what they can get for them today."

The bottom line: Fannie's and Freddie's strategy of not flooding the market with foreclosed homes may come under pressure as their inventory builds.