ÿþ<?xml version="1.0" encoding="UTF-8"?> <!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> <html xmlns="http://www.w3.org/1999/xhtml"> <head> <meta http-equiv="Content-Type" content="text/html; charset=utf-8" /> <meta name="author" content="mimi miller"/> <meta name="description" content="Longmont, Firestone, Boulder, Loveland, Mead real estate,Longmont Colorado Real Estate and Homes For Sale. Search Longmont CO Homes and Property Listings. 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} --> #footer ul {margin-left: 100px} #main_body {width: 900px; margin-left:auto;margin-right:auto} </style> <link rel="EditURI" type="application/rsd+xml" title="RSD" href="http://mimimiller.us/xmlrpc.php?rsd" /> </head> <body id="main_body" style="background-color: #000033; align: center"> <div id="wrapper"> <div id="tophead"> <h1>Mimi Miller Realty</h1> <div id="buttons"><a href="mailto:mimi.miller@comcast.net"><img src="gold.jpg" alt="email me" /></a> <a href="aboutMe.htm#callMe"><img src="gold1.jpg" alt="call me" title="Call me at 303-709-6990" /></a> </div> </div> <div id="navbar"> <ul> <li><a href="index.htm" >Home</a></li> <li><a href= "aboutMe.htm">About Me</a></li> <li><a href="buyers.htm">Buyers</a></li> <li><a href="homeSearch.htm">Home Search</a></li> <li><a href="sellers.htm">Sellers</a></li> <li><a href="foreclosures.htm">Foreclosures</a></li> <li><a href="newsletter.htm">Newsletter</a></li> <li><a href="favorites.htm">Favorites</a></li> <li><a href="community.htm">Community</a></li> <li><a href="myBlog.htm">My Blog</a></li> </ul></div> </div> </div> </div> <br/> <br/> <div id="container" style="margin-left: 50px"> <!-- header --> <div id="header"> <div id="slogan" style="text-align: center"><a class="link6" href="http://mimimiller.us/">Welcome to Mimi Miller's Blog</a></div> <div id="key_visual"><a class="link6" href="http://mimimiller.us/">&#xA0;</a></div> <div id="logo">&#xA0;</div> </div> <div id="main_container"> <div id="left_column_container"> <div id="main_nav_container" class="content"> <!-- list of main navigation items --> <ul id="main_nav_list"> <li><a href="index.htm">Home</a></li> <li><a href="aboutMe.htm">About Mimi</a></li> </ul> </div> <!-- end #main_nav_container --> <!-- sub container 1 --> <div id="sub_container1"> <!-- container for the boxes, search, navigation --> <div id="weblog_sub_container1" class="content"> <div id="weblog_calendar"><table id="wp-calendar" summary="Calendar"> <caption>December 2009</caption> <thead> <tr> <th abbr="Monday" scope="col" title="Monday">M</th> <th abbr="Tuesday" scope="col" title="Tuesday">T</th> <th abbr="Wednesday" scope="col" title="Wednesday">W</th> <th abbr="Thursday" scope="col" title="Thursday">T</th> <th abbr="Friday" scope="col" title="Friday">F</th> <th abbr="Saturday" scope="col" title="Saturday">S</th> <th abbr="Sunday" scope="col" title="Sunday">S</th> </tr> </thead> <tfoot> <tr> <td abbr="June" colspan="3" id="prev"><a href="http://mimimiller.us/2008/06/" title="View posts for June 2008">&laquo; Jun</a></td> <td class="pad">&nbsp;</td> <td colspan="3" id="next" class="pad">&nbsp;</td> </tr> </tfoot> <tbody> <tr> <td colspan="1" class="pad">&nbsp;</td><td id="today">1</td><td>2</td><td>3</td><td>4</td><td>5</td><td>6</td> </tr> <tr> <td>7</td><td>8</td><td>9</td><td>10</td><td>11</td><td>12</td><td>13</td> </tr> <tr> <td>14</td><td>15</td><td>16</td><td>17</td><td>18</td><td>19</td><td>20</td> </tr> <tr> <td>21</td><td>22</td><td>23</td><td>24</td><td>25</td><td>26</td><td>27</td> </tr> <tr> <td>28</td><td>29</td><td>30</td><td>31</td> <td class="pad" colspan="3">&nbsp;</td> </tr> </tbody> </table></div> <div class="box2 list2 link2"> <div class="box2_head">Categories</div> <ul> <li><a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="A quick synopsis on buying and selling real estate.">Real Estate</a> (27) </li> </ul> </div> <div class="box2 list1 link2"> <div class="box2_head">Latest Postings</div> <ul> <li><a href="http://mimimiller.us/2008/06/11/buying-rental-property/" id="post-37">June 11, 2008: Buying rental property</a></li> <li><a href="http://mimimiller.us/2008/01/22/the-changing-face-of-generational-buyers-and-how-to-position-yourself/" id="post-36">January 22, 2008: The changing face of generational buyers and how to position yourself</a></li> <li><a href="http://mimimiller.us/2008/01/17/curb-appeal/" id="post-35">January 17, 2008: Curb appeal</a></li> <li><a href="http://mimimiller.us/2007/12/13/rental-property-may-be-the-place-to-be/" id="post-34">December 13, 2007: Rental property may be the place to be..</a></li> <li><a href="http://mimimiller.us/2007/12/13/new-rules-for-mortgage-qualification/" id="post-33">December 13, 2007: New rules for mortgage qualification</a></li> <li><a href="http://mimimiller.us/2007/12/10/subprime-freeze-plan/" id="post-32">December 10, 2007: Subprime freeze plan</a></li> <li><a href="http://mimimiller.us/2007/12/09/current-foreclosure-statistics/" id="post-31">December 9, 2007: Current foreclosure statistics</a></li> <li><a href="http://mimimiller.us/2007/11/23/most-homeowners-have-negative-equity/" id="post-30">November 23, 2007: Most homeowners have negative equity</a></li> <li><a href="http://mimimiller.us/2007/11/09/foreclosure-scams/" id="post-29">November 9, 2007: Foreclosure scams</a></li> <li><a href="http://mimimiller.us/2007/11/08/dump-this-house/" id="post-28">November 8, 2007: Dump this house</a></li> </ul> </div> <div class="box2 list1 link2"> <div class="box2_head">Links</div> <ul> <li id="linkcat-4" class="linkcat"><h2>Blogroll</h2> <ul> <li><a href="http://www.mimimiller.net" title="Listings and my primary web site" target="_blank">My listings page</a></li> </ul> </li> </ul> </div> <div class="box2 list2 link2"> <div class="box2_head">Archives</div> <ul> <li><a href='http://mimimiller.us/2008/06/' title='June 2008'>June 2008</a></li> <li><a href='http://mimimiller.us/2008/01/' title='January 2008'>January 2008</a></li> <li><a href='http://mimimiller.us/2007/12/' title='December 2007'>December 2007</a></li> <li><a href='http://mimimiller.us/2007/11/' title='November 2007'>November 2007</a></li> <li><a href='http://mimimiller.us/2007/10/' title='October 2007'>October 2007</a></li> <li><a href='http://mimimiller.us/2007/09/' title='September 2007'>September 2007</a></li> <li><a href='http://mimimiller.us/2007/08/' title='August 2007'>August 2007</a></li> </ul> </div> <div class="box2 list1 link3"> <div class="box2_head">Meta</div> <ul> <li></li> <li><a href="http://mimimiller.us/wp-login.php">Login</a></li> <li><a href="http://mimimiller.us/feed/">Entries (RSS)</a></li> <li><a href="http://mimimiller.us/comments/feed/">Comments (RSS)</a></li> </ul> </div> <!-- search --> <div class="search_box"> <form id="searchform" method="get" action="http://mimimiller.us"> <div id="weblog_search_input"><input type="text" value="" name="s" id="s" /></div> <div id="weblog_search_button"><input type="submit" id="searchsubmit" value="Search" /></div> </form> </div> </div> <!-- end #weblog_sub_container1 --> </div> <!-- end #sub_container1 --> </div> <!-- sub container 2 --> <div id="sub_container2"> <div id="weblog_article_container" class="content"> <div class="weblog_article" id="weblog_article-37"> <a class="link6" href="http://mimimiller.us/2008/06/11/buying-rental-property/" rel="bookmark" title="Buying rental property"><h1>Buying rental property</h1></a> <p class="weblog_article_info"> June 11, 2008 by mimi.</p> <p> <p> MARSHALL LOEB&#8217;S DAILY MONEY TIP<br /> How to buy rental property </p> <p>By Marshall Loeb, MarketWatch<br /> Last update: 2:48 p.m. EDT June 8, 2008Comments: 10NEW YORK (MarketWatch) &#8212; Prices on property are dropping in many areas and while that is bad news if you&#8217;re looking to sell it puts the ball in your court if you&#8217;re interested in buying. Buying rental property in a down market can be a lucrative investment but there are some factors you should consider before you jump in.<br /> From Consumer Reports, consider these four tips on how to find a good rental property:<br /> Find out where renters want to live. Location, location, location takes on added economic urgency when purchasing a rental property. Ask your real-estate agent to show you properties that have an established rental track record going back two or three years, during which vacancies were limited to no more than three months at a time. And make sure that you see the income and expense statements on the properties for at least two to three years to find out what has been spent on repairs and general maintenance.<br /> Do the math. Before you buy, figure out whether the rents will cover your expenses and leave room for profit. To determine how much yearly rental income you are likely to receive, ask real-estate agents for the going rates and scan the classifieds for comparable properties in the same neighborhood. Don&#8217;t forget to take into account the possibility that the property may be vacant for a month or so. Then subtract annual mortgage payments and operating expenses &#8212; insurance, utilities, projected repairs and maintenance and landscaping. Ideally, income tops outlays, and what&#8217;s left is called cash flow. If outlays top income, producing negative cash flow, the property is too expensive. Either negotiate a lower price or continue hunting.<br /> Assess the tax consequences. Anything left over after expenses is taxed as ordinary income. You can depreciate the cost of residential rental property, but not the land it sits on, over 27.5 years &#8212; even if it is increasing in value. Suppose you paid $400,000 for a triplex on a sliver of property assessed at $50,000. Depreciation would come to nearly $13,000 a year, or, put another way, you could have that much rental income without paying taxes on it.<br /> Choose tenants carefully. Neophyte landlords often fail to conduct a thorough background check on prospective renters, says Vito Simone, a broker at Simone Real Estate in Baltimore. Such a lapse can be costly if the tenant stops paying rent or damages the property. Don&#8217;t approve tenants until you have checked their credit and criminal histories and talked to references and employers. The lease should lay out rules about pets, parties, rent due dates and late fees. If tenants already occupy the property when you buy, you will have to honor their lease until it expires. </p> <p>Marshall Loeb, former editor of Fortune, Money, and the Columbia Journalism Review, writes for MarketWatch.</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2008/06/11/buying-rental-property/#respond" title="Comment on Buying rental property">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-36"> <a class="link6" href="http://mimimiller.us/2008/01/22/the-changing-face-of-generational-buyers-and-how-to-position-yourself/" rel="bookmark" title="The changing face of generational buyers and how to position yourself"><h1>The changing face of generational buyers and how to position yourself</h1></a> <p class="weblog_article_info"> January 22, 2008 by mimi.</p> <p> <p>RISMEDIA, Jan. 22, 2008-The recent housing price bubble has caused concern, with the post-2000 increase in house prices keeping the younger generation out of the housing market, particularly in California and Hawaii, Nevada, Florida and the east coast states from Maryland north. Yet in context, these increases are merely one facet of a larger transition on the horizon.</p> <p>What is the generational housing bubble?</p> <p>The massive Baby Boomer population (78 million) is poised to enter elderly years after four decades of surging through the housing market. The elderly sell many more homes than they buy and in the next decade the relatively smaller younger generation may not absorb all the homes released by the Baby Boomers sell-off.</p> <p>The younger generation is not only smaller but its purchasing power has been eroded by the rapid increase in house prices in the recent boom. This surplus of potential home sellers is expected to create a prolonged buyersýÿ marketýÿa sharp reversal from recent decades-and will likely cause prices to soften and decline.</p> <p>Newly estimated data reported in this article show that roughly 2% of people of all ages younger than 70 sell homes each year, but the selling rate climbs far higher after age 75 [1]. Meanwhile, the percent buying homes peaks at a much younger age, 30 to 34 (3.6%), before declining steadily into older ages.</p> <p>After three decades of relative stability, the ratio of seniors to working age adults nationwide will increase by a total of 67% in the next two decades (2010 to 2030). After 2010 the leading edge of the 78m strong boomer population will pass age 65 and growth among the elderly population will substantially exceed that of younger adults, an unprecedented social and economic development that is expected to impact every state in the U.S.</p> <p>How will it affect the states?</p> <p>There are important differences between the states in the ages at which residents become net home sellers rather than buyers. The six earliest (where sellers dominate before age 60) are New York; Connecticut; New Jersey; Massachusetts; Illinois; Alaska. The latest (who sell on average after the age of 74) are Florida; Arizona; Nevada.</p> <p>The study forecasts the time when the total number of annual sellers of all ages begins to outnumber the buyers, based on the growing number of seniors relative to younger adults, and applying typical per capita home buying rates at each age in each state.</p> <p>States where sellers will dominate before 2015: New York; Connecticut; Massachusetts; Pennsylvania; West Virginia; North Dakota; Hawaii</p> <p>States where sellers become surplus between 2016 - 2020: New Jersey; Rhode Island; Ohio; Iowa; Nebraska; Louisiana</p> <p>A further 16 states, led by California and Illinois, develop a surplus of sellers in the 2020s .</p> <p>Finally, another 21 states reach a position of surplus sellers after 2030 - including most of the Southern and Western states.</p> <p>Consequences for the housing market</p> <p>The market shift could begin as early as 2010, as the leading edge of the baby boom generation moves past the age of 65. As the number of sellers in the market begins to outnumber the buyers, itýÿs likely to lead to a drop in the housing market. It could mean:</p> <p>- A collapse in home equity - for half the families in America, home equity amounts to more than half their net worth (this is especially important for the working class and most of the middle class)<br /> - Young adults could get a bargain if they can wait long enough for prices to bottom out - but by waiting for the best price they could exacerbate the problem<br /> - Many communities could acquire an excess of vacant and unsold properties, or they could be converted to rental units pending sale<br /> - Property values will be assessed downward and this will diminish tax revenues available for municipal services</p> <p>Planning for change</p> <p>The coming generational transition in the housing market will upset the historic balance of buyers and sellers and demands action from state and local governments to reduce the impacts. They can:</p> <p>- Monitor new construction and unsold inventory to prevent overbuilding<br /> - Plan services and community designs to retain aging residents as long as possible, slowing their departure from the broader community<br /> - Plan services to attract young households, such as better day care and schools, and more appealing amenities<br /> - Attract new immigrants, who already account for 40% of US growth in homeownership this decade<br /> - Invest in the economic capacity of youth, through higher education and job training - young adults with college degrees are more likely than those with high school degrees to become home owners, and they pay an average 64% higher price when better educated.</p> <p>The impact of the aging boomer population will effect, not only housing prices, but transportation, land use and community development. It demands a response from urban planners and local officials that acknowledges the need to transform urban environments, and soon. Because this is a nationwide problem affecting a broad swath of the citizenry and with potential negative effects on the U.S. economy, the federal government should also assist in these solutions.</p> <p>Aging and home ownership trends</p> <p>A widely reported study by Mankiw and Weil (1989) predicted a 47% decline in house prices during the 1990s, based largely on their modeling of declining demand as baby boomers aged - an expectation that home investments would peak and decline after age 45. However, instead baby boomer demand for housing has grown into their 50s and house prices have doubled.</p> <p>It has since proven that home ownership rates rise with age, and do not generally peak until after age 65. John Pitkinýÿs (1990) study of elderly homeownership was especially notable for showing how most variation in homeownership among older age cohorts over time is explained by demographic factors and inertia from prior decades, while current economic factors add small but significant effects at the margin.</p> <p>Housing price changes and home ownership</p> <p>In recent years, abnormally low mortgage rates have helped to inflate housing prices. This has encouraged even more home buying. In what might seem a paradox, when market fundamentals drive housing prices up, word of mouth and the fear that rising prices will make future purchases unaffordable amplify the trend. As a result, the number of buyers in the market increases to include both speculators and young adults accelerating their entry into homeownership.</p> <p>This short-term housing bubble is now bursting in most of the U.S. Many analysts expect prices to decline through 2009 before beginning recovery. However, the eventual recovery in some states will be prevented by the downturn of the generational bubble that has been newly identified in this study.</p> <p>Source: Journal of the American Planning Association (JAPA)</p> <p>For more information, visit www.informaworld.com/japa.</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2008/01/22/the-changing-face-of-generational-buyers-and-how-to-position-yourself/#respond" title="Comment on The changing face of generational buyers and how to position yourself">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-35"> <a class="link6" href="http://mimimiller.us/2008/01/17/curb-appeal/" rel="bookmark" title="Curb appeal"><h1>Curb appeal</h1></a> <p class="weblog_article_info"> January 17, 2008 by mimi.</p> <p> <p>By David Sobel</p> <p>RISMEDIA, Jan. 17, 2008-Youýÿve all had that experience with a client where you drive up to a house and they donýÿt even want to go inside. Itýÿs an immediate ýÿun-appeal.ýÿ You may know the inside of the house shows much better, but you just canýÿt convince them to spend the time to even go inside. In todayýÿs market where lots of choices in housing are available to the buyer, why should they?</p> <p>Here are some easy, inexpensive fixes that will help create that outside appeal and get you one, giant step further to a sale.</p> <p>1. Paint or stain the front and garage doors, especially if they show any weathering. These are the first visuals where a potential buyer focuses. If garage doors are metal and dented, they may need to be replaced.</p> <p>2. Any old, basically abandoned sheds or small structures, must be removed, the area graded and the grass replaced.</p> <p>3. Change any dated, outside light fixtures.</p> <p>4. Fix that driveway. If it is blacktop, make sure cracks and crumbling areas are dug out and filled and then the whole driveway sealed. If it is cement, have large cracks filled and repaired professionally. The buyer must at least feel they can drive the moving truck in confidently!</p> <p>5. Make sure landscaping bricks are in their proper placement. Mowing, weed-whipping sometimes moves them and this is something the homeowner rarely notices, but makes the property look unsightly.</p> <p>6. Fill in bare dirt under large shade trees. Plant shade-tolerant plants in defined planters or groundcover. Landscape properly for that area.</p> <p>7. All landscaping beds should be cleaned out and updated for the time of year it is in your region. Place new bedding material down.</p> <p>8. Have trees and bushes pruned and trimmed. If a bush or tree is looking old or about to expire, remove it and replace it with a similar size and type if you can. If there is a tree limb(s) over the roof, have them removed.</p> <p>9. If the house needs painting and a full paint job is not in the cards; have it touched up professionally in the worst, most visible spots. Paint shutters and fix them if they are hanging crooked. At least this may help get your client in the front door, even if they negotiate a full paint job into the sale later.</p> <p>10. If the house is sided, have it power-washed and have gutters and windows cleaned. Window cleaning inside and out makes the house feel updated and fresh, rather than old and dingy.</p> <p>11. Make sure grass is in good shape, weeds are removed, trimming done regularly. So many sellers fall down on this job the minute the house is listed, and this is critical to selling a house quickly, especially one where the owners have already moved out. In snowy climates, removal must be done regularly too. If owners have moved out, make sure you have an HWA Home Warranty to re-assure buyers.</p> <p>12. Keep garbage and recycle containers inside the garage, along with all toys and equipment. Make sure the garage is neat and organized. Painted walls and floors also go a long way in this area and are inexpensive to do.</p> <p>13. Decks should be washed and repainted or re-sealed; plantings around them cleaned, weed-free and looking good. Patio furniture should be in excellent condition. Even though it is in the backyard, this is the area where the family can envision enjoying the warm days and the new yard.</p> <p>14. If the roof has missing shingles and they can be replaced inexpensively, suggest this be done as it may save negotiation over a completely new roof. Roof repair needs and costs should be minor or the homeowner might as well replace the entire roof.</p> <p>15. If the homeowner wants to do a bit more, suggest solar lights lining the driveway or installing a more attractive front door with lead glass inserts and replacing plain doorknobs with something more custom.</p> <p>16. If you have an evening showing, make sure lights are on outside and inside the house. This is warm and inviting.</p> <p>17. If itýÿs a holiday season, by all means decorate the home! Just like sugar cookies or vanilla scent on the inside of the house, this really says ýÿitýÿs a homeýÿ and I can see myself enjoying life here! In the least, always have some greenery or flowers for the season on the front step or porch; even a birdbath with a little garden around it says home.</p> <p>Remember, most home buyers cannot visualize even these simple changes and clean ups in a house and the ones who can, will be looking for a reduced price. So to sell the house at top dollar and quickly, make it ýÿappealýÿ to the many who will be seeing it rather than the few who are looking for a ýÿfixer upper.ýÿ These people know what they want, go after it and need less assistance.</p> <p>Finally, have neighbors or friends look at the finished results to see if you or the home owner has missed anything key that would be quick and easy to do. Use this article in your listing presentations so they can get started right away on these easy, inexpensive fixes and adapt the ideas to their home. When that home looks fabulous, update that picture on the Internet! This is especially important if the season has changed too and itýÿs a reward to your client too!</p> <p>For more information, please click here</p> <p>RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.</p> <p>For more ways to impress your clients, see</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2008/01/17/curb-appeal/#respond" title="Comment on Curb appeal">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-34"> <a class="link6" href="http://mimimiller.us/2007/12/13/rental-property-may-be-the-place-to-be/" rel="bookmark" title="Rental property may be the place to be.."><h1>Rental property may be the place to be..</h1></a> <p class="weblog_article_info"> December 13, 2007 by mimi.</p> <p> <p>&#038; MoneyMoney MattersPresented by<br /> With this housing scene, itýÿs a rentals market<br /> Financial editor Jean Chatzky on using the bleak market to your advantage<br /> View related photos </p> <p> Money on<br /> Holidays at Half the Price!<br /> Stuff We Love: Air Apparent<br /> Stuff We Love: Ways to Get Comfy-Cozy<br /> 5 Tips to Save Money This Winter<br /> Should You Be in a Panic About Mortgages?<br /> TODAYShow.com contributor<br /> updated 3:39 p.m. MT, Wed., Dec. 12, 2007</p> <p>Jean Chatzky<br /> TODAY Financial Editor</p> <p>&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8211;</p> <p>ýÿ Profile<br /> ýÿ E-mail </p> <p>This past week, Robert Kiyosaki, author of &#8220;Rich Dad, Poor Dad,&#8221; one of the best-selling personal finance books of all time, dropped by my radio show to talk real estate. </p> <p>Yes the waters are rocky, the mortgages may be harder to come by, but particularly if you&#8217;re interested in buying rental properties with an eye toward becoming a bit of a mogul yourself, Kiyosaki says now is as good a time as any.<br /> The stats seem to bear him out. Home prices fell 1.7 percent in the third quarter of this year, according to the S&#038;P Case/Shiller Home Price Index and many experts, including Kiyosaki, are predicting a continued decline. He says to people like him and Donald Trump, his co-author on a volume called &#8220;Why We Want You To Be Rich,&#8221; (Rich Press) the fact that prices are going to plummet even further is good news: It makes buying even more lucrative. </p> <p>But investing in rental properties isn&#8217;t a decision to be taken lightly. It requires a whole lot of know-how and (preferably) a shining credit report. You also need a firm understanding of exactly what you&#8217;re signing up for, which means knowing your local market inside and out.<br /> Here&#8217;s how you can turn today&#8217;s bleak market to your advantage:</p> <p>Get your credit in shape<br /> True, you can probably purchase a property with a middle of the road credit score. But do you want to? A low credit score means a high interest rate on your mortgage, and that increased expense is going to cut into your overhead pretty dramatically. </p> <p>So, take the next 12 months to improve your credit score before diving in. Pay your bills on time, turn down offers of new credit and reduce your outstanding balances. Based on Kiyosaki&#8217;s prediction, you&#8217;ll still have time to get in while the getting is good. </p> <p>Study up<br /> Jumping in without knowing the basics is the wrong move. Before you sign on any dotted lines, take the time to read a few solid (and up-to-date) books on real-estate investing. Once you feel you have a pretty good ýÿ albeit broad ýÿ handle on the subject, you can start scoping out the market where you plan to buy. </p> <p>&#8220;You need to go out and see the area for yourself. Look at a lot of properties, get a handle on what they are renting for, and how much insurance and property taxes will be so you don&#8217;t have any surprises,&#8221; advises Thomas Lucier, an investor in Florida and author of &#8220;The No-Nonsense Real Estate Investor&#8217;s Kit,&#8221; (Wiley, 2006). Do it in person, but also check out the classified sections of your local newspapers to get a feel for the rents. </p> <p>Spot a good investment<br /> Location is key, obviously, and a good rule of thumb is to not buy rental property in an area where you yourself wouldn&#8217;t be willing to live. That means looking at crime rates, as well as walking the neighborhood during the day and after dark. It also means looking at things like the age of the property (an older building can mean more repairs), and enlist the help of a good inspector who will spot any structural problems. If your inspector finds something, you can then weigh your options ýÿ often, these kinds of issues can be used as bargaining chips to lower the price, but if they&#8217;re severe, you may want to just move on. </p> <p>Start small<br /> Lucier suggests a duplex that will allow you the ability to live in one side and rent out the other. Even Kiyosaki, who says he now only buys apartment buildings with more than 300 units, started with a small condo on the island of Maui, Hawaii. &#8220;I&#8217;ve ridden the market up and down, and that&#8217;s how I got smart,&#8221; he explains. As you gain experience, you can slowly begin to expand your portfolio. </p> <p>Focus on cash flow<br /> The key to making money off of your investment properties is thinking in terms of cash flow rather than capital gains, says Kiyosaki. </p> <p>&#8220;When I buy a piece of real estate, my first question is what&#8217;s my cash flow? What&#8217;s my rental income from the property? A property is only worth its rent.&#8221; That means adding up your mortgage payments, property taxes, insurance costs and maintenance, and subtracting that figure from what you can reasonably charge for rent. The amount that&#8217;s left? It&#8217;s your salary. Increase it by becoming a do-it-yourselfer, if you have the time and skill to fix a leaky faucet. </p> <p>With reporting by Arielle McGowen.</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2007/12/13/rental-property-may-be-the-place-to-be/#respond" title="Comment on Rental property may be the place to be..">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-33"> <a class="link6" href="http://mimimiller.us/2007/12/13/new-rules-for-mortgage-qualification/" rel="bookmark" title="New rules for mortgage qualification"><h1>New rules for mortgage qualification</h1></a> <p class="weblog_article_info"> December 13, 2007 by mimi.</p> <p> <p>Tougher Standards Drive Up the Cost of Homeownership<br /> Even borrowers with decent credit are beginning to feel the mortgage crisis pinch.</p> <p>Fannie Mae, soon to be followed by Freddie Mac, has imposed an extra 0.25 percent upfront charge on all new mortgages that it buys or guarantees. </p> <p>In a statement, Fannie said the new fee is needed &#8220;to ensure that what we charge aligns with the risk we bear.&#8221; The National Association of Home Builders labeled the fee &#8220;a broad tax on homeownership&#8221; because more than 40 percent of all mortgages outstanding are owned or guaranteed by Fannie or Freddie.</p> <p>Mortgage insurers have raised premiums for certain borrowers and tightened standards. PMI Group Inc. has stopped writing mortgage insurance for borrowers with credit scores below 620 who are financing more than 95 percent of their home&#8217;s value. Triad Guaranty Insurance Corp. has stopped providing mortgage insurance on option adjustable-rate mortgages, which carry low introductory rates but can lead to a rising loan balance.</p> <p>The bar for credit scores is rising, too. &#8220;Historically, lenders would consider top-tier credit [a score of] 680,&#8221; says David Soleymani, a mortgage broker in Los Angeles. &#8220;Now, many of those lenders want to see a 720,&#8221; but are rewarding such borrowers with better rates, he says.</p> <p>Source: The Wall Street Journal, James R. Hagerty and Ruth Simon (12/11/07)</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2007/12/13/new-rules-for-mortgage-qualification/#respond" title="Comment on New rules for mortgage qualification">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-32"> <a class="link6" href="http://mimimiller.us/2007/12/10/subprime-freeze-plan/" rel="bookmark" title="Subprime freeze plan"><h1>Subprime freeze plan</h1></a> <p class="weblog_article_info"> December 10, 2007 by mimi.</p> <p> <p>Subprime freeze plan: Who&#8217;s left out<br /> The new foreclosure prevention program may leave out most distressed subprime borrowers.<br /> EMAIL | PRINT | DIGG | RSS Subscribe to Real Estate</p> <p> feed://rss.cnn.com/rss/money_realestate.rss<br /> Paste this link into your favorite RSS desktop reader<br /> See all CNNMoney.com RSS FEEDS (close) By Les Christie, CNNMoney.com staff writer<br /> December 9 2007: 9:43 AM EST</p> <p>Special Reportfull coverage </p> <p>Subprime freeze plan: Who&#8217;s left out<br /> Bush subprime plan offers help to 1.2M<br /> Hope Now faces big challenges<br /> Foreclosures reach record high </p> <p>NEW YORK (CNNMoney.com) &#8212; Distressed borrowers looking for relief from the recently announced White House foreclosure prevention plan may be in for a disappointment. </p> <p>In announcing the Administration&#8217;s plan, which includes a five-year freeze on interest rate hikes for some subprime borrowers with adjustable-rate mortgages (ARMs), the White House estimated it would offer relief to 1.2 million families out of the 1.8 million facing higher interest rates. The initiative comes at a time of record high foreclosure rates.</p> <p>But there are very strict limitations.</p> <p>Sharon Reuss, a spokeswoman for the Center for responsible Lending, estimated it would help 7 percent of those stuck with unaffordable subprime loans, or 145,000 borrowers.</p> <p>&#8220;This is so limited in scope,&#8221; she said. </p> <p>The guidelines on who can be helped are spelled out by the American Securitization Forum (ASF), which represents the players in the securitization process, including lenders, those who service the loans and investors who hold the debt.</p> <p>The ASF guidelines limit the interest rate freeze solely to those borrowers who are unable to afford payments if they rise above their introductory rates. These normally adjust higher after the first two (2/28 ARMs) or three (3/27 ARMs) years of the loans.</p> <p>Left out are both the people who can afford to continue payments even after rates adjust higher and those who cannot afford the loan even at the low initial rates.</p> <p>Further limitations are that the loans must have been made between Jan. 1, 2005 and July 31, 2007 and have been included in securitized pools. Rates must be scheduled to reset no earlier than Jan. 1, 2008 and no later than July 31, 2010 and the restructuring process must begin before the loans reset.</p> <p>To determine affordability, the plan would use readily available criteria, especially credit (FICO) scores. These must not exceed 660 or have gained more than 10 percent since the origination of the mortgage. </p> <p>In either of those cases, borrowers have failed the FICO test and must apply for another type of rework. &#8220;It&#8217;s very likely these people will be able to refinance into a fixed rate loan,&#8221; said Tom Deutsch, Deputy Executive Director of the ASF. Deutsch helped write the guidelines.</p> <p>Even if loans qualify for a freeze, servicers, according to the ASF guidelines, will not take any actions that violate contracts or applicable laws.</p> <p>Additionally, the loan-to-value-ratio of the mortgage must be less than 97 percent. That is, the face amount of the loan must be less than what the home is actually worth.</p> <p>Servicers of any second mortgages on the homes must agree to cooperate. </p> <p>And candidates for a freeze must be current on their monthly payments; they cannot be more than 30 days late nor have been 60 days late more than once in the previous 12 months. </p> <p>Also, if borrowers qualify for an FHASecure loan, the freeze is not available to them. Borrowers must also be owner/occupiers as opposed to speculators. </p> <p>And the reset has to send payments up by at least 10 percent, which should not be a difficult hurdle; typically, these loans will reset from around 7 or 8 percent to at least 9 or 10 percent.</p> <p>Any modifications must maximize profits for investors and be in their best interests. Especially in a falling market, investors are usually better off taking smaller profits of modifications than major losses brought on by foreclosures.</p> <p>Some critics wonder individual reworks will need to gain approvals from investors. That would be a monumental task. The loans are often carved up and sold in pieces to investors all over the world.</p> <p>According to Deutsch, however, mortgage servicers have the authority to make the modifications. &#8220;A key point,&#8221; he said, &#8220;is that servicers are responsible for making these decisions based on the entirety of the interest of the trust,&#8221; (the investors).</p> <p>According to Mary Moore, of the Center for Responsible Lending, however, servicers may have reasons of their own to pursue foreclosure rather than working with borrowers to keep them in their homes.</p> <p>&#8220;Servicers can have incentives to foreclose,&#8221; she said. &#8220;They sometimes have affiliates who work on foreclosures - that generates a lot of income for the affiliates.&#8221;</p> <p>As for the Bush plan, Moore welcomes it, but with no great enthusiasm. &#8220;We would love to see further steps,&#8221; she said, &#8220;but we have no indication that more is coming</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2007/12/10/subprime-freeze-plan/#respond" title="Comment on Subprime freeze plan">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-31"> <a class="link6" href="http://mimimiller.us/2007/12/09/current-foreclosure-statistics/" rel="bookmark" title="Current foreclosure statistics"><h1>Current foreclosure statistics</h1></a> <p class="weblog_article_info"> December 9, 2007 by mimi.</p> <p> <p>Survey Says: Delinquencies and Foreclosures Increase</p> <p>Click stars to vote (left is low, right is high) (1 votes, average: 5 out of 5)<br /> Loading &#8230;<br /> [?]<br /> Print This<br /> RISMEDIA, Dec. 10, 2007-The delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 5.59% of all loans outstanding in the third quarter of 2007 on a seasonally adjusted (SA) basis, up 47 basis points from the second quarter of 2007, and up 92 basis points from one year ago, according to MBAýÿs National Delinquency Survey.</p> <p>The delinquency rate does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process was 1.69% of all loans outstanding at the end of the third quarter, an increase of 29 basis points from the second quarter of 2007 and 64 basis points from one year ago.</p> <p>The rate of loans entering the foreclosure process was 0.78% on a seasonally adjusted basis, 13 basis points higher than the previous quarter and up 32 basis points from one year ago.</p> <p>The total delinquency rate is the highest in the MBA survey since 1986. The rate of foreclosure starts and the percent of loans in the process of foreclosure are at the highest levels ever.</p> <p>The increase in foreclosure starts was due to increases for all loan types. From the previous quarter, prime fixed rate loan foreclosure starts increased 4 basis points to 0.22%, prime ARM foreclosure starts increased 40 basis points to 1.02%, subprime fixed foreclosure starts increased 3 basis points to 1.38%, subprime ARM foreclosure starts increased 88 basis points to 4.72%, and FHA foreclosure starts increased 16 basis points to 0.95%.</p> <p>Since the third quarter of 2006, the foreclosure start rates for prime ARMs increased from 0.30% to 1.02% and the rate for subprime ARMs increased from 2.19% to 4.72%. The foreclosure starts rate for prime fixed loans increased from 0.13% to 0.22% and the rate for subprime fixed loans have increased from 0.97% to 1.38%.</p> <p>As can be seen in the chart below, while subprime ARMs only represent 6.8% of the loans outstanding, they represent 43.0% of the foreclosures started during the third quarter.</p> <p>Florida and California are the two largest states in terms of mortgages outstanding and are the key drivers of the increase in the national foreclosure rates. While California and Florida together have 36.4% of all of the prime ARM loans in the country, they had 42.4% of the nationýÿs foreclosure starts for prime ARMS. Similarly, California and Florida together have 28.1% of the subprime ARMs and 33.7% of foreclosure starts for subprime ARMs.</p> <p>Florida, Ohio, Michigan and Indiana have 16.4% of the prime fixed loans in the country but 29.3% of the foreclosures started on prime fixed loans, and 18.9% of the subprime fixed rate loans and 26.3% of the foreclosure starts.</p> <p>Doug Duncan, MBAýÿs Chief Economist and Senior Vice President of Research and Business Development, said,</p> <p>ýÿAs conditions in the housing finance market continue to deteriorate, several factors are clear:</p> <p>- This is the first quarter which registers the full combined effects of the seizure of the nonconforming securitization market, broad-based home price declines, continued weakness in some regional economies and rate adjustments on monthly payments. The predictable results are increased delinquency and foreclosure.<br /> - In areas where the supply of homes far exceeds demand at current prices, home prices are falling and leading to more foreclosures. In Michigan and Ohio the problem continues to be the declines in demand due to drops in employment and population that have left empty houses in cities like Cleveland, Detroit and Flint. In states like California, the problem is excess supply due to speculative over-building and properties coming back onto the market.<br /> - While subprime ARM delinquencies and foreclosures are climbing in all states, in most states the actual number of loans involved is fairly modest. For example, the number of subprime ARM foreclosure starts in California during the third quarter equaled the starts in 35 other states combined.<br /> - While this quarterýÿs numbers show the highest level of foreclosure starts (on a seasonally adjusted basis) for prime fixed rate mortgages in the last 10 years, that increase is largely due to increases in Florida, Ohio, Michigan and California. In most states the increase in prime fixed rate foreclosure starts is due to borrowers who will fall behind on their payments for the traditional reasons (employment, medical, marital, etc.) but who cannot sell their homes due to market conditions.ýÿ</p> <p>Change from last quarter (second quarter of 2007)</p> <p>The SA delinquency rate increased 39 basis points for prime loans (from 2.73% to 3.12%), 149 basis points for subprime loans (from 14.82% to 16.31%), 34 basis points for FHA loans (from 12.58% to 12.92%), and increased 43 basis points for VA loans (from 6.15% to 6.58%).</p> <p>The foreclosure inventory rate increased 20 basis points for prime loans (from 0.59% to 0.79%), and increased 137 basis points for subprime loans (from 5.52% to 6.89%). FHA loans saw a seven basis point increase in foreclosure inventory rate (from 2.15% to 2.22%), while the foreclosure inventory rate for VA loans increased one basis point (from 1.02% to 1.03%).</p> <p>The SA foreclosure starts rate increased 10 basis points for prime loans (from 0.27% to 0.37%), 40 basis points for subprime loans (from 2.72% to 3.12%). The foreclosure start rate increased 16 basis points for FHA loans (from 0.79% to 0.95%) and two basis points for VA loans (from 0.37% to 0.39%).</p> <p>The seriously delinquent rate, the non-seasonally adjusted (NSA) percentage of loans that are 90 days or more delinquent, or in the process of foreclosure, was up from both last quarter and from last year. This measure is designed to account for inter-company differences on when a loan enters the foreclosure process. During the third quarter, the seriously delinquent rate increased for prime, subprime, FHA, and VA loans. The rate increased 33 basis points for prime loans (from 0.98% to 1.31%), 211 basis points for subprime loans (from 9.27% to 11.38%), 36 basis points for FHA loans (from 5.18% to 5.54%) and 21 basis points for VA loans (from 2.35% to 2.56%).</p> <p>Change from last year (third quarter of 2006)</p> <p>On a year over year basis, the SA delinquency rate increased for prime, subprime, and FHA loans and was unchanged for VA loans. The delinquency rate increased 68 basis points for prime loans, increased 375 basis points for subprime loans, and increased 12 basis points for FHA loans.</p> <p>The foreclosure inventory rate increased 35 basis points for prime loans and 303 basis points for subprime loans. The foreclosure inventory rate decreased six basis points for FHA loans and nine basis points for VA loans.</p> <p>Over the year, the SA foreclosure starts rate increased 32 basis points overall, 18 basis points for prime loans, 130 basis points for subprime loans, 16 basis points for FHA loans, and seven basis points for VA loans.</p> <p>The seriously delinquent rate was 52 basis points higher for prime loans and 460 basis points higher for subprime loans. The rate decreased 12 basis points for FHA loans and 8 basis points for VA loans.</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2007/12/09/current-foreclosure-statistics/#respond" title="Comment on Current foreclosure statistics">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-30"> <a class="link6" href="http://mimimiller.us/2007/11/23/most-homeowners-have-negative-equity/" rel="bookmark" title="Most homeowners have negative equity"><h1>Most homeowners have negative equity</h1></a> <p class="weblog_article_info"> November 23, 2007 by mimi.</p> <p> <p>Nearly 16% of Recent Homeowners Have Negative Equity</p> <p>Click stars to vote (left is low, right is high) (4 votes, average: 4.25 out of 5)<br /> Loading &#8230;<br /> [?]<br /> Print This<br /> RISMEDIA, Nov. 21, 2007-Home values nationwide declined for the fourth consecutive quarter, down 5.7% year-over-year - the largest year-over-year decline in more than a decade, according to Zillowýÿs Q3 2007 Home Value Report (1) released this week. This brings the U.S. Zindex(R) home value indicator (2) to $244,000, down 2.8% from the second quarter. The Zindex is the median Zestimate(R) valuation and measures all homes in an area, not just those that have sold during the quarter.</p> <p>According to the company, for many homeowners who bought during the last two years when most local markets reached their peak, subsequent declines in value have left them with negative home equity, owing more than the home is currently worth. As of September 30, nearly 16% (15.6%) of homeowners nationwide who bought in the last year (3) and 17.5% of those who purchased two years ago have current home values that are less than the original mortgage amount. By comparison, less than 2% (1.8%) of those who purchased a home five years ago have seen their equity slide into the negative.</p> <p>Not surprisingly, markets with the greatest proportion of homes with negative equity were those hit hardest by declining values. For example, people who purchased homes in Californiaýÿs Central Valley, parts of Florida and Las Vegas during the past year have seen double-digit depreciation and negative equity rates reach up to five times the national median.</p> <p>ýÿThe decline in home values picked up steam in the third quarter, posting the largest nationwide year-over-year drop in more than a decade,ýÿ said Stan Humphries, Zillowýÿs vice president of data and analytics. ýÿContinuing depreciation coupled with the downward trend in the size of mortgage down payments has left many new home owners ýÿupside downýÿ on their mortgage, meaning they owe more than the current value of their home.</p> <p>ýÿSince homeownership is typically a long-term investment, itýÿs important to keep in mind that short-term value declines mostly affect homeowners who either must sell or want to withdraw equity,ýÿ added Humphries. ýÿThe run-up in home values we saw over the last several years had many home buyers counting on continued housing appreciation to drive home equity growth, but the market has proven that this strategy is no longer a safe short-term bet.ýÿ</p> <p>Despite decreasing home values and increasing incidence of negative equity scenarios, most U.S. homeowners still have positive equity in their homes. In fact, many homeowners who purchased in the last two years have seen overall equity increase since they made their purchase. The variances and movements in owner equity depend on many factors such as when the home was purchased, how much was put down and net market appreciation.</p> <p>Americans who bought a home in the last two years placed a median down payment of 10% and now have a median of 13% equity (4) in their investment. This is the equivalent of owning only about 200 square feet ýÿ the size of one standard bedroom ýÿ in an average 1,500-square-foot, three-bedroom, two-bath home. Most homeowners who bought five years ago have the benefit of time and the market on their side. After placing a median down payment of 11%, these homeowners watched home values grow at an annualized rate of 9.4% over the past five years and now own a median of 41% of their home.</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2007/11/23/most-homeowners-have-negative-equity/#respond" title="Comment on Most homeowners have negative equity">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-29"> <a class="link6" href="http://mimimiller.us/2007/11/09/foreclosure-scams/" rel="bookmark" title="Foreclosure scams"><h1>Foreclosure scams</h1></a> <p class="weblog_article_info"> November 9, 2007 by mimi.</p> <p> <p>More than 2.2 million Americans are in default on their mortgages. And that figure is expected to grow sharply through next year as 2 million more homeowners with adjustable-rate loans face higher payments. In Ohio, whose foreclosure rate is second-worst in the nation, after Michigan, Attorney General Marc Dann has received hundreds of complaints from all over the state. </p> <p>&#8220;The sad part about this particular offense,&#8221; Dann says, &#8220;is that (the homeowners) lose everything. You lose the little bit of money they had squirreled away, you lose your house and you lose your hope. How do you quantify that?&#8221;</p> <p>In a sweep in August, Dann filed complaints against six companies, including American Housing Authority and Foreclosure Assistance Solutions, and he says he expects to bring a half-dozen more cases in the next few weeks. Phone numbers for the companies were not available.</p> <p>Regulators and law enforcement in many states are targeting the two most common forms of foreclosure rescue scams: &#8220;equity skimming&#8221; and bogus or fruitless consulting services.</p> <p>The first scam works like this: A company offers to take legal ownership of the home temporarily. The homeowners pay &#8220;rent&#8221; to the company, which promises to return legal ownership to them once they regain their financial footing. </p> <p>But all too often, con artists borrow as much as they can against the equity in the house ýÿ and collect the rent from the original homeowners but never make any mortgage payments. In the end, the property still goes into foreclosure, and any equity the homeowner had built up is gone. Their financial ruin is complete.</p> <p>The second-most-common foreclosure-rescue pitch goes like this: A company offers to renegotiate the homeowners&#8217; mortgage with the lender or help refinance the property. In exchange, they charge an up-front fee, typically $800 to $1,200.</p> <p>Frequently, though, the company never contacts the lender, or knows the borrower can&#8217;t qualify for another loan. What little extra cash the homeowner could have used to pay the mortgage or move to an apartment has been wiped out by worthless &#8220;services.&#8221;</p> <p>There are, of course, hundreds of reputable groups that provide legitimate services for homeowners in trouble. The Department of Housing and Urban Development has certified 2,300 counseling agencies to help homeowners nationwide (www.hud.gov).</p> <p>HUD and the mortgage industry also support the Homeownership Preservation Foundation, which operates a toll-free counseling hotline, 24 hours a day (888-995-HOPE). Last month, it fielded 22,000 calls from homeowners in financial distress.</p> <p>When scary letters start piling up </p> <p>A family that&#8217;s more than two months behind on a mortgage will often come home to a mailbox stuffed with brightly colored envelopes and postcards from companies promising to help them save their homes.</p> <p>One such postcard that Steve and Dawn Reyes received after Steve lost his job as a carpenter was from Mortgage Assistance Solutions, a Florida-based company that&#8217;s known by its customers as Fresh Start.</p> <p>&#8220;YOU WILL LOSE YOUR HOUSE IF YOU DON&#8217;T CALL US NOW!!!&#8221; the postcard said.</p> <p>When Dawn called, the company promised to refund its $1,200 upfront fee if it couldn&#8217;t help them. A month after they signed up, the Reyeses received a summons stating that their house was scheduled for auction on Dec. 12 of last year.</p> <p>&#8220;I called the guy at Fresh Start, and I&#8217;m frantic,&#8221; recalls Dawn, 27, a stay-at-home mom and first-time homeowner in Machesney Park, Ill. &#8220;I said, &#8216;Look, I got this summons to go to court; I thought you were talking to the bank.&#8217; &#8221;</p> <p>The reply, she says, was: &#8220;Yeah, we&#8217;re talking with them. I&#8217;ll call them and put a stop to them. We get a lot of calls like this. It&#8217;s just a scare tactic; nothing&#8217;s going to happen.&#8221;</p> <p>The Reyeses had signed a document in November of 2006 giving Mortgage Assistance Solutions permission to negotiate with the family&#8217;s lender. But the Illinois Attorney General&#8217;s office, which filed a lawsuit against Mortgage Assistance Solutions two months ago, told Dawn that their lender didn&#8217;t receive that document by fax until Dec. 14 ýÿ two days after Dawn received the summons, and called them. </p> <p>Angry, Dawn demanded her family&#8217;s money back. Mortgage Assistance Solutions sent her $700 and said it was entitled to the remaining $500 because of the time it spent on her case.</p> <p>Yet soon after Dawn canceled the services, she says, she received another green-and-white envelope in the mail from Fresh Start. It read: &#8220;FORECLOSURE COMPLAINT NOTICE. Your House Is Scheduled To Be Sold At Auction. National Bank.&#8221;</p> <p>Michael Stoller, a Los Angeles attorney and owner of Mortgage Assistance Solutions, says, the Reyeses were &#8220;denied a repayment plan because of insufficient income and lack of supporting documentation.&#8221; The family wasn&#8217;t entitled to a full refund, Stoller explains, because the company charges $150 an hour for time spent negotiating with the lender.</p> <p>When USA TODAY told Stoller that a non-profit counselor was able to help the Reyeses obtain a new fixed-rate loan with a much lower interest rate in June, he suggested that lenders are more willing to modify delinquent loans to help an owner stay in a home than they were before.</p> <p>Mortgage Assistance Solutions, Stoller says, has handled more than 6,000 cases this year and refunded $1.1 million this year to homeowners it couldn&#8217;t help. &#8220;That&#8217;s not a company that takes money from customers and runs away,&#8221; he says. &#8220;Our goal was always to help homeowners.&#8221;</p> <p>Still, Stoller says his company is winding down its operations and will stop doing business by early next year, because of increased regulation and competition.</p> <p>Marilyn Libby, 55, a nursing assistant, says Mortgage Assistance Solutions helped her modify her subprime loan with her lender. She says she feared she &#8220;was getting the shaft&#8221; from the company, because she had received few updates about her loan and was getting threatening letters from her lender to foreclose on her home in Stout, Ohio.</p> <p>Libby obtained a lower fixed-rate loan last week, and afterward, she says, &#8220;I called Fresh Start and said: &#8216;Thank you, thank you. I can sleep now.&#8217; &#8221;</p> <p>But Bob Campbell, executive director of the Rockford Area Affordable Housing Coalition, the non-profit counseling service that helped the Reyeses, says: &#8220;I&#8217;ve got a file sitting here on Fresh Start. We sent quite a few names to the (state) attorney general because that was a name we kept running into.&#8221;</p> <p>The Better Business Bureau says it&#8217;s received 106 complaints nationwide against Mortgage Assistance Solutions in the past year.</p> <p>Preying on the victimized </p> <p>Two months ago, Massachusetts Attorney General Martha Coakley permanently banned foreclosure-assistance companies from taking title of homes and then renting them back to their cash-strapped owners. She&#8217;s also filed lawsuits against the people operating three such companies.</p> <p>Consumer complaints about such scams have spiked this year, and she says she expects that trend to continue for the next year or two.</p> <p>What&#8217;s most heart-wrenching, Coakley says, is that many victims of foreclosure-rescue scams had already been cheated by predatory lenders. </p> <p>Those predators, she says, persuaded the victims to take out loans with unfavorable terms, knowing the borrowers probably couldn&#8217;t afford the payments they&#8217;d face once their introductory &#8220;teaser&#8221; rate reset to a much higher rate.</p> <p>&#8220;We saw this as an egregious problem at the end of a bad process,&#8221; Coakley says. &#8220;We saw people in trouble, in foreclosure, and it appeared to my folks that this was really, in that sense not serious in terms of impact but in terms of perdition. People were coming in to pick at the carrion.&#8221;</p> <p>Why people get behind </p> <p>The most common reasons that lead people to fall behind on their mortgages are job or income loss, health problems or a death in the family. Yet fear, shame or distrust of their lenders keeps about half of borrowers from calling those lenders, according to Freddie Mac.</p> <p>That communication gap can leave homeowners vulnerable to fast-talking con artists who buy mailing lists of homeowners in default or slap their business ads on telephone poles.</p> <p>Back at the Legal Assistance Foundation of Metropolitan Chicago, Lindsey says the saddest stories he hears are from retirees who have lost the only home they&#8217;ve ever owned, thanks to a foreclosure &#8220;rescue&#8221; fraud.</p> <p>&#8220;That property is their entire life, most of their wealth, they&#8217;ve raised their children there, they are completely emotionally invested in it, and that&#8217;s exactly the last thing they want to lose,&#8221; he says. &#8220;The vulnerability they are experiencing gets exploited by these &#8216;rescuers.&#8217; &#8221;</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2007/11/09/foreclosure-scams/#respond" title="Comment on Foreclosure scams">No Comments &#187;</a> </p> </div> <div class="weblog_article" id="weblog_article-28"> <a class="link6" href="http://mimimiller.us/2007/11/08/dump-this-house/" rel="bookmark" title="Dump this house"><h1>Dump this house</h1></a> <p class="weblog_article_info"> November 8, 2007 by mimi.</p> <p> <p>Dump This House: Unloading<br /> Your Property in a Slow Market</p> <p>By Jonathan Clements<br /> From The Wall Street Journal Online </p> <p>It could be the kindest cut of all.</p> <p>Look at the prices of homes getting sold, and the property market&#8217;s decline seems no worse than a rough day in the stock market. Look at the number of unsold homes, and you realize there&#8217;s a world of financial pain out there.</p> <p>True, these unsold homes may eventually get bought at decent prices. But in the meantime, the owners are often bleeding money &#8212; and many of them would be smart to slash their asking price and go for the quick sale.</p> <p>ýÿ Taking time. As you can see from the accompanying chart, home prices are down just 4.5% from their July 2006 peak. </p> <p>Yet even as prices appear pretty much unchanged, the number of unsold homes has soared. At the current pace of sales, it would take more than 10 months to clear this backlog, according to the National Association of Realtors.</p> <p>Personal finance columnist Jonathan Clements answers a reader&#8217;s question about claiming social security. He says half of Americans claim social security at 62, the earliest age to claim, which could be a big mistake.<br /> Sure, it would be emotionally draining to have your home on the market for more than 10 months. But it probably wouldn&#8217;t be a financial disaster &#8212; as long as you&#8217;re still in the house and you can comfortably cover the mortgage.</p> <p>Maybe, however, you have an adjustable-rate loan that&#8217;s now unaffordable. Maybe you&#8217;re trying to unload a vacation home. Maybe you moved cross-country for a new job, but your old house still hasn&#8217;t sold. </p> <p>The monthly cost of carrying a vacant home could equal 1% of a home&#8217;s value, figures Charles Farrell, an adviser with Denver&#8217;s Northstar Investment Advisors. After all, you still have to pay utilities, insurance, property taxes, maintenance and, of course, the mortgage.</p> <p>What if the mortgage is paid off? There&#8217;s still an opportunity cost. The equity in your home could instead be invested in, say, bonds yielding 5%.</p> <p>To make matters worse, &#8220;prices could be lower a year from now,&#8221; Mr. Farrell warns. &#8220;There&#8217;s also the risk of owning a physical asset. I&#8217;m thinking about things like fire, broken pipes, theft.&#8221;</p> <p>ýÿ Cutting deeply. Despite all this, sellers are loath to cut their asking price, which is the reason prices have barely budged &#8212; so far. </p> <p>&#8220;People focus on what their home was worth two years ago, or how much they&#8217;ve sunk into it, or on their desire not to bring a check to the closing,&#8221; notes financial adviser Bert Whitehead, author of &#8220;Why Smart People Do Stupid Things With Money.&#8221;</p> <p>His advice: Ditch these emotional hangups &#8212; and unload your property now. &#8220;If you really want to sell your house, you have to cut deep,&#8221; Mr. Whitehead says.</p> <p>Good advice? Here&#8217;s how to decide for yourself:</p> <p>ýÿ Ask your real-estate agent how many properties are on the market in your town today and how many sold in each of the past six months, advises Chris Mayer, director of Columbia Business School&#8217;s Milstein Center for Real Estate. </p> <p>&#8220;If there are 2,000 houses on the market and 200 houses sold last month, that means it&#8217;s taking 10 months to sell a house,&#8221; Prof. Mayer says. &#8220;That&#8217;s pretty simple math, but nobody ever does it. If you price your house like everybody else, it might take 10 months to sell it.&#8221;</p> <p>ýÿ Suppose you price your home like everybody else and it does indeed take 10 months to sell. Figure out how much you would be out of pocket over that stretch, either because your home is vacant or because the mortgage has become unaffordably large. </p> <p>ýÿ Spend your Sunday going to open houses in the neighborhood. That should give you an indication of what you need to ask if you want to get your home sold now. Given the cost of carrying your home and the risk prices will fall further, would it be cheaper to slash your asking price?</p> <p>If you&#8217;re going to lower your price, Prof. Mayer advises doing it right away &#8212; or waiting until early next year. He notes that very few houses sell between Thanksgiving and mid-January.</p> <p>&#8220;The best scenario is that prices fall through the spring and then stabilize,&#8221; Prof. Mayer says. &#8220;But I&#8217;m more pessimistic than that. I would sell now.&#8221;</p> <p>Email your comments to rjeditor@dowjones.com.</p> </p> <p class="weblog_comment_link"> Posted in <a href="http://mimimiller.us/category/buying-and-selling-real-estate/" title="View all posts in Real Estate" rel="category tag">Real Estate</a> | <a href="http://mimimiller.us/2007/11/08/dump-this-house/#respond" title="Comment on Dump this house">No Comments &#187;</a> </p> </div> <div class="pager link5"> <a href="http://mimimiller.us/page/2/">Next Entries &raquo;</a></div> </div><!-- end #weblog_article_container --> </div> <!-- end #sub_container 2 --> </div> <!-- end #main_container --> <div id="footer"> <div id="footer_text" class="content"> <a style="text-decoration:none;" href="http://www.1and1.com" target="_blank">1&amp;1 Blog - powered by </a> <a style="text-decoration:none;" href="http://wordpress.org/">WordPress</a> <!-- 24 queries. 0.722 seconds. --> </div> </div> <div id="footer"> <ul> <li><a href="index.htm">Home</a></li> <li><a href="aboutMe.htm">About Me</a></li> <li><a href="buyers.htm">Buyers</a></li> <li><a href="homeSearch.htm">Home Search</a></li> <li><a href="sellers.htm">Sellers</a></li> <li><a href="foreclosures.htm">Foreclosures</a></li> <li><a href="newsletter.htm">Newsletter</a></li> <li><a href="favorites.htm">Favorites</a></li> <li><a href="community.htm">Community</a></li> <li><a href="myBlog.htm">My Blog</a></li> </ul> </div> </div> <!-- end #container --> <!-- These extra divs/spans may be used as catch-alls to add extra imagery. --> <div id="extra_div1"><span></span></div><div id="extra_div2"><span></span></div><div id="extra_div3"><span></span></div> <div id="extra_div4"><span></span></div><div id="extra_div5"><span></span></div><div id="extra_div6"><span></span></div> <div id="extra_div7"><span></span></div><div id="extra_div8"><span></span></div><div id="extra_div9"><span></span></div> <div id="extra_div10"><span></span></div><div id="extra_div11"><span></span></div><div id="extra_div12"><span></span></div> <address>Mimi Miller Realty &bull; 303-709-6990</address> </body> </html>