Real Estate News and Information

Home equity loans: the types, pros, and cons

CENTURY 21 Gold — Sun, 05 Feb 2012 04:28:00 GMT

A home equity loan uses a borrowers "equity" in a home as collateral. The term generally refers to a loan taken out after the home has been owned for a while. The owner signs a mortgage, pledges his home as collateral, and walks away with a check. But technically, even a piggyback "second" loan, opened concurrently with a first for a new home purchase, is a home equity loan.

Then there are the Home Equity Lines of Credit, or HELOCs (pronounced just the way it looks). The difference is that you don't get a lump sum of cash. Instead you get a "checkbook" and the ability to "draw" on your home equity whenever you need cash. Naturally, the convenience comes with a cost—a higher interest rate. HELOCs are often referred to as "open-ended" loans while their fixed-amount counterparts (without the checkbook) are called "closed-ended."

Home equity loans were devised originally as a way to invest in home improvements, with the assumption that the money borrowed would be recovered eventually when the home was sold. But in recent years, home equity loans have financed everything from college educations to plastic surgeries.

Home equity loans and lines of credit may carry a shorter term than first mortgages. A 15-year term is common, as compared to a 30-year fixed loan. Many HELOCS are also ARMs, or Adjustable Rate Mortgages, with rates that float up and down along with some index such as the U.S. Prime Rate.

Home equity loans are "secured" by the underlying property, as opposed to credit cards which are a form of "unsecured" debt. Many homeowners have opted to refinance their higher-interest credit cards with home-equity loans or HELOCs. The lower rates and the tax deductibility of mortgage interest made the move a "no brainer," or so it seemed. But when the economy became weaker and home values dropped, their secured debt became a target for foreclosing lenders.

Conventional mortgages can be "non-recourse" loans in some states, secured only by the property itself. The lender may come after the home in a default situation, but the borrower is not personally liable. A home equity loan may be different and might be a "recourse loan" for which the borrower is personally liable. This distinction becomes important in foreclosure, because the borrower may remain personally liable for a recourse debt on a foreclosed property.

30-Year Mortgage Rate Falls to 9th Record Low in a Year

CENTURY 21 Gold — Sun, 05 Feb 2012 04:07:00 GMT

WASHINGTON -- The average rate on the 30-year-fixed mortgage fell this week to a record low, the ninth time that has happened in the last year. But even with the cheapest rates in history, the housing market remains depressed.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan dropped to 3.87 percent this week. That is below the previous record of 3.88 hit two weeks ago.

The average on the 15-year fixed mortgage fell to 3.14 percent, also a record low. Records for mortgage rates date back to the 1950s.

Mortgage rates tend to track the yield on the 10-year Treasury note, which fell below 1.9 percent this week.

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Rates have been low for more than a year, and the average rate on the 30-year loan has hovered near 4 percent for more than three months. Yet few people can afford to buy a home or qualify for a loan. Many of those who can have already done so.
High unemployment and scant wage gains have made it harder for many others to qualify for loans. Still others don't want to sink money into a home that they fear could lose value over the next few years.

Sales of previously occupied homes were dismal last year. New-home sales in 2011 were the worst on records going back half a century.

Builders are hopeful that the low rates could boost sales next year. But so far, they have had a minimal impact.

Mortgage applications have risen slightly over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.

For the five-year adjustable loan, the average rate fell to 2.80 percent from 2.85 percent. The average on the one-year adjustable loan rose to 2.76 percent from 2.74 percent.

The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.

Super Bowl Commerical

CENTURY 21 Gold — Thu, 02 Feb 2012 05:34:00 GMT

For the first time in the 40-year history of our iconic brand, we will air a commercial during the Super Bowl, the most watched television event of the year. In addition, we'll precede the game with 11 commercials on NBC throughout the day of the game. We hope you are ready to celebrate.

Century 21 Gold 951-479-4580

Obama proposes new mortgage refinance program

CENTURY 21 Gold — Wed, 25 Jan 2012 02:59:00 GMT

President Obama said in his State of the Union address Tuesday that he will submit to Congress a plan that gives responsible homeowners the chance to refinance and save roughly $3,000 a year on their mortgage.

"No more red tape," he said. "No more runaround from the banks."

The legislation, he said, would be funded by a small fee charged to the largest banks. It will expand on the already widened Home Affordable Refinance Program. The Federal Housing Finance Agency eliminated barriers in November for Fannie Mae and Freddie Mac borrowers to refinance into historically low interest rates.

Nearly 11 million borrowers in the U.S. are underwater, roughly 22.5% of all outstanding loans, according to CoreLogic (CLGX: 14.64 +0.90%). Another 2.4 million hold less than 5% equity in their homes.

In addition to the new assistance, Obama directed the U.S. Attorney General and leading state AGs to expand their investigations into mortgage fraud and other abusive practices that led to the housing crisis.

"This new unit," he said, "will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans."

In 2010, a multistate coalition of AGs, the Justice Department and federal agencies launched an investigation into apparent foreclosure mispractices at the major banks. More than one year later, a settlement draws near. But Obama said Tuesday the investigation will now span across lending and securitization issues.

"Some financial firms violate major anti-fraud laws because there's no real penalty for being a repeat offender," Obama said. "That's bad for consumers, and it's bad for the vast majority of bankers and financial service professionals who do the right thing."

How to Shop for Your 1st Home

CENTURY 21 Gold — Wed, 25 Jan 2012 02:56:00 GMT

The need for more space was what got Kim and Jason Fitzsimmons thinking about buying their first home. They'd been married for a year and realized that a small apartment, even with two bedrooms, wasn't big enough for all they'd accumulated.

But it wasn't until they had their income taxes done that they learned from a tax preparer about the deductions they could get from owning a home. The Fitzsimmonses then got serious about buying their first home, and about doing it before the end of the year. Deducting the mortgage interest from their income taxes would make buying a home less expensive than renting. While that isn't true for everyone (check with your tax preparer first on home deductions), the couple started doing their homework and soon were out looking for their first home. #mini_module { BORDER-BOTTOM: medium none; BORDER-LEFT: medium none; MARGIN: 10px; WIDTH: 265px; FLOAT: left; HEIGHT: 220px; FONT-SIZE: 12px; BORDER-TOP: medium none; BORDER-RIGHT: medium none } #mini_module IMG { BORDER-BOTTOM: medium none; BORDER-LEFT: medium none; MARGIN: 0px; WIDTH: 265px; HEIGHT: 131px; BORDER-TOP: medium none; BORDER-RIGHT: medium none } #mini_module .mini_title { PADDING-BOTTOM: 0px; MARGIN: 0px; PADDING-LEFT: 0px; WIDTH: 265px; PADDING-RIGHT: 0px; HEIGHT: 131px; PADDING-TOP: 0px } #mini_module .mini_main { PADDING-BOTTOM: 0px; MARGIN: 0px; PADDING-LEFT: 0px; WIDTH: 265px; PADDING-RIGHT: 0px; BACKGROUND: url(http://www.aolcdn.com/travel/bg-short); HEIGHT: 85px; PADDING-TOP: 0px } #mini_module .mini_item { BORDER-BOTTOM: #cccccc 1px dotted; PADDING-BOTTOM: 12px; MARGIN: 0px 20px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 12px } #mini_module A { COLOR: #49a3ca; TEXT-DECORATION: none } #mini_module A:hover { COLOR: #f98419; TEXT-DECORATION: underline }

It's tempting to just go out and start shopping for your first home. After all, that's the ultimate goal and the most fun part. But doing your homework first will pay off in less stress and more savings. If you're a first-time home buyer, whether for tax reasons, the desire for more space or just for the chance to have your own washer and dryer, here are tips to get you started.

1. Know how much you can afford

This should be the first step in buying your first home so you don't waste your time, or a real estate agent's, by looking at houses that you can't afford a mortgage on. The Fitzsimmonses visited a real estate broker who helped them determine how much of a loan they would qualify for, based on their income and credit. They also factored in property taxes, maintenance, utilities, insurance and possible homeowner-association dues. They totaled those expected costs and set up an experiment: After paying the rent on their apartment, they set aside money equaling the difference between their rent and the projected cost of homeownership. They did this for a few months so they could get used to making the payments. A loan calculator will help figure out how much a home loan will be.

2. How long will you stay in your first home?

The longer you live in your first home, the better the savings because you're spreading out the upfront costs of buying a house. Those costs include a real estate agent's fee, closing costs, inspection fees and loan fees -- which can add up to 10 percent of the sale price, or approximately 18 months of rent.

3. Get a loan

Getting preapproved for a home loan helps make buying a first home faster and easier, especially if there are multiple offers on the home. Your mortgage lender or broker should be able to give you an estimate, down to the penny, of how much money you'll need in closing costs. Then you'll know how much of your savings to set aside for a down payment, which will help determine how much your loan -- and the monthly mortgage -- will be. Putting down 20 percent will eliminate the need for mortgage insurance, although your lender or broker might be able to find loans at good rates that don't require 20 percent down. This is where it really pays to shop around for the best loan rate and terms.

4. Know the market

After determining where your finances stand, the fun part begins in finding out what you can afford and where you want to buy your first home. Research neighborhoods that interest you and find out the median price of homes there. You can research homes on websites such as AOL Real Estate, Zillow, Realtor.com, Trulia.com or others you trust. Finding homes similar to the kind you want, and in the same neighborhood, will give you an idea of how fair the price is when you are ready to buy.

5. Shop around

Every house buy requires sacrifices, and you won't get everything you want. There are many factors to consider, such as how much room you need. Does your first home have to be a single-family home or will a condo work? Is it near transportation, good schools, parks, shopping and your other essentials? Does the home have the amenities you want, such as a fireplace, dining room, backyard, pool or deck?

Find a Century 21 Gold to represent you, or if you're brave and want to do it on your own, go out and shop on your own. Either way, stick to these five steps and you should be fine.

Buying a house, whether your first home or several down the line, is one of the most stressful and expensive transactions you'll ever undertake. But if you do your homework and prepare for it with the above steps -- figuring out how much you can afford, how long you'll stay, getting a loan, studying the local market, and shopping for a house -- it should be a lot easier.

A FREE CLASS OF - "Responsible Couponing"

CENTURY 21 Gold — Fri, 20 Jan 2012 04:06:00 GMT

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4th Annual Winter Rod Run

CENTURY 21 Gold — Fri, 20 Jan 2012 03:17:00 GMT

Sunday, January 29th 2pm to 5pm

at Bob's Big Boy Restaurant a gathering of Classic American Cars and Trucks, vintage music, games, awards, and discounts on food.

For more information phone:

(951) 371-5833

Fun for the entire family - Hope to see you there!

1/2 Percent Down Payment

CENTURY 21 Gold — Tue, 17 Jan 2012 01:09:00 GMT

Homeownership may be just around the corner with the CLHP ACCESS Loan Program.

This program combines a 30-year fixed interest rate FHA mortgage loan with downpayment and/or closing cost assistance in the form of a low and fixed interest rate second mortgage.

Total financing up to 99.5% of the purchase price is possible. That means the down payment from the homebuyer’s own funds could be as little as 1/2 of a percent of the purchase price.

The program can be used to purchase either a new or existing home, as long as it will be the primary residence of the homebuyer. This loan also features a variety of flexible qualifying guidelines. For example, it is not restricted to first-time homebuyers.

Families or individuals who may have owned a home in the past are still eligible to apply for the CLHP ACCESS Loan Program.

96.5% FHA Loan
3% Access 2nd Mortgage, 8.25% Rate, 15yr Fixed
CA Properties ONLY
Income Limits Apply
Down to 580 FICO!!!
First Time Buyers OK
Prior Homeowners OK
Gift Funds OK
No FICO OK with Alternative Credit

Great for First Time Home Buyers!

_________________________

Explore the
possibilities.
Call today to learn more
about CLHP ACCESS or
to find out how you can qualify.

Do you qualify?

As an Access approved lender, we will guide you through the homebuying process, and provide you with the complete program guidelines,
loan applications, current interest rates, applicable fees
and APRs.

• Fixed interest rates
• Second Loan available to
assist with downpayment
and/or closing costs*
• Low-to-moderate incomes

Call today to see if this or any other current programs will work for you

(951) 479-4580

Outstanding mortgage buyback claims double at Chase in 2011

CENTURY 21 Gold — Tue, 17 Jan 2012 00:33:00 GMT

JPMorgan Chase (JPM: 35.92 -2.52%) must sort through more than $2.3 billion in claims to buyback defaulted mortgages sold mostly to Fannie Mae and Freddie Macat the end of the fourth quarter, nearly double the $1.2 billion outstanding at the end of 2010, according to the bank's financial statements.

Chase and other originators must comb through the mortgage file. "Claims are fact intensive," said CEO Jamie Dimon at an investor conference this past December. "There is no repurchase absent proof that an underwriting breach 'materially or adversely' affected value of the loan."

He added at the time that for private-label investors, the process was often more difficult than with the GSEs. The bank's mortgage business swung to a $258 million loss in the fourth quarter with more than $390 million in losses directly from rep and warranty claims. That's up 12% from the same quarter a year ago.

At Chase, the amount of outstanding rep and warranty claims from investors increased every quarter since the middle of 2010 when the bank reported more than $1.3 billion in claims. And the wave doesn't appear to be regressing, according to some analysts.

"Rep and warranty repurchase related efforts will likely intensify further in 2012 and some decisions/settlements may happen before the end of next year," said Barclays Capital analysts in a recent report. "That said, we expect any benefit to be chunky and unlikely to boost prices at a generic level."

Chase currently holds roughly $3.6 billion in reserves for mortgage repurchases.

"That's another number that over time should come down materially," said the bank's Chief Financial Officer Doug Braunstein said in a conference call with investors in January.

HAFA Short Sales

CENTURY 21 Gold — Thu, 12 Jan 2012 03:39:00 GMT

What is a Short Sale?

A short sale is the sale of real property which falls short of the amount due on that property’s mortgage(s). Since it means that the lender(s) will discount their debt(s) and take a loss on their investment, the sale must be approved by the lender(s) on all mortgages and liens on the property. A short sale is generally approved only as an alternative to foreclosure.

The lender on your first mortgage has the first right to the proceeds from the sale because they have the first right to foreclose on the property in case of default. If you have other mortgages or liens on that property, you must be able to get those lenders to release their lien on the title to your property before the original lender can accept the deed. Just like in other real estate transactions, the title must be clear when it is transferred through a short sale.

You must agree to work together with your original lender, real estate agents and brokers, appraisers, title companies, mortgage insurance companies, and all other lienholders in order to avoid foreclosure through a short sale.

When your first mortgage lender agrees to accept a short sale under HAFA, they must agree to give up their right to ask you to repay any part of that debt, whether by cash, a promissory note, or a default judgment in court. The other lienholders may require cash, a promissory note, or a combination of both before they will agree to release their lien. Be prepared to negotiate terms with them.

Increase in short sales give market a little breathing room

CENTURY 21 Gold — Tue, 10 Jan 2012 03:56:00 GMT

It's a tarnished silver lining for people at risk of losing their houses and homeowners in neighborhoods blighted by bank-owned properties, but the robosigning scandal that slowed the foreclosure process to a crawl appears to have increased lender interest in short sales.

"Foreclosure sales are pretty devastating," said Faith Schwartz, executive director of Hope Now, a resource for homeowners facing foreclosure. "We'd much prefer a modification, but if [homeowners] don't quality, then the next best alternative is deed-in-lieu or short sales."

Short sales, in which the lender agrees to let the owner sell the home for less than the amount owed on the mortgage, and foreclosures both climbed in 2010, but while short sales rose by 26,000 this year, the number of foreclosures fell by 255,000, according to Hope Now. Short sales, along with deed-in-lieu of foreclosure deals in which the lender takes the deed essentially as payment for the mortgage, still upend families, torch credit ratings and hurt neighboring property values, but they're far less toxic than foreclosures.

Short sales are better for homeowners. They can stay in their homes, and the quicker process means they can begin rebuilding their credit sooner. Credit scoring firm Fair Isaac Co., which developed the FICO score, says foreclosures and short sales slash the same number of points from a homeowner's credit score. Homeowners with short sales may be able to obtain a loan sooner than foreclosed homeowners, though, which can improve their credit.

In some states, mortgage lenders can pursue a delinquency judgement against homeowners for the difference between the amount due on the mortgage and the purchase price at a foreclosure auction. A delinquent homeowner engaging in a short sale has an opportunity to negotiate away the bank's right to sue for that judgement.

The biggest plus for banks is that they stand to make more from a short sale than a foreclosure. According to foreclosure specialists RealtyTrac.com, the average price of a foreclosed home in the second quarter of 2011 was $164,217, while the average price of a short sale was $192,129.

Besides yielding less, foreclosures also cost lenders more in legal and administrative resources. "The incentives against foreclosing are even larger now," Karen Dynan, co-director of the Economic Studies program at the Brookings Institution, said via email. "Servicers are facing enormous staffing constraints because they are trying to deal with so many distressed properties, so it is probably even harder now to find the staff to do the paperwork for the foreclosure."

Lenders are also spending more on due diligence, she said. "Servicers and lenders are being heavily scrutinized right now so they probably are more worried than ever about making a mistake in a foreclosure that could subject them to legal liability in the future."

Neighborhoods also benefit from short sales rather than foreclosures. "Short sales typically sell at less of a discount than foreclosure sales do," Jed Kolko, chief economist at real estate website Trulia.com, said via email. "Also, foreclosed homes often sit vacant while short sales are re-occupied more quickly. For both these reasons, short sales tend to depress neighboring property values less than foreclosures do."

Another issue that plagues foreclosures is vandalism, either from opportunistic criminals preying on vacant homes or from disgruntled homeowners. "It's often not a friendly process so you frequently have cases where people deliberately vandalize homes," Dean Baker, co-director of the Center for Economic and Policy Research, said.

Some economists worry that the drop in foreclosures is less an indication of lenders' willingness to compromise and more a function of a huge backlog of foreclosures that haven't been processed. "Foreclosures are going to be a drag on the market for along period of time," Baker said. Until these distressed homes are resold and assimilated back into the market, real estate prices can't stabilize.

Baker added, though, that lenders facing years' worth of legal wrangling and costs to execute a foreclosure may be more willing to accept a buyer's offer in a short sale.

The other caveat is that short sales aren't an option for all distressed homeowners. Short sales are contingent on the ability of sometimes multiple lenders to agree on a price that a buyer is also willing to pay. For people who took out multiple mortgages or have other liens, this presents a challenge. "It's just a little more complicated when you have more parties involved," Schwartz said.

Fed officials push more stimulus for housing

CENTURY 21 Gold — Tue, 10 Jan 2012 03:27:00 GMT

Two top Federal Reserve officials on Friday pushed the case for more stimulus from the U.S. central bank to help the economic recovery, each zeroing in on the country's weak housing market.

Policymakers need to consider more action to kick-start the housing sector and help the country's "frustratingly slow" economic recovery and "unacceptably high" unemployment, William Dudley, president of the New York Federal Reserve Bank, said in a speech in New Jersey.

Monetary policy should work to complement actions by other U.S. government policymakers, which together could help to stabilize home prices and turn around the housing market within a year or two under good conditions, said Dudley.

Speaking in Hartford, Connecticut, the president of the Boston Fed, Eric Rosengren, said one way to shore up housing would be for the central bank to buy more mortgage-backed securities.

"Given the low inflation rate and weak labor markets that are both likely to persist this year, I believe the Federal Reserve should continue to explore ways to promote more rapid recovery through stronger growth," Rosengren told a business group.

The speeches from Dudley and Rosengren, both of whom are considered part of the Fed's "dovish" wing -- more concerned with strengthening the economy than trying to contain inflation -- made similar arguments and could set the tone for the central bank's more activist wing this year. Dudley, as the president of the New York Fed, holds a permanent vote on the central bank's policy-setting committee; Rosengren will rotate into a voting seat in 2013.

The Fed has bought Treasury debt and, to a lesser extent, mortgage-backed securities as part of its so-called quantitative easing efforts over the last three years, totaling $2.3 trillion in purchases. In response to the worst recession in decades, the Fed late in 2008 also slashed interest rates to near zero. .

The purchase of mortgage securities, however, was a controversial part of the first round of easing in 2009, known as QE1, drawing criticism from some officials for propping up a specific sector of the economy.

Dudley has in the past suggested the Fed could potentially do more to drive down mortgage rates to support the housing sector, which was at the heart of the financial crisis and recession and has continued to hamper the recovery.

"I believe it is also appropriate to continue to evaluate whether we could provide additional (policy) accommodation in a manner that produces more benefits than costs, regardless of whether action in housing is undertaken or not," Dudley told the New Jersey Bankers Association Economic Forum.

"Monetary policy and housing policy are much more complements than substitutes."

The Fed is to hold its next policy-setting meeting January 24-25, when a new slate of four regional Fed bank presidents will rotate into voting seats. Any further action could hinge tightly to prospects for the United States' stubbornly high unemployment.

The Labor Department on Friday reported that nonfarm payrolls added 200,000 jobs in December, the biggest gain in three month, and the jobless rate dropped to a near three-year low of 8.5 percent, offering the strongest evidence yet of an acceleration in economic activity.

Asked about the news, Rosengren said that while the job growth is better than had been seen recently, it is still not enough to return the country to full employment.

The moribund housing market and the European debt crisis, which is dragging on the European economy, continue to pose a threat to the U.S. recovery.

The Fed waded into the debate over what to do with the two main government-run mortgage finance firms this week, arguing in a paper sent to Congress that Fannie Mae and Freddie Mac could play a bigger role in turning around the housing market if they were allowed to provide cheaper mortgages to a broader pool of homeowners.

On Friday, Dudley called the white paper "a thoughtful analysis of housing policy."

A "truly comprehensive approach," he added, "would also include long-term reform -- including reform of Fannie Mae and Freddie Mac -- to put housing finance on a more stable footing and to equip the market to deal more effectively with any future systemic shocks."

Top 10 skills you need to survive homeownership

CENTURY 21 Gold — Tue, 10 Jan 2012 03:15:00 GMT

What do I do now?

Too bad a house doesn't come with an owner's manual. And a weeklong seminar during which you learn the purpose of every button, switch and wire. But the keys to the castle come with no troubleshooting guide to dog-ear — and, we're betting, no wise master to unlock the mysteries of the place you call home.

Then again, that's what we're here for: to provide fast fix-it advice when it's time for you to do your homeowning duty. Because, at some point, you're going to have to know how to change out a light fixture without zapping yourself to kingdom come. Or paint a double-hung window without gumming up the works. Or stem the flood when the toilet overflows. And you're going to want to do things right. The first time.

So consider these 10 tips a crash course in homeowner self-confidence. Study them well. Owning a house means you're going to have questions. Luckily for you, we've got answers.

1. Fix a leaky faucet

This particular type of water torture is likely due to a failed washer inside a handle. The faucet is just the messenger.

To replace the washer, turn off the water supply valve under the sink. Stuff a rag in the drain so you don't lose parts, then take the handle apart. Pop the screw cover on top, remove the screw and pull off the handle. Use a wrench to disassemble the stem and line the parts up on the counter in the order they came off, so you know how it goes back together. Examine rubber parts or plastic cartridges for cracks, and take the offending piece to the hardware store for an exact replacement. Reassemble the parts you've laid out, in reverse. Then revel in the ensuing peace and quiet.

2. Locate a stud

Say you want to hang a shelf. Knuckling the wallboard can pinpoint a stud, but to improve the odds when your electronic stud finder has gone missing, use deductive reasoning. Most studs are placed at 16-inch intervals; once you know where one is, you can usually find the rest.

Start at a corner, where there's always a stud, or take the cover plate off an electrical outlet and find out on which side it's mounted to the stud. From there, measure 16, 32, 48 inches and you should hit a stud at each go. Eliminate all guesswork by using a thin bit to drill a test hole at the top of the base molding, which you can easily repair with a dab of caulk.

3. Unclog a sink

"Chemicals rarely clear a stoppage — they only make a small hole," says Richard Trethewey, This Old House's plumbing and heating expert. "A full stoppage requires mechanical clearing." Remove the stopper and block off overflow holes. With water in the bowl — the water puts more pressure on the clog — plunge with a flat-faced plunger. If that's not enough, get under the sink and take off the trap to see if that's where the clog is lodged. If the blockage is deeper, rent a hand snake. Slowly push the coil down the drain, carefully twisting, pulling and pushing when you hit the blockage. If the snake fails, call a drain-clearing service to get things flowing.

4. Remove a stripped screw

Hey, even This Old House master carpenter Norm Abram has been there. He recommends a hand screwdriver appropriate for the screw and a double dose of elbow grease to fix this unfortunate bit of handiwork. Gently hammer the screwdriver into the head. Then use as much downward force as you can while you slowly back out the screw.

5. Hardwire a light fixture

Anything powered by electricity requires that the current make a full circuit to and from the main box. All the wiring in a house has two lines: one that brings in the electricity (the hot wire) and one that carries it back (the neutral wire). Connect hot wires to each other and neutrals to each other. And make sure you don't become the conduit in between.

The hot is usually black and the neutral white. But if yours look different, use a circuit tester. With the electricity on, touch one node of the tester to the wire and the other to something metal that is not touching you. If the light goes on, that's your hot wire.

Turn off the electricity and connect the black ("hot") wire to the black wire or the brass screw on your fixture and the white (neutral) to white wire or silver screw. If your fixture has two like-colored wires, the grooved one always goes to the neutral connection. Be sure to connect the copper grounding wire from the cable to the green grounding screw in the junction box, then to the grounding wire coming from the fixture, if there is one.

6. Know which breaker to turn off

When you finally get around to putting in that dimmer switch, you won't want to be stumped by a poorly labeled breaker box. Ditch the pencil and paper chart — you're not changing your wiring any time soon. Instead, write directly on the metal next to each switch with a fine indelible marker. Have a friend plug lamps into all the sockets in a room and tell you via cellphone which ones go dark when you flip a switch. Be specific ("sofa and window walls only" or "kitchen minus fridge") when you jot it down.

7. Use a fire extinguisher

Work fast — the typical extinguisher has as little as eight seconds of life, so know in advance how yours works. Make sure to stow it near an exit so you can back out as you fight the flames. Then remember the acronym "PASS": 1) Pull the pin. 2) Aim the nozzle at the base of the flames. 3) Squeeze the trigger. 4) Sweep the spray from side to side. Don't assume the fire is out just because the flames are gone. Call 911 and wait for the fire department to give you the high sign.

8. Stem a flood — and save your wiring

As a safety measure, you should know where your main water and electrical shutoffs are. The water shutoff will be near where the water enters the house. Look for a metal wheel or a flat handle like a paddle. Or check outside for a mini manhole cover — the shutoff may be there. The main electrical switch will be in or near the main box. On an old fuse system, it may be a big lever or a handle that pulls out a whole block. On a modern breaker box it will be an isolated switch near the top of the box. Flip it to keep the circuits (and you) from getting fried.

9. Paint a double-hung window

Forget the blue tape for this job. Your No. 1 tool is a 1½- to 2-inch sash brush. Its angled bristles come to a point, giving you a fine line. Raise the bottom sash and lower the top sash so they've almost switched places.

Paint the exposed parts of the top sash, now on the bottom, including the muntins.
Carry a thin line of paint onto the glass to seal the glazing.
Nearly close the window and paint the rest of the top sash.
Paint the entire bottom sash, without getting paint between the sash and the stops (the pieces of wood in front that hold them in place).
Paint the casing, sill and apron. Before the paint dries, move the sash up and down. "If you can't see a clear crack between the sash and the stop because of wet paint," says Tom Silva, "then you just glued the window shut."

10. Stop an overflowing toilet

A toilet works by gravity: The water in the tank — just enough to fill the bowl — drops down and pushes waste through the drain. The float drops, opening a valve that lets in water to refill the bowl and the tank simultaneously. The valve closes when the float rises far enough to shut off the water.

If the water from the tank can't leave the bowl fast enough, the refill will spill over. To stop the refill action, take off the top of the tank, grab the float and pull it up to close the valve. That should give you time to reach down and shut off the water, or at least wait for some of the water in the bowl to drain.

Contract signings for homes up in November

CENTURY 21 Gold — Wed, 04 Jan 2012 03:19:00 GMT

The number of Americans who signed contracts to buy homes in November rose to the highest level in a year and a half.

Normally, that would signal better home sales. But a growing number of buyers are canceling their contracts at the last minute, making the gauge less reliable.

The National Association of Realtors says its index of sales agreements jumped 7.3 percent last month to a reading of 100.1.

A reading of 100 is considered healthy. The last time the index was that high was in April 2010, one month before a federal home-buying tax credit expired.

Contract signings usually indicate where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal.

6 ways to save your underwater home

CENTURY 21 Gold — Wed, 04 Jan 2012 03:10:00 GMT

What seemed like a housing market downturn is now nearly universally seen as the new normal. Accordingly, many homeowners are taking a tough look at their mortgage situations in this stark light.

This New Year's season, I've received a massive influx of reader questions -- quasi-challenges, really -- asking me why they shouldn't just walk away from their underwater homes and upside-down mortgages.

If you've read my work at all, you'll know that I almost never give an absolute answer to such an important question. The decision whether to walk away from your home is too big and too personal, and there are simply too many variables -- legal, financial, credit, tax, personal, lifestyle, family, etc. -- at play for me to give a glib black-and-white answer.

If you're trying to make this decision now, it absolutely behooves you to consult with a reputable real estate broker, mortgage broker, local attorney and local tax professional -- at minimum.

However, I've also noticed that most upside-down homeowners don't really want to default on their mortgages. If you count yourself in that number, I thought I'd take the opportunity this New Year's week to encourage you to harness the renewed energy and commitment that comes along this time of year and provide you with some direction for it, in the vein of avoiding foreclosure if you decide that is the right path for you.

Here are six alternatives to walking away, some more obvious, some less, but all underutilized, from my vantage point.

1. Get rid of your credit card debt. Again, this might seem obvious, but I've encountered a number of people who say they can't afford their mortgage payments who actually could afford them if they dealt with their credit card and other debt.

Call your creditors and make an effort to settle your debt; many will take a lump sum payment much lower than your balance. While this might have tax and credit score implications, it might also help you keep your house. Or work through steps No. 2 and No. 3, below, to just eliminate those balances, by any means necessary.

2. Get a second job. This seems obvious, too, but I believe it's simply not done nearly as often as it should be, mostly out of pride and emotional defeatism.

You already work 40 hours a week. You're already tired. But you know what? I know MBAs who got into a bad debt situation and are climbing their way out with high-end, table-waiting tips. It won't last forever and, again, could be very much worth it.

If you're not up for this sort of hustle, and you're a white-collar professional, there are tons of consulting or contract gigs out there to be had, which can help you catch up on missed mortgage payments or bring down your debt.

3. Start a side business. Sites like Etsy, TaskRabbit and elance allow people to monetize their spare time, quirky hobbies and special skills. I know a journalist who nearly matches her day-job income dog-sitting while she writes.

4. Rent a room -- or two -- out. Put your man cave on Trulia or Craigslist for rent. If you can't stomach the idea of a permanent roommate, check out Airbnb and see if you can generate some extra cash renting out your rooms to those visiting for short periods of time.

5. Apply for everything. Decide right now to simply refuse to be deterred by the first roadblock that comes up in your pursuit of a loan modification -- and there might be many. Commit, instead, to applying for everything for which you might possibly qualify, and don't make assumptions about what programs might work for you (many loan mod programs have loosened their guidelines or gotten more efficient over time).

Apply through your lender to the federal HARP program, and also to the lender's own loan mod program. Visit this federal site to determine whether there are additional state programs available to you under Treasury's Hardest Hit Fund. Apply to the wildly successful (as these things go) Home Save program run by NACA.

It ain't over till it's over.

6. Short-sell it. Banks are now taking a couple of years, on average, after the first missed payment to foreclose on and repossess a home. If you list your home for sale with a local agent who has experience closing these transactions right this moment, your chances of selling it and having the short sale complete in time to qualify for the income tax exemption that expires Dec. 31, 2012, are actually better than your chances of qualifying for the exemption if you stop making your mortgage payments right now.

Again, it's ubercritical that you work with professionals, from the folks at NACA to a local agent and attorney and certified public accountant (CPA) if you're seeking a loan mod or a short sale. Beyond advising you about implications to be wary of, the pros can help educate you about the full scope of options available to you.

Your best bet is to run even getting a second job past your trusted advisers before you do it, as it might impact your prospects of getting relief from your lender.

Fortunately, your options for avoiding a foreclosure are not so limited as they might seem at first glance.

1st Time Homebuyer's Guide

CENTURY 21 Gold — Thu, 29 Dec 2011 01:50:00 GMT

Mike Valdez fits the profile of a savvy first-time homebuyer perfectly. A 34-year-old financial analyst from New Rochelle, N.Y., he and his family had grown sick of living the renter's life. So two years ago he decided to test the market and find a townhouse for his growing family. But despite his financial aptitude, he quickly ran into a setback.

"We found a place we liked and ran the numbers," he says, but the young couple soon discovered that they had underestimated the burden of their college debt. They were forced to back out.

Mike's lesson goes to the heart of what every first-time homebuyer needs to know -- buying a home means so much more than paying a mortgage.

Fix Your Credit

The first step toward buying a home takes place months before walking into your lender's office. It's crucial to check your credit score at least three to six months ahead of your mortgage application, says Rod Griffin, director of Public Education at Experian. You can request a free copy of the report from each of the three credit bureaus (Experian, TransUnion and Equifax) atannualcreditreport.com.

Even if you don't have sterling credit (generally a FICO score of 720 or above), the most important thing to do is to take stock of what the figure means. "Every score is educational," says Griffin. "It's more about why the number is than what the number is."

This is especially true since there are different proprietary scales used to gauge credit: the Vantage score, for instance, ranges from 501 to 990, while the FICO score runs from 300 to 850. Make sure to read the accompanying credit report to understand what your score actually means. It's also important to check for errors in the report, which can have a negative effect on your credit, and ultimately, your mortgage rate. One in four reports has an error serious enough to prevent homebuyers from getting credit, according to the U.S. Public Interest Research Groups. So get your reports well in advance of the house hunt.

Prepare for Down Payment and Closing Costs

A generation ago, it used to be the norm to put 20 percent down, but with the market in its current state of flux, many first-time homebuyers are finding ways to pay just 3 to 5 percent of the total cost upfront. Federal Housing Act (FHA) loans increasingly have become a popular option for first-time buyers, says Greg Herb, regional vice president of the National Association of Realtors. These competitively low-interest loans are ideal for buyers with less than perfect credit, and because the Department of Housing and Urban Development (HUD) minimizes the risk of default for lenders on these loans, borrowers are only required to put down 3.5 percent of the cost--a far cry from the traditional 20 percent down payment.

Still, there are advantages to paying more at the start. A larger down payment ultimately means smaller monthly bills down the line. Also, if you purchase a conventional loan (i.e.: one that is not backed by a federal agency), paying 20 percent or more upfront will eliminate the need to pay Private Mortgage Insurance (PMI) charges. PMI is insurance for your lender that can be paid upfront or in monthly installments, and is designed to offset your lender's risk in the case that you've paid less than 20 percent on your home. It can cost around $55 a month per $100,000 financed. While it's important to note that FHA loans also carry mortgage insurance with a down payment of under 20 percent, their low barriers to own still make them a good choice for first-time buyers.

Figure How Much House You Can Afford

Your debt-to-income ratio (DTI) is the percentage of your gross monthly income set aside for paying debts. While some loans may qualify you for up to 50 percent of your monthly gross income, it's advisable that you use no more than 30 percent, says Joe Adamaitis, a mortgage banker in Sarasota, Fla. Be realistic about how much you can pay, because an unexpected event could tear a hole in a tight budget.

If, for example, you have a $5,000 gross monthly income, Adamaitis gives this scenario: After taxes, you might actually clear around $3,600. If you expect to owe 30 percent of your gross monthly income, that's $1500 a month, leaving you a grand total of $2,100 to live on. At this rate, your 30 percent debt is actually cutting into 42 percent of your monthly income, after taxes. So when calculating your budget, be completely honest about your spending habits, even if lenders say you qualify for more.

Hunt for a House

Finding the perfect home can have a lot to do with finding a compatible real estate agent, especially in today's evolving mortgage landscape. "The person you choose will quarterback the whole process for you," he explains. It's crucial to be in contact with an agent before starting the home search, "because you might be looking at x when all you can afford is y." First-time homebuyers should make it clear what features they're looking for and how much they're willing to spend.

There are, however, certain questions that Fair Housing laws prohibit agents from answering, such as where to find religious centers in the area, the quality of the school systems, and crime rates. Be proactive in speaking with members of the community and inquire about the issues that matter most to you. For parents, search public sex offender registries, which can be found online, to see if there are high-risk areas in the neighborhood. In most states, agents must disclose whether violent crimes occurred on a property within a set number of years, but not so with suicides -- find your comfort level and do your research.

Make an Offer

Sellers can price a property however they see fit, but that doesn't mean homebuyers should pay a ridiculous cost. "Get your agent to pull all the comparable sold properties that occurred in the last six months," says Adamaitis. "How many were short-sales? How many were foreclosures? Then gauge by square foot the comparable cost."

Get Your Money's Worth

At signing, the buyer should demand that the contract be contingent on an objective appraisal of the house, Adamaitis says. Look into the history of the home and make sure there aren't any liens against the property. You should be able to negotiate with the seller to make any necessary repairs to the house before closing on the deal.

Contingencies vary by state, but you should certainly inspect the home for possible lead paint, radon, and structural issues. Depending on which contingencies your state recognizes, these flaws can provide grounds to cancel the contract without penalty, and get back the earnest money deposit you put down at the start of negotiations.

Stay on Course

Beginning to end, you can expect the entire process to last around four to five months, says Herb. Of course, with as much great inventory on the market as there is, it's not unusual for homebuyers to find something within two to four weeks.

On a brighter note, Mike jumped back into the house hunt a little wiser this year and closed on a three-bedroom townhouse for him and his family in about four month's time. The real journey starts at the end of the month, though -- when his first bill arrives in the mail.

Home prices down for 6th straight month

CENTURY 21 Gold — Thu, 29 Dec 2011 01:44:00 GMT

NEW YORK (CNNMoney) -- Home prices fell for the sixth straight month in October, down 1.2% compared with September and 3.4% a year ago, according to the latest S&P/Case-Shiller 20-city index.

In recent weeks, reports on new home sales, existing home salesand home building all recorded increases. In addtion, mortgage rates are at record lows, which should be giving homebuyers an added boost.

However, tight lending standards and a glut of foreclosures continue to weigh on the housing market, said Pat Newport, a housing market analyst for IHS Global Insight.

With so many homes for sale at distressed prices, the home price numbers come as no surprise, he said.

Home prices headed for triple dip

"The numbers are pretty bad and will get even worse over the next two years," he said.

The 20-city index has dropped every month since April. Since the housing bust began in mid-2006, homes have lost nearly 33% of their value.

Peter Morici, a professor of economics at the University of Maryland, said home prices remain weak because demand for existing homes is soft. Many potential buyers are migrating to rental markets or buying new homes that had been sitting unsold for months.

According to Morici, the current home price levels represent a correction from inflated prices reached during the bubble.

"Prices are where they belong and that's where they'll stay," he said.

Nineteen of the 20 cities posted declines in October, with Phoenix the only exception. Prices went up there 0.3% compared with September.

Midwest markets and the Atlanta metro area fared badly, with Atlanta prices down 5% in October following a 5.9% plunge in September. The decline was disappointing in light of several other recent reports, which painted a more positive picture of the housing market.

Victims in mortgage case could get thousands

CENTURY 21 Gold — Mon, 26 Dec 2011 22:58:00 GMT

Consumers who were victims of mortgage discrimination could get anywhere from $500 to thousands of dollars each as a result of a settlement announced Wednesday by the Justice Department.

Under the deal, Bank of America's Countrywide Financial unit is paying a record $335 million to settle civil charges that it discriminated against minority home buyers.

More than 200,000 individuals were affected and could be eligible for payments from the fund.

Affected consumers include two different groups of victims who will be eleligible for two different types of damages, said Ira Rheingold, executive director of the National Association of Consumer Advocates, who spoke with Justice Department officials abou the settlement.

The first group involves Latinos and African Americans who had quality, prime loans with Countrywide but were charged more money, mostly in fees, for their mortgages than other consumers, Rheingold said. This group, which includes about 200,000 individuals can expect to get anywhere from $500 to $1,500.

The second set of victims, including about 10,000 Latino and African American borrowers, were steered into subprime loans even though they qualified for prime loans that carried a lower interest rate.

“Their damages may be more extensive,” Rheingold said, because in addition to being charged a higher rate many of these consumers ended up with greater financial problems as a result, including bad credit and possibly the loss of their homes. Such damages could total thousands of dollars per victim.

Rheingold expects the cases for the 200,000 victims to be handled much more quickly than those of the subprime borrowers, but overall he estimated most claims would be paid by the end of 2012.

“This is a good thing for the nation and for consumers,” said Kathleen Day, a spokeswoman for the Center for Responsible Lending, about the settlement.

The settlement, she added, “establishes what should a have been a line in the sand more than a decade ago. This never should have been allowed to happen.”

The Justice Department has identified the victims and will be contacting consumers directly about the settlement, but if you believe you were a victim or have questions about the case you can email the agency at:countrywide.settlement@usdoj.gov.

Mortgage rates drop to record low

CENTURY 21 Gold — Mon, 26 Dec 2011 22:49:00 GMT

The average rate for a 30-year fixed-rate mortgage has dropped to a record low 3.91 percent, mortgage giant Freddie Mac said Thursday.

That's down from last week's 3.94 percent, which matched the previous record low set in the fall, which was the lowest since records began being kept in the 1950s. The rate for a 15-year fixed rate mortgage was steady at 3.21 percent, also a record.

Rates may be low, but they haven't been able to spur sales for a number of reasons, including stagnant wages and persistently high unemployment.

Housing data has recently been showing some improvement lately. Sales of previously owned homes rose 4 percent last month to a seasonally adjusted annual rate of 4.42 million. That's below the roughly 6 million homes a year that economists say are consistent with a healthy housing market. But it's ahead of 2008's revised sales, now considered the worst in 13 years.

But applications for new mortgages fell last week as low rates were not enough of an incentive to spur demand. There's also a huge glut of foreclosed homes on the market and in the pipeline that continue to depress home prices.

The Freddie Mac benchmark is based on loans that included an average up-front fee of 0.7 percent of the loan's value on a 30-year loan.

13 great gifts for do-it-yourselfers

CENTURY 21 Gold — Thu, 22 Dec 2011 21:50:00 GMT

Do you have some avid do-it-yourselfers on your holiday gift list this year? If so, here's my annual roundup of suggestions for some interesting, quality tools worth considering. They're listed in order of the manufacturer's suggested retail price.

Black & Decker All-In-One Laser Level (Model BDL100AV, $29.97): This is a clever and useful little level that really works. It has two parts: a heavy-duty suction cup; and a small level with a bubble, a light and a laser beam.

The two are held together with a powerful magnet. The suction cup holds the unit securely to most surfaces, and a green light tells you when the unit is level (red light when it's not). It projects a bright red laser line for leveling pictures, shelves or whatever. It includes two AA batteries.

Craftsman Folding Clench Wrenches (Model 30879, $29.99): This clever, compact pair of wrenches covers a wide range of bolt sizes and types to tackle just about any type of project. Ratcheting, adjustable and collapsible, for the toolbox, glove compartment, RV, bike -- anywhere. One 6-inch and one 8-inch wrench cover 1/4 to 7/16 inch and 6 millimeters to 11 millimeters.

Milwaukee 6-in-1 Combination Pliers (Model 48-22-3069, $32): A very handy, professional-grade tool for anyone's toolbox. These heavy-duty, needle-nose pliers feature a wire stripper, wire cutter, pliers, loop-maker, screw cutter for the common 6-32 and 8-32 screws, and a head designed for reaming metal pipe from 1/2 inch to 1 inch in diameter. Nonslip, spring-loaded, locking handles and forged alloy steel round out a very well-made tool.

Craftsman NEXTEC G2 Drill/Driver (Model 30565, $79.99): A nice, compact, 12-volt lithium ion drill/driver at an affordable price. It features a two-speed gear box (0-400 and 0-1,300 RPM, trigger-controlled). There's an 18-position clutch for proper torque settings to match the material and fastener. It has a comfortable, soft-grip handle, built-in fuel gauge, keyless chuck, and LED work light. It includes a 12-volt battery, carrying case and quick charger.

Skil Oscillating Multi-Tasker (Model 1400-02, $79.99): Oscillating tools have been on everyone's wish list, and Skil has introduced a great kit for do-it-yourselfers at a very affordable price. Designed for home projects and light remodeling, the Multi-Tasker has a variable speed, 2-amp motor, integrated dust control, a soft-grip handle, and a no-mar head. The kit comes with three blades; sanding pad and paper; case; and an adapter plate to fit other blades.

Home Right Command Max HVLP Sprayer (Model C800766, $89): The Command Max offers the occasional user the opportunity to own a sprayer at a very affordable price. Lightweight and easy to use, the Command Max is perfect for smaller projects such as spraying clear sealers, polyurethane, stain and varnish. Properly thinned, it can also be used to spray paint. It features an adjustable spray nozzle for different patterns, and adjustable material flow volume control.

Skil Combo Router Kit (Model 1830, $109.99): For anyone who needs to add a router to his or her arsenal of tools, Skil's come up with a very attractive combo kit at a great price. With a 2 1/4-horsepower motor and a 1/2-inch collet, this is a definite step up from most entry-level routers.

The motor even has variable speed and soft start, usually only found on more expensive routers. You get a fixed base and a plunge base, both with micro-fine depth adjustments, quick-release clamps and soft-grip handles. You even get a case.

Werner Telescoping MultiLadder (Model MT-13 [13-foot], $119.99): If you have only one ladder around the house, this should be it. The Werner MultiLadder is a single stepladder that adjusts to different heights; is a stair ladder that can be adjusted to unequal lengths for stairs; converts to two stepladders; converts to an extension ladder; and splits into two scaffold bases for use with an optional plank. The operation is smooth and easy, and the ladder feels sturdy underfoot in all the different modes. It features a type 1A duty rating and a 300-pound load rating.

Dremel Saw-Max (Model SM20-02, $129.99): This is an innovative new tool from Dremel with a ton of uses around the house. It's basically a small but powerful worm-drive circular saw with interchangeable, 3-inch cutting wheels. Use it to cut wood, plastic, metal, tile, masonry and more. You can plunge cut, or flush cut for tasks like fitting flooring under door jambs. It's light and easy to handle, and cuts to 3/4 inch deep. It includes four different cutting wheels, vacuum adapter, and a hard case.

Milwaukee M12 Cordless Ratchet (Model 2457-21, $149): Part of the Milwaukee family of compact 12-volt lithium ion tools, and perfect for anyone who needs the convenience of a powered 3/8-inch ratchet. It's powerful, with 250 RPM and 35 foot-pounds of torque. There's a compact head design for tight spaces, on-board LED light and battery power levels, variable speed metal trigger and reinforced steel housing for durability. It includes a case, battery and 30-minute charger.

Ridgid TwinBlade Saw (Model R3250, $149.95): This heavy-duty little brute from Ridgid uses twin 5-inch blades spinning in opposite directions, coupled to a powerful 10-amp motor. It'll cut through just about anything, including stainless steel, galvanized iron, wood, copper, steel, aluminum, rebar and more -- both forward and backward.

It has a compact design and comfortable grips for use even in confined areas, and has a wax port for use with wax sticks. It includes blades and a case.

Ridgid 18-Volt Compact Drill/Driver (Model R86008K, $179): Pro-grade cordless drill/drivers are always a great gift for the do-it-yourselfer, and Ridgid has a great one here. Featuring a compact size with a slide-in, flat-bottom 18-volt 1.5 Ah lithium ion battery with fuel gauge, it's got 455 inch-pounds of torque and two speed ranges (0-450 and 0-1,650 RPM).

It has a textured, nonslip grip, 24-position clutch, 1/2-inch keyless chuck, and an LED light that can be triggered independently. It includes a belt hook and very handy auxiliary handle. Complete kit with fast charger, two batteries, and soft case.

Dewalt 20-Volt MAX Compact Drill/Driver (Model DCD780C2, $219): Looking for more power in a compact package? Dewalt delivers with its new pro-grade 20-volt MAX lithium ion drill/driver. It's loaded with features, including two speed ranges (0-600 and 0-2,000 RPM); 1/2-inch keyless chuck; 16-position clutch; LED light; 1.5 Ah flat-bottom, slide-on battery; and a soft, contoured grip.

It's all packed into a compact body that weighs only 3.4 pounds and is just 7 1/2 inches long for easy access in tight spaces. It includes a complete kit with two batteries, fast charger, belt hook and hard case.

New Mortgage Tool Can Help Avoid Pain, Cost of Rejection

CENTURY 21 Gold — Thu, 22 Dec 2011 21:47:00 GMT

If there's one thing lenders have learned from the housing meltdown, it's that making high-risk loans entails, well, a lot of risk.

As a result, banks have severely tightened lending standards and increased paperwork requirements. That's made the application process quite a doozy for aspiring homeowners.

Borrowers are now forced to invest significant time and resources into meeting the strict requirements of banks, sometimes staying engaged in talks with banks for an extended period of time only to learn that their loan has been rejected. Occasionally, rejection comes even after prospective borrowers have already paid an appraisal fee or other costs.

But a new mortgage qualification tool could help borrowers avoid this scenario. Perhaps the most sophisticated of its kind, the tool assesses a borrower's loan qualifications based on various factors and determines, lickety-split, what options he or she has to choose from.

The tool guides the user through "something that the borrower doesn't do until he gets to a loan provider and spends some time with the loan provider," according to its creator, Jack Guttentag, a professor of finance emeritus at the Wharton School of the University of Pennsylvania.

Accessible on Guttentag's site, The Mortgage Professor's Web Site, the tool assesses a user's credit-worthiness by crunching data that includes homeownership history, property value, the equity that a borrower owns or intends to own upon buying, and his credit score. The tool also factors in documentable income, debt payments and home location -- all in the hope of providing the user with a full understanding of borrowing options.

If you don't have any options, the tool explains where you come up short, by how much and how to fix it.

Shooting for an FHA-insured mortgage? Improve your credit score and make sure you can muster at least 3.5 percent equity, the report may suggest.

Or want to clinch a conforming mortgage and avoid private mortgage insurance (PMI) payments? The report may suggest that you worry less about your credit score and more about scraping together a sizable down payment -- 20 percent if you're looking to rid yourself of PMI altogether.

Guttentag based the tool's metrics on the specific lending standards of various lenders and general mortgage borrowing rules of thumb.

The tool may be the only one of its kind. That's because banks, says Guttentag, have no interest in "providing any tools or decision-support materials except those that will induce borrowers to come to them." Informing borrowers of their qualifications on the Internet, banks have decided, doesn't help "their bottom line," he says. The logic is that borrowers may easily take what they've learned and use it to apply for a similar loan at a competitor.

In other words, if the bank only reveals to a borrower that he qualifies for a loan during one-on-one engagement, then "the loan originator has first dibs on the deal."

Thus, Guttentag's tool could loosen lenders' clutch on mortgage qualification standards. The service is part of a larger loan origination network that he is developing which is scheduled to launch before the end of the year.

Here's how to get help with your mortgage

CENTURY 21 Gold — Mon, 19 Dec 2011 00:22:00 GMT

Are you behind on your mortgage payments, or already in foreclosure? Or have you just experienced a life change which will affect your ability to pay? Consumer advocates, loan counselors and government housing officials support these recommendations about what to do:

1) Ask for help. Don't wait.

2) Contact your loan servicer. Check the servicer's website to see what help is available for borrowers needing assistance.

3) Contact a mortgage help hotline, your state's department of housing and/or a HUD-approved mortgage loan counseling service.

4) Get a HUD-approved counseling service to take your case and work with your loan servicer to try and get it resolved without foreclosure. Avoid foreclosure services that charge you a fee. HUD-approved counseling agencies are generally free of charge.

5) Ask the counselor about the possibility of getting a loan modification — changing the terms of your existing loan to ones you can afford.

6) Attend a foreclosure prevention workshop event in your area to get additional information face-to-face.

7) Don't apply for more credit.

Story: No end in sight to foreclosure quagmire

Mortgage Help Hotlines
There are various mortgage help hotlines borrowers can call for assistance and guidance.

HOPE NOW Alliance - Homeowner's Hope Hotline
The HOPE NOW Alliance is a private-sector group of counselors, mortgage market participants, and mortgage servicers. At President George W. Bush's direction, the Departments of Treasury and Housing and Urban Development established this alliance to provide voluntary assistance to borrowers. Call 888-995-HOPE (4673).

National Foundation for Credit Counseling

The NFCC is the nation's largest national nonprofit credit counseling network, with more than 100 member agencies and nearly 850 offices in communities throughout the country. NFCC members, often known as Consumer Credit Counseling Services, can be identified by the NFCC member seal. You can find one of its members and get more information about avoiding foreclosure on the NFCC's website.

NeighborWorks America
This group administers housing counseling agencies funded through the National Foreclosure Mitigation Counseling Program. These agencies can provide you with information about several federal programs for homeowners facing foreclosure. The group's website also includes information on avoiding loan modification scams.

Department of Housing and Urban Development
The website for this federal agency offers tips on avoiding foreclosure and advice on what to do if you’re in the process.

State and Local Mortgage Help Hotlines
Most states and some cities have set up their own mortgage help hotlines and provide other resources to help homeowners having mortgage trouble. Check out the HUD website for links and the latest information on what's available.

SEC charges ex-Fannie, Freddie CEOs with fraud

CENTURY 21 Gold — Mon, 19 Dec 2011 00:20:00 GMT

Federal regulators have charged six former executives -- including former CEOs -- at mortgage giants Fannie Mae and Freddie Mac with securities fraud, alleging they misled investors about their exposure to risky subprime mortgage debt.

The Securities and Exchange Commission said it sued three former executives at Fannie Mae and three at Freddie Mac Friday. The civil charges were filed in two separate lawsuits in federal court in New York City. Among those charged were former Freddie Mac CEO Richard Syron and former Fannie Mae CEO Daniel Mudd.

"Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was," said Robert Khuzami, Director of the SEC's Enforcement Division. Khuzami added that these misstatements "misled the market about the amount of risk on the company's books."

The SEC said both firms have agreed to cooperate with the agency and have entered into non-prosecution agreements.

Freddie Mac and Fannie Mae have been propped up by about $169 billion in federal aid since they were rescued by the government in 2008. Fannie and Freddie own or guarantee about half of U.S. mortgages, or nearly 31 million loans.

The Associated Press said lawyers for Syron and Mudd couldn't be reached. But in a statement obtained by CNBC, Mudd said, "This is a lawsuit that should never have been brought in the United States of America. Every piece of material data about loans held by Fannie Mae was known to the United States government and to the investing public. The SEC is wrong, and I look forward to a court where fairness and reason — not politics — is the standard for justice."

The SEC said it is seeking financial penalties, disgorgement of ill-gotten gains with interest and to bar Syron, Mudd and the others charged from serving as directors on company boards.

The others charged include:

Fannie Mae - former Chief Risk Officer Enrico Dallavecchia and former Executive Vice President of its single family mortgage business, Thomas A. Lund.
Freddie Mac - former Executive Vice President and Chief Business Officer Patricia L. Cook, and former Executive Vice President for the Single Family Guarantee business Donald J. Bisenius.

Refinancing Do's & Don'ts

CENTURY 21 Gold — Tue, 13 Dec 2011 03:17:00 GMT

The lowest mortgage rates in our lifetimes are inspiring a huge volume of new mortgages. The Mortgage Banker's Association, a national organization representing the real estate finance industry -- expects to see nearly $3 trillion in business this year. But it's not only new buyers that are tempted to apply for home loans. Nearly 80% of recent loans went to current homeowners refinancing.

The association says that the average buyer of a 30-year fixed mortgage with 20% down now pays 4.63%.Last year the average rate was 5.98%.

But, many people are finding out that they don't qualify for those great rates they've been hearing about. If you're interested in refinancing, you'll have to carefully figure out whether it will work for you right now. Here are some tips to help you navigate the field of refinancing.

Clean up your credit first

You are going to have to have great credit to get the best rates. That may mean a score of at least 740. That could be hard if you're motivated to refinance because your budget is too tight.

Start by getting a copy of your credit record and credit score. If your credit score is not high enough, consider working on it for a few months by paying down debt, removing errors and applying again -- especially if you are within 100 points or so of 740. After all, of all the factors banks consider when you apply for a loan, this is the one you can change the most easily.

Expect to wait longer & try harder

Instead of the usual 30 days it used to take to refinance, count on a four to six week process, says John Holmgren, spokesman for the California Association of Mortgage Brokers. Banks are scrutinizing loan applications a lot more than they did in the recent past.

"As a general rule a lot of people who have gotten loans in the past will find there are a lot of changes and challenges," he said.

Consider the same payment over a shorter mortgage

If you can swing your current payment, instead of just refinancing to get your monthly bill down, consider changing to a 15-year mortgage. Depending on your situation, you may be able to do it with little or no increase in your monthly payment. But you'll get out of debt much sooner, so your overall interest payments will be much lower. And in case you sell your house in the interim, you'll have built up much more equity.

Don't overextend yourself

Lenders are getting back to the traditional way of thinking about debt to income ratios. And so should you.

Just a few decades ago, lenders didn't want you to pay more than one-quarter of your monthly income to your debts. In industry jargon, that's a debt-to-income ratio of 25%. So for example, if you wanted to take out a mortgage with a payment of $1,000 a month, lenders expect that you would make to make at least $4,000 a month.

The 25% ratio was what was called a front-end debt to income ratio -- just your house. Banks may also look at your back-end debt ratio, which includes all the other monthly loan payments you make, such as credit cards, car or student loan payments.

The problem comes in when some lenders began allowing the debt-income ratio to creep up to 30%, then 35%, with back-end ratios going over 50%. Including a home loan, that means some people would end up spending more than half their salary solely on loan payments. That's not a position you want to be in, so set a debt-income ration for yourself, and stick to it.

Pay the points, especially if you plan on staying for the long run

Back when you got your mortgage you probably chose not to pay points (a 1% fee on your principal you pay upfront to lower your interest rate) or closing costs. Now, to get the best rates, you're going to have to -- but it's probably worth it.

"When people see statistics, they assume that it's a loan with no points," says Holmgren, but changes in the way loans are priced means there is often a big difference in the average rate and what you get.

"Most people are electing to pay a point or more because it makes a huge difference," he says.

Paying higher costs up front will reduce your monthly payment more, but it also means you have to stay in the house longer to make the refinancing worthwhile.

Don't be shocked by what the bank says your home is worth

This is the part that may break your heart: if your home fell in value by more than you added in equity, you may not even have enough for what amounts to the 20% down payment on your mortgage.

When you refinance, it's like you're buying your house all over again. The bank is only going to loan you what they think your house is worth now; what you paid for it doesn't matter. You may have a magical number stuck in your head; the highest price someone paid for a home in your neighborhood, the price you wish you had sold at, the price you think your house is inherently worth.

The bank doesn't use those price markers, but instead, looks at comparable sales, lots of them. Traditionally banks wanted to see three comparable properties recent sale prices, Holmgren says. Now they want to see more and possibly what current sellers are asking to detect further downward trends.

"A lot more property value data is being required," he says. Every home owner seems to tell themselves that their home is nicer than their neighbors, so that they ignore those current prices, he says. "If I had a penny for every time people say houses are selling for this, but mine is so much better ..."

You'll pay more for condos and investment properties

You always had to pay a little bit higher of a rate for an investment property, Holmgren says, but not that much -- maybe one-quarter or one-half a percent. Now you may be looking at a whole percentage point higher. The best rates you see are for single-family homes that you live in.

For condos, lenders worry that buying just part of a building is more risky than buying a single family home. There are too many other risk factors you can't control, and they have higher default rates.

Fannie Mae recently tightened restrictions on condo loans: they won't guarantee loans in mostly still-vacant buildings or ones where 15% or more of owners are behind on their mortgage. They're also charging an added fee unless you have a 25% down payment.

Principal reduction outpaces short sales under HAMP

CENTURY 21 Gold — Tue, 13 Dec 2011 03:11:00 GMT

A borrower is more likely to get a principal reduction than a short sale or deed-in-lieu of foreclosure under the Home Affordable Modification Program.

The Home Affordable Foreclosure Alternatives program launched in April 2010 to give borrowers who are eligible for HAMP a chance at a short sale or DIL. Participating servicers completed about 20,700 of these deals as of October, with less than 600 of them deeds-in-lieu, according to Treasury Department data.

The principal reduction alternative, or PRA, began in October 2010 and only for mortgages not guaranteed by Fannie Mae or Freddie Mac. But in six fewer months, servicers started 33,376 modifications by writing down principal.

The effect of the reduction is eye catching. The Treasury released characteristics of HAMP modifications last week. The median loan-to-value ratio on modifications that went through principal reduction was 158%. After the workout was complete, the borrower held an LTV of 115%, meaning he or she owed 15% more on the mortgage than the home was worth rather than being 58% underwater.

The average amount reduced is more than $65,000 or 31% of the unpaid principal balance.

Through PRA, the Treasury pays investors for every dollar of principal forgiven on a sliding scale depending on how far underwater the borrower is.

HAMP enters its final year next month, and it has been criticized at nearly every turn since it launched in March 2009. It will not reach the 3 million to 4 million originally predicted. After redefaults are factored in, roughly 800,000 homeowners will avoid foreclosure thanks to HAMP, according to the Congressional Oversight Panel.

The Treasury did not release estimates for HAFA or the PRA programs when these launched. But to have principal reductions, which has been long thought of as the spark for anyone considering strategic default, outpace short sales highlights how convoluted and fraudulent the process remains. Especially when banks experience a loss rate of 60% on short sales compared to 70% on the lengthy foreclosure and REO process, according to Moody's Investors Service.

Bren Sheriff, a co-owner of AMAXX Title Services, a boutique title firm for inner city Chicago, said the problem is that many buyers in short sales can't take the wait.

"It has taken so long for some of the short sales to get completed, investors have lost their end buyers – thus no deal," she said.

It isn't just the public short sale program struggling but private ones as well. The top 10 servicers gave short sales or DILs to roughly 35,500 borrowers canceled out of HAMP trials through September. The nearly 92,000 foreclosure starts on this group of borrowers was nearly triple that amount.

In January, the Treasury attempted to relax certain HAFA guidelines such as no longer requiring a servicer to verify a borrower's financial information or to determine if the monthly mortgage payment exceeds 31% of his or her income. At the time, HAFA had totaled roughly 660 short sales and has since added 20,000.

Christopher Hanson, who works on short sales at the Hanson Law Firm, said because of the various qualifiers borrowers had to reach, HAFA was doomed from the beginning.

"The loss sharing agreement (under the principal reduction program) criteria are more realistic than the borrower eligibility under HAFA – at least that’s what I’d suspect," Hanson said.