Archive for March, 2010

Vacation Home Sales Up but Investments Down

water front vacation home

Vacation-home sales recovered in 2009 while investment sales fell sharply, according to the National Association of Realtors®.

NAR’s 2010 Investment and Vacation Home Buyers Survey, covering existing- and new-home transactions in 2009, shows vacation-home sales rose 7.9 percent to 553,000 last year from 513,000 in 2008, while investment-home sales fell 15.9 percent to 940,000 in 2009 from 1.12 million in 2008. Primary residence sales rose 7.1 percent to 4.04 million in 2009 from 3.77 million in 2008.

NAR Chief Economist Lawrence Yun said, “The typical vacation-home buyer is making a lifestyle choice, with nine out of 10 saying they intend to use the property for vacations or as a family retreat,” he said. “Investment buyers primarily seek rental income, with six in 10 planning to rent to others, although one in five wants a family member, friend or relative to use the home.”

Quick Stats:

Only one in four vacation-home buyers plan to rent their properties to others, while one in five investment buyers plan to use their homes for vacations or as a family retreat. However, 26 percent of vacation-home buyers and 8 percent of investment buyers intend to use the property as a primary residence in the future.

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Source: National Association of Realtors (NAR)

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How to Buy a Foreclosed Property – 9 Steps

foreclosure price reduced sign

If you’re looking for real estate bargains, consider buying foreclosed property.  A foreclosure takes place when a homeowner or property owner cannot pay the mortgage fees on the property and is forced to give up the land to pay back what is owed.

Here’s an overview of what you’ll need to do if you want to buy a foreclosed property:

Step 1:  Locate properties scheduled for foreclosure sales by checking classified newspaper ads for listings under Foreclosure Notices, Auction Sales or Sheriff’s Sales.

Step 2:  Notify local real estate agents and attorneys that you’re interested in purchasing foreclosed properties.

Step 3:  Check with local lending institutions and government agencies – such as the Federal Housing Administration, Veterans Administration or Department of Housing and Urban Development – about foreclosed properties in your area.

Step 4:  Investigate foreclosure proceedings in your state.

Step 5:  Inspect the foreclosed property to determine its condition and market value; obtain sales prices of comparable properties in the area from a local real estate agent.

Step 6:  Determine ownership, identify potential problems and research any existing liens by conducting a title search on the foreclosed property.

Step 7:  Contact the trustee of the foreclosure sale to inquire about the minimum bid the lender will accept.

Step 8:  Determine how you’ll finance the foreclosed property or find out if the current loan is assumable.

Step 9:  Make an offer on the foreclosed property by bidding at the foreclosure auction or submitting a sealed bid to a lender after the foreclosure sale.


  • Foreclosure proceedings can be complicated, so be aware of your state’s legal procedures for acquiring foreclosed properties.
  • Since properties are usually offered “as is” at foreclosure auctions, inspect the property before you make a foreclosure bid to avoid a costly mistake.
  • Depending on the reason for the foreclosure sale, there may be a redemption period in which the previous owners can make payment in full and get their property back. Check with the trustee to protect your rights.

Source: eHow Contributing Writer

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A Morning Cup of Inspiration (March 26, 2010)

morning cup of inspiration

It’s not about doing one thing 100% better.

It’s a matter of doing 100 things

1% better each day.

Inspiration from

More amazing Gifts of Inspiration at

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Bank of America to Cut Mortgage Debt for Homeowners

bank of america

The plan is one of the boldest moves yet to address the plight of millions of U.S. homeowners who are “under water,” owing more on their homes than they’re worth.

Bank of America Corp. said it would reduce mortgage-loan balances as much as 30% for thousands of troubled borrowers, in what could presage a wider government effort to encourage banks to offer debt reduction to ease the mortgage crisis.

So far, most modifications, including those under the government-subsidized Home Affordable Modification Program, involve reducing interest rates. Some also extend terms to 40 years, to shrink monthly payments.  But banks are finding that some borrowers aren’t willing to keep making even reduced payments, believing they have little hope of ever having equity in their homes and might be better off renting, and perhaps buying a less-expensive home later.

“Severely under-water homeowners are reluctant to accept a solution that does not offer some reduction in principal,” said Barbara Desoer, president of Bank of America Home Loans. “The whole purpose of the program is to get more customers to return phone calls” and make payments for trial modifications so workouts can be made permanent, she added.

The action by Bank of America is notable because it is the largest mortgage servicer, collecting loan payments on one of every five home loans in the U.S.  At the end of last year, 14.76% of them were at least 30 days past due or in foreclosure, versus an industry average of 12.31%, according to Inside Mortgage Finance.

The bank’s program is limited to Countrywide borrowers whose loan balance is at least 120% of the estimated home value, who are at least 60 days overdue, and who can show that financial hardship makes them unable to meet current payments. The bank estimated that 45,000 customers will qualify for principal reductions averaging more than $60,000.

Source:  JAMES R. HAGERTY And NICK TIMIRAOS (The Wall Street Journal)

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Hump Wednesday Funnies

real estate cartoon with 3 little pigs and wolf

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Cash for Keys – New Short Sale Incentive

Cash for Keys short sale incentive

Homeowners who are underwater in their mortgage loans will have another option to home foreclosure beginning April 5.   In this case, they can get cash for their keys.

On April 5, the U.S. Treasury Department will launch the Home Affordable Foreclosure Alternatives Program (HAFA). The program is aimed at streamlining and reducing the paperwork needed for a short sale.

A short sale is where a homeowner sells the property for its current market value, which is usually less than what is owed on the mortgage. Lenders must agree to the short sale since the borrower will be repaying less than what they owe to the lender. In return for accepting the short-sale, both the lender and seller would get a cash incentive, which is why the program has been nicknamed “cash for keys.”

Realtors are hoping the program will “revolutionize the short-sale situation,” which historically has been a long, arduous process taking an average 90 to 120 days, according to the National Association of Realtors.®  In that time, a buyer can lose interest.

Why Cash For Keys?

Much like the federal government’s home loan modification program, the short sale program, which ends on December 31, 2012, is aimed at reducing the number of home foreclosures and improving the housing market.

According to the National Association of Realtors®, at its peak in March 2009, bank-owned sales were 31 percent of the housing market versus 18 percent for short sales.

Again, Realtors say this is because the short sale process is so long and complicated, a buyer usually gives up, and the bank ends up foreclosing on the home.

The government is hoping HAFA will change that practice, and bring about lasting-change to the housing market.

Under the new rules:

  • A lender must approve or deny a purchase offer within 10 days of it being submitted.
  • An acceptable value of the home, based on an appraisal or broker’s price opinion, must be accepted by the bank up front.
  • A seller may stop paying all mortgage expense once the lender approves the short sale.
  • A seller is entitled to up to 1,500 dollars for relocation expenses from the government at closing.
  • The bank will not only forgive the remainder of the mortgage, but unpaid payments will not be shown as late on credit reports.
  • To qualify for the program, a seller must be unable to meet the requirements for a loan modification under the Home Affordable Mortgage or afford a home loan modification.

More details on the Home Affordable Foreclosure Alternatives program (HAFA).

Source: Nicole Service from

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Wells Fargo Will Join in Modifying Second Mortgages

wells fargo home mortgage modify second mortgages

Wells Fargo & Co. has joined Bank of America Corp. as the first two banks to sign onto the federal government’s program to modify second mortgages.

Under the government’s plan, borrowers who have been extended loan modifications on first mortgages can now apply to reduce their second mortgages.

Analysts say banks have been reluctant to adopt this part of the government’s loan modification program because they continue to hold most second mortgages and forgiving them will be costly.

The program is part of the Obama administration’s mortgage modification program that is aimed at reducing monthly payments to help customers stay in their homes.

The modification program offers lenders who made “piggyback” loans – second mortgages that allowed consumers to make a small or no down payment during the housing boom – incentives to lower payments or eliminate the loans entirely. During the market’s peak, even customers with spotty credit history were extended second mortgages.

By signing up for the program, all customers of Wells Fargo or Wachovia who have already modified their first mortgage through the modification program, known as the Home Affordable Modification Program or HAMP, can also modify their second mortgage.

Source: Associated Press and

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