Thursday, April 30, 2009

The Federal Reserve in Plain English

Parsing the Fed from the Wall Street Journal (April 29, 2009)

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today within its target range of 0.000-0.250 percent.  The Fed also reiterated its plan to support the mortgage market to the tune of $1.5 trillion.

In its press release, the FOMC noted that the economy may still be contracting, but that it's not happening with the same speed as in prior months.  Household spending is stabilizing and financial markets are "easing".

Nevertheless, threats to the recovery are everywhere with the following items on the Fed's short list:

  • The growing ranks of unemployed workers
  • The reduction of housing wealth nationally
  • Reduced inventories and investment from business

Furthermore, the FOMC fingered today's inflation levels as too low to support economic growth.  This justifies the Fed's plan to hold the Fed Funds Rate near zero percent "for an extended period".

For home buyers and refinancing homeowners, today's press release was not favorable.

After the Fed's announcement, stock markets rallied on the idea that the worst of the economy really is over and that led to a broad bond market sell-off.  Mortgage rates spiked in response, adding as much as 0.125 percent, in some cases.

The FOMC's next scheduled meeting is June 23-24, 2009.

Parsing the Fed Statement
The Wall Street Journal Online
April 29, 2009

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Tuesday, April 21, 2009

Is the Recession Over Already?

Highland Quadrangle at Vanderbilt University, ...Image via Wikipedia

Image via Wikipedia
Though it took the Federal government a long time to determine that we were in a recession, it seems that they may have already decided that we've reached the end of it according to an article published on
Fed Officials: The Worst is Over

The worst of the economic crisis is over,according to U.S. officials speaking at a financial conference Friday at Vanderbilt University.

Frank Nothaft, the chief economist for Freddie Mac, said housing sales have just about hit bottom and a third of home sales are now foreclosed properties.

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, warned that the declining commercial real estate market still poses a risk to the economy.

It would seem however, that though the housing market may recover , the lack of liquidity may still pose a problem for home buyers.

"It is worth emphasizing (that) actions that lead investors to shun taking risk, especially in this
environment, are ultimately detrimental to the ability of households and businesses to secure credit at reasonable borrowing rates," Dudley said.

So that still leaves the average buyer with the need to act, the desire to act, and benefits that accrue to the action.. if they can get a loan to buy the house.

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Friday, April 17, 2009

Great Gadgets for Mother's Day or Father's Day!

After attending the International Home and Housewares show, The Today Show filmed a 5-minute segment called "Housewares You Won't Be Able To Live Without".

The title is somewhat over-the-top but don't let that turn you off. The gadgets reviewed are both practical and inexpensive. They include:

  1. Make-no-mess vegetable peeler for the kitchen
  2. Efficient kabob tool for the grill
  3. Grow-In-Your-Kitchen garden that grows like an outdoor one

Of over 2,000 products at the show, NBC selected seven. Watch the video to see them in action.

Gadgets don't improve a home's value but they can make life easier sometimes. And for homeowners, easier is often better.

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Thursday, April 16, 2009

50% of the Foreclosures in the US are in 3 States!

More than half of the country's foreclosure actions from March occurred in just 3 states -- California, Florida and NevadaSince 2007, foreclosures have dominated real estate news. You can't turn on the news or open a paper without some foreclosure-related story.

But for all of the discussion, foreclosures continue to be geographically concentrated.

Adding up the latest stats from, more than half of the country's foreclosure actions from March occurred in just 3 states -- California, Florida and Nevada.

Those 3 states represent just 19 percent of the nation's population.

Despite the local concentration of foreclosures, however, they remain a national problem. This is because mortgage lenders lend in all 50 states -- not just 3 of them -- so the impact of mortgage defaults in one region can quickly spread to others.

In part because of foreclosures are higher, the following has happened:

  • Mortgage guidelines have tightened
  • Downpayment requirements have increased
  • Private mortgage insurance has become more expensive

That's an important set of changes for a would-be borrower. In some cases, it can keep a person from qualifying.

Search the March 2009 foreclosure report for yourself on's website.

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Friday, April 10, 2009

Just Filing Your Taxes? Here's some Tips!

There are 138 million taxpayers in the United States and, according to the IRS, 20 percent of them file their taxes within 7 days of April 15. In a holiday-shortened week, that means that 27 million people had better get a move on.

And while a portion of this year's last-minute filers will file with storefront operations like Liberty Tax Service or H&R Block, many others will self-prepare with the help of tax software from TurboTax or TaxCut.

If you're a member of the do-it-yourself crowd, consider taking a review of this year's tax law changes before starting your returns. The stimulus package signed into law this past February made a profound impact on tax liability and the list of changes may be helpful for you.

A few of the new, allowable income tax deductions for 2008 include:

  • Mortgage debt forgiveness in the event of a short sale

  • An additional standard deduction on real estate taxes paid

  • $8,000 tax credit for homes bought since January 1, 2009

TurboTax offers 4 tax filing choices online, ranging in price from $100 to free. If you're among the 27 million yet to file, choose whichever program fits best -- just choose it before April 15.

Filing could take several hours. Plan accordingly.

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Thursday, April 9, 2009

Short Sales What the Heck are They?

In Philadelphia and New Jersey, there are more short sales then there were in the past, but we don;t have the problems faced in some other parts of the country. Even so, even real estate agents need specific training to help you with them, which is why I developed our short sale training course after returning from chairing the Short Sale Working Group last year for the National Association of REALTORS .

Because there is so much interest in , and confusion about Short Sales, I thought that this video might help consumers understand just what they are and how they work.

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Monday, April 6, 2009

How to buy Foreclosures

This video was sent to me as I am attending the REOMAC (REO Managers Association of California) meetings in Palm Desert California. Because I have been an REO expert for 20 years, I became a member of REOMAC several years ago.

REOMAC is the leading organization for the mortgage default industry, and its two annual meetings provide its members with a tremendous amount of information on the amount of foreclosures throughout the country, and the best ways to help lenders and consumers work together to reduce the number of foreclosures.

Watch and learn!

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Friday, April 3, 2009

How to Avoid Sabotaging Your Mortgage Application

8 things you should absolutely not do while your home loan is in processWith mortgage rates are hovering near all-time lows, lots of Americans are taking advantage of refinance and home buying opportunities.

The downside of today's unexpectedly-low rates, though, is that mortgage lenders are ill-equipped for the rush of new business.

As a result, the process of underwriting and approving new mortgage applications is taking some conforming lenders as long as 2 months to complete.

This is double the time needed as recently as six months ago.

Because there may be 60 days between the application date and the closing date, it's important for applicants to remember that mortgage approvals can be revoked at any time prior to funding.

As mortgage applicants, there are many events that are out of our control -- job security and health matters, for example. But there are also events that are within our control.

Knowing that mortgage approvals can be fragile, here are 8 things you should absolutely not do while your home loan is in process. It may be the difference between being approved by the bank, and being turned down.

  1. Don't buy a new car or trade-up to a bigger lease.
  2. Don't quit your job to change industries
  3. Don't switch from a salaried job to a heavily-commissioned job
  4. Don't transfer large sums of money between bank accounts
  5. Don't forget to pay your bills -- even the ones in dispute
  6. Don't open new credit cards -- even if you're getting 20% off
  7. Don't accept a cash gift without filing the proper "gift" paperwork
  8. Don't make random, undocumented deposits into your bank account

Now, avoiding these items may not be practical for everyone. For example, if your car lease is expiring and you need a larger vehicle, it doesn't mean you can't buy the car -- just check with your loan officer first to be sure the new payments won't "break" your approval.

The same goes for accepting cash gifts from parents. There's a right way and a wrong way to accept gifts and doing it the wrong way may prevent you from using the gift as a source of downpayment.

Mortgage lending is full of "gotchas" and with underwriting times stretching to 60 days, it's a lot more likely that a mortgage applicant will trip into one. Following these 8 rules, though, is a good start.

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Thursday, April 2, 2009

9 Steps to Spring Cleaning!

Spring cleaning can be easier if you have a helping handWith the official start of Spring came the official start of Spring Cleaning Season nationwide.

In some homes, Spring Cleaning is an annual ritual, tackled within one sweat-filled, rubber-gloved weekend. In other homes, it's a less serious endeavor.

Either way, it helps to have a game plan.

Courtesy of Martha Stewart's website, the Spring Cleaning Organizer is a 9-step checklist covering all of the basics.

  • Clean shades and windows

  • Sort through wardrobes

  • Clean and rotate mattresses and cushions

Most of the checklist items can be retired with household cleansers and vacuums. A few, however, require heavy-duty appliances that you may not have at-home. For example, cleaning carpets and rugs is best-handled with a steam cleaner; and, washing windows may be too dangerous, depending on your home.

If you don't want to rent cleaning equipment from your local hardware store just for Spring Cleaning, consider hiring an Angie's List contractor to do the job for you. It will cost more money than doing it yourself, but the job will get done right (and your home will be clean).

The Spring Cleaning checklist also reminds homeowners to check the batteries of in-home safety devices like smoke alarms, carbon monoxide detectors, and flashlights. And its a great time to get rid of the things you don't use or need, either through a garage sale or a donation to a charitable organization. Some of those things you have cluttering up your basement or garage can find new life and utility in someone else's house, giving you more storage space and less clutter.

(Image courtesy: Junk Bee Gone)
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Wednesday, April 1, 2009

Real Estate Technology from Philadelphia to Los Angeles

DSCN1003.JPGImage by reeltor99 via Flickr

Ok, so it looks like I'm hard at work writing this blog for your pleasure, but I'm actually on the way to Philadelphia International Airport (PHL) to catch my flight to Los Angeles (LAX). Though the weather is probably warmer there than here (I'm in Philadelphia writing this earlier this week), the weather is not why I'm going.

Tomorrow is REBarCamp Los Angeles, (actually being held in lovely Pasadena) another one of the many ReBarCamps which have been springing up across the country.

ReBarCamp is

an ad-hoc gathering born from the desire for people to share and learn in an open environment. It is an intense event with discussions, demos, and interaction from attendees.
I had the pleasure of attending the very first ReBarCamp last July in San Francisco just prior to the Inman Connect event. It was boisterous, friendly and educational. The camaraderie was intense, as were a number of the sessions.

This year, the REBar Camps have really taken off, with events being held in New York and Virginia and more Camps scheduled all over the country, in fact yesterday I visited sites for REBarCamp Philadelphia which will be held on May 27th at Greater Philadelphia Association of REALTORS, located at 1341 N. Delaware Ave. - Suite 200 - Philadelphia, PA (just north of Penn Treaty Park where William Penn signed his treaty with the local native Americans).

I know that I have enjoyed the experience and increased my knowledge every time I have participated in an RE Bar Camp, and I think almost anyone will. And if I don't see you tonight at the welcome for ReBarCamp LA, then I hope I'll see you in Philly on May 27th!

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