Debt Consolidation Analysis
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Wednesday, June 24, 2009
Saturday, May 9, 2009
Alternative Economics
My friend and mentor, Steve Hettema,wrote an article a little while back that I feel really encapsulates what I am trying to do here with "Wealth Matters". In fact, I so wholeheartedly beleive in Steve's message that I joined his National organization of investment clubs, the NSIC, and started my own chapter called The Willamette Investor Group.http://www.willametteinvestorgroup.com. Steve will alos be in Eugene on June 13th for a full day event we have opened to the public (http://OregonBootCampBlitz.com).
To read Steve's article you can go to http://ezinearticles.com/?id=1248224
To read Steve's article you can go to http://ezinearticles.com/?id=1248224
Friday, April 10, 2009
Tuesday, March 31, 2009
Never More Affordable
For the last 39 years the National Association of Realtors (NAR) has been gauging the affordability of homes across the US. Amazingly, the number just released is the best number since the report began. What this means is that this is the absolute best time to buy a home since 1970. Actually, since the report is only 39 years old it is possible, and likely, that this is the best time in nearly 50 years to buy a home. With rates having gone even lower since the report came out affordability is now through the roof and it's time to buy. Take a look at the history of the index and see for yourself what a great time it is: http://www.mortgagemarketguide.com/download/conarchy/Affordability_1970_88.pdf
http://www.mortgagemarketguide.com/download/conarchy/Affordability_1989_2009.pdf
8000 tax credits, low rates and now the most affordable housing market in a generation. GET MOVING!
Saturday, February 14, 2009
New Lending Changes to Get You Buying
Two new important changes have happened in the world of home loans. The first and best publicized is the new $8000 tax credit being offered to first tiime homebuyers. Unlike the current credit this one does not have to be paid back if you stay in the home for at least three years. This credit is for home purchases from January 1st till the end of November, 2009 and will give the full $8000 credit to any first time buyer earning up to $75,000 as an individual or up to $150,000 as a couple. However, you do not need to have paid income taxes to receive a credit. This is an improvement over last years attempt at a $7,500 "credit" that was actually a long term interest free loan from the government. The prior credit was a turnoff to many would be buyers because it felt like you were being forced into a situation where you owed the government money for the next 15 years.
The second change comes for investors who own more than four financed properties. As I wrote in my last entry currently both Fannie Mae and Freddie Mac have reduced the number of financed properties a person can have all the way down to four. Although to some people this may sound like a lot of real estate there are tens of thousands of investors who have been taken out of the market at a time when we need well qualified buyers to buy as much of the inventory of available homes as possible. Now, recent changes in these guidelines once again will put the number back up to ten allowing these buyers the chance to buy up the over abundant inventory of homes and help stabilize the market. I would argue that theses people are exactly the kind of people who should be able to take advantage of this market. These are the buy and hold landlords who keep property forever and whose job it is to provide quality housing to tenants. Bravo to Fannie and Frddie for seeing it MY way.
If you've been reading my prior posts you know there are still a couple of imortant changes that need to happen (ie, Seller funded DPAs via HR 600 and the reintroduction of Stated Income loans done the old fashoined way) but these are definitely two important steps in the right direction.
The second change comes for investors who own more than four financed properties. As I wrote in my last entry currently both Fannie Mae and Freddie Mac have reduced the number of financed properties a person can have all the way down to four. Although to some people this may sound like a lot of real estate there are tens of thousands of investors who have been taken out of the market at a time when we need well qualified buyers to buy as much of the inventory of available homes as possible. Now, recent changes in these guidelines once again will put the number back up to ten allowing these buyers the chance to buy up the over abundant inventory of homes and help stabilize the market. I would argue that theses people are exactly the kind of people who should be able to take advantage of this market. These are the buy and hold landlords who keep property forever and whose job it is to provide quality housing to tenants. Bravo to Fannie and Frddie for seeing it MY way.
If you've been reading my prior posts you know there are still a couple of imortant changes that need to happen (ie, Seller funded DPAs via HR 600 and the reintroduction of Stated Income loans done the old fashoined way) but these are definitely two important steps in the right direction.
Saturday, January 31, 2009
The Problem With Rate Fixing
So I'm sitting here watching Forbes on Fox on a Satuday morning (yes, I have no life) and the talking heads are discusing the newest Republican plan to fix rates at 4%. Fortunately, most of them think this is a bad idea, they just don't know why so let me tell you.
Currently, we have the lowest national average for mortgage rates ever and it will likely be dropping a bit more as the Fed continues buying mortgage backed securities. That said, the lending guidelines that are set by Fannie and Freddie make these rates available onlty to the most deserving of borrowers. The people I help every day have 700 or higher credit scores,a 75% or lower loan to value, a good stable job they've had for years and plenty of assets. These people have a good rate but are looking for a great rate. Good for them but this will not help the housing market or stimulate the economy in any real substantive way. What we need is guideline changes that make acquiring a home easier. So far nothing has been done to fix the real problems and the fixes are readily available and free to implement.
There are three main changes that would create an immediate improvement in the marketplace and serve to stabilize the housing market. The first change that needs to be made is the reauthorization of Seller Funded Downpayment Assistance Plans. Non-proftis like HART, AmeriDream and others have been around a long time and only recently have come under scrutiny. The programs were legislated out on October 1st of last year due to data that indicated a higher default rate among those who use these programs. Much of the data used ny HUD and the Fed has been deemed erroneous however and now there is a movement to bring these programs back. HR600, a new bill in congress, has bi-partisan support and will likely pass. The difference between this law and others is that access to these programs is now limited to a higher quality of borrower. Passage of this bill is critical to getting first time buyers back to buying homes.
The second change that must be made is that stated income loans must come back. Whoa!, you say, weren't these loans the biggest problem? I answer, yes and no. Stated income loans have been around and successfully used for years. Long before anyone could get one of these loans and simply lie about their income these loans were used to help the successful, self-employed borrower with good credit and assets get a 70 to 80% loan. There is a way to do stated loan correctly and the Fed acted irresponsibly by simply outlawing them altogether. Now, successful, well off self-employed people are out of the market. There are 100s of thousands of these borrowers who would buy in this market in a heartbeat if they could. Guidelines can be implemented that keep the market safe and allow these peopke to still get in the game.
Fianlly, we need to allow buy and hold real estate investors, the professional landlords, to buy more property with Fannie and Freddie loans. Currently, guidelines allow these people the have only three financed investment properties and only four total financed properties. Until recently that number was nine. The rationale to the reduction is to lower the risk of the downturn to Fannie and Freddie. However, I beleive there is a way to determine if someone is a speculator or a landlord who buys and keeps real estate and we should allow landlord borrowers who are good at owning and managing real estate to buy up more of the inventory. This step would eliminate many of the vacant homes and would allow the low end of the inventory to get soaked up right away by people whose job is to provide housing for others. Keeping these quality borrowers out of the market is shameful.
Some people will read this and think "isn't that what got us into trouble in the first place?" While on the surface this may be true remember that these guidelines and programs were available long before the current housing/credit bubble and worked just fine when they were implemented with a little sanity and lenders used solid underwriting principals and some common sense. Ultimately, the lending pendulum is going to have to swing back toward a neutral center to get things back on track and no low rate price fixing will help someone who isn't allowed to buy or can't afford a downpayment.
Currently, we have the lowest national average for mortgage rates ever and it will likely be dropping a bit more as the Fed continues buying mortgage backed securities. That said, the lending guidelines that are set by Fannie and Freddie make these rates available onlty to the most deserving of borrowers. The people I help every day have 700 or higher credit scores,a 75% or lower loan to value, a good stable job they've had for years and plenty of assets. These people have a good rate but are looking for a great rate. Good for them but this will not help the housing market or stimulate the economy in any real substantive way. What we need is guideline changes that make acquiring a home easier. So far nothing has been done to fix the real problems and the fixes are readily available and free to implement.
There are three main changes that would create an immediate improvement in the marketplace and serve to stabilize the housing market. The first change that needs to be made is the reauthorization of Seller Funded Downpayment Assistance Plans. Non-proftis like HART, AmeriDream and others have been around a long time and only recently have come under scrutiny. The programs were legislated out on October 1st of last year due to data that indicated a higher default rate among those who use these programs. Much of the data used ny HUD and the Fed has been deemed erroneous however and now there is a movement to bring these programs back. HR600, a new bill in congress, has bi-partisan support and will likely pass. The difference between this law and others is that access to these programs is now limited to a higher quality of borrower. Passage of this bill is critical to getting first time buyers back to buying homes.
The second change that must be made is that stated income loans must come back. Whoa!, you say, weren't these loans the biggest problem? I answer, yes and no. Stated income loans have been around and successfully used for years. Long before anyone could get one of these loans and simply lie about their income these loans were used to help the successful, self-employed borrower with good credit and assets get a 70 to 80% loan. There is a way to do stated loan correctly and the Fed acted irresponsibly by simply outlawing them altogether. Now, successful, well off self-employed people are out of the market. There are 100s of thousands of these borrowers who would buy in this market in a heartbeat if they could. Guidelines can be implemented that keep the market safe and allow these peopke to still get in the game.
Fianlly, we need to allow buy and hold real estate investors, the professional landlords, to buy more property with Fannie and Freddie loans. Currently, guidelines allow these people the have only three financed investment properties and only four total financed properties. Until recently that number was nine. The rationale to the reduction is to lower the risk of the downturn to Fannie and Freddie. However, I beleive there is a way to determine if someone is a speculator or a landlord who buys and keeps real estate and we should allow landlord borrowers who are good at owning and managing real estate to buy up more of the inventory. This step would eliminate many of the vacant homes and would allow the low end of the inventory to get soaked up right away by people whose job is to provide housing for others. Keeping these quality borrowers out of the market is shameful.
Some people will read this and think "isn't that what got us into trouble in the first place?" While on the surface this may be true remember that these guidelines and programs were available long before the current housing/credit bubble and worked just fine when they were implemented with a little sanity and lenders used solid underwriting principals and some common sense. Ultimately, the lending pendulum is going to have to swing back toward a neutral center to get things back on track and no low rate price fixing will help someone who isn't allowed to buy or can't afford a downpayment.
Tuesday, December 9, 2008
"Worried About Losing Dollars? You Better Watch Your Data Too..."
Hi All,
Here's a great little tidbit from my friend Tony at www.yourmortgageoryourlife.com. Read on…
"Worried About Losing Dollars? You Better Watch Your Data Too..."
"What of the dozens of boxes of personal financial information, credit reports, social security numbers and other sensitive information that was found in a dumpster behind an apartment complex in Georgia? It had been in the custody of Ameriquest... And do you remember when WaMu, the troubled national lender, was discovered to have shipped sensitive loan documents to Mexico in semi trucks with some 10,000 records lost in transit? Don't underestimate the threat that shrinking budgets and layoffs pose to your data security. In these heady and uncertain economic times, don't we want to know where our data is day and night?"
http://information-security-resources.com/2008/12/09/worried-about-losing-dollars-you-better-watch-your-data-too/
--
Best Regards,
Anthony M. Freed
eFax 1-210-579-1109
YourMortgageOrYourLife.com
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