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RISMEDIA, April 30, 2008-The Federal Trade Commission testified before the U.S. Senate Committee on Commerce, Science, and Transportation’s Subcommittee on Interstate Commerce, Trade, and Tourism, about the Commission’s continuing efforts to protect subprime mortgage borrowers.

The testimony described the agency’s priorities, including deceptive mortgage advertising, deceptive or unfair servicing practices, discrimination in lending, and foreclosure rescue scams, and it emphasized the following points:

- The Commission has been at the forefront of the fight against deceptive subprime lending and servicing practices since 1998, when it filed its case against Capital City Mortgage. The case alleged that the defendant took advantage of African-American consumers in Washington, D.C.
- In the past decade, the FTC has brought 22 actions in the mortgage lending industry, with particular attention to entities in the subprime markets. Through these cases, many of which have challenged deceptive advertising and marketing practices, the FTC has returned more than $320 million to consumers.
- The Commission is investigating more than a dozen mortgage companies as part of a mortgage advertising law enforcement sweep. Last year, the agency sent more than 200 warning letters to mortgage brokers, mortgage lenders, and media outlets that carry their home mortgage advertisements. FTC staff recently reviewed the current advertising of those who received warning letters and will follow up with law enforcement where appropriate.
- With the recent rapid increase in mortgage delinquencies and foreclosures, the FTC has intensified its focus on protecting consumers from scams that promise to rescue them from mortgage foreclosure. The Commission has filed law enforcement actions against defendants allegedly engaged in mortgage foreclosure fraud, and has additional nonpublic matters under investigation.
- This month, FTC staff filed a public comment in response to the Federal Reserve Board’s proposed rules to restrict certain mortgage practices. The comment supports the Board’s goals of protecting consumers in the mortgage market from unfair, abusive, or deceptive lending and servicing practices. If the Board’s rules are finalized, the FTC will have the authority to enforce them against nonbank entities under its jurisdiction. The FTC’s enforcement efforts would be more effective if it could obtain civil penalties for violations of these rules.

To empower consumers to better protect themselves from potentially harmful conduct, the FTC’s extensive consumer education efforts include new educational materials, in English and Spanish, about deceptive mortgage advertisements, buying a home, mortgage foreclosure rescue scams, and steps borrowers can take to avoid foreclosure.

The Commission engages in research and policy development to better understand and protect consumers in the mortgage marketplace. Next month, FTC staff economists will host a conference to assess the role of consumer information in the current mortgage crisis, and to discuss strategies for ensuring that mortgage disclosures will be designed to provide the greatest benefit to consumers.

The Commission vote authorizing the presentation of the testimony and its inclusion in the formal record was 4-0.

In other FTC news, they have charged Foreclosure Solutions, LLC and Timothy A. Buckley with operating a nationwide mortgage foreclosure “rescue” scam that charged consumers as much as $1,200 to save their homes from foreclosure but failed to do so. The FTC seeks to bar them from further law violations and make them forfeit their ill-gotten gains.

According to the FTC’s complaint, the defendants market their services through direct mail to consumers named in court records of foreclosure actions and through Internet websites, including www.program10.com and www.foreclosuresolutionsusa.net. Through the direct mail solicitations, the defendants warn that consumers could lose their home within 10 days, and they promise that they can stop foreclosure proceedings. In one of their letters they claim a 93% success rate.

Consumers who call a toll-free number are told that the defendants will provide an attorney and a case manager to help them avoid foreclosure, the complaint alleges. The defendants allegedly state that they have helped thousands of others, and they promise to guarantee in writing that they will save each consumer’s home. In some instances, consumers are permitted to pay about half the fee up-front and the balance within 30 days for an extra $50.

The defendants allegedly send a representative to the consumer’s home to close the sale and collect the up-front fee. In the agreement they require consumers to sign, they attempt to disclaim their guarantee that they will save the consumers’ homes, stating that they will work faithfully but not guarantee the success of their efforts. The defendants also provide consumers with a money-back guarantee, promising a refund if the consumer follows their instructions to save money and avoid lender phone calls. They also require consumers to sign a power of attorney form, authorizing them to represent the consumer in the foreclosure action.

In addition, the complaint alleges that the defendants instruct consumers to open a savings account and to deposit, every month until further notice from the defendants, the consumer’s monthly mortgage payment plus an additional 25 to 35%. They claim that the extra payment will be used to negotiate with the lender to reinstate the loan. After consumers have paid for the services, the defendants often don’t answer or return their calls. In other instances, the defendants’ representatives allegedly tell consumers that they are working on a solution, that they need more information from the consumer, or that no solution can be found.

According to the complaint, the defendants hire attorneys to respond to the foreclosure complaints filed against consumers. In many instances, the attorneys file the same form response to every complaint, usually without investigating consumers’ individual circumstances that might identify defenses or counterclaims unique to particular consumers. In many instances, the defendants do not stop foreclosure or save consumers’ homes, and many consumers who have contracted for their services lose their homes to foreclosure. Consumers who stop foreclosure through their own efforts sometimes learn that their lenders offer the same settlement terms regardless of whether the consumers negotiate on their own or through the defendants. Others learn that their lenders will negotiate only with them and not with the defendants.

The Ohio-based defendants are charged with falsely representing that they will stop foreclosure in all or virtually all instances, in violation of the FTC Act.

The Commission vote to authorize staff to file the complaint was 4-0. The complaint was filed in the U.S. District Court for the Northern District of Ohio, Eastern Division.

NOTE: The Commission files a complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendant has actually violated the law. The case will be decided by the court.

For more information, visit http://www.ftc.gov.

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Alexandra Zega (Lic. in MA and NH)

 

 

Dogs and Cats Get Sunburn, Too

by Alexandra Zega

A great reminder from Dr. Rainey - let's not forget our four-legged family members this summe

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RISMEDIA, April 29, 2008-(MCT)-The approach of summer will bring constant reminders about the danger of overexposure to the sun and the need for sunscreen.

The dangers are real, and we should all take appropriate measures to prevent skin damage and skin cancer. But, did you know that the family pet is susceptible to many of the same diseases? Dogs, cats and even horses suffer from sunburn, solar dermatitis, and skin cancer.

The skin of a sunburned animal is red and painful, just as in people. Hair loss may also be evident. The most common sites for sunburn include the bridge of the nose, ear tips, skin around the lips, groin, abdomen and inner legs. Pets that have light-colored noses and skin, thin or missing hair, or have been shaved for surgery are at greater risk for solar induced skin diseases.

Sunburn can progress to solar dermatitis which is characterized by redness, hair loss, crusting and ulceration of the skin. With continued sun exposure skin cancer (such as squamous cell carcinoma) may occur.

The best way to prevent sunburn is to avoid the sun between 10 a.m. and 4 p.m. This can be done by keeping the animal inside or providing shaded areas in the yard. Horses can be protected in a barn. Using a black felt-tip marker or tattooing depigmented areas of the nose can help absorb some sunlight, but alone will not prevent sunburn.

Sunscreens may help prevent sunburn in our pets. They are not only a good idea, but are actually recommended by The American Animal Hospital Association in appropriate animals. The sunscreen should be fragrance free, non-staining, and contain UVA and UVB blockers. Because most human sunscreens can be toxic if ingested by a dog or a cat it is best to use a pet-specific product. Sunscreens should be applied liberally and reapplied every 4-6 hours during the brightest part of the day (10 a.m. to 4 p.m.).

Doggles, Nutri-vet, and Epi-Pet all produce pet specific sunscreens and can be found on-line. Be sure to inquire which product is right for your pet as some products should not be used on cats.

Ideally, it is better to prevent sunburn than to treat it. However, if sunburn does occur your veterinarian can provide you and your pet with treatment options.

Dr. Chris Rainey is a veterinarian at Northwood Hills Animal Hospital in Gulfport, Miss.

© 2008, The Sun Herald (Biloxi, Miss.).
Distributed by McClatchy-Tribune Information Services.

Act Now - What Agents, Buyers Need in Today’s Market

by Alexandra Zega

 

Here is an interesting article from a former Wshington Post journalist and editor, Eugene L. Meyer, as published by RISMEDIA on April 7, 2008:

Janice Petteway has a simple solution to the credibility gap that seems to plague the real estate industry as a result of public cynicism bred by media doom and gloom contrasted with smiley-face broker optimism.

“We just want one of the candidates to have a good affair and we’ll be really fine,” says the Orlando, Florida broker. Then, she says, the media would obsess over the scandal and publish fewer downbeat housing stories. Even without such a scandal, she adds, “The election has helped, because the media is on a different tangent.”

While that may not be entirely the case, many brokers believe that without what they consider media-fueled fear of the market, they are better able to give clients their best angst-free advice. For a lot of brokers, that translates into a recommendation to buy now. Or, as Barbara Reynolds, president and chief executive officer of Real Living Realty One of Cleveland, puts it: “If you’re in buyer’s market, you should buy.”

Keeping It Local

But what to tell clients in this complex marketplace, where perceptions are national but realities are local, may be one area where one size does not fit all. If consumer confidence is built on a foundation of straight talk, the rap can-and probably should-vary from region to region.

Wichita and Phoenix, for example, might as well be on different planets, their markets are so different. Wichita brokers’ biggest problem is not the local market-which is remarkably stable, with 4% appreciation forecast this year-but local perceptions based on negative national trend stories.

“Probably our biggest problem is simply overcoming the national press, because what they report has nothing to do with what’s going on here,” says Gary Walker, vice president and general manager of the residential division of J.P. Weigand & Sons Real Estate in Wichita. “If people are coming from one of the 27 states where values are depreciating, it’s a little hard to convince them that it’s not going on here. We haven’t been affected at all by the things that have been a downward force in other parts of the country.”

Consider what Phoenix-area agent Debora Nichols has to say. “In May 2005, we had somewhere around 7,000 to 8,000 homes on our market. Right now, we have over 56,000.” And, with a lot of adjustable-rate mortgages scheduled to reset in May, the expectation is for more foreclosures and further price reductions. “That tells me that the bottom of our market is nowhere near in sight.”

Nichols’ prescription might sound contrarian to some. “We’re all in it to make a living,” she says, “but I think taking care of your clients is more important. If they’re not going to benefit in the long-run or as far as we can see, then it’s not good to advise them to buy now.

A Relationship Based on Trust

“When you start to bond with somebody and build a relationship, I think they expect honesty. They expect you to be on their side. I hope that if I’m honest with them and they appreciate the straight talk that will come back to me in referrals. Or maybe when they are ready to buy, they’ll come back looking for me because I was honest with them.

“In the current climate, I try to put myself in the client’s shoes, because it’s really important for us to understand their longer goals.” If a buyer plans to stay put for five or six years, “it’s a good time to buy. Interest rates are good. There are a ton of opportunities. But if they don’t know what their future holds, then we tell them they’re better off to rent.”

Jennifer Melo, a working mother with three children whose mother-in-law recommended Nichols, appreciates her low-pressure style. “She’s not trying to sell me a house; she’s just waiting for me to pick one I like,” she says. “[Nichols] has the mindset of, ‘if it’s right, it will be.’ She’s very honest and just really open about how she feels. If we walk into house and it’s not meeting my qualifications, we’ll still look at it but she’ll tell me, ‘It doesn’t have the things you want.’ So I just don’t rush it. She keeps us updated on what the market doing.”

Says Keith Geissenberger, a Nichols associate: “My approach is honesty. I tell buyers the market is still dropping and has a very long way to go. My approach with sellers is simply to lay out the facts. I talk about just how bad the overall market is and show them the latest stats from the Arizona MLS. Most importantly, I tell them that no matter how much they love their house, they will only get what the market values it at.

“If all Realtors would just point out to their clients that the markets are efficient and no one is going to over pay just because they wish it, we would recover faster. Lenders know that. They’re not lending above appraised value. If you sell something that doesn’t appraise, what do you have? A lot of angry people.”

Lori Reynolds, moving from Arizona to Iowa, chose Geissenberger after the firm had sold her brother’s house. Working with him, she and her husband have dropped their asking price by about $50,000, from an initial $389,000. The house has been on the market 120 days.

“They’re pretty realistic and honest with you, as far as what to do to make it most presentable,” she says. “They don’t sugarcoat anything, as far as telling you to ‘sell it at this or that price.’ They continue to update you, looking at what you’re charging per square foot, compared to houses selling and listed.”

An Incentive for Buyers

The Florida market has also experienced rapid appreciation and is now trending downward. But Petteway says more buyers are looking now that prices are lower. “Our showings were up 200 percent in the last month,” she says. “Buyers are not sitting on the fence. They’re out there. Buyers are starting to see ‘Just Sold’ and ‘Sale Pending’ signs. They don’t want to miss it. I think the negativity has gone too long. The world has not fallen apart.

“People need homes,” she continues. “It’s a little bit different than consumer confidence in buying a vehicle. You can live with the car you have to get back and forth to work. But most people prefer to get their families settled. You can’t be settled in a rental, because you don’t know when it’s going to be pulled out from you. We’ve had people renting who don’t know if it’s in foreclosure, and they’re three days away from being homeless.

“We do what’s best for them. We want to make sure they’re 100 percent financially able. We don’t encourage them to buy over their means and grow into it. We encourage them to do 30-year fixed mortgages and buy into an area that’s right for their family. We make sure they have all the data they need. There are times we advise people to wait a year or two, typically not because of the market but because something is happening or not happening in own their own situation. If they are looking at being in area for only one or two years, it’s best to rent.”

But overall, she notes, “A lot of people seem to forget that when you’re buying real estate, you’re buying a huge asset with a very little bit of your own money. It’s one of the few things you can buy that is so leveraged, and you get to live in it.” Unless, of course, you’re an investor, as is Petteway, who is buying a rental property for $60,000 or $70,000 less than she would have paid at the height of the market. For her, she says, “it’s a smart time to buy.”

According to Rick Weidel, president of a large central New Jersey brokerage that bears his family name, “There is no time when you shouldn’t buy,” though, of course, buyers will be purchasing a home “relative to the market.” Even if a house doesn’t appreciate, however, he says, “it’s better than paying a landlord, and the odds of someone living in a house for only a year are very slim, next to zero in my market, unless there’s a financial hardship.”

Keeping It Real

The message for sellers unhappy over prices, Weidel says, is to look not at a home’s peak value but at the cost basis. “[Look at] what someone paid for the property,” he explains. “That’s what we try to get our associates to focus on; sellers then feel very realistic and pleased. I don’t know why the real estate industry is fixated on what a product sold for yesterday. “

To which Reynolds, the Cleveland CEO, adds: “Until last year, it was very much a seller’s market. From my vantage point, there is just a tremendous opportunity in the market today, particularly for first-time buyers. There are fewer buyers in the marketplace, and that puts the buyer in the driver’s seat.” Only if a client plans to move in two years, she “would tell them to save money, build up equity for where they are moving and, in the meantime, rent.”

Lynn Kosner, manager broker of Baird & Warner’s Highland Park, Illinois office, also urges house-hunting clients not to wait. “Real estate, whatever it’s doing at the current moment, will increase in value at the end of the day.” But she adds, “Unfortunately, so many properties are in distress and the process is so much more complicated. We’re all learning to deal with the correction. It’s a great time to take advantage of it. There is no bad time to buy.”

In Connecticut, brokers are also challenged in their client dealings by national headlines that don’t reflect local reality. “Lately, we’ve had to do a lot more educating because the media is broad-stroking,” says Candace Adams, president of Connecticut Prudential Realty. “We drive people to a quarterly market report on our website, so the public understands that our market is healthy.”

With interest rates still low and sellers willing to negotiate, Adams urged her own daughter to purchase a house less than a year ago. Buyers, she said, should “get a clear perspective on value and pay what it’s worth, understand the trend and offer 5% less if you think the property will be worth 5% less in a year.

“Our role,” she adds, “is to educate and support clients, sellers and buyers, through any time. Historically, housing remains a great investment.” Over the decades, there have been down times accompanied by “some awful headlines. People listened to them or they didn’t, and if they didn’t they’re millionaires or billionaires today.”

Eugene L. Meyer is a former Washington Post reporter and editor who freelances from Silver Spring, Maryland.

PLEASE FEEL FREE TO SEND ME YOUR THOUGHTS AND COMMENTS ON MY BLOGS. YOUR INPUT MEANS A LOT.

Thank you for your continued support. Alexandra Zega, Realtor, CBR - RE/MAX Country Crossroads in Rowley Massachusetts - 978 948 5333

RISMEDIA, April 9, 2008-

Little change is expected in existing-home sales over the next few months, before improving notably during the second half of the year, according to the latest forecast by the National Association of Realtors®.

Lawrence Yun, NAR chief economist, said the market will come into clearer focus this summer. “Existing home sales could start to show a sustained increase within a few months, unless there are some additional economic problems or excessive inflationary pressure,” he said. “We’re looking for essentially stable sales in the near term, before higher mortgage loan limits translate into more sales in high-cost markets. The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met.”

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, slipped 1.9% to 84.6 from an upwardly revised reading of 86.2 in January, and was 21.4% lower than the February 2007 index of 107.6. “The slip in pending home sales implies we’re not out of the woods yet, though an era of successive deep sales declines appears to be over,” Yun said.

The PHSI in the Northeast rose 3.2% in February to 71.8 but remains 25.4% below a year ago. In the Midwest, the index declined 3.7% to 82.7 and is 17.4% lower than February 2007. The index in the South fell 5.5% in February to 85.0 and is 30.3% below a year ago. In the West, the index dropped 9.8% in February to 84.6 and is 17.1% below February 2007.

Existing-home sales are likely to rise from an annual pace of 4.9 million in the first quarter to 5.9 million in the fourth quarter. With relatively weak activity in the first part of the year, existing-home sales for all of 2008 are forecast at 5.39 million, increasing 6.6% to 5.74 million in 2009.

“Exceptionally weak home sales related to jumbo loans problems will depress home prices in the first half of the year, but steady liquidity improvements in the conforming jumbo-loan market will help prices recover in the second half of the year,” Yun said. The aggregate existing-home price will probably ease by 1.4% to a median of $215,800 for all of 2008 before rising 3.7% to $223,800 next year.

Yun noted that there will continue to be wide variations in regional housing market conditions. “Some parts of the country that can expect improvement include the Northeastern region and the oil-patch states of Texas, Oklahoma, Louisiana and Arkansas,” he said. With lower interest rates and flat home prices in many areas, NAR’s housing affordability index is forecast to rise 14 percentage points to 127.0 in 2008.

New-home sales are projected to fall 25.7% to 576,000 in 2008 before rising 4.6% to 602,000 next year. Housing starts, including multifamily units, are estimated to drop 26.3% to 999,000 this year, and slip another 0.5% to 994,000 in 2009. The median new-home price will probably fall 3.6% to $238,400 in 2008, and then rise 4.0% next year to $247,800.

The 30-year fixed-rate mortgage, which has fluctuated recently, should average 5.8% in the second and third quarters, but trend up to an average of 6.3% in 2009.

“The economy will not grow in first half of the year,” Yun said. “However, the combination of recent fiscal stimulus enactment and the lagged impact of monetary policy will help jump start the economy in the second half.” Growth in the U.S. gross domestic product (GDP) is expected to be 1.4% in 2008 and 2.4% next year. The unemployment rate is forecast to average 5.4% this year and 5.6% in 2009.

Inflation, as measured by the Consumer Price Index, is projected at 3.4% in 2008 and 2.2% next year. Inflation-adjusted disposable personal income is likely to grow 1.2% this year and 3.0% in 2009.

For more information, visit www.Realtor.org.

This is the ‘Perfect Spring’ to Buy a Home!

by Alexandra Zega

April 4, 2008

For home buyers, this is the “perfect spring."

In fact, for the first time in 30 years, home buyers can take advantage of low mortgage rates, combined with a large selection homes that are realistically priced.

By acting now serious buyers can take advantage of "priced to sell" homes and low interest rates still available to buyers with good credit. Know your options and working with a Realtor you can trust  will make this home buying experience successful.

- Know what you can afford: talk with a mortgage lender you trust or ask your Realtor for someone they trust and work with to know your options. Low downpayments are still available but realize that the more you can put down the lower your monthly payment will be.

- Do your homework to determine your wants and needs. Pick a neighborhood that will suit your lifestyle and family. Be realistic , flexible and willing to compromise when it comes to finding that "dream" home. Ask questions and find your options. Short Sales and Bank Owned Properties are a good buy if you have an agent that knows their stuff and can explain the in and outs of those transactions.

-Retain a good real estate sale agent who knows the local housing market. The right agent can make all the difference when it comes to negotiating the deal and help you with the details of buying a home. The right Realtor will help you understand the process and guide you through the transaction in a easy and professional manner. Your real estate agent will help you find the right attorney, home inspector and other professionals needed to close the deal.

- Don't forget that there are closing costs. From Insurance to Radon testing to recording fees, there may be many costs that buyers and sellers are required to pay at closing. Talk to your real estate professional to get an estimate of what your costs may be so there are no surprises on closing day.

This is a great time to buy a home and done right this spring can be the perfect time for you to realize that dream of homeownership. Get the facts and get moving.

Displaying blog entries 1-5 of 5

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