Featured Listing

Featured Listing

Scratch-free hardwood floors possible

Tips on sanding, staining, applying finish
Friday, April 13, 2007 By Paul Bianchina Inman News

Q: I have older hardwood floors, and I want to remove scratches and lighten the color. I would also like to redo the paneling in my den. Do you have any ideas on how to do this? --Marsha H., via e-mail.

A: Removing the scratches and changing the color of your hardwood floor will require that the floors be sanded and refinished. The basic process is as follows: All of the furniture is removed; the floors are sanded down far enough to remove the scratches and the original stain color; the sanded wood is thoroughly vacuumed and wiped to remove dust; new stain is applied and allowed to dry (the wood can also be left its natural color, with no stain); then two to three coats of clear finish are built up, allowing each coat to dry before applying the next one.

For the least hassle and the best overall results, I would recommend that you have a pro come and do the refinishing. However, if you're patient and ambitious, you can certainly do the work yourself. All of the sanding equipment you need can be rented at any rental center, and the stain and finish materials are available from any good paint store or home center. If you want to take a shot at this yourself, I would suggest that you check out your local bookstore or library for a book containing complete, step-by-step instructions.

As far as the paneling is concerned, you have several options. You can remove the old material and replace it with new paneling; you can lightly sand the old paneling, then prime and paint it; you can apply new paneling or new drywall directly over the old paneling; or you can cover the old paneling with a base sheet and then wallpaper over it. A lot depends on the condition of the old paneling, how it was installed, lights, outlets, windows and other obstacles that need to be worked around, and what the final result is you want to achieve.

Q: I bought a newly built home in 2003 that has central heating and cooling, with all of the ducts in the attic. In the winter, it is hot upstairs and cold downstairs, while in the summer the upper story does not get cool while the downstairs is freezing. The builder said there are baffles in the ducts so the warm and cold air could be proportionately distributed, but I have been unable to locate these baffles. I currently have to open and close different registers depending on the season. Do you have any other suggestions for balancing the system? --Karen L., via e-mail.

A: Warm air will naturally rise and cold air will naturally fall, so having all of the ducts located in the attic can cause the problems you're referring to. As warm air is produced, it will want to naturally stay in the upper floor, leaving the lower floor colder. The opposite is true when cold air is produced. For that reason, a better configuration is to have a balance of ducts in both the attic and under the floor.

You mentioned that you have spoken to the builder. I would call him again and ask that he come over and show you exactly where these baffles are and how to operate them. You might also ask who the original HVAC contractor was, and have them come out, explain the baffles and rebalance the system for you. Other factors that might help would be relocating the thermostat and/or the return air duct, but both of those might be difficult to do at this point.

If rebalancing the system doesn't help -- and given the configuration of the ducts, it probably won't -- I would suggest that you install one or more reversible, ceiling-mounted paddle fans.

The fans will help with air circulation, pushing warm air down from upstairs and, when reversed, pulling cold air up from below.

Q: What exactly is HVAC? I have heard the term a lot, but I don't really know what it means. --Wyndye F., via e-mail.

A: HVAC is an acronym for Heating, Ventilating and Air Conditioning. It refers to the systems that handle all of the building's heating needs, including the furnace and duct work; air conditioning, including all of the air conditioning equipment and related ducts; ventilation, including fans, kitchen ventilation and ducts; and all of the related exhaust vents for any equipment that requires them. An HVAC contractor is one who installs, services, or otherwise works with any or all of these systems.

Remodeling and repair questions? E-mail Paul at paul2887@hughes.net.

When to Call a Listing Agent

If you’ve ever bought or sold a home, you know that being a successful real estate agent is a full-time job — and then some.

In fact, between the preliminary research, evening and weekend showings, and post-sale paperwork, some agents are essentially on call 24/7.

Most real estate agents would probably suggest you call as soon as you’ve decided to sell your home. That way they can offer advice about pricing, home improvements, and other pertinent matters. And, for some home sellers, that may be the best way to go.

DIY to a Point - However, it is possible to make some decisions before you dial — especially if you’re thinking of doing some of the work yourself. Depending on your skills and sense of adventure, here are some of the tasks you might consider doing in advance of contacting an agent:

Preparation: Are you handy or do you know someone who is? Cleaning, de-cluttering, and simple touch-ups can add new shine to even the oldest homes. (Your agent won't really help with this — it's your elbow grease!)

Valuation: Check out your Zestimate and compare it to the listing prices of other homes for sale in your neighborhood.

Exploration: Real estate types call it " pre-marketing," and it refers to gauging the interest in your home before you list it. Mention you’re selling at parties or the local grocery store. You never know who might be looking. If you find a buyer this way, you might save money in agent commissions.

Presentation: Are you willing to show the house yourself or would you rather someone else handled it?

Negotiation: If you’re comfortable dealing with offers, counter-offers, etc., you may only need assistance once you’ve accepted an offer.

Then there’s probably the most important question of all: How much time are you willing (and able) to spend on the above? Some sellers have both the time and the inclination to do a lot of the work themselves; some have one but not the other; and others would rather pay somebody else to do it all.

There are no right or wrong answers, of course, and the idea isn’t necessarily to bypass real estate agents. Rather, it’s to determine the point at which you’d be better off having one. Depending on how you respond, you may want to call an agent from the get-go, somewhere down the line, or not at all.

(Article courtesy of Zillow)

The Facts About FSBO's

"A close look at "For-Sale-By-Owner" (FSBO) data from NAR's 2006 Profile of Home Buyers and Sellers.

Each year a small army of home sellers throw caution to the wind and “go it alone” — without the assistance of a licensed real estate professional. This ever-decreasing band of risk-takers, ventures into the land of pricing, marketing, screening, scheduling, showing and paperwork, with the goal of saving some money. It's often an experience they find less than rewarding.

The numbers (if not the sellers) tell the story. In 2006, just 12 percent of sellers chose the FSBO (“For Sale By Owner”) route, down from 13 percent the previous year, according to NAR’s 2006 Profile of Home Buyers and Sellers. This is down from about 20 percent in 1987. But more telling than the decline in FSBOs is the fact that 40 percent of all FSBOs sold their homes to someone they knew prior to the transaction. This means that only 7 percent of all home sales are open market FSBO transactions. The rest are simply unrepresented sellers in private transactions.

From NAR's 2006 Profile of Home Buyers and Sellers

Eighteen percent of FSBO sellers indicated that preparing the home for sale was the most difficult task when selling without the assistance of an agent, followed closely by understanding and performing paperwork (16 percent) and selling within their desired time frame (15 percent). As for profit — after all is said and done, FSBOs don’t always come out with fatter wallets.

Again, the numbers tell the truth. Homes sold with the help of a real estate professional in 2006 sold on average for 32 percent more than FSBO sales. The median FSBO selling price in 2006 was $187,200, compared with $247,000 for agent-assisted transactions. "

If you currently have your home for sale, on a For Sale By Owner basis (FSBO), or are considering doing so, please call me for a no obligation discussion on how our marketing system can help to sell your home faster while potentially saving you thousands versus a standard 6% real estate transaction.

The best of both worlds: Lower costs and a faster property sale. We maximize your ability to retain and liquidate the equity in your property. Help-U-Sell real estate and marketing professionals get the job done.

Vito Boscaino
Help-U-Sell North High Realty
Owner / Realtor / MBA

Why home-ownership shortcuts will lead to longer recovery

The following article includes what I believe are some very valid concepts that help to explain why the current sub-prime mortgage mess will lead to a significant increase in foreclosure activity, and why this will also cause a much slower recovery in the housing market, than what many "experts", including the National Association of Realtors, would like consumers to believe.

For those of us in Central Ohio, the ultimate impact will be far more dire than many would like to admit. With low to non-existent new job creation in the state, coupled with the continued loss of existing manufacturing jobs related to the automotive industry, capped with excessive sub-prime loan origination over the past several years, I would posit that Ohio can expect of wave of foreclosures of "tsunami like proportions" over the next two to three years. This will undermine property valuations in every community in the state. It will not be a question of how much can I expect my property to appreciate over the next several years? But the exact contra of that, in that the question will be how much will the property values depreciate and for how long?

This will in the near term trigger a cyclical series of movements by home owners who will not have considered selling otherwise, but well might consider selling "now" in order to cap the downside risk of diminishing property values over the next three to five years. This "added" inventory will further soften the market. The only realistic way out of this impending disaster is for the government to reduce the tax burden on businesses and consumers and to create incentives for existing businesses to move into the state, or for entrepreneurs to start companies. Unfortunately, the new governor has already started trying to raise taxes which will only further fuel the number of jobs that are fleeing the state.

As an added downward risk, unless government, at all levels, takes significant "cost" our of the bureaucratic infrastructure, many government entitities will find themselves loosing significant revenues from property taxes as the assessed value bases will decline, and those in foreclosure, when not paying mortgages, will most certainly not be paying taxes as well. Of course, the government, at all levels will have an initial knee-jerk reaction to fill the gap by increasing taxes on the rest of us. This will only further increase the exodus of jobs and constitutents to more tax friendly environments.

While this appears to be an "overly dark" assessment of the near-term real estate and economic climate in the State of Ohio, I firmly believe that what we can expect to see down the road will look more like this scenario, rather than less.

Vito Boscaino
Owner/ Realtor / MBA
Help-U-Sell North High Realty

"Guest perspective: An insider's view on the subprime mess
Wednesday, April 04, 2007By Steven Krystofiak

Editor's note: Steven Krystofiak offers an insider's take on what's been unfolding in the subprime mortgage industry. But he is no industry apologist. Stay tuned for a series of articles from Krystofiak on Inman News in coming weeks.

Every year there is a natural progression of future first-time home buyers, usually consisting of people in their late 20s to mid-30s. These people have obtained financial stability with savings and steady employment, which is a healthy precursor to buying a first home.

In recent years far too many people took popular shortcuts to obtain their homes. These shortcuts are in stark contrast to healthy real estate practices that have a long, traditional, proven track record.

In many cases, these new highly popular loan products were the only way for first-time home buyers to obtain a home. These shortcuts were misnamed "affordability products" and would have been better described as "obtain-ability products." Long-term affordability, which should be a goal for both consumer and lender, is not associated with these toxic shortcuts.

The home-obtainer-ship shortcuts included "stated-income loans" (which encouraged consumers to lie about their income on mortgage applications), zero down payments, negatively amortized loans, interest-only loans, and short-term suicide loans where the fixed loan period is only two or three years commonly tacked on with an equally long prepayment penalty. Many times the menu of these options would be coupled together.

People who took shortcuts should have waited, and were only able to obtain a home because of the risky loans that will be the culprit of their foreclosures in the coming months and years to follow. Many people facing foreclosure should have waited one, two or even three years before starting the home-buying process.

Communities, the media and industry insiders built up the courage to the would-be home buyers with such rhetoric as, "If you don't buy now you will be priced out forever," and "Real estate prices only go up," and "You can't afford not to buy a home," and "If you buy one property you can make $50K a year, so why not buy two, three or four more properties and
make even more?"

Lastly, I end with my favorite quote that came from a winner in a real estate game show: "This (market) is not a bubble; bubbles are for bathtubs."

The hype and hysteria we have seen for the past few years gave comfort to people wanting to take out these loans. But with foreclosures sure to happen in droves just around the corner, these people otherwise would have been the ones helping us get out of the future impending home debacle we will continue to experience in 2008, 2009 and 2010.

With these recently foreclosed people now out of the real estate market in 2009, where will that natural progression of home buyers come from? With foreclosure or bankruptcy on their records there will be a lack of qualified candidates to become first-time home buyers in the future. This will cause the future recovery to take longer than in previous real estate corrective cycles.

First-time home buyers are the key to a good real estate market. An old rule of thumb is that with every first-time home buyer entering the market there is a filtering up, which creates three more transactions. A large reason the real estate cycle of the last five years has been so successful is because banks have been able to provide toxic mortgages to first-time home buyers. This has kept the succession of real estate sales going and going like the Energizer bunny.

But as many of you are now thinking, "I haven't seen that bunny on TV for years." There lies the problem -- this market can't keep going.

The market needs more first-time home buyers for it to be successful. Without them, in coming years the real estate market will go the way of the Energizer bunny. In the future, you will think back just like with that commercial and say to yourself, "Oh yeah, I haven't seen home-price appreciation in years."

Steven Krystofiak is a mortgage broker based in California. He is president of the Mortgage Broker Association for Responsible Lending, an advocacy group.

(Read Krystofiak's previous articles, "What is a subprime loan? It depends on whom you ask," and "High-risk loans enable buyers to obtain, not afford homes.")"

Tough New Rules Limit Refinancing Options

By Peter G. Miller

RISMEDIA, March 30, 2007-Imagine driving along the highway. You run over some glass and a tire goes flat. It's no problem because there's a spare in the trunk.

For the past several years real estate buyers have had a financial spare tire, a back-up system that was always there if times got tough. But now that spare tire is about to disappear, a vanishing act that will surprise some borrowers and bankrupt others.

What happened?

The "smart" play in real estate between 2001 and 2006 was to buy as much property as possible, finance with little or nothing down and then make the smallest allowable monthly payments.

Such a strategy made sense in a world where home values "always" rose and lenders provided ideal forms of financing, loans where initial monthly payments equaled no more than the cost of interest and sometimes less.

But now the game has changed. Freddie Mac — a major buyer and packager of mortgages — has announced that starting in September it will substantially change the way it purchases subprime adjustable-rate mortgages (ARMs). From this point forward loans with little down and tiny payments up front are going to be much tougher to get.

Freddie Mac will not buy subprime loans unless the borrower is qualified to pay for the loan at its fully-indexed and fully-amortizing rate and not merely an upfront and low-ball "teaser" rate.

Freddie Mac will require stronger proof of financial capacity. For most borrowers this will mean showing tax returns and W-2 forms.

Freddie Mac wants subprime lenders to collect money each month to assure that property taxes and insurance are being paid.

"Right now," says Jim Saccacio, chairman and CEO at RealtyTrac.com, a leading online marketplace for foreclosure properties, "the new Freddie Mac standards apply only to subprime loans, mortgages used to finance borrowers with high-risk credit records. However, the potential for excess risk also exists for loans for more-qualified borrowers. The result is that borrowers in every credit category would be smart to assume that mortgage standards are about to tighten throughout the marketplace."

Freddie Mac's rules are important because they create big profits for lenders. Freddie Mac buys loans from lenders-lots of loans. According to The New York Times the company has purchased subprime loans worth $184 billion.

The catch is that Freddie Mac only wants loans that meet its standards. If you're a lender you want to meet the requirements of Freddie Mac and other mortgage buyers because then your loans can then be quickly sold. Once sold, the cash you receive can be used to create new loans, new fees and new profits.

While the new Freddie Mac standards will plainly impact new borrowers, the real marketplace worry concerns those who now have loans but will need to refinance in the next few years.
Between 2001 and 2006 millions of properties were financed with interest-only and option ARM financing, loans which allowed borrowers to make low monthly payments during initial start periods, the first few years of the loan. Borrowers with such financing know-or should know-that once initial start periods end the loans can only be continued with far higher monthly payments, in some cases payments that will double.

Despite the potentially bankrupting impact of such larger monthly payments most borrowers did not worry and with some reason: As start periods ended properties could be refinanced so borrowers could get another few years of low monthly payments.

Now, however, the ground rules have changed.

First, if the original loan was obtained with a "stated income" mortgage application that contained-shall we say, "generous" and unchecked income estimates-new applications will demand verifications and proof. Without evidence of real income, borrowers will be unable to refinance.

Second, if the original loan application was obtained with a full-documentation application that had every number checked and verified.

In practical terms, suppose buyer Dixon qualified to borrow $200,000 in 2005. He now has the same income and credit, he can document everything, but his loan application will be judged on his ability to pay the real monthly cost of the loan and not just a payment based on an up-front teaser rate. The result? It may be that he can only borrow $175,000 in 2007.

This means Dixon cannot refinance unless he can also pay down a substantial chunk of his existing debt in cash-$25,000 in this example. Without the additional cash Dixon is effectively locked into his existing loan-the very loan that he doesn't want to pay or perhaps can't afford to pay once the "start" period ends.

For some borrowers the new rules mean existing loans-especially recent loans-cannot be refinanced. Unfortunately the alternatives to refinancing may also be unworkable because larger payments may be unaffordable; in slowing markets homes may not sell at a profit and rents may be insufficient to cover monthly mortgage costs. For too many borrowers, it will no longer be possible to delay mortgage problems by refinancing, an option that could have prevented foreclosure and bankruptcy.

Are the new standards too harsh? Did Freddie Mac do the right thing?

"Freddie Mac," says RealtyTrac's Saccacio, "deserves credit for being the first to make a terribly tough choice. It's the right decision, one that will be painful now but a strategy which will ultimately result in far fewer foreclosures, a reduced number of lender failures and smaller investor losses."

Peter G. Miller is the author of the Common-Sense Mortgage and is syndicated in more than 90 newspapers.

February 2007 Columbus Board of Realtor Statistics

Report finds subprime loan servicers practicing forbearance

Long-term benefits of modifying loan terms a matter of debate
Thursday, March 15, 2007 By Matt Carter Inman News

A new report by Standard & Poor's Ratings Services details steps subprime loan servicers are taking to help borrowers avoid foreclosure, but doesn't attempt to gauge how successful those efforts will be.

With estimates of more than $500 billion in adjustable-rate mortgages expected to reset to higher interest rates this year, the willingness of lenders to work with debtors to avoid foreclosure could mean the difference between a soft and hard landing for some U.S. housing markets in 2007.

Loan servicers, who not only collect payments from borrowers but also handle defaults, foreclosures and the sale of real estate-owned properties, can "minimize losses to investors while providing assistance to thousands of homeowners in dire financial trouble," the Standard & Poor's report said. There's plenty of incentive for lenders, too, since the foreclosure process can cost $40,000 per home or more.

But subprime loans -- which can include "exotic" mortgages like interest-only and pay-option adjustable-rate mortgages, as well as hybrid 2-28 loans and 80-20 piggybacks -- are more complex to administer than 30-year fixed-rate mortgages, the report noted.
Some borrowers have complained that it's difficult to communicate with their lender, and that some are unwilling to discuss alternatives to foreclosure such as modified loan terms or a short sale. Standard & Poor's said discussions with loan servicers about their efforts to work with borrowers were "encouraging."

"Sound, proactive management, along with ingenuity, planning, and investment in staff and technology have put most servicers in a solid position to help borrowers work through the substantial difficulties they may be facing," the report said. "All of the servicers we contacted said curtailing defaults and engaging in early-stage loss mitigation are paramount for minimizing investor losses and keeping borrowers in their homes"

The point of the report, said Standard & Poor's Servicer Analyst Robert Mackey, is that "major servicers really understand that early intervention and loss mitigation is a much better way to address this" than proceeding directly to foreclosure.

J. Michael Collins, president of Ithaca, N.Y.-based MortgageKeeper Referral Services Inc., said that when borrowers get into trouble, "they tend to panic."

From his perspective, "Servicing could improve, so that people are not scared of the lender."
MortgageKeeper helps lenders find help for troubled borrowers by maintaining a database of nonprofits in 15 cities that provide counseling and assistance. The company has received "a lot more inquires lately," Collins said. "There are a lot of folks in the industry trying to figure out solutions."

Subprime loan servicers seem to be moving more quickly than prime lenders in adopting a "customer-oriented" approach in response to the current rise in loan delinquencies and defaults more quickly than prime lenders, Collins said.

"There is probably more they could do in the early stages, and be less confrontational," Collins said. "Many are starting to go in that direction."

Servicing loans can be a labor-intensive job, and some lenders outsource the job to companies that rely heavily on loan processing software and overseas call centers to reduce costs.
"I think a lot of folks think of loan servicing as a cost," Collins said. "When the goal is minimizing costs, they miss that this is a place where you can get a lot of added value."

In the long run, cost-cutting measures could actually increase expenses if more loans go into foreclosure.

"If I'm a borrower, and get shunted to a call center overseas, how much do I feel the lender trying to work with me?" Collins said. "This sort of laser-like focus on cost-cutting can result in worse borrower behavior, and less likelihood of getting those payments and a resolution."
Mackey said lenders understand the importance of loan servicing.

"Any staff reductions you're reading about (in the mortgage lending industry) today is on the origination side," Mackey said. "The servicers are adding staff because of the complexity and the volume of loans having trouble."

In his report for Standard & Poor's, Mackey found that many loss-mitigation departments are trying to identify troubled borrowers in the early stages of delinquency, reviewing accounts that are current to determine if they may be headed for trouble. Servicers are trained to spot problems based on conversations with borrowers, assigning them risk profiles that help loan administrators make early contact.

Standard & Poor's found that Saxon Mortgage Services Inc. calls and writes borrowers facing ARM resets, and offers repayment plans to those with escrow shortages beyond the traditional 12-month period.

When a loan is still in the early stages of payment default, "Our staff is attempting contact every other day until the customer is reached and a status on the account is obtained and hopefully a payment taken or a short-term repayment plan established a promise to pay is made," Saxon executive vice president Stella Hess told Standard and Poor's.

Saxon has reduced the number of accounts each agent handles, allowing them to devote more time to borrowers in need of consultation, Hess said.

Before referring any delinquent loan to a foreclosure attorney, a committee at Saxon conducts a review to verify the company has taken every possible step to mitigate a loss and stave off foreclosure.

GMAC ResCap Vice President Mitch Oranger told Standard & Poor's the company is sending staff to cities around the country with high foreclosure rates.

The company aims to make early contact with troubled borrowers, which can require verifying borrower information and authorizing skip-tracing even as a new loan is being boarded to its system, Oranger said.

In 2003, ResCap partnered with the City of Chicago, Neighborhood Housing Services of Chicago, the Federal Reserve Bank of Chicago, and others to form HOPE, a loss-mitigation effort that has expanded to 10 cities.

ResCap's foreclosure prevention team is also providing similar services in 12 other markets where foreclosures are rising and local partners want to provide local counseling to homeowners.
At Irvine, Calif.-based Option One Mortgage, all loans are eligible for loss mitigation, even those with first-payment defaults. Option One has opened satellite offices in areas with high foreclosure rates such as Detroit, Columbus, Ohio, Atlanta, Houston and Philadelphia.

Collins said Mortgage Keeper is talking to its lender clients about expanding its database of counseling and assistance programs for borrowers to another 10 cities. In discussions with lenders on where the need is greatest, California, Tennessee and Florida have emerged as likely candidates, Collins said.

Although Standard & Poor's did not attempt to gauge the effectiveness of efforts to assist borrowers, a report released Tuesday by the Center for American Progress looked at several foreclosure prevention programs.

The programs examined in "From Boom to Bust: Helping Families Prepare for the Rise in Subprime Mortgage Foreclosures," included a mortgage foreclosure program in the Minneapolis-St. Paul area.

The program, created in 1991, provided counseling for 4,200 households and mortgage assistance to a smaller number.

A 2005 study found that 60 percent of households receiving services and 70 percent of those that received assistance loans were current on their mortgages 12 months after receiving services.

Most homeowners receiving services were able to reinstate their mortgages in approximately 9.5 months and pay back their assistance loans, and the rate of foreclosure by families served by the program dropped from 11 percent to 6.8 percent.

But the drop could have been because of the growth of nontraditional loans offered to borrowers with no equity and a state law prohibiting creditors from collecting deficiency judgments, which made lenders more willing to restructure loan terms.

Some experts think efforts by loan servicers to mitigate losses may have contributed to the current crisis in subprime lending, by obscuring the true risk of securities backed by mortgages and sold on Wall Street.

In a recent paper, "How Resilient Are Mortgage Backed Securities to Collateralized Debt Obligation Market Disruptions?" Joseph R. Mason and Joshua Rosner point out that loss mitigation may have long-term risks, citing studies that suggest the rate of re-default FHA loans with modified terms may be as high as 25 percent.

The Department of Housing and Urban Development requires servicers of FHA-guaranteed loans to attempt loss-mitigation strategies, Mason and Rosner note. Government-sponsored entities Fannie Mae and Freddie Mac have reported a success rate of nearly 50 percent in such efforts, they write.

"Given that subprime servicers have implemented some of the most aggressive approaches to servicing delinquent loans, it would be surprising if their workout ratios have not kept pace with the (GSEs)," they say.

These mortgages can be placed in pools of loans that back securities purchased by Wall Street investors, who may not be fully aware of the added risk of default, Mason and Rosner said.

"While the industry and HUD have frequently stated the social benefits and business savings of loss mitigation, scant data exists to analyze the ultimate effectiveness of these programs," they wrote.

As a result, historical data on delinquency and default may understate risk. That, combined with the lack of loan-level data about loss-mitigation efforts makes it difficult for investors in mortgage-backed securities to properly gauge their risk.

The rollover of nonperforming loans is considered one of the main causes of the savings-and-loan crisis of the 1980s, they noted, and can "create greater systemic risk" in the banking and financial industries.

The Standard and Poor's report, "Subprime Loan Servicers Step Up Loss Mitigation Efforts To Avoid Foreclosures," recognized such dangers.

If forbearance plans and loan modifications "are not prudently underwritten, delinquencies will only worsen," the report concluded. "Competent mortgage servicers should focus their most seasoned default management personnel on loss-mitigation negotiations, and that staff should receive continuous training. Senior management should closely monitor recidivism rates and forbearance break rates to ensure that the decisions being made by staff are sound and provide long-term solutions."

"I hope borrowers understand that it's always their best bet to contact the lender sooner rather than later," said MortgageKeepers' Collins. "The consumer psychology is often, 'I can take care of this tomorrow.' The longer they put it off, the harder it's going to be."

***

What to Expect from a Home Inspection

Agents frequently discuss home inspections with home buyers, since inspections are a valuable tool for them to use in deciding if they can afford a prospective home in its current condition. But inspections are also valuable tools for sellers, who can use pre-listing inspections to develop a check list of repairs to make before the home goes on the market – and while there are no time constraints relating to a pending transaction. Even sellers who don’t have time for repairs can benefit from a pre-listing inspection, because they’ll be able to anticipate what the buyer’s inspection will uncover and can use that knowledge with their Realtor® to set the best price possible.

Sellers frequently ask their agents how they can prepare their home for a buyer’s inspection. Aside from holding a pre-listing inspection, remind sellers that they can take the following steps to ace a buyer’s inspection:

Outside impressions: Advise the seller to clean the home’s exterior, and remove soil or mulch from contact with exterior siding. They’ll want to clean roofs or gutters, and double-check how water flows from downspouts and other pipes. Sellers should trim trees and bushes and remove roots that are near the home’s exterior or foundation. They may also wish to paint or repair weathered siding, bricks, and trims around doors and windows. All external wall penetrations should be caulked.

Interior efforts: Tell sellers to clean and replace heating and cooling filters or, at the very least, clean them. They’ll need to test smoke detectors and replace burned-out light bulbs. They should clean the chimney, fireplace, or wood stove, and have furnaces and air conditioners serviced. Moving furniture or storage belongings may be necessary so that an inspector can easily access attics, crawl spaces, the garage, and areas of the basement that contain major home systems. Sellers should keep utilities running if the home is vacant, and make sure windows will open and shut properly. Sellers may want to add insulation and ventilation to attics and make sure crawl spaces are dry.

Bathroom and kitchen work: Sellers will want to make sure plumbing works without leaking or perpetually dripping. They may also need to caulk around tubs or other fixtures. They should check that ventilation systems (range hood, bathroom fans or ventilation systems) work, and clear under-sink areas so an inspector can access pipes.

Gather documents: Before listing the home, sellers may want to organize service records and warranties for appliances in one place. This can help an inspector or buyer see what repairs were made to various home systems and how often or well various home systems and appliances were maintained. Sellers may wish to make a note of any warranties that are transferable to a new owner.

© 2005-2007 WIN Home Inspection. WIN Home Inspection is a registered trademark of World Inspection Network International, Inc., a franchisor of home inspection services.

A flood of foreclosures, but should you invest?

Experts caution potential buyers to do their homework
By Amy Hoak, Marketwatch

CHICAGO (MarketWatch) -- The number of homes in or nearing foreclosure is growing, and some investors are taking advantage of the bargains created.

But even with a steady stream of distressed properties coming on the market, jumping into foreclosure investing is dangerous, especially if you are not familiar with the process or new to real estate investing.

"Some people are using the phrase 'tsunami;' there's going to be a tsunami of foreclosures," said Dave Jenks, co-author of "The Millionaire Real Estate Investor." "For the people who are pros at dealing with foreclosures and have the infrastructure of information and wherewithal ... they will take full advantage of this."

Consider these recent statistics: 1.05 percent of mortgages were in the foreclosure process in the third quarter of 2006, according to the Mortgage Bankers Association. The foreclosure rate increased from 0.99 percent in the second quarter; the rate was 0.97 percent in the third quarter of 2005.

And RealtyTrac reported last week that the number of homes entering the foreclosure process increased by 19 percent in January, compared with December's numbers. Compared with January 2006, the number of homes in the process is up 25 percent. In 2006, a total of 1.2 million homes entered the foreclosure process, 42 percent more than 2005.

See Top Cities for Foreclosures

While there are opportunities to purchase homes at reduced prices in many markets, they're "cautious opportunities," said John Anderson, owner/broker of Twin Oaks Realty in Crystal, Minn., a suburb of Minneapolis.

Above all, you can't assume that just because a home is heading for foreclosure means that it is automatically a good deal, Anderson said. Remember, even for pros, foreclosure investing involves some risk, as does any purchase of "real estate as an investment, as opposed to a home (in which to live)," said Rick Sharga, vice president of marketing at RealtyTrac.

Doing the math

The transaction has to make sense financially, figuring in the costs of getting the property back into marketable condition, the value it's going to have at resale and the length of time it's going to take to find a buyer -- if you do, in fact, plan on reselling immediately instead of holding it to rent out or live in. It's also important to know if there are liens on the property.

Adding to the complexity of the investment are the various state and county foreclosure laws and regulations throughout the country. "This is hard work," said Daryl White, a foreclosure investor in Valencia, Calif. "Forget about 'If I can do it, you can do it'" lines from late-night television infomercials, he added. White, a subscriber of Foreclosures.com, a foreclosure listing service and educational Web site, uses a spreadsheet to figure the costs associated with investing in a particular property. When his analysis is complete, he can decide what to pay for the property.

The goal, he said, is to buy at 30 percent below the after-repaired market value -- half of the discount allows him to cover such expenses as holding costs and repairs while the other half earns him a profit. The formula is taught through Foreclosures.com. In the "changing market" he's in, near Los Angeles, he has to factor in that houses are taking about three to five months to sell, which adds to his holding costs, he said. But even in a cooling market, a home that is priced right will sell, said Alexis McGee, president of Foreclosures.com. It's important, she said, to pay careful attention to prices of comparable houses that are selling in a particular neighborhood to get an idea of what return an investment can bring. In fact, many who have had success in real estate investing will also recommend not depending on a strong market for a good return, Jenks said. "Most of the really good investors will tell you never rely on appreciation to make a deal work."

Homeowners in trouble

There are a couple of key reasons for the uptick in foreclosures, said Sharga, whose site also lists homes in the foreclosure process. For one, a slower housing market has stretched out the time it takes for a home to sell, making it tougher for families who must sell to strike a deal in time to avoid the foreclosure process, he said. Also at play is the rise in interest rates on adjustable-rate mortgages, at times squeezing "people who have overextended themselves in the first place."

Those looking to buy a home in the foreclosure process can do so during a few different stages. Some investors, including White, prefer purchasing homes prior to the actual foreclosure. Others make the investment later in the process, at a foreclosure auction. If the property is unable to be sold by the bank at a desired price, an investor can deal with the institution in buying what is called a real estate owned property, or REO. Each point has its own complications, so tread slowly and do your homework first, Anderson said. He recommends beginners start out by sitting down with a real estate agent who has experience in the arena, someone who has done it before.

Dealing with a preforeclosure, for example, often involves negotiating with a distressed homeowner -- and doesn't always shape up to be a comfortable situation."They (homeowners) don't want to be bothered or may not be as reasonable as they are under normal circumstances," Sharga said.

On top of that, there are a number of "foreclosure rip-off artists" who have taken advantage of people when they're most vulnerable, he added. White said he's often battling a negative image because people "don't see the white knight part of it," when, in fact, the sale of a preforeclosure home could help homeowners keep negative marks off their credit histories and also get at any remaining equity.

As a Realtor working with investors, Anderson said his first thought is to try and find a way to keep the homeowner in the house. If a sale must take place, he recommends the seller have fair representation before proceeding -- to ensure they get a fair deal.

Professional Marketing, Superior Results!

Help-U-Sell is a FULL SERVICE real estate marketing company that provides the same services as traditional real estate brokerages, while utilizing a more comprehensive and effective marketing system. This allows us to help you sell your commercial, multi-family, office or raw land property, or even a business enterprise, faster, while at the same time, significantly lowering your transaction costs. At Help-U-Sell, we charge a low set fee, payable at closing.

The chart below illustrates the significant savings potential that we can deliver to our clients, compared to a traditional real estate practitioner charging an industry average six percent commission.


The bottom line: We can help you to keep more of your equity!



Considered to be the fastest growing set fee real estate company in America, with over 850 franchise offices across the US, we are members of: The Columbus Board of Realtors; the Ohio Association of Realtors; and the National Association of Realtors. We regularly use the Multiple Listing Service (MLS) as a component of our marketing system.

Additionally, we have “unbundled” our services so that clients have the opportunity to choose only the services they need, while not paying for services they may not want. In this way, they can save thousands, or tens of thousands, and better protect their equity position. Also, we are the only company in the area that Guarantees in writing to advertise our clients properties weekly during the entire term of the listing agreement, or until sold. The result, the potential for a faster sale at a much lower cost. A better way to sell real estate!

If you have any further questions regarding our services, or you’re ready to put our marketing program to work for you, simply give us a call at 614.447.3050. You can also visit our website for additional information.

We look forward to having the opportunity to work closely with you in the sale of your property.

Existing-home sales rise 3% in January

ECONOMIC REPORT
By Rex Nutting, MarketWatch
Last Update: 10:13 AM ET Feb 27, 2007

WASHINGTON (MarketWatch) -- Sales of existing U.S. homes rose 3% to a seasonally adjusted annual rate of 6.46 million in January, the highest in seven months, the National Association of Realtors reported Tuesday.

It was the largest percentage gain in two years. Sales were down 4.3% year-on-year. Economists surveyed by MarketWatch were expecting sales to rise to about 6.30 million. See Economic Calendar.

Resales of single-family homes rose 3.5% to 5.69 million annualized, while condo resales fell 0.1% to 767,000 annualized.

The results were "surprisingly strong," said David Lereah, chief economist for the real estate trade group. Lereah said he couldn't be confident that the bottom had been reached, because unusually warm weather earlier helped to boost sales in January.

Inventories of unsold homes on the market rose 2.9% to 3.55 million, a 6.6-month supply.

The median sales price fell 3.1% year-over-year to $210,600. "The price correction is working," Lereah said. Prices fell the most in the West, which had been the hottest region for price appreciation. Median prices are down 4.6% in the West, which could reflect slower sales in relatively high-priced California and faster sales in cheaper areas such as Utah, Idaho and New Mexico.

In a separate report, Standard & Poor's said national home prices rose 0.4% year-on-year, according to the Case-Shiller index, which compares sales of the same homes over time. See full story.

Revisions to historic data show the pace of sales in December was slightly higher than previously reported at 6.27 million vs. 6.22 million. The supply of homes on the market was revised down to 3.45 million from 3.51 million.

Regionally, sales rose 5.6% in the West, 4.8% in the Midwest, 2% in the South and were unchanged in the Northeast.

In other reports, the Commerce Department said orders for durable goods plunged 7.8% in January. See full story.

The consumer confidence index rose to a five-year high of 112.5 in February from 110.3 in January, the Conference Board reported. See full story.

Rex Nutting is Washington bureau chief of MarketWatch.

Warm U.S. weather to prevail in March - Potential good news for the real estate markets.

The following article from WSI Corp. (WSI Corporation is the world's leading provider of weather-driven business solutions with top clients including CNN, FOX, NBC, American Airlines, Delta, and FedEX. WSI's innovative products, services and software satisfy the professional weather needs of the most demanding media, aviation, energy trading and utility customers in the world) forecasts warmer than usual temperatures for March for most of the nation.

This is potentially important news for the midwest as it could lead to a resurgence of Buyer activity in the local markets as the cold weather spell that we have experienced since mid-January fades away. As we saw a high-degree of activity in the first two weeks of January when temperatures were warmer than usual, I predict we will see a step-increase in buyer showings and offers as we move into next week and then into March. Along with the warmer temperatures, mortgage rates are continuing to weaken, with 30 year fixed rates falling below 6% for the first time in several months.

As I believe buyer activity will accelerate, it is imporant for sellers to recognize that it may be in their best interests to prepare and list their properties sooner than they may have been planning. Typically many sellers wait until late March or even April to put their properties on the market. If a potential seller waits another 30 to 45 days, I am afraid they will miss the potential wave of buyer showings that I expect to occur over the next several weeks.

If you are either buying or selling, please contact us so we can assist you in your efforts. We have marketing programs for sellers that can potentially save them thousands versus a traditional real estate transaction based on a 6% commission structure.

As well, we offer a buyer credit program wherein buyers who agree to work with us on an exclusive basis can receive a credit at closing of up to 20% of our commission, for properties listed in the Multiple Listing Service, that are offering a 3% co-op, and that are not listings of Help-U-Sell North High Realty.

We stand ready to serve and positioned to save our clients thousands.

Vito Boscaino
Help-U-Sell North High Realty
office: 614.447.3050
http://northhighrealty.helpusell.com


"Warm U.S. weather to prevail in March: WSI
Mon Feb 19, 2007 9:33pm ET

NEW YORK (Reuters) - Temperatures will be above normal in most parts of the United States through March, spelling a mild end to the winter heating season, private forecaster WSI Corp. said on Monday.

After deep cold in late January and into February that spiked demand for heating oil and natural gas, March temperatures will average above normal in all regions of the country except part of the South, WSI said.

"The warmer March outlook should help to keep gas inventories at or above the five-year average," WSI said in a press release.

April will average warmer than normal in the Northeast and the Northwest, but cooler than normal in the middle of the country, WSI said in the release.

Winter weather can have significant impact on world oil prices by altering demand for heating fuels. A recent spell of frigid temperatures in the United States that began in late January pushed crude prices back near $60 a barrel.

© Reuters 2007. All Rights Reserved. "

Title Insurance for the Buyer

The title is what gives you ownership of a property. As the buyer you want a clear or clean title — one that doesn’t have liens for unpaid taxes against it or claims of ownership by dear Aunt Millie or a surprise easement through the backyard to reach power lines or a cell phone tower.

As for your lender, he wants to know that the loan is going to a legitimate transaction — the seller really does own the property and therefore can sell it to you.

The Title Search

In other words, nobody wants an unpleasant surprise after the settlement. So a couple of things happen. First, a title search is conducted. Public records are examined manually or by computer or both. It depends on how pertinent records are kept in your area. The searcher looks at deeds, will, and trusts, tracing the history of the property back many, many years. Among the important questions are whether all past mortgages and liens have been paid.

Does anyone hold an easement? Are there any pending legal actions? But what if the title search misses something and it comes back to bite after you’ve moved in? This could happen. Buyers have even been known to lose their houses because of clouded ownership — some past problem that wasn’t discovered.

Title Insurance

The way to avoid losing everything is to buy title insurance, which is available from title insurance companies, title agents, or, in some states, attorneys.

Title insurance is a one-time, up-front investment with rates based on the purchase price of your home and the type of policy you buy. Some are more comprehensive than others. The policy protects you by making the insurance company liable for most claims against your ownership. If a critical document was overlooked during the title search and you actually lose the house, you’ll likely receive damages — but only if you bought an owner’s title policy at closing. You can see why experts advise you to do this.

Make sure you understand the policy you’re buying — what it covers and what’s excluded. The owner’s policy should cover your full sales price. If you want a policy that covers the value of your home as it increases, ask about adding an inflation rider. Your lender wants a policy, too. He or she won’t even loan you money unless you buy a separate lender’s title insurance policy to cover the bank’s interest in your property. The lender’s policy should be for the amount of the mortgage.

Shopping for Title Insurance

The only time you can purchase insurance is at closing. Whether buyer, seller, or both pay for the coverage varies according to local custom. In some areas the seller buys the owner’s policy and the buyer pays for the lender’s policy. Both policies take effect on closing day. A congressional subcommittee hearing on title insurance in early 2006 looked into why consumers were paying so much for title insurance. They found the industry rife with joint ventures between title insurance companies, real estate brokers, and lenders and heard that these deals are a factor contributing to rates higher than they should be. The Federal Citizen Information Center Web site offers advice on title coverage and cost savings from the Department of Housing and Urban Development.

Buyer's Tip: You need a clear title on closing day and two title insurance policies — one to cover the owner, the other the lender.

How to Take Title

Many home buyers, especially first-time buyers, are at the closing ceremony signing the mysterious documents when the closing agent asks how they want to take title to the property — sole owner, joint tenancy, tenants-in-common ... Oops! Another new subject that sounds like a foreign language. Will this never be over? Don’t let your eyes glaze over. This really is important. There are tax and estate considerations to ponder prior to deciding. And you also need to ask whether you need to protect your home from, say, a lawsuit against your business or a malpractice suit against a partner or spouse. Here are three of numerous ways to take title:

Sole owner - An unmarried person buying a house alone has the easiest task. Title is taken as a sole owner in the individual’s name.

Joint tenancy - When a married or unmarried couple buy a house together, things get more complicated. If they choose to take title with joint tenancy, each has the right of survivorship. If the spouse or partner dies, full ownership goes to the survivor. There are tax advantages for the survivor as well, regardless of marital status.

Tenants-in-common - When two or more individuals buy a home together as tenants-in-common, they are partners who may own unequal shares and who can sell their shares of ownership independently. Buyer's Tip: Decide before you attend the closing how you wish to take title to the property. Consult an accountant, real estate attorney, or estate planner to learn the advantages and disadvantages of each type of ownership.

Recording the Deed

When you have title to your property, you own it. But the deed is the written document used to transfer the title from seller to buyer. It is only when the deed is recorded at the appropriate county office that your ownership is official. Here’s what happens. On the day of closing, buyer and seller sign numerous documents and the closing agent disburses the money.

Then, depending on the time of day and practices in your area, someone from the title company takes the deed and other documents that must be recorded to the county office. This is usually done first thing in the morning or at the end of the business day. A recording fee is paid. The county recorder assigns each document a number and records the time of entry to the minute. A copy is made for the county file. Your real estate transaction is now part of the public record.

The Keys, Please

Your sales and purchase contract spells out when you can take possession of your new home. But ask your real estate or closing agent whether you’ll get the keys to the house at your closing ceremony or after the deed is recorded. If you live where all parties gather with a closing attorney to sign documents, you might leave the meeting with keys. But if your seller is signing paperwork after you, it might be later in the day or even the next day before you get the keys, garage door opener, and security alarm codes.