Monday, April 25, 2011
Forget the no money down, they will be looking at ten (10) percent minimum. They want the Home Buyer to have real “skin in the game.” In the past the Feds guaranteed nine out of ten loans; going forward we will see a major reduction and the buyer will have to qualify the old fashion way: on their own strength. Fannie Mae and Freddie Mac will be restructured but don’t expect the Federal Housing Administration(FHA) to replace them.
On April 1, 2011 most of the “Dodd-Frank Wall Street Reform and Consumer Protection Act”
went into effect with more coming out in the fall and in 2012. Right now is the best time to buy
and get a mortgage before the process is much harder and expensive.
Regardless of regulations and costs, the buyer only has two basic questions: how much per
month and how much do I have to put down. Both of them are going up and will stay there for
the foreseeable future; isn’t time to get off the fence today?
A final quick recap:
• Fannie Mae and Freddie Mac are going through major changes and complete restructuring since the Feds want to reduce their “lending” position to very little.
• Whatever loans will be made with Fannie Mae and Freddie Mac as the back-up will result in much higher monthly insurance fees and higher total monthly payment.
• Some down payments currently at three (3) percent will be a thing of the past; look for a down payment (minimum) around ten (10) percent in the near future.
• FHA loans in general will cost more to build up reserves in case of default on the note.
• Credit score: like it or not, it’s controlling the loan and its interest rate
• More and more paperwork, disclosures, verifications; the ease of a loan in the past is gone, be ready for delays and a lot more time needed to complete the process.
• The sixty-day-lock will need to be longer, causing a higher cost for the longer period of time that the lender has to set aside the loan amount while not collecting interest on it.
Besides the financing part of the home, buyers now (and going forward) have the best inventory of
homes for the lowest prices in decades. Buyers…now is the time!
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Monday, April 11, 2011
Someone will actually call you from this area code and leave you a message along these lines:
“Hey, this is Karen, sorry I missed you – get back to us quickly. I have something important to
tell you.” Then she will repeat a phone number beginning with 809: do not respond, it’s a scam!
AT & T has been sending out emails NOT to ever dial area codes 809, 284 and 876. If you call from the U.S. you will be charged $2,425.00 per minute!
If you call back you will be listening to a very long message (just to keep you on and add minutes to the call). They will tell you that they have important information about a family member who has been ill or tell you that someone has been arrested, died or to let you know you have won a wonderful prize etc. With so many new area codes these days, people unknowingly return these calls by just tapping on the number and not even look at what’s on caller ID.
The 809 area code is located in the Dominican Republic. The charges can quickly become a nightmare since you made the call. Your local and long distance companies will most likely tell you that they are simply providing the billing for the foreign company and you will end up dealing with a foreign company that will argue having done nothing wrong. Nobody needs this kind of very expensive pain.
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Jerry Taylor and Peter Van Doren had a great article in Forbes that helped me “balance” the ongoing conversation and costs of green energy compared to our current structure; wind, solar and biomass presently constitutes only 3.6% of fuel used to generate electricity in the U.S. How much will it cost to go green? Energy expert Vaclav Smil calculates that achieving that goal in a decade would incur building costs and write-downs on the order of $4 trillion; $2.5 trillion just to build the necessary generators alone.
Green energy/economy is old and back in the 13th century it was all they had; it is quite literally the energy of yesterday. Few seem to realize that we abandoned “green” energy centuries ago for five very good reasons.
First, green energy is diffuse and it takes a tremendous amount of land and material to harness even a little bit of energy. Jesse Ausubel, at Rockefeller University, calculates that the entire state of Connecticut would need to be devoted to wind turbines to power the city of New York.
Second, it is extremely costly. In 2016 President Obama’s own Energy Information Administration estimates that onshore wind (the least expensive of these green energies), will be 80% more expensive than combined cycle, gas-fired electricity. That doesn’t account for the costs associated with the hundreds of billions of dollars worth of new transmission systems that
would be necessary to get wind and solar energy which is generally produced far from where consumers/ratepayers happen to live.
Third, it is unreliable. The wind doesn’t always blow and the sun doesn’t always shine when the energy is needed. We account for that today by having a lot of coal and natural gas generation on “standby” to fire-up when renewables can’t produce. The cost of maintaining this back up is not even included in the cost estimates for green energy. It’s no wonder the peasants of the Dark Age could not rely upon the vagaries of the weather.
Fourth, it is scarce. The wind and sunlight are obviously not scarce but the real estate where those energies are reliably continuous and in economic proximity to ratepayers is scarce.
Finally, once the electricity is produced by the sun or wind, it cannot be stored because battery technology is not currently up to the task. Hence, we must immediately “use it or lose it.” Fossil fuels are everything that green energy is not. Approximately 1,000 cubic feet of natural gas (which costs about $4.00) can generate the same amount of electricity as running an average
rooftop solar system for 131 days. It is comparatively cheap, reliable, will burn and produce energy whenever you want it and you can store fossil fuels until you need them.
The federal government once promised that nuclear energy was on the cusp of being “too cheap to meter.” That was in the 1950s. Sixty-one billion dollars of subsidies and impossible-to-price regulatory preferences later, it’s still the most expensive source of conventional energy on the grid. So much for government promises!
The fundamental question that green energy proponents must answer is: if green energy is so inevitable and such a great investment, why do we need to subsidize it? If and when renewable energy makes economic sense, profit-hungry investors will build all that we need for us without government needing to lift a finger. But if it doesn’t make economic sense, all the subsidies in the world won’t change the fact.
Wednesday, March 9, 2011
The IRS recently announced changes to its procedures on filing liens with the hope of assisting taxpayers and small businesses in climbing out of their debt obligations.
In order to understand the impact of these changes and how they will affect your client, it is first necessary to be familiar with how a federal tax lien can affect, and possibly terminate, the sale of one’s property.
A federal tax lien gives the IRS a legal claim to a taxpayer’s property for the amount of an unpaid tax debt. A lien informs the public that the IRS has a claim against all property, and any rights to the property, of the taxpayer. This includes property owned at the time the notice of lien is filed AND any property acquired after the lien is filed. If the IRS places a lien against one of your clients, that lien will show up on title for any property owned by your client, no matter when purchased, until the lien is paid in full.
The new procedures enacted by the IRS focus on assisting taxpayers in paying off federal tax liens faster to minimize the negative impact that these liens have on their financial well-being. The five major changes include:
· Significantly increasing the dollar threshold when liens are generally issued.
The new rules generally prohibit the IRS from filing a lien unless unpaid taxes exceed $10,000 which is double the previous limit. The new dollar amount was aimed at keeping pace with inflation as the previous limit has been in effect since the mid-1980s.
· Making it easier for taxpayers to obtain lien withdrawals after paying a tax bill.
The IRS will now minimize the damage to taxpayers’ credit scores after their debts have been fully paid. Liens will now be withdrawn after taxes are no longer owed. A “lien withdrawal” wipes out the lien from the taxpayer’s record immediately where a “lien release” leaves it on the record for at least seven years.
· Withdrawing liens in most cases where the taxpayer enters into a Direct Debit Installment Agreement.
For taxpayers who owe $25,000 or less to the IRS, they can enter into a Direct Debit Installment Agreement to pay the balance. In return, the IRS will allow for a lien withdrawal.
· Creating easier access to Installment Agreements for more struggling small business.
Prior to the changes in the IRS rules, only small businesses with under $10,000 in liabilities could participate in a payment program involving Installment Agreements. Now, small businesses with $25,000 or less in unpaid taxes can participate. In order to qualify, the businesses must arrange to make automatic payments from their bank accounts.
· Expanding a streamlined Offer in Compromise program to cover more taxpayers.
An Offer in Compromise is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to make a determination of whether or not to accept the offer. Under the recent changes, the Offer in Compromise program is being expanded to allow taxpayers who make $100,000 or less to participate. In addition, the taxpayers must owe less than $50,000 to the IRS, which is double from the previous limit of $25,000.
Keep in mind that no matter how your client resolves his or her debt obligation with the IRS, in order to avoid a delay at closing, it is important to obtain written documentation from the IRS stating that the debt has been paid off and that the lien no longer affects the specific property that your client is selling.
I went to a panel a few weeks ago that included a yoga teacher, a celebrity nutritionist, a spiritual healer and a woman who created her own beauty line.
What really stood out to me from that workshop was what the yoga teacher said. A question was asked: How does one stay calm and focused in a busy and intense environment? The yoga teacher replied: Just relax, do yoga and breathe. I was taken aback by this comment, as it doesn’t give the ‘regular’ person the tools to ‘relax’ in a busy environment. Not everyone can do yoga everyday and stay calm. It made me think about someone telling me once, in response to my 3PM sugar craving, to take a few deep breaths, drink some water and the craving will pass – it doesn’t.
So what does one do? Is it possible to stop for a minute and think about what is going on around you, take a deep breath and attempt to stay calm in an intense situation? YES! It is being self-aware of YOU!
Self-Awareness, per Wikipedia, is the awareness that one exists as an individual being. Without self-awareness the self perceives and accepts the thoughts that are occurring to be who the self is. Self-awareness gives one the option or choice to choose thoughts being thought rather than simply thinking the thoughts that are stimulated from the accumulative events leading up to the circumstances of the moment.
So when you find yourself stressed or having a 3PM craving, have self-awareness, stop and think about your choices. Being self-aware doesn’t mean you have a higher power, it just means that you are actually engaging with yourself and your thoughts. Thinking about your next step instead of just taking it.
Monday, February 28, 2011
Please click here to access your copy of the March Issue of "Real Estate CyberTips"
This month's special security issue includes the following Tips:
* AN EASY WAY TO KEEP OFF THE SPAM LISTS!
* MANAGE YOUR PASSWORDS - WITH EASE!
* WE KNOW YOU DON'T SPEED - BUT --
* DE- CRAPIFY YOUR NEW COMPUTER!
I hope you enjoy "Real Estate CyberTips". Please let me know at any time if I may be of help with any of your real estate needs.
Paul Paterakis of The Paul Paterakis Power Team
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Wednesday, February 23, 2011
We just wanted to pass along some news about FHA to you. The administration just announced that would be raising the monthly mortgage insurance premiums on FHA loans. As you already know FHA loans have become a common loan program in this current market environment. This increase in monthly mortgage insurance can have an adverse effect on your purchasing power.
Currently FHA monthly mortgage insurance on the 30 year fixed is .90 of the base loan amount. Starting on April 18th this amount will increase by .25% to 1.15%.
That means you will pay more monthly and will qualify for less overall.
The change in FHA mortgage insurance will ultimately change buyer affordability. Under the new mortgage insurance premiums a buyer that is qualified for a $2,000 monthly payment will see their buying power diminished around $7,000 to $10,000. Again this will take effect on all FHA case numbers issued starting April 18th.
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Monday, February 14, 2011
Recently I had the opportunity to read about an interview with Michael Ellsberg, an expert in the art of eye contact and I would like to share with you some of his points that will help you, unless you already have them, with your customers and clients.
Many of us are “eye shy” and holding another person’s gaze makes us feel uncomfortable or even vulnerable. We need to work on that part since making strong eye contact increases the odds for us to be considered honest, trustworthy and confident. It could help you get that new contract/listing or even spark your current relationship! Michael recommends we begin by practicing in situations where very little is at stake just to get comfortable with it; here is his road map:
* Make eye contact with strangers you pass in public areas. Establish your eye contact when you are four or five paces away; keep a neutral expression and hold your gaze just long enough to determine the stranger’s eye color – no longer than one second. Longer eye contact or pronounced facial expressions, even smiles, can make strangers uncomfortable.
* Make extended eye contact with salespeople, waiters and waitresses among the many.These people tend to be very receptive to eye contact and skilled at returning it in a friendly manner. They know that strong eye contact often results in larger tips and commissions. Once you feel more comfortable making this low pressure eye contact, try holding eye contact with people you know.
The first day maintain contact for a moment longer than it feels comfortable. Then the next day, maintain the eye contact for a moment longer than that. When someone breaks eye contact with you, you should too; Extending eye contact any longer will make him/her uncomfortable.
* Expert tricks. The goal during eye contact is to send a soft gaze, not a penetrating laser like stare. When you are speaking with someone, relax the muscles of your brow and imagine that you are talking in both of your conversation partner’s eyes at once.
* Helpful. Maintaining an attitude of warmth and charity toward the person with whom you are speaking can help create a soft, reassuring gaze. When the time comes to break eye contact, do so by looking to the side. Breaking eye contact by glancing down sends a signal of shame and submission. Breaking it by looking up sends a signal of uncertainty and will seem somewhat
unnatural. Once eye contact is broken, gaze slightly to one side of his/her eyes. Do not focus on something or someone else suggesting disinterest in the person with whom you are speaking unless the conversation is about that person or thing.
* In a professional setting. Try to make eye contact for about half the time that you are speaking with someone: about five seconds on and five seconds off. Making more eye contact than this could seem overly familiar and inappropriate. Adjust according to your conversation partner’s reaction. Do not cut more than 50 % or you could appear unsure.
* With friends. Pay attention to how much eye contact each particular friend tends to make with you and try to do the same. This increases the odds that the friend will feel a bond with you.
* To build intimacy in a romantic relationship. Resume eye contact almost immediately upon breaking it. If the person you are speaking with does the same, the odds are very good that you have made a strong connection. Unfortunately, the opposite is also very true.
* Meeting with buyers/sellers, sales calls in general. Must look confident but not pushy; we also need to give the impression that we are “on the same page” as the client. One subtle-but effective way to accomplish both of these things is to alternate who breaks eye contact. Early in the conversation, notice how long the client tends to hold eye contact with you; then, strive to break contact first roughly half the time. Always breaking contact first seems unsure, while always maintaining eye contact longest seems overbearing. As we break and resume the eye contact, it will become more natural and nothing to worry about any longer.
* Public speaking. Do not try to make eye contact with everyone when speaking to large groups. It’s better to maintain eye contact with a single audience member for five to ten seconds or until you complete your thought before gazing to someone else. Don’t worry if you do not have time to make eye contact with everyone. Even audience members whose eyes you do not meet will sense that you are making connections and will feel closer to you because of it. If you are not comfortable with public speaking or not doing well on that session, make eye contact with only the members of the audience who are nodding in agreement.
* A showdown. If your goal is to prevail in an adversarial situation, maintain eye contact with your adversary for as long as possible. It does not weaken your position if you blink. Maintain a facial expression of extreme calm. An angry scowl or a tensed body lets your opponent know that he/she is not getting to you. The opponent is likely to back down from the confrontation if he/she repeatedly breaks eye contact by looking downward or stops making eye contact with you entirely.
Now that you know the basics, make it work for you in relationships, friendships and business meetings; we may or not have been aware of it but it has been taking place around us nonetheless any time two people talk to each other for whatever reasons.
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Positive Housing Video (Must See)