THE GRAY RIDER

THE ANT AND THE GRASSHOPPER - TWO VERSIONS OF AN OLD FABLE

2012-01-21T16:03:00.001-05:00

http://1.bp.blogspot.com/-I7ibJVSrDnM/TxsnNHl_iPI/AAAAAAAAAN4/hf4fezeigE8/s1600/Libertynews-story-ant-grasshopper.jpg" imageanchor="1" style="clear:left; float:left;margin-right:1em; margin-bottom:1em">http://1.bp.blogspot.com/-I7ibJVSrDnM/TxsnNHl_iPI/AAAAAAAAAN4/hf4fezeigE8/s200/Libertynews-story-ant-grasshopper.jpg" />

THE TRADITIONAL CONSERVATIVE VERSION:

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.

Come winter, the ant is warm and well fed.
The grasshopper has no food or shelter, so he dies out in the cold.

MORAL OF THE OLD STORY: Be responsible for yourself!
---------------------------------------------------

THE PROGRESSIVE-SOCIALIST VERSION

The ant works hard in the withering heat and the rain all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.

Come winter, the shiveringgrasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while he is cold and starving.

CBS, NBC, PBS, CNN, and ABC show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food.

America is stunned by the sharp contrast. How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so?

Kermit the Frog appears on Oprah's Show with the grasshopper and everybody cries when they sing,'It's Not EasyBeing Green...'

Occupy the Anthill stages a demonstration in front of the ant's house where the news stations film the SEIU group singing, We shall overcome.

Then Rev. Jeremiah Wright has the group kneel down to pray for the grasshopper's sake, while he damns the ants.
President Obama condems the ant and blames President Bush 43, President Bush 41, President Reagan, Christopher Columbus, Sarah Palin and the Pope for the grasshopper's plight..
Nancy Pelosi & Harry Reid exclaim in an interview with Larry King that the ant has
gotten ric h off the back of the grasshopper, and both call for an immediate tax hike on the ant to make him pay his fair share.
Finally, the EEOC drafts the Economic Equity & Anti-Grasshopper Act retroactive to the beginning of the summer.

The ant is fined for not having a formal Affirmative Action program and for not hiringe a correct proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the GovernmentGreenCzar
and given to the grasshopper.

The story ends as we see thegrasshopper and his free-loading friends finishing up the last bits of the ant's food while the government house he is in, which, as you recall, just happens to be the ant's old house, crumbles around them because thegrasshopper doesn't maintain it.

The ant has disappeared in the snow, never to be seen again.

The grasshopper is found dead in a drug related incident, and the house, now abandoned, is taken over by a gang of spiders who terrorize the ramshackle, once prosperous and peaceful, neighborhood.
The entire Nation collapses bringing the rest of the free world with it.

MORAL OF THE STORY:

Be careful how you vote in 2012.

I've posted this article because I believe that you are an ant, not a grasshopper!
Make sure that you pass this on to other taxpaying ants.

Don't bother sending it on to any grasshoppers because they wouldn't understand it, anyway

TEN POINTS FOR SELLERS IN THE WINTER

2011-12-05T13:50:00.001-05:00

If your home will be for sale this winter, it is important that you understand some seasonal issues that are less significant or even non-existent at other times of the year.

Here are 10 points to know when selling your home in the winter:

1. Let Those Lights Shine: The best way to combat winter’s short and frequently cloudy days is to turn on your house lights. For a showing, every single light in the house must be on, even in the closets and utility/mechanical rooms. Make sure all the bulbs are working, and stock up on all the right bulbs for lamps and fixtures so burned out bulbs can be replaced immediately. Also, it’s a great idea to keep the lights on in the front of the house even if no showings are scheduled. People are always driving past the house, and keeping it lighted makes it look happy and welcoming. You should also consider opening the drapes and blinds during the day to let in light and let visitors enjoy the view.

2. Provide Convenient Parking: It’s vital that buyers have a convenient place to park. They won’t want to walk very far in cold weather or be forced to climb over a snow bank to exit their vehicle. Because parking is often more restricted around condominiums, sellers should make sure their agent can pass along parking details to buyers.

3. Make It Easy to Enter: Winter showings can get off to an awkward start if prospective buyers arrive with snow or salt on their shoes. Make it easy for buyers to deal with their shoes when they arrive. Put a festive area rug at the front door for a great first impression and so visitors can wipe their feet. Have slippers or disposable booties available, along with a bench or chair, if there is room for one, where a visitor can sit and easily remove or put on their boots.”

4. Keep Odors Under Control: Any home tends to be stuffy in winter when windows are opened rarely. That can allow odors to build up, which can be a turn-off to buyers.
Pet odors can be especially worrisome in winter. Use a room fragrance if needed, but nothing too strong, and I recommend that in winter sellers clean more often. For example, change the cat litter daily, rather than every third or fourth day, or even consider using an air purifier.

If pets are in the house, consider setting the thermostat control so that the furnace fan runs constantly during the day to keep air moving through the house and dissipate odors. Also try to avoid strong cooking odors, especially if a showing is scheduled that day.

5. Cultivate a Festive Look: Appropriate decorations for Christmas and even St. Valentine’s Day help give a home a cheerful look during the winter months. Holiday decorations can help homes sell, but don’t go to excess. Keeping small, decorative white lights on trees and bushes pretty much through the winter season is fine, but other decorations should be taken down quickly once the holiday passes.”

6. Don’t Ignore the Outdoors: Make a good first impression on buyers with a neatly maintained yard. Walks and steps should be kept clear, especially of snow and ice.

7. Look after Condo Common Areas: If the home you are selling is a condominium, your job as a seller may be relatively easy in winter, with no snow to shovel or yard work to worry about. However, that is only the case if your condominium association does its job well. If the association isn’t doing it, the homeowner may have to take responsibility for keeping the entrance area and hallways clean. If the association isn’t getting snow shoveled promptly, consider buying some de-icing salt and sprinkling it judiciously around the building entry.

8. Don’t Roast Buyers: We all tend to prefer a specific temperature for our homes during the winter, but don’t blast buyers with hot air. Keep the temperature at a comfortable 65 degrees for all showings. Remember, buyers are likely to be wearing their coats even as they walk through the house.

9. Keep Seasonal Clothing under Control: One major challenge of selling a home during the winter months is the overabundance of cold weather gear that must be stored. A buyer doesn’t want to find the mudroom filled with boots or the hall closet overflowing with heavy coats. Shift some winter coats to another closet and put anything not needed in the closet into storage. To keep gloves and scarves from piling up in the front hall or mudroom, put a special container for them, such as a decorative chest, where the family typically enters the home.

10. Encourage Day Time Showings: A home shows to its best advantage during daylight hours, which are relatively scarce in winter. Encourage your agent to show your home before 3 p.m. and have it ready to show by 9 a.m. if you want the best results.

Despite the special challenges of marketing a home during winter, there also are benefits. Buyers who are out looking at homes in December or January are, as a group, quite serious about buying. Therefore, sellers tend to benefit because each showing is more productive, and fewer showings are needed to sell the property.

SHOULD I TAKE MY PROPERTY OFF THE MARKET DURING THE HOLIDAYS?

2011-11-28T10:01:00.001-05:00

When you look at your holiday calendars you may find the months already overloaded with seasonal obligations -- shopping, entertaining, children's pageants, charity work, decorating the house, and so much more. If you are also trying to sell your home, you are under extra pressure to keep your home in "showtime" condition. And that could be the last thing you need before the holiday spirit is broken.

It is understandable why you would be tempted to take your home off the market during the holidays. And the list of justifications is long. If you are too busy, buyers may be also, and you may find your efforts unrewarded by enough showings. And what if you do get an offer? You may be faced with the possibility of packing and moving during the busiest time of the year. Besides, you can give your house a rest, and it will have better momentum after the holidays. Better to just pack it in and start fresh in January, right?

But wait! Top-selling Realtor Jennie Ling says taking your home off the market during the Christmas season is a mistake. A vice president of Virginia Cook REALTORS® and the number one sales person in her company for almost every one of her more than 35 years in the real estate business, Ling exclaims, "The house sure isn't going to sell off the market! What is the advantage of that? So you're busy. Let your Realtor do the work. You can leave in the morning, go to work, go shopping, and let your Realtor take care of things."

"The holidays are my best-selling period. Why? Because most people take off work sometime during the season. The husband and wife are both off and want to see houses. I showed homes on New Year's Day last year. I like the holidays because the buyers have more time, and they can look at homes together."

Before you take your home off the market, consider the following points:

Although buyer activity may appear to slow down, the buyers who are actively looking during the holidays are that much more serious. Ling believes the home market is no more affected at Christmas than during other "busy" period. If that were so, the market would shut down throughout the year as families concentrate on spring weddings, June graduations, summer vacations, and autumn back-to-school activities.
Many buyers deliberately choose to shop for a home after the busy spring and summer rush. They know that it will be easier to look, and that negotiations will be less stressful. They may not have children, or they may have grown children, so moving to accommodate the school year isn't a consideration. Finding the right home at the right price, however, is.
Relocating families often don't have a choice in when they can leave for their new destination. Although 68 percent of transferring families have children, many families have to transfer during the middle of the school year. These families are that much more motivated to get their families settled in before either before the January semester begins, or to arrange for the move during spring break in March. If you sign a contract by New Year's Eve, the timing couldn't be more perfect.
At Christmastime, our culture focuses on family and the home. Preparing for the indoor activities of winter is one of the most enjoyable periods of family life. Allowing buyers to view your home during this most hospitable of seasons lets them better picture their own family life in the attractive environment you have created.
When is your home ever more beautiful and inviting? You have cleaned and decorated, and your home looks like a picture postcard. If the results are good enough for family and friends, they will surely be good enough to impress your buyers. Get the family team on board to do a five-minute blitz pick-up every morning to keep holiday messes to a minimum.
With reduced inventories and motivated buyers, you will have all the members of the MLS on your team. You may find you have more showings than you would if your marketed your home during a busier time of the year.
If you do get a contract, you can arrange the terms to suit your needs. If moving during the holidays isn't an option, you can put in the closing date of your choice. "Most people can close 30 to 60 days after a contract is written, so there is plenty of time," Ling says. "Possession and closings are are very negotiable."

By: The Realty Times Staff
----------------------
ORIGINAL ARTICLE: http://realtytimes.com/rtpages/20111125_holidays.htm

THE HOUSING MARKET IS GREAT: IF YOU ARE RICH!

2011-09-26T08:26:00.000-04:00

NEW YORK–It's starting to feel as if there are two housing markets. One for the rich — and international buyers — and one for everyone else.

Consider foreclosure-ravaged Detroit. In the historic Green Acres district, a haven for hipsters, a pristine, three-bedroom brick Tudor recently sold for $6,000 — about what a buyer would have paid during the Great Depression.

Yet just 15 miles away, in the posh suburban enclave of Birmingham, bidding wars are back. Multimillion-dollar mansions are selling quickly. Sales this August were up 21% from the previous year. The country club has ended its stealth discounts on new memberships. And Main Street's retail storefronts are full.

"We're getting more showings, more offers and more sales," says Ronnie Keating, a real estate agent with Sotheby's International.

Think of this housing market as bipolar. In the luxury sector, the recession is a memory; sales and prices are rising. Everywhere else, the market is moving sideways or getting worse.

In the housing market inhabited by most Americans, prices have fallen 30% or more since the peak in 2007. That's a steeper decline than during the Depression. Some people have had their homes on the market for a year without a single offer.

Almost a quarter of American homeowners owe more on their house than it's worth. Another quarter have less than 20% equity. About half of homeowners couldn't get a mortgage if they applied today, says Paul Dales, senior U.S. economist for Capital Economics.

Then, there is the other housing market, occupied by 1.5% of the U.S. population, according to Zillow.com.

Here, houses have outdoor kitchens and in-home spas, his-and-her boudoirs and closets the size of starter homes. This market is not local but global, with international buyers bidding in cash. And the gyrations of the stock market are cause for conversation, not cutting expenses.

In this land of luxury properties, the Great Recession seems over. Prices of $1 million-plus properties have risen 0.7% since February, according to Zillow. Prices of houses under $1 million have fallen more than 1.5%.

Normally, these two segments of the housing market rise and fall together. Now, they're moving in opposite directions.

"Luxury is the best performing segment of the housing market right now," says Zillow.com chief economist Stan Humphries.

After every recession since World War II, housing has led the economic recovery. Not this time. The renewed vitality in the comparatively small market for luxury homes is not enough to power a full-blown recovery.

This bifurcation in the market is yet another reason Michelle Meyer, chief economist at Bank of America Merrill Lynch, says her housing outlook is "increasingly downbeat."

The phenomenon is not limited to real estate. You can see the same split elsewhere in the economy. Sales at Saks vs.Walmart. Pay on Wall Street vs. Main Street. Corporate profits vs. family balance sheets.

The divide also is making credit a perk of the rich. Mortgage rates are the lowest in decades. But what good are absurdly cheap rates if you can't get a mortgage?

Banks aren't granting credit to anyone "who even has a smudge on their application," says Jonathan Miller, founder of real estate consulting firm Miller Samuel. Applications for new mortgages are at 10-year lows.

Across the U.S., prices on high-end homes fell after the subprime crash in the fall of 2008. The price on the $25 million mansion became $20 million, then $15 million. Such "bargains" are pushing luxury buyers to commit to more deals.

There are other factors, too. In Detroit, a recovering auto industry is helping propel high-end sales. All those car executives who helped turn around the auto industry used to rent homes. Now they are using their performance bonuses to buy.

Wall Street's recovery has brought back the market for mansions in the Hamptons, on Long Island, where the number of real estate closings has returned to the 2007 level, and for luxury co-ops in New York City. And because of social-network riches in Silicon Valley, twice as many homes have sold for $5 million or more this year than last.

But in the other housing market, an apartment tower built in 2007 in San Jose, Calif., recently converted to all-rental. The building had not sold a single unit.

In Miami, a city that exemplifies the foreclosure epidemic, idle cranes dot the skyline. Unemployment shot up again this summer from 12% to 14%, a level not seen since the energy crisis in 1973. There are so many two-bedroom condos in gated communities with golf courses, private pools and jogging paths that you can pick one up for $25,000, 66% off the price five years ago. But luxury condos priced at $1 million or more are selling as rapidly as they did during the boom.

"In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not," says Peter Zalewski, founder of the real estate firm Condo Vultures.

One big factor in the divide in the real estate world is foreign cash. For international buyers, U.S. real estate is the new undervalued asset, the new fire sale, and foreigners are big buyers of luxury properties. International clients bought $82 billion worth of U.S. residential real estate last year, up from $66 billion in 2009. In states like Florida, international buyers account for a third of purchases, up from 10% in 2007.

"Luxury properties are drawing buyers from all over the world," says CoreLogic's chief economist, Mark Fleming.

That's true even in such seemingly all-American enclaves as Detroit. Step off a plane at the city's futuristic new airport and the internationalization of the Motor City is obvious. All the signs — as well as the announcements on the public address system — are in both Chinese and English.

In the middle of the terminal sits a five-star Westin Hotel, the better to serve the global executive class that jets in and out as the U.S. auto industry regains its footing. Many of them are buying in Birmingham, Mich.,, where home values are up 3.1% this year, according to Zillow.com.

In Birmingham, store owners say business is as good as it was during the boom years last decade. Chasta Fase, who owns Old World Olive Press, a boutique shop that sells $30 bottles of olive oil from around the world, says business "has been just awesome" since she opened in November. And since April, she says, customers have been spending more than ever.

Real estate agent Keating says the same is happening to her sales. In June, she sold a lakefront mansion in Birmingham to a Russian entrepreneur. He had purchased a local steel company that he plans to turn around.

"They're coming from all over," says Keating, who for the past 30 years has sold most of the car barons their homes, from Roger Smith, former CEO of General Motors, to former Chrysler CEO Bob Nardelli. "I don't know who any of them are anymore."

HOUSE ON THREE ACRES IN COPAKE-HILLSDALE AREA - $175,000.

2011-09-17T23:21:00.003-04:00

This ranch-style home is strategically located on a mostly open three acre parcel to catch the best views of the nearby hills. The house was built in 1967 by the current owner and is being offered for sale for the first time. It has 1,000+ square feet of living area that includes three bedrooms, 1 full bath, triple-pane thermopane windows for energey efficiency, oil hot water heating, ceramic tile and carpeted floors, covered porch to enjoy the great views, and a 2-bay detached garage/barn with electric service and workshop. Total Annual real estate taxes are only $3,150. This house is in excellent, ready-to-move-in condition.

The property is located only a few minutes away from Catamount Ski Center, New York State Parks, Bash Bish State Park, and the Harlem Valley Rail Trail goes right by the property. You can also walk to the hamlet of Hillsdale for shopping and fine dining. More land is available.

For more information call John Wallace at 518-392-7062 or email him at John@GrayRider.com

FARM LAND RUSH IN THE USA

2011-08-25T09:58:00.001-04:00

“It’s a feeding frenzy out there,” says Renee Harvey, ALC, of Century 21 Harvey in Paris, Texas. Farmers, private investors, and institutional owners are bidding up cropland prices to record highs, fueled by commodity prices that rose 29 percent in the year ending March 2011, according to the U.S. Department of Agriculture. In the Midwest alone, prices rose 23 percent during 2010, according to the Federal Reserve of Chicago, and have since spiked higher. Total returns for farmland were 2.4 percent in the first quarter of 2011, up 1.3 percent from a year ago and the strongest first quarter return since 2006, according to the National Council of Real Estate Investment Fiduciaries Farmland Index.

The eye-popping prices and impressive returns, in large part, reflect the relative scarcity of land for sale. Amid rising food prices, owners aren’t inclined to sell. “There’s just not much on the market and finding property for buyers takes a lot of networking,” says Ray Brownfield, ALC, of John Greene Land Co. in Oswego, Ill. In fact, the 2010 annual report of the Illinois Society of Professional Farm Managers and Rural Appraisers found that 57 percent of the farmland sold in the state came from estate sales. With relatively few sellers, transaction volume has stayed low, despite liquidity in the market. Data from the Farmers National Credit Services of America, an Omaha-based lender, found that transaction volume on crop and pasture land in Iowa, South Dakota, Nebraska, and Wyoming dropped 54 percent in three years from 2,326 sales in the first quarter of 2008 to 1,074 sales in the first quarter of 2011.

The appeal is easy to understand. “High-quality farmland can generate a 3 to 4 percent annual cash-on-cash return with low volatility,” says Murray Wise, ALC, of Murray Wise Associates, headquartered in Champaign, Ill. Compare that to a yield of less than 1 percent on six-month Treasuries, and you can see why income-hungry investors love farms.

Rising rents have also kept returns high despite higher land prices. In Illinois, for example, the cash rents for the mid-third range of leases on excellent farmland rose from $183 per acre in 2007 to $319 in 2011, according to a survey by the Illinois Society of Professional Farm Managers and Rural Appraisers. More owners are negotiating flexible profit-sharing agreements to capture rising commodity prices, says Winnie Stortzum, ALC, GRI, a land broker and appraiser at Farmers National Co. in Arcola, Ill.

Six Keys to Farm Land Value
Farmland investment income rests on crop production for much of its return on investment. What makes for a productive farm?
-Soil quality
-Water availability and control
-Fertilizer requirements
-Topography
- Percentage of tillable land
- Proximity to transportation

Another draw is land's inverse correlation with the stock market, says Jeff Conrad, president of Hancock Agricultural Investment Group in Boston. “You really saw that in 2008,” he says. Investors worried about inflation like that land is a tangible asset.

But even with strong investor activity, there are doubters. Yale University economist Robert Shiller, famous for predicting the fall in housing prices, cited farmland as his “favorite dark horse bubble candidate” over the next decade in a spring 2011 article in Slate. Some investors are already pulling back, especially in the hot Midwest farm belt. “When land reached $10,000 an acre in the first quarter of 2011, it was a mental stopping point for some cash investors,” says Mark Goodwin, Goodwin & Associates in Shorewood, Ill. The U.S. Department of Agriculture is also reporting slight drops in income streams from such major crops as cotton, oilseeds like soybeans, and feed grains for the first quarter of 2011. Part of the challenge is that “the agricultural industry doesn’t set its own commodity prices; that’s done by traders and speculators,” says Kirk Goble, ALC, with The Bell 5 Land Co. in Greeley, Colo.

Many agriculture brokers agree that there may be a 5 percent drop in land prices, but “as long as people from developing countries want to increase the quality of their diets and their protein consumption, commodity prices and land prices will remain very strong,” says Mac Boyd, ALC, GRI, of Farmers National Co. in Arcola, Ill.

Another factor that mitigates a sharp drop in agricultural land prices is the low debt-to-asset ratios for most farmers today, says Conrad. “Farm debt is the lowest it’s been in 30 years. That’s not the sign of a bubble.” Brownfield agrees: “The average mortgage debt load for farmland purchases today is less than 20 percent.” Many current buyers are coming in with all cash. Those who do use debt are putting 40 or 50 percent down.

Does that mean that farmland investment is bulletproof? Not quite. Government policy—particularly anticipated changes in farm subsidies in the 2012 farm bill—could have “a significant impact on what goes in the farm market,” says Stortzum. While subsidies aren’t as critical when commodity prices are high, land ownership would get much riskier without some sort of federal backstop, notes Brownfield. A rising dollar could soften demand, while higher interest rates could pull investors away to higher returns elsewhere.

Flexibility Counts

Given the high prices and retreats in commodity prices, are there still opportunities in farmland investment? Yes, but only if you’re savvy and flexible, say land experts. Finding willing sellers is the toughest part, since only about 1 percent of U.S. farmland turns over every year, says Wise. His tip: If you do find a farm, be ready to make a cash offer in 24 hours. Other buyer-finding advice: Check tax rolls for absentee owners, who may have inherited farm property and now live far away.

Bargain hunting can also pay off. “It’s an imperfect market. Sometimes there aren’t any aggressive buyers at an auction, and the land sells for less than the perceived market,” says Randy Hertz, alc, of Hertz Farm Management Inc. in Nevada, Iowa. Another way to get a better buy: Look beyond the top cropland markets of the central Midwest to somewhat less fertile, but more affordable, land in states like South Dakota, he says. The Mississippi Delta, similarly, hasn’t been bid up as high, suggests Bob Turner, alc, with Southern Properties LLC in Cordova, Tenn. “Prices per acre are averaging $2,500 to $3,500 in our area,” he says. Another option: Focus on commodities that are soft at the moment, like wine grapes and cranberries, suggests Conrad. When these products rebound, land prices will rise, too.

A Comeback for Ag

The strength of farmland prices is even pulling some undeveloped transitional land back into the farming fold, says Nancy Surak, ALC, CCIM, of Eshenbaugh Land Co. in Tampa, Fla. With prices on bank-owned transitional land down as much as 80 percent from the peak of 2005, “ag may be the highest and best use,” she says.

Farmers in the collar counties around Chicago are following a similar pattern, says Goodwin. Those who sold to developers for $75,000 an acre a few years ago are now buying it back for $15,000. “They’ll farm it for five to 10 years and sell it to a developer again,” he says. Much of this land is REO from larger banks, which seem more ready than smaller ones to take write-downs, he says.
In some cases, this farming or grazing use is a temporary way to qualify for lower agricultural tax rates. “You can get a fence up and cattle on a property in two weeks and substantially lower your carrying costs,” Surak says.

Comparably lower prices on build-ready land are also attracting buyer interest. “We sold almost 1,000 finished lots last year, every one we had listed,” says Surak. Homebuilders who have cash as well as regional investors are snapping them up at 40 percent of the average $25,000 replacement cost, she says. Other buyers for build-ready land include state and local governments and local housing authorities, which have used federal Neighborhood Stabilization Program funds to buy bank-owned land for new construction.

Even recreational land is getting the farm bug. “The biggest trend in recreational land is multiuse opportunities, including farming, timber, and habitat development,” says Derrick Volchoff, manager of Cabela’s Trophy Properties, a network of more than 250 independent real estate affiliates based in Sidney, Neb. Income helps to offset carrying costs as buyers remain hesitant in a weak economy.
Like all real estate, agricultural land prices are cyclical—so the highest of today will decline at some point. But as the world’s population grows and needs to be fed, the future looks bright for U.S. farmland and for those who sell and manage it.

-----------------------------------
http://realtormag.realtor.org/commercial/feature/article/2011/09/farm-land-rush

HOW WILL THE U.S. CREDIT RATING DOWNGRADE IMPACT HOUSING FUNDAMENTALS?

2011-08-09T08:35:00.000-04:00

Congress’ last-minute accord to raise the nation’s debt ceiling and avert a default wasn’t enough to save the United States’ AAA rating from Standard & Poor’s. The market’s reaction to the news could have an impact on Treasury yields and with these yields closely tied to mortgage rates, on homebuyers’ borrowing costs.

[Editor’s Note: As the day unfolded, following publication of this article, investors responded to the news with a Treasury bond buying spree, resulting in a 13 basis point drop in 10-year Treasury yields.]

The international ratings agency downgraded the long-term sovereign credit rating of the United States to AA+ late Friday night. That’s a grade level just below the AAA rating the U.S. had held for 70 years, going back to 1941 when S&P began assigning ratings to countries.

S&P said the fiscal plan that Congress and the administration agreed to last week “falls short” of what its analysts believe is “necessary to stabilize the general government debt burden by the middle of the decade.”

The agency also said the wrangling that went on in Washington – namely the use of the impending threat of default as a political bargaining chip – makes near-term progress on curbing public spending or reaching an agreement to raise revenues “less likely than we previously assumed.” S&P says the debate “will remain a contentious and fitful process.”

White House and Treasury officials fired back at S&P for basing the downgrade on what they said was a “math error of significant consequence.” The administration says S&P misquoted estimates from the Congressional Budget Office by $2 trillion in projecting the deficit over the next 10 years. S&P has since acknowledged the error but says that doesn’t change its decision.

So what does all this mean for the housing and mortgage markets?

Mortgage financiers Fannie Mae, Freddie Mac, and 10 of the 12 Federal Home Loan Banks also had their senior debt issue ratings cut from AAA to AA+ by S&P Monday morning. (The Federal Home Loan Banks of Chicago and Seattle were already rated AA+ prior to the U.S. sovereign downgrade.)

S&P says the downgrades were the result of the institutions’ “direct reliance on the U.S. government.” The agency warned back in April that the rating of the U.S. would have a direct impact on the ratings attached to the debt of these government-sponsored entities.

Reuters notes that a downgrade of Fannie Mae and Freddie Mac could also affect billions of dollars of debt issued by public housing authorities, debt that is secured by federally guaranteed mortgages.

The markets are bracing for an eventful week ahead, with expectations that the value of the dollar will slip and Treasury yields will begin to rise. The trajectory of mortgage rates typically goes hand-in-hand with Treasury yields.

But market participants point out that mortgage rates are already at historical lows, and it still hasn’t done much to boost demand from homebuyers.

Economists and housing experts alike were expecting mortgage rates to head higher later this year, even before the rating downgrade.

According to Paul Dales, senior U.S. economist for the research firm Capital Economics, “[A]ny spike in Treasury yields and/or fall in the dollar should be relatively short-lived. Once the dust settles, attention will turn back to the economic fundamentals, which are certainly consistent with low Treasury yields.”

The analysts at Barclays Capital don’t expect the ensuing shock to the market to run very deep.

“Treasuries are not going to sell off…but longer-run the fiscal problems are likely to mean a weaker dollar,” Barclays said.

The firm also stressed that for many observers, it was really a question of when the downgrade would happen rather than if it would since S&P had been very clear about its expectations.

“But it is yet another milestone in the ongoing financial crisis: another once-unthinkable event has taken place,” Barclays said. “For decades the 10-year U.S. government bond yield was the definition of the long-run risk-free interest rate; now that has been declared a less than top-notch credit risk.”

S&P is the only one of the three major ratings agencies to downgrade the United States.

Moody’s Investors Service and Fitch Ratings both confirmed their AAA ratings after the debt deal was reached last week.

By Carrie Bay
www.DSNews.com

TWO BEDROOM COUNTRY COTTAGE - ONLY $198,000.

2011-07-04T12:08:00.000-04:00

This two Bedroom, two Bath, 1960's Cottage is located on 2.04 acres of mostly wooded land on County Route 24 (Red Rock Road) in the town of Canaan. It is in excellent condition, has oil hot water heating, 1,136 square feet of living space, double-hung windows, enclosed porch, seasonal stream at property border, 1-car detached garage, and plenty of storage.

For more information and/or an email brochure, please email John Wallace at: John@GrayRider.com

or call him at 518-392-7062

PROFESSIONAL OFFICE BUILDING IN CHATHAM, NEW YORK

2011-06-28T17:30:00.000-04:00

PROFESSIONAL MEDICAL OFFICE BUILDING IN CHATHAM - $425,000.

Professional Office building fully leased. Excellent tenants with current leases. New rubber roof in 2010, new furnaces and hot water heaters. This 5,000 square foot professional office building was built in 1962. It sits on 3.8 acres of land on a side street in the Village of Chatham. It has waiting rooms, reception/office areas, 5 baths, and ample parking in both the front and the rear of the building. Tennants pay for heat and electric. There is a total of 4 furnaces (including backups) and the building is air conditioned. Total Annual Real Estate taxes are approximately $11,732. per year. Gross income is approximately $81,000+ per year. Owners pay the real estate taxes and tenants pay approximately 91% of the common charges.

Total Annual Income: $81,116.
Total Annual Expenses: $48,200.
Total net Income: $3,916.

Cick on the link below for more information:

http://www.grayriderrealestate.com/Form-MedicalBuilding-InfoRequest.htm

Survey: 87% of First-Time Homebuyers Don't Foresee Payment Troubles

2011-06-13T16:08:00.001-04:00

Prospective homebuyers cite worries about future unemployment, concerns about property affordability, and the local economic outlook as issues that hold them back from jumping into the market, according to an industry survey commissioned by Genworth.

But the Virginia-based mortgage insurer says these economic concerns have not translated into excessive mortgage stress among recent U.S. homebuyers.

According to the survey, 87 percent of Americans who bought their first home in the past 12 months expect to easily meet their mortgage repayment obligations in the coming year.

Genworth debuted its new International Mortgage Trends Report Friday based on a global survey of current and aspiring homebuyers aimed at gaining local insight into key world markets. More than 9,000 respondents were interviewed from Australia, Canada, India, Ireland, Italy, Mexico, the United Kingdom, and the United States.

The company says the U.S. is the most optimistic among all the markets surveyed about buying a home. According to the findings, nearly two-thirds of Americans polled believe now is a good time to buy a home.

Genworth says indebtedness colors how households around the world view their financial situation and how they approach buying a home. Western countries tended to have higher levels of debt, but were also more comfortable taking on debt.

Of the many factors that influence the decision to buy a home, Genworth notes that consumer confidence is one of the most important.

The company’s survey found that homebuyer confidence has eroded due to property market instability and worries about personal finances, leading consumers to adopt a wait-and-see attitude.

Still, nearly two-thirds of Americans surveyed believe now is a good time to buy a home for those who can afford it.
------------
Article by Carrie Bay - www.DSNews.com

FLANDERS CORP COMING TO COLUMBIA COUNTY

2011-06-08T17:47:00.001-04:00

The news that the Flanders Corporation will move into Columbia County is a welcome sign that the changing dynamics in New York State are starting to reap benefits.

The Flanders Corporation has picked our region to expand its growing air filter manufacturing business which is based out of North Carolina. The Company will be creating 180 jobs and investing approximately $7 million in the former Kaz plant. The collaboration between state, county and local officials helped make this a reality and I was pleased to be a part of this economic development team.

As challenging as this past budget process was, my Republican Senate Colleagues and I remained steadfast in our commitment to deliver an on time budget that contained no new tax increases. A signal that New York can be competitive in attracting and maintaining businesses and jobs.

I am hopeful the Flanders Corporation is the first of more businesses who will see the region full of potential to establish or expand a business.

Posted by State Senator Steve Saland

SENIOR LIVING FACILITIES SEE A BOOM IN THE USA

2011-05-09T10:33:00.000-04:00

Seven years ago, real-estate developer Greg Smith purchased a failed nursing home in Danbury, Conn., with an eye toward converting it into residential condominiums.

When a friend suggested instead a senior housing strategy known as assisted living Mr. Smith initially wasn't enthused. "I didn't even know what assisted living was," Mr. Smith says.

Now he knows. His company Maplewood Communities LLC has developed and is operating three assisted-living communities including the one in Danbury and has three others under development. Moreover, Maplewood also just cut a deal with Aviv REIT Inc., one of the country's largest landlords of skilled nursing facilities, under which Aviv will provide capital for future growth, initially $60 million.

"We're talking about getting 15 to 25 communities under our belt," Mr. Smith says.

Assisted-living housing is growing into a bigger business in the New York region. While development is slow of most commercial property types—like office buildings and retail centers—a number of developers are moving ahead with plans to provide facilities that occupy a middle ground between standard apartment buildings and nursing homes.

Assisted-living tenants typically are elderly people who are generally healthy and can take care of themselves, but the facilities provide services like nurses, aides, dining and memory care. Average rents at Maplewood are $4,700 to $4,900 per month.

The New York metro area has the second lowest number of available assisted-living units in the country with 2.6 units for every 100 households with seniors aged 75 years and older, according to the National Investment Center for the Seniors Housing & Care Industry. The number of units has grown only 3% in the last five years in the region compared to 7.4% nationally, according to the center.

But the region's population is aging. People 75 years and older constitute nearly 20% of all households in the metro area, compared to 14.7% in the U.S. overall, according to the National Investment Center.

"We see that demand [is growing] as baby boomers start to climb" in age, says Mr. Smith. "The amount of [new] supply over the last 10 years has been virtually nonexistent."

The strategy so far has paid off for Maplewood. For example, it spent $11.5 million to buy the Danbury property and convert into an assisted-living facility equipped with a manmade waterfall in the dinning area. Today, it's roughly 90% occupied, has an annual income of $1.5 million. Mr. Smith estimates its worth at $18 million.

Altogether, Maplewood has invested about $35 million for its three existing properties. For the properties under development, it has invested about $45 million with a total of 225 units. Mr. Smith estimates that "conservatively" they're worth $55 million.

Other regional operators also are expanding. Benchmark Senior Living, which is Connecticut's largest owner of assisted living with 15 facilities, is expanding into northern New Jersey and suburban New York as well as New England, according to Thomas Grape, Benchmark's chief executive. He declined to elaborate citing competitive concerns.

The regional activity reflects a national trend. The biggest real-estate mergers so far this year involved national health- care landlords seeking to expand their senior housing exposure including Ventas's $5.8 billion acquisition of Nationwide Health Properties in February several months after it acquired Atria Senior Living, one the biggest regional operators in the New York region. In addition, Health Care REIT recently enters a partnership with Benchmark Senior Living involving 34 assisted living facilities in New England.

Jeff Theiler, an analyst at Green Street Advisors, says there are nearly 2 million assisted living units in the U.S. and on average, the number has increased 5% every year for the past 25 years. "Because of that resiliency, there has been a big …interest in the property type among the health care REITs," Mr. Theiler says.

To be sure, assisted living isn't without its pitfalls. Although rents have risen in recent years, the growth hasn't been robust. During the recession, many seniors or their children couldn't sell their homes or didn't have viable employment to pay for assisted-living accommodations, which are relatively expensive.

Mr. Smith started in commercial real estate by developing and acquiring office and hotel buildings more than 10 years ago. But, after he purchased his first assisted living facility in Danbury he decided to focus on this sector. He even recruited family members to live in the Danbury facility, including his great aunt and grandmother who died last year. "They fell in love with it. My grandmother was the matriarch of the community," Mr. Smith said.

-------------------------
Article written by A.D. PRUITT, Wall Street Journal

Picture of Maplewood Community by Anton Troianovski/The Wall Street Journal

http://online.wsj.com/article/SB10001424052748703864204576311443059330956.html#printMode

CLEAR CAPITAL: HOME PRICES HAVE OFFICIALLY DOUBLE-DIPPED

2011-05-05T09:47:00.001-04:00

The national home price index from Clear Capital has officially entered double-dip territory.

The company says data through the end of April has pushed its reading of national home prices 0.7 percent below the prior low recorded in March 2009, as markets have become saturated with bank-owned properties.

Clear Capital’s report shows prices have fallen 11.5 percent over the previous nine-month period. A rate of decline this rapid has not been seen since 2008.

All the major metropolitan statistical areas tracked in Clear Capital’s report showed quarter-over-quarter price declines. The company says it’s a “sign of the continued volatility and fragility of home prices.”

At the regional level, home prices in the West, Northeast, and South regions have all crossed into double dip territory to record their lowest prices since the downturn began.

Clear Capital says the fact that the Midwest is the only region yet to double dip is largely a reflection of magnified gains it experienced during the last two years of tax credit activity.

Dr. Alex Villacorta, director of research and analytics at Clear Capital, says he continues to see evidence of an increase in the proportion of distressed sales taking hold in markets nationwide.

“With more than one-third of national home sales being REO, market prices are being weighed down as many markets have not regained enough footing to withstand the strain of the high proportion of REO sales,” Villacorta said.

“In light of the compounding effects of winter’s seasonal slowdown and increased distressed sale activity, the market now faces the true test of whether prices can rebound in the historically active spring season,” according to Villacorta.

While spring typically brings with it a resurgence in home sales – and home prices follow – Clear Capital warns that markets have entered uncharted territory since this spring homebuying season will be the first since 2008 without any tax credit incentive.

“A note of caution to those looking for a strong end to 2011: The last time no incentives were in place and distressed inventories were this high, home prices fell sharply,” Clear Capital said in its report.

The company’s home price report last month noted the subtle but rather ominous trend that distressed sales activity in the West, as a percentage of total sales, had climbed after a prolonged 18-month period of general improvements, and in turn, home prices in the western part of the country hit the double-dip mark in March.

Nationally, Clear Capital says a similar trend has formed with REO saturation climbing to a current level of 34.5 percent after it declined to near 20 percent in mid-2010. Strikingly similar, the company says, 2008 saw REO saturation grow from near 20 percent early in the year to 32 percent by the end of 2008.

Looking at home price trends during these same two periods ties together similarities, Clear Capital explained, with a 15.6 percent price decline for the 2008 timeframe compared to the 11.5 percent decline for the mid-2010 through April 2011 period.

“This comparison leads to concern over home price declines through the rest of 2011,” Clear Capital said in its report, noting that the trends of 2008 were quickly reversed with the introduction of stimulus measures.

“[T]he housing market still faces many challenges that will only be solved through increased buying activity or a reduction in the distressed segment ― neither of which is assured in 2011,” according to Clear Capital.

Written by Carrie Bay - http://www.dsnews.com/

1810 COLONIAL AND GRIST MILL ON 8 PLUS ACRES IN GHENT, NEW YORK - $595,000

2011-04-29T14:40:00.001-04:00

Circa 1810 Center Hall Colonial with 5 Bedrooms and 3 Baths, with early addition. Period charm with modern amenities. 8.32 surveyed acres along Kline Kill Creek. Early (1800's) 3 story Grist Mill (Brookside Flour and Feed Mill) with many artifacts still remaining. 1,100 sq. ft. shop/garage plus a 6,000 sq. ft. commercial building with elec., water, & heat, currently rented to marine repair facility. (all out buildings have electric). Wonderful property for both residential or commercial uses. Come take a look. Additional 16.73 acres available.

For additional information, click on the following link:

www.GristMillForSale.com

FIRST-TIME HOME BUYERS PREPARE FOR BEST BUYER'S MARKET IN RECENT HISTORY

2011-03-18T09:33:00.001-04:00

RISMEDIA, March 18, 2011—While affordable housing prices, ample inventories, and historically low interest rates signal ‘buyer’s market’ for investors or move-up buyers in many U.S. markets, inexperienced first-time buyers may not know if the time is right to make a move into real estate.

“It’s not about timing the market. It’s about time in the market,” says Steve Berkowitz, chief executive officer at Move, Inc., a leader in online real estate. “Once you know how long you expect to own a home, look at the historical value performance of properties in the neighborhood. Be confident about your own job security, down payment resources and tolerance for upkeep, as well as the lifestyle you want today and in the near term. While homeownership may not be for everyone, it is the right choice for hundreds of thousands of people. Today’s housing market, especially for first-time buyers, makes it almost impossible not to think about the possibilities.”

To help first-time buyers know if they’re ready to look for the home of their dreams as we head into this year’s home-buying season, the experts at Move have created a ‘reality checklist’ designed to help them decide if the time is right.

Get your financial house in order

Before you decide to buy a home, it’s essential to make sure your credit is in good shape and repair any damage previously done. Know your credit score: thirty-five percent (35%) of successful buyers recently reported they didn’t know their credit score when they went house shopping, according to a national survey fielded for MortgageMatch.com. Having enough money set aside for a down payment is a key component to making sure you are ready to purchase a home. Also, it’s important to not put all of your money in the down payment as other fees or unexpected expenses often arise after closing.

Don’t fall in love with a house you can’t buy

Find out how much you can afford: establishing your purchase power upfront, including how much money will be required for a down payment and closing costs, is a must for first-time buyers. Look for special loans available from FHA and government sponsored loans for first-time home buyers that reduce the amount of money required to get into a home.

Learn the lingo

Since first-time buyers are new to the market and will finance a significant portion of their purchase, it’s important to get familiar with the processes and terminology associated with home-buying. Here are a few key terms from MortgageMatch.com to add to your vocabulary:

Bait rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location and the day you lock your rate, etc. The loan isn’t locked until the application is accepted. By then, it may be too late to find a better rate from another lender.

Basis point: A term used in the mortgage industry which simply means 1/100th of 1%.

Closing costs: The fees required to process and close your loan. They’re a cash obligation running from 3-5% of the purchase price. Motivated sellers might pay a portion of these costs.

FHA: Federal Housing Administration, the Federal Government Agency that oversees the U.S. Housing market. FHA Loans are loans insured by the Dept. of Housing and Urban Development.

FRM and ARM: A Fixed-Rate Mortgage Loan (FRM) is a loan where your interest rate stays the same for the life of the loan. ARMs are Adjustable-Rate Mortgages with variable interest rates that fluctuate based on an agreed-upon index.

GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.

TIL: The Federal Truth-in-Lending Form is a document that spells out the costs and fees of the loan.

Lis pendens: An official notice that there is a pending lawsuit over real estate.

Per Diem interest: Interest you pay per day, from the day you close to the last day of the month.

Underwriting/underwriting fees: Underwriting is a process the lender performs to qualify a borrower for a loan and the fee is what you pay the lender at closing to cover evaluating the risk involved with loaning you money.

Warranty deed: A legal document guaranteeing the seller has a right to sell a property, which is very important if you are considering a distressed or discounted property.

Mortgage Knowledge

While national rates on 30-year-fixed-rates mortgages have risen slightly this year, they are still at historic lows not seen since 1980, according to Freddie Mac. “Buyers who prepare themselves financially before they start looking for a home will have a better chance of succeeding,” says Sue Stewart, senior vice president for Move, Inc. “If you want to land the best mortgage that fits your needs, start early, educate yourself on your financial situation, get your documentation together and find a lender you trust.”

Find a REALTOR® and go shopping

For those ready to buy, REALTOR.com® has the tools and tips to help you find a REALTOR® and, ultimately, the right home. Finding a licensed real estate professional in your area will make the process smoother and easier to understand. Once you find an agent, share your realistic budget and what you’re looking for in a home. Stay in constant contact with your agent and look for homes whenever you have a spare moment.

First-time home buyer resources

For more tips designed to help the first-time buyer navigate the home buying process, the experts at Move have provided an abundance of helpful information that’s just one click away:

-Reality checklist – Are you sure you’re ready to buy? Here’s how to know.

-How-to Guide: Buying Your First Home – Everything you need to know about buying a home

-Get Prequalified Now – Get prequalified for a mortgage before you begin shopping

-Realtor.com Blogs– Connect with REALTORS® to help you navigate the market

-MortgageMatch.com News – Answers questions about finances and mortgages

-Move.com Home Finance – Equips first-time buyers with tools, guides, advice, and more

If now isn’t the right time, prepare for your future purchase

If now isn’t the right time to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It’s also important to refrain from making any new large purchases or applying for new credit.

For more information, visit www.move.com [2] and www.Realtor.com [3].

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com [4].

Have you heard about RISMedia’s Real Estate Information Network® (RREIN)? RREIN is an elite network of leading real estate companies dedicated to providing consumers and their agents with leading real estate information, and committed to the belief that Information Share Equals Market Share. Having only launched this past June 2010, the RREIN network is already comprised of 40 leading brokerages, which make up 575 offices, 30,000 agents, 167,000 closings and represents over $41 billion in transactions. How can RREIN help your recruiting efforts and differentiate your company today? For more information, email rrein@rismedia.com [5].
Copyright© 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Obama Administration Lays Out Plan for Winding Down Fannie and Freddie

2011-02-14T09:42:00.001-05:00

The Treasury Department released the Obama administration’s plan Friday for reforming the nation’s housing finance system and winding down Fannie Mae and Freddie Mac.

Officials say the reform measures will shrink the government’s footprint in the mortgage market, fix “fundamental flaws” in the system, increase transparency for investors, and improve underwriting and mortgage servicing standards.

On a conference call with the media, Treasury Secretary Timothy Geithner stressed that “realistically, this is going to take five to seven years” for full reform to be implemented.

HUD Secretary Shaun Donovan added, however, that there are short term steps that don’t require legislation, which can and need to be taken immediately to return private capital to the market.

“We are going to start the process of reform now, but we are going to do it responsibly and carefully so that we support the recovery and the process of repair of the housing market,” Geithner said.

The first item on the administration’s laundry list of reform measures is phasing out the nation’s two largest mortgage companies. With the financial crisis, private capital retreated from the housing market, leaving the government to guarantee more than nine out of every 10 new mortgages. Both Geithner and Donovan underscored the fact that the plan for winding down Fannie and Freddie is centered on returning private capital to the market.

The private sector must fill in the receding role of the government and “should be the primary source of mortgage credit and bear the burden for losses,” according to a Treasury statement.

The administration recommends ending what it called “unfair capital advantages that Fannie Mae and Freddie Mac previously enjoyed” by requiring them to price their guarantees as though they were held to the same capital standards as private lenders. Although the pace of increasing guarantee fees will depend largely on market conditions, the administration says it wants to bring Fannie and Freddie to a level playing field with the private market “over the next several years.”

The administration is also recommending Congress allow the temporary increase in conforming loan limits to reset as scheduled on October 1, 2011. The limits for GSE loans, as well as for the Federal Housing Administration (FHA), were raised to $729,000 to allow for greater market support. Unless Congress extends the temporary increase, the limit will revert back to $625,500 in the fall.

The report also advocates a 10 percent down payment requirement for any mortgage than Fannie Mae and Freddie Mac guarantee. The proposal suggests a “gradual increasing,” but does not set a target date for hitting the 10 percent mark.

In addition, the administration’s plan calls for scaling back Fannie Mae and Freddie Mac’s investment portfolio at an annual rate of no less than 10 percent per year.

“We believe that under our current Preferred Stock Purchase Agreements, there is sufficient funding to ensure the orderly and deliberate wind down of Fannie Mae and Freddie Mac,” the administration said in its report.

While much attention has been centered on what will become of Fannie and Freddie, the proposal covers many elements of the housing finance system beyond the GSEs, including FHA, which currently accounts for about a third of the mortgage market.

The report recommends increasing FHA’s annual mortgage insurance premium by 25 basis points – a change the administration wants to see go into effect in April.

Additionally, the plan will help provide targeted support to creditworthy but underserved families that want to own their own home, as well as affordable rental options.

In the report, officials note that “[a]ny responsible reform effort that addresses the flaws in the pre-crisis housing market will make credit less easily available than before the crisis.”

For months now, economists have been debating the government’s decades-long push to provide the American Dream of homeownership to every citizen and whether or not that modus operandi served to fuel the housing bubble and lax lending standards that put so many borrowers into unsustainable mortgages.

Donovan stressed that the government must ensure a “better balance of homeownership and renting.” He said the proposal includes measures that would expand FHA’s capacity to support financing of affordable rental and multifamily housing.

The administration is also throwing its weight behind several immediate and near-term reforms to correct problems in mortgage servicing and foreclosure processing. These include:
•Putting in place national standards for mortgage servicing;

•Reforming servicing compensation to ensure servicers have proper incentives to help borrowers avoid foreclosure;

•Requiring that mortgage documents disclose the presence of second liens and define the process for modifying a second lien; and

•Allowing primary mortgage holders to restrict additional debt secured by the same property.

Beyond the administration’s specific recommendations, the report also puts forward three longer-term reform choices, ranging from a government role that is limited to just the FHA, to an FDIC-type insurance guarantee for certain mortgage securities. We cover these three options in more detail in a separate article on DSNews.com.

The administration’s proposal has been delivered to Congress. Donovan says the options outlined in the report should “deepen debate and dialogue” among lawmakers as they decide the best route to take to move forward. A copy of the full 32-page report can be accessed here.

Article Written by Carrie Bay - DSNews.com

©2011 DS News. All Rights Reserved.

U.S. CENSUS: 11% OF HOMES IN USA ARE VACANT

2011-02-01T15:41:00.001-05:00

Data continue to mount showing that the housing sector remains depressed. First came news from the Standard & Poor’s/Case-Shiller index that home prices fell 1.6 percent in the year through November.

\Now, the Census Department reports that vacant home totaled 18.4 million in the fourth quarter, meaning 11 percent of all housing units are vacant year-round, according to CNBC.

The country’s home ownership rate, after holding steady for months, dropped to 66.5 percent in the fourth quarter from 66.9 percent in the third quarter. That's the lowest level since 1998.

“Homeownership is falling at an alarming pace, despite the fact that home prices have fallen, affordability is much improved, and inventories of new and existing homes are still running quite high,” writes CNBC real estate columnist Diana Olick.

Much of the problem is that the nation is still recovering emotionally from the housing crash of the past four years, she says.

“Younger Americans have seen what home ownership has done to their friends and families, and many want no part of it. Credit has become very nearly elitist.”

Ace economist Nouriel Roubini says housing is in the midst of a double-dip recession. “Demand is falling, and supply is increasing because there is a shadow inventory of millions of not yet foreclosed homes. Therefore, prices are going to fall even further,” he tells Forbes video.

-------------------------------

© Moneynews. All rights reserved.

Article written by Dan Weil - MoneyNews.com

IS A SOLAR-THERMAL HOT WATER SYSTEM FOR YOU?

2011-01-17T10:47:00.001-05:00

We Americans take our hot water for granted—we love our soaker tubs, and many of us just can’t start the day without a vigorous shower. But it’s not free. According to the U.S. Department of Energy, on average we spend about $308 per year, per household, just to have hot water ready at the twist of a faucet handle. But you could slash that figure in half, or more, with a solar-thermal system—a proven renewable-energy technology that enables the rays of the sun to heat your home’s hot-water supply.

THE FUEL IS FREE

Both solar-thermal systems and more costly solar-photovoltaic panels—which use the sun to generate electricity—can make a significant dent in your utility bill. But with a solar-thermal system, instead of generating energy, you’re saving it.

“When compared to solar-electric panels, it is a lower-cost option,” says Monique Hanis, a spokesperson for the Solar Industries Association. “A system for a home would run anywhere from $4,000 to $6,000, and that could take care of a good chunk of your hot-water needs.”

Those ballpark figures don’t include the across-the-board federal tax credit that knocks 30% off the cost of a system, plus there are additional state and local-government incentives that can trim set-up costs even more. (Check the Database of State Incentives for Renewables & Efficiency for relevant programs in your area.) Maintenance is minimal, and collectors should last for 20 years or more.

HOW SOLAR-THERMAL WORKS:

All solar-thermal systems feature glassed-covered boxes or sets of tubes that contain fluid-filled piping. The systems can be divided into two basic categories—direct and indirect.

In an indirect system, a pump continually circulates an antifreeze solution between the collector mounted on your roof and a heat-exchanger coil located inside your home’s hot-water tank. A pump circulates the antifreeze solution between the solar panel—where the sun heats it—and the coil, where it raises the temperature of the water in the tank.

The second type of solar-thermal system, called a direct system, circulates household water directly through the solar collector. This setup is only appropriate for regions, such as Hawaii and Florida, that don’t experience winter freeze-ups.

Either type of thermal collector is so efficient that it will produce hot water even on a cloudy day—though a snowfall will bury and temporarily disable a collector until warmer temperatures melt the snow off.

HOW MUCH YOU WILL NEED:

A solar contractor/installer will evaluate your property’s potential for capturing solar radiation throughout the year, but your house is likely a good candidate if one side of its roof faces south, without too much shading from tall trees and structures. A pair of 4-by-8-foot collectors will significantly reduce the cost of heating hot water for a family of four.

How much you’ll save depends on where you live. The National Renewable Energy Laboratory has researched the degree to which a solar-thermal system can reduce a homeowner’s energy bill in various regions of the country. The lab expresses this savings via a rating known as a “solar fraction.”

Put simply, a solar fraction is the percentage of a home’s water-heating energy needs that could be met with a rooftop collector. For example, a solar fraction of 60% means that the solar-thermal hot water system would reduce the amount of energy a home used to heat hot water by 60%. In Harrisburg, Penn., Albany, NY, and Eugene, Ore., the solar fraction is 50%. In Fort Worth, Texas, and Tampa, Fla., it’s a whopping 75%.

RESEARCHING SOLAR-THERMAL COLLECTORS:

Last fall, the U.S. Department of Energy added solar-hot water systems to its EnergyStar program. You can browse approved solar water heaters on the Energy Star web site, and discuss which model best suits your needs with an installer. Bear in mind that solar-thermal collectors are not do-it-yourself projects. The North American Board of Certified Energy Practitioners certifies solar-thermal installers. As of late 2009, the group’s web site lists 97 professionals across the country who sell, install, and service the systems.

If you’re interested in saving energy and harnessing the free power of the sun, a solar-thermal water-heating system is an attractive option.

-----------------------------------

Article written by James Glave. James Glave is the author of “Almost Green: How I Saved 1/6th of a Billionth of the Planet.” He has been reporting on the challenges and opportunities of sustainable development full-time since 2005.

HOME OWNERSHIP REALLY DOES MATTER

2011-01-14T09:37:00.001-05:00

As a real estate professional, I know that America is a nation of homeowners—67% of American households are owner-occupied. And housing is a key driver of our economy, accounting for 15% of our Gross Domestic Product in general. Research shows that for every home purchased, $60,000 is pumped into the economy for furniture, home improvements and related items. Plus homeowners pay 80-90% of individual federal income taxes, contributing to federal programs that benefit all Americans.

Yet some of our politicians question the value of homeownership and whether it is worthy of the tax benefits currently available. Some media reports even contend that changing federal policies and eliminating tax incentives that support homeownership, such as the Mortgage Interest Deduction, might even be in the public’s best interest.

For more than 100 years, REALTORS® have championed homeownership as a fundamental part of the American Dream. Now more than ever, we must stand up for homeownership. And with the help of the NATIONAL ASSOCIATION OF REALTORS®’ (NAR’s) I have pledged to spread the word about the value of homeownership to my clients, community and elected officials.

“There are some, mostly in academic circles and in the media, who have been questioning the value of homeownership and the importance of incentives for homeowners,” says Pamela Geurds Kabati, vice president of Public Affairs and Consumer Media. “They ask whether we wouldn’t be better off as a nation of renters. As an industry, we have to stand up and say, ‘Absolutely not.’ We need our voice to be loud and clear to influence the court of public opinion and policymakers. Homeownership provides homeowners, their communities, and our country with so many benefits.”

HOME OWNERSHIP MATTERS:

Homeownership has a significant, positive impact on net worth, educational achievement, civic participation and overall quality of life. Owning a home is one of the best ways to build long-term wealth. In the past 12 years, a typical homeowner’s net worth has been 31-46 times that of a renter. Plus, most homeowners enjoy stable housing costs. In fact, studies show that fixed rate mortgage payments typically stay the same, while rent has increased at an average rate of approximately 3% per year in the last 10 years.

The National Association fo Realtors believe that homeowners contribute more to their communities by voting and volunteering more. They do not move as frequently as renters, bringing stability to neighborhoods, which helps reduce crime and support upkeep.

And it has been shown that homeowners enjoy a better quality of life. They tend to be happier and healthier, and feel a greater sense of control over their lives. They are free to redecorate, renovate and modify their homes as they wish. And their children tend to do better in school and stay in school longer, according to a recent white paper by NAR titled “The Social Benefits of Home Ownership.”

To learn more about why Home Ownership Matters, visit www.REALTOR.org/homeownership where you’ll find everything you need to keep you current on the debate, including articles, stats and data, blog posts, videos, and webinars.

NAR will continue to fight to preserve this important institution through advocacy and outreach to lawmakers, consumers and the media. NAR will continue to lobby policymakers in Washington, DC, and its consumer website, www.Houselogic.com, will help reinforce the benefits of homeownership.

So spread the word. Because homeownership really does matter.

A POEM: THE AMERICAN SOLDIER STANDING GUARD AT CHRISTMAS

2010-12-24T14:24:00.001-05:00

The embers glowed softly, and in their dim light,
I gazed round the room and I cherished the sight.
My wife was asleep, her head on my chest,
My daughter beside me, angelic in rest.
Outside the snow fell, a blanket of white,
Transforming the yard to a winter delight.

The sparkling lights in the tree I believe,
Completed the magic that was Christmas Eve.
My eyelids were heavy, my breathing was deep,
Secure and surrounded by love I would sleep.
In perfect contentment, or so it would seem,
So I slumbered, perhaps I started to dream.

The sound wasn't loud, and it wasn't too near,
But I opened my eyes when it tickled my ear..
Perhaps just a cough, I didn't quite know, Then the
sure sound of footsteps outside in the snow.
My soul gave a tremble, I struggled to hear,
And I crept to the door just to see who was near.

Standing out in the cold and the dark of the night,
A lone figure stood, his face weary and tight.
A soldier, I puzzled, some twenty years old,
Perhaps a Marine, huddled here in the cold.
Alone in the dark, he looked up and smiled,
Standing watch over me, and my wife and my child.

"What are you doing?" I asked without fear,
"Come in this moment, it's freezing out here!
Put down your pack, brush the snow from your sleeve,
You should be at home on a cold Christmas Eve!"
For barely a moment I saw his eyes shift,
Away from the cold and the snow blown in drifts..

To the window that danced with a warm fire's light
Then he sighed and he said "Its really all right,
I'm out here by choice. I'm here every night."
"It's my duty to stand at the front of the line,
That separates you from the darkest of times.

No one had to ask or beg or implore me,
I'm proud to stand here like my fathers before me.
My Gramps died at ' Pearl on a day in December,"
Then he sighed, "That's a Christmas 'Gram always remembers."
My dad stood his watch in the jungles of ' Nam ',
And now it is my turn and so, here I am.

I've not seen my own son in more than a while,
But my wife sends me pictures, he's sure got her smile.
Then he bent and he carefully pulled from his bag,
The red, white, and blue... an American flag.
I can live through the cold and the being alone,
Away from my family, my house and my home.

I can stand at my post through the rain and the sleet,
I can sleep in a foxhole with little to eat.
I can carry the weight of killing another,
Or lay down my life with my sister and brother...
Who stand at the front against any and all,
To ensure for all time that this flag will not fall.."

" So go back inside," he said, "harbor no fright,
Your family is waiting and I'll be all right."
"But isn't there something I can do, at the least,
"Give you money," I asked, "or prepare you a feast?
It seems all too little for all that you've done,
For being away from your wife and your son."

Then his eye welled a tear that held no regret,
"Just tell us you love us, and never forget.
To fight for our rights back at home while we're gone,
To stand your own watch, no matter how long.
For when we come home, either standing or dead,
To know you remember we fought and we bled.
Is payment enough, and with that we will trust,
That we mattered to you as you mattered to us."

-------------------------------------------------
PLEASE, would you do me the kind favor of sending this to as many
people as you can?

Christmas is upon us and some credit is due to our U.S service men and women for our being able to celebrate these festivities. Let's try in this small way to pay a tiny bit of what we owe. Make people stop and think of our heroes, living and dead, who sacrificed themselves for us.

By an Anonymous and Gratefull American Citizen

SALES OF EXISTING HOMES GAINED GROUND IN NOVEMBER 2010

2010-12-23T11:17:00.001-05:00

Existing-home sales got back on an upward path in November 2010, resuming a growth trend since bottoming in July, the National Association of Realtors (NAR) reported Wednesday.

Sales of previously owned homes rose 5.6 percent last month to a seasonally adjusted annual rate of 4.68 million, according to the trade group’s market study. That follows a 2.2 percent drop during the month of October when the annual sales rate was at 4.43 million units.

Distressed homes accounted for 33 percent of the month’s total sales volume. Housing inventory at the end of November fell 4 percent to 3.71 million existing homes available for sale, which represents a 9.5-month supply at the current sales pace. That’s down from a 10.5-month supply in October.

Paul Ashworth, chief U.S. economist for the research firm Capital Economics, says despite the November gains, sales are running at about the same pace we saw during the worst of the financial crisis in the first quarter of 2009. According to Ashworth, home sales are still down by more than a third from the homebuyer tax credit induced rebound earlier this year and down by 40 percent since the peak in 2005.

“Put in that context, it would be more than a stretch to characterize this latest uptick as a meaningful recovery,” he said. “The more appropriate description is that housing is still bouncing along the bottom.”

Still, Lawrence Yun, NAR’s chief economist, says the numbers bode well heading into the new year. “Continuing gains in home sales are encouraging, and the positive impact of steady job creation will more than trump some negative impact from a modest rise in mortgage interest rates, which remain historically favorable,” Yun said.

Yun added that homebuyers are responding to improved affordability conditions. “The relationship recently between mortgage interest rates, home prices, and family income has been the most favorable on record for buying a home since we started measuring in 1970,” he said. “Therefore, the market is recovering and we should trend up to a healthy, sustainable level in 2011.”

NAR’s study shows that the median price for existing-homes sold nationwide in November was $170,600, up 0.4 percent from November 2009.

Foreclosures, which accounted for two-thirds of the distressed sales share last month, sold at a median discount of 15 percent, while short sales were discounted 10 percent in comparison with traditional home sales, according to NAR.

A parallel NAR practitioner survey shows first-time buyers purchased 32 percent of homes in November, the same as in October, but well below their 51 percent share in November 2009 from the surge to beat the initial deadline for the first-time buyer tax credit.

Investors accounted for 19 percent of transactions in November, also unchanged from October, but are up from 12 percent in November 2009. The balance of sales were to repeat buyers.

All-cash sales were at 31 percent in November, up from 29 percent in October and 19 percent a year ago. Yun says the elevated level of all-cash transactions continues to reflect tight credit market conditions.

--------------------

Article by Carrie Bay - http://www.dsnews.com/

NEW MORTGAGE APPLICATIONS FALL AS RATES RISE FOR THE FIFTH STRAIGHT WEEK

2010-12-16T08:33:00.001-05:00

Data released by the Mortgage Bankers Association (MBA) Wednesday shows that consumer demand for mortgages waned last week as interest rates soared to their highest level in nearly seven months.

MBA’s index of total mortgage application volume slipped 2.3 percent for the week ending December 10, 2010, when compared to the previous week.

The organization’s index of new applications for home purchases plummeted 5.0 percent from one week earlier, breaking a three-week streak of increases, but MBA says its purchase index remains near levels last seen in early May.

With mortgage interest rates up more than half a percentage point over the past month, it’s no surprise that refinance activity has also declined sharply. MBA’s refinance index decreased 0.7 percent last week, marking the fifth straight weekly decline for the trade group’s gauge.
MBA reported that the average contract interest rate for 30-year fixed-rate mortgages increased to 4.84 percent for the week ending December 10, up from 4.66 percent the week before – nearly a 20 basis point jump in a mere seven days. This is the highest 30-year fixed-rate observed in the group’s weekly survey since the beginning of May

The average contract interest rate for 15-year fixed-rate mortgages climbed 23 basis points to 4.21 percent last week, up from 3.98 percent the previous week. It’s the highest 15-year fixed-rate reported by MBA since the beginning of June.

“Treasury rates increased last week following news that lower tax rates could be extended for another two years, boosting growth prospects. With this move, mortgage rates reached their highest level in more than six months,” said Michael Fratantoni, MBA’s VP of research and economics.

The Federal Reserve held fast to its plan to buy up $600 billion in Treasury securities at its monetary policy meeting Tuesday. The strategy is intended to keep Treasury rates low, and in turn also drive down mortgage interest rates. But it has yet to bear out the desired outcome, as Fratantoni explained, because of other economic factors that are having a greater influence on the markets.

Paul Dales, U.S. senior economist for the research firm Capital Economics, says it is too soon to judge whether the Fed’s latest round of capital infusion, dubbed QE2, has been a success or a failure.

“[I]n recent weeks the economy has picked up momentum. And … the proposed second fiscal stimulus, if signed into law will surely put less of the burden to boost the economy on the Fed,” Dales said.

“These two developments explain why the markets are not convinced that the Fed will complete the $600bn of Treasury purchases announced at the last meeting in early

November,” Dales continued. “Indeed, Treasury yields continued to rise after [Tuesday’s policy meeting]. But the Fed was never going to perform a u-turn and shrink the size of QE2 just six weeks after announcing it.”

---------------------

Article written by Carrie Bay - DSNews.com

MORTGAGE RATES ON THE MOVE AGAIN........UPWARD!

2010-12-03T09:20:00.001-05:00

They’ve been sitting at half-century lows for months now, but that trend appears to have snapped as mortgage interest rates across the board rose again this week. One industry report released Thursday points out that long-term rates have been heading upward for three weeks straight; another says they’ve now hit a four-month high.

Freddie Mac’s latest survey puts the average rate for 30-year fixed-rate mortgages at 4.46 percent (0.8 point) for the week ending December 2. That’s up from last week’s average of 4.40 percent. Last year at this time, 30-year fixed mortgages were averaging 4.71 percent, according to the GSE.

Freddie’s results are based on data gathered from about 125 lenders nationwide, including thrifts, credit unions, commercial banks, and mortgage lending companies. Rates offered for 15-year fixed mortgages averaged 3.81 percent this week (0.7 point), up from 3.77 percent the week before.

Shorter term mortgage rates also rose in Freddie Mac’s survey. The 5-year adjustable-rate mortgage (ARM) averaged 3.49 percent (0.6 point), up from 3.45 percent last week. The 1-year ARM came in at 3.25 percent (0.6 point), up from 3.23 percent.

Nothaft, VP and chief economist for Freddie Mac, explained that mortgage rates followed bond yields higher this week after newly released economic data suggested the economy may be stronger this quarter than in the third quarter.

A separate study released by Bankrate Thursday called the latest move upward by mortgage rates “notable,” as they hit their highest mark in four months in the company’s survey. Bankrate’s figures are derived from data provided by the top 10 banks and thrifts in the top 10 U.S. markets.

The tracking firm reported that the benchmark conforming 30-year fixed mortgage rate rose to 4.71 percent (0.36 point) this week. That’s up pretty significantly from 4.58 percent reported by the company last week.

The average 15-year fixed mortgage increased from 3.97 percent to 4.07 percent (0.35 point) in Bankrate’s study. The larger jumbo 30-year fixed rate jumped as well, settling at 5.29 percent.

Bankrate also documented a rise in adjustable rate mortgages, with the average 5-year ARM climbing to 3.74 percent and the average 7-year ARM jumping to 4.08 percent.

Bankrate says the November unemployment report due out on Friday could be the catalyst for the next move in mortgage rates, with evidence of solid private-sector job growth fuel for higher rates.

The tracking company’s regular weekly forecast for mortgage rate indicates that we’ll likely see another increase subsequently. Sixty-four percent of the mortgage experts surveyed by Bankrate expect mortgage rates to rise again over the next seven days.

------------------------

Article written by Carrie Bay
http://www.dsnews.com/

J.D. POWER AND ASSOCIATES SURVEY SHOWS BORROWER SATISFACTION DECLINING

2010-11-19T08:41:00.001-05:00

A study released Thursday by J.D. Power and Associates shows that the time from submission of a mortgage application to approval time has increased by more than a week from the time for approval last year.

In 2009 the average time for approval was 20 days. This year the average is 27.5 days.

In addition to this escalation, the time frame for the entire origination process increased from 46.9 days in 2009 to 52.1 days.

Overall customer satisfaction has decreased five points to 734 from 2009’s level of 739. Satisfaction is measured on a 1,000-point scale.

“While the revised Real Estate Settlement Procedures Act (RESPA) guidelines appear to have streamlined and shortened the time from approval to closing, the unintended consequence is that the application to approval time fame has lengthened and become more complicated,” said David Lo, director of financial services at J.D. Power

He continued, “Ultimately, this longer timeline has a negative impact on overall satisfaction, although there are specific best practices that may mitigate the negative perceptions.”

According to the survey, changes in RESPA resulted in a decrease in the length of time from approval to closing, bringing the average to 24.5 from last year’s 26.9 days.

The 2010 U.S. Primary Mortgage Origination Satisfaction Study is based on responses from more than 3,000 consumers who originated new mortgages. The scale measures satisfaction in four areas of the origination process: application and approval process, loan officer/mortgage brother, closing, and contact.

The Westlake Village, California-based company said the practices most appreciated by customers included providing proactive updates on the status of the loan, providing a welcome acknowledgment after an application is submitted, closing on the promised date, and clearly explaining loan options and ensuring that the customer understands.

Quicken Loans was ranked highest on the satisfaction scale with a score of 826.

Borrowers ranked Bank of America, JP Morgan Chase and Citigroup lowest in the survey, giving them scores of 676, 699 and 691, respectively.

Branch Banking & Trust, last year’s highest ranked company, received a score of 767, a 16 point drop from it score of 783 last year.

-----------------------------------------

Article written by Joy Leopold - DSNews.com

LONG-TERM MORTGAGE RATES EDGE HIGHER

2010-10-29T09:47:00.001-04:00

Mortgage rates are still incredibly low by historical standards. They’ve been fluctuating around record lows not seen in more than a half-century for a good many months now. This week was one where that movement was upward, according to industry data released Thursday.

A nationwide survey conducted by Freddie Mac found that 30-year fixed-rate mortgages averaged 4.23 percent (0.8 point) for the week ending October 28. That’s up from last week’s average of 4.21 percent, and the second consecutive time in the past six weeks 30-year rates have risen.

Rates for 15-year fixed mortgages averaged 3.66 percent (0.7 point) this week in Freddie’s study. Last week, the 15-year rate came in at 3.64 percent.

The GSE reported that rates for adjustable-rate mortgage (ARMs), on the other hand, are heading lower. The 5-year ARM averaged 3.41 percent this week (0.6 point), down from last week when it was 3.45 percent. The 5-year ARM has not been lower since Freddie Mac started tracking it in January 2005.

Frank Nothaft, VP and chief economist at Freddie Mac, says the historically low rates are supporting home sales and reducing the excess stock of homes available for sale.

He notes that existing home sales, including condominiums and co-ops, rose for the second consecutive month in September, up almost 18.0 percent over July’s low.

Similarly, sales of new homes had back-to-back increases and were 7.7 percent above July. Nothaft pointed out that the inventory of new homes for sale has either stayed the same or declined every month of this year.

A separate study released by Bankrate Thursday, which is based on data provided by the top 10 banks and thrifts in the top 10 U.S. markets, also showed that mortgage rates jumped after five weeks of record-low readings and returned to levels last seen one month ago.

The tracking company reported that the average rate on the benchmark conforming 30-year fixed mortgage moved up to 4.51 percent (0.33 point) this week from 4.22 percent last week.

The average 15-year fixed mortgage rate climbed to 3.90 percent (0.33 point) in Bankrate’s survey, up from 3.82 percent the week prior, while the larger jumbo 30-year fixed rate reversed last week’s decline, returning to 5.10 percent.

Bankrate says adjustable-rate mortgages were higher also, with the average 5-year ARM rising to 3.67 percent and the average 7-year ARM rebounding to 3.95 percent.

Bankrate noted in its report that even though the Federal Reserve is poised to announce renewed efforts to boost the economy, it doesn’t automatically mean lower mortgage rates.

“Investors tempering their expectations were behind the increase seen this week and if inflation worries increase once specifics of the Fed’s bond-buying are announced, mortgage rates could continue moving higher. Time will tell just what impact the Fed has on mortgage rates and the overall economy,” Bankrate said.

-------------------------------
Article written by Carrie Bay - http://www.dsnews.com/

KINDERHOOK BANK CORP. TO ACQUIRE VALLEY MORTGAGE

2010-10-21T09:09:00.001-04:00

Robert A. Sherwood, President and CEO of Kinderhook Bank Corp. (the “Company”) announced today that the Company has executed a letter of intent to acquire Valley Mortgage Company, Inc., (“Valley Mortgage”) a New York State registered mortgage brokerage firm headquartered in Hudson, New York.

Seth Rapport, President of Valley Mortgage, will continue as President of the company which works with local, regional and national lenders to offer a full range of mortgage products. Founded by Mr. Rapport in 1996, Valley Mortgage Company arranges financing for real estate located throughout New York State. The acquisition is subject to the parties
entering into a definitive purchase agreement, obtaining all regulatory approvals, and other terms and conditions. It is anticipated that the acquisition transaction will be completed in the first quarter of 2011.

“Valley Mortgage Company has grown today to become one of the most respected mortgage companies serving the Hudson Valley and Metropolitan New York areas,” stated Mr. Sherwood. “We are pleased to have Valley Mortgage become part of our company because like Kinderhook Bank, Seth is well known for his emphasis on exceptional customer service and high ethical standards,” Mr. Sherwood added.

Mr. Rapport stated, “Becoming part of Kinderhook Bank Corp. is very exciting for us as I believe this affiliation will favorably impact current and future customers as well as to expand our services and generate growth. I look forward to continuing to serve as President of Valley Mortgage Company well into the future.” Valley Mortgage Company will continue its brokerage operations and expand Kinderhook Bank’s product offering to include programs through Fannie Mae, Freddie Mac, FHA, VA and Rural Housing Services.

Kinderhook Bank Corp. is the parent company of The National Union Bank of Kinderhook, with five branch locations in Columbia and Rensselaer counties, New York and Kleeber Insurance Services, with locations in Valatie and East Greenbush, New York. Kinderhook

ECONOMISTS SAY HOME PRICES HAVE ALREADY HIT BOTTOM

2010-10-13T10:10:00.000-04:00

Home prices in the United States found their floor during the early part of 2010 and are expected to begin trending upward next year, according to a panel of elite economists surveyed by the National Association for Business Economics (NABE) for its October 2010 Outlook.
“The housing recovery is intact, but tepid overall. Home prices have hit bottom,” NABE stated in its report outlining the survey results.

The panel anticipated a 1.5 percent drop in residential home values this year, and that decline has already been registered through the first half of 2010, NABE explained.

The group of economists is projecting gains in home prices of 1.2 percent over the course of 2011, but they warn that the modest increase will not keep up with the broader measures of inflation.

NABE panelists expect any evidence of price weakness post-tax incentive to be temporary. Their assessments of the importance of the government’s recent stimulus measures in the form of tax breaks for homebuyers vary widely. Nearly one-third feel that a persistent relapse will follow the incentives’ expiration, while the remaining two-thirds believe an underlying recovery is in place.

When it comes to the distressed side of the business, it’s become clear that the nation’s high level of unemployment is now one of the primary triggers of default among struggling homeowners. Getting more people back to work is key to a recovery in housing and getting a handle on still-rising delinquency numbers. But NABE’s panel warns that labor market conditions will be slow to improve.

The economists are forecasting monthly payroll gains to average 150,000 or less until the latter half of 2011, at which time gains will improve to a range of 170,000 to 175,000. The unemployment rate is expected to persist at over 9.5 percent through midyear 2011, before easing only slightly to 9.2 percent by the end of next year.

“This will mark the worst post-recession job recovery on record,” NABE said.

NABE panelists trimmed their projections on overall economic growth. Those projections now remain sub-par through year-end, the organization explained.

“This summer’s slowdown has exposed the economy’s sensitivity to wealth losses, the unwinding of debt, and the reductions in economic stimulus,” said Richard Wobbekind, NABE president-elect and associate dean of the Leeds School of Business at the University of Colorado-Boulder. “Confidence in the expansion’s durability is intact, but recent economic weakness has prompted many panelists to scale back expectations for the year ahead.”

The October 2010 NABE Outlook presents the consensus of macroeconomic forecasts from a panel of 46 professional analysts. The group included economists from such firms as Moody’s Analytics, the PMI Group, Fannie Mae, and Goldman Sachs.

©2010 DS News. All Rights Reserved.

-----------------------------

Article written by Carrie Bay - http://www.dsnews.com/

MORTGAGE RATES FALL TO NEW LOWS......AGAIN!

2010-10-01T09:32:00.002-04:00

How low can we go? When it comes to mortgage rates, the floor keeps dropping. Industry reports released Thursday show that interest rates for home loans – already at their lowest marks in more than a half-century – dropped again this week.

Market analysis conducted by Freddie Mac found that the 30-year fixed-rate mortgage (FRM) averaged 4.32 percent (0.8 point) for the week ending September 30, 2010. That’s down from 4.37 percent last week and tied with the all-time low in Freddie’s survey set four weeks ago.

The GSE reported that the 15-year FRM this week averaged a new record low of 3.75 percent (0.7 point). Last week, it came in at 3.82 percent.

The 5-year adjustable-rate mortgage (ARM) dropped to an average of 3.52 percent this week (0.6 point), according to Freddie Mac, also setting a new record low. The 1-year ARM rose slightly to 3.48 percent (0.7 point).

“Confidence in the state of the economy fell among consumers and businesses, which led to a decline in long-term bond yields and brought many mortgage rates to record lows this week,” said Frank Nothaft, Freddie Mac’s VP and chief economist.

Weakening confidence in the economy’s trajectory was evident despite notable improvements in household balance sheets. Nothaft cited a Federal Reserve report, which shows that homeowners have regained $1.0 trillion in home equity as of the second quarter of 2010, after losing more than $7.5 trillion over the three-year period ending in the first quarter of 2009.

A separate weekly study by Bankrate also put mortgage interest rates at record-lows. Bankrates survey is based on data gathered from the top 10 banks and thrifts in the top 10 U.S. markets.

The tracking company reported that rates for conforming 30-year fixed mortgages remained unchanged this week at their 4.5 percent low (0.36 point).

The average 15-year fixed mortgage retreated to 3.94 percent (0.31 point), down from 3.96 percent last week, while the larger jumbo 30-year fixed rate inched lower to 5.16 percent.

Bankrate says adjustable rate mortgages hit new lows also, with the average 5-year ARM decreasing to 3.68 percent and the average 7-year ARM falling to 3.91 percent.

According to Bankrate, mortgage rates remain at record lows, not as a result of poor economic data, but rather in expectation of additional efforts by the Federal Reserve to revive the economy.

“Specifically, investors are counting on the Fed to resume quantitative easing – purchases of government bonds in an effort to drive market interest rates even lower,” the company said in its report. “Investors have been front-running the Fed by buying government debt now, bringing bond yields to ultra-low levels. Mortgage bond investors are pricing for the risk that loans could be refinanced if the Fed’s efforts reduce mortgage rates further.”
-------------------
Article writen by Carrie Bay - DSNews.com

NAR: EXISTING HOME SALES REBOUND 7.6% IN THE USA

2010-09-24T10:27:00.001-04:00

Sales figures for previously owned homes rose in August following a big correction in July, according to data released by the National Association of Realtors (NAR) Thursday. The trade group’s existing-home sales report showed a 7.6 percent increase in transactions during the month, bumping the annualized sales pace to 4.13 million homes.

That’s up from a revised sales pace of 3.84 million the previous month, after sales plunged 27 percent in July – the worst showing for existing-home sales in nearly 15 years.

Sales transactions for pre-owned homes remain 19 percent below the 5.10 million-unit pace recorded a year ago.

The research firm IHS Global Insight said the month-to-month rise was in line with expectations, but called the results “disappointing nonetheless,” noting that housing demand remains weak and mortgage applications to buy homes have been stagnant since collapsing in May.

“We are not expecting worse sales numbers going forward, just a long climb out of a deep hole,” said Patrick Newport, U.S. economist for IHS. Newport says the path to recovery in housing will be through the labor market, and as a result, he’s doesn’t anticipate sales to climb above the 6.0 million mark – a number he says would accompany “normal conditions” – until 2013.

According to NAR’s report, the sales share of distressed homes rose to 34 percent in August, up from 32 percent the month prior. First-time buyers purchased 31 percent of homes last month, compared to 38 percent in July.

NAR says the national median existing-home price was $178,600 in August, up 0.8 percent from August 2009.

The analysts at Capital Economics contend that the current weakness of demand relative to the high level of supply suggests home prices still have further to fall.

The August rebound did pare housing inventory down to 3.98 million existing homes available for sale, resulting in the months’ supply of unsold properties falling from 12.5 to 11.6.

But as Paul Dales, U.S. economist for Capital Economics, explained, that is still well above the 6-7 months that has historically been consistent with stable prices.

----------------------------

Article written by Carrie Bay - DSNews.com

MORTGAGE DEFAULT RISK DIMINISHES AS CONSUMER CREDIT CONDITIONS IMPROVE

2010-09-23T09:16:00.002-04:00

The credit bureau TransUnion says U.S. consumers are less of a credit risk now than they were in 2009 and earlier this year.

The Chicago-based agency’s proprietary Credit Risk Index (CRI) declined 117 basis points, or 0.9 percent, between the first and second quarters of 2010. The drop was more than double the decrease observed between the fourth quarter of 2009 and the first quarter of 2010.

TransUnion says this decrease is the second decline in as many quarters and is a harbinger of the moderate improvements in delinquency rates reported by the company in August across all credit sectors.

The CRI is now 5 percent lower than it was a year ago. The index “is a stronger leading indicator of consumer credit risk and is much more highly correlated to consumer delinquency rates than the average credit score,” according to TransUnion.

At the end of the second quarter in 2010, 46 states and the District of Columbia experienced declines in their respective credit risk indices, “signaling that a broad improvement in consumer credit conditions is finally taking root,” TransUnion said. Only Alaska, Hawaii, Idaho, and North Carolina experienced increases in their consumer credit risk readings.

“We are optimistic that, short term, the Credit Risk Index will to continue to experience small declines. Consumer delinquency rates should continue to decrease as employment conditions improve,” said Chet Wiermanski, global chief scientist at TransUnion.

“Long term, we are encouraged by the great lengths consumers have taken to reduce their debt burden, which possibly represents a fundamental paradigm shift in consumer behavior,” Wiermanski added. “After experiencing the most difficult economic times in two generations, it appears that consumers are relearning how to manage their existing credit obligations and live within their means.”

TransUnion also analyzed how university cities fared compared to other large cities in their state in terms of consumer credit risk. The company found that cities that were home to a university were 12.5 percent less risky than their same-state counterparts without a college campus.

For mortgages, the average 90-day delinquency rate for university cities was 5 percent, compared to 8.9 percent for the largest cities.

Wiermanski says a relatively stable employment picture and a captive consumer base with disposable income are two reasons driving these results.

TransUnion’s analysis sourced from a database of 27 million randomly sampled consumer records.

-----------------------

Article written by Carrie Bay - DSNews.com

MARKET FORECASTS FOR HOME PRICES CONTINUE TO DARKEN

2010-09-14T13:16:00.001-04:00

Home prices have hit upon relatively stable ground in recent months – a welcome reprieve from the freefall days most markets had grown acutely accustomed to after the reverberating bursting of the housing bubble. But that stability may be fleeting. If you heed the words of the seers keeping a close watch over industry trends and movements in price lines, you should be bracing for another decline in property values, as the elusive floor drops a little lower.

The analysts at Moody’s Investors Service say they don’t expect the national house price index to find its bottom until the early half of next year. And even then, they warn that price appreciation will remain weak for at least the next couple of years.

Fiserv expects to see prices bounce up and down around their lows for the next two to three years. A recent forecast from the company paints a picture of particularly steep declines in markets that have been hit the hardest by the housing downturn.

In Nevada, Fiserv projects that by the first quarter of 2011, home prices will be 11.1 percent below Q1 2010 levels. In Arizona the company predicts an annual decline of 10.8 percent by March of next year, and Florida is likely to see prices fall another 8.8 percent.

Barclays Capital says it expects depressed readings in home prices for the next five to ten months, with national property value gauges ultimately bottoming 7 percent from current levels in the first quarter of 2011.

MacroMarkets LLC recently announced the results of its August 2010 Home Price Expectations Survey, compiled from 107 responses of a diverse group of economists, real estate experts, and investment and market strategists.

“For the third consecutive month, the consensus from the experts indicates weakened overall confidence in the U.S. housing recovery,” said Robert Shiller, MacroMarkets co-founder and namesake of the closely-watched Case-Shiller Home Price Index.

Shiller says only 21 percent of the surveyed panelists now predict positive growth in home prices nationwide for 2010. The majority of the respondents expect annual U.S. home price appreciation will not exceed 3.58 percent until 2014.

“Any real improvement in the nation’s economic health will depend on improvement in home prices,” according to Michael Feder, president and CEO of the real estate data and analytics firm Radar Logic.

“Weakening housing demand, coupled with a large and growing supply of unsold homes, make it likely that housing prices will fall by the end of the year, perhaps to new lows,” Feder added. “If home prices make another large move downward, the odds of a second U.S. economic downturn likely will increase.”

------------------------
Article written by Carrie Bay - http://www.dsnews.com/

FIVE MISTAKES HOME BUYERS MAKE

2010-09-10T08:24:00.001-04:00

Home buyers are an increasingly rare breed these days. Many who were eager to buy a house raced to take advantage of federal homebuyer tax credits. When those government perks expired in April, home sales essentially went into deep freeze, plummeting to levels not seen in more than a decade, according to the latest numbers from the National Association of Realtors.

Still, the Realtors project that nearly 4 million existing homes will sell in 2010. First-time buyers, without the burden of a home to sell, could benefit from the foul market–and the record low mortgage rates.

But woe to the overconfident buyer. Here are five common missteps that first-time home buyers make.

1. SNUBBING THE REAL ESTATE AGENT

With so many websites offering a mass of data on listings, who needs an agent? Most people, actually. Finding a house and figuring out comps–the price of comparable homes on the market–is the easy part. Managing the nuances of offers, inspections, financing and all the other pivotal steps to buying a home is where many new buyers tend to get tripped up, says Shii Ann Huang, an associate broker with The Corcoran Group in New York.

When you hire an agent to act as your "buyer's representative," she's obligated to put your interests first, even if her commission is paid by the seller and based on the sale price. Skeptical? That's all the more reason to find an agent on your terms. Ask friends and acquaintances for referrals and interview two or three candidates before deciding.

But don't let the agent find you. When Viviane Ugalde and her husband, both physicians, bought their first home in Sacramento nearly two decades ago they made this mistake. "We stumbled onto an agent when she saw us peeking in the windows of an empty house for sale," Ms. Ugalde recalls. The agent, who happened to live on the same block, came out of her house (wearing pajamas), offered to show the couple around the neighborhood, and ultimately helped them find a house. Then the agent, who was new to real estate, neglected to show up for the closing. "It was scary and confusing signing what seemed like a thousand pages," says Ms. Ugalde.

2. GUESSTIMATING HOW N=MUCH YOU CAN AFFORD

Many buyers mistakenly take a do-it-yourself approach to financing. They use online calculators to estimate how much house they can afford, dive into the house hunt and then get a dose of cold water when lenders refuse to qualify them for that amount. "The process is so different than it was four or five years ago," says Diann Patton, a broker with Coldwell Banker in Grass Valley, Calif. Not only are lenders reading loan applications closely, she says, they're verifying employment and running credit checks multiple times during the process.

Make a date with a mortgage broker or banker before you get serious about your search, says Ms. Patton. Remember, too, that the costs of buying and owning a home go well beyond the sticker price. While online calculators do take into account property tax and insurance, it's up to you to account for maintenance costs, moving fees and association dues.
3. LETTING CHARM CLOUD YOUR JUDGEMENT

No one will fault you for falling hard for a charming older home. But, unless the house has been painstakingly remodeled or you're prepared to pay for repairs and upgrades, an old house can quickly lose its allure. Last year Alison Koop, a public relations manager for the University of Washington, came dangerously close to saying "I do" to a seemingly fabulous mid-century home in northeastern Seattle. Ms. Koop was so smitten with the big windows and vaulted ceilings in the living room that she neglected to notice the exposed wires, shoddy roof and other structural problems. Any delusions Ms. Koop had were laid to rest in the guest bathroom. "When the inspector turned the faucet on," she says, "the spigot fell off, hitting the floor of the tub with an exclamatory thunk."

If you're considering an old home, don't let the inspection be your last line of defense, says Jay Papasan, vice president of publishing at Keller Williams Realty. "Negotiate a long due diligence period," he says. That gives you time to get real estimates from contractors and back out if need be.

Of course, new homes aren't without their drawbacks. Recently, many newly built homes experienced serious problems with Chinese-made drywall, for example. Proceed with care whatever the home's age.

4. FOCUSING ON THE HOUSE, NOT THE NEIGHBORHOOD
In hindsight, many buyers say they wish they'd taken their due diligence a few steps further to really get to know all the perks, quirks and hassles of living in a particular place. You can always fix up the house, but there's no easy remedy for annoying neighbors, oppressive homeowner association rules and marathon commutes. When Laurie Tarkan and her husband bought their first home in 2001 they were so infatuated with the circa-1924 three-bedroom cottage that–in addition to brushing over some of the headaches of an old house –they didn't give a whole lot of thought to its somewhat out-of-the-way location about a mile from downtown Maplewood, N.J., a popular New York suburb. "As a first-time buyer you're not aware of all the things you should think about that aren't about the house," says Ms. Tarkan, who after living in New York City for 17 years, still hasn't gotten used to driving everywhere.

Spend as much time as you can in your future neighborhood, ideally on different days and times. Eat in the restaurants, drop in a yoga class, test drive your commute.

5. MAKING ARBITRARY OFFERS

With housing inventory running high and sales at record lows, in most markets, there's no shortage of houses for sale and sellers desperate to get out from under them–all the more reason to hold out for the right house and the right price. But when you find that perfect house, don't assume you can lob a lowball offer or make unreasonable demands. Even in hard-hit markets, nice houses in desirable neighborhoods are fetching multiple bids.

If the house has been on the market for months, you probably don't need to worry about other buyers lining up behind you. Make an offer based on recent sales for comparable homes, foreclosure activity and market trends, and don't be afraid to start the bidding low. If the house is fresh on the market (or recently foreclosed) and other buyers are circling the block, put your best foot forward but don't get suckered into a bidding war.

--------------------------------------

Article written by Sarah Max - Wall Street Journal - Real Estate

FHA PPROGRAM FOR UNDERWATER BORROWERS NOW UNDERWAY

2010-09-08T11:03:00.001-04:00

Tuesday marked the start of a new, targeted government housing program designed to help the millions of Americans who, in the wake of plummeting property values, owe more on the mortgage than their home is worth.

The government’s mortgage insurer, the Federal Housing Administration, is at the center of the new program for underwater homeowners. FHA is now offering certain non-FHA borrowers with negative equity, who are current on their existing mortgage, the opportunity to refinance into a new FHA-insured loan, as long as their existing lien holders agree to write off at least 10 percent of the unpaid principal balance on the first mortgage.

Officials have suggested that between 500,000 and 1.5 million underwater borrowers could receive a new, more sustainable mortgage through the FHA Short Refinance oprion.

But analysts say because participation in the program is voluntary and requires the consent of all lien holders, they expect significantly smaller results. Barclays Capital estimates that the new FHA refinancing program will only reach 200,000 to 300,000 homeowners.

The latest data from CoreLogic shows that some 11 million borrowers were in a negative equity position as of the end of June. That equates to 23 percent of all U.S. residential properties with a mortgage.

The FHA Short Refinance option, originally announced in March, is aimed at providing some mortgage relief to homeowners whose biggest investment – their home – has left them with a huge equity gap because their local markets saw declines in home values.

Homeowner advocates and even government watchdog groups have been imploring the administration to tackle the underwater mortgage issue for some time now. Studies have shown that severe negative equity can be a strong default trigger. By getting in front of the problem early with a solution, while these homeowners are still current, the administration is hoping to fend off a new round of foreclosures.

To facilitate the refinancing of new FHA-insured loans under the program, the U.S. Department of Treasury says it will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens.

The government has earmarked $14 billion in Troubled Asset Relief Program (TARP) funds to support the program.

-----------------------------------

Article written by Carrie Bay - http://www.dsnews.com/

NAR's INDEX OF PENDING HOME SALES UNEXPECTEDLY CLIMBS

2010-09-03T09:09:00.001-04:00

Following a sharp drop in the months immediately after the homebuyer tax credit expired, the National Association of Realtors’ (NAR) gauge for future sales of previously owned homes has risen.

NAR reported Thursday that its Pending Home Sales Index, a forward-looking indicator based on contracts signed in July, increased 5.2 percent from last month’s reading. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

The index remains 19 percent below measurements recorded a year ago, but the month-to-month jump was an unexpected development, and some analysts are saying it may be a sign that the post-tax credit lull in home sales will soon come to an end. A group of economists surveyed by Bloomberg were expecting the pending sales index to fall by 1 percent.

The national index had fallen 29.9 percent based on contract signings in May – closely reflected in July’s 27 percent drop in actual existing-home sales. It lost another 2.8 percent after NAR’s analysis of June’s contracts, likely a good indicator of where August’s actual sales will end up. The latest 5.2 percent increase could be a telling sign of September’s sales numbers.

Despite the bit of good news his organization offered the markets with its Thursday report, Lawrence Yun, NAR’s chief economist, cautioned that the recovery ahead will be a slow and lengthy one.

“Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” Yun said. “But the recovery looks to be a long process. Homebuyers over the past year got a great deal [but] for those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”

Pending home sales are currently up in every region of the country. The Northeast saw an increase of 6.3 percent; the Midwest’s index rose 4.1 percent; the South posted a 1.2 percent gain; and the West was the big leader, with an 11.6 percent increase.

Paul Dales, U.S. economist for the research firm Capital Economics, says though, that the key point is that economic conditions are not strong enough to generate a decent housing recovery.

“Processing delays mean that the relationship between pending home sales and actual existing home sales has loosened in recent months,” Dales said. “But at face value, the former is now consistent with a rise in existing sales from July’s record low of 3.83m to around 4.40m in August.”

Dales added, “That would be a spectacular-sounding 15 percent month-to-month jump, but it would not even reverse the falls seen after the expiry of the tax credit and would leave sales at levels not sustained since 1997.”

------------------------------
Article written by Carrie Bay - http://www.dsnews.com/

THE TOP FIVE CONTRACTOR SCAMS AND HOW TO AVOID THEM

2010-08-25T12:00:00.003-04:00

Protect yourself against unscrupulous contractors by learning about the warning signs of these common home-improvement scams.

Crooks go where the money is. So with Americans spending as much as $22 billion a year on construction projects, it’s no surprise that home improvement has become a favorite target for fraud artists. Some of these shady characters use amazingly well-polished hoaxes that are tricky to spot until it’s too late.

The vast majority of contractors are honest, hardworking professionals. Protecting yourself against the few bad apples requires checking references, having a solid contract, and being alert to the warning signs of these top five contractor scams.

SCAM 1: I NEED THE MONEY UPFRONT

This is the most common ruse reported to the Better Business Bureau, says Erin Dufner, vice president of the organization’s Austin, Texas, office. Your contractor explains that because he has to order materials and rent earthmoving equipment to get the job started, he needs, say, 30% to 50% of the project price up front. Once you’ve forked over the dough, one of two things happens: He disappears on you, or he starts doing slapdash work knowing that you can’t really fire him because he’s sitting on thousands of your dollars.

How to protect yourself: Never prepay more than $1,000 or 10% of the job total, whichever is less. That’s the legal maximum in some states, and enough to establish that you’re a serious customer so the contractor can work you into his schedule—the only valid purpose of an advance payment. As to the materials and backhoe rentals, if he’s a professional in good standing, his suppliers will provide them on credit.

SCAM 2: TAKE MY WORD FOR IT

When you first meet with the contractor, he’s very agreeable about doing everything exactly to your specifications and even suggests his own extra touches and upgrades. Some of the details don’t make it into the contract, but you figure it doesn’t matter because you had such a clear verbal understanding. Pretty soon, though, you notice that the extras you’d discussed aren’t being built. When you confront the contractor, he tells you that he didn’t include those features in his price, so you’ll have to live without them or pony up additional money to redo the work.

How to protect yourself: Unfortunately, you have no legal recourse because you signed a contract that didn’t include all the details. Next time, make sure everything you’ve agreed on is written into the project description. Add any items that are missing, put your initials next to each addition, and have the contractor initial it, too—all before you sign.

SCAM 3: I DON'T NEED TO GET A PERMIT

You’re legally required to get a building permit for any significant construction project. That allows building officials to visit the site periodically to confirm that the work meets safety codes. On small interior jobs, an unlicensed contractor may try to skirt the rule by telling you that authorities won’t notice. On large jobs that can’t be hidden, the contractor may try another strategy and ask you to apply for a homeowner’s permit, an option available to do-it-yourselfers.

But taking out your own permit for a contractor job means lying to authorities about who’s doing the work. And it makes you responsible for monitoring all the inspections, explaining to the contractor what changes the inspector wants, and getting him to make them—since the contractor doesn’t answer to the inspector, you do.

How to protect yourself: Always demand that the contractor get a building permit. Yes, it informs the local tax assessor about your upgrade, but it weeds out unlicensed contractors and gives you the added protection of an independent assessment of the work, says Tampa, Florida, attorney George Meyer, chair-elect of the American Bar Association’s Forum on the Construction Industry.

SCAM 4: WE RAN INTO UNFORSEEN PROBLEMS

The job is already under way, perhaps even complete, when this one hits. Suddenly your contractor informs you that the agreed-upon price has skyrocketed. He blames the discovery of structural problems, like a missing beam or termite damage, or design changes that you made after the job began.

The additional fees might very well be legit, but some unscrupulous contractors bid jobs low to get the work and then find excuses to jack up the price later. If you’re unsure whether your contractor is telling the truth about structural problems, you can get an impartial opinion from a home inspector, the local branch of the National Association of Home Builders, or even your local building department.

How to protect yourself: Before signing the contract, make sure it includes a procedure for change orders, which are mini-contracts containing a work description and a fixed price, for anything that gets added to the job in progress. The extra work, whether it’s related to unforeseen building issues or homeowner whims, can proceed only after the change order is signed by both homeowner and contractor.

SCAM 5: I HAVE EXTRA MATERIALS I CAN SELL YOU CHEAP

This hoax is usually run by driveway paving companies, whose materials—hot-top asphalt and concrete—can’t be returned to the supplier. So the crew pulls up to your house with a load of leftover product and quotes a great price to resurface your driveway on the spot. Even assuming they really are giving you a bargain (by no means a sure thing), taking them up on the offer is risky. You have no idea who they are or whether they’ll do the job right. And if the driveway starts cracking next year, you can be sure that you won’t be able to find this bunch again.

How to protect yourself: Never hire a contractor on the spot, whether it’s a driveway paver, an emergency repairman who shows up after a major storm, or a landscaper with surplus plantings. Take your time to check contractors out to make sure they have a good reputation and do quality work.

All of these situations can be difficult to resolve once you’re a victim. But a little up-front effort now can keep you from throwing good money after bad later on.

--------------------------------

Article written by Oliver Marks - HouseLogic.com

A former carpenter and newspaper reporter, Oliver Marks has been writing about home improvements for 16 years. He’s currently restoring his second fixer-upper with a mix of big hired projects and small do-it-himself jobs.

HOME SALES PLUNGE 27 PERCENT TO LOWEST IN 15 YEARS

2010-08-24T10:49:00.001-04:00

WASHINGTON -- Sales of previously occupied homes plunged last month to the lowest level in 15 years, despite the lowest mortgage rates in decades and bargain prices in many areas.

July's sales fell by more than 27 percent to a seasonally adjusted annual rate of 3.83 million, the National Association of Realtors said Tuesday. It was the largest monthly drop on records dating back to 1968, and sharp declines were recorded in all regions of the country.

Sales were particularly weak among homes priced in the lower to middle ranges. For example, in the Midwest, homes priced between $100,000 and $250,000 tumbled nearly 47 percent.

As sales have slowed, the inventory of unsold homes on the market grew to nearly 4 million in July. That's a 12.5 month supply at the current sales pace, the highest level in more than a decade. It compares with a healthy level of about six months.

One reason the market is hurting is that buyers and sellers are in a standoff over prices. Many sellers are reluctant to lower their prices. And buyers are hesitating because they think home prices haven't bottomed out.

"It really is a self-fulfilling prophecy," said Aaron Zapata, a real estate agent in Brea, Calif. "If all buyers perceive that home prices are coming down, then they will stop making offers - and home prices will come down."

The housing market is also being hampered by the weakening economic recovery. Unemployment remains stuck at 9.5 percent and many potential buyers worry they might not have a job to pay the mortgage.

Prices have fallen in part because foreclosures are running about 10 times higher than before the housing bust. Though the average rate for a 30-year fixed mortgage has sunk to 4.42 percent, many people can't qualify because banks have tightened their lending standards.

Home sales picked up in the spring when the government was offering tax credits. But the tax credits expired on April 30 and the market has been hobbled since.

The drop in July's sales was led by 35 percent plunge in the Midwest. Sales were down 30 percent in the Northeast, 25 percent in the West and 23 percent in the South.

The median sale price was $182,600, up 0.7 percent from a year ago, but down 0.2 percent from June.
-------------

This article was written by Alan Zibel - Associated press

HOUSING MARKET CONTINUES TO SEE FIRST TIME HOME BUYER EXODUS

2010-08-24T09:34:00.001-04:00

First-time homebuyers continued to desert the housing market in July, according to a new industry study released Monday.

Data compiled by Campbell Surveys and Inside Mortgage Finance, shows that first-time homebuyers accounted for only 39.1 percent of the home purchase market last month. That’s down from a peak of 48.2 percent as recently as March and the lowest level seen in at least a year.

“The end of the tax credit has clearly had an effect,” said Thomas Popik, research director for Campbell Surveys. “First-time homebuyer participation is continuing to drop.”

Popik’s research team says the share of first-time homebuyer activity could fall to as low as 30-35 percent of the market by the fall months.

With homeowners continuing to fall behind on their mortgages, and more distressed properties coming onto the market, Popik says first-time homebuyers serve the function of soaking up this excess inventory.

In contrast, purchases by current homeowners have little positive effect on the housing inventory, because they usually sell a house at the same time they are buying another.

Short sales remain one of the few bright spots in the residential housing market. Time-on-market for short sales continued to decline, from an average of 20.5 weeks in February to 15.8 weeks in July, according to Campbell Surveys. First-time homebuyers made up a healthy 46.4 percent of short sale purchasers last month.

Campbell polls more than 3,000 real estate agents nationwide each month to evaluate trends in home sales and mortgage usage patterns.

The company says while fewer first-time homebuyers in the housing market will likely put downward pressure on home prices in the late summer and fall, in the near-term, real estate agents are reporting stable prices overall for the month of July and rising prices for non-distressed properties.

One real estate agent in Florida predicted, “Non-distressed property pricing is rising too quickly. Anticipated REOs coming on the market will impact this pricing by the end of September.”

Another agent in Iowa commented, “Once the ‘free’ money [from the federal tax credit] was over, the market began to die. The sales that would have normally taken place over the summer took place in March and April to get the money. The residential market is dying-prices are gradually falling.”

---------------------

This article was written by Carrie Bay - http://www.dsnews.com/

LET THE AMERICAN HOUSING MARKET NORMALIZE

2010-08-23T17:07:00.001-04:00

Recently there have been some encouraging signs that Congress is finally willing to admit what should have been evident two years ago. Even after a $150 billion bailout, Fannie Mae and Freddie Mac are still bankrupt and should be abolished. Indeed Rep. Barney Frank, a longtime champion of Fannie and Freddie has made a few statements alluding to this and I have signed on to a letter asking him to clarify his remarks and hold hearings on this topic. There seems to be a growing consensus in favor of abolishing Fannie and Freddie. This is the good news.

The bad news is that instead of simply returning to the free market, Fannie and Freddie will probably be replaced with something equally damaging, and at this point we can only guess what that will be. One possibility is that instead of these two giant Government Sponsored Enterprises (GSEs) the government will deputize thousands of smaller banks to do the same thing – that is to securitize mortgages with taxpayer guarantees to encourage lending that otherwise would not happen. In other words, there will be a myriad of smaller Fannies and Freddies, and government involvement will reach even deeper into the financial sector.

Fannie and Freddie, and thus the taxpayer, has an alarming $5 trillion exposure to the mortgage market. To some, spreading out this risk might seem tempting, and a smart thing to do. But the fact remains that if a bank expects to lose money on a loan, so will the taxpayers. Playing around with structures and definitions will still not deal with the root problem – government meddling in the housing market, playing fast and loose with our tax dollars, and central planning by the Federal Reserve.

Banks have complex risk assessment strategies in place that help them forecast if a particular loan will make them any money or not. If they expect to make money, they will approve the loan. If they have doubts, sometimes they will ask for a co-signer to improve their odds. You might do this willingly for a friend or a relative if you didn’t mind losing some money on their behalf, but current government policies essentially force taxpayers to become cosigners for risky borrowers that are complete strangers, who the banks have already determined to be bad risks. Taxpayers have no choice in the matter because politicians decided a few decades ago that dangling homeownership in front of more people seemed like a good way to garner votes.

That was sold to voters as a compassionate gesture to the poor and beneficial to society as a whole. After all, how could giving more Americans an ownership stake in society be bad? The combined policies of loose credit and government backing increased the demand for housing and drove prices sky high. When the housing market heated up to the breaking point everything came crashing down. Those suddenly facing foreclosure saw the reality of government compassion. Truly, when government offers you a gift, you should eye it with great suspicion.

Another tragedy is that many job seekers are now tethered to their locations because of upside down loan obligations. It takes a lot of effort with their bank and damage to their credit scores to figure out how to get out and move to a place where there are jobs. Will the government now be seeking ways to subsidize renters in some way because of this lack of mobility? Some think so.

My hope is that for the long term stability and health of the economy, the government will extricate itself from the market altogether and let it normalize. My fear is that in its usual misguided efforts at solving one crisis, it will create a thousand others.

-----------

Article written by Mr. Ron Paul - Congressman from Texas

NY BANKING DEPARTMENT ISSUES NEW REGULATIONS FOR MORTGAGE SERVICERS

2010-08-23T08:37:00.001-04:00

In its efforts to protect homeowners and avoid another mortgage and foreclosure crisis, the New York State Banking Department has issued new rules regarding the business practices of mortgage loan servicers.

The regulations, which go into effect October 1, implement provisions from 2008’s Mortgage Lending Reform Law to create consumer protections for subprime and high-cost home loans.

Servicers handling New York-based mortgages must abide by these new regulations, which include a duty to avoid preventable foreclosures by pursuing loss mitigation efforts. In addition, if a homeowner is being considered for, or is currently in, a trial or permanent modification, servicers are expected to avoid foreclosure actions.

Daily interactions between servicers and borrowers are also regulated, and lenders are prohibited from employing “unfair or deceptive business practices.”

“New York State is continuing to take important steps toward ensuring that we will not see another mortgage and foreclosure crisis spurred on by irresponsible lenders or by unscrupulous individuals taking advantage of cracks in the system,” said Richard H. Neiman, the state’s superintendent of banks.

Neiman added, “With these business conduct rules for mortgage servicers combined with our existing oversight of mortgage bankers, brokers, and loan originators, we are covering a mortgage throughout its life. From the moment a mortgage is signed in New York State to the time it comes to its end, these loans must now be handled at every step of the process by individuals and companies that are accountable to homeowners.”

Somewhat analogous to servicer guidelines provided by the Home Affordable Modification Program (HAMP), New York’s newly issued requirements are enforceable as law by state and federal regulators.

“We would like for the regulation of mortgage servicers in New York State to serve, not only as a model for other states, but also as a model for national minimum standards that can be enforced across the country,” said Neiman. “Just as we saw with the SAFE Act and the licensing of mortgage loan originators, states can and should serve as examples for lawmaking at the federal level.”

Servicers are also required to have a sufficient staff on hand, written procedures for consumer inquiries and complaints, and methods for ensuring that homeowners do not have to submit multiple copies of required documents.
-----------------------

Article written by Heather Hill Cernoch - http://www.dsnews.com/

SEVENTY TWO ACRE FARM IN COPAKE, NEW YORK

2010-08-18T18:08:00.000-04:00

In cooperation with Fabio Real Estate, we are offering a MAGICAL HOME isolated on a 72 Acre hilltop property in Columbia County overlooking a pastoral hamlet, 2 hours from NYC, with far reaching views of Taconic State Park-lands near Catamount Ski Lodge. Just ewenty minutes from Tanglewood, Stockbridge & Great Barrington, the

Hamptons of the mountains!! Bike on the Harlem Valley "Rail-Trail"."Bash-Bish Falls, "Catamount Ski Lodge," in 5 minutes . A 3 minute ride takes you to the Under-Utilized Taconic State Park with its "Ore Pit Lake" (lifeguards on duty all summer) and toddler wading pool.

Approximately 70 Acres of this property is currently farmed and benefit from an agricultural tax exemption.
The property taxes are under $8k yearly. This 10 year young cedar-clapboard home was built with great care (i.e.. Over-Sized Beams and Insulation, Marvin Windows) and is "Energy Efficient," with a state of the art 2-zone oil hot water central heating system. 3 large Bedrooms and 2-1/2 baths, Living Room with Energy Efficient Fireplace. The Dining Room has Sweeping View to Distant Mountains as does the porch and sun deck. New Kitchen with Island, Mud &

Laundry room. The full basement has high ceilings, Oil hot water heating system with a separate Hot Water heater, Heavy Duty Electric. 2-1/2 Car Attached garage.

SPECIAL FEATURES:

1. Detached Work Shop Building: 4x40, heated, water, sufficiently large to hold 4 large vehicles.

2. Green House: 24x30 with automatic propane heating & cooling system.

3. Tennis Court

For more information and/or pictures, CLICK HERE!

THE YEAR OF THE SHORT SALE: SEVEN TIPS TO FINDING YOUR NEW HOME AT DISCOUNT

2010-08-17T09:54:00.004-04:00

Real estate professionals nationwide are calling 2010 “the year of the short sale,” where homeowners who owe more on their properties than what they are worth sell at deeply discounted prices—with the blessing of their lender.

Here is how to go about successfully buying a short sale:

1. Search for short sale properties

Most short sales are listed by real estate agents. You will find these listings on local websites and in MLS feeds. Some lenders have complained about advertising that identifies the home as a short sale, because the lenders feel it puts them at a disadvantage when it comes to home pricing. This is accurate, as buyers generally offer less when the property is advertised as a short sale.

Read the listing carefully. Agents slip in words that identify the listing as a short sale. Look for the following terms:

• Subject to bank approval

• Pre-foreclosure

• Notice of Default

• Give the bank time to respond

• Preapproved by bank

• Headed for auction

2. Select a real estate professional

Professionals with short sale experience can help you navigate the short sales process in your local market. The buying process is often far more complex—and far longer than typical sales–so a trained ally on your side can make your experience successful.

3. Investigate the mortgage and liens on the property

Here’s where a good short sale real estate agent is worth his or her weight in gold. Uncover how much the mortgage is worth. Find out how much the current owners paid and when. Find out how many liens are on the property. Find out which lender is the primary lien holder. Research comparable sales in the area.

4. Have a home inspection

Short sales are typically sold “as is,” with no contingencies allowed. That short sale is no bargain if you discover—after the closing—that it requires major, unexpected repairs. A thorough home inspection will provide a clear view of the home’s condition, allowing you to make educated decisions on whether or not to purchase.

5. Write a complete offer

Remember, the lender—not the owner selling the property—is calling the shots and decides whether your offer will be accepted, rejected or countered. Helping the lender, whose agents may be overloaded with a glut of short sales, fully understand the financial picture will support your bid. Include the following materials with any short sale offer:

• Cover letter

• Signed owner/borrower short sale purchase agreement

• Seller hardship letter

• Seller payroll stubs

• Two years of seller tax returns

• Market comparables

• HUD-1 closing net sheet

• Repair cost estimate

• Pictures of property

6. Negotiate

Like any real estate transaction, successful negotiation is required to strike a deal. If the lender rejects or counters your written offer, you’ll have to negotiate with the lender by making a higher offer. Be prepared to offer more money to close the deal, or to walk away if it doesn’t make financial sense.

7. Be Patient

Short sales, which have increased in volume and frequency, are overloading some lenders. Be aware that processing and decision-making times for some lenders can be quite long—up to a year or more. Decide if you have flexibility in your timing, and if so, know that you may be waiting for awhile.
----------------------------

Article written by Dan Steward, President of Pillar To Post Home Inspection.
For more information, visit http://www.pillartopost.com/.

EVALUATE YOUR HOUSE FOR BASEMENT FINISHING

2010-08-16T08:37:00.000-04:00

Finishing your basement into a family room, game room, or spare bedroom is a financially sound decision. In addition to increasing the usable (and enjoyable) living space of your home, a finished basement pays back a high percentage of your investment at resale. According to Remodeling Magazine’s annual Cost vs. Value Report, a basement remodeling project returns more than 75% of its original cost.

The cost of finishing your basement into usable living space is about $100 per square foot—generally less expensive than building up or out from your existing footprint. That’s because the basic structure—your home’s foundation—is already in place. Placing occasional-use areas, such as a laundry room, a spare bedroom, or a home theater below grade means that square footage above can remain dedicated to daily uses.

Code Considerations

The first step is to determine if your existing basement meets building codes for habitable space. As defined by the International Residential Code (IRC), a basement living space must have a clear, floor-to-ceiling height of at least 7 feet (6 feet for bathrooms). There are some exceptions for the presence of exposed structural beams, girders, or mechanical system components along the ceiling, but only if they’re spaced at least 4 feet apart and extend no more than 6 inches from the ceiling. Note that local and regional building codes may vary—always check the specific codes in your area.

If your existing basement ceiling height doesn’t meet those specifications, you have two options: The first is to raise your house and build up the foundation around it to gain the ceiling height you need. The other is to lower the floor, which entails removing the existing concrete slab floor, excavating to the desired level, and pouring new concrete footings and a floor slab. Both options require professional and precise engineering, excavation, and structural work that will cost at least $20,000.

Emergency Egress

Assuming, though, that your existing basement meets the IRC definition of “full height,” your next code challenge is to accommodate egress. The IRC dictates that at least one of a habitable basement’s windows or doors to the outside must be large enough to serve as an emergency point of egress (or exit, as well as an emergency rescue access) in addition to the staircase to and from the home’s main level.

If you’re planning a basement retreat to include a bedroom (what code calls a “sleeping” room), that room and all other sleeping rooms also must have their own point of egress, in addition to the one required for a general “living” space, such as a rec room or home office.

Each egress opening must be at least 5.7 sq. ft. with the windowsill no more than 44 inches above the floor, among other requirements that allow safe passage to the outside in the case of an emergency.

If you have a walkout basement, egress shouldn’t be an issue. Otherwise, you’ll have to build an egress. Most basement walls are built using poured concrete or masonry blocks, which can be cut (although not as easily as wood-framed walls) to create openings for egress windows or doors.

A Proper Staircase

In addition, the IRC regulates the specifications of the staircase from your home’s main level to the basement. Requirements include a handrail and stairs with proper width, tread, and riser dimensions. Also, there must be at least 6 ft. 8 inches of headroom at every point along the staircase.

It may be that you simply need to add a handrail—perhaps with a balustrade if the staircase is open to the basement instead of encased in a wall structure. If the stairway isn’t wide enough (at least 36 inches) or the steps aren’t to code, you may have to rebuild them, an extra cost of about $2,000.

Make sure your contractor confirms or considers code compliance for ceiling height, egress, and the staircase in your project budget to avoid potential conflicts, delays, and additional costs.

Checking for Moisture Problems

Arguably the biggest problem with basements is moisture and water infiltration. If you have seen water or moisture on your basement walls or floor, or signs of efflorescence or mold as a result of long-term dampness, you’ll need to solve that problem before you go any further. In addition to damaging finishes and eroding your home’s structure, unchecked moisture and water may cause mold and mildew growth that can adversely affect your health.

Depending on the severity of the water infiltration, and your available budget for a basement retreat, you have several options for addressing moisture problems. The best solution is to determine and solve the root cause, which is usually hydrostatic pressure from water in the surrounding soil pushing moisture through the basement walls or floor.

In that case, it’s best to excavate around the perimeter of your home’s foundation and install a drainage system and waterproofing membrane to relieve hydrostatic pressure against the structure and effectively block water from getting through the walls—a professional job that can cost $5,000 or more.

If that’s too far out of your budget, and the moisture issue is relatively minor, you can cover all cracks and joints with a 100% acrylic elastomeric sealant and apply brush-on coatings to the inside poured concrete or masonry walls and floor surfaces, a DIY project that might cost about $1,700 for a full-size basement.

If there’s a potential for flooding in your basement, think twice about turning the space into a living area. Even a minor flood can ruin flooring and finishes, leading to expensive repairs.

Your best defense against minor flooding is a sump pump. A sump pump automatically engages in the event of a flood and is about a $1,400 investment with professional installation. Because sump pumps run on a dedicate electrical circuit from the service panel, you might also consider a battery-operated backup pump (around $300) to engage in the event of a power outage, such as during a severe storm.

Heating and Cooling your Remodeled Basement

Your next task is to extend or supplement your home’s heating, cooling, and ventilation systems to serve the below-grade spaces. Those systems also requires code compliance for occupant health and safety (such as adequate venting of furnace combustion gasses), though typically nothing out of the ordinary or restricted by most jurisdictions.

With your contractor, make sure that your existing HVAC system can adequately keep your additional living space comfortable and properly ventilated. Sizing a furnace and air conditioner is a calculation generally based on square footage per ton of capacity. However, contractors should consider the home’s insulation values and other high-performance building practices to “right-size” the equipment and balance its performance and cost.

If your existing HVAC setup is not up to the task, you may have to add a secondary system dedicated to your finished basement or replace your existing system with larger-capacity equipment. Installing a vented room air conditioner and heater may add a few thousand dollars to your budget, while a complete HVAC system upgrade can run $10,000 or more.

A usable basement will also need electricity for lighting and other fixtures or finishes, such as an entertainment system or small appliances. Most homes will have adequate capacity in their existing electrical service box for basic needs; if not, a subpanel may be required to bring power to your retreat at a cost of a few hundred dollars.

Adding a Bathroom

The last big (and also potentially expensive) consideration is whether to add a bathroom to your basement retreat. The main issue here is draining wastewater to the existing city sewer or on-site septic system, and venting sewer gasses directly to the outside—just as your other bathrooms do—in compliance with building codes. That’s why a bathroom alone might be a $10,000 line item in your basement retreat budget.

Wastewater drainage typically relies on gravity, so you have to make sure that the waste pipes from your basement bathroom sink, shower or tub, and toilet are designed with enough of a slope (or “fall”) to drain properly and effectively. Achieving proper fall will require the removal and rebuilding of a small section of the basement slab and excavation of the ground underneath. The process involves digging a trench for the drainage pipe to connect the new bathroom to your home’s existing drainage system.

For the toilet, you might also consider a pressure-assisted toilet. A toilet equipped with a pressure valve forces waste through the pipes, rather than relying only on gravity to do the job. Such a unit may allow you to avoid digging into the foundation—consult with a licensed plumber about the feasibility. Expect to pay $150-$800 for a pressurized toilet.

If possible, locate the toilet (and any water-using appliance, such as a clothes washer) against an outside wall. This location will reduce the costs required to drain away waste and vent sewer gasses. Vents typically are required to extend up the wall (either through the structure or along the outside) to a height of at least 8 feet and at least 4 feet from any operable windows.

Converting your basement into finished living area calls for a contractor familiar with the special requirements of basement remodeling. When looking for a contractor, be sure to find one who has experience as a basement remodeler.
------------------------------------

Article witten by Richard Binsacca - HouseLogic.com

Rich Binsacca has been writing about housing and home improvement since 1987. He’s the author of 12 books on various home-related topics, is currently a contributing editor for Builder and EcoHome magazines, and has written articles for such magazines as Remodeling, Home, and Architectural Record. He still has the plans and cost estimate for the addition of a finished basement to a previous house, which required digging out the crawl space to create a full-height room.

TAX DEDUCTIONS FOR VACATION HOMES

2010-08-13T09:16:00.000-04:00

Tax deductions for vacation homes vary greatly depending on how much you use the home and whether you rent it out. A vacation home offers a break from the daily grind, but it can also offer a break from taxes. The IRS allows most owners to lower taxable income by taking tax deductions for vacation homes. What’s deductible depends on a number of factors, especially how often you visit and whether you allow renters.

Don’t limit your notion of a vacation home to a beach cottage or a mountain cabin. Even RVs and boats can count, as long as there are sleeping, cooking, and bathroom facilities. Tax deductions for vacation homes are complex, so consult a tax adviser.

Is your vacation home a vacation home?

If you bought your vacation home exclusively for personal enjoyment, you can generally deduct your mortgage interest and real estate taxes, as you would on a primary residence. Use Schedule A to take the deductions.

The IRS even allows you to rent out your vacation home for up to 14 days a year without paying taxes on the rental income. You might be able to deduct any uninsured casualty losses too, though you can’t write off rental-related expenses. (More on those below.) If the home is rented for more than 14 days, you must claim the income.

Now, if you own what you consider a vacation home but never visit it, or only rent it out, other tax rules apply. Without personal use the home is considered an investment or rental property by the IRS. Time spent checking in on a house or making repairs doesn’t count as personal use.

Tax deductions for rental owners

As an exclusive rental property, you can deduct numerous expenses including taxes, insurance, mortgage interest, utilities, housekeeping, and repairs. Even towels and sheets are deductible. Use Schedule E. You can also write off depreciation, the value lost due to the wear and tear a home experiences over time.

Treat the rental property like a business, says Mark Steber, chief tax officer at Jackson Hewitt Tax Services. Keep detailed records and maintain a separate checking account. Figure you’ll spend a couple of hours a week, on average, over the course of the year managing the property.

To maximize deductions you need to be actively involved in the rental property. That means performing such duties as approving new tenants and coming up with rental terms. You also need to own at least 10% of the property. See IRS Publication 527 for details.

If your adjusted gross income is $100,000 or less you can deduct from your taxable income up to $25,000 in rental losses—that is, the difference between your rental income and your rental expenses. The deduction gradually phases out between an AGI of $100,000 and $150,000. You may be able to carry forward excess losses to future years, or use losses to offset taxable gains when you sell.

Expenses can add up. HOA fees (average: $420), routine maintenance costs ($360), and six months’ worth of utilities ($1,100) alone total nearly $2,000. By deducting $2,000 from taxable income of $100,000, a married couple filing jointly would cut their tax bill by $488.

Mixed use of a vacation home

The tax picture gets more complicated when in the same year you make personal use of your vacation home and rent it out for more than 14 days. Remember, rental income is tax-free only if you rent for 14 days or fewer.

The key to maximizing deductions is keeping annual personal use of your vacation home to fewer than 15 days or 10% of the total rental days, whichever is greater. In that case the vacation home can be treated as a rental, meaning you get the same generous deductions. To avoid going over the 10% limit, essentially you shouldn’t use your vacation home more than one day for every 10 days you rent it.

Make personal use of your vacation home for more than 14 days (or more than 10% of the total rental days), however, and your deductions may be limited. If your rental income is less than your rental expenses, for example, you can’t use the loss to offset other sources of income. There’s a worksheet that determines which expenses you can carry over to the following year.

Another big blow: The IRS requires you to divide expenses between personal use and rental use. Let’s say you have a vacation home you personally use for 25 days and rent for 75 days. That’s 100 total days of use. You can only write off 75% of the expenses as rental expenses—75 rental days divided by 100 total days of use works out to 75%. Some of the personal expenses, such as mortgage interest and real estate taxes, may be deductible on Schedule A.

IRS closes tax loophole

A popular strategy used by owners of vacation homes to avoid paying capital gains on a sale was to convert a vacation home into a primary residence. This was accomplished by living in the home for two years out of the previous five before selling. By doing so a gain on the sale of up to $250,000 for single filers ($500,000 for married filing jointly) was tax-free.

The IRS hasn’t done away with the cap-gains exclusion, but it is closing the loophole for vacation homes. Starting in 2009, you have to pay regular cap-gains taxes on the portion of the gain that’s equivalent to the time you used the home as a vacation home after 2008.

Let’s say on Jan. 1, 2010, you move into a vacation home you bought on Jan. 1, 2002. Two years later you qualify for the cap-gains exclusion and decide to sell. You’d pay regular capital gains on 10% of the gain because in 2009 the home was a vacation home subject to the new IRS rules. The other nine years—2002 to 2008, when the old rules applied, and 2010 to Jan. 1, 2012, when the home was used as a primary residence—qualify for the exclusion.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.

------------------------
Article was written by Donna Fuscaldo, who has written about personal finance for more than 10 years at the Wall Street Journal, Dow Jones Newswires, and Fox Business. She one day hopes to own a vacation home in the Catskills of New York.

30 ACRE FARM FOR SALE IN GALLATIN

2010-08-12T17:50:00.003-04:00

This 30 Acre Farm, currently used for raising horses, is located on a quiet country road in the town of Gallatin, in Columbia County. It consists of a Ranch-style home built in 1951, with 1,344 sqft of living area, oil hot water heat, 3 bedrooms, 1 bath, living room, Eat-in-Kitchen, woodstove in living room. Appliances included: Clothes Washer and Dryer, Stove and Refrigerator. There is also an 8 stall horse barn, an old heffer barn in poor condition, tool shed, garage, paddock areas, fields and a stream. The property is almost all open and cleared and consists of rolling hills. The privacy and views are spectacular.

Click on the link below to see pictures and more information:
http://www.grayrider.com/FarmForSale-Gallatin-30acres.htm

RECORD LOW RATES DO LITTLE TO INCREASE MORTGAGE DEMAND

2010-08-12T17:46:00.001-04:00

Mortgage interest rates have been hovering at their lowest levels in decades, but that’s done little to sway consumers to buy a home or refinance their mortgage to take advantage of the interest savings.

The Mortgage Bankers Association (MBA) reported Wednesday that for the week ending August 6, 2010, mortgage loan application volume remained relatively flat from the already-depressed level of the week before.

Total app volume increased just 0.6 percent from week-to-week. MBA’s refinance index was up 0.6 percent, while the purchase index rose only 0.3 percent.

The poor weekly showing comes despite the fact that mortgage interest rates again hit new record-lows during the period.

MBA reported that the average contract interest rate for 30-year fixed-rate mortgages (FRMs) decreased to 4.57 percent, down from 4.60 percent the week before. This was the lowest 30-year contract rate ever recorded in the history of MBA’s survey.

The average contract interest rate for 15-year FRMs dropped to 3.95 percent from 4.03 percent the previous week. And again, this was the lowest 15-year rate ever recorded by MBA.

Freddie Mac, too, has been tracking mortgage interest rates, and the GSE says we’re currently seeing the lowest conventional fixed-rates available in more than 50 years. So, why aren’t consumers taking advantage of today’s favorable and affordable market conditions?

The economists at Freddie Mac say that under normal circumstances, such low rates would support home purchases and generate substantial refinance activity. For example, they point to 2003, when mortgage rates hit the

then-record low of 5.21 percent. At that time, nearly $4 trillion in new mortgages were originated, with refinances making up 70 percent or roughly $2.7 trillion.

But the nation’s recession and the subprime credit crisis “have left us with anything but normal conditions today,” Freddie’s economists said in commentary released Wednesday. They note that mortgage origination forecasts are well below half of what occurred in 2003.

One reason Freddie gives for the “missing” originations is that more and more people are paying in cash. The National Association of Realtors reports that nearly a quarter of existing-home sales in 2010 have been all-cash transactions. Freddie says similarly, more than 20 percent of borrowers in the past few quarters have been paying down their principal balance with cash during a refinance.

A second reason why originations are lower than one might expect is that home value declines have eroded equity so much in some neighborhoods that the borrower no longer qualifies for a low-loan-to-value refinance, Freddie said.

Second liens are also posing a problem. Freddie’s economists explained that if the second lien is not paid off, then the second lien-holder will be requested to resubordinate their loan to the new (refinanced) first-lien loan. They say some potential borrowers have run into trouble getting second-lien lenders to submit the resubordination paperwork on time, in some cases forcing borrowers to forego refinance altogether.

Freddie says origination volumes are also running at low levels because home sales volumes are low. The GSE’s economists referenced the Conference Board’s Consumer Research Center Survey for July, which includes and index for “plans to buy a home within the next six months.” The index is at its third-lowest level since the survey began in 1978.

Freddie contends that potential homebuyers remain concerned by the possibility of continuing home value declines and are nervous about investing in homes, absent big incentives.

“Whether on-the-fence homebuyers and potential refinancers will soon take advantage of the historic opportunities presented by the lowest mortgage rates in five decades remains to be seen, but we’re not counting on a change anytime soon,” Freddie’s economists said in their report.

©2010 DS News. All Rights Reserved.

-------------------------

Article written by Carrie Bay - http://www.dsnews.com/

FHA ROLLS OUT PRINCIPAL REDUCING REFIS FOR UNDERWATER BORROWERS

2010-08-09T10:14:00.001-04:00

Nearly a quarter of U.S. homeowners with a mortgage owe more on the loan than their home is worth, and home prices are threatening to fall further and push even more borrowers underwater. The Federal Housing Administration (FHA), though, is throwing out a lifeline.

Starting September 7, the federal agency will offer new FHA-insured mortgages to certain underwater, non-FHA borrowers who are current on their mortgage payments and whose lenders agree to write off at least 10 percent of the unpaid principal balance.

This last part could prove to be the caveat that leads the new FHA refi program down the same road as the federal government’s other housing programs – a road of below par results and public criticism.

Lenders are fantastically reluctant to write down mortgage principals. It would mean either they or their mortgage investors would have to eat the amount of debt that’s forgiven, and it could set a precedent that a loan contract is not a contract at all if the terms spelled out in black and white can be changed based on market nuances, such as a slump in real estate values.

The FHA refi program for underwater borrowers was originally announced in March as part of the administration’s expanded foreclosure prevention strategy. On Friday, FHA and HUD published a mortgagee letter explaining to lenders the details of the new negative equity refinancing program.

To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth, be current on their existing mortgage, and occupy the property as their primary residence. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score equal of at least 500.

Participation in the program is voluntary and requires the consent of all lien holders. The borrower’s existing first lien holder must agree to write off at least 10 percent of their unpaid principal balance to bring the borrower’s combined loan-to-value ratio to no more than 115 percent.

In addition, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.

To facilitate the refinancing of new FHA-insured loans under this program, the Treasury will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens.

Servicers planning to take part in the new program must execute a Servicer Participation Agreement (SPA) with Fannie Mae by October 3, 2010.

HUD says interested homeowners should contact their lenders to determine if they are eligible and whether the lender agrees to write down a portion of the unpaid principal.

FHA Commissioner David H. Stevens, said, “This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”

------------------

Article written by Carrie Bay - DSNews.com

CONGRESS PASSES BILL INCREASING FHA PREMIUMS

2010-08-06T08:30:00.001-04:00

The Federal Housing Administration (FHA) has received congressional approval to raise borrowers’ annual premiums for single-family mortgage insurance.

House Resolution (HR) 5891 passed the Senate late Wednesday. It cleared the House last Friday, and now heads to President Obama’s desk for final sign-off.

The bill allows FHA to increase the statutory cap of the annual fee charged for federal mortgage insurance three-fold, from 0.55 percent to 1.55 percent.

On April 5th, FHA raised borrowers’ up-front mortgage insurance premiums from 1.75 percent to 2.25 percent – a move that did not require congressional approval. Now that the agency has been granted the authority to raise the annual fees assessed, FHA has said it will shift some of the premium increase from up-front to the annual cost, which is paid over the life of the loan instead of at the time of closing.

FHA Commissioner David Stevens has indicated that he may not need to raise premiums to the maximum.

Robert Story, Jr., chairman of the Mortgage Bankers Association (MBA) says a small increase in the annual premium, coupled with a decrease in FHA’s upfront premium, will help stabilize FHA while lowering closing costs for many borrower

The premium increases give FHA a means of increasing its capital reserve funds, which as of the end of fiscal year 2009 had deteriorated to its lowest level in the agency’s 75-year history. FHA is required by law to keep its capital reserve nest egg at a minimum of 2 percent of all the mortgages it insures against default. But rising delinquencies and the stress of the nation’s housing woes pushed the agency’s reserve purse to just 0.53 percent last year.

A larger FHA reform bill – which includes not only the premium increase, but also gives FHA greater enforcement authority against lenders who originate bad loans – is currently on the legislative table. And although the House had already approved the full-length reform bill, lawmakers pulled out the provision for the premium increase and made it a separate measure to speed its passage before the Senate recesses on August 7.

Both chambers of Congress also passed a companion standalone bill that addresses FHA’s multi-family business, which is being sent to the president along with HR 5891.

House Resolution 5872 increases FHA’s commitment authority for its multifamily insurance programs by $5 billion for the remainder of the fiscal year. Without this increase, FHA would have exhausted its current authority sometime in mid-August and would have been forced to stop issuing any commitments to insure the loans in their current pipeline of applications until the next fiscal year, which begins October 1st.

“FHA’s multifamily programs have been a critical source of funding to build and renovate multifamily and rental housing during the recent credit crunch,” Story commented. “MBA has been working tirelessly with officials at FHA and on Capitol Hill to help keep the program up and running and we are gratified that Congress acted before a shutdown became reality.”

------------------

Article written by Carrie Bay - DSNews.com

PENDING HOME SALES DIP 2.6% IN JUNE 2010

2010-08-04T09:40:00.001-04:00

After tumbling 30 percent in May in the wake of the expiration of the homebuyer tax credit, pending home sales continued to edge down in June, hitting the lowest level recorded in more than a year, the National Association of Realtors (NAR) reported Tuesday.

NAR’s Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed during the month, declined 2.6 percent to 75.7 in June from an upwardly revised level of 77.7 in May. In addition, the June 2010 index was 18.6 percent below June 2009’s level of 93.

According to NAR, an index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

“There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” Yun said. “Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values.”

While pending home sales fell on a national basis, Yun said some areas such as Washington, D.C.; Maryland suburbs; and Virginia suburbs posted pending home sales equal with year-ago levels, when the first round of the tax credit served as a motivating factor for potential buyers. In addition, he said markets in Texas are holding up nicely.

Yun noted that the D.C. region and the Texas market are the healthiest in terms of their labor markets. This, he said, attests to the fact that employment growth and job market improvement is a key to a sustained recovery in the housing market.

“We really need to see stronger job creation to have a meaningful recovery in the housing markets,” he said.

Despite the strength seen in some local markets, the PHSI fell in all but one area when looked at on a larger regional basis.

Pending home sales in the Northeast tumbled 12.2 percent from May and were 25.4 percent lower than June 2009. In the Midwest, the PHSI fell 9.5 percent from the month prior and plummeted 27.8 percent from year-ago levels. The index in the West slipped 0.2 percent on a month-to-month basis and was 14.2 percent below June of last year. The only region to show an improvement was the South, where pending home sales rose 3.7 percent from May to June. However, the South’s PHSI was still 14.2 percent below year-ago levels.

Lawrence Yun, NAR chief economist, said the continued month-to-month drop in the PHSI means we are in a “pausing situation” for home sales activity. He said the weak contract signing in both May and June implies that closing activity will remain underperforming at least through August.

--------------------------------
Article written by Brittany Dunn - DSNews.com

AS HOUSING PROGRAMS FALTER, ADMINISTRATION WEIGHS NEW REFINANCE PLAN

2010-08-03T10:06:00.002-04:00

Rumors of a new government-led mortgage refinancing program have begun to surface. DS News has received word from sources inside the administration and from high-ranking executives at some of the largest banks, confirming that the White House is indeed considering a refi push that would allow homeowners to lower their monthly mortgage obligations by locking in today’s rock-bottom interest rates.

Some industry insiders are viewing the move as a concession by the federal government that its existing housing programs aren’t doing enough. The latest figures from the U.S. Treasury show that 16 months in, the Home Affordable Modification Program (HAMP) has yielded just 389,198 permanent loan restructurings – results that even the government’s own special inspector general has assailed as “anemic” and not even close to putting “an appreciable dent in foreclosure filings.”

The administration has already initiated several refinancing programs in hopes of stemming the nation’s foreclosure crisis, but they too have generated tepid outcomes at best. As of the end of March, the Home Affordable Refinance Program (HARP) had allowed 291,600 homeowners to obtain new mortgages with lower rates – a mere drop in the bucket considering the program’s end-goal is 4-5 million refinancings.

And then there’s the Federal Housing Administration’s (FHA) Hope for Homeowners (H4H) effort, which was initiated under the Bush administration. Even after a program revamp in March of last year to increase flexibility for lenders and allow a broader scope of borrowers to qualify, H4H has seen virtually no pick-up in volume. In June, for example, FHA insured just seven new mortgages under its H4H program.

One target where the administration has seen tremendous success, however, is its efforts to lower mortgage rates, which are currently sitting at historic lows. The hope of translating this success into tangible savings for homeowners has ignited discussions among government officials for a new refinance program.

While the specific details of such a program have yet to be made official, sources tell DS News that it would again be implemented through FHA, and could take shape as early as mid-August.

A position statement from one of the nation’s four largest lenders obtained by DS News points out that while the benefits provided to homeowners under a new refinance program would certainly appeal to policymakers, those benefits would come at a cost.

Namely, a large portion of such efforts would be negated with high redefault rates expected on the refinanced loans, the bank said. Secondly, while a government-sponsored refi wave may help existing borrowers, it could penalize prospective new borrowers, as investors price in the potentiality of another government-driven refi wave in the future. And thirdly, refis would result in large losses for mortgage investors.

“Ironically, the worse the economy gets, the more likely there will be a ‘heroic’ attempt to get refis going….we must face the possibility – no matter how remote – that a 2003 style refi wave materializes,” the bank said, but noted that implementation of a government-mandated refinance rate, say 4 percent for example, would face significant logistical hurdles such as we’ve already seen with the administration’s earlier housing programs.

Another well-known name among Wall Street banks described the idea of a new refi wave as a “slam dunk stimulus.”

“The bottom line is that market conditions have created a potential costless windfall that is not being used,” the institution said in its own position paper, noting that a potential average rate reduction of 125 basis points on 50 percent of the GSEs’ 37 million mortgages outstanding could result in a savings of $46 billion per year for homeowners, in aggregate.

The analysts at Barclays Capital have voiced their own doubts that a new government-spurred refi wave will actually come about.

“We do not expect a refi wave unless mortgage rates rally at least another 25 basis points, to 4.50 percent,” the research firm said.

Barclays also pointed out that, “One of the central elements would involve the GSEs waiving the ‘put-back option’ (when agency MBS loans go bad, the GSEs can put them back if there are defects in the underwriting). Waiving this right (albeit for a fee) could open policymakers up to charges that big banks that made bad loans are being bailed out, again.”

-------------------
Article written by Carrie Bay - DSNews.com

U.S. HOUSING MARKET IS IN WORSE SHAPE THAN YOU THINK: ALTOS RESEARCH

2010-08-02T10:04:00.003-04:00

Real estate data provider Altos Research is taking a very bearish outlook on the housing market. The California-based company says that ominous shadow inventory of distressed properties hanging over the industry will lock home prices into a downward trajectory for the remainder of this year, with property values starting out 2011 even lower than they were in 2009.

Market trends charted by Altos show that inventory levels are indeed moving higher and the influx of shadow inventory is beginning to show in the market. The company’s VP of data analytics, Scott Sambucci, described a noticeable shift in housing supply dynamics in a Webinar earlier this week, in what he called “a sign of market weakness.”

Data provided by Altos as recently as January 2010 pointed to a steady decline in housing inventories over the previous 16 months, at both the national and local market levels. But Sambucci says that quickly changed after the first month of this year.

Since January, and particularly post-tax credit stimulus, Altos has tracked a rapid divergence in inventory numbers vs. listings sold and absorbed. This, Sambucci explained, means more inventory is coming onto the market, with less inventory leaving.

As a result, he says, we’re going to see an extreme inventory overhang going into 2011. Add to that the fact that the pool of viable buyers out there is shrinking – thanks to tight credit, a declining homeownership rate, and more and more consumers being locked out of the market after a foreclosure – and you’ve got an equation that’s right in line with Altos’ bearish outlook.

Following the rudimentary rules of supply and demand, more inventory with fewer takers equals lower prices.

Altos Research provided its assessment of the most stable housing markets…and the markets that it considers to be on shaky ground.

The San Francisco metro area topped the stable list, along with Las Vegas and Washington, D.C.

Unstable metros included Minneapolis, Denver, Chicago, and Phoenix.
------------------
Article written by Carrie Bay - DSNews.com

U.S. HOME OWNERSHIP RATE FALLS TO LOWEST LEVEL SINCE 1999

2010-07-29T09:33:00.001-04:00

The nation’s foreclosure crisis and economic pressures, such as rising unemployment, continue to batter the U.S. housing market, as evidenced by the latest figures from the Census Bureau on homeownership rates.

Data released by the federal agency Tuesday shows that the U.S. homeownership rate dropped to 66.9 percent during the second quarter of this year, hitting its lowest mark in more than 10 years.

The Census Bureau reports that approximately 85.6 percent of the housing units in the United States last quarter were occupied. Owner-occupied homes made up

57.3 percent of total housing units, while renter-occupied units made up 28.3 percent of the inventory.

The number of homes sitting empty during the second quarter, including foreclosures and residences for sale, as well as vacation homes, claimed 14.4 percent of the nation’s total housing stock. Vacant properties rose from 18.6 million in Q2 2009 to 18.9 million in Q2 2010, according to the Census Bureau’s report.

As the homeownership rate continues its slide and turmoil in the market has many would-be buyers questioning the soundness of sinking their money into a home, apartment landlords are experiencing a surge in rental activity.

A separate report released by the market analytics firm MPF Research shows that 215,000 previously empty apartment units in the largest U.S. markets became occupied during the first half of this year.

The company says that six-month figure is nearly double the number of units that were filled during the full 2009 year, and the highest mid-year tally since MPF began tracking apartment occupancy statistics in 1992.

The firm found that the apartment vacancy rate fell to 6.6 percent as of the end of June, down from 8.2 percent last December.

-----------------------------------

Article written by Carrie Bay - DSNews.com
©2010 DS News. All Rights Reserved.

IT'S STILL A BUYERS MARKET

2010-07-29T09:28:00.002-04:00

The real estate downturn has sent home prices tumbling, inflated housing inventories, and prompted stimulus programs that have pushed mortgage rates to record lows and given homebuyers tax breaks and cash incentives for their purchases.

Undoubtedly, it’s a buyers’ market. A new study released by J.D. Power and Associates Wednesday confirms that with today’s bargain-basement market conditions, homebuyers are giving their real estate experiences a thumbs-up. Sellers, on the other hand, aren’t nearly as pleased once the deal is done.

Satisfaction with national real estate companies among homebuyers has improved over the past year. Overall satisfaction among homebuyers is now averaging 803 on J.D. Power’s 1,000-point scale – an increase of 12 points from the 2009 reading. The company says this improvement is primarily driven by increased satisfaction with agents and salespersons.

In contrast, overall satisfaction among home sellers has declined by 40 points from 2009 and averages 742 in 2010. Among home sellers, the largest drop-off in satisfaction was observed in marketing of the home and the scope of additional services offered by agents.

“Among both homebuyers and home sellers, the importance of agents and salespersons has increased substantially in 2010, compared with 2009,” said Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates. “Buyers are increasingly relying upon negotiating skills of agents and seem to be satisfied with the purchase prices they are obtaining.”

Howland continued, “Despite the fact that selling agents appear to be doing a good job of negotiating and marketing on behalf of home sellers, the tough economic conditions are negatively impacting their overall satisfaction with real estate companies.”

J.D. Power’s study, now in its third year, measures customer satisfaction of home buyers and sellers with the largest national real estate firms.

Overall satisfaction is determined by examining three factors for the homebuying experience: agent/salesperson; office; and additional services. Four factors are examined for the home-selling experience: agent/salesperson; marketing; office; and additional services.

--------------------

Article written by Carrie Bay - DSNews.com

CONSUMER CONFIDENCE DIMS AS HOME PRICES CLIMB

2010-07-27T13:40:00.001-04:00

NEW YORK (Reuters) – Job worries drove July consumer confidence to its lowest since February, with one in six people expecting lower income in the next six months, underscoring the precarious state of economic recovery.

Home prices rose in May but display no signs of a sustained rebound as long as unemployment flirts with 10 percent and a record stockpile of foreclosed houses looms over the market, a separate report showed on Tuesday.

Single-family house prices remain 29.1 percent below peaks four years ago, according to a Standard & Poor's/Case-Shiller index.

The deepest housing crash since the Great Depression dragged the U.S. economy into recession, and is doing little to stimulate broader growth as many economists fret about a possible double-dip recession.

The Conference Board, a New York-based business and economics research group, reported that consumer attitudes worsened this month as did expectations about jobs being hard to get.

"Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves," said Lynn Franco, Director of The Conference Board Consumer Research Center.

The group's index of consumer attitudes fell to 50.4 in July from an upwardly revised 54.3 in June, below the median forecast of 51 in a Reuters poll.

The "jobs hard to get" reading, meanwhile, rose to 45.8 percent from 43.5 percent.

The tepid consumer data tempered stock market gains. Treasuries fell in the face of new supply.

"There have been quite a few headwinds -- the fiscal stimulus is fading, the European situation certainly did have an impact on consumer confidence and inventories are being brought more into line," said David Sloan, economist at 4Cast Ltd in New York. "But clearly the big problem for consumers is jobs."

U.S. unemployment stood at 9.5 percent in June, the lowest in nearly a year, but reflected people leaving the workforce rather than a trend toward greater hiring.

New jobless benefits claims, to be reported by the Labor Department on Thursday, are seen are seen dipping to 459,000 in the week ended July 24 from a surprisingly high 464,000 the prior week

"Without consumers on board, the economic recovery is looking dangerously vulnerable," Paul Dales, U.S. economist at Capital Economics in Toronto, wrote in a report. "Falling consumer confidence and the growing likelihood of a double-dip in house prices have put a further dent in the already deteriorating outlook for consumption growth."

Consumer sentiment fell to a nearly one-year low in July on renewed fears about economic stability, according to the Thomson Reuters/University of Michigan's Surveys of Consumers earlier this month. The final data will be reported on Friday.

U.S. single-family home prices rose more than expected in May, but still reflected robust spring sales spurred by now-expired homebuyer tax credits, the S&P/Case-Shiller home price indexes showed.

May is a strong seasonal period for home sales, and buyers who rushed to sign contracts by the April 30 deadline for up to $8,000 in tax credits have until September 30 to close loans.

Seven of the 20 largest metro areas still reported lower prices than a year ago and most economists predict further single-digit declines before any sustained upturn. A record inventory of foreclosed properties further threatens prices.

"For me, a double-dip is another recession before we've healed from this recession ... The probability of that kind of double-dip is more than 50 percent," Robert Shiller, professor of economics at Yale University and co-developer of the price index told Reuters Insider.

The 20-city composite price index in May rose 0.5 percent, seasonally adjusted, after an upwardly revised 0.6 percent April gain, topping the 0.2 percent rise seen in a Reuters poll. The index was 4.6 percent above last May, S&P said.

Prices jumped 1.3 percent on an unadjusted basis after a 0.9 percent April gain and falls in the six prior months.

"While May's report on its own looks somewhat positive, a broader look at home price levels over the past year still does not indicate that the housing market is in any form of sustained recovery," David M. Blitzer, chairman of the Index Committee at Standard & Poor's, said in a statement.

Sales of new homes in June, reported on Monday, surged 23.6 percent but remained at the second-lowest level since the Commerce Department started keeping records in 1963.

The government is expected to report on Friday that gross domestic product growth slowed to a 2.5 percent annual rate in the second quarter from a 2.7 percent pace in the first.

------------------

Article written by Lynn Adler - Reuters

(Additional reporting by John Parry, Chris Reese, Jennifer Rogers and Julie Haviv; Editing by Andrew Hay)

TAXPAYER TAB FOR FANNIE, FREDDIE, OTHER HOUSING BULGES BY $700 BILLION

2010-07-22T07:53:00.001-04:00

Increased housing commitments swelled U.S. taxpayers' total support for the financial system by $700 billion in the past year to around $3.7 trillion, a government watchdog said on Wednesday.

The Special Inspector General for the Troubled Asset Relief Program said the increase was due largely to the government's pledges to supply capital to Fannie Mae and Freddie Mac and to guarantee more mortgages to the support the housing market.

Increased guarantees for loans backed by the Federal Housing Administration, the Government National Mortgage Association and the Veterans administration increased the government's commitments by $512.4 billion alone in the year to June 30, according to the report.

"Indeed, the current outstanding balance of overall Federal support for the nation's financial system ... has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion — the equivalent of a fully deployed TARP program — largely without congressional action, even as the banking crisis has, by most measures, abated from its most acute phases," the TARP inspector general, Neil Barofsky, wrote in the report.

The total includes Federal Reserve programs and a myriad of asset guarantees, including Federal Deposit Insurance Corp. protection for bank deposits.

The increased government commitments more than offset about a $300 billion decline in the U.S. Treasury's TARP commitments in the past year as programs have closed and banks have repaid taxpayer funds.

Barofsky also in the report ramped up his criticism of the Treasury's housing relief efforts, saying that its program to reduce monthly mortgage payments for struggling homeowners was showing "anemic" participation numbers and had failed to "put an appreciable dent in foreclosure filings."

He said Treasury had refused his repeated recommendations to announce more effective goals and benchmarks for its mortgage modification program, which could reach up to $50 billion in TARP funds.

"Treasury's refusal to provide meaningful goals for this important program is a fundamental failure of transparency and accountability that makes it far more difficult for the American people and their representatives in Congress to assess whether the program's benefits are worth its very substantial cost," Barofsky wrote.

Among other recommendations repeated in the report, Barofsky called for the Treasury to consider making its voluntary mortgage principal reduction program mandatory, saying this would make it less likely for "underwater" homeowners to abandon their properties.

The Treasury has declined to adopt the recommendation, citing the prospect that mandatory principal reduction would cause mortgage servicing firms to opt out of the program and fairness issues in reducing principal for both responsible homeowners hit by value declines and homeowners who overleveraged their properties in refinancings.

U.S. Treasury officials defended the Home Affordable Modification Program, saying that it was still on track to reach its goal to keep 3 million to 4 million homeowners in their homes by the end of 2012 and was adapting to changing conditions by offering forbearance to unemployed people and extra funding for the hardest-hit markets.

Herbert Allison, Treasury assistant secretary for financial stability, said the Treasury often agrees with Barofsky's recommendations, "but once in a while, we differ on what type of policy will best carry out our mandate."

The report provoked swift criticism of Obama administration housing policies from U.S. Rep. Darrell Issa, a California Republican who has taken every opportunity to blast the Treasury's handling of financial bailout programs.

"The fact that the Obama administration is treating TARP like its own personal slush-fund is beyond egregious and a complete betrayal of what the American people were told would be then when their tax-dollars were used to bailout Wall Street," Issa said in a statement, adding that the housing efforts were "dumping good money after bad."

© 2010 Reuters. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.

FIVE REAL ESTATE SCAMS YOU NEED TO KNOW ABOUT

2010-07-22T07:44:00.001-04:00

Don't be duped by mortgage fraud. Here are a few common scams and the red flags you should look for in a transaction.

Mortgage fraud is pervasive: An estimated $4 billion to $6 billion in annual losses result from mortgage fraud, according to FBI reports. “An entire community can be damaged by mortgage fraud,” says Rachel Dollar, a lawyer from Santa Rosa, Calif., and editor of the Mortgage Fraud Blog. Mortgage fraud can lead to a spike in foreclosures, home values plummeting, and lenders raising their rates and fees to recover losses.

The crimes are often complex, involving several parties and occurring over multiple transactions. To protect you and your clients, educate yourself about mortgage fraud and be on guard for any warning signs in a transaction. You can start by reviewing these five scams, and then test your knowledge by taking our Mortgage Fraud Quiz at: http://www.realtor.org/rmoquiz2.nsf/mortgagefraud?openform.

1. THE FORECLOSURE RESCUE SCHEME

The Scam: “Rescuers” promise cash-strapped home owners that they can save their home from foreclosure. The rescue, which involves paying upfront fees, can take multiple forms, such as the perpetrator obtaining a new loan on behalf of the owner or by having the owner sign over the home’s deed and then rent the home until they can repurchase it. Eventually, the home owner loses the home, either to foreclosure or the fictitious rescue company.

Red Flags: With foreclosure rescue programs, borrowers are often advised to sign over the title of their house to a third party, become renters of their home, not contact their lender, or send mortgage payments to a third party, according to Fannie Mae, which provides fact sheets on mortgage fraud.

2. LOAN DOCUMENTATION FRAUD

The Scam: This fraud involves numerous schemes in which a borrower provides inaccurate financial information — such as about their income, assets, and liabilities — or employment status in order to qualify for a loan with lower rates and more favorable terms. Occupancy fraud is one growing area: Borrowers say they plan to live in the property when they actually intend to rent it.

Red Flags: Documentation may raise suspicion if the employer’s address is shown as a post office box, accumulation of assets compared to the person’s income appears too high or low, the new house is too small to accommodate occupants, the person has no credit history, or the application is unsigned or undated, according to Fannie Mae.

3. APPRAISAL FRAUD

The Scam: A faulty appraisal — saying a property is worth more than what it really is — is connected to many types of mortgage fraud. It entails manipulating or overstating comparables, market values, or property characteristics in order to obtain a higher appraisal. The higher property appraisal, which generates false equity, is done by falsifying an appraisal document or using an appraiser accomplice to obtain the higher value.

Red Flags: Be skeptical of appraisals that are dated prior to the sales contract, list comparable sales that do not contain similarities to the property or are outside the neighborhood, the owner is not the seller listed on the contract or the title, or a third party participating in the transaction orders the appraisal, Freddie Mac warns.

4. ILLEGAL PROPERTY FLIPPING

The Scam: This entails purchasing properties and reselling them at inflated prices. These scams usually involve faulty appraisals and inaccurate loan documents. The property is then refinanced or resold immediately after purchase for an inflated value. The home is purchased at a higher price, often by straw buyers working with the “flipper,” and eventually falls into foreclosure.

Red Flags: Some key things to look for are rapid refinancing of a property; the seller recently having acquired the title or acquiring the title concurrent with the transaction; an appraisal that comes in too high; a property that was recently in foreclosure being purchased at a much lower price than its sales price; or the owner listed on the appraisal and title not matching the seller on the sales contract, according to Fannie Mae.

5. SHORT SALES SCHEMES

The Scam: Borrowers owe more than the current value of their home so they fake financial hardship and no longer make their mortgage payments. An accomplice of the borrower then submits a low offer to purchase the property in a short sale agreement. The lender agrees to the short sale, unaware that it was premeditated. The property, after being purchased at the reduced price, is then often resold at the home’s actual value for profit.

Red Flags: The borrower suddenly defaults on the mortgage with no workout discussions with the lender, an immediate offer is made to a lender at a short sale price, the short sale offer is less than current market value, or a cash back is offered at closing to the delinquent borrower (disguised as “repairs” or other payouts, for example) and is not disclosed to the lender, according to Fannie Mae.

You can report instances of suspected mortgage fraud to http://www.stopfraud.gov/.

-------------------------

This article was written by Melissa Dittmann Tracey

http://www.realtor.com/

HOUSE FOR SALE ON FIVE ACRES

2010-07-20T11:39:00.004-04:00

CAPE COD IN MOVE-IN CONDITION ON 5 ACRES IN GHENT

This exeptionally well maintained Cape Cod style home is located on 5.21 surveyed and groomed acres in the town of Ghent. It has 1,968 square feet of living space, 3 bedrooms, 1.75 baths, Oil Hot Water heating, 200 amp electric service, very large open field behind the house. It has a covered front porch and a rear deck, a large Equipment barn, woodshed, and a 2-car attached garage with a breezeway into the home. On the main level, there is a livingroom, family room with a woodstove, kitchen, dining room, laundry rooms and a 3/4 bath. Upstairs there are 3 bedrooms, 1 full bath and a storeroon. The poured concrete basement is completely dry and is used as a workshop by the owner.

See see pictures of this house, Click on the Link Below!
http://www.grayrider.com/forsale-ghent-capecod.htm

TEN REAL ESTATE RETIREMENT OPTIONS

2010-07-20T11:22:00.001-04:00

It's hard to think about retiring to a warm climate when opening your 401(k) statement or checking your home's value on Zillow.com already makes you break out in a sweat. Last year 40% fewer homeowners 65 and older moved than in 2005, with their mobility falling more than any other age group's, according to Harvard's Joint Center for Housing Studies. (Of those 65-plus, 81% own their own homes.)

But now, with the real estate market showing signs of stabilizing and the economy showing tentative signs of recovery, it's a fine time to start assessing your retirement housing options--based on your current (likely reduced) net worth. Even with median existing home prices down 26% over the last five years and one in seven of the nation's homeowners “under water” on their mortgages--owing more than their homes are worth--most older folks still have equity in their homes. That makes a move possible.

But here's the rub: Since only weak home appreciation is likely in the foreseeable future, any move you make now needs to be suitable for the long term. Don't assume you can buy in a sunny place, decide after a few years it doesn't suit you and get your money back or even realize a profit when you sell the place. Now is not the time to be spending your remaining retirement savings on multiple Realtors' commissions.

So before you do anything, think about such issues as whether you want to continue to work part time, what you enjoy doing most and whether you'll have access to the supermarket, health care and other services if and when you decide it's unsafe to drive.

Talk to your spouse and your kids or your extended family or friends--whoever would jump in if your health turns for the worse, gradually or suddenly. See what resources are available to you where you live now and what's available in any target location. Here are 10 retirement living options to consider:

1. Cross State Lines To Save

The smartest retirement move for you might be across the country to an area with lower costs, low or no state income tax , or nearby family to help you out. After having a heart attack, Deborah Huff, 62, moved from California to Kentucky and found a much cheaper but nicer home near her brother. "I wasn't sure I could afford to retire," she says, adding that her financial planner, Graydon Coghlan in San Diego, showed her how, with the move, it worked. "When I'd see him, I'd say, 'I just don't want to be a bag lady," she jokes. A bonus: Kentucky excludes retirement income of $41,110 per person from its state income tax. (For how states woo retirees with tax breaks, click here.)

2. Move Across Town (or up here to Columbia County NY)

If you're well-established in your community, consider downsizing in your hometown, says Diane Winland, a financial planner with Financial Finesse in Manhattan Beach, Calif. For example, an older couple she lived next to was straining under carrying costs and moved to a house on a smaller lot in an older neighborhood, saving thousands a year in maintenance and property taxes.

3. Tap Into Your House

Stay in your home but reduce your equity in it through a reverse mortgage. A reverse mortgage lets you take money out of your house so you can stay put. But beware of fat fees. In some cases banks will let you fund the purchase of a new downsized home with a reverse mortgage.

4. Move Abroad

While a no-income tax state might be enticing, for some folks the cafes of Paris or the cheap living of Panama beckon. But moving abroad requires more legwork than moving to another state. For example, can you bring your dog? What are the country's residency requirements? Make sure you research the Internal Revenue Service tax rules for expats and buy health care coverage (Medicare doesn't cover Americans living abroad) before you leave. (For tips on how to investigate before you expatriate, click here.)

5. Become A Temporary Renter

The likelihood of little or no housing appreciation has an upside too: You can sell your home, invest your take (in something safe) and try out life in another place for a few years as a renter, without fear of the housing prices getting away from you. This is a particularly good strategy if you're making a lifestyle change--say moving from a Northeastern metropolis to the Sunbelt. You might take to the new climate and lower taxes, or find yourself missing your old haunts.

6. Become a Long-Term Renter

A widow who turned 80 brought her adult children with her to see her financial advisor, Nick Barnwell with Weiser Capital Management in New York City, because she feared she was running out of money. Her spending, including house expenses, ran $100,000 plus a year. The solution: selling her two-bedroom $1.2 million NYC apartment and renting a one-bedroom unit in the same building. "This gives her a cushion of at least 10 years of spending money, and she can still go to the opera with her friends," Barnwell says.

7. Move In With Your Kids (or Vice Versa)

The recession has put intergenerational living back into fashion. Combing two or more households into one saves on big expenses like property taxes and upkeep and has emotional rewards--grandma putting the grandkids to bed. (For tips on intergenerational living, click here.)

8. Be Part Of A Natural Retirement Community

Check out you own community's resources for the aging. Is there a community center? A van service? In New Canaan, Conn., a local group called "Staying Put" provides services to help seniors remain in their homes. Similar groups are springing up elsewhere, using member dues and grants from nonprofits and government to link seniors and services in "naturally occurring retirement communities." If you like where you live and your community doesn't have such an effort, consider launching one--it's a great project for a young retiree

9. Find An Active Adult Community

If golf courses, hiking trails, and yoga classes are enticing, and you like hanging out primarily with folks your own age, consider buying into (or renting at) an active adult-only community such as The Villages in central Florida or one of Pulte Group's 81 DelWebb communities in 21 states. These communities are made up primarily of owner-occupied single-family detached homes but include apartment and rental units. Their share among all 55-plus households increased from 2% in 2002 to 3% in 2007 and is expected to increase even further over the next decade, according to the MetLife Mature Market Institute. Remember, however, that these communities may be far from family--and don't guarantee access to assisted living or nursing care.

10. Buy Into A Continuing Care Retirement Community

In these communities, you start out living independently in an apartment or townhome. But should your health deteriorate, you have guaranteed access to assisted living or nursing home beds. These communities generally require payment of a big upfront fee that may not be refundable and have complicated contracts.

-------------------------------------

Article by Ashlea Ebeling - http://www.forbes.com/

SURVEY FINDS SIDELINED HOMEBUYERS ARE PREPARING TO ENTER THE MARKET

2010-07-19T09:08:00.001-04:00

Although both new and existing home sales were down in May, it’s not all bad news. According to a new survey by Relocation.com, more Americans are positioning themselves to purchase a home in the near future.

The survey found that some families are opting to rent while they research for deals to purchase a more desirable home in their area. There’s no surefire way to determine when these sidelined homebuyers will enter the market, but the survey results were encouraging.

Of the 60 percent of individuals moving into rentals, 24 percent were previous homeowners renting temporarily while they look for a new home to purchase. Underscoring this finding is that for many of these families, foreclosure was not the reason for moving. In fact, the number of consumers who moved due to foreclosure dropped by 70 percent compared to Relocation.com’s February 2010 survey.

“While the housing market continues to flux from month to month, we’re seeing strong, continued interest as consumers looking to move start their research with us,” said Sharon Ashser, chairman and founder of New York-based Relocation.com. “These findings suggest that more Americans may be poised to re-enter the housing market this year.”

While it seems that financial and economic issues still continue to exert an effect on U.S. moving behaviors, the survey found signs that the worst of the recession crisis may be over. In the February 2010 survey, 18 percent of respondents indicated that they moved to a new location with a lower cost of living and/or cheaper rent, but this percentage dropped to 7 percent in June. Furthermore, only 4 percent of the consumers in June moved due to a job loss, a drastic drop from the 13 percent who moved for that reason in February.

When it comes to homeownership, the survey found that 18 percent of movers tracked in the June survey were homeowners who moved and purchased a new home, up from 12 percent in February. And an additional 12 percent were former renters who moved to purchase a home. The June survey also found that 4 percent of movers were able to purchase a home for the first time due to the decline in home prices, and another 10 percent moved to a bigger, better home or a better neighborhood.

-----------------------------------

Article written by Brittany Dunn - DSNews.com
©2010 DS News. All Rights Reserved.

FORCLOSURES DIP 5% IN THE USA

2010-07-19T08:36:00.002-04:00

NEW YORK (CNNMoney.com) -- The foreclosure plague seems to have reached its peak and started to fade, but the recovery is still fragile.

The number of foreclosure filings of all types -- including notices of delinquency, auction notices and repossessions -- fell during the first six months of 2010, according to RealtyTrac, the online marketer of foreclosed properties.

There were 1,654,634 properties with foreclosure filings, a 5% decline compared with the previous six months. That equates to 1 out of every 78 homes being at risk. Unfortunately, the pace of bank repossessions quickened, with nearly 270,000 homes lost to foreclosure during April, May and June, a 5% increase over the three winter months.

James Saccacio, CEO of RealtyTrac, called the report a "tale of two trends." He pointed out that the filings data showed improvement because fewer properties were entering the foreclosure process. Part of that is because lenders are now more committed to modifying defaulting mortgages or allowing homeowners to sell their homes for less than they owe.

At the same time, lenders have cleared many properties out of the foreclosure pipeline, finalizing repossession proceedings rather than allowing homes to sit in limbo.

However, there is still much inventory to move through the system and experts aren't sure how bad it will be.

"While the foreclosure problem is being managed on the surface," Saccacio said, "a massive number of distressed properties and underwater loans continue to sit just below the surface, threatening the fragile stability of the housing market."

HARDEST HIT STATES:

As they have for many months now, the "sand states" led the nation in foreclosures during the first half of the year. One in 17 Nevada households, or 64,429, received a filing. That is the highest rate of any state.

The number of California homes with filings came to more than 340,000, the highest total of any state.

Florida had more than 277,000 filings, or 1 for every 32 households; Arizona had more than 91,000, 1 in 30 homes.

Lenders repossessed 45,000 Calif. homes during the three months ended June 30, more than in any other state. Nevada, with a much smaller population, had nearly 11,000 repossessions, about twice the rate of the Golden State.

Article written by Les Christie, staff writer of http://www.newsgeni.us/

HOME BUYER TAX CREDIT DEADLINE EXTENDED TO SEPT 30TH

2010-07-16T19:11:00.000-04:00

The home buyer tax credit now has an extended closing deadline, thanks to Congress. The new deadline is set for September 30, 2010. This new legislation, bill H.R. 5623, will allow for thousands of home buyers to take advantage of the $8,000 and $6,500 tax credits that saw their previous deadline pass on June 30th.

The National Association of Realtors (NAR) has been encouraging of its passage. “We know that up to 180,000 home buyers eligible for the tax credit are rejoicing this morning. And we all thank both houses of Congress for their work to ensure passage of both bills,” said NAR president Vicki Cox Golder.

Who is eligible for this deadline extension? If you are a first time or "step up" homebuyer who had a ratified contract in place as of April 30, 2010, but was unable to close by the previous June 30th deadline, then you're in luck. You are considered a first time home buyer if you have not owned your own home in the last three years. The same income restrictions and rules apply for the extension as were in place for the previous June 30th deadline.

Congress has also helped property owners seeking extensions flood insurance policies. Senate passed H.R. 5569, the National Flood Insurance Program Extension Act of 2010, allowing currently stalled transactions to move forward.

According to the National Association of Realtors, "Any new policy applications or renewals that were signed and submitted during the lapsed period will be effective from the date of application. In the case of waiting periods, the waiting period will start from the date of application." Vicki Cox Golder said, “We know that thousands of property owners seeking flood insurance policies will now be able to close transactions."

For more information on whether or not you are eligible for this extension, please call me at 518-392-7062.

FIVE TIPS TO PREPARE YOUR HOME FOR SALE

2010-07-16T19:05:00.000-04:00

Working to get your home ship-shape for showings will increase its value and shorten your sales time.

Many buyers today want move-in-ready homes and will quickly eliminate an otherwise great home by focusing on a few visible flaws. Unless your home shines, you may endure showing after showing and open house after open house—and end up with a lower sales price. Before the first prospect walks through your door, consider some smart options for casting your home in its best light.

1. Have a home inspection

Be proactive by arranging for a pre-sale home inspection. For $250 to $400, an inspector will warn you about troubles that could make potential buyers balk. Make repairs before putting your home on the market. In some states, you may have to disclose what the inspection turns up.

2. Get replacement estimates

If your home inspection uncovers necessary repairs you can’t fund, get estimates for the work. The figures will help buyers determine if they can afford the home and the repairs. Also hunt down warranties, guarantees, and user manuals for your furnace, washer and dryer, dishwasher, and any other items you expect to remain with the house.

3. Make minor repairs

Not every repair costs a bundle. Fix as many small problems—sticky doors, torn screens, cracked caulking, dripping faucets—as you can. These may seem trivial, but they’ll give buyers the impression your house isn’t well maintained.

4. Clear the clutter

Clear your kitchen counters of just about everything. Clean your closets by packing up little-used items like out-of-season clothes and old toys. Install closet organizers to maximize space. Put at least one-third of your furniture in storage, especially large pieces, such as entertainment centers and big televisions. Pack up family photos, knickknacks, and wall hangings to depersonalize your home. Store the items you’ve packed offsite or in boxes neatly arranged in your garage or basement.

5. Do a thorough cleaning

A clean house makes a strong first impression that your home has been well cared for. If you can afford it, consider hiring a cleaning service.

If not, wash windows and leave them open to air out your rooms. Clean carpeting and drapes to eliminate cooking odors, smoke, and pet smells. Wash light fixtures and baseboards, mop and wax floors, and give your stove and refrigerator a thorough once-over.

Pay attention to details, too. Wash fingerprints from light switch plates, clean inside the cabinets, and polish doorknobs. Don’t forget to clean your garage, too.

-----------------------------

Article was written by G.M. Filisko. She is an attorney and award-winning writer who has found happiness in a Chicago brownstone with the best curb appeal on the block. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

SAVE MONEY BY PLANTING SOME FRUIT TREES

2010-07-16T10:12:00.000-04:00

Money really can grow on trees! Cut your grocery bill while improving your landscape by planting and growing a fruit tree.

Investing in a fruit tree is a win-win-win-win proposition. You’ll save money on your grocery bill; you’ll improve the health of your family by assuring an ample supply of healthy produce (which you can grow organically if you want); you’ll enhance your landscape with a pretty spring-flowering tree; and you’ll have the satisfaction of growing your own food. As a bonus, the whole family will learn a delicious lesson about nature and gardening.

“With fruit trees, the return you get on your input is quite a bit,” says Ron Perry, a Michigan State University professor of horticulture who specializes in fruit trees.

Your investment is minimal; figure $20 to $30 for a young tree and perhaps an hour to plant it. From that point, you’ll also need patience. Most fruit trees take three years to start bearing, and up to five years to bear fully.

There are basically three types of trees. Full-sized fruit trees grow to be 30 feet tall and produce an overwhelming amount of fruit at maturity. For home gardens, semi-dwarf and dwarf trees are a better choice and are easier to harvest. Plan on harvesting in late summer through fall.

Semi-dwarf trees grow 12 to 15 feet tall and will produce hundreds of fruits. Dwarf trees grow 8 to 10 feet tall and produce perhaps a bushel or so of fruit, depending on the type and year.

How much will you save?

How much money you’ll save by planting a fruit tree varies, depending on what you plant, the size of the tree, and your food buying and eating habits. Note that fruit trees tend to produce more heavily every other year.

On average, a single semi-dwarf apple tree may produce 40 or more pounds of fruit each year. With prices of apples ranging from 60 cents to $3.50 per pound, your tree might easily produce $80 worth of fruit. That reduces the annual amount a family of four spends on produce by 5% to 10%.

Plan on refrigerating some produce to keep it weeks longer. You’ll see even more savings by freezing, canning, making preserves, or drying fruit (a dehydrator costs about $60). This can shave another few dollars a week off your grocery bill and provide you with plenty of nutritious food to eat all year long.

Picking the right tree for your region

Choose fruit trees that are easy to grow in your region and which you and your family will be happy to eat.

Apples, pears, cherries and plums are among the best choices for home gardens, says Perry, because as long as you choose disease-resistant types, they require little spraying or fuss that commercial growers lavish on their trees to assure the biggest, most perfect, store ready fruits.

You can find a disease-resistant variety of fruit tree that will do well in your area by contacting your government-funded local cooperative extension service. Or, find out even faster by Googling the following four words together: “Recommended,” the type of fruit (such as “apple”), “trees,” and the name of your state, such as “Illinois.”

Some fruit trees need a second tree for cross-pollination by bees in order to produce fruit. Check the plant label or catalog description to be sure.

Here are some tips for growing the best fruit trees for home gardens:

Apples: Most varieties need a second tree for cross-pollination. Disease-resistant varieties are Freedom and Liberty. Increase savings by making apple butter, applesauce, and drying. Apple trees do well in Zones 3 through 9.

Pears: These often need a second tree for cross-pollination. Delicious, Harrow Delight, and Moonglow are particularly resistant to disease. Increase savings by canning and making pear butter. Pear trees do well in Zones 4 through 9.

Cherries: Sour cherries do not need a cross-pollinator tree nearby. They are excellent for pies and baking, and all sour cherry trees are highly disease- and pest-resistant. Sour cherries do well in Zones 4 through 8.

Most sweet cherries need a cross-pollinating tree. They’re excellent for eating fresh. Freeze extra cherries for even more savings. They do well in Zones 5 through 8.

Plums: Japanese and American plums always need a cross-pollinator; European types usually do. European types, such as Damson, are the most disease- and pest-resistant. Make plum jam or dry plums for even more savings. Plum trees do well in Zones 4 through 9.

Peaches: Most peaches do not need a cross-pollinator. You need to be diligent about spraying if you want large, blemish-free fruits. Can peaches, make jam, or freeze peaches for more savings. Peach trees do well in Zones 6 through 9.

Growing fruit trees

The main requirement for a fruit tree is full sun—at least 8 hours of direct, unfiltered light a day.

Space is also important. Allow as much space between trees and other plantings as the tree will be at mature height. Space full-size fruit trees 30 feet apart; plan 15 feet between semi-dwarf trees and 10 feet between dwarf trees.

Plant fruit tree saplings in spring. Planting is easy—simply dig a hole about 12 inches deeper and wider than the root ball of the tree. Work in a shovelful or two of compost, then set the tree in the hole and backfill. Keep well watered for the first few weeks.

Saplings come from the nursery with their roots in containers. Plant the tree so that the trunk is at the same depth it was in the container. If the tree is bare-root, that is, sold in a bag with its roots exposed, plant it so the knobby bud union that joins the trunk with the roots is 1 to 2 inches above soil level.

Prune your fruit trees as directed by the planting instructions that come with the tree. Each spring, minimize disease problems by spraying with an organic horticultural oil (a $10 bottle will last you a few years) diluted in a $25 pump sprayer.

------------------------------
This article was written by Veronica Lorson Fowler - HouseLogic
Veronica Lorson Fowler grew up on a farm and has gardened since she was a child. A garden writer for more than 20 years, she has written and edited numerous garden books, and has written hundreds of garden articles for web sites and national magazines. She tends her own highly varied garden, which includes several fruit trees, in Ames, Iowa.