Tough Housing Market Complicates Divorce

by Elizabeth Razzi Friday, August 15, 2008
provided by BankRate.com

Divorce is rarely an easy process. But falling home values and sluggish real estate sales are combining to make it particularly difficult right now.Couples aren't fighting over who gets to keep the house. They're scrambling to get away from the burden of it.

It's too soon to see the trend reflected in official statistics; the most recent marriage and divorce numbers compiled by the National Center for Health Statistics date back to 2005 -- just when real estate markets started to turn down from their boom years.
Read more...

"Richard says..."

This is a tough one on several levels but I will stick to the Real Estate issues. I am not Dr. Phil or Jerry Springer, which ever way things are working or not working out. If you are married and bought together in AZ it is usually community property. If you had a committed relationship and had purchased together with both names on the loan and deed, there were different ways to take Title. (Consult a qualified attorney for answers to your specific situation)

If one of you can keep the home and buy out the other with a promissory note and make payments to the other party, that is one option. You could rent it out or get a boarder for a while to help with the payments.

With the promissory note, it could be arranged through a Title Company with an escrow account. The advantages are that the ownership interest of the party that moved out and is receiving payments will be recorded and records will be kept. The parties never have to meet or mail a check directly to the other. When the other party is fully paid off, the quit claim deed is executed and recorded. The house was not sold and both parties benefited from it and did not have credit issues from a forced sale of the home.

Option 2 is to sell the house somehow. You may have to actually pay a check at closing to clear you existing mortgage loan, especially if there is no equity. There is the Short Sale option, which means that real financial hardship must be proved to the lender with financial statements, tax returns, budget records and more. A qualified Realtor that is experienced in Short Sales may be a valuable asset here.

Option 3 is to let it go into Foreclosure. That will greatly harm both party's credit scores and seriously hamper both financially in starting over. Give it careful thought here. Option 1 may work the best. Selling a home normally is an expensive proposition taking up as much as 11% of the Sale Price. That money could be put to better use in your respective pockets to assist both parties in moving on and rebuilding their lives.

To help you know what questions you should ask and how to arrive at the right answer for your specific situation, a FREE special report has been prepared by industry experts entitled "Divorce: What You Need to Know About Your House, Your Home Loan and Taxes". Read it today.

Do you need help in finding a more affordable home? When you are buying a home, having current and accurate knowledge of what area homes are listed for is important. Our best buy service enables you to get priority access to the hottest new listings so you can beat out other buyers and negotiate to get the most home for the least amount of money.

Are you interested in learning more about buying homes that are Short Sales or Foreclosures? Distress Sales resulting from bank foreclosures, short sales, court orders, and probate often represent a great way to get a fantastic deal on a home.

It's not easy for the average homeowner to find these deals, because you have to keep scouring the paper and the Internet to see when one comes up. Or you can pay a huge monthly fee to an expensive foreclosure subscription service and receive the same property lists as hundreds of others.

When you receive this free, no obligation service, you're automatically plugged in to the most current list of Foreclosure Properties on the market, in the price range and area that interests you. This FREE, no obligation service, "Foreclosure Weekly Report" will save you a lot of research and running around.

That's all for now. I welcome you posting any questions or comments about this and any other articles on my Blog.

Have a Great Day,

Richard

FHA Officials Seek to Ban Seller-Assisted Payments

FHA Officials Seek to Ban Seller-Assisted Payments
By MICHAEL CORKERY and MICHAEL R. CRITTENDENJune 10, 2008; Page A13

Federal housing officials are trying again to ban seller-assisted down payments on federally insured mortgages, amid concerns about mounting losses tied to these loans.
Read the complete story... http://online.wsj.com/article/SB121306712046559817.html?mod=RealEstateMain_1

Richard says....

It is going to be much harder for you to buy a home whether new or resale when this loop hole for hard-working people like you is closed.

Here is what this means to you as a Buyer

1. You will need lots more cash to buy a home. The required 3% FHA down payment. That’s $6000.00 of YOUR CASH for a $200,000 home, $9000.00 for a $300,000 home.
   (FHA loan limits are around $350,000 now, not just for the low end of the market.). Have you got $10,000 cash saved to buy a home now? How long will it take for you to save it?
2. It must be your money and you will have to prove it. No gifts from family, friends, builders or charities will be allowed. More background checks of your bank account activities looking for large unexplained deposits. If you are purchasing an Investment property, you will have to come up with more cash for the buying end.
3. Missed opportunity to have Home Seller pay the 3% down payment for you.
   Your housing costs will increase faster if you are renting. Landlords will take advantage of that and quickly raise rents.
4. Renters don't receive tax saving benefits, equity build-up, and price appreciation of home ownership, your landlord gets them and your rent too.
5. It is harder to save for the down payment with no tax breaks and ever increasing rents.
   

What to do about it.

Assess your personal situation.

1. If the home seller paid your down payment and closing costs and you could keep your money in your account, could you buy a home now?
2. Could you afford the monthly payments necessary? Remember that you may be elilgible for some big tax breaks with deductability of mortgage interest and property taxes (consult your tax/ financial advisor for details).
3. Do you have steady employment and income that can safely cover your house payment?
4. Would you like to have fixedmonthly payments for up to 30 yrs into the future, or will you be willing to pay your landlord more rent every year for the next 30 yrs? What would the rent be then?
5. Do you want to set down roots and own a home to start with? Maybe renting is right for you now.
6. Most homeowners are way ahead of renters in wealth accumulation in addition to home equity.
7. If you needed money for your children's education, retirement or emergency needs, home equity has been a very useful source of funds.

Just a few things to consider....

A new free report by Real Estate Industry experts has been prepared entitled "How to Stop Paying Rent and Own Your Own Home". It has already helped dozens of local renters get out from under their landlord's finger, and move into a wonderful home they can truly call their own. You can make this move too by discovering the important steps detailed in this FREE Special Report.

Got a Real Estate question??? Ask a Real Estate Expert.

Feel free to call me or leave a response to any of my articles by posting your comments.

Thank you and have a Great Day,

Richard

Home Buying Experts Warn - Builder Loan Fine Print Could Cost You Thousands

RISMEDIA, May 22, 2008-The home loan packages offered by builders are often touted as being very convenient. But when it comes to evaluating the true benefits the picture is often quite different, according to the home buying specialists at the National Association of Exclusive Buyer Agents, (NAEBA). Recent difficulties in the mortgage marketplace bear this out.”Mortgage shopping can take a significant level of sophistication. In addition, negotiations with a builder’s mortgage company can sometimes be stressful and costly,” stated Barry Nystedt President of NAEBA. “Home buyers still need to compare the builder’s loan offerings to what is available on the open market. Complications arise when the buyer becomes obligated to the builder’s lender without being able to compare the rates and fees other lenders may offer months later when the home is complete. Read more...

Richard says...
This article highlights the very real problem posed when home buyers think that walking into a new builder development to buy a home is the same as going to the grocery store to buy a can of peas. The builders agent works for the Builder...not you the home buyer. His/her job is to get the most money out of your pocket as ethically possible and make the most profit for the Builder.

Builders make additional profits from you, the new home buyer, by using their recommended lenders and their recommended Title Companies. Is that a surprise to you? Do you think maybe having a savy Realtor that understands the New Home Market and knows how to negotiate with Builders would be a smart thing to do? In most transactions, the Builder will pay your Realtor his/her fee, not you. You may ask....if that is the case, won't I get a better deal if I don't have my own Realtor represent me? It will save the Builder 3 to 6 % on my home price. It sounds logical. But...you don't know the Real Estate business. Please re-read this article. I also recommend reading all of the other articles posted to this Blog as well.

Read this new FREE report, Ten Secrets Every New Home Buyer Should Know for more information.

Got an opinion? I'd love to hear about it. Post your comments now.

Happy Househunting :-)

Housing affordability best in four years

Tuesday May 20, 1:23 pm ET By Les Christie, CNNMoney.com staff writer

With prices crashing around the nation, home price affordability has improved dramatically in many U.S. cities.
As a result, 53.8% of all new and existing homes sold nationwide during the first three months of 2008 were affordable to families earning the median household income of $61,500, according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders (NAHB). Read more...

My Commentary:
If you have been sitting on the fence waiting for prices to fall even lower, NOW is the time to beat the crowd. When the crowd gets out there, the best deals will already have been snapped up. The remaining sellers will be much tougher on helping you with your downpayment and closing costs. Remember just a few years ago, everyone was frantic to buy a home, like it was the last train out of town, even a crappy fixer upper at crazy prices. Don't let that happen to you this time.

Find homes for sale from ALL Real Estate Companies that match you are looking for here.

Get your Free Report on How to Stop Paying Rent and Own a Home the smart way.

Got a comment? Post it. I'd love to hearwhat you think about this or any other articles.

Have a great day,

Richard

Bargain Hunters are Boosting Home Sales Now

An Article on the front page of USA Today on April 17, 2008 suggests now is the time to get out there and buy a home, especially if you are a first time buyer. I could not agree more. It is a great Buyer's Market. A word of caution... When more and more of these "Get out and Buy Now" articles appear in the media, other potential Buyers will start getting the message. Then your advantage of being there first WILL BE LOST and may cost you BIG MONEY.


Home sellers are reading and watching the media too. They will get stubborn on price and terms. That will cost you BIG MONEY. The time to move is now, before the rest of your potential Buying competition finds their own Realtor and gets Pre-Approved for a home loan. The Summer is the busy season and 2008 promises to be better than the last two years.


I suggest two things to make the most profit on your home purchase:


#1 Read this article and

#2 Contact me or any other competent Realtor and Lender to find out how you can get in now and get a great deal on a home.

Read the complete story in USA Today

Find the GREAT Home Deals here!

Best regards and Happy House-hunting,

Richard Pomisel, Realtor
Dan Schwartz Realty Inc


Toll Free (24hr Hotline) 1(800)474-2841

Direct (602)214-1166

eMail: Richard@Pomisel.com

Federal Reserve Rate Cuts, Do Not Necessarily Mean Lower Interest Rates

(Additional reporting by Emily Kaiser in Washington and Caroline Valetkevitch in New York, Editing by Andrea Ricci) Copyright 2008 Reuters

We have seen the Federal Reserve cut rates again and may soon do so one more time. As a result, many mortgage applicants are calling their mortgage representative and expecting a lower interest rate. Others who have been waiting to refinance are puzzled as to why mortgage rates have not moved lower during recent five Fed rate cuts. In fact mortgage rates are now higher than they were before the Fed began cutting rates in January. This is difficult to explain to many consumers who have watched a 2.5% reduction by the Fed with no benefit in mortgage rates.



Is a Fed rate cut really good news for mortgage rates? The facts may be surprising. The Fed can only control the Discount Rate and the Fed Funds Rate. This is very different from mortgage rates. A mortgage rate can be in effect for 30-years, a rate that is set by the Fed can change from one day to another.



Another common mistake is in thinking that 30-year Treasury bonds or 10-year Treasury notes are directly pegged to mortgage rates. Those are government securities that are backed by the full faith and credit of the U.S. government and have no direct effect on mortgage rates. So what are mortgage rates based on? As it turns out the answer is mortgage-backed bonds known as Mortgage Backed Securities (MBS). Bonds issued by Fannie Mae and Freddie Mac (MBS) and the trading performance of those bonds will determine the direction of mortgage rates.



Finding the catalyst that causes mortgage bonds to move will give you the keys to finding out what makes mortgage rates rise or fall. We know that inflation will always be a negative for any long-term bond because it eats away at the future returns. Since the bond will pay a set amount over a long period of time, that amount will be less valuable if inflation is high.



Over the past several years, one catalyst that seems to be working in the opposite direction of MBS prices is the Nasdaq and broader stock market. As bond prices rise, interest rates fall. As bond prices fall, interest rates rise. As the Nasdaq moves higher, bond prices move lower causing interest rates to rise. As the Nasdaq declines, mortgage bonds benefit, causing mortgage rates to fall. Additionally, and unlike common opinion, Fed rate cuts have had virtually no direct effect on mortgage rates. Moreover, it appears that since Fed rate cuts act to stimulate the Nasdaq, they have a negative effect on mortgage rates.

Aaron says....

The bottom line is that it appears mortgage rates will get better if the Nasdaq sells off and will get worse if the Nasdaq rallies. So it is not necessarily what the Fed does that affects mortgage rates, it's how the Nasdaq and broader stock market interprets the Fed's action that will ultimately influence the direction of mortgage rates.



This is because money managers and mutual fund companies typically keep funds in either stocks or bonds with very little in cash. If stocks are in favor, money is pulled from bonds, causing bond prices to drop and interest rates to rise. When stocks are being sold off, the money is then parked into bonds, which improves bond prices and causes interest rates to decline.



A closer look at the five rate cuts by the Fed this year shows that mortgage bond prices deteriorated after each Fed rate cut. This means that mortgage rates rose after the Fed had cut rates while many consumers were expecting their mortgage rates to decline.



Worse yet are the consumers who missed the opportunity to obtain a lower rate because they mistakenly waited for the anticipated Fed action to cut short-term rates, thinking that longer-term mortgage rates would decline as a result. Predicting the future is tough, so nothing is written in stone.



Keep an eye on the Nasdaq, and keep in mind that the best rates may be behind us. But, mortgage rates are still low and could have some quick dips so make the most of them while they last. Posted by Aaron Brown, Loan Advisor, Flagstar Bank

What do you think about this issue or any other? Post your comments. Any questions? Just Ask the experts.

Read this special report prepared by Real Estate industry insiders, "Homebuyers: How to Save Thousands of Dollars When You Buy".

Rental Strategies - 5 Basics to Remember When Renting Out a House

RISMEDIA, March 10, 2008—Renting out a house isn’t rocket science, but there are some basic rules that should be followed to increase your chances of success: Continued >

Richard says...

I receive many inquiries from investors and home sellers who for one reason or another can not sell their homes right now by the usual means of cashing out and moving on. Renting can be a very good money making strategy if done right and getting all of the ducks in a row.

If you keep your present house as a rental, you may still be able to finance and buy your next home. The rental property income is considered when obtaining financing on your next home. If it is rented out at the same price as your payments, it is a wash. If for more than your expenses, then it is added income on your financial statement. There are additional benefits to owning rental properties but I won't get into them at this time.

Most horror stories I have heard about rentals is related to not following sound practices as outlined in this article and taking short cuts. These "time and money saving" short cuts can ultimately be a very costly financial and legal disaster to the novice landlord.

Some things to consider are...

1. Proper cleaning of the property is very important. Have you gone to rent or buy a home with dirty bathrooms and an oven with crusted food in it? "Next" is what most reasonable people would say.
2. Know what the rents are for similar properties in your area. This is business. Get your numbers. Your property is competing with others in the area. Make sure you are priced right. Buyers of any product or service look for value in what they are paying their hard earned money for just as you do.
3. Do some creative marketing and get the word out that you have a nice property for rent. There are many creative and inexpensive ways to do this.
4. How about not screening prospective tenants properly? This is a big one. Yes, it costs a few bucks but....would you like to trust your home (expensive investment) to a deadbeat or have it turned into a meth lab ? Have a non-refundable application fee cover this expense. Large apartment complexes do, so why not you?
5. Know and follow the laws relating to landlord and tenant rights. Have a well written lease agreement in place. Yes they are renting your property, but you can not do anything you want to tenants. Treat your tenants with fairness and respect. They are putting money in your pocket. They are not the enemy. They may be the perfect buyer for your property in the future.

If you have any questions on any real estate subject matter, feel free to "Ask a Real Estate Expert".

Have a profitable day,

Richard Pomisel