REMAX 440/Central Blog

Nine Tips for Protecting Your Family While at Home

November 1, 2010 10:29 am

RISMEDIA, November 1, 2010--Most parents and grandparents have learned to put child-safe lids on medications and to keep them locked away or out of the sight and reach of curious children. But there are plenty of other measures we can take to help ensure our families are safe at home, according to the U.S. Consumer Product Safety Commission.

In the kitchen, keep a fire extinguisher handy--and make it a habit never to place potholders, plastic utensils, towels or other flammable kitchen items too close to the range burners.

Be sure danger items such as cleansers, bleach and drain cleaners stored under the sink are placed behind child-proof cabinet locks.

Electrical appliances and power cords can cause shock or electrocution when they come in contact with water. Ask an electrician to install bathroom outlets equipped with ground fault circuit interrupters (GFCIs).

Use non-skid mats in the tub and shower and consider installing grab bars to help prevent falls.

Be certain smoke detectors are located and working properly near bedrooms and at least one on every floor. Once a year, on your birthday or on another easily remembered date, change the batteries.

Establish family planning rules for escape in the event of fire or other emergency, and practice regular fire drills to be certain younger children remember them.

Carbon monoxide can kill. Never use charcoal to cook or provide heat in enclosed spaces, including garages, tents or vans. Unvented heaters should be used only with windows or doors slightly open.

Apply double-faced adhesive carpet tape to the backs of small rugs or runners.

Post telephone numbers for Police, Fire Department, Poison Control Center and a neighbor in plain sight near the telephone. Even toddlers should be taught to dial 911 in an emergency.

By scoping out your home for possibly dangerous scenarios, you can prevent accidents from happening and keep your family safe.


Freddie Mac Loan Delinquencies Fall, Showing Signs of Stabilization

October 29, 2010 10:29 am

RISMEDIA, October 29, 2010--Freddie Mac announced Wednesday that it had observed a decrease in their share of late-paying mortgages for the month of September, marking the fourth straight month of similar findings. In addition, loan modifications rose for the month of September to 17,121, up from August's 9.976, reports Mortgage Lending News. By negotiating with lenders and reducing mortgage rates, more Americans seem to be attempting to keep their homes.

"Overall credit is improving to some extent. It reflects fewer and fewer loans going into delinquency," says Janaki Rao, interest rate strategist at Morgan Stanley.

Freddie Mac reports that the overall delinquency rate on single-family mortgages fell to 3.80% last month, the lowest since October 2009 when it was 3.65%. On the other hand, late mortgage payments are at historically high levels, especially for subprime and multifamily loans, according to Reuters.

Though this is hopefully the beginning of a long line of good news, Freddie Mac and Fannie Mae are still caught in the middle of a nationwide foreclosure crisis, the results of which remain to be seen. Both government enterprises own or guarantee more than half of the $11 trillion in U.S. Mortgages.

In other news, home prices in 20 major U.S. cities fell 0.3 percent in August from July but were up 1.7 percent from a year ago, S&P/Case Shiller said on Tuesday. Though both are small victories, this is still positive news for the two federally controlled companies.

"They [Fannie and Freddie] are not out of the woods, but it's a step in the right direction," says Rao.


Is Your Potential Investment a Money Pit?

October 29, 2010 10:29 am

RISMEDIA, October 29, 2010--You've completed all of the hurdles of the buying process and you're almost ready to close, but how can you be sure you won't have to sink hundreds or thousands of dollars into the home later? We've all seen the Tom Hanks movie The Money Pit from the '80s. How can you avoid that from happening to your family?

In order to accurately judge a house, one must be sure to evaluate its structure. The first stop should be in the basement, says Bankrate. From there, you will be able to see the quality of the materials and the type of construction process used. Double-check the HVAC, plumbing and electrical systems. How has the equipment been maintained? Are the systems old or on the newer side? Repairs on housing systems can be costly, so be sure everything is in good working condition. If you're not the best judge, bring along a knowledgeable friend, contractor or appraiser to help you evaluate.

The home's foundation is also a crucial piece of the puzzle and can oftentimes be the reason a house is unstable or has problems. Are there any large trees near the home? It is possible that roots can eventually crack the foundation and break it over time. Check hard-surface floors for cracks or gaps, and also check the drywall. Any issues here would likely hint towards a small foundation problem that could be a major one in the future.

Some of the most costly damages are done by water. Any water damage in the bathrooms or kitchen can be huge red flags for buyers to look for. Fixtures should be checked as well, giving you a quick sign as to the maintenance of the home. In addition, inspect the caulking in sinks and seals around windows. According to the Environmental Protection Agency (EPA), mold can be a serious problem, reproducing and spreading throughout a home or any other improperly ventilated area. If mold seems to be a problem, research the EPA's findings at www.epa.gov. If the problem seems too large to tackle, you definitely have a legitimate reason to abandon ship.

A professional home inspection is always the answer to prevent the purchase of a possible money pit, says the Sunmark Financial Credit Union. If the home is being sold as-is, try to negotiate the price based on the work it needs. In other scenarios, the seller may complete the work beforehand based on a certain price agreement. After you receive your inspection, check with local contractors and get estimates on any work you might want done. RealTime recommends researching contractors on the National Association of the Remodeling Industry website. You can also check the Better Business Bureau to see if there are any complaints against them.

Don't let your love for a home blind your good judgment. If the home needs any major repairs, find out what they are in advance and decide if purchasing that property is truly worth your time and investment.


Don't Let Industry Confusion Stand in the Way of Action

October 29, 2010 10:29 am

RISMEDIA, October 29, 2010--Recently, the foreclosure process has been in a state of disarray, as banks, regulators and lawyers struggle to uncover issues and faults within the system. As a result of this confusion, some homeowners either currently in the foreclosure process or in danger of foreclosing may lack a clear direction or be unsure of what steps to take next. In a press release sent out this week, consumer money resource Bills.com urged homeowners not to wait it out, and instead, take action to avoid an even larger legal battle down the road.

"Homeowners facing foreclosure are being bombarded with confusing and often opposing messages right now, but the meter has not stopped running, says Ethan Ewing, president of Bills.com. It is imperative that these individuals reach out to their lender now to avoid an unwelcome outcome later. The most dangerous thing a homeowner can do is nothing."

Lenders typically lose money when they foreclose on a property, and because of this, they are often motivated to reach some sort of conclusion with struggling borrowers. According to Bills.com, it's important to recognize the fact that lenders will usually respond to a settlement offer made by a borrower.

Don't consider the recent foreclosure confusion temporary relief. Rather, homeowners concerned about their ability to continue paying on a mortgage should take advantage of the opportunity and reach out to their lender to open a line of communication. In addition, seeking third-party help is another great option you can partake in simultaneously. Federal programs, such as Home Affordable Modification Program (HAMP) exist to aid troubled homeowners and nonprofit organizations, like the Neighborhood Assistance Corporation of America (NACA), offer help to low-to-moderate income households.

There are many legitimate foreclosure resources out there for homeowners who have tried to go it alone before or prefer not to negotiate directly with their lender, adds Ewing. But homeowners should avoid those who promise fast, advantageous settlements. Foreclosure settlements are usually difficult and complex if it sounds too good to be true, then it probably is."

Potential alternatives to foreclosure include:

A forbearance, which is a temporary agreement with your lender to delay mortgage payments for a short time. If you can prove that you will be able to restart payments in the future and bring your mortgage up to date, lenders may allow for this.

A reinstatement occurs when you are behind on payments and agree to a lump sum payment by a specific date that brings you current on your loan status. A reinstatement is normally part of a forbearance agreement.

Repayments are usually negotiated plans that allow you to become current by making catch-up payments over a fixed amount of time. Some repayments may allow for a combination of your overdue amount with your regular payments until you catch up.

A loan modification adjusts the terms of your loan by changing either the amortization table or interest rate to sizably affect the amount of your regular payments. This is great for banks because it avoids foreclosure while you keep your home at a more affordable monthly rate.

Short sale agreements can be made after a failure to negotiate occurs between lender and borrower. In a short sale, your lender agrees to let you sell the property for less than it's worth while they absorb the loss. Short sales are good for borrowers because they avoid the credit damage of a foreclosure, while the lender ends up receiving more money than in a foreclosure.

In a deed-in-lieu of foreclosure, a last resort option, the lender allows you to give your property back in exchange for cancelling the mortgage. This will hurt your credit score, but the damage is far less severe than a foreclosure.

For homeowners who find themselves in trouble, taking action is always the best move to prevent foreclosure. By knowing these options, you can hopefully work out a plan to keep your home or at least prevent excessive damage to your line of credit.

For more information about preventing foreclosure, please visit the Bills.com Foreclosure Resource Center at http://www.bills.com/stop-foreclosure/.


New Housing Podcast Series Provides Counseling to Struggling Homeowners

October 28, 2010 10:29 am

RISMEDIA, October 28, 2010--As a result of the economy and record high unemployment rate, many Americans have found themselves at risk of foreclosure and/or overwhelming debt. According to the Bureau of Labor Statistics, unemployment has reached 9.7% in some areas of our nation, putting many homeowners in a stressful financial bind.

To counter this negativity, the National Foundation for Credit Counseling (NFCC) is continuing its goal of educating the public about the financial crises and issues that impact many homeowners today. Through their Housing Counseling 101 Podcast Series, the NFCC plans to provide useful information, including tips on how to prevent foreclosures, and how to aid homeowners who might need help out of a sticky situation.

Current housing statistics show that one in every 366 U.S. households received a foreclosure notice at the end of 2009. This along with the many other challenges of homeownership, i.e. saving money and managing finances appropriately, can often burden homeowners. The NFCC hopes to educate the public as early as possible so that homeowners all over the nation can make better decisions and plans for their financial future.

The podcast also hopes to dispel myths surrounding housing counseling, explain what a Housing Action Plan is, and describe what one could expect from a housing counseling session. For those who may have fallen behind on their mortgage payments, the NFCC Housing Counseling 101 podcast could be the perfect solution to many current problems.

For more information, please visit http://www.nfcc.org/, or to watch the video series, visit http://www.youtube.com/user/NFCC09.


Mortgage Applications Increase in Latest MBA Weekly Survey

October 28, 2010 10:29 am

RISMEDIA, October 28, 2010--The Mortgage Bankers Association (MBA) has released its Weekly Mortgage Applications Survey for the week ending October 22, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 3.2% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 3.1% compared with the previous week.

The Refinance Index increased 3.0% from the previous week. The seasonally adjusted Purchase Index increased 3.9% from one week earlier. The unadjusted Purchase Index increased 3.5% compared with the previous week and was 30.3% lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is up 1.4%. The four week moving average is down 0.7% for the seasonally adjusted Purchase Index, while this average is up 1.9% for the Refinance Index.

The refinance share of mortgage activity decreased to 82.3% of total applications from 82.4% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.3% from 5.8% of total applications the previous week.

The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.25% from 4.34%, with points increasing to 1.0 from 0.81 (including the origination fee) for 80% loan-to-value (LTV) ratio loans. The 30-year contract rate matches the rate from the week ending October 1, 2010, which was the second lowest ever observed in this survey. The effective rate also decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.67% from 3.74%, with points decreasing to 0.96 from 1.00 (including the origination fee) for 80% LTV loans. The 15-year contract rate is the second lowest observed in this survey, with the lowest being 3.62% from two weeks ago. The effective rate also decreased from last week.

The survey covers over 50% of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.


Don't Dip In: Why You Should Leave Those Retirement Funds Alone

October 28, 2010 10:29 am

RISMEDIA, October 28, 2010--As a result of the recovering economy, many Americans are dipping into their retirement funds as a means to avoid foreclosure, pay college tuition or purchase a home. During the second quarter of this year, 62,000 workers began the process of withdrawing funds from a 401(k) plan, up from 45,000 during the first quarter, according to a recent study from Fidelity Investments.

"Consumers are dipping into their 401(k) accounts because they don't have any other options," says Mark Nash, a partner at PricewaterhouseCoopers' Private Company Services Practice. The declined real estate market and recent credit trends have limited homeowners' ability to secure home equity loans, giving consumers limited liquid assets to handle life's curve balls such as job loss, wage decrease or continued debt.

Even if dipping into retirement funds seems like your only option, financial advisors still recommend that investors consider alternatives before severely raiding accounts that are supposed to sustain life after retirement. SmartMoney offers the following five reasons why consumers should leave their 401(k) and other retirement funds intact:

The market should recover. With prices down, and continuing to drop, it simply is not a good time to pull money out of your account. Depleting your balance just hurts you even further in an unstable market. When the market eventually comes back to life, which it will, you won't reap the benefits because you have limited your returns.

Borrowing from a retirement account disturbs your money's ability to compound. By removing funds, you're essentially taking a step back from retirement. SmartMoney writes: "A 35-year-old man with a 401(k) balance of $25,000, for example, could save $757,409 for retirement by age 65 (assuming 8% annual returns, a contribution of 7% of his $50,000 salary and no company match). But if he took a $10,000 loan and repaid it over five years, he'd lose $25,892 of that amount. If he halted contributions while he was repaying the loan, the loss grows dramatically to $132,171." By keeping these funds out of mind, your dollars will compound into a lump sum that will be extremely helpful to you in the future.

In the unfortunate event of job loss, any outstanding 401(k) loan balance becomes due immediately. After three months, if the balance isn't paid off, the loan becomes a taxable withdrawal, adding a 10% penalty on top of your regular income tax. Given the state of the economy and level of unemployment, taking out a loan from your 401(k) is an extremely risky gamble. Would you be able to pay the loan back immediately, if necessary? If not, leave those funds alone.

Borrowing from your 401(k) simply means another payment, with interest, you must make. Borrowers must pay back the loan with post-tax dollars, which is a whole new ballgame when considering the pretax contributions. According to Nash, someone in the 35% tax bracket would need to earn about $13,500 pretax to pay off a $10,000 loan, and that's before interest or loan administration fees get thrown into the mix.

Your retirement funds are your safety net. Creditors cannot seize anything from your pension, 401(k) or IRA. If your financial situation is unsteady, keeping these protected accounts intact is even more important than ever.

These are just a few of the reasons why consumers should avoid touching their retirement funds. With the proper plan and funds in place, your retirement can be a financially stress-free life.


Prevent Further Disaster by Taking a Home Inventory

October 27, 2010 10:29 am

RISMEDIA, October 27, 2010How much do you like your widescreen plasma TV, ultra-fast computer, designer clothes, high-count Egyptian cotton sheets and tweaked out ride-on lawn mower? How would it change your life if you had to downgrade everything you've earned and worked hard for?

If the unthinkable happened tomorrow and your home was severely damaged or destroyed in a fire or hurricane, you'd be understandably devastated. Once you got over the initial shock, you'd have to begin the long and difficult task of recovering or replacing everything that you lost. If you don't have a home inventory, the chances are good that you will be doing some major downgrading. To prevent this from happening and to make your life exceptionally easier in lieu of a tragedy, be sure to take a proper home inventory.

You have a lot more responsibility than you think you do. The first thing you're going to do is call the insurance company, who is going to ask for a detailed list and description of everything you lost and need to replace. All you need to do is provide the make, model and serial number of your electronics and appliances and substantial proof that your clothes were from Talbot's, your sheets were 600-count and your mower was a high-end John Deere. But most people can't even remember where they bought many of their belongings, never mind the model and serial number.

Receipts and appraisals lost in a fire? It's not unheard of to find people digging around in the soggy ashes of their once-home desperately looking for evidence to show insurance adjusters. If you are more proactive now and prepare your home and belongings for the worst, you can arrange to have all of the necessary information that the insurance company will ask for before something terrible happens.

You won't remember as much as you think. How big are your grandmother's heirloom pearls? How many are on the string? How long is the strand? What about that pocket watch your great-grandfather brought here when he emigrated from Europe? Can you describe it in detail? When is the last time you really looked at it? If they were stolen, could you describe them to the police? Do you have any pictures?

A comprehensive home inventory can help ensure that you have the right amount of insurance coverage, provide proof of ownership to your insurance company, maximize your insurance recovery payments, and improve your chances of recovering irreplaceable treasures if they're stolen.

"A complete inventory, including photos, may be one of the most valuable investments for peace of mind anyone can make for themselves and their families," says Dennis Kizziah, acting director for FEMA's Mississippi Transitional Recovery Office, on http://www.FEMA.gov. "If something happens to damage homes and property, an inventory will eliminate the need to piece that information together in the aftermath."

A home inventory can document and catalog all your possessions. Home inventory services can also be purchased and tailored to suit your needs and budget. Whether you conduct the inventory yourself or hire an outside company, having a proper inventory done will be invaluable if disaster strikes. You'll sleep better knowing you're ready to maintain your family's quality of life in a worst-case scenario.


Bailout for Fannie and Freddie Could Cost Taxpayers Up to $363 Billion

October 27, 2010 10:29 am

RISMEDIA, October 27, 2010--The government bailout of mortgage giants Fannie Mae and Freddie Mac will likely cost taxpayers $154 billion, which government estimates claim is somewhat more than originally anticipated but less than the worst-case projections. The government-sponsored entities have already received $135 billion in Treasury Department funds, but will likely draw another $19 billion by 2013 to offset losses from the mortgage crises, says USA Today.

"Today's projections show that, in the most likely economic scenario, nearly 90% of the losses at Fannie Mae and Freddie Mac are already behind us," says Jeffrey Goldstein, Treasury's undersecretary for domestic finance.

According to Inside Mortgage Finance, Fannie Mae and Freddie Mac purchased 62% of all new mortgages during the first half of 2010. The $154 billion estimate serves as a middle ground among three possible scenarios laid out by the Federal Housing Finance Agency (FHFA), Fannie and Freddie's regulator.

FHFA uses Moody's Analytics, which shows that home prices may fall another 8% by the third quarter of 2011. Under Moody's "stronger-recovery" scenario, the bailouts would cost $142 billion. If the U.S. economy slips back into a double-dip recession, costs could climb to $363 billion, according to FHFA. If extra dividends, either paid or expected to be paid, are included, the number could skyrocket by 2013. Edward DeMarco, FHFA acting director, said earlier this year that the total would likely be less than $400 billion.

"It cost a lot less than what people feared, largely because the economy has stabilized," says Moody's chief economist Mark Zandi. Yet still, the Fannie Mae/Freddie Mac bailout is far more expensive than any other government bailout operation.


Doubting Dodd-Frank: Bank Executives Question New Legislation's Effectiveness

October 27, 2010 10:29 am

RISMEDIA, October 27, 2010--According to a survey by consultant Grant Thornton, a majority of bank executives feel the Dodd-Frank legislation will not be as effective in detecting risk in the financial system or in preventing future bailouts as originally anticipated by officials.

The poll, which surveyed 231 bankers from small to mid-size banks, states that 47% believe the reform will be ineffective, while 52% claim it would be "somewhat" effective, fixing some of the financial services industry's problems, reports HousingWire. None of the bankers surveyed reported that it would be "very" effective. In addition, 64% of bankers expect a change in their bank's regulator in the coming months.

Nichole Jordan, sector leader of Grant Thornton's Banking and Securities practice, says most bankers are uncertain about Dodd-Frank, given that its rules have yet to be defined by regulators.

Under Dodd-Frank, the newly created Consumer Financial Protection Bureau (CFPB) will oversee seven regulators beginning July 21, 2011. Those regulators are still forming hundreds of new rules as required by Dodd-Frank, such as the Federal Deposit Insurance Corporation's (FDIC) latest proposal on resolving failed financial institutions.

The survey also reports that 73% of the bankers are most worried about the creation of the CFPB, while at a close second, 71% worry that fees paid by merchants to banks for processing debit-card payments, now to be set by the Federal Reserve, won't be "reasonable and proportional," according to bankinvestmentconsultant.com.

"Although some financial institutions are beginning their compliance efforts now, the success of financial reform is something to be measured over the long term," says Jordan.

Despite bank hesitation, regulators remain confident that the legislation that will be imposed can and will make a difference. "We want to have market discipline," says Federal Reserve Chairman Ben Bernanke to Congress. "We want firms to know that they can fail and keep them from taking excessive risks."


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