The Keys to Housing Recovery

January 16, 2009

To move the country out of this economic crisis, Congress and the next administration must place significant emphasis on restoring confidence in the housing market. That’s what National Association of Realtors® President Charles McMillan told the House Financial Services Committee in testimony today.

“The housing sector is at the core of the current economic crisis,” McMillan said. “A renewed, revitalized and robust housing market is essential to generating commerce and helping families build wealth.”

McMillan congratulated Chairman Barney Frank, D-Mass., on H.R. 384, the TARP Reform and Accountability Act, which was introduced last week. Many points in this bill reinforce NAR’s proposed recovery plan to stimulate housing investment, mitigate foreclosures, help current homeowners, and provide needed liquidity to commercial mortgage markets to ensure that financing is available.

The principle focus of NAR’s plan is to ensure that the Troubled Asset Relief Program does what it was originally intended to do – end the credit crisis and jumpstart mortgage lending. “It is imperative to get TARP back on track by targeting funds for mortgage relief, which will help lower mortgage rates and reduce foreclosures,” said McMillan. “In addition, eliminating the repayment feature of the first-time home buyer tax credit and expanding it to all home buyers; reinstating the higher mortgage loan limits for FHA, Fannie Mae and Freddie Mac; and lowering mortgage interest rates through a buy-down program will meaningfully impact the housing industry.”

“We are pleased that Congress is moving forward on these important issues. Together these actions will build a solid foundation for a housing recovery,” said McMillan.

NAR’s plan also includes keeping mortgage interest rates low, boosting home buyer confidence, and reducing the current foreclosure rate. NAR has also asked that regulators be encouraged to help financial institutions resolve problems in the short-sale process, make it easier for servicers to modify existing loans, remove unreasonable underwriting guidelines and insist that credit reporting agencies correct errors promptly.

“Low interest rates are only effective if people can get a loan. We hear every day from our members that even home buyers with good credit are having trouble getting mortgage loans. We must all work together to unclog the housing and financial system,” said McMillan.

NAR called on Congress to use current TARP dollars to not only reduce interest rates, but also fix operational issues that are preventing consumers from getting or modifying home loans. “These are critical steps that must be undertaken quickly if we are to right our nation’s housing and financial markets,” McMillan said.

NAR hailed the House of Representatives’ actions and called on the Senate to move quickly in adopting its proposal. NAR also expressed hope that the new administration will focus on a housing recovery as it moves forward with a larger stimulus package.

Read President McMillan’s testimony (PDF)

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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How to Be a Real Estate Statistic – The Good Kind

January 11, 2009

2007 was a year of record-breaking real estate statistics in the United States. Unfortunately, most of those stats were bad. Just ask the hundreds of thousands of homeowners who faced foreclosure last year!

On the up side, there is a lot you can do to prevent this kind of real estate misery, and to avoid becoming a negative real estate statistic. Education goes a long way in this regard, and that’s why I continue to publish articles like this.

So with that said, here are five ways to be a good real estate statistic in 2008, instead of a negative one:

1. Understand and Guard Your Credit

Good credit has always been important for home buyers who are shopping for a mortgage loan. But it will be even more important this year, and for the foreseeable future. Last year’s subprime mortgage crisis has led to tougher regulation of the lending industry. As a result, most lenders (those that are regulated anyway) will be paying closer attention to the credit scores of borrowers.

So your first step is to understand the importance of credit in the real estate world. Your next step should be ordering a copy of your credit report so you’ll know where you stand, compared to the average consumer in this country. You should also check your credit reports for errors and work to get them corrected if need be.

You are entitled to one free credit report per year, from all three of the credit-reporting companies. There are several websites you can use (including my own) to request all three reports at once, which is certainly the convenient way to do things.

Also, if your credit score is low — lower than average, this is — you should work on improving it. You can do this by paying down your debt, paying all of you bills on time, and being financially responsible in general.

2. Don’t Buy Over Your Head

Many of the negative real estate statistics from 2007 were people who bought more home than they could rightfully afford. Of course, some of the lenders were to blame as well, mainly for offering ARM loans with low teaser rates during the introductory period, and glossing over the potential rise in monthly payments that would ensue.

Here’s the bottom line. If you can’t afford a home, you just can’t afford a home. Instead of pursuing dangerously “creative” financing methods to purchase that new home, focus on improving your financial situation first. Reduce your debt. Save up some cash. Try to increase your income, if at all possible. You might even relocate to an area where the housing costs are more within your reach. Heck, that’s the main reason I moved from San Diego to Austin!

Avoid buying beyond your financial means. It never ends well, and you will likely end up as a bad real estate statistic instead of a good one!

3. Choose Your Mortgage Type Carefully

In the previous point, I talked about the perils of the adjustable rate mortgage (ARM) loan, for people who don’t truly understand the ARM.

Don’t get me wrong … an adjustable-rate mortgage can be a good idea, mainly if you have plans to sell or refinance the home within a few years. In that case, you could save yourself some money by paying lower interest rates in the short term.

Here’s the key to success when choosing a type of mortgage loan. First of all, you have to understand the pros and cons of the different mortgage types. Secondly, you have to be realistic about your future plans. If you’ll be staying in the home for many years, you might be better off with a fixed-rate mortgage that can weather the financial storms of the future without being affected by them.

Research the different types of mortgage loans, and then match your loan to your home-buying situation and future plans.

4. Don’t Trust Lenders … Or the Government

Here’s a real “shocker.” Mortgage lenders are in the business of lending money to people, and making a profit while doing so. Surprised by this? I told you it was a revelation! Mortgage lenders will do everything they can to get somebody to borrow from them, as long as they don’t get burned in the short term.

So you really can’t trust a lender to tell you what you can and cannot afford to pay each month. The only thing a lender can tell you with certainty is whether or not you’re qualified for the mortgage … not whether or not you can realistically afford it. And if they sell the loan to the secondary market after granting it to you, then they don’t really have to worry about your financial woes down the road.

But what about the government? Surely they are looking out for home buyers, right? Well, not always. You see, there are these people called lobbyists, and many of them represent the lending industry. They make big contributions to certain political campaigns (like Schwarzenegger and Bush, to name only two) in order to influence regulations — or the lack of regulations — on the lending industry as a whole.

So don’t expect the government to come riding to your rescue if you get in over your head with a mortgage loan. You must be a smart consumer, an educated consumer, and a self-reliant consumer.

5. Be Proactive in Times of Trouble

Even if you adhere to the other four guidelines on this list, but you still find yourself in trouble, you should be proactive about finding a solution. In other words, don’t procrastinate.

Here’s an example of what I mean.

Let’s say you buy a new home and take on a mortgage loan to pay for it. Everything is fine for the first two or three years, but then you run into some unexpected hospital bills and other expenses. So you get behind on your mortgage payments. But you fully expect to be back on track in a few months.

Here’s where it pays to be proactive. If you contact your mortgage lender and explain that your financial problems are only temporary, they probably have ways to help you out.

Generally speaking, mortgage lenders want to avoid foreclosure as much as the homeowner does. After all, they are in the business of loaning money, not managing and selling properties. That’s why most lenders will work with homeowners to come up with a solution to temporary setbacks. Some lenders have tools at their disposal to help in such cases, such as repayment plans and lump-sum reinstatements. But you won’t know about them unless you’re proactive about it.

About the Author: Brandon Cornett publishes the Home Buying Institute, a website full of advice on mortgages loans, house hunting, credit scores and more. Learn more or contact the author by visiting

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New Ferrari dealership on Tampa Road

January 8, 2009

Have you seen the brand new location for Ferrari of Tampa Bay? They’re located at 2420 Tampa Road in Palm Harbor, FL 34683, which is just west of US 19. It’s a gorgeous building and just driving by the showroom could easily give a car enthusiast a heart attack…so be careful. If you’d like to see what they offer without the health risks just visit their web site at

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Annual Strawberry Festival in Plant City – Feb. 26 to Mar. 8, 2009

January 8, 2009

For more information and directions visit the Florida Strawberry Festival web site at

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FREE Foreclosure workshop

January 8, 2009

A FREE Foreclosure Workshop will be sponsored by the Pasco County Board of County Commissioners on Saturday, January 17, 2009 from 10:00 AM to 2:00 PM at the Victorious Life Church, 6223 Old Pasco Road, Wesley Chapel, Florida 33544. Information will be presented on short sales, legal aspects of foreclosures, and programs available in Pasco County. Housing Counselors will be available to speak with you about your particular situation. For more information call: Pasco County Community Development at 727-834-3445 or 813-996-7341 Ext. 3445, or 352-521-4274 Ext. 3445.

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Enthusiasm – the Best Weapon in the War Against Procrastination

January 4, 2009

Author: Kevin Hensey

Enthusiasm is what makes the difference between reaching our goals and giving up before we get started. Thomas Edison said, “If the only thing we leave our kids is the quality of enthusiasm, we will have given them an estate of incalculable value.” Edison’s research laboratory burned to the ground when he was 67. As the fire consumed his world-famous “invention factory,” Edison told his children, “Kids, go get your mother. She’ll never see another fire like this one.” Edison knew that enthusiasm is the best antidote for tragedy, and it’s the most powerful weapon to use in the war against procrastination.

I have learned that my level of enthusiasm has nothing to do with my feelings; my feelings wake up on a different side of the bed every day. To take control of my life, I must choose the way I feel-I can’t let my feelings control me. Can you talk yourself into a positive frame of mind when you’re discouraged? How do you keep yourself motivated? How do you stay focused when a job is tedious? How do you handle failure when your plan isn’t going well?

  • Stay away from negative people. Attitudes are contagious-negative people infect us with negative attitudes. Associate with positive thinkers; their self-confidence is contagious, too.
  • Schedule difficult tasks for the time of day when your energy is highest. If you haven’t determined the best time for you to tackle the day’s least appealing jobs, try doing them as early as possible.
  • Tackle a problem that’s been a thorn in your side. When you get in the habit of making things happen, your enthusiasm goes through the roof. Inactivity is a major cause of depression and anxiety. (On the other hand, you can increase your energy level without eliminating other forces that cause procrastination; teenagers are particularly adept at expending enormous amounts of energy without getting anything done. Always remember that any technique is only effective when used as part of a total strategy.)

When you breeze through a task with particular ease and competence, make a note of the time of day. And ask yourself what other factors might have contributed to making you more productive. When you start to discover a pattern, you will have found how to operate at a higher level every day. And when you identify the time of day when you are usually most efficient, schedule some of your least enjoyable tasks for that time.

We must continue to learn new things as if we were going to live forever, while living each day as if it were the last. Telling myself that “Today is the first day of the rest of my life” doesn’t work for me. If today were the last day of my life, how would I live it? That is the question I ask myself when I must fight against the forces of procrastination.

Always remember that enthusiasm is a choice. Mark Twain said, “Do something every day that you don’t want to do; this is the golden rule for acquiring the habit of doing your duty without pain.”

BOOST YOUR CONFIDENCE! How to Succeed at Being Yourself

About the Author:

Kevin Hensey speaks at business clubs and prisons on personal growth. He has written articles regarding personal development.
His website is:
BOOST YOUR CONFIDENCE! How to Succeed at Being Yourself

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Behind on your mortgage? Modify or Sell!

January 1, 2009

Plenty of borrowers think it wise to avoid calls from their lender when they start to fall behind on their monthly mortgage payments. Nothing could be further from the truth and this decision could very well be laying the foundation for an eventual foreclosure. It makes much more sense to have those conversations, explain your position, and then see what sort of resolution your bank offers.

Many home owners that are in trouble with their mortgages don’t even realize how common their situation is today. If they only knew how many other people are in the same boat they might not feel so embarrassed and might actually have a chance of solving the problem.

Be proactive. Call your lender.

Give your bank a call or visit their Internet home page. You might be surprised how many lenders have solutions right on the home page. This should tell you that financial troubles are obviously quite common in 2008 and 2009. Why else would lenders place links right on the home page offering loan modifications and short sale assistance?

What is a loan modification?

A loan modification is simply where your bank adjusts the terms of your loan to make it more affordable to you, the borrower. Most loan modifications involve a simple adjustment of the interest rate on your existing loan from a higher rate to a lower rate, but the loan modification doesn’t address an even bigger concern. If you owe $180,000 and your home is now only worth $90,000 a loan modification isn’t going to help with this $90,000 difference. Sure, it will lower your monthly payments, but the $90,000 difference will stay with you for years and years while the market continues to decline, eventually stabilizes, and then finally climbs slowly back to the $180,000 price level. A short sale might make more sense.

If dealing with your bank scares the heck out of you contact a qualified Realtor to handle the short sale process. And a short sale might be your best option. A short sale is where you sell your home for less than you owe the bank – with your banks approval, naturally. It is a tricky, complicated and stressful experience for most borrowers so hiring a Realtor makes sense.

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