Banks Find Silver Lining in Settlement

Posted on May 4, 2012 by admin

: Banks Find Silver Lining in Settlement

The settlement agreed upon among banks, state attorneys general, and the federal government of $25 billion for foreclosure abuses is certainly one that banks will feel. Still, banks can see a positive come out of the situation. Specifically, now that the number is set, already improving sentiment toward financial stocks should be aided even more.
The individual banks have to bear a large price tag; however, the payouts aren’t likely to adversely affect bank earnings since firms seem to have placed money aside in prior quarter to pay for the deal. This was accomplished through increases to litigation reserves. This will likely cover the $5 billion in cash payments that banks will have to pay to borrowers, states and the federal government. Additionally, provisions to build up loan-loss reserves should amount to about $20 billion in principal forgiveness, short sales, loan modifications and other measures.
The final cost to banks will depend on the types of actions they take. Per the settlement, banks will receive greater credit for principal forgiveness for loans they maintain than for modifications sold to investors. For this reason, the Justice Department claims the settlement will provide borrowers with benefits beyond $20 billion.
A number of other legal issues still face banks. While the government is closing the book on foreclosure abuses, a new financial-fraud task force will be investigating whether banks bundled and sold shaky mortgages leading up to the financial crisis.
The foreclosure settlement doesn’t provide protection for banks against future legal action by some states. This means that banks are looking at one legal challenge after another.
In the end, the real measure of the settlement will be in terms of benefits to banks, investors and homeowners. Can it relieve housing pressure while allowing foreclosures to resume, helping to clear markets? If this is not the case, bank investors may still have much to lament.

Cabinet Dressing, Preparing Your Kitchen So That Your Home Sells

Posted on March 6, 2012 by Amitesh

Sure you know that the kitchen is probably the best place to make renovations. And sure you know that it’s here that you can get the best return on your investment. But, if you’re not selling your home, should you put up with ugly cabinets?

Sell Your House Quicker with a New Kitchen

A new kitchen install can add value and appeal to your home.

With the variety of paints and tools at your disposal today, you can upgrade your kitchen in little time and for only about a couple hundred dollars. Even if it is, just for you – you deserve it.

Start by removing the doors and drawers or drawer fronts. Remove all the door handles, pulls, knobs and hinges. After removing all hardware, fill the holes left behind. If your handles or knobs were located along the side edge of the panel, replace them lower on the door to give them a more modern look.

Use a degreaser to thoroughly clean the door and drawer surfaces – also hit the face frames and cabinet sides. Those surfaces near the oven are going to need special attention, as these will have accumulated more grease and dirt than other areas.

Sand the surfaces to eliminate dents and scratches, also to remove the paint’s gloss. When you’re done sanding wipe off the sanding dust using a moist cloth.

Place the doors and drawer fronts on supports and apply a primer so that the topcoat you apply will better adhere and be more durable.

Now, apply the topcoat. Using a paint roller instead of a paintbrush will enable you to achieve a finish that almost as good as one that’s sprayed on. Try a velour or foam type of paint roller.

To finish the job, reinstall the doors and drawers with your new pulls, handles and knobs. The finished product might surprise you. Enjoy your DIY project, done right.

The Case for Refinancing

Posted on February 27, 2012 by admin

Mortgage rates are so low now that banks are issuing incentives to win your business. So, if you’ve put off refinancing your mortgage until now, your fortitude may be well rewarded.

Many economists are saying if you're going to refinance your home, now may be the time.

The average interest rate on a 30-year mortgage fell to 4.05%, the lowest it’s been in six decades. Rates on jumbo mortgages – those that are larger than $400,000 in most areas – have hit lows as well.

Most market analysts won’t argue that rates are going to get any lower than they are now. Furthermore, demand for refinancing is declining, since a large number of homeowners have already refinanced – taking advantage of lower mortgage rates.

A number of factors have moved some lenders to offer incentives to win business -especially those banks that are focused on jumbo mortgages. It’s this need to bring in more customers that has banks aggressively marketing discounts.

Examples of incentives include one in which banks are allowing borrowers to roll the costs of refinancing into the mortgage – fees such as the appraisal fee and loan processing fee.

The incentives, in and of themselves, may not be enough to bring in extra business as many applicants are still unable to meet all of the qualifications. The most difficult requirement is the home equity minimum of 10%; those with less find it very difficult to be considered.

Last month, the federal government unveiled a re-worked version of the Home Affordable Refinance Program with relaxed home-equity requirements, which is aimed at allowing more borrowers to refinance. To qualify, the mortgage must be one that is owned or guaranteed by Fannie or Freddie – also, borrowers must be current on their payments.

A FICO credit score of at least 740 is needed to get the best rates and a mountain of documentation is required; but after meeting these requirements you can receive a sixty-day rate lock for free. With rate locks, however, if the rates spike within the lock period, you’ll wind up paying higher rates.

How to Customize a New Home in Arizona

Posted on February 24, 2012 by Amitesh

There are many myths in home buying, and one of these is that a perfect house exists for every family. It’s not true, which leads some people to feel frustrated. To make sure you get your dream home, it often makes the most sense to buy customized new homes in Arizona. This means having a builder construct your home according to your specifications. Of course, it will be expensive, but it also means that you’ll get to live in a house that’s like no other.

Most home builder's standard floorplans are customizable, but a for a fully custom built house, you'll need to speak to a local custom home builder.

The specifications of custom homes depend upon the buyer, so you better make sure that you have the following basics:

Have a good drainage system. Make sure your builder has this in place. While you can’t see it, it’s as important as the external structure of the house. After all, you don’t want clogs to ruin your stay in your new house!

Check the electrical and other connections. Above all else, they should not pose a risk to you and your family. They should also be well placed, according to local codes and specifications.

It should be well ventilated. It can be very warm in some parts of the state, so newly built homes in Arizona should be well ventilated as a standard building feature. Make sure that there are enough windows and doors strategically located to provide maximum ventilation.

The home should be positioned well to receive adequate sunlight. A house that receives adequate sunlight means more savings in electricity. It will also seem more welcoming and warm.

Only quality materials should be used. Make sure that your builder buys quality materials in constructing your house. There are new homes in Arizona that are built with substandard materials because the owner didn’t bother to check. Save yourself the headaches now and monitor your builders closely.

Aside from these basic features of a house, however, there are also other things that you can customize. Instead of having a flat ceiling, for example, you may decide to give it shape, like a dome, cove, or even a Cathedral ceiling to make your home look more spacious. The materials to be used can also be customized depending on your needs—there’s drywall, lathe, or plaster.

Closets can also be personalized. Instead of having just a regular one, you can choose to have a walk-in closet in which you can store not only your clothes and accessories, but other things as well.

There are so many things you can do if you want a customized new home in Arizona. Just make sure, though, that you can afford it!

Location Matters When it Comes to Buying a New Home in Arizona

Posted on February 23, 2012 by Amitesh

The popular saying is that the only thing that really matters when it comes time to buy a new home is the location, location, location. This is a true saying regardless of where you are in your life and what your needs are, and it’s very true when it comes to looking at new homes in Arizona. Once you find a location that meets your needs, it is often easy to find a home that contains the primary features you are looking for.

When selecting your ideal Arizona home, keep in mind that location still matters!

Location matters in so many different ways for people. A few of the most popular reasons why location matters to people are listed below.

• Close to work: For most people, having new homes in Arizona that are close to their place of employment is a huge plus. Needing to drive for an extended period of time to spend eight, or more, hours of every day at work is just unacceptable for many people. With commute times drastically reduced, you are able to have more time to relax in your new home or with your family and friends. Even if the location of your dream home is not close to your place of employment, you could still find a good place to commute with others in your area or to take the train or bus into work.

• Close to good schools: School quality is often one of the first criteria that families consider when they are moving to a new neighborhood. It is often easier to come into a school district that already has a strong parent involvement component rather than trying to get such an initiative going by yourself. That being said, if the schools in the neighborhood you are considering are not up to your standards, many neighborhoods are close to other options for schooling such as private or parochial schools.

• Close to entertainment: Whether you love shopping, visiting museums, or riding your bike down trails, finding a home that is close to those activities you like to do best is going to be important to you. Having this convenience means that you will be able to enjoy your hobbies and extracurricular activities much more often than if you need to plan a special trip each time you do so. Living right in the center of all the activity gives you ample opportunities to do so.

Why Simplicity Works in Real-Estate

Posted on February 17, 2012 by Amitesh

Hindsight is 20/20. So after reviewing your own real-estate investments, what have you learned? Unfortunately, the lessons are learned for some much too late.

Phoenix Real Estate: New Homes in San Tan Valley

Even seasoned real estate investors can learn a thing or two from this recession.

A real-estate investment that was once a hot commodity is now a problem. The answer to the problem is often not as complicated as you might be led to believe – usually by someone who stands to gain from you believing so.

Investors shelled out $13 billion for tenancies-in-common (TICs) securities between ’04 and ’08. TICs allow sellers of real-estate to roll their proceeds over into other properties without incurring capital-gains tax. These types of securities were made for a real-estate bubble.

TICs were structured as privately placed securities that don’t trade, with up to thirty-five investors able to own stakes. Buyers claim a stake in the rental income and potential sale of one or more commercial, retail or residential properties.

Ideally, TICs can help investors to shield their real-estate sales from capital-gains taxes, to bring in regular income, as well as hand the asset down to family in a tax-efficient manner.

Problems arose when Wall Street sold the idea that works well for a limited number of specialized, wealthy investors to ordinary investors. The issue is illustrated by considering an example of one investor who sold a local business for a bit over $1 million, net of debt.

The investor placed the entire sales worth into two TICs that gave him a stake in two apartment complexes in different states. The annual yield projections were 6.5%.

This was a new investor, with no previous investment experience. He explained to his investment adviser that he was looking for a conservative to moderately risky investment with income as the objective.

TICs must be executed on a precise, tight schedule. Although it was very stressful to get all the required documents in on time, his advisers warned that it would be really expensive to undo the transaction.

After the deals closed, all the investors had to infuse more capital when one of the properties was involved in a lawsuit. The monthly income on their investment has dropped from $5,000 to $300, and is expected to be completely gone soon.

For anyone considering a TIC, it’s important to proceed with caution. These only make sense if you are already planning to sell a property and to reinvest eh profits into other real-estate properties. The 15% you stand to avoid on capital-gains tax is not worth the 7% more you will pay on commission.

If looking to relocate to Phoenix’s East Valley, consider buying a new home in San Tan Valley at LGI Homes’ latest Arizona new home community, San Tan Heights.

New Home in a Changing Economy

Posted on February 16, 2012 by admin

The state of the economy affects all areas of our lives; it certainly has an impact on home design. For example, during the housing-boom the square footage of homes soared -McMansions became all the rage.

Spaces by Shea Homes in Gilbert, Arizona.

Although fewer homes are being built, homebuilders and architectural firms have adjusted to more practical features for the homes that they are designing. Remodels and renovated homes also reflect this trend.

Value and family needs are the driving force behind the purchases in homes, today – it’s no longer the home’s potential investment. So here are a few outgoing home features and the replacements:

Formal living rooms are giving way to open family rooms. More and more
homeowners are beginning to view the formal living room as a waste of space. An
area that integrates the kitchen, family room, and dining area is efficient and
functional. Spaces are separated now more by furniture than walls.
A home office is out, the lifestyle center is in. Portable devices enable work to be
done all over the home. Multifunctional rooms are trending, which are positioned
near the kitchen affording parents an at-home work option while children can employ
the room to print homework assignments and surf the net.
A breakfast nook used to be a nice place to eat your morning meal – it was cozy.
Now, however, an outdoor living space connected to your home by sliding glass
doors has become a family favorite. Styling your outdoor living area, which can be
seen from inside, to fit your home’s decor make the home look bigger.
Large bathtubs were luxuries that were nicer seen that used. For efficiency and
function, the steam shower has become popular. Stalls are getting bigger for
convenience and comfort – digital options, too, are a bonus. For those homeowners
interested in resale value, however, might not want to go tub-less. Perhaps a modern
hydrotherapy bubbler will be enjoyable to you now, and prove valuable when you
look to sell.

Distressed Properties Present Opportunity

Posted on February 9, 2012 by Amitesh

A bad turn for the economy has sent the prices for commercial property to the floor. This has opened up opportunities for investors as lenders and servicers who are disposing of an ever-growing stock of distressed loans and foreclosed properties.

Who's Buying Distressed Properties and Foreclosures?

Distressed properties being disposed of by lenders and servicers.

The growing flow brings new owners to buildings that have been struggling with high vacancy and a lack of investment by owners overwhelmed by debt.

Specialists that oversee troubled loans on hundreds of billions in commercial mortgages on behalf of bond investors have sold over $11.5 billion in distressed loans and foreclosed property in the past year. That’s an increase of more than $4.5 billion dollars over the prior year.

Of the loans sold by these special servicers, investors suffered an average of almost 40% loss on loans or property sold this year. So it’s clear that these assets are being shed at large loss.

Although sales of distressed property have occurred throughout the economic recovery, sales of commercial mortgages have typically been dominated by a few banks and the FDIC, which shed assets to large private-equity firms in large stocks.

With many commercial real-estate loans set to mature in 2012, it’s no wonder many property owners unable to pay off mortgages due to a sluggish economy are cutting deals with lenders and servicers to refinance and extend the terms of their loans. However, every month finds billions of dollars of new properties falling into default. This, in fact, is what economists expect to see over the next few years – an ever-increasing volume of loans falling into default.

Buyers are capitalizing on the growing volume of distressed assets being put up for sale. Many foresaw this time during the early part of the downturn and saved money in hopes of buying property at a premium, but it is only now that they are being put on the block.

Caring for your Home’s Caretakers

Posted on January 23, 2012 by Amitesh

Although you are a great do-it-yourselfer (no one doubts that you are) you’ll certainly need to employ the help of professionals from time to time. Every homeowner should strive to forge solid relationships with those who care for their homes. Here are some suggestions on how to show your appreciation:

Every homeowner should strive to forge solid relationships with those who care for their homes.

1. Know when to tip. For anyone who provides you with a service throughout the year, a gift is a nice gesture if the two of you have a relationship. From the landscaper to the housekeeper, show them you appreciate their hard work – and tip accordingly.

2. Know when not to. The sole proprietor of a business is not expecting a tip, but if that person has gone the extra mile for you in some way then tipping is simply your acknowledgement of the fact. Also remember that some companies have policies and procedures that don’t allow acceptance of tips in order to ensure bribes aren’t taking place. Here’s a scenario in which you wouldn’t want to tip. If a company sent a repairman to your home for the roof, and you offered him cash on the side to install a skylight. Any problems that may arise from the installation may not be covered under the warranty. Things could get messy.

3. Give appropriately. Although no set standard exists for tipping service professionals,
your goal is to show them that they are appreciated. Twenty to fifty dollars will do the
trick. If it’s your pool person or housekeeper that you’re tipping, a bonus of at least
20% over what you normally pay per visit is good.

If you find that financial circumstances won’t allow you to tip this season, send a card or thank you note instead. The idea is to let your service professional know that you value their work and maybe even their friendship. Include in your note that the tip isn’t coming this time, not because of quality of work, but budgetary issues.

Home Prices on the Decline

Posted on December 12, 2011 by Amitesh

Nationwide home prices have dropped to a median level that is down over 4.5% amid a housing market that continues to struggle.

As home prices continue to drop, many are asking why sales aren't increasing.

Among metro areas, the median price for previously occupied homes sold in the last quarter dropped compared to last year. In fact, three quarters of metro areas declined in price.

The housing market has been slow to recover from one of the worst downturns in decades. Not helping the recovery is the reluctance of Americans to commit to purchasing a home, due in part to a weak economy. According to one report, the number of previously occupied homes sold slumped to a new low in the last five months.

Third-quarter sales of homes increased 17% over last year – during the same period sales went down as a result of a federal tax credit that expired.

Economists point out the need for home sales to recover before prices can stabilize. It’s been forecasted that the nation’s home prices will fall an additional 3% by the year’s end, resulting from weak demand, a struggling economy, as well as a large inventory of foreclosures and other distressed properties on the market.

Critics of a looming recovery warn that it may take years for a proper recovery to get underway, not months like optimists claim. Home prices may not begin to rise sustainably nationwide until 2014.

Distressed properties, which include foreclosures, accounted for 30% of third-quarter transactions nationally, down 3 percentage points from the second quarter.

Metro areas showing the largest drop in median prices from the previous year include Phoenix (down 17.6%) and Salt Lake City (down 17.5%).

Arizona New Homes

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