Sunday, June 27, 2010

A close-up and personal look at housing collapse

Hollis R. Towns, executive editor of the Asbury Park Press, writes about a second home he has in the Atlanta, Georgia area. He's trying to sell the home and things aren't going well.

"I've always understood Main Street's frustration with the Obama administration and the bailout of Wall Street. The fat cats were made whole and the little guys were left trying to hold on. But you never really understand an issue until you are affected by it."

Mr. Towns found a buyer for the house, the present tenants, but problems arose with the appraisal.
"It was for $90,000 — $44,000 less than the list price of $134,000 and $34,000 less than the payoff amount. This, for a 3,500-square-foot, six-bedroom Cape Cod with a finished, walk-out basement, screened porch and bonus room, all on nearly an acre of land in a drop-dead gorgeous, old neighborhood."
The culprit is the undeniable fact that the house was located in a neighborhood full of foreclosed homes. Prices on those homes are, by necessity, depressed. That, in turn, impacts the value of homes where the owners have made every payment on time.

The lender was of no help--suggesting a "short sale" that would impact the owner's credit report and possibly have terribly adverse income tax consequences.

Read Mr. Towns' column.

[Note, I wrote to Mr. Towns in order to get more facts surrounding his original acquisition of the property; was it as his home or an investment property, and why he didn't sell the house when he moved. As of July 1, I have not received a response.]

If you have questions about what you see here,
contact Stephen M. Flatow

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Saturday, June 26, 2010

V.A. mortgages drying up

With all the problems American military vets face, The New York Times' Bob Tedeschi writes about another one -- the difficulty in getting V.A. mortgages.

Tedeschi writes,
"MILITARY veterans have long been accustomed to a relatively easy mortgage process. Even borrowers with no down payment or a low credit score were usually granted V.A. loans, in large part because the Department of Veterans Affairs insures a quarter of the loan amount."
"But about two years ago, lenders began limiting the conditions under which they would offer these mortgages, and industry executives say that since the start of the year, all the nation’s major lenders have followed suit."

This is not a new issue. Loans are still offered with no down payment but some of the big lenders are backing away.

Credit scores seem to be playing a major role in the decision of lenders to make the insured loans.

Is this a way to treat men and women who have stood in the front lines for America?

Read the full article here.

If you have questions about what you see here,
contact Stephen M. Flatow
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Thursday, June 24, 2010

Extension of the first-time home buyers credit?

Anyone in the residential real estate business can tell you the crunch is on to get transactions closed. We in the title business are no exception. With June 30th, the date by which buyers must close in order to get the Federal credit, looming, the pressure is on to get to the closing table.

The Congress is trying to come to the rescue by extending the deadline. It should happen, but will we come down to the wire?

Read the full article from the Boston Globe, Another extension of the first-time home buyers credit? - Managing Your Money

If you have questions about what you see here,
contact Stephen M. Flatow
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