Principal Reduction Will Solve The Housing Crisis and Jumpstart The Economy

Realty Times has a blow-out article written by Tanya Marchiol, President of Team Investments, an Arizona real estate broker.

The gist -

The American economy is chained to the crushing housing debt load. Chronic unemployment, foreclosures, and small business closings can all ultimately be traced back to the housing crisis. Working families across the country have seen their home values plummet, have had their life savings wiped clean, have been powerless to help when their loved ones lost their jobs, and in too many cases watched helplessly while they lost their homes to banks that continue to post billion-dollar profits and pay out billion-dollar bonuses. Add to that the trillions in bailouts and backstops that taxpayers gave to the banks, and one thing is clear: tax payers have already done their part. Now it is the banks' turn. Principal reduction will restore the American Dream, create jobs, and give the American family the ability to breathe again.

Ms. Marchiol is on to something here. We have heard many of the stories that she writes about. 

Read the full article.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

F.H.A. may need a bailout

According to a story in the New York Times, the F.H.A., the backbone of the Federal government's housing program is running low on cash.

Chances are nearly 50 percent that the Federal Housing Administration will need a bailout next year if the housing market deteriorates further, the agency’s independent auditor said in a report released Tuesday.

With the amount of cash on hand about 50% less than last year, the F.H.A. may have to call on the central government to replenish its accounts. All due, of course, to the housing crisis and the number of defaults in F.H.A. related mortgages. Stay tuned.

Read the full story here.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

Is there good news out there about the housing market?

Simon Constable writing in the Wall Street Journal thinks

“There might finally be some good news this year about the nation's dismal housing market. Or, at least, the bad news could stop.”

“Either way, it will be welcome relief for current homeowners as well as for potential real-estate investors. Reasons to be optimistic have been sadly lacking since the housing bubble burst in 2006.”

Constable points to the continuing decline in the S&P/Case-Shiller home-price index that fell again for the fifth month.

What are the signs that the bottom is close?

“Houses Are a Good Deal. Housing is the most affordable it has been in decades, according to analysts at Moody's Analytics. They don't just look at house prices. They also look at incomes.”

“Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years' pay, although that varies nationally.”

“Investors Stepping Up. Here's another sign the market is nearing a bottom: Investors have started to buy up houses and condos, in some instances paying entirely in cash. That's a far cry from the heady bubble days when borrowed money seemed the key to riches. The bubble-era speculators who got burned tended to buy at the peak and borrowed heavily to do so. When the crash came, they quickly saw their wealth erased.”

“Plan to Stay Put. Buy and hold. While the good news is that the worst of the housing crash might be over, the bad news is that the fast gains of the glory days of 2005 and 2006 won't be back any time soon. So to cover the costs of buying and selling, and what could be a prolonged recovery, plan to own for more than 10 years, explains Jack Ablin, chief investment officer at Chicago-based Harris Bank.”

“Home Buying Without a House. There are other ways to benefit from a real-estate rebound than directly buying a house. Such investments include stocks, mutual funds or exchange-traded funds. Unlike homes, which typically cost tens of thousands of dollars, these financial investments can be made in smaller amounts and typically are easy to sell.”

Is there light at the end of the tunnel.  Could be, but it can also be a locomotive entering the tunnel.
Read the full article.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Stephen's Title Agency, LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-227-4724 - Fax 973-556-1628

E-mail Stephenstitle AT comcast.net - www.stephenstitle.com

N.J. Home buyer tax credit - will it happen?

Is the N.J. home buyer tax credit in jeopardy? That's the question being asked in a news report from Channel 3 in Philadelphia.

"A bill that some say would reenergize New Jersey's housing market is still sitting on the desk of Governor Chris Christie.

"It's a spend money to make money, create jobs and create commerce initiative."

Patrick Murray, on Newsroom New Jersey, asks a question, what's the bottom line on the bill's effectiveness?

Well, what happens after the credit program is shut down? Do those buyers stay in the market and keep housing demand high? If we look at the experience of the federal credit program, the answer appears to be "No."

The numbers are even more astounding if we look at how the credit will apply to sales of existing homes. According to state figures, more than 110,000 existing houses were resold last year. That translates to about 300 a day. This means the $25 million pot for existing home sales tax credits will be snapped up within a week of the program going into effect. One week!

Considering how lengthy the sales and mortgage process is, a homebuyer's likelihood of closing on their purchase within the seven day window this credit program is available will be more a matter of luck than planning. "Mr. and Mrs. Jones, here are the keys to your house, and congratulations — you just won $15,000!"

The bill is seen as a jump-start, more like a defibrillator, if you ask me, for New Jersey's ailing housing market. The idea is to give home buyers a $15,000 tax credit or get back 5 percent of the price, whichever is less. The money would be paid over three years. You can read the bill here.

We'll keep you posted.

If you have questions about what you see here,
contact Stephen M. Flatow
Stephen's Title Agency, LLC
StephensTitle@comcast.net
973-556-1628 Fax