Van Eck Mortgage Update

The September report on existing home sales was released yesterday. It was stronger than expected – posting an annual pace of 4.53 million – that was about 10 percent stronger than the average Wall Street estimate. The media still loved the report and used it to justify the running theme from the Establishment about how the economy and housing are broken and sure to get worse soon. The September report on new home sales is coming out tomorrow. I am going to wait and publish an expanded Hotline on Thursday. As I will discuss in that Hotline, the latest data on home sales confirmed the fact that housing has already bottomed in most markets and at worst the industry is in a consolidation phase. By this time next year, I expect to see stronger demand overcome any obstacles that might be thrown in the way of a recovery.

Foreclosures remain a problem but there are going to be plenty of willing and able buyers out there that will be available to soak up that supply. The fact that mortgage rates are historically low will only help to reinforce that demand story. Most commentaries on housing are still obsessively focused on supply in the market. I believe that is going to prove to be one of the great fake outs of recent financial history. The bears are sure that housing is headed for a major decline. Someday, if it turns out that housing simply ran in place for a while and then began to recover, the bears will no doubt backtrack and still claim victory. A few years from now, all that will have mattered is whether or not it was prudent to buy a home, condo or apartment either as a residence or as an investment during 2009 and 2010. If prices are higher in 2011 and 2012, it would be a severe blow to the crowd that has been predicting an imminent crash of 20 to 50 percent in home prices. I expect incomes to improve. That would be the ultimate driver of a sustained bottom and recovery in the housing market.

Ten Ways To Improve Your Home’s Curb Appeal

Replace old hardware- Update your dated house numbers, entry door lockset and overhead light fixture. Each of these elements can add style and interest to your home’s exterior, especially if you incorporate a great finish option.

Make over your mailbox- Restore your existing mailbox with a fresh coat of paint or stain that matches the trim, color and woodwork of hour house.

Tame planter beds and landscaping- Prune, pull weeds and plant flowers to add color. Add a fresh coat of paint or stain that matches the trim, color and woodwork of your house.

Illuminate your walkway- Adding low-voltage solar lighting to your front walkway can have a big impact on your home’s curb appeal and adds safety and security.

Freshen up the front door- Clean off any dirty spots and remove any loose paint. If your door is beyond repair, install a new one. Be sure to add a piece of decorative flair, like a door knocker that showcases your personality to the outside world.

Renew paint and trim- Give your home an exterior facelift by adding a new coat of paint or stain.

Replace gutters and downspouts- If your gutters look worn out, install a new, snap-fit gutter system that goes together with a few tools for an easy and important upgrade.

Add shutters or accent trim- To mirror the pulled-together appearance of your indoor rooms, install shutters and trim to provide an extra layer of interest on the exterior.

Upgrade railings- Porch and stoop railings deteriorate over time and can become loose. If yours are past their prime, look for quality wood or metal replacements. Make sure the color, scale, design and details coordinate with the rest of your home’s main features.

Dress up the drive- Repair any cracks or stains and be sure to kill the weeds and then add some extra character by staining the concrete or affixing flagstone.

Home Buying Secrets By Greg & Lisa Doyle

•Study- Ask your Real Estate professional for the latest sales data. Review the comparables and consult your Real Estate professional for the latest market trends in the specific area of your interest as that may affect what you should offer for the house you are trying to buy.
•Cure your credit- A low credit score could prevent you from obtaining a mortgage. It’s best to aim for a score 700 or higher. Learn how to boost your scores.
•Bid low- You can offer 10-15 % below the list price, because prices are based on contracts signed 3-4 months ago. List prices don’t necessarily reflect the most current values, especially in markets still on the decline.
•Get pre-approved- You will know your parameters. You will also present yourself to the seller as a serious buyer. It will also help level the playing field with all-cash buyers and investors and it will help you negotiate a better purchase price.
•Consider a newly built home- They have been harder hit. Concessions and reduced prices are the norm. Be sure to check the reputation of the builder.
•Inspect everything- Just because a home might be new doesn’t mean it’s defect free.
•Read the title report- Make sure that any new additions or construction to an existing home are fully permitted and recorded with the local municipality.
•Check the appraisal- Likewise check the appraisal report for any oversights, missed features or other errors that could cause the property to be undervalued.
•Negotiate- Ask for help with the closing costs, repairs, even furnishings and other perks.
•Do not skimp on the help-If you look for the least expensive attorney, real estate professional, inspector, etc., you will get what you pay for. Ask family, friends, co-workers and others you trust for referrals and then carefully vet them.

Hot Buy of the Month! 100 Starlight Place in Danville

3 Bedrooms, 2 Baths, 1802 Square Feet, 2-Car Garage

Light and bright throughout, neutral colors, wood floors, plantation shutters, granite counters and stainless steel appliances in kitchen, open floor plan, sunken tub in guest bathroom, 1-year-old HVAC system with extended 9-year warranty, fireproof tile roof, and so much more!

To watch the short video/tour of 100 Starlight Place in Danville click here:

http://tour.circlepix.com/LMH98M

As always, if you have Real Estate questions or need our help, call us anytime! 925-855-4046

Greg & Lisa Doyle

Article From Van Eck Mortgage and Property Hotline

Greg & I often run into articles we want to share. Let us know if you have any questions. Thanks!
Greg & Lisa

The things that have happened involving the U.S. housing market during the past decade represent both the best and the worst of human psychology. At the beginning of the process, when the market was in good shape in terms of construction, supply, demand and prices – people looked at homeownership as a good thing. It was seen as an important part of financial stability. Owning a home – investing in its maintenance and using it as a vessel of increasing wealth – has long been seen as part of the American Dream. I have known people over the decades that refused to own a home, condo or apartment. They did not want to be hindered by the costs associated with such ownership (property taxes, insurance, repairs etc…). However, a number of those people were quite suddenly informed by the owner of the rental property that they had to move out at the end of the lease. Sometimes, such “rental evictions” were because the owner had decided to sell the property. However, a myriad of other reasons also came into play. There is something satisfying about owning a home and believing that as long as you keep making mortgage payments on time – no one can tell you to leave and eventually you will own the property outright – thus decreasing costs later on in life.

After the speculative run up in real estate – which reached a peak during 2006 – and the subsequent crunch to the downside that has taken place during the past four years – it seems like the old adages about homeownership and the American Dream have been pushed aside. Analysts, reporters and commentators have led the charge – using the media as a conduit to try and convince millions of Americans that it is actually a bad idea to buy a residence. I read one article the other day that came right out and declared that owning a home is more like having an anchor tied around your neck as you are struggling to swim amongst raging ocean waves. Boy have we come a long way in terms of perceptions. For my part, I believe owning a home is still one of the best ways to provide social and financial stability – not only for individuals and families – but for society in general. It is popular these days to say that owning a home is a terrible idea. The new mantra along those lines runs something like this, “Why not rent and leave the troubles of the world to others?” I recall hearing similar skeptical talk about buying and owning stocks back when the stock market hit its lows in 2008-09.

As the housing market slowly but surely recovers during the years ahead, the human psychological tendency to forget about the past and extrapolate recent trends into the future will switch perceptions in America back to a pro-homeownership mode. Some people that have run into trouble with their homes (foreclosures etc) during the past four years should never have been allowed to get a mortgage in the first place. Everyone from politicians to bankers got caught up in a rush to boost the total number of homeowners in the country. As I said earlier, owning a home can be a very satisfying and stabilizing experience. However, allowing people to get a mortgage and move into a home – without properly investigating income and other factors – helped to set up the mess that is still playing itself out in the housing market and the economy in general. In recent weeks, there has been news that certain banks and mortgage lenders have been just as sloppy with facts and figures during the foreclosure process.

Recently, the GMAC Mortgage unit, Ally Financial, stopped all eviction proceedings in more than 20 states. As lawyers and Attorney Generals around the nation begin to latch on to this story – the list of states involved will only grow. What is this all about? It has been discovered that Ally Financial and many other major players in the mortgage market have been bending and breaking rules in order to get their backlog of foreclosures moving. I know that the housing bears have been claiming that banks and other institutions have been delaying foreclosures, but this story reveals that many of the companies involved have actually been rushing through the process. Jeffrey Stephan, a manager at GMAC, recently admitted that he has been signing about 10,000 foreclosure packages a month. That was a daunting task – especially in a world where financial companies have refused to hire and train enough workers to help deal with the load. Mr. Stephan has admitted that in order to deal with the thousands of foreclosures that passed his way each month, he failed to investigate whether or not the owner named in the paperwork had in fact legally defaulted on the mortgage and whether or not the mortgage lender listed was still holding the mortgage.

In a world where mortgages were often bundled up and sold as investments, it has become increasingly difficult for companies such as GMAC to properly investigate those important facts before moving ahead with a foreclosure. The problem has not been specific to GMAC. Many of the other top mortgage lenders and servicers have also admitted to rushing through the process – leaving proper procedures in the dust. A supervisor at a unit of JPMorgan Chase testified earlier this year during a deposition that she and seven other managers had been signing about 18,000 documents per month without properly investigating the contents and claims in the documents. Another problem has been that a notary was not always present when the foreclosure related documents were signed. All of that has opened up a can of worms. Homeowners have begun to cancel or at least delay foreclosure proceedings as their lawyers convince judges that the banks and mortgage providers failed to follow the law.

Several of the big firms have recently announced that they are halting all foreclosures for the time being until they get this situation rectified. The housing bears are always hungry for a new angle to justify their predictions of doom for housing and the economy. Therefore, they have decided that foreclosure delays are horrible news for housing. They say that any delay in the processing of foreclosures now will only push off the inevitable crash in home prices and thus the final lows and subsequent recovery. Nice try! If anything, the delay in foreclosures is a near-term positive, as it will limit the amount of supply hitting the market from that source. As for the problems at banks and mortgage lenders delaying the final bottom in the housing market … I will let the facts speak for themselves. In terms of the pace of existing home sales and the median price of those sales, the bottom took place at least 18 months ago! People have to stop confusing the foreclosure situation (which is apt to add about one million homes to the market this year) with the broad housing market. As the economy continues to recover, layoffs are drying up and job growth is returning. Those forces are going to be enough to counter the foreclosure mess. In fact, foreclosures failed to sink the housing market in 2009 and 2010 – despite the fact that the economy was weaker during most of that time than is currently the case. More next week.

Watch Out for Cyber Crime- Article Information from Realtor Magazine October 2010

Scam artists are targeting small business owners via email. They are sending emails from phony email addresses and when the businesses are clicking on the links, viruses are going into their whole computer systems.

Smaller companies are the prime targets, because they don’t have the most sophisticated technologies to keep the frauds out. One of the best things to remember is to only click on links you know are legit. If you think it looks phony, chances are it’s a virus.

Once the virus hits your system, it can wipe out all of your data. The scammers can also get a hold of your bank account information and take money out. It would be good to go with a bank that offers online fraud protection. Check with your existing bank and see if they offer protection.

As always, if we can be of any help to you or anyone you know, call us anytime.

Have a great day!

Greg & Lisa Doyle
925-855-4046

In order to Increase Home Sales, More Jobs are Needed- Article Information from Realtor Magazine October 2010

Since there has been a stall in the growth of the economy and a continuing increase in the unemployment rate, home sales price changes could drop again. They’ve been stable for about 18 months now, but if businesses don’t begin creating new jobs, the prices could fall again.

Houston and Washington D.C. have a rise in jobs and pending home sales are remaining in good shape even without the tax credit help.

The economy could grow about 5% per year as long as business spending rises. This could mean possibly adding 3 million jobs in one year!

Call us anytime you have questions or need our help.

Have a nice weekend!

Greg & Lisa Doyle
925-855-4046