Foreclosures are rising in many parts of the country, fueled by a slowdown in home sales, slumping real-estate prices and rising payments on adjustable-rate mortgages. Homeowners who have lost a job or faced another economic crisis are finding it hard to refinance or take out home-equity lines of credit to bail themselves out, analysts say.

The Detroit, Fort Lauderdale, Fla., and Denver areas posted the nation’s three highest foreclosure rates for the third quarter of 2006, replacing Indianapolis, Atlanta and Dallas, which had been the top three markets for the two previous quarters. The Indianapolis area was the only one of the three to see the high rate of foreclosure rates dip, edging down 2%. (more…)

search for : Foreclosures, slumping real-estate prices, rising payments on adjustable-rate mortgages

A banana republic is also characterized by a ruling class that curtails people’s personal freedoms and is moving towards a heavy-handed military dictatorship under the excuse of fighting guerrilla (or terrorist) opposition groups or enemies. Moreover, the fact that the ruling class or the elite comes from different political parties isn’t a relevant factor in classifying a country as a banana republic; what is relevant is the determination of the elite, irrespective of which party its members belong to, to shift wealth from the majority of the people (the masses) to themselves, usually through simply printing money and incurring chronic budget deficits, and frequently also through senseless warfare.

The third good news is that although there are ominous signs of the US drifting towards the status of a banana republic, the polarization of wealth isn’t due only to appreciating asset values, inheritances, and the disproportionate growth of the financial sector compared to the rest of the economy. The five richest Americans all made their money themselves, and while money managers, real estate moguls (including hotel and casino owners), and leverage buyout artists are very predominant on the Forbes list of the 400 richest people in America, there are also a large number of “new economy” entrepreneurs on the list, such as the founders of Yahoo, eBay, Amazon, and Google. (more…)

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It doesn’t make financial sense to pay for points to buy down the cost of a mortgage only to refinance the mortgage before reaping the advantage of the buy down. Apparently, however, that’s what virtually all home buyers do when they elect to include points to lower their interest rate with plans to save money over time, according to “Do Borrowers Make Rational Choices on Points and Refinancing?” a special mortgage study by Abdullah Yavas, an Elliott Professor of Business Administration at Penn State’s Smeal College of Business and Freddie Mac analyst Yan Chang.

Only a tiny fraction, 1.4 percent, of borrowers who bought points held their loans long enough to make them pay off. Of those who didn’t buy points, only 1.5 percent would have been better off purchasing them, according to the study an examination of 3,785 mortgages originated between 1996 and 2003. Each “point” is 1 percent of the value of the mortgage. That is, if your mortgage is $200,000, one point is $2,000. Some points are called origination points — charged for originating or writing your mortgage. (more…)

search for : mortgage, refinance the mortgage, Points and Refinancing, origination points

Activity drops more than 14 percent as 30-year fixed-rate mortgage climbs to 6.12 percent, industry trade group’s weekly index says. Mortgage applications fell as interest rates rose across the board, an industry trade group reported Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity for the week ended Dec. 22 fell 14.2 percent to 555.8, from 647.6 a week earlier.

The 30-year fixed-rate mortgage rose to 6.12 from 6.10 percent last week. The group’s seasonally adjusted refinance index fell 18.5 percent to 1604.6 from 1968.8 the previous week, and the purchase index decreased 10.6 percent to 390.2 from 436.5 one week earlier. The refinance share of mortgage activity decreased to 48.8 percent of total applications from 50.8 percent the previous week. Fixed 15-year mortgage rates increased to 5.84 from 5.82 percent. Rates on one-year adjustable-rate mortgages (ARMs) increased to 5.87 from 5.82 percent. (more…)

search for : fixed-rate mortgage, Mortgage Bankers Association, one-year adjustable-rate mortgages

Randy and Jennifer Rimstad of Minnetonka, Minn., refinanced their mortgage in 2004 to replace a 50-year-old furnace and pay for their youngest daughter’s wedding. In May, their interest rate jumped to 8.55% from 5.55%, pushing their monthly payment from $1,654.81 to $2,295.68, and the Rimstads buckled under an adjustable rate mortgage they say they didn’t understand and could ill afford. Then came the collection nightmare that tacked on another $700 or so in monthly payments.

Millions of other families in the U.S. could soon find themselves in the same dire straits. Some $1.2 trillion in adjustable mortgages will shift to higher rates in 2006 and 2007, more than half of which are to borrowers with less-than-perfect credit, or subprime borrowers, like the Rimstads. These loans already are defaulting at unprecedented rates. Lenders are in large part responsible because they sold risky and unsuitable mortgages to unsophisticated borrowers. In some cases, of course, careless borrowers shoulder some of the blame. But some say there’s another force at work: aggressive servicing tactics. (more…)

search for : adjustable rate mortgage, monthly payments, adjustable mortgages

As a weak housing market nudges the foreclosure rate higher, next year is looking promising for investors in distressed real estate. So far, the U.S. housing slump hasn’t produced a bonanza for such investors, but lenders stuck with foreclosed property are becoming more inclined to slash prices or sell properties through auctions, industry experts say. “We’re all going to have to be more creative in the next 12 to 24 months” in selling foreclosed homes, says Chad Neel, president and chief operating officer of Fidelity National Asset Management Solutions, a unit of Fidelity National Information Services Inc., Jacksonville, Fla. Mr. Neel’s company helps lenders manage and sell foreclosed homes.

In the first half of 2006, REO properties accounted for 3.1% of all U.S. home sales, up from 2.4% two years earlier, according to a study by First American Real Estate Solutions, a unit of First American Corp., Santa Ana, Calif. The study found that those homes sold at a median discount of 14% to their estimated value in the first half, compared with 12.5% two years before. The discounts reflect the gap between the actual sale price for the homes and the value estimated by a computer model, which takes into account sales of comparable homes nearby and price trends. It has taken a while for foreclosures to mount. The housing boom of recent years reduced foreclosure rates because most people who fell behind on their loans could refinance or quickly sell their homes for at least enough to pay off the loans. (more…)

search for : U.S. housing slump, foreclosed property

In good markets or bad, real estate broker Ralph R. Roberts reveals in “Flipping Houses for Dummies” how he acquires run-down houses, fixes them up, and then either “flips” (sells) them for a profit or holds for long-term investment. Roberts, a highly respected real estate author, trainer and broker, shares his techniques along with advice on how to minimize the tax bite on profits.

As a longtime real estate broker, Roberts knows all aspects of the home brokerage business and he doesn’t hesitate to share his insider secrets. For example, he says, “Nothing on the MLS (multiple listing service) is the gospel truth. Sellers and real estate agents alike often estimate room sizes or make mistakes when entering details. Approach all prospects with a discerning eye.” Even if you are not interested in “quick flip” real estate profits, this is a great book to study because the author shares so much of his real estate knowledge which he gained, starting at age 19, over more than 30 years in the real estate business. Maybe Roberts is getting a little “salty” in his old age, but he exposes secrets most Realtors would never share with their clients. Examples include how to obtain a “listing history” of a property, how to determine what the seller paid, how long the property has been on the market even with more than one listing, and if the property is difficult to “unload.” (more…)

search for : Flipping Houses for Dummies, run-down houses, long-term investment, real estate business

Scott Patterson, a college dropout-turned-real estate investor, flings open the door of a vacant bungalow in north Charlotte and shouts to scatter any vagrants who might linger inside. The run-down house emits a musty odor, its walls are grimy and rust covers the bathroom fixtures. Patterson likes what he sees. “You never know which house will be a moneymaker,” he says.

In a city remarkable for its can-do economy and penchant for business deals, Patterson and others like him fill a special — and risky — niche. They snap up dilapidated houses and duplexes for less than $100,000, long before the neighborhoods become popular with newcomers and urban pioneers. They renovate and sell the properties for more than $300,000 in some cases. “Everybody’s trying to predict what the next hot area will be,” said Mike Jaffa president of Graham Investment, which writes loans for some of the city’s biggest individual speculators. In some neighborhoods, real estate investors have reduced blight, raised property values and lured young professionals to long-neglected areas. But not everyone is thrilled. (more…)

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December is a time when most Americans will run up at least a little extra debt in order to celebrate the holiday season. Now, if we only saved up our money the other 11 months of the year, this wouldn’t be a problem. But we don’t. In fact, for the last two years, Americans as a whole have been spending more than we save. That hasn’t happened since the Great Depression. We are officially living on credit. Americans have become used to living on credit. We think nothing of whipping out the plastic to get those things we “need,” like iPods and flat-panel televisions.

Americans generally understand that we have a serious problem. They just don’t know how to fix it, or are unwilling to take the measures to fix it. It’s not easy. There are no quick, painless solutions. We simply need to stop spending the money we don’t have, and deal with the resulting economic fallout, which will be significant. We can’t stop the pain, but we can keep adding to it. For one thing, we should work to come up with an alternative energy source to oil, which will keep hundreds of billions of dollars from flowing to the Middle East, money that is used to fund wars against us, which further erodes our treasury. Not only could we stop the oil dollars from flowing out, we could reverse the process and export energy to the world. (more…)

search for : Great Depression, living on credit

The easing market may be worrying those who invested in real estate this year, but to avoid facing even more financial pain at tax time, those investors should consider the following year-end tax strategies. Keep in mind that real-estate investment tax tips are a bit different from standard investment tax tips, given that real estate is not as liquid as other investments. “There are some things you can do, but for the most part real estate works a little bit differently than some of the other areas where you normally do year-end tax planning [such as] selling some dog stocks from your portfolio,” said Eric Kea, a director of the real estate taxation practice at BDO Seidman.

If you bought real estate this year, consider having an expert evaluate your property piece by piece in what’s called a cost-segregation or component-evaluation analysis. Each piece of your building is put into various categories, each with different depreciation timelines. If, instead, you depreciate your building and its contents as a whole, you’re forced to do that over 27-1/2 years for residential rental property and 39 years for a commercial property, Lechter said. By using a cost segregation analysis, you can “depreciate parts of the building over a much shorter lifespan. It greatly increases your depreciation deduction, therefore reducing your taxable income,” Lechter said. A professional cost-segregation analysis might be too expensive for a real-estate investor with just one small property. If that describes you, consider creating your own analysis based on your property-tax bill, said John Michel, a national real estate tax partner in the Cincinnati office of Grant Thornton, based in Chicago. (more…)

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Lifestyles of the twenty-first century have radically changed from fifty years ago. The clamor for big lots and single-family houses has been replaced by a demand for condominiums and planned communities (generically called “homeowner associations” or HOAs). The growth of HOAs has been nothing short of phenomenal in the last decade. In many urban areas, upwards of 75 percent of all new residential housing is in the form of a homeowner association. Mixed used HOAs combine residential and commercial together. For instance, retail and office units often occupy street level space while residential units occupy upper floors.

HOAs are essentially governmental corporations controlled by the members through an elected board of directors. The HOA has authority to make and enforce rules and regulations and to collect HOA fees from the members to support the HOA operation and maintenance responsibilities. Like the IRS, the HOA has significant power to enforce its will through liens and, in extreme cases, foreclosure. When homeowner associations are properly conceived and constructed, they work very well. When they are haphazardly implemented, trouble and discontent follows. The success or failure of an HOA begins at the beginning … with the developer. (more…)

search for : condominiums, homeowner associations, HOA

More and more often, natural disasters from summer hurricanes to winter snow storms don’t blow through without leaving injuries and deaths in their wake — not from the event itself, but from misusing power generators to keep the lights on when the power goes out. After Hurricane Katrina left much of the Gulf Coast in the dark last year, a dozen deaths and scores of carbon monoxide (CO) poisonings were blamed on portable gas-fired generators in the hands of those unfamiliar with their proper use.

An early winter snowstorm in the Buffalo, NY area just months ago turned out the lights for hundreds of thousands of residents and half the six storm-related deaths were attributed to CO poisoning from gas fired portable generators. Area hospitals reported dozens of cases of CO poisonings caused by the appliances. After a snow storm with hurricane force winds knocked out power to 1.5 million customers in the Pacific Northwest, including homes and businesses, hospital officials said CO poisonings reached “epidemic” levels. Just a week before Christmas, at least one man died of inhaling the colorless, odorless gas, more than a hundred were treated at area hospitals and dozens were sent to pressurized hyperbaric chambers which forced oxygen into their blood. (more…)

search for : winter snow storms, carbon monoxide (CO) poisoning, portable gas-fired generators, CO poisoning

More American homeowners are slipping behind on their monthly mortgage payments, especially those who had subprime credit histories and scores when they applied for their loans. Roughly one of every 20 homeowners with a mortgage — 4.7 percent — was at least 30 days late during the third quarter, according to the Mortgage Bankers Association’s national delinquency survey released last week. The survey examined payment performances on over 42.6 million active home mortgages.

Though the overall trend in delinquencies is upward, Mortgage Bankers Association chief economist Doug Duncan said the slightly higher rates were expected as the housing boom wound down. They are also well below the recent high points reached during the 2001-2002 period. The subprime late payment jumps, however, “were noticeably larger” than projected, “particularly for subprime adjustable rate mortgages.” The reason for the spike: “subprime borrowers are more likely to be susceptible to the cumulative increases in (short-term) rates we’ve experienced, and the slowing of home price appreciation that has resulted,” said Duncan. But “it is important to remember,” he added, “that delinquency and foreclosure rates have been quite low the last two years.” The national foreclosure rate of 1.05 percent during the third quarter was up slightly compared with the same period the year before. But today’s rate is well below the 1.6 percent level reached in early 2002, when subprime foreclosures hit 8 percent. (more…)

search for : monthly mortgage payments, credit histories, mortgage, subprime, subprime adjustable rate mortgages

Despite the recent fluctuations in real-estate prices nationwide and sale prices that have fallen short of sellers’ expectations, homeownership has proved to be a good long-term investment, financial experts agree. Buying a home is the largest investment most people will ever make, said Shrikant Nadkarni, a certified public accountant, certified financial planner and shareholder at WithumSmith+Brown PC’s Somerville office. “Owning a home over a long period of time is generally a good investment idea,” Nadkarni said. “It brings financial obligations and forces savings through paying down the mortgage while building equity.”

Homeowners, though, have to be mindful of tax savings from mortgage interest and property taxes, and costs of things needed to keep a house in good condition, like reroofing, repainting and updating appliances, aAnd timing and market conditions are key to whether buying a home will end up being a profitable endeavor, as history shows. People who bought in the 1980s had to wait until 1998 to match the 1988 peak-of-market prices. Recent price downturns are nothing new in real estate. But people are cautioned people about the more exotic mortgages available. which enable people to buy with no money down or with adjustable rates (ARMs). When the housing prices do dip a bit this is going to be a deadly thing. . . . Their monthly payments will go up. It’s just too bad that the criteria is not a little more stringent to make sure that these people can afford to continue with these houses. Surely people should buy, but they should be qualified to buy. (more…)

search for : real-estate prices, Owning a home, building equity

Early next year my husband Gerry and I will reach two milestones in our finances: Our mortgage’s outstanding balance will drop below $100,000 and, more significantly, more of our monthly payment will go toward principal than interest. With the passing of both of these milestones, Gerry and I will be that much closer to paying off our 20-year fixed-rate mortgage, a process we’re hastening by making additional principal payments of $195 a month. (Why the odd figure? I’ll get to that later; the short story is that it is part of $395 a month in spare cash we debated over where to invest. )

Some people believe paying off a mortgage is a stupid move, and would advise us to forgo the mortgage prepayments and invest that $395 a month elsewhere. This school of thought holds that the wisest financial move you can make is to get mortgages with the lowest monthly payments possible — refinancing as rates decline — and never pay off the loans, a strategy that improves your cash-flow and lets you benefit from potential home-price appreciation. (more…)

search for : paying off a mortgage, mortgage prepayments, monthly payments

Of all the confusing and expensive things about buying a house or refinancing a mortgage — and there are plenty — title insurance just might take the prize. “A lot of customers don’t understand title insurance,” said Samuel Ingram, president and CEO of myclosingspace.com, a Wall company that offers title insurance and other house-closing services. “It’s the largest component of your closing costs, and yet people don’t know anything about it.”

They should start learning about it, because title insurance, which protects homeowners’ property ownership rights, is drawing scrutiny from state regulators and other critics. They charge that: title insurance prices — and profits — have unfairly soared, because they’re based on house prices, which skyrocketed from 2000 to 2005. “The real estate boom has been very profitable for title insurers,” said J. Robert Hunter, director of insurance for the Consumer Federation of America. (more…)

search for : refinancing a mortgage, title insurance

Trump-Style Negotiation by George Ross (John Wiley and Sons, $24.95). This book offers insights into Donald J. Trump’s big-thinking negotiation style, which leaves the contract details to his trusted adviser, George Ross. Only serious real-estate buyers, sellers, real-estate agents and investors will study this well-written book that reveals negotiation tactics not found elsewhere, illustrated with many actual examples from Trump acquisitions.

The Automatic Millionaire Homeowner by David Bach (Broadway Books, $19.95). If you could read only one real-estate book, whether you are a renter considering a home purchase, a current homeowner, a seasoned realty investor or a real-estate agent, this is the book for you because it shows how homeownership can lead to wealth. The book’s two themes are a) renters can become millionaires by investing in their first house or condo and b) that residence can become the foundation for a better home or more investment property in future years. (more…)

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The cost of affordable rental housing has risen 28 percent in the past seven years, far outpacing the wages of those who need it most, according to a new report released Tuesday. “Out of Reach,” the annual report of the National Low Income Housing Coalition (NLIHC), found that housing affordability is most difficult for minimum-wage earners but is also tough for those who earned the median hourly wage ($14.57) last year. In 2006, what the NLIHC calls the “national housing wage” rose to $16.31 for a two-bedroom rental, from $15.78 last year.

The report found that a minimum-wage earner making $10,712 a year cannot afford a one-bedroom home based on fair market rents anywhere in the country. To do that, he or she would need to earn at least $28,475, NLIHC calculated. And two-bedroom homes are out of reach even for families with two minimum-wage earners making $21,424 annually. For that, they’d need to make $33,925. (more…)

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For two enterprising couples, gingerbread became a relocation inspiration on a grand scale that extended well beyond holiday connections; sweet and spicy gingerbread baking emerged as the signature touch in Lynne and Peter Van Wyck’s transplanted venture on the banks of Ontario’s well-named Grand River, elaborate gingerbread wood-carved trim was part of the attraction for the relocation of Bermudians Alan Barker and Libby Rego to Wolfville, Nova Scotia.

Gingerbread played a different role in this Nova Scotian attraction. ‘Gingerbread’ is also the name given to the intricately-carved decorative wood trim which traditionally adorned roof edges and porches of Victorian houses. Barker and Libby Rego were drawn to a property that was defined by its ornate woodwork. Originally the 1893 carriage house for a neighbouring historic inn, it was converted into a family home in the 1980’s. The owner then transformed the building into the gingerbread wonder which became the Gingerbread House Inn. “The [Inn] does not look that big from the front and people are taken by surprise,” said Barker. “This is not a typical bed and breakfast where you peel off and go down a hall, one room here, one room there, and you fight for the remote. Our 4 suites with hot tubs in the rooms are the only ones in Nova Scotia and they have private entrances. The other 3 rooms have Jacuzzis.” (more…)

search for : gingerbread, gingerbread wood-carved trim, Gingerbread House Inn

We have purchased several single family homes, and our lender has always insisted that we obtain a hazard insurance policy before settlement. We are about to purchase our first condominium unit, and our real estate agent has advised that we do not need any insurance, since the entire association is covered under what they call a master policy. Is our agent correct?

This is your space; this is where you live; you own it. You pay real estate tax on your unit and can obtain a mortgage loan using your unit as security. In order to determine what is your space, you have to read your Declaration. Additionally, the units will be shown on the condominium Plat and Plans. Limited Common Elements is a common element and is reserved exclusively for use by one or more, but less than all, of the unit owners in the condominium. Limited Common Elements may include balconies, roof decks, storage areas and parking spaces. The Declaration will define Limited Common Elements and the Plats should show where in the complex they are located. (more…)

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Subprime mortgages are loans made to borrowers who are considered to be higher credit risks because of past payment problems. Since these loans are so profitable, the market has grown at a 39% annual rate from $120 billion in 2001 to $625 billion in 2005. But if a borrower can’t pay back the loan, the costs of this rapid growth become apparent. Up until 2005, if a borrower could not pay back the mortgage, the borrower could sell the house and use the proceeds to pay the mortgage company.

In October, borrowers were 60 days or more behind in payments on 3.9% of the subprime home loans packaged into mortgage securities this year — nearly twice the delinquency rate on new subprime loans recorded in 2005. And UBS expects 2006 to be “one of the worst ever for subprime loans” with 80,000 subprime borrowers behind on their payments. The way this happened with subprime mortgages is similar to what is going on now in lending to private equity buyouts. In subprime mortgages, the initial success during the real estate boom caused lenders to relax their standards and loosen their requirements for documentation. In 2003 and 2004, defaults were unusually low and investors who bought the mortgages did well and wanted more. (more…)

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Democrats plan to use their new majority status in Congress to expand the mortgage market for tens of thousands of home buyers in Massachusetts and other states where high housing prices are limiting use of federally regulated mortgage programs, according to Capitol Hill lawmakers. Representative Barney Frank, a Newton Democrat set to become the chairman of the House Financial Services Committee in January, said he will aggressively push legislation to ease current restrictions on the amount of a mortgage that can be held by Fannie Mae and Freddie Mac, two private mortgage companies chartered by the federal government.

Current law sets a limit — currently at $417,000 — on the maximum amount of a housing loan held by Fannie Mae and Freddie Mac. But because home prices in Massachusetts are comparatively high, relatively few buyers can benefit from the programs, housing advocates said. Frank said he will use his power as chairman to seek a change in the law to correlate the mortgage cap to the price of housing in an area, instead of a flat limit that now applies to all areas of the country. The current rules “keep them from doing luxury housing in Nebraska,” but severely limit opportunities for what would be considered middle-income homebuyers in Massachusetts, Frank said. (more…)

search for : mortgage market, Representative Barney Frank, House Financial Services Committee

To hear many reports from my media colleagues, there’s no reason to buy real estate today because the “bottom’s fallen out,” the “balloon burst,” etc. With the real estate market down (number of sales AND dollar volume), you might as well put your money somewhere else — how about the stock market or in bonds? Following this philosophy, then whenever any investment tool drops in value — dump it. Stocks, bonds, real estate, mutual funds — it doesn’t matter which vehicle, park it, get out and hitch a ride on the fastest moving investment possible … right? Actually, for the real estate investor who does his homework, money can be made in any market. You just have to decide on your profit methodology: cash flow or asset growth. Both are available in today’s market, and the savvy investor must be sure to conduct due diligence on the bottom line.

Most real estate assets grow consistently year after year. What the last few years created in the short-term, however, is what it usually takes years to create — thousands of dollars in equity growth. The usual way this growth occurs is by using other people’s money (OPM) to grow your equity along with the usual appreciation. OPM is one of the most powerful investment tools out there. Most people use OPM to purchase real estate (the mortgage) with a little bit of their own money (down payment). Each month after you buy a house, there’s the monthly mortgage payment. Thus, your second use of OPM is the rental payments you receive from your tenants. Now, you’re growing that equity month by month, plus paying the interest, fees, etc., with the funds provided to you from the tenants. (more…)

search for : real estate, balloon burst, real estate investor, other people’s money, OPM, monthly mortgage paymen

If you are a serious home buyer, the absolute best time of the year to buy is between Thanksgiving Day and New Year’s Day, even extending through Super Bowl Sunday in many cities. The reasons are (1) few home buyers are in the market during the holiday season so competition is low and (2) house and condo sellers who have their homes listed for sale now are usually highly motivated to sell and will listen to any reasonable purchase offer.

Thousands of home sales take place during this “slow season.” New-home builders are anxious to close sales by Dec. 31, 2006, so they are offering amazing sales incentives such as (1) no mortgage payments for several months, (2) free upgrades, (3) no closing costs, (4) 100 percent mortgage financing, and (5) even reduced sales prices. But sales incentives for buyers of resale homes are different. Motivated sellers (and their anxious listing agents) are willing to listen to all reasonable purchase offers. Buyer negotiation strategies include asking for the seller to pay the mortgage loan fee and/or nonrecurring closing costs. In other words, it’s a great time to be a home buyer. (more…)

search for : Super Bowl Sunday, highly motivated to sell, mortgage payments, 00 percent mortgage financing, Buyer negotiation strategies, mortgage loan fee

Control. Cost-efficiencies. Choice. These are three of many reasons why radiant heat is gaining in popularity with today’s time-strapped, environmentally-conscious, value-driven homeowners. For builders, radiant heat can help drive higher profits and bring back to market Gen X and Gen Y buyers who purchase products and services that afford them control, cost- efficiencies and choice.

“Electric radiant floor heat is more efficient than forced air or convection heat for two reasons: first, because comfort can be achieved at a lower set point on the thermostat, typically 65 to 67 degrees F for electric radiant heat as opposed to 71 to 74 degrees F for forced or hot air heat; and, second because electric radiant heat does not heat the air, but rather it heats objects, including human beings, in the same manner that the sun warms objects behind a window on a cold winter day,” explained Steven D. Bench, Managing Member, Heatizon Systems. “While it is true that hot air rises it is also true that heat has a propensity to go to cold. The hot air produced by a forced air convection heating system carries the heat with it towards the ceiling where it is not needed, resulting in wasted energy and a higher set point at the thermostat to achieve comfort.” (more…)

search for : homeowner, Electric radiant floor heat

We have been trying to sell our condominium unit for several months, and finally our real estate agent presented us with a contract. Although the price was lower than we were hoping to get, we decided to accept that offer. In reliance on that transaction, we entered into a contract to buy another property. Our buyer had a contingency for a home inspection, which was done to his satisfaction. He specifically advised our agent that he was removing the contingency.

Your agent must immediately advise the buyer about his bounced check and give him five business days to make it good. The agent should advise that buyer that if this is not done, he will be in default and that you will sell the property to the third party. If that third party offer is acceptable, you should sign it, but make it clear that this is a backup contract. You — or your agent — should advise the third party of all of the facts, since full disclosure will avoid any future litigation. You should consider using this language: BACK UP CONTRACT: This contract is a first back-up to a contract dated ______. This contract shall become the primary contract immediately upon delivery of notice from the Seller that the other contract is void. The rights and obligations of the parties under the primary contract are superior to the rights and obligations of this back-up contract. (more…)

search for : condominium, home inspection

One of the many unsavory features of the home loan market is that borrowers, when they close on their loans, sometimes find their settlement costs substantially higher than the earlier estimates given to them in the Good Faith Estimate of Settlement (GFE). Lenders are required by law to provide the GFE to borrowers within three days of receipt of a loan application, but the GFE is sometimes used in bad faith. Some lenders as a matter of course raise their fees or add new ones as a loan moves toward closing. This is especially easy to do on purchase transactions when borrowers pass a point where there isn’t time to begin again with another loan provider. Some lenders low-ball third-party fees as an inducement to borrowers who believe they can shop total fees, then raise them at closing.

The MBA also proposes a limit on deviations between the third-party charges including title costs contained in the GFE and those paid by the borrower at closing. They would cap the deviation on the total of such charges at 10 percent. This would curb some of the worst low-balling, but it would not do anything to reduce third-party charges, which are far higher than they would be if they were sold in competitive markets. I will have an article about this next week. (more…)

search for : home loan, settlement costs, Good Faith Estimate of Settlement

I’ve already given my husband Gerry a Christmas present: He can finally decorate the outside of our house however he likes. That’s because this year I’ve finally given up my losing battle against gaudy holiday decorations. Back in 1992, when Gerry and I spent our first Christmas in our new house, I knew exactly how I wanted to decorate for the holidays. I went out and spent about $150 to buy strings of white lights for the bushes and the railings along the front porch, and electric candles and wreaths for the front windows. I wanted to surprise Gerry, so I decorated the house myself.

By the time we finished decorating last year, our home looked like it had a split personality. My delicate white lights and wreaths were fighting for attention with Gerry’s blinking, multicolored carnival. What’s more, by my count we’d spent nearly $600 to create this unfortunate mish-mash. Defeated, I decided this year to give in to Gerry’s longing for fun holiday decorations, and left the white lights and candles in their boxes. Last weekend we spent another $24 to replace the strings of white lights with multicolored ones. After we finished hanging up the decorations, Gerry said triumphantly, “There, doesn’t that look better than the plain white lights?” And I have to admit, our home does look better with one personality instead of two — even if that personality is a bit loud for me. (more…)

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No money down and adjustable rate mortgages sounded like a good idea two years ago when the housing market was still a seller’s playground. But lenders say in today’s buyer’s market these loan programs are leading to more defaults and foreclosures, which last month reached a year-long total of 1 million homes nationwide.

With an adjustable rate mortgage, buyers pay the interest or less for the first two years of the loan. After the initial 24-month period they are moved to the actual payment, including interest and principal, and find they can’t afford to make the payments, Peck said.

Others blame the slowing housing market, which in some cases has depleted home prices by up to 15 percent, for increased foreclosures throughout the state.

No matter the reason, the fact remains: Foreclosures are increasing drastically throughout the United States, with a 42 percent increase last month from October 2005 numbers, according to a report released earlier this month by RealtyTrac, an online marketplace for foreclosure properties. (more…)

search for : No money down, adjustable rate mortgages

There is a difference between insulating a building and sealing it, so the contractor is correct in that regard. However, I sense he is also making some misleading and overblown claims about his product. With standard blown-in fiberglass attic insulation, bits of fiberglass are blown into place with air. The loft of the fiberglass/air combination creates millions of tiny air pockets, which in turn slows down the movement of heated air from the house and helps keep that heat from being lost and therefore wasted.

R-value, which indicates how well a material resists the passage of heat through it, is a consistent, calculated value. So when the building codes require R-38, that means R-38, whether it’s from fiberglass, foam boards, sprayed foam, or any other material or combination of materials. And while the foam does offer some definite sealant properties that will contribute to a warmer home, that certainly does not account for an additional R-14 in insulating value. I would suggest that you contact whichever local utility company supplies the fuel you use as your primary heating source – electricity, gas, etc. They can provide you with a wealth of information about weatherization and insulation, and can assist you further with what will work best for your home and who the reputable local insulation contractors are. (more…)

search for : insulating, fiberglass attic insulation, R-value, weatherization