Archive for Real Estate

Desperate to boost your credit?

June 4th, 2007 • Business, Finance, Loan Programs, Real Estate

One of my Digg.com friends Chris just passed along an interesting story on yahoo about some enterprising credit repair providers. They use a technique that many mortgage brokers/Loan Officers have known about for years called piggybacking.

Instead of spending several years repairing his credit rating, which he said was marred by two forgotten cell phone bills and identity theft, the 37-year-old real estate agent paid $1,800 to an Internet-based company to bump up his score almost overnight.

Instantcreditbuilders.com, or ICB, helped Estruch boost his score by arranging for him to be added as an authorized user on several credit cards of people with stellar credit who were paid to allow this coattailing. Parents also use this practice when they add their children to their credit cards to help them build solid credit.

The pitch to those who are essentially renting their credit history for pay is seductive: You don’t need to worry about users of this service receiving duplicate copies of your credit cards, account numbers or any of your personal information. It’s essentially free money, they are told.

In the past if a borrower needed a few points extra to qualify for a loan program loan officers would ask them if any of their family members had an account they could get authorized on. Once the borrower is authorized as a user on the account, they do a rapid rescore and 75% of the time the prior history would be attached to the newly authorized user. This company however is taking it to a new level.

Tucson Real Estate Market In The News

February 6th, 2007 • 1 comment Arizona, Real Estate

From USA Today

After five years of blockbuster home sales, 2006 delivered a reality check for homeowners in Tucson. Sales of single-family homes skidded 33% from 2005, and price appreciation last year dropped to 8%, down from nearly 27% in 2005, according to DataQuick Information Systems.

only 8% appreciation? THE SKY IS FALLING!

“December was a little quiet, and 2006 was definitely a time of adjustment here,” says Martha Briggs, an agent at Long Realty. But last year’s sales figures were on par with the 2000-03 period; they “only look terrible in comparison with 2005.”

What happened to the bubble?

Dave from Barbaralasky.com has some more in depth MLS analysis for the month of December.

The Reality of Foreclosure Investing

September 15th, 2006 • Business, Finance, Real Estate

The reality of foreclosure investing is very different from what people have been led to believe through late night infomercials and the hundreds of books written on the subject. Always remember these two key facts when dealing in foreclosures.

• Every active foreclosure investor works a lot more than people working 9-5 jobs.

• Serious foreclosure investors either have large sums of money of their own or have another investor backing them up.

read more | digg story

Real Estate News Today

August 31st, 2006 • Finance, Real Estate

Real Estate Round Up

August 29th, 2006 • Finance, Real Estate

Turning College Housing into an Investment Strategy

August 29th, 2006 • Arizona, Real Estate

Forbes has released its list of the top college towns to invest in. Phoenix – Mesa- Scottsdale came in at #7. From the article:

The good news is, college doesn’t need to be so hard on the wallet–at least when it comes to housing, an area that becomes more absurdly expensive with each passing year.

Total room-and-board expenses at private undergraduate colleges averaged $7,791 during the 2005-2006 school year, up 5% from the previous academic year, according to The College Board’s annual report on college pricing trends. But consider the alternative: investing in real estate. If done wisely, this nontraditional approach could not only save you the cost of college housing, it might even help you turn a profit.

Rather than shell out a small fortune for a ratty dorm room or an overpriced apartment, parents can build equity, generate cash flow and eventually benefit from real estate appreciation–assuming they are willing to be landlords and invest some cash up front.

Rhonda Butler, sales manager at Fonville Morisey Realty’s Chapel Hill, N.C., office, near the University of North Carolina at Chapel Hill, breaks down a local example.

“Say you have a $200,000 townhouse,” she says. “You can take four students and charge them each $700 a month for rent, and suddenly you’re going to have a positive cash flow on the transaction.”

With 10% down, a 30-year mortgage and a rate of, say, 7%, monthly mortgage payments would total about $1,200, for a net of $1,600 per month.

And though home prices around the country appear to be flattening out after a few years of sharp increase, college housing markets tend to experience less ups and downs.

I ran across a real world example Here

Today’s Good News in the Housing Market

August 28th, 2006 • Finance, Real Estate

I know some people who read this blog must laugh at my unrequited optimism for the housing market, however here is today’s support for my opinion that there will be another short term housing or at least a refinancing boom.

From Reuters and Richard Leong

A further decline in benchmark Treasury yields may spur massive buying of government bonds by mortgage investors, adding zest to a market already spurred on by the Federal Reserve’s pause in interest-rate increases.

A tumble in Treasury yields on hopes the Fed may lower its key rate in 2007 has hurt returns on mortgage investments. As falling yields have lowered mortgage rates, homeowners have been enticed to refinance their loans.

As a result, some fund managers and loan-service companies have been forced into so-called convexity hedging, buying Treasuries or using interest-rate swaps to receive fixed-rate payments on their investments to make up for expected lost income from mortgage holdings.

“The mortgage market has been awoken here,” said Terry Belton, head of fixed income and derivatives strategy at J.P. Morgan Securities in Chicago. “The rally (in Treasuries) has triggered some significant buying by mortgage hedgers.”

Homeownership – The Road to Serfdom?

August 28th, 2006 • Finance, Real Estate

I came across an interesting article today by !PDF Warning!Michael Hudson – Distinguished Professor of Economics at the University of Missouri–Kansas City. After reading it I thought I had never read anything that was so completely off the mark.

From the Article:

The reality is that, although home ownership may be a wise choice for many people, this particular real estate bubble has been carefully engineered to lure home buyers into circumstances detrimental to their own best interests. The bait is easy money. The trap is a modern equivalent to peonage, a lifetime spent working to pay off debt on an asset of rapidly dwindling value.

This paragraph makes two faulty assumptions. First and most egregious is the idea that there was a master plan set forth by the Fed to enslave Americans to mortgage repayments. I’m not a big fan of Owner-Occupied housing, as i see it as a liability and not an asset, however the flip side of paying rent and claiming no interest deduction and no possibility of equity gains is even more patently absurd. The second is that these new homeowners will never be able to pay off their loans. We are in a period of extremely low interest rates. Even now when the average loan is running 6.5% for 30 year fixed paper (and falling I might add). How long ago was it when we thought a 7.5% fixed interest rate was reasonable? This means of course that as a percentage of payments a buyer is paying less on interest expense than at any time in recent history. That one percent drop in interest rate just negated a 10% rise in home values. Lets not forget either that a god number of the homes sold during the recent boom were locked in at 5.5% or lower. A full 20% increase in buying power when compared to pre-boom financing.

I also find it hard to take the author seriously when he compares homeowners to the sharecroppers of the south at the turn of the century:

Debtors were medieval peons or Indians bonded to Spanish plantations or the sharecropping children of slaves in the postbellum South. Few Americans today would volunteer for such an arrangement, and therefore would-be lords and barons have been forced to develop more sophisticated enticements.

Yes! That enticement is called lower interest rates!

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