Adding Value by Dennis O'Hagan

THIS IS HOW YOU FIX CONGRESS! Leave it up to Warren Buffet to figure it out...

Warren Buffett, in a recent interview with CNBC, offers one of the best quotes about the debt ceiling:

"I could end the deficit in 5 minutes," he told CNBC. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election".

The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971 before computers, e-mail, cell phones, etc..

Of the 27 amendments to the Constitution, seven (7) took one (1) year or less to become the law of the land - all because of public pressure.

Warren Buffet is asking each addressee to forward this email to a minimum of twenty people on their address list; in turn ask each of those to do likewise.

In three days, most people in The United States of America will have the message. This is one idea that really should be passed around.

Congressional Reform Act of 2012

1. No Tenure / No Pension. A Congressman/woman collects a salary while in office and receives no pay when they're out of office.

2. Congress (past, present & future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system, and Congress participates with the American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all Americans do.

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and participates in the same health care system as the American people.

6. Congress must equally abide by all laws they impose on the American people.

7. All contracts with past and present Congressmen/women are void effective 1/1/12. The American people did not make this contract with Congressmen/women. Congress made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

If each person contacts a minimum of twenty people then it will only take three days for most people (in the U.S.) to receive the message. Don't you think it's time?

THIS IS HOW YOU FIX CONGRESS!

HUD Extends Unemployed Mortgage Relief Program

Daily Real Estate News | Tuesday, August 30, 2011

The Department of Housing and Urban Development has once again extended its deadline for a program that provides up to $50,000 in interest-free loans to unemployed or medically ill home owners who are struggling to make their mortgage payments. 

The new deadline is now Sept. 15. HUD resumed taking applications for the program on Monday.

The $1 billion Emergency Homeowners Loan Program, which launched in June, was originally slated to end on July 22, but HUD first extended the deadline to July 27 to give home owners more time to apply. 

Home owners eligible for the program will be able to qualify for up to $50,000 in interest-free loans for up to two years. Home owners who have had a drop in income of at least 15 percent from involuntary unemployment or underemployment due to economic conditions or a medical emergency are eligible for the program. Home owners must still be able to contribute $150 per month toward their mortgage. (Learn more about eligibility requirements and the participating states at http://findehlp.com.)

Source: “HUD Extends Deadline for Unemployed Mortgage Assistance,” HousingWire (Aug. 29, 2011)

Fourth Quarter 2010 Shows All Signs Lead to Slowdown of Home Sales in 2011

DON'T PANIC...  That is what Cheryl and myself are telling all of our clients and potential clients...  YES, there is a slow down in the housing market but there is a slow down in the entire economy...  YES, there are more homes for sale than there are buyers therefore making it a buyers market (SOMETIMES).  By all of the above and before you read the "HOUSING MARKET TRENDS" newsletter below believe me when I say there are plenty of people out here buying homes but the key is they are buying the homes that are MOVE-IN-READY and they are paying a fair price for them.  Many of our Listings are flying off the shelves.  The age old idea of "I'll give the buyer a repair allowance when they buy my home" doesn't work in this market.  Buyers want a house that is MOVE-IN-READY...  Not almost MOVE-IN-READY!!!  Buyers want to buy the home, drop off their furniture, go out to dinner, come home and go to bed and go to work the next morning.  They don't want to paint marked up walls, replace stained or worn out carpet, change out the countertops and/or outdated appliances or redo the landscaping...  If your house is MOVE-IN-READY and it is priced fairly we can get it sold for you...  All that said, here is the Housing Market Trends Newsletter below.

*********************************************************************************************

Despite record low interest rates and a temporary slowdown in bank foreclosures it appears the housing market struggled in the fourth quarter of 2010 and will continue to struggle in 2011. It is expected that banks will accelerate the foreclosure process and interest rates will rise, which will negatively impact prices. Home buyers continue to struggle to obtain financing because of higher down payment requirements and tougher qualification standards.

Specifically, the fourth quarter 2010 saw a strong decline in first-time home buyers due to the elimination of the first-time homebuyer tax credit and an increase in repeat buyers who are purchasing second homes and investment properties.

According to agents polled in the United States by HouseHunt.com, 61% percent reported that there are more sellers than buyers in their respective local markets. This is the largest percentage reported in over three years and is almost 20% higher than in January of 2010. Only 32% of the agents reported a predominantly buyer-heavy market during the fourth quarter of 2010. Seven percent of agents reported a good balance between the number of buyers and sellers in their real estate market.

Another notable trend revealed during the fourth quarter is the amount of time homes are staying on the market. Eighty-nine percent of agents reported that properties are sitting on the market for 60 or more days. More than 20% of agents show homes in their community are staying on the market for over 120 days, which is understandable considering there are less buyers bidding and driving up the selling price. A mere 11% of agents are seeing homes sell within 60 days of being put on the market.

Home prices have been a particular focus as 2010 came to a close. With 57% of agents polled reporting a negative appreciation in home prices it is evident that the real estate market is still suffering. Agents who are experiencing a decrease in home prices said it was only a slight drop from the third quarter 2010 numbers. A highlight in the survey results is that only 10% of agents reported a neutral market regarding prices, which leaves 25% of agents reporting an increase in home prices in their communities. Five percent are even experiencing price jumps of over 10% in cities such as St. Augustine, FL, Vail, CO, Carmel, IN, Eagle Point, OR, and Saratoga, CA. These numbers indicate some price stabilization, however, the overall home prices nationwide continue to fall as 2011 begins.

One dramatic change from third quarter 2010 is that only 37% of the active buyers on the market now are first-time home buyers, which is the lowest percentage in over three years. This change is largely due to the first-time homebuyer tax credit that ended in the third quarter. That credit created an influx of buyers eager to take advantage of the opportunity, but now many agents are seeing more of those first-time buyers disappear. Repeat buyers now make up 63% of the active buyers on the market, which includes investors.

Compared to the third quarter results, agents said some buyers are having an easier time getting financing, particularly those with good credit and the ability to make the down payment. Still, the financial aspect for buyers is still the biggest obstacle between them and the purchase of a home.

"Our research indicates that 2011 will be another tough year," said Michael Bearden, President and CEO of HouseHunt, Inc. "Overall, more foreclosures, declining home prices, and more difficult lending standards are causing home buyers to remain cautious about buying today. Since real estate is a highly localized industry there are certain communities throughout the country that are doing well and experiencing home price increases. Lower priced homes are finding more action than higher priced homes. Low down payment government financing and favorable interest rates are allowing buyers to obtain financing on lower priced properties, which is not available on higher priced homes. Despite the potential for slightly lower prices in 2011, consumers should really take advantage of the unique conditions with low interest rates, affordable pricing, and the availability of many great homes on the market."

Here are a few additional notable results from HouseHunt.com member-agents in the fourth quarter of 2010.

- 87% reported their market reflects a good supply of homes on the market (the highest percentage posted in 2010)
- 13% reported a limited supply of homes on the market, which represents mostly healthy and active communities where prices are also steady or slightly rising.
- 59% of agents reported that sellers are getting under 95% of their asking price (the highest percentage recorded since the first quarter of 2009)
- 54% reported that listings are getting multiple offers while on the market (the lowest amount reported since the second quarter of 2009)
- Only 6% of agents reported their home values as decreasing 15% or more from previous quarter

Today we live in a global economy, an interconnected world where goods and capital move freely at lightning speed across countries. The widely accepted view is that globalization not only benefits all countries across the world but lends itself towards the betterment of the economy as a whole.

As we have seen, globalization can also have a negative impact with a domino effect in times of turmoil and unrest. This impact affects the financial markets both in the U.S. and abroad.

Flight to Safety
When there is political unrest, which was sparked recently in Egypt and has spread like wildfire throughout the Middle East, global investors get nervous. Often they shed their risky assets like Stocks and flee to the safe haven of the U.S. Dollar and U.S. Bond market.

This geopolitical unrest can create a buying binge, which helps Bond prices improve. And when Bond prices improve, so do home loan rates. However, there are growing concerns that trump the disturbing news coming from the Middle East, which will be the guiding force of home loan rates in the times ahead. What might that be?

Inflation, Inflation, Inflation
Inflation is the arch enemy of Bonds and home loan rates, even if inflation is across the pond. The increase in global unrest, not just in Egypt but in other parts of the world as well, is mostly attributed to economic factors – primarily runaway inflation in commodities and food.

The People's Bank of China has raised interest rates a couple of times, most recently by 0.25% in an effort to head off a continued rise in consumer prices in China. The culprits? Soaring food prices and higher raw material costs lead the pack.

China has also tightened lending standards by requiring banks to raise their capital reserve requirements. In their latest reporting, China's inflation rose by 4.9% year over year. This was lower than their expectations, however it still marked their highest reading in a couple of years. China may have to tighten their belt some more.

Brazil is appearing on the scene with the hottest rates of inflation in six years. They are attributing this to a rise in food costs and increased bus fares. It is anticipated the Central Bank will raise the benchmark interest rate in March for a second straight time in an effort to contain the spike in inflation.

The British are grappling with inflation as well. Their year over year reading struck a hot 4%, which is twice the rate of the Central Bank's target. The UK has yet to address this with rate hikes because their economy is in such bad shape that any hike would make matters worse.

Inflation is beginning to become a problem in Europe where it has risen to 2.4%. This is super hot and well above the European Central Bank's (ECB) comfort zone of beneath 2%.

With an inflation problem in Europe, the ECB will eventually have to raise rates to fight it. When they do, the Euro will strengthen against the dollar, making European Bonds relatively more attractive than U.S. Bonds. This attraction will likely put a damper on U.S. Bond purchases, and could also cause home loan rates to rise.

Many of these countries within Europe have a high number of union workers. They could very well demand pay increases to offset the higher cost of living resulting from inflation. This would exacerbate matters.

As we see signs of inflation around the world, the U.S. isn't immune. With the second round of Quantitative Easing, known as QE2, the Federal Reserve's stated goal is to boost Stock prices, create inflation, and lower the unemployment rate. These are all unfriendly to Bonds and could also cause home loan rates to move higher. As the old trading saying goes, "Don't Fight the Fed." It's a bit like the Golden Rule, "He with the gold, rules." If the Fed wants to accomplish these goals at the expense of Bonds, they probably will.

Some Good News
Despite inflation rising around the world, the global economy will continue to recover and growth will continue to expand. Consumer confidence has picked up, hitting the highest level since February 2008. With continued confidence as the economy picks up speed, housing may begin to show signs of improvement as well.

These are very interesting times. Historically speaking, rates are still extremely attractive and remain close to the historic lows…but for how long? Overall, as a percentage of total income, the cost of owning a home is less expensive that it's been at any time since 1963. So if you or someone you know has been thinking about purchasing or refinancing a home, now is the time to get started! Contact the person who supplied you with this month's issue of YOU Magazine and spend time reviewing your situation today.

Craig Wilbur
V.P./Sr. Loan Officer
Hancock Mortgage Partners, LLC.
Phone: (214) 801-3079
craig@craigwilbur.com
www.craigwilbur.com
License: NMLS 317194

Money Saving Tip...

QUICK TIP that may save you a couple bucks...

Take unnecessary items out of your car; extra weight wastes fuel.  The Department of Energy says every 100 pounds removed could improve your fuel economy by up to 2%, depending on the size of your car.

How can I reduce the cost of my homeowners insurance?

You may not have control over all of the factors that affect the cost of your homeowners insurance. But there may be some things you can do to save some money.

If your home is older, your insurer may lower your premium if you upgrade your heating, plumbing, or electrical systems to reduce the risk of fire and water damage. Let your insurer know when you've made these changes.

Selecting a larger deductible is another good way to lower your cost of insurance. You might want to put your premium savings in an emergency fund to pay the deductible, if needed.

Review your policy. You may be adding to the cost of insurance by carrying extra coverage for things that have declined in value or you no longer own, like furs or jewelry.

Swimming pools can add to the cost of insurance. However, many insurers may not increase your rates if you show them that you have safety features such as fencing or a locking gate around your pool.

Before you get a dog, check with your insurer to be sure your new pet won't increase the cost of your insurance--or cause it to be cancelled. Also, advise your insurer that you've properly trained your pet and that you've obtained all required vaccinations and tags.

Some insurers will raise your premiums if you file frequent (more than 2-3) claims of relatively small value. Try to use your insurance for major claims and consider self-insuring the rest.

Another way to save on your insurance costs is to buy your homeowners insurance and auto insurance from the same insurer. Most companies will discount the cost of insurance if you buy two or more policies from them.

You may receive a discount from your insurer by improving your home's security. Ask your insurer if adding an anti-theft system, flood lights, or even dead-bolt locks will lower your premium.

Who REALLY lives in those million dollar homes???

Millionaires live in the most expensive homes, right?  You might be surprised.  Certainly, many people with large incomes and high levels of accumulated wealth own pricey homes, but large numbers of wealthy individuals live in more modest dwellings.  Here are some interesting numbers from Stop Acting Rich... And Start Living Like a Real Millionaire by Thomas J. Stanley, Ph.D.

403,211 - Number of millionaires who live in homes valued at $1 million or more

1,138.070 - Number of millionaires who live in homes valued at $300,000 or less

90% - Percentage of millionaires who live in homes valued at $1 million or less

67,000 - Approximate number of millionaires who live in mobile homes

41% - Percentage of homes valued at $1 million or higher owned by people with $200,000 or higher annual income

27% - Percentage of homes valued at $1 million or higher owned by millionaires

Foreclosures up for first half of 2009

  The below article was written by Danny Gallagher - McKinney Courier-Gazette on Wednesday, July 15, 2009

Collin County's foreclosures rose by more than two-thirds...

Real estate experts who compiled foreclosure data for the first half of 2009 used jarring words like "skyrocketed" to describe their findings.

Foreclosures in Collin County rose by more than 75% for the first half in 2009 compared to the same time in 2008, according to recent data complied for Foreclosure Listing Service for the Dallas-Fort Worth area.

A total of 130 homes went on the auction block from January to July this past year compared to only 74 homes that were foreclosed on in the same time frame in 2008, a difference of 76 percent, according to tabulated data.

Collin County had the second highest year-to-date difference of the year.  Denton County posted the highest increase rate with 156 homes in the first half of 2009 representing an increase of 136 percent, according to collected data.

"Denton and Collin Counties do not have the largest volume of commercial postings," said FLS senior president George Roddy.  "That title still belongs to the Metro's most urban counties - Dallas and Tarrant."

Dallas County only posted 27 percent increase from the first half of 2008 to 2009, and Tarrant County actually saw a decrease of 27 percent in foreclosures for the same period, according to the data.

"However, both Denton and Collin Counties have seen tremendous growth in both the commercial and residential real estate markets over the last decade," Roddy said.  "That growth has led to these two suburban counties laying claim to a bigger piece of the foreclosure pie.  About 23 percent of the entire Metro's commercial posting activity for the first seven months of this year rests within the boundaries of Collin and Denton Counties."

Economic Update

On Tuesday, May 26, the Conference Board reported that its consumer confidence index rose to 54.9 in May from an upwardly revised 40.8 in April. It was the biggest increase in six years. Economists had expected an increase to 42.3. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The Standard & Poor’s / Case-Shiller 20-city housing price index dropped 18.7% from March 2008 to March 2009. It was the second straight month the index didn't post record drops, indicating that the slump in home values might be easing.

The National Association of Realtors said existing home sales rose 2.9% in April to a seasonally adjusted annual rate of 4.68 million from 4.55 million in March. Economists had expected an annualized rate of 4.66 million homes.

Orders for durable goods, items expected to last three or more years, rose 1.9% in April after a revised lower 2.1% drop in March. This was the second increase in the last three months after having recorded six straight declines. Economists had anticipated orders for durable goods to rise only 0.5%.

Initial claims for unemployment benefits fell by 13,000 to 623,000 in the week ending May 23 from a revised figure of 636,000 in the previous week. The number of people continuing to claim jobless benefits in the week ending May 16 rose to 6.78 million, a record-high figure for the 17th straight week.

New home sales rose 0.3% in April to a seasonally adjusted annual rate of 352,000 from a downwardly revised rate of 351,000 in March. Economists had expected a sales pace of 360,000 units.