Since you're involved in the real estate industry, you certainly know that 'green' is hot these days. Consumers are considering the environment in more ways every day. More importantly, there has been a shift from awareness to action. People know that there is a problem and they are actively looking for ways to help.
As a result, the demand for information on environmentally-friendly products and activities has grown dramatically. No where is this more evident than with real estate. Homeowners are researching and installing alternative sources of energy for their homes as well as a wide range of eco-friendly home products - from the watering systems for their yards to the insulation they use in their attics (and everything in between!)
GetWithGreen.com was started to fill the void of eco-friendly information for homeowners. Sure, there's information out there, but it's scattered all over the place and it's not always current or very complete. GetWithGreen.com is the only resource on the internet dedicated to providing information to help homeowners go green. GetWithGreen.com provides in-depth product reviews (some recent articles have covered tankless water heaters, eco-friendly countertops and LED lighting for example) as well as a product directory, stories with homeowner experiences and more.
We've just added a new feature that makes it extremely easy for you to share this information with your clients. It's a great way to add value to your website, blog or even social networking sites like Facebook and MySpace and it takes only a couple of minutes. Simply add the free GetWithGreen widget!
This is an example of what it looks like. You can even customize the colors to match your site. The articles are automatically updated. Users will see the latest article titles and can scroll through the list and click on any to see the full article.
GetWithGreen is proud to provide this tool to help spread the word and encourage homeowners to consider the environment when remodeling or making basic home improvements.
To add the GetWithGreen widget to your site, simply click on this link and choose they type of site where you’d like to add the widget. Depending on the destination selected, the widget will either be added directly or you will get the code that can simply be copied and pasted to your site.
We at GetWithGreen appreciate your support and encourage you to post the widget on any web pages that you might have to demonstrate that you are 'eco-friendly' and to inspire as many others as possible. It's a fast and easy way to add ongoing value to your website with relevant content that's automatically updated. If you are interested, we can also make select articles available for other uses including printed newsletters. Just send us an email and we'll get you the details.
If you have any questions or need help getting the widget set up, don't hestitate to ask us. We'd be glad to help.
Best regards,
Will
Will Kelty
Founder, GetWithGreen.com
founder@getwithgreen.com
Friday, December 28, 2007
Houses are cheaper, so why aren’t you buying?
Prospective buyers are waiting until ‘the market’s hit bottom’
Image: Home for sale
"Negative psychology" surrounds the housing market and that's contributing to people putting off buying.
View related photos
Paul Beaty / AP
Most Popular
• Most Viewed • Top Rated • Most E-mailed
Bhutto joins long list of assassinated leaders
Aniston, ‘Sex and the City’ hottie shack up
Mourners gather as Bhutto is laid to rest
Tiger’s wall was low, S.F. zoo director says
IRS: You may have to wait for your tax refund
Most viewed on MSNBC.com
35 years after jetliner crash, hero gets his due
Honey making a medical comeback
Dead man sends cards from ‘heaven’
Illegal immigrants ‘self deport’ as woes mount
U.S. teen brings new school to rural Cambodia
Most viewed on MSNBC.com
Honey making a medical comeback
Bhutto joins long list of assassinated leaders
IRS: You may have to wait for your tax refund
The top 10 wines of 2007
Observatory cat gets deserved retirement
Most viewed on MSNBC.com
updated 1:54 p.m. ET, Thurs., Dec. 27, 2007
NEW YORK - The upside to a housing slump is cheaper homes. But many prospective buyers don't see bargains yet, especially as stricter lending standards qualify only the cream of the credit crop.
While some markets like south Florida, Las Vegas and the central valley of California have seen sharp declines in home prices — up to 20 percent by some measures — overall national statistics show a much less dramatic drop so far.
Home prices fell 0.4 percent nationally in the third quarter, according to the Office of Federal Housing Enterprise Oversight. That's the first decline after 50 straight quarters of appreciation averaging 1.62 percent per quarter. On Wednesday, the U.S. Standard & Poor's/Case-Shiller home price index, another home price tracker, said prices dropped a record 6.7 percent in October from a year ago.
Story continues below ↓advertisement
While the supply of unsold homes is at a record high and forecasts of further price depreciation and swelling inventories bode well for buyers, housing affordability still remains low. The decrease in housing prices has only begun to eat into the nearly 13 years of quarterly price gains.
The National Association of Home Builders said in November that only 42 percent of all homes sold in the third quarter were priced low enough to be affordable for families earning the national median income of $59,000. That's down from 61.5 percent in the third quarter of 2001, when incomes and, more importantly, home prices were lower during this decade's recession.
Colorado Springs, Colo., real estate agent Terry Shattuck said only those who need to move are motivated buyers these days.
"The apartment dwellers and those just looking for a change are holding back, either afraid to buy right now, or are waiting for prices to drop," he said. "Few are looking to upgrade until this whole thing shakes out."
Renters Italo and Alexandra Subbarao are biding their time in what they call a pricey Chicago market. They want to buy a two-bedroom condo close to downtown by next summer, but are torn about what to do.
"If the prices came down a little bit more we'd certainly be more apt to go for it without hesitation," said Italo, a physician. "But we know it's a significant investment. There is uncertainty in the market and that gives us uncertainty."
Consumers, especially cautious ones who didn't buy during the boom, don't want to buy a house until they know the market's hit bottom, said Bernard Baumohl, managing director of the Economic Outlook Group based in Princeton, N.J.
"There's certainly no incentive to buy if in a month or two from now that same house will be cheaper," he said.
Most forecasters say that's a good bet. Moody's Economy.com and Banc of America Securities predict prices will tumble 15 percent from peak to trough, which they forecast won't occur until early 2009.
Inventories of unsold homes are at the highest levels since the post-World War II period, even though many national builders like Centex Corp., Pulte Homes Inc. and Hovnanian Enterprises Inc. have been holding special promotional sales with deep discounts to move inventory quickly.
A surge of foreclosures as monthly payments jump higher on adjustable-rate loans would add to this already ballooning supply, giving buyers more choice and more pricing power. Banc of America Securities estimates that $361 billion in loans to risky borrowers are scheduled to reset next year.
Foreclosed homes typically sell at a 20 percent discount to comparable properties, and a high concentration of them in a neighborhood pressures other home sellers to drop their prices.
Baumohl also said potential home buyers are holding back over concerns about the economy and their financial security. Consumer confidence — which he characterizes as a leading indicator of spending on expensive items like cars and houses — edged up in December after being at its lowest level since Hurricanes Katrina and Rita in October 2005
By the final week of December, holiday sales appeared to fall short of modest growth expectations.
"Clearly a negative psychology pervades consumers, which has hurt home buying," Baumohl said.
Even for home shoppers willing to buy now, stricter mortgage requirements have made it harder for many to qualify for loans. Many national lenders and banks like Wells Fargo & Co. and Washington Mutual Inc. have scaled back their mortgage lending to borrowers with questionable credit because they know they won't be able to resell the paper to Wall Street firms and others in the securitization market.
Story continues below ↓advertisement
"Housing affordability has changed in dramatically different ways for different borrowers," said Douglas Elmendorf, an economist at the Brookings Institution.
"The change in affordability depends crucially on your credit history, how big a house you want to buy, and where you want to buy it," he said. "The first two points are more important now than they have ever been in the past."
For example, interest rates on so-called jumbo mortgages — home loans for more than $417,000 — are slightly higher than six months ago. Because Freddie Mac and Fannie Mae don't buy mortgages with loan amounts that high, lenders are wary of originating them, worried no investor will buy them.
Interest rates on mortgages to consumers with spotty credit are sharply higher these days as delinquencies and foreclosures on these loans have skyrocketed, scaring off both lenders and investors.
For many borrowers, exotic subprime loans featuring adjustable rates, interest-only payments or short-term teaser rates were viewed as the only way they could afford to get into the housing market. But soaring monthly payments have led many to default, and most lenders no longer offer these types of mortgages.
"It will be more difficult for people with poor credit histories to get mortgages in the next five years," Elmendorf said.
But market conditions are looking better for buyers with better credit scores and the cash for hefty down payments. For them, interest rates on conforming, prime 30-year fixed rate mortgages are the lowest in six months and lower home prices are available in most areas of the country.
Mortgage giant Freddie Mac reported Thursday that interest rates on 30-year, fixed-rate mortgages averaged 6.17 percent in the week ending Dec. 27, down from 6.74 percent in the middle of June.
Ben Pedraza took advantage of the current mortgage market and seller's desperation to snag a four-bedroom brick home in Duncanville, Texas. He paid $30,000 less than the asking price on the house, which sits on a half-acre wooded lot and features granite countertops, a hot tub and a six-person cedar sauna.
With a credit score around 785 and a steady job as a network administrator for an engineering company, the 33-year-old qualified for a 30-year fixed rate loan from Coldwell Banker with only 3 percent down on the $235,000 brick home. He moved in last month.
Pedraza plans to live in the house for at least 10 years, growing into a home that is more than he needs now. He thinks he'll ride out the current housing downturn and, when he finally wants to sell, the timing will be right.
"I think I got a great deal as far as the house," said Pedraza. "I think once the market picks up, I'll have instant equity."
Image: Home for sale
"Negative psychology" surrounds the housing market and that's contributing to people putting off buying.
View related photos
Paul Beaty / AP
Most Popular
• Most Viewed • Top Rated • Most E-mailed
Bhutto joins long list of assassinated leaders
Aniston, ‘Sex and the City’ hottie shack up
Mourners gather as Bhutto is laid to rest
Tiger’s wall was low, S.F. zoo director says
IRS: You may have to wait for your tax refund
Most viewed on MSNBC.com
35 years after jetliner crash, hero gets his due
Honey making a medical comeback
Dead man sends cards from ‘heaven’
Illegal immigrants ‘self deport’ as woes mount
U.S. teen brings new school to rural Cambodia
Most viewed on MSNBC.com
Honey making a medical comeback
Bhutto joins long list of assassinated leaders
IRS: You may have to wait for your tax refund
The top 10 wines of 2007
Observatory cat gets deserved retirement
Most viewed on MSNBC.com
updated 1:54 p.m. ET, Thurs., Dec. 27, 2007
NEW YORK - The upside to a housing slump is cheaper homes. But many prospective buyers don't see bargains yet, especially as stricter lending standards qualify only the cream of the credit crop.
While some markets like south Florida, Las Vegas and the central valley of California have seen sharp declines in home prices — up to 20 percent by some measures — overall national statistics show a much less dramatic drop so far.
Home prices fell 0.4 percent nationally in the third quarter, according to the Office of Federal Housing Enterprise Oversight. That's the first decline after 50 straight quarters of appreciation averaging 1.62 percent per quarter. On Wednesday, the U.S. Standard & Poor's/Case-Shiller home price index, another home price tracker, said prices dropped a record 6.7 percent in October from a year ago.
Story continues below ↓advertisement
While the supply of unsold homes is at a record high and forecasts of further price depreciation and swelling inventories bode well for buyers, housing affordability still remains low. The decrease in housing prices has only begun to eat into the nearly 13 years of quarterly price gains.
The National Association of Home Builders said in November that only 42 percent of all homes sold in the third quarter were priced low enough to be affordable for families earning the national median income of $59,000. That's down from 61.5 percent in the third quarter of 2001, when incomes and, more importantly, home prices were lower during this decade's recession.
Colorado Springs, Colo., real estate agent Terry Shattuck said only those who need to move are motivated buyers these days.
"The apartment dwellers and those just looking for a change are holding back, either afraid to buy right now, or are waiting for prices to drop," he said. "Few are looking to upgrade until this whole thing shakes out."
Renters Italo and Alexandra Subbarao are biding their time in what they call a pricey Chicago market. They want to buy a two-bedroom condo close to downtown by next summer, but are torn about what to do.
"If the prices came down a little bit more we'd certainly be more apt to go for it without hesitation," said Italo, a physician. "But we know it's a significant investment. There is uncertainty in the market and that gives us uncertainty."
Consumers, especially cautious ones who didn't buy during the boom, don't want to buy a house until they know the market's hit bottom, said Bernard Baumohl, managing director of the Economic Outlook Group based in Princeton, N.J.
"There's certainly no incentive to buy if in a month or two from now that same house will be cheaper," he said.
Most forecasters say that's a good bet. Moody's Economy.com and Banc of America Securities predict prices will tumble 15 percent from peak to trough, which they forecast won't occur until early 2009.
Inventories of unsold homes are at the highest levels since the post-World War II period, even though many national builders like Centex Corp., Pulte Homes Inc. and Hovnanian Enterprises Inc. have been holding special promotional sales with deep discounts to move inventory quickly.
A surge of foreclosures as monthly payments jump higher on adjustable-rate loans would add to this already ballooning supply, giving buyers more choice and more pricing power. Banc of America Securities estimates that $361 billion in loans to risky borrowers are scheduled to reset next year.
Foreclosed homes typically sell at a 20 percent discount to comparable properties, and a high concentration of them in a neighborhood pressures other home sellers to drop their prices.
Baumohl also said potential home buyers are holding back over concerns about the economy and their financial security. Consumer confidence — which he characterizes as a leading indicator of spending on expensive items like cars and houses — edged up in December after being at its lowest level since Hurricanes Katrina and Rita in October 2005
By the final week of December, holiday sales appeared to fall short of modest growth expectations.
"Clearly a negative psychology pervades consumers, which has hurt home buying," Baumohl said.
Even for home shoppers willing to buy now, stricter mortgage requirements have made it harder for many to qualify for loans. Many national lenders and banks like Wells Fargo & Co. and Washington Mutual Inc. have scaled back their mortgage lending to borrowers with questionable credit because they know they won't be able to resell the paper to Wall Street firms and others in the securitization market.
Story continues below ↓advertisement
"Housing affordability has changed in dramatically different ways for different borrowers," said Douglas Elmendorf, an economist at the Brookings Institution.
"The change in affordability depends crucially on your credit history, how big a house you want to buy, and where you want to buy it," he said. "The first two points are more important now than they have ever been in the past."
For example, interest rates on so-called jumbo mortgages — home loans for more than $417,000 — are slightly higher than six months ago. Because Freddie Mac and Fannie Mae don't buy mortgages with loan amounts that high, lenders are wary of originating them, worried no investor will buy them.
Interest rates on mortgages to consumers with spotty credit are sharply higher these days as delinquencies and foreclosures on these loans have skyrocketed, scaring off both lenders and investors.
For many borrowers, exotic subprime loans featuring adjustable rates, interest-only payments or short-term teaser rates were viewed as the only way they could afford to get into the housing market. But soaring monthly payments have led many to default, and most lenders no longer offer these types of mortgages.
"It will be more difficult for people with poor credit histories to get mortgages in the next five years," Elmendorf said.
But market conditions are looking better for buyers with better credit scores and the cash for hefty down payments. For them, interest rates on conforming, prime 30-year fixed rate mortgages are the lowest in six months and lower home prices are available in most areas of the country.
Mortgage giant Freddie Mac reported Thursday that interest rates on 30-year, fixed-rate mortgages averaged 6.17 percent in the week ending Dec. 27, down from 6.74 percent in the middle of June.
Ben Pedraza took advantage of the current mortgage market and seller's desperation to snag a four-bedroom brick home in Duncanville, Texas. He paid $30,000 less than the asking price on the house, which sits on a half-acre wooded lot and features granite countertops, a hot tub and a six-person cedar sauna.
With a credit score around 785 and a steady job as a network administrator for an engineering company, the 33-year-old qualified for a 30-year fixed rate loan from Coldwell Banker with only 3 percent down on the $235,000 brick home. He moved in last month.
Pedraza plans to live in the house for at least 10 years, growing into a home that is more than he needs now. He thinks he'll ride out the current housing downturn and, when he finally wants to sell, the timing will be right.
"I think I got a great deal as far as the house," said Pedraza. "I think once the market picks up, I'll have instant equity."
30-year, fixed-rate loans averaged 6.17 percent
updated 3:12 p.m. ET, Thurs., Dec. 27, 2007
WASHINGTON - Rates on 30-year and one-year mortgages climbed this week, while rates on some other home loans didn’t budge.
Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 6.17 percent this week. That was up from 6.14 percent last week and was the highest since the week of Nov. 21, when 30-year rates stood at 6.20 percent.
Just three weeks ago, 30-year rates had dipped below 6 percent, edging down to 5.96 percent, the lowest level in more than two years.
Rates on one-year adjustable-rate mortgages rose to 5.53 percent this week, compared with 5.51 percent last week.
Analysts blamed the rise in these rates on worries about inflation. Economic reports last week showed both a big jump in consumer spending and a big pickup in inflation for November.
That “caused long-term bond yields to inch up over the end of last week and beginning of this week, with mortgage rates following,” said Frank Nothaft, chief economist at Freddie Mac. Looking ahead, Nothaft predicted consumer spending “will likely slow” given the problems in the housing and credit markets.
Other mortgage rates, meanwhile, held steady. .
Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, averaged 5.79 percent this week, unchanged from last week. And, rates on five-year adjustable-rate mortgages, rates stood at 5.90 percent this week, also the same as last week.
Harder-to-get credit has made it more difficult for some would-be home buyers to secure financing for home and other big-ticket purchases. The more restrictive credit situation has deepened the housing slump, which is weighing heavily on national economic activity.
The mortgage rates do not include add-on fees known as points. Thirty-year, 15-year and five-year mortgages each carried a nationwide average fee of 0.5 point. One-year adjustable-rate mortgages had a fee of 0.7 point.
A year ago, 30-year mortgages stood at 6.18 percent. Rates on 15-year mortgages were at 5.93 percent a year ago, while five-year adjustable-rate mortgages averaged 5.98 percent and one-year adjustable-rate mortgages were at 5.47 percent.
The housing market has been suffering through a severe slump, following five years of heady activity. Sales turned weak as did home prices. The boom-to-bust situation has been especially hard on some homeowners. Foreclosures have climbed to record highs and probably will keep rising. The problems in housing are expected to persist well into next year.
New-home sales at lowest level in 12 years
The last time housing data was this grim was April 1995
updated 4 minutes ago
WASHINGTON - Sales of new homes plunged last month to their lowest level in more than 12 years, a grim testament to the problems plaguing the housing sector.
The Commerce Department reported Friday that new-home sales tumbled by 9 percent in November from October to a seasonally adjusted annual rate of 647,000. That was the worst showing since April 1995, when the pace of sales was 621,000.
The sales pace for November was much weaker than economists were expecting. They were predicting sales in the weakest sector of the economy to drop by around 1.8 percent, to a pace of 715,000.
Reverse Mortgages: A Way Out
By Kelly Greene
From The Wall Street Journal Online
Reverse mortgages used to be a way for homeowners to get extra cash during retirement. Now they're also being used for a more-pressing purpose: helping people who are struggling to meet payments on high-interest-rate loans to keep their homes.
The strategy, which is relatively novel but gaining popularity among legal-aid attorneys and housing advocates around the country, calls for persuading lenders to take the cash generated by a reverse mortgage in lieu of foreclosing on older homeowners.
With a reverse mortgage, the bank makes payments to the homeowner instead of the homeowner making payments to a bank. The loan is repaid, with interest, when the borrower sells the house, moves out permanently or dies. The products are complex and have high fees -- typically about 7% of the home's value -- and they make it difficult for homeowners to leave the property to their heirs. But they may be the best option for people who have built up equity in their home and would otherwise lose it.
Most of these older homeowners in trouble had refinanced their home into so-called subprime mortgages. Such loans -- many of which feature adjustable rates that can tack sharply higher after an initial teaser period -- have roiled the mortgage industry and credit markets this year as default rates have shot up, and analysts expect hundreds of thousands of additional subprime loans to go bad over the next several years.
While no one tracks subprime mortgage holders by age, the approximately 30 million Americans 65 and older who own their homes are routinely targeted by subprime lenders with refinancing deals, borrower advocates say. Given that the rescue plan recently proposed by the Bush administration and the mortgage industry doesn't provide relief for individuals who can't afford their current loan terms, reverse mortgages are currently one of the few tools available to help older homeowners facing foreclosure.
The strategy worked recently for Gloria Forts, a 62-year-old retired federal worker in Forest Park, Ga., a suburb of Atlanta. After refinancing her home in August 2006 with a $106,500 mortgage from Fremont Investment & Loan in Brea, Calif., Ms. Forts was facing monthly payments of $950.41. That consumed 70% of her monthly income from Social Security and a pension. Intending to start a new job, she found herself kept at home by diabetes complications and back surgery. In June, she sought help from the Atlanta Legal Aid Society.
There, she found William J. Brennan Jr., a veteran housing attorney who, over the past 18 months, has developed a sophisticated model for settling subprime debts with reverse mortgages. After Ms. Forts received a foreclosure warning in October, Mr. Brennan connected her with Genie McGee, a reverse-mortgage specialist with Financial Freedom Senior Funding Corp., an Irvine, Calif., unit of IndyMac Bancorp Inc. She determined that Ms. Forts would qualify for a reverse mortgage of about $61,000.
Mr. Brennan sent Fremont's loss-mitigation department a letter proposing that the company agree to take that sum and cancel its plans to foreclose on the house. On Dec. 3, the day before the foreclosure sale was supposed to take place, Fremont agreed to the deal and stopped the foreclosure.
The transaction illustrates one of the biggest challenges in getting lenders to accept payouts from reverse mortgages: taking less money than the house may be worth. In the 14 cases Mr. Brennan has settled to date, lenders have accepted payments for an average of 65 cents on the dollar. Mr. Brennan contends that the loans -- typically mortgage refinancings or home-equity loans with high interest rates and monthly payments that gobble up more than half of the borrowers' fixed income -- should never have been made in the first place. Lenders, he says, "have been making loans regardless of the borrowers' ability to pay, and there needs to be a penalty for that."
When Mr. Brennan first attempted to broker such settlements a few years ago, he hit resistance from mortgage lenders who were unwilling to accept reverse mortgages as full loan repayment instead of foreclosing on properties they could sell outright. He finally started getting traction when Georgia Sen. Vincent Fort, an Atlanta Democrat who pushed state legislation to damp predatory lending, personally called the executive offices of the banks involved.
Now, with real-estate markets struggling, more lenders may be willing to entertain reverse-mortgage payoffs. "If there's a way to settle the debt that nets the investor more than it would get if there was a foreclosure and a sale, then the servicer would look at it," says Thomas Kelly, a spokesman for J.P. Morgan Chase & Co., whose Chase Home Lending unit services more than $700 billion in mortgages. (Chase was the trustee on one mortgage loan Mr. Brennan settled, though another bank has since acquired that business.)
A spokeswoman for Fremont General Corp., Fremont Investment & Loan's parent, declined to comment about Ms. Forts's settlement. The Federal Deposit Insurance Corp. issued a cease-and-desist order against Fremont in March, in which it said it had determined "that the bank had been operating without adequate subprime mortgage loan underwriting criteria, and that it was marketing and extending subprime mortgage loans in a way that substantially increased the likelihood of borrower default."
Other public-service attorneys around the country are turning to reverse mortgages as a way to negotiate lower payoffs for subprime loans made to older clients. In Chicago, for example, "we advise a lot of clients that a reverse mortgage is appropriate when it's the only way to keep them in their home," says Michelle A. Weinberg, a supervisory attorney at the Legal Assistance Foundation of Metropolitan Chicago. "The same people have been refinanced over and over again to very little benefit for themselves, with high fees."
But the strategy may not be suitable for every homeowner in trouble. "We've helped a handful of people get refinanced with reverse mortgages," says Jessica Attie, co-director of the Foreclosure Prevention Project at South Brooklyn Legal Services in New York. "We'd like to do it more, but a lot of times we find that they have too much debt on the property to qualify."
In Washington, the National Council on Aging, an advocacy group, has launched a reverse-mortgage initiative to help older homeowners around the country learn how to use the product appropriately -- including ridding themselves of monthly mortgage payments.
"Conventional mortgage loans, whether they're subprime or not, are risky for seniors because they have to make that monthly payment from a fixed income," says Barbara Stucki, the initiative's director. "If anything gets out of whack, they are in danger of losing their home." Recent studies have found that the portion of households age 65 and older with mortgage debt increased to 22% in 2004 from 15% in 1989, and increased in dollar terms to $47,000 from $15,000 per household. An AARP study released earlier this month found that nearly one-third of 946 reverse-mortgage borrowers surveyed used the loans to pay off existing mortgage debt.
"For a small but crucial number of potential borrowers who are in financial distress, reverse mortgages can be essential in avoiding foreclosures -- sometimes on subprime or home-equity loans with very high interest rates," the AARP report says.
Elizabeth Renuart, a staff attorney at the National Consumer Law Center in Boston, reviews hundreds of mortgage documents annually, and says that the adjustable-rate mortgages she has examined this year that she considered "to be made inappropriately were almost entirely made to people over 60. To me, that's a very shocking revelation."
Mr. Brennan in Atlanta is regularly giving speeches to and fielding calls from legal-aid lawyers around the country who want to use reverse mortgages to relieve older homeowners of their mortgage debt. "There has to be a way to systemize this strategy," Mr. Brennan says. "Every senior in America should be able to use a reverse mortgage to get out of these subprime loans."
Bonds Yields Inch Up, Bringing Some Mortgage Rates With Them
McLEAN, VA -- Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.17 percent with an average 0.5 point for the week ending December 27, 2007, up from last week when it averaged 6.14 percent as well. Last year at this time, the 30-year FRM averaged 6.18 percent.
The 15-year FRM this week averaged 5.79 percent with an average 0.5 point, unchanged from last week when it also averaged 5.79 percent. A year ago at this time, the 15-year FRM averaged 5.93 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.90 percent this week, with an average 0.5 point, also unchanged from last week when it averaged 5.90 percent. A year ago, the 5-year ARM averaged 5.98 percent.
One-year Treasury-indexed ARMs averaged 5.53 percent this week with an average 0.7 point, up from last week when it was 5.51 percent. At this time last year, the 1-year ARM averaged 5.47 percent.
"Stronger consumer spending and an increase in the core price deflator in November caused long-term bond yields to inch up over the end of last week and beginning of this week, with mortgage rates following," said Frank Nothaft, Freddie Mac vice president and chief economist. "Offsetting some of the increase, however, was a decline in November's index of leading economic indicators and a weak manufacturing report in Philadelphia for December."
"House prices continued to decline in October, falling nearly 16 percent (annualized), and represented the fifteenth consecutive monthly decline according the Standard & Poor's/Case-Shiller® 20-city composite index. Seventeen of the twenty metropolitan areas displayed negative growth from October 2006. Falling house prices and tightened credit standards will likely slow consumer spending somewhat over the near term."
Published: December 28, 2007
When Selling Your Home, Using Scents Makes Sense!
by Phoebe Chongchua
Even though now doesn't seem to be the ideal time to sell your home, you can take heart in knowing that small actions may make a difference in getting your home sold.
"Scentmosphere" isn't exactly new but it is rapidly becoming a way to attempt to attract buyers.
"When [buyers] walk into a house before they actually see anything in that house, because they breathe, they are smelling. So they are actually getting an impression, whether it's conscious or subconscious, of your home -- just by the way it smells," says Rick Ruffolo, senior vice president of brand, marketing, and innovation for Yankee Candle Company.
So, right now take a deep breath. What kind of "smellment" is your home making?
Choosing to proactively make a statement in the way your home smells is just another step in helping to sell your home faster. It's the next step after curb appeal. Ruffolo says curb appeal gets buyers in the door but then they see and smell your home and begin to decide if this is the home for them.
"If it's a vacant home it can be musty. But if it's an active home it also could have [odors of] whatever activities that are going on in that house," says Ruffolo.
Are buyers going to smell the over-sized dog that traipses around the house after rolling in the newly-cut grass? Are they going to smell your son's gym bag filled with dirty socks that has been buried deep in his closet for the last five weeks? While we certainly don't all have the same preferences for scents, most would agree neither of those two things pose a welcoming aroma.
"It's not rocket science, but it is candle science," says Ruffolo.
He suggests candle fragrances such as the smell of freshly-baked cookies. "Not everybody likes to eat cookies but everybody enjoys the smell of cookies, and when I say everybody, there may be the exception here or there, but the vast majority would enjoy the baking smell. So we're always fond of fragrances that are in the vanilla family," says Ruffolo.
Fragrances such as French vanilla, butter cream, and créme brûleé that mimic baking scents are welcoming and inviting for buyers. Scents register in our brain and frequently remind us of our past experiences. Creating pleasant aromas in your newly-listed house can help the buyer to experience an emotional connection with the home.
Ruffolo says when it comes to bathrooms, great rooms, or even basements it's a good idea to try different fragrances.
"You may want to think of what we refer to as clean or fresh fragrances and those could be based in various fruits, so the citrus family is a really good one," says Ruffolo.
He says, however, there are some fragrances that you should avoid as they don't tend to appeal to the masses or they have too strong an odor.
Ruffolo instead encourages sellers to use fragrances that will instantly be winners such as vanilla, kitchen spice fragrances, citrus, and the smell of freshly cleaned laundry.
"Scent impacts the atmosphere," says Ruffolo. He says that candles are the best way to get the fragrant aroma in the air, but if you don't have time to let them burn before showing your home there are other methods that work to get the right "scentmosphere."
The company has electrical plug-in products that have oil them so they provide continuous fragrance. "If you're away from the house for a period of time, you don't have to worry about the candle being lit," says Ruffolo.
Reed diffusers are both decorative and powerful for giving off fragrance. The diffusers contain oil and the reeds help to draw the oil up and out into the room. "They don't fill a large room but they fill a nice small space very well," says Ruffolo.
But if you give every room a fragrance, is there a point of over-saturation? Ruffolo says that's not likely to happen.
"It's not like the person who put on too much perfume. A home is a very large place and it absorbs a lot of the fragrance so it would be pretty hard to overpower a house with too much fragrance," explains Ruffolo.
Ruffolo says with all the tips out there about selling a home, the scent factor is often the most forgotten.
"If you don't have a scent that you want in there, buyers are going to smell whatever is going on in that room. So if it's been closed up or doesn't have a lot of air flow [there will] be more of a musty, damp, or a less desirable scent," explains Ruffolo.
It just makes sense that if you want to create an appealing environment for buyers, pleasing scents should be part of the selling plan.
Published: December 28, 2007
Washington Report: Capital Gains Takes on Change
by Kenneth R. Harney
Hardly anybody noticed it, but Congress tucked away a valuable bit of holiday cheer for real estate when it passed its final tax bill of the year.
It was the first substantive change in years to the generous capital gains rules governing sales of principal homes.
Most homeowners and real estate professionals can recite these rules in their sleep: Married, joint-filing sellers of houses can exclude up to $500,000 of gain, and single-filing sellers can take up to $250,000 … provided they've used the property as a principal residence for a cumulative two of the previous five years.
But what happens when a married home owner dies? Does the surviving spouse still qualify for the full $500,000 -- or does she or he only get to exclude $250,000?
The answer from the IRS has been this: you only get the full $500,000 if you sell during the tax year in which you were married and filing a joint return. Otherwise, the tax code sees you as single, and then you're limited to $250,000.
In other words, if your wife or husband died in June of 2007, you can only claim the full $500,000 benefit if you sell before December 31, 2007.
After that, as long as you remain unmarried, you're capped at the $250,000 limit for single taxpayers.
As a practical matter, most surviving spouses inherit their husband's or wife's share of the property at what's known as a "stepped up" tax basis, with no capital gains tax liability at the current market value.
But here's the problem: Some surviving spouses complain that they feel rushed into sales by the current tax rules. This is especially true for people who've lost their loved ones during the final few months of the year.
With everything else going on, they don't want the additional pressure of having to make the decision to sell the family home quickly. They want more time. Fair enough.
Well, now they've got it. Legislation signed into law before the holiday recess gives surviving spouses two full years to qualify for the $500,000 exclusion -- even though technically they're single.
And who says Congress doesn't have a heart?
Since your tax professional may not be familiar with this yet, here's the official citation: The bill is H.R.3648. The capital gains change is in Section 7.
Published: December 28, 2007
Friday, December 14, 2007
Senate Democrats Propose New Restrictions on Mortgage Lenders
Inman News (12/13/07)Sen. Chris Dodd, D-Conn., on Dec. 12 introduced the Homeownership Preservation and Protection Act of 2007—which would ban prepayment penalties and yield spread premiums, require mortgage lenders to only make loans that borrowers are able to repay and force loan servicers to implement loss mitigation strategies before initiating foreclosures on homes. Mortgage Bankers Association Chairman Kieran Quinn said the bill's provisions "concern us deeply" because they would also require mortgage lenders and brokers to make loans in the best interest of borrowers as well as expose investors in mortgage-backed securities to lawsuits by individual borrowers. Quinn also noted that the bill does not establish uniform national standards that preempt state laws—something that MBA supports. Nonetheless, the bill "is an important development, as it will jumpstart the debate in the Senate over how to prevent a reoccurrence of the current troubles facing the mortgage market," he said.
Bush Plan To Ease Foreclosures Supported By Home Builders
December 6, 2007 - A plan put forth today by President Bush to limit foreclosures by working with key mortgage lenders and investment firms to freeze interest rates for five years on certain subprime mortgages is supported by the National Association of Home Builders (NAHB).
“The Administration’s plan to help struggling borrowers stay in their homes is one of several steps that can help stabilize the housing market and reassure consumers and investors in the mortgage market,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif. “We applaud this action and urge Congress to follow up quickly on pending legislation that would provide additional help in easing the credit crunch and restoring confidence in the marketplace.”
Specifically, Catalde called on Congress to:
- Enact FHA reform legislation to allow the agency to insure more home loans and help subprime borrowers.
- Strengthen regulatory oversight of Fannie Mae and Freddie Mac and allow them to purchase mortgages in high-cost markets.
- Enact legislation that eliminates taxes on mortgage debt that is forgiven as part of a loan workout.
The Bush plan to stave off foreclosures, which emerged from discussions with various groups including lenders, builders, investors, consumer activists, housing economists and regulators, is aimed at borrowers with loans that were originated between Jan. 1, 2005 and July 31, 2007, with rates that are scheduled to reset between Jan. 1, 2008 and July 31, 2010.
Home owners with steady incomes who have been making timely payments on their mortgages, but who cannot afford the higher adjusted rate, could qualify for a freeze of up to five years on their current interest rate if they meet certain conditions. They could also be placed on a fast-track approach that would enable them to refinance or modify their loans.
To ensure that the break is not granted to real estate speculators or investors, the plan would only be available for owner-occupied homes.
Separately, a UCLA Anderson Forecast study concluded that the U.S. and California economies will weather the housing downturn without a national recession and another report by Harvard said that even with today’s excess supply of unsold homes on the market, the underlying demand for new housing will ultimately rebound to robust levels through 2014.
On the opposite coast, a report from Harvard University’s Joint Center for Housing Studies, “Projecting the Underlying Demand for New Housing Units: Inferences from the Past, Assumptions About the Future,” found that even with the large inventory of unsold homes on the market today, the long term demand for conventional new housing units will run at a strong clip of 1.82 million per year between 2008 and 2014.
“The basic market fundamentals for housing are still very strong,” said Sandy Dunn, NAHB president-elect and a builder from Point Pleasant, W.Va. “Once we work down the inventory of unsold units and put the credit crunch behind us, demand among both first-time and trade up buyers will return to more normal and sustainable levels.”
The Harvard report concluded: “Do not mistake short-term reactions to the housing slowdown as a harbinger of things to come for the long-term. On the strength of demographically-driven demand for housing, the market will bounce back from its currently suppressed levels.”
“The Administration’s plan to help struggling borrowers stay in their homes is one of several steps that can help stabilize the housing market and reassure consumers and investors in the mortgage market,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif. “We applaud this action and urge Congress to follow up quickly on pending legislation that would provide additional help in easing the credit crunch and restoring confidence in the marketplace.”
Specifically, Catalde called on Congress to:
- Enact FHA reform legislation to allow the agency to insure more home loans and help subprime borrowers.
- Strengthen regulatory oversight of Fannie Mae and Freddie Mac and allow them to purchase mortgages in high-cost markets.
- Enact legislation that eliminates taxes on mortgage debt that is forgiven as part of a loan workout.
The Bush plan to stave off foreclosures, which emerged from discussions with various groups including lenders, builders, investors, consumer activists, housing economists and regulators, is aimed at borrowers with loans that were originated between Jan. 1, 2005 and July 31, 2007, with rates that are scheduled to reset between Jan. 1, 2008 and July 31, 2010.
Home owners with steady incomes who have been making timely payments on their mortgages, but who cannot afford the higher adjusted rate, could qualify for a freeze of up to five years on their current interest rate if they meet certain conditions. They could also be placed on a fast-track approach that would enable them to refinance or modify their loans.
To ensure that the break is not granted to real estate speculators or investors, the plan would only be available for owner-occupied homes.
Separately, a UCLA Anderson Forecast study concluded that the U.S. and California economies will weather the housing downturn without a national recession and another report by Harvard said that even with today’s excess supply of unsold homes on the market, the underlying demand for new housing will ultimately rebound to robust levels through 2014.
On the opposite coast, a report from Harvard University’s Joint Center for Housing Studies, “Projecting the Underlying Demand for New Housing Units: Inferences from the Past, Assumptions About the Future,” found that even with the large inventory of unsold homes on the market today, the long term demand for conventional new housing units will run at a strong clip of 1.82 million per year between 2008 and 2014.
“The basic market fundamentals for housing are still very strong,” said Sandy Dunn, NAHB president-elect and a builder from Point Pleasant, W.Va. “Once we work down the inventory of unsold units and put the credit crunch behind us, demand among both first-time and trade up buyers will return to more normal and sustainable levels.”
The Harvard report concluded: “Do not mistake short-term reactions to the housing slowdown as a harbinger of things to come for the long-term. On the strength of demographically-driven demand for housing, the market will bounce back from its currently suppressed levels.”
Fannie Mae Plan To Raise Housing Finance Costs Highlights Need For Congressional Action
December 7, 2007 - In response to Fannie Mae’s announced plan to impose an “Adverse Market Delivery Charge” for all mortgages purchased after March 1, 2008, National Association of Home Builders (NAHB) Executive Vice President and CEO Jerry Howard today issued the following statement:
“Fannie Mae’s new fee is a broad tax on homeownership that ultimately will be passed along to consumers. It’s certain to be more difficult for the housing market to regain its footing when steps are being taken to drive up mortgage costs. This is the exact opposite of what needs to be done and underscores the importance of Congress quickly enacting legislation that would strengthen regulatory oversight of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac while also preserving their vital housing mission.
“As of March 1, 2008, Fannie Mae plans to charge lenders an additional 25 basis points across the board for loans purchased for portfolio as well as for loans delivered into its guaranteed mortgage-backed securities. It appears this action is being taken specifically to ensure that Fannie Mae meets a 30 percent minimum capital surcharge imposed by the Office of Federal Housing Enterprise Oversight (OFHEO) as a result of financial difficulties that Fannie Mae has been working through since 2004.
“This is like a mini perfect storm created by Congress’s inability to pass meaningful GSE reform and OFHEO’s regulatory inflexibility in a time of crisis. So it should be of little surprise to anyone that, under these circumstances, a GSE would resort to a mortgage surcharge to meet capital requirements.
“This is no time for Fannie Mae’s business interests to take precedence over its mission responsibility. NAHB has long opposed government efforts to impose user fees on the GSEs, and this, despite the fact that it is called a necessary result of a down market, is essentially a user fee that is being imposed by Fannie Mae. We oppose it and urge Fannie to reconsider.”
“Fannie Mae’s new fee is a broad tax on homeownership that ultimately will be passed along to consumers. It’s certain to be more difficult for the housing market to regain its footing when steps are being taken to drive up mortgage costs. This is the exact opposite of what needs to be done and underscores the importance of Congress quickly enacting legislation that would strengthen regulatory oversight of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac while also preserving their vital housing mission.
“As of March 1, 2008, Fannie Mae plans to charge lenders an additional 25 basis points across the board for loans purchased for portfolio as well as for loans delivered into its guaranteed mortgage-backed securities. It appears this action is being taken specifically to ensure that Fannie Mae meets a 30 percent minimum capital surcharge imposed by the Office of Federal Housing Enterprise Oversight (OFHEO) as a result of financial difficulties that Fannie Mae has been working through since 2004.
“This is like a mini perfect storm created by Congress’s inability to pass meaningful GSE reform and OFHEO’s regulatory inflexibility in a time of crisis. So it should be of little surprise to anyone that, under these circumstances, a GSE would resort to a mortgage surcharge to meet capital requirements.
“This is no time for Fannie Mae’s business interests to take precedence over its mission responsibility. NAHB has long opposed government efforts to impose user fees on the GSEs, and this, despite the fact that it is called a necessary result of a down market, is essentially a user fee that is being imposed by Fannie Mae. We oppose it and urge Fannie to reconsider.”
Fed Rate Cut Will Help Economy; Congressional Action Also Needed
December 11, 2007 - The Federal Reserve Board’s decision today to cut short-term interest rates by 25 basis points is an important step to ensure that the economy is not derailed by problems in the subprime mortgage market, and it is now up to Congress to do its part, according to the National Association of Home Builders (NAHB).
“The Federal Reserve’s third rate reduction since September shows that it is determined to cut interest rates as needed in order to keep the economy moving forward, boost consumer confidence and increase liquidity in the credit markets,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif.
In addition, Catalde said that the Fed should be prepared to act again quickly in the event further reductions in interest rates are necessary to stabilize financial markets and reassure investors.
The Fed’s action, along with the plan announced last week by President Bush and Treasury Secretary Henry Paulson to help struggling subprime borrowers, shows that the government realizes the importance of housing to the nation’s economy and the need to get housing back on track, said Catalde.
Catalde also called on the Senate to act promptly on several pieces of legislation that would also help to ease the mortgage credit crunch and increase liquidity in financial markets.
“The Senate should move quickly to approve House-passed initiatives that will modernize FHA, provide tax debt forgiveness when the terms of a mortgage are renegotiated and a portion of the loan is forgiven, strengthen the regulatory oversight of the GSEs and allow Fannie Mae and Freddie Mac to purchase mortgages in high-cost markets,” said Catalde.
“The Federal Reserve’s third rate reduction since September shows that it is determined to cut interest rates as needed in order to keep the economy moving forward, boost consumer confidence and increase liquidity in the credit markets,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif.
In addition, Catalde said that the Fed should be prepared to act again quickly in the event further reductions in interest rates are necessary to stabilize financial markets and reassure investors.
The Fed’s action, along with the plan announced last week by President Bush and Treasury Secretary Henry Paulson to help struggling subprime borrowers, shows that the government realizes the importance of housing to the nation’s economy and the need to get housing back on track, said Catalde.
Catalde also called on the Senate to act promptly on several pieces of legislation that would also help to ease the mortgage credit crunch and increase liquidity in financial markets.
“The Senate should move quickly to approve House-passed initiatives that will modernize FHA, provide tax debt forgiveness when the terms of a mortgage are renegotiated and a portion of the loan is forgiven, strengthen the regulatory oversight of the GSEs and allow Fannie Mae and Freddie Mac to purchase mortgages in high-cost markets,” said Catalde.
Wind Dancer at Jefferson Crossroads Grand Opening
Bestfield Homes announces the grand opening of its newest community in Sussex County “Wind Dancer at Jefferson Crossroads”. This new community offers the very best of what today’s homeowners are searching for in their next new home. This premier community is located 1.8 miles west of route 1 and only 15 minutes from the Delaware beaches and attractions. Quality constructed by Bestfield Homes, one of Delaware’s most respected local builders with over 50 years of building experience, Wind Dancer at Jefferson Crossroads features pricing that starts in the low 300’s.
Unlike many communities offering hundreds of homes, Wind Dancer offers a total of just 28 three quarter acre home sites in a quiet setting amid rural farm land. Wind Dancer offers ranch, two story and first floor master suite plans designed for today’s life styles. The newly completed ranch model at Wind Dancer the “Berwyn” features the very best in first floor living with an open plan that consists of 3 bedrooms, 2 and one half baths, a formal dining room, large family room, deluxe owners suite and gourmet kitchen. The lower level is finished with a large gathering space so the family can entertain in style. Each home comes with a wide array of standard features including hardwood flooring in the foyer, a gas fireplace, two car side entry garages, large poured concrete basement and a list of standard features you’d expect to find in a quality built home. You also have the ability to customize your home utilizing Bestfield’s “flexible” floor plans. These plans enable you to add your own finishing touch to compliment your home by expanding rooms and adding square footage where you want it.
As an added benefit, Bestfield has partnered with Shallcross Mortgage Company enabling us to offer financing that gives you the ability to have both your housing and finance needs addressed in one location.
Make the trip this weekend to visit Wind Dancer at Jefferson Crossroads and take advantage of the builder incentives that are being offered. For directions and more information, please call 302-684-1450 or visit us a www.bestfieldhomes.com. . Model home hours are Friday through Tuesday from 11:00am to 5:00pm with appointments for Wednesday and Thursday. Let us show you why your next home should be a Bestfield Home.
Unlike many communities offering hundreds of homes, Wind Dancer offers a total of just 28 three quarter acre home sites in a quiet setting amid rural farm land. Wind Dancer offers ranch, two story and first floor master suite plans designed for today’s life styles. The newly completed ranch model at Wind Dancer the “Berwyn” features the very best in first floor living with an open plan that consists of 3 bedrooms, 2 and one half baths, a formal dining room, large family room, deluxe owners suite and gourmet kitchen. The lower level is finished with a large gathering space so the family can entertain in style. Each home comes with a wide array of standard features including hardwood flooring in the foyer, a gas fireplace, two car side entry garages, large poured concrete basement and a list of standard features you’d expect to find in a quality built home. You also have the ability to customize your home utilizing Bestfield’s “flexible” floor plans. These plans enable you to add your own finishing touch to compliment your home by expanding rooms and adding square footage where you want it.
As an added benefit, Bestfield has partnered with Shallcross Mortgage Company enabling us to offer financing that gives you the ability to have both your housing and finance needs addressed in one location.
Make the trip this weekend to visit Wind Dancer at Jefferson Crossroads and take advantage of the builder incentives that are being offered. For directions and more information, please call 302-684-1450 or visit us a www.bestfieldhomes.com. . Model home hours are Friday through Tuesday from 11:00am to 5:00pm with appointments for Wednesday and Thursday. Let us show you why your next home should be a Bestfield Home.
Best Place to be Gay and Gray
Location – Location – Location is more than a real estate mantra. It’s what every prospective retiree thinks about as the day to collect the crystal bowl or silver gavel marking the end of a career approaches. But location includes more than mere geography. It also includes can I afford it? Will I be safe? Are there good doctors and hospitals nearby? And are there cultural and leisure-time activities to enjoy? Often weather is also a part of the mix. Will my retirement home be in a tornado tunnel, on an earthquake fault line or along hurricane alley? And for gay men and lesbian women there’s the added question of, “Where can I live comfortably and know that my life-style will be respected?”
In answering these important questions, few communities can compete with Rehoboth Beach, Delaware, frequently on the “Best Of” lists produced by organizations such as the American Association of Retired Persons (AARP). They named Rehoboth Beach as one of five dream towns in their Best Places to Retire List in the July 2006 issue of the AARP Magazine.
Anthony Kulp Broker/Owner of Beach to Bay Real Estate Center, the largest gay owned and operated agency, sees the Rehoboth / Lewes Beach and surrounding areas as a lifetime investment for both full time and part time residents, particularly for gay and lesbian retirees. Many developments already have high percentages of gay and lesbian retirees and future retirees. Where else can you breathe salt air, enjoy the outdoors, have cocktails with your gay and lesbian neighbors and know that the investment in your home is growing.
What makes Rehoboth special is the beauty of the foam capped waves massaging the broad sand beaches and the tidal estuaries and bays providing a home to myriads of migrating birds. Add to that the mile long Boardwalk where bikers and hikers get their morning rush, the ocean-side gazebo band stand, which would make Norman Rockwell proud, and Rehoboth Avenue, a kaleidoscope of interesting boutiques and unique restaurants. Before the swoop of summer sun-seekers, the town is resplendent in the brilliant reds, yellows and violets of Spring, and in Fall the smell of smoke from a nearby hearth permeates the gentle fog that occasionally envelops the Boardwalk as the seasons change.
But in addition to this list of touchy-feely attributes there are practical financial reasons that draw retirees to Rehoboth Beach. Delaware has no sales tax on goods, food or entertainment and Social Security, railroad retirements and out-of-state pensions are exempt from income tax. Taxpayers 60 and older can exclude up to $12,500 of investment and qualified pension income.
Since Rehoboth Beach is small, approximately one square mile, housing prices in town for a single family home start in the $500s and condos in the $300s. County taxes on a $400,000 property will be approximately $1200 – and that’s per year, not per month. Beyond the town limits, in surrounding communities like Lewes, Milton, and Millsboro, or in the many beautiful communities that have sprung up in the corn fields reminiscent of Rehoboth’s more rural past, housing is much less expensive (Single Family homes start in the Low $200s and Condos in the low $100s) and all the advantages of Rehoboth and Lewes are still only a short drive away. Auto insurance and property insurance also reflect Rehoboth’s rural roots and are lower than in metropolitan areas.
Residents love, and strive to preserve, the small town feel that allows them to greet store owners and postal clerks by name. Instead of a New Year’s or Thanksgiving Day Parade, Rehoboth thrives on their Seawitch Halloween Parade, Christmas Parade, Chocolate Festival, Jazz Festival and Film Festival along with special events presented by the Henlopen Theater Project, the Rehoboth Art League and the Sussex County Library. The Possum Point Players stage major theatrical events in nearby Georgetown and in Milton, a neighboring small town known for its Victoriana, seminars, classic movies and plays are featured at their newly restored theater.
Hospitals in nearby Lewes and in Seaford Delaware, as well as in Salisbury, Maryland provide excellent medical care with a wide variety of specialists and primary care physicians. Personal safety, as well as personal health, is well cared for in Rehoboth with crime statistics well below the national average and below all major metropolitan areas.
Washington, Baltimore, Philadelphia and New York City are all within a few hours drive of Rehoboth and many residents avail themselves of community sponsored bus trips in order to enjoy theater, opera, musical events and museums. For the stay-at-homers, in addition to the lure of salt-water fishing, there are a dozen golf courses in the area, indoor and outdoor year-round tennis, and several nearby state parks which provide hiking and biking trails, canoe and kayak access and overnight camping.
For gays and lesbians and their friends there are a host of special events which bring the whole community together - the annual Labor Day Sundance, the drag volley-ball game on the beach, Love Dance on the Fourth of July weekend, the Black and White Ball, to name a few. Like any gay destination the bar scene changes from time to time but places like Blue Moon, Cloud 9, Double L Bar, Iguana Grill and Purple Parrot have been long term survivors offering food and drink to weekend and holiday escapees from Washington, Philly and Baltimore for many years.
Perhaps it was predestined for Rehoboth Beach to play an important role in our nation’s gay life. When the English explorer Henry Hudson sailed from the Atlantic through the inlet into what is now known as Rehoboth Bay, he chose the Biblical name Rehoboth, meaning “room for all.” Presumably, he was grateful that there was room for all his ships. But it seems somehow symbolic that after its start as a Methodist campground in 1873 and its first somewhat secretive gay bar in the ‘50s that Rehoboth now is a community with room for all and all are welcome.
Camp Rehoboth, a nonprofit gay and lesbian community service organization, has worked diligently for more than a decade to help insure that Rehoboth is a community with room for all. With more than 1.3 million dollars in pledges and cash, Camp Rehoboth is in the process of building a Community Center in the heart of the town. Their periodical, Letters From Camp Rehoboth, serves as a guidebook to residents and visitors, gay and straight.
In his introduction to Rehoboth Beach Memoirs, James Meehan put it this way.
Rehoboth Beach “… has that indefinable magic quality that makes certain places special. It’s sophisticated but friendly; exciting but not intimidating; relaxing but never boring.
Simply put, you might find Rehoboth Beach a pretty special kind of place to retiree.”
In answering these important questions, few communities can compete with Rehoboth Beach, Delaware, frequently on the “Best Of” lists produced by organizations such as the American Association of Retired Persons (AARP). They named Rehoboth Beach as one of five dream towns in their Best Places to Retire List in the July 2006 issue of the AARP Magazine.
Anthony Kulp Broker/Owner of Beach to Bay Real Estate Center, the largest gay owned and operated agency, sees the Rehoboth / Lewes Beach and surrounding areas as a lifetime investment for both full time and part time residents, particularly for gay and lesbian retirees. Many developments already have high percentages of gay and lesbian retirees and future retirees. Where else can you breathe salt air, enjoy the outdoors, have cocktails with your gay and lesbian neighbors and know that the investment in your home is growing.
What makes Rehoboth special is the beauty of the foam capped waves massaging the broad sand beaches and the tidal estuaries and bays providing a home to myriads of migrating birds. Add to that the mile long Boardwalk where bikers and hikers get their morning rush, the ocean-side gazebo band stand, which would make Norman Rockwell proud, and Rehoboth Avenue, a kaleidoscope of interesting boutiques and unique restaurants. Before the swoop of summer sun-seekers, the town is resplendent in the brilliant reds, yellows and violets of Spring, and in Fall the smell of smoke from a nearby hearth permeates the gentle fog that occasionally envelops the Boardwalk as the seasons change.
But in addition to this list of touchy-feely attributes there are practical financial reasons that draw retirees to Rehoboth Beach. Delaware has no sales tax on goods, food or entertainment and Social Security, railroad retirements and out-of-state pensions are exempt from income tax. Taxpayers 60 and older can exclude up to $12,500 of investment and qualified pension income.
Since Rehoboth Beach is small, approximately one square mile, housing prices in town for a single family home start in the $500s and condos in the $300s. County taxes on a $400,000 property will be approximately $1200 – and that’s per year, not per month. Beyond the town limits, in surrounding communities like Lewes, Milton, and Millsboro, or in the many beautiful communities that have sprung up in the corn fields reminiscent of Rehoboth’s more rural past, housing is much less expensive (Single Family homes start in the Low $200s and Condos in the low $100s) and all the advantages of Rehoboth and Lewes are still only a short drive away. Auto insurance and property insurance also reflect Rehoboth’s rural roots and are lower than in metropolitan areas.
Residents love, and strive to preserve, the small town feel that allows them to greet store owners and postal clerks by name. Instead of a New Year’s or Thanksgiving Day Parade, Rehoboth thrives on their Seawitch Halloween Parade, Christmas Parade, Chocolate Festival, Jazz Festival and Film Festival along with special events presented by the Henlopen Theater Project, the Rehoboth Art League and the Sussex County Library. The Possum Point Players stage major theatrical events in nearby Georgetown and in Milton, a neighboring small town known for its Victoriana, seminars, classic movies and plays are featured at their newly restored theater.
Hospitals in nearby Lewes and in Seaford Delaware, as well as in Salisbury, Maryland provide excellent medical care with a wide variety of specialists and primary care physicians. Personal safety, as well as personal health, is well cared for in Rehoboth with crime statistics well below the national average and below all major metropolitan areas.
Washington, Baltimore, Philadelphia and New York City are all within a few hours drive of Rehoboth and many residents avail themselves of community sponsored bus trips in order to enjoy theater, opera, musical events and museums. For the stay-at-homers, in addition to the lure of salt-water fishing, there are a dozen golf courses in the area, indoor and outdoor year-round tennis, and several nearby state parks which provide hiking and biking trails, canoe and kayak access and overnight camping.
For gays and lesbians and their friends there are a host of special events which bring the whole community together - the annual Labor Day Sundance, the drag volley-ball game on the beach, Love Dance on the Fourth of July weekend, the Black and White Ball, to name a few. Like any gay destination the bar scene changes from time to time but places like Blue Moon, Cloud 9, Double L Bar, Iguana Grill and Purple Parrot have been long term survivors offering food and drink to weekend and holiday escapees from Washington, Philly and Baltimore for many years.
Perhaps it was predestined for Rehoboth Beach to play an important role in our nation’s gay life. When the English explorer Henry Hudson sailed from the Atlantic through the inlet into what is now known as Rehoboth Bay, he chose the Biblical name Rehoboth, meaning “room for all.” Presumably, he was grateful that there was room for all his ships. But it seems somehow symbolic that after its start as a Methodist campground in 1873 and its first somewhat secretive gay bar in the ‘50s that Rehoboth now is a community with room for all and all are welcome.
Camp Rehoboth, a nonprofit gay and lesbian community service organization, has worked diligently for more than a decade to help insure that Rehoboth is a community with room for all. With more than 1.3 million dollars in pledges and cash, Camp Rehoboth is in the process of building a Community Center in the heart of the town. Their periodical, Letters From Camp Rehoboth, serves as a guidebook to residents and visitors, gay and straight.
In his introduction to Rehoboth Beach Memoirs, James Meehan put it this way.
Rehoboth Beach “… has that indefinable magic quality that makes certain places special. It’s sophisticated but friendly; exciting but not intimidating; relaxing but never boring.
Simply put, you might find Rehoboth Beach a pretty special kind of place to retiree.”
THE BEACH TO BAY REAL ESTATE CENTER WELCOMES AGENTS
As the Beach To Bay Real Estate Center continues to grow, it welcomes the addition of six Real Estate Agents to its office located at 17316 Coastal Highway in Lewes, Delaware. Owners Anthony Kulp and Andrew Staton are extremely excited to welcome the following agents: Nory Davis, Thomas Kyewski, Kristy Skuby, John Marino, Marisa (Moore) Smyth and Robyn Warren. Each of the aforementioned agents brings with them a wealth of experience in full-filling the Real Estate needs of our clients.
In joining the Beach to Bay Real Estate Center these agents will have the availability of In-House Mortgage and Loan Services provided by Metrocities, an In-House Certified Real Estate Auctioneer, an In-House Certified Appraiser, a Full Service Rental Department, and an incredible For Sale By Owner and Auction/Sheriff Sale Buyer Agency Program to name just a few. The Beach To Bay Real Estate Center is also proud to offer all Real Estate Agents the utilization of their New Home Showroom recipient of the 2006 Regal Award, Best New Home Showroom in the State of Delaware.
In joining the Beach to Bay Real Estate Center these agents will have the availability of In-House Mortgage and Loan Services provided by Metrocities, an In-House Certified Real Estate Auctioneer, an In-House Certified Appraiser, a Full Service Rental Department, and an incredible For Sale By Owner and Auction/Sheriff Sale Buyer Agency Program to name just a few. The Beach To Bay Real Estate Center is also proud to offer all Real Estate Agents the utilization of their New Home Showroom recipient of the 2006 Regal Award, Best New Home Showroom in the State of Delaware.
The Beach To Bay Real Estate Center in Lewes, Delaware is the proud representative of Bestfield Homes Knollac Acres Development.
The easy life just got easier. Located just 18 minutes from the Delaware Beaches and attractions, Knollac Acres is quickly becoming Sussex County's Community of Choice. A beautiful rural setting just minutes from historic Milford, this community offers spacious home sites of 3/4 of an acre and larger. Select from their semi-custom plans of Ranch, Two-Story and First Floor Owner Suites with three or four bedrooms, large basements, numerous baths and an extensive list of standard features. Whatever your pleasure, boating, crabbing, fishing, a walk on the beach or just relaxing, you can find it at Knollac Acres.
Want the best of both worlds with the ease of a ranch and the practicality of a two-story home? Bestfield's latest design, the affordable Carlyle model, has it all. A first floor owners suite complete with a walk-in closet, lavish bath including a corner soaking tub and separate four foot shower. This beautiful home comes standard with three bedrooms, two and one half baths plus a formal living room and dining room. The study is a perfect room for a home office or for the kid's homework. Relax in the two-story family room with adjacent kitchen. Take the sweeping staircase to the second floor and find two large bedrooms and a full bath. The standard two-car garage and a large basement round out this exceptionally unique home.
For more information or to preview any Knollac Acres homes by appointment, call the Beach To Bay Real Estate Center at 302-644-6880.
Want the best of both worlds with the ease of a ranch and the practicality of a two-story home? Bestfield's latest design, the affordable Carlyle model, has it all. A first floor owners suite complete with a walk-in closet, lavish bath including a corner soaking tub and separate four foot shower. This beautiful home comes standard with three bedrooms, two and one half baths plus a formal living room and dining room. The study is a perfect room for a home office or for the kid's homework. Relax in the two-story family room with adjacent kitchen. Take the sweeping staircase to the second floor and find two large bedrooms and a full bath. The standard two-car garage and a large basement round out this exceptionally unique home.
For more information or to preview any Knollac Acres homes by appointment, call the Beach To Bay Real Estate Center at 302-644-6880.
Thursday, December 6, 2007
Bush announces mortgage rate freeze plan
By MARTIN CRUTSINGER AP Economics Writer
AP Photo/Charles Dharapak
Watch Related Video
Mortgage Rate Freeze Reached
tcdacmd="cc=wdn; dt";
var hosted_site ="DEWIL";
var hosted_section ="POLITICS";
hosted_ad('@x96');
Advertisement
document.write("");
document.write('');
hosted_ad_pop('@x03');
');
//-->
AP_Tacoda_AMS_DDC_addPair("SECTION", "POLITICS")
AP_Tacoda_AMS_DDC("http://te.ap.org/tte/blank.gif", "1.0")
Buy AP Photo Reprints
var urlArray=document.URL.split("?");
document.write(" ");
Multimedia
AP Fact Check: Bush Iraq Speech, 9/13/07
From George Washington to George Bush: Executive Privilege Through History
Presidential Veto Primer
Latest White House Headlines
White House seeks to clarify Iran stance
Bush: Nation 'grieves' for Omaha
Bush calls on Iran to 'come clean'
Lobbying pays off for top Bush aide
Bush plans heavy travel in 2008
var mytd = document.getElementById('mytd');
var mydiv = document.getElementById('spnrefmoneymarkets');
if (mytd != null) {mytd.innerHTML = spnrefmoneymarkets.innerHTML; mydiv.innerHTML = ''};
PHOTO GALLERY
President Bush
WASHINGTON (AP) -- Hundreds of thousands of strapped homeowners could get some relief from a plan negotiated by the Bush administration to freeze interest rates on subprime mortgages that are scheduled to rise in the coming months.
"There is no perfect solution," President Bush said Thursday as he announced an agreement hammered out with the mortgage industry. "The homeowners deserve our help. The steps I've outlined today are a sensible response to a serious challenge."
Bush has been accused of moving too slowly to address a crisis that has spread to the broader financial market. But he also was careful not to sound as if he were imposing a government solution and violating his free-market principles. He billed his plan as a voluntary, private-sector arrangement that involves no government money.
"We should not bail out lenders, real estate speculators or those made the reckless decision to buy a home they knew they could never afford," Bush said after meeting with industry leaders at the White House. "But there are some responsible homeowners who could avoid foreclosure with some assistance."
Bush said 1.2 million people could be eligible for help. But only a fraction will be subject to the rate freeze. Others would get assistance in refinancing with their lenders and moving into loans secured by the Federal Housing Administration, Bush said.
Also, the aid will only come to those who ask for it, he said. Thousands of borrowers who are falling behind on their payments have been sent letters about the options, and Bush also urged people to call a new hot line: 1-888-995-HOPE.
The announcement followed the news earlier Thursday that home foreclosures surged to an all-time high in the July-September period. The Mortgage Bankers Association reported that the percentage of all mortgages that started the foreclosure process in the third quarter jumped to a record 0.78 percent, surpassing the previous record of 0.65 percent of all mortgages in the second quarter.
The administration's effort is aimed at stemming a further tidal wave of foreclosures in coming years as 2 million subprime mortgages - loans provided to borrowers with spotty credit histories - reset from their introductory rates of around 7 percent to 8 percent to levels as high as 11 percent, adding hundreds of dollars to the typical monthly payment.
A recent surge in mortgage defaults, part of the worst housing slump in more than two decades, has piled up billions of dollars in losses for big banks, hedge funds and other investors while roiling financial markets worldwide. Some economists think the housing bust may become severe enough to push the country into recession.
Bush originally gave the wrong number for the hot line; the White House later corrected him.
The president mentioned other steps to prevent foreclosures. The FHA has greater flexibility to offer refinancing to homeowners with good credit histories. It is expected that this eventually will help 300,000 families, officials said.
The Federal Reserve is announcing stronger lending standards this month, while the Housing and Urban Development Department and federal banking regulators are acting to improve disclosure requirements, he said.
Fed Chairman Ben Bernanke said the streamlined procedures for supporting efforts to refinance mortgages and freeze rates were a "welcome step in helping Americans protect their homes and communities from the consequences of unnecessary foreclosures."
The highest-profile part of the plan would freeze introductory "teaser" rates on certain subprime mortgages, preventing rates from rising for five years.
This offer would apply only to people living in their homes and who have not missed any payments at the lower rate. It also only would apply to loans taken out between 2005 and this past July 30 and scheduled to rise to higher rates in 2008 and 2009.
The hope is that the five-year freeze will buy time for the housing sales and prices to start rising again. Such a rebound would enable homeowners to refinance their current adjustable rate mortgages into fixed-rate loans with more affordable monthly payments.
But even Treasury Secretary Henry Paulson, who led the negotiations with the mortgage industry, acknowledged the effort is "not a silver bullet."
"We face a difficult problem," he said.
The big sticking point in the negotiations was getting investors who had purchased the mortgages after they were bundled into securities to agree to accept lower interest payments. Critics have said even with a deal, there are likely to be lawsuits. But officials representing major players in the mortgage industry said they believed the plan would withstand any legal challenges and would help at-risk homeowners avoid defaulting on their mortgages.
But George Miller, executive director of the American Securitization Forum, which represents companies that package mortgages into mortgage-backed securities, told reporters he expected the industry would face suits from investors unhappy that the original terms of the mortgages have been modified.
The president also did not miss the chance to lash out at the Democratic-controlled Congress.
Bush blamed lawmakers for not sending him legislation that he said would show they "are serious about responding to the challenges in the housing market." One measure would give the FHA more flexibility; a second would change the tax laws temporarily to help people who have a portion of their mortgage forgiven by banks.
"The Congress has not sent me a single bill to help homeowners," Bush said.
© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.
AP Photo/Charles Dharapak
Watch Related Video
Mortgage Rate Freeze Reached
tcdacmd="cc=wdn; dt";
var hosted_site ="DEWIL";
var hosted_section ="POLITICS";
hosted_ad('@x96');
Advertisement
document.write("");
document.write('');
hosted_ad_pop('@x03');
');
//-->
AP_Tacoda_AMS_DDC_addPair("SECTION", "POLITICS")
AP_Tacoda_AMS_DDC("http://te.ap.org/tte/blank.gif", "1.0")
Buy AP Photo Reprints
var urlArray=document.URL.split("?");
document.write(" ");
Multimedia
AP Fact Check: Bush Iraq Speech, 9/13/07
From George Washington to George Bush: Executive Privilege Through History
Presidential Veto Primer
Latest White House Headlines
White House seeks to clarify Iran stance
Bush: Nation 'grieves' for Omaha
Bush calls on Iran to 'come clean'
Lobbying pays off for top Bush aide
Bush plans heavy travel in 2008
var mytd = document.getElementById('mytd');
var mydiv = document.getElementById('spnrefmoneymarkets');
if (mytd != null) {mytd.innerHTML = spnrefmoneymarkets.innerHTML; mydiv.innerHTML = ''};
PHOTO GALLERY
President Bush
WASHINGTON (AP) -- Hundreds of thousands of strapped homeowners could get some relief from a plan negotiated by the Bush administration to freeze interest rates on subprime mortgages that are scheduled to rise in the coming months.
"There is no perfect solution," President Bush said Thursday as he announced an agreement hammered out with the mortgage industry. "The homeowners deserve our help. The steps I've outlined today are a sensible response to a serious challenge."
Bush has been accused of moving too slowly to address a crisis that has spread to the broader financial market. But he also was careful not to sound as if he were imposing a government solution and violating his free-market principles. He billed his plan as a voluntary, private-sector arrangement that involves no government money.
"We should not bail out lenders, real estate speculators or those made the reckless decision to buy a home they knew they could never afford," Bush said after meeting with industry leaders at the White House. "But there are some responsible homeowners who could avoid foreclosure with some assistance."
Bush said 1.2 million people could be eligible for help. But only a fraction will be subject to the rate freeze. Others would get assistance in refinancing with their lenders and moving into loans secured by the Federal Housing Administration, Bush said.
Also, the aid will only come to those who ask for it, he said. Thousands of borrowers who are falling behind on their payments have been sent letters about the options, and Bush also urged people to call a new hot line: 1-888-995-HOPE.
The announcement followed the news earlier Thursday that home foreclosures surged to an all-time high in the July-September period. The Mortgage Bankers Association reported that the percentage of all mortgages that started the foreclosure process in the third quarter jumped to a record 0.78 percent, surpassing the previous record of 0.65 percent of all mortgages in the second quarter.
The administration's effort is aimed at stemming a further tidal wave of foreclosures in coming years as 2 million subprime mortgages - loans provided to borrowers with spotty credit histories - reset from their introductory rates of around 7 percent to 8 percent to levels as high as 11 percent, adding hundreds of dollars to the typical monthly payment.
A recent surge in mortgage defaults, part of the worst housing slump in more than two decades, has piled up billions of dollars in losses for big banks, hedge funds and other investors while roiling financial markets worldwide. Some economists think the housing bust may become severe enough to push the country into recession.
Bush originally gave the wrong number for the hot line; the White House later corrected him.
The president mentioned other steps to prevent foreclosures. The FHA has greater flexibility to offer refinancing to homeowners with good credit histories. It is expected that this eventually will help 300,000 families, officials said.
The Federal Reserve is announcing stronger lending standards this month, while the Housing and Urban Development Department and federal banking regulators are acting to improve disclosure requirements, he said.
Fed Chairman Ben Bernanke said the streamlined procedures for supporting efforts to refinance mortgages and freeze rates were a "welcome step in helping Americans protect their homes and communities from the consequences of unnecessary foreclosures."
The highest-profile part of the plan would freeze introductory "teaser" rates on certain subprime mortgages, preventing rates from rising for five years.
This offer would apply only to people living in their homes and who have not missed any payments at the lower rate. It also only would apply to loans taken out between 2005 and this past July 30 and scheduled to rise to higher rates in 2008 and 2009.
The hope is that the five-year freeze will buy time for the housing sales and prices to start rising again. Such a rebound would enable homeowners to refinance their current adjustable rate mortgages into fixed-rate loans with more affordable monthly payments.
But even Treasury Secretary Henry Paulson, who led the negotiations with the mortgage industry, acknowledged the effort is "not a silver bullet."
"We face a difficult problem," he said.
The big sticking point in the negotiations was getting investors who had purchased the mortgages after they were bundled into securities to agree to accept lower interest payments. Critics have said even with a deal, there are likely to be lawsuits. But officials representing major players in the mortgage industry said they believed the plan would withstand any legal challenges and would help at-risk homeowners avoid defaulting on their mortgages.
But George Miller, executive director of the American Securitization Forum, which represents companies that package mortgages into mortgage-backed securities, told reporters he expected the industry would face suits from investors unhappy that the original terms of the mortgages have been modified.
The president also did not miss the chance to lash out at the Democratic-controlled Congress.
Bush blamed lawmakers for not sending him legislation that he said would show they "are serious about responding to the challenges in the housing market." One measure would give the FHA more flexibility; a second would change the tax laws temporarily to help people who have a portion of their mortgage forgiven by banks.
"The Congress has not sent me a single bill to help homeowners," Bush said.
© 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.
Despite housing problems and high oil prices, recession unlikely, study asserts
By ALEX VEIGA, Associated Press
Posted Thursday, December 6, 2007Read Comments-->12/06/2007 -->
LOS ANGELES -- The nation's housing doldrums will drag on at least through 2009, dampening U.S. economic growth and job creation, but the slowdown won't push the economy into a recession, according to a new economic report.
Despite plunging housing values, rising oil prices and credit problems that continue to plague Wall Street, the nation's job market is unlikely to suffer the kind of steep losses that would tip the economy into recession, according to the quarterly Anderson Forecast by the University of California, Los Angeles.
"We still think an official recession is not in the immediate future," said Edward Leamer, co-author of the forecast to be released today.
Some economists and financial pundits have warned the nation will sink into recession, with a wave of reset adjustable-rate mortgages tearing through the economy next year.
Leamer, however, insisted the housing woes alone won't hobble the economy enough to cause two consecutive quarters of negative economic growth in the nation's gross domestic product -- the standard used to define a recession.
The U.S. unemployment rate would have to soar from the current 4.6 percent to nearly 6 percent by the end of next year, the equivalent of a loss of at least 2 million jobs, Leamer said.
That would require major job losses from a sector other than construction, which Leamer doesn't see happening.
Heavy job losses in manufacturing, which has shed about 3 million jobs since 2001, could have such an impact, but Leamer says that is implausible.
Still, he projects the economy will remain sluggish before starting to rebound in the second half of 2008.
The forecast estimated the housing slump cost the U.S. economy a percentage point of growth this year.
Leamer predicted U.S. housing prices will continue to drop, and levels of new construction will remain depressed, through 2009.
Even so, the housing drag on the national economy will "substantially abate" by mid-2008, with housing starts bottoming out by next summer to about 900,000 units, Leamer said.
Posted Thursday, December 6, 2007Read Comments-->12/06/2007 -->
LOS ANGELES -- The nation's housing doldrums will drag on at least through 2009, dampening U.S. economic growth and job creation, but the slowdown won't push the economy into a recession, according to a new economic report.
Despite plunging housing values, rising oil prices and credit problems that continue to plague Wall Street, the nation's job market is unlikely to suffer the kind of steep losses that would tip the economy into recession, according to the quarterly Anderson Forecast by the University of California, Los Angeles.
"We still think an official recession is not in the immediate future," said Edward Leamer, co-author of the forecast to be released today.
Some economists and financial pundits have warned the nation will sink into recession, with a wave of reset adjustable-rate mortgages tearing through the economy next year.
Leamer, however, insisted the housing woes alone won't hobble the economy enough to cause two consecutive quarters of negative economic growth in the nation's gross domestic product -- the standard used to define a recession.
The U.S. unemployment rate would have to soar from the current 4.6 percent to nearly 6 percent by the end of next year, the equivalent of a loss of at least 2 million jobs, Leamer said.
That would require major job losses from a sector other than construction, which Leamer doesn't see happening.
Heavy job losses in manufacturing, which has shed about 3 million jobs since 2001, could have such an impact, but Leamer says that is implausible.
Still, he projects the economy will remain sluggish before starting to rebound in the second half of 2008.
The forecast estimated the housing slump cost the U.S. economy a percentage point of growth this year.
Leamer predicted U.S. housing prices will continue to drop, and levels of new construction will remain depressed, through 2009.
Even so, the housing drag on the national economy will "substantially abate" by mid-2008, with housing starts bottoming out by next summer to about 900,000 units, Leamer said.
Housing crisis, rising health costs cut into states' finances
Spending growth expected to be below average; rainy day funds may be tapped to cover shortfallsBy ANDREW WELSH-HUGGINS, Associated Press
Posted Thursday, December 6, 2007Read Comments-->12/06/2007 -->
Strong economic conditions for state governments are giving way to troubling budget shortfalls as rising health care costs and harmful ripples from the housing crisis pressure both revenue and spending, a new report says.
States are spending less in the current budget year than in fiscal 2007, which for most states ended in June, according to the analysis by the National Governors Association and the National Association of State Budget Officers released Wednesday.
Spending is expected to grow by only 4.7 percent this year, below the historical average.
A few states are also talking about tapping their rainy day funds to address budget shortfalls caused by lower-than-anticipated revenues in fiscal 2007, which can be traced to the housing slump in many locations.
States' total reserves -- a combination of year-end balances and rainy day funds -- remain healthy but are starting to decline, the report says.
Scott Pattison, NASBO's executive director, used a sports analogy to describe the downturn states were facing.
In the past couple of years, states were so well-off they "would have no problem running the Marine Corps Marathon," he said Wednesday.
"Now we're starting to see some sluggish growth," Pattison said. "They can do a walk-run or a 10K but not necessarily at the peak where they could run a marathon."
Several states have announced budget shortfalls since the report was completed this fall, said Ray Scheppach, the NGA's executive director.
If conditions worsen, states need to be prepared for an economic downturn that could hit them hard, Pattison added.
"There's just so many pressures and there's just not the cushion that they've had in the last few years," he said.
The survey of states' financial conditions in fiscal 2007 found:
•Only one state, Wisconsin, was forced to make a midyear budget cut in the fiscal year that ended, in all but four states, in June.
•State general fund spending grew by 9.3 percent in fiscal 2007, which is significantly higher than the 30-year average of 6.4 percent, as states used surpluses to cover tax cuts and bolster previously underfunded programs.
•States budgeted more modest revenue growth in fiscal 2008, with seven states enacting negative growth budgets.
States also were expected to end fiscal 2008 with total balances of $47 billion, down from $63 billion in 2007 and $69 billion in 2006. Despite the decrease, balances of $47 billion, or 6.7 percent of states' total spending, are still healthy, Pattison said.
Spending on health care is rising again after a relative lull, and the housing market is hurting revenues as states lose the taxes from big-ticket sales driven by real estate, Scheppach said.
"People aren't moving into larger houses, they're not buying rugs and carpets and that type of thing, plus they can't pull the home equity out any more because there isn't any," he said.
Posted Thursday, December 6, 2007Read Comments-->12/06/2007 -->
Strong economic conditions for state governments are giving way to troubling budget shortfalls as rising health care costs and harmful ripples from the housing crisis pressure both revenue and spending, a new report says.
States are spending less in the current budget year than in fiscal 2007, which for most states ended in June, according to the analysis by the National Governors Association and the National Association of State Budget Officers released Wednesday.
Spending is expected to grow by only 4.7 percent this year, below the historical average.
A few states are also talking about tapping their rainy day funds to address budget shortfalls caused by lower-than-anticipated revenues in fiscal 2007, which can be traced to the housing slump in many locations.
States' total reserves -- a combination of year-end balances and rainy day funds -- remain healthy but are starting to decline, the report says.
Scott Pattison, NASBO's executive director, used a sports analogy to describe the downturn states were facing.
In the past couple of years, states were so well-off they "would have no problem running the Marine Corps Marathon," he said Wednesday.
"Now we're starting to see some sluggish growth," Pattison said. "They can do a walk-run or a 10K but not necessarily at the peak where they could run a marathon."
Several states have announced budget shortfalls since the report was completed this fall, said Ray Scheppach, the NGA's executive director.
If conditions worsen, states need to be prepared for an economic downturn that could hit them hard, Pattison added.
"There's just so many pressures and there's just not the cushion that they've had in the last few years," he said.
The survey of states' financial conditions in fiscal 2007 found:
•Only one state, Wisconsin, was forced to make a midyear budget cut in the fiscal year that ended, in all but four states, in June.
•State general fund spending grew by 9.3 percent in fiscal 2007, which is significantly higher than the 30-year average of 6.4 percent, as states used surpluses to cover tax cuts and bolster previously underfunded programs.
•States budgeted more modest revenue growth in fiscal 2008, with seven states enacting negative growth budgets.
States also were expected to end fiscal 2008 with total balances of $47 billion, down from $63 billion in 2007 and $69 billion in 2006. Despite the decrease, balances of $47 billion, or 6.7 percent of states' total spending, are still healthy, Pattison said.
Spending on health care is rising again after a relative lull, and the housing market is hurting revenues as states lose the taxes from big-ticket sales driven by real estate, Scheppach said.
"People aren't moving into larger houses, they're not buying rugs and carpets and that type of thing, plus they can't pull the home equity out any more because there isn't any," he said.
Plan freezes mortgage loan rates
Del. officials praise accord, still fear tide of foreclosuresBy LESLIE A. PAPPAS, The News Journal
Posted Thursday, December 6, 2007Read Comments-->12/06/2007 -->
A federal proposal to freeze interest rates on certain subprime mortgages drew cheers from members of Delaware's foreclosure task force Wednesday, but in the same breath they cautioned it would only be the first step to bringing the state's looming foreclosure problem under control.
The Bush administration is expected to detail today an agreement between the banking industry and federal regulators to set a five-year moratorium on resets of certain subprime adjustable rate mortgages. The plan is aimed at homeowners who are making payments on time at lower introductory mortgage rates but cannot afford a higher adjusted rate.
The agreement will apply to borrowers who took out loans between January 2005 and July 30, 2007, with adjustable rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010, according to the Associated Press.
"It's a positive thing, particularly for the future," said Lt. Gov. John Carney, who announced Delaware's foreclosure task force at the end of October. "The thing that we're really afraid of is this increasing slope of foreclosures. ... The biggest concern is that we get snowed under with a number that we're just not able to handle. And to a certain extent, that is happening."
Foreclosure filings in Delaware broke records in the last fiscal year and continue to rise. Housing counselors are overburdened with new cases, they have told the task force, and they worry that as mortgages with low "teaser" rates begin to reset in the coming year, more homeowners will fall into default.
"I just hope this [the freeze] is the first of a larger package," said Delaware Deputy Bank Commissioner Gerry Kelly.
Kelly said he would have preferred a seven-year moratorium that included borrowers whose rates have already gone up.
Freezing rates on the segment of mortgages at high risk of default could give struggling borrowers time to find a better job, refinance or sell the home without having to go into foreclosure, said Camilla Conlon, president of the Delaware Association of Realtors and a task force member. "Five years is enough time for folks to recover from these circumstances."
Conlon also hoped the five-year freeze, which she called a much-needed "shot in the arm," would put confidence back into Delaware's housing market.
Overall, Delaware's housing market still remains stronger than most. Wilmington was even highlighted in this month's issue of Money magazine as one of the last "red-hot housing markets," experiencing a 5.2 percent increase in home prices in the past year.
But in some neighborhoods, delinquencies and foreclosures are taking a toll.
Delaware Secretary of Housing Sandy Johnson called the five-year freeze a "silver bullet" that would help stem the rising number of foreclosures.
"But we're going to need several silver bullets for this stuff," said Johnson, a task force member. "Maybe after bullets three and four ... we'll have some breathing room."
There were 3,452 seriously delinquent mortgages in Delaware at the end of 2007's second quarter, with slightly more than half (51 percent) subprime, the Delaware State Housing Authority reported to the task force in November. Of the 1,776 subprime loans that were seriously delinquent, two-thirds were adjustable-rate mortgages.
Judging by the number of subprime mortgages in Delaware, anywhere from 6,500 to 10,000 borrowers could be eligible for the freeze, Johnson said.
"Anything that can ... give us assistance from a federal level would be a great benefit," said task force member Ken Smith, director of the Delaware Housing Coalition. Smith's only objection would be if the agreement somehow prevented the state task force from continuing its work.
"If any of these national agreements pre-empts the ability of the states to do things, that would be a concern," Smith said. "There's some movement afoot to include language in these measures that would override state actions, and many of us would not like to see that happen."
Delaware Rep. Mike Castle said the freeze would give greater security to the nation's housing market and would help struggling borrowers.
"The argument you may get is from those investors who feel that they were going to get a higher return on their dollar and are not getting it now," said Castle.
Castle has introduced legislation to protect lenders who renegotiate loans from being sued by investors, legislation that is scheduled to be considered during a House Committee on Financial Services hearing today.
Posted Thursday, December 6, 2007Read Comments-->12/06/2007 -->
A federal proposal to freeze interest rates on certain subprime mortgages drew cheers from members of Delaware's foreclosure task force Wednesday, but in the same breath they cautioned it would only be the first step to bringing the state's looming foreclosure problem under control.
The Bush administration is expected to detail today an agreement between the banking industry and federal regulators to set a five-year moratorium on resets of certain subprime adjustable rate mortgages. The plan is aimed at homeowners who are making payments on time at lower introductory mortgage rates but cannot afford a higher adjusted rate.
The agreement will apply to borrowers who took out loans between January 2005 and July 30, 2007, with adjustable rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010, according to the Associated Press.
"It's a positive thing, particularly for the future," said Lt. Gov. John Carney, who announced Delaware's foreclosure task force at the end of October. "The thing that we're really afraid of is this increasing slope of foreclosures. ... The biggest concern is that we get snowed under with a number that we're just not able to handle. And to a certain extent, that is happening."
Foreclosure filings in Delaware broke records in the last fiscal year and continue to rise. Housing counselors are overburdened with new cases, they have told the task force, and they worry that as mortgages with low "teaser" rates begin to reset in the coming year, more homeowners will fall into default.
"I just hope this [the freeze] is the first of a larger package," said Delaware Deputy Bank Commissioner Gerry Kelly.
Kelly said he would have preferred a seven-year moratorium that included borrowers whose rates have already gone up.
Freezing rates on the segment of mortgages at high risk of default could give struggling borrowers time to find a better job, refinance or sell the home without having to go into foreclosure, said Camilla Conlon, president of the Delaware Association of Realtors and a task force member. "Five years is enough time for folks to recover from these circumstances."
Conlon also hoped the five-year freeze, which she called a much-needed "shot in the arm," would put confidence back into Delaware's housing market.
Overall, Delaware's housing market still remains stronger than most. Wilmington was even highlighted in this month's issue of Money magazine as one of the last "red-hot housing markets," experiencing a 5.2 percent increase in home prices in the past year.
But in some neighborhoods, delinquencies and foreclosures are taking a toll.
Delaware Secretary of Housing Sandy Johnson called the five-year freeze a "silver bullet" that would help stem the rising number of foreclosures.
"But we're going to need several silver bullets for this stuff," said Johnson, a task force member. "Maybe after bullets three and four ... we'll have some breathing room."
There were 3,452 seriously delinquent mortgages in Delaware at the end of 2007's second quarter, with slightly more than half (51 percent) subprime, the Delaware State Housing Authority reported to the task force in November. Of the 1,776 subprime loans that were seriously delinquent, two-thirds were adjustable-rate mortgages.
Judging by the number of subprime mortgages in Delaware, anywhere from 6,500 to 10,000 borrowers could be eligible for the freeze, Johnson said.
"Anything that can ... give us assistance from a federal level would be a great benefit," said task force member Ken Smith, director of the Delaware Housing Coalition. Smith's only objection would be if the agreement somehow prevented the state task force from continuing its work.
"If any of these national agreements pre-empts the ability of the states to do things, that would be a concern," Smith said. "There's some movement afoot to include language in these measures that would override state actions, and many of us would not like to see that happen."
Delaware Rep. Mike Castle said the freeze would give greater security to the nation's housing market and would help struggling borrowers.
"The argument you may get is from those investors who feel that they were going to get a higher return on their dollar and are not getting it now," said Castle.
Castle has introduced legislation to protect lenders who renegotiate loans from being sued by investors, legislation that is scheduled to be considered during a House Committee on Financial Services hearing today.
Subscribe to:
Posts (Atom)