1 hour ago
Thursday, October 30, 2008
Home Modifications
Modifying your home to suit your changing needs can often be done quite cheaply--and the benefits to making sure your home fits your lifestyle can't be underestimated. For seniors and people with special needs, sometimes a few adjustments are all it takes to ensure a home's safety and to allow seniors to stay in their homes as long as they'd like. A recent article in the Palo Alto Weekly says modified homes allow seniors to "age in place." For those of you worried about your parents or noticing a change in your health that is affecting your comfort at home, consider consulting with someone about the options you can take to design your house for safety and ease. Studies from the Palo Alto Weekly article (called Designed for Safety and written by Susan Golovin), reveal alarmingly high statistics for the number of people over 65 who suffer from falls in their homes; over 1/3 of them will fall, and those falls could have been easily prevented with some simple remolding action. Sometimes all it takes is removing some rugs! If you're worried about the safety of your home, get a safety assessment. Nothing is more important than your health!
Monday, October 20, 2008
Steve Papapietro's Weekly Mortgage Bulletin: De-Lever US From Evil
Provided by Steve Papapietro
Relationship Manager
MetLife Home Loans
For the Week of Oct. 20, 2008--Vol. 6, Issue 43
Last Week in Review
"I'm always making a comeback but nobody ever tells me where I've been." Billie Holiday. Making a comeback was exactly what Bonds and home loan rates attempted last week, after approaching some of their worst levels this year.
While the Bond market was closed last monday in Observance of Columbus Day, the early part of the week wasn't short of market-impacting news. On Tuesday, the Bush Administration, including Secretary Henry Paulson, Federal Chairman Ben Bernanke, and FDIC Chariman Sheila Bair announced a plan to use $250 billion of the $700 billion financial rescue bill recently passed by Congres to buy directly into American banks. The government will begin by buying up stock in nine of the largest banks including Bank of America, JPMorgan Chase, and Citigroup.
Why did the government do this? Because the financial crisis is due to over-leverage... that means the ratio of outstanding loans to capital is too high. If left unchecked, this can lead to the failure of institutions. And it has already taken a great toll. The only way to repair this is by reducing the leverage ratio, or "de-leveraging". That means sell of loans or increase capital. The Fed's plan helps this on both sides as they can be a buyer of some loans as well as an investor in some banks.
Another result of the current financial crisis is that economic reports are taking a back seat to market dynamics in ways that have never been seen before. In the past, fund managers or institutional traders would typically contemplate which direction would best favor the market, and position their portfolio in Stocks if the outlook was favorable, or Bonds if the outlook was cloudy. So we have come to expect Bond prices to move in the opposite direction from Stock prices much of the time, as money flows out of one and into the other. But the pressure to "de-leverage" has all but removed the thought process, and forced settling of all types of securities to raise capital. And while this situation should stabilize and return to normal (which we saw some evidence of on Friday as Stocks and Bonds alternated going up and down), it is one I will continue to monitor as the weeks and months progress.
And after all the ups and downs of the week, Bonds and home loan rates did manage a comeback, ending the week a bit better than they began.
HAVING A MEDICARE CLAIM DENIED IN WHOLE OR IN PART DOESN'T MEAN YOU CAN'T COMEBACK AND ACHIEVE A DIFFERENT OUTCOME! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT SUGGESTIONS FOR APPEALING A DENIAL.
Forecast for the Week
This week is a slow week when it comes to economic reports, but as we have seen, that doesn't mean we should expect the volatility to slowdown. One important report to watch for is Friday's Existing Home Sales Report. Last week's New Home Sales Report showed that new home sales were at their lowest level since January 1991. Since sales of existing homes make up around 84% of all houses sold, it will be important to see how existing home sales are fairing in these economic times... and what kind of comeback is needed in the housing market.
Another important point to note is that we are in the middle of earning season for the Stock market. While poor economic news typically causes money to flow from Stocks into Bonds, helping home loan rates improve, as I described above, Bonds and home loan rates may not necessarily benefit from weak economic news given the current economic environment. I will be watching closely to see how both Stocks and Bonds react to the earnings reports.
And speaking of comebacks, as you can see in the chart below, Bonds and home loan rates managed to bounce back after last week's worsening trend. I will let you know if Bonds and home loan rates can make an even bigger comeback this week.
The Mortgage Market View...
Fighting Medicare Claim Denials
When an insurance company denies a claim in whole or in part, it is possible to appeal their decision. The same is true with Medicare claims... and in fact more than half of Medicare appeals are successful. If you, a family member, or a friend have had a Medicare claim denied, the following information can help you successfully appeal the decision:
Time Frame: If your Medicare claim is denied for less than the full amount, you can ask for a "redetermination" but you must do so within 120 days. Download the Medicare Redetermination Request form HERE, or call 8006334227 to request a copy.
Common Denials: The denial you received will include an explanation, which you will need to contest your appeal. Ask your doctor to write a letter addressing the reasons in the denial and include this letter with your appeals form. Common denials include:
1. The treatment, prescription, or medical service is unlikely to cause your health to improve: Fight this by having your doctor write a letter explaining why the care is necessary. Medicare is required to look at your total condition, not just your chance for a full or partial recovery.
2. You are likely to require care for a very long time: Medicare coverage is not limited to treatments that work quickly, so ask your doctor to write a letter explaining that the treatment is making some positive difference or is expected to.
3. The prescription dosage level is greater than what is normally prescribed, or the drug prescribed is not normally prescribed for your health problem: Have your doctor write a letter explaining why the unusual drug or dosage is medically necessary. For instance, you may be allergic to the medicine normally prescribed.
4. You do not qualify for Medicare-covered home care because you are not homebound. Under Medicare rules, home bound does not mean that you are completely unable to leave your home or that you are confined to a bed. It does mean that you require assistance and that it takes considerable effort for you to leave your home. Ask your doctor to write a letter describing in detail how difficult it is to leave your home.
Be Persistent: If your first appeal is denied, you can file as many as four more appeals. And the more appeals you file, the greater your odds of success. While your first appeal is made to the same group that denied your initial claim, subsequent appeals are made to independent arbiters.
Sunday, October 19, 2008
Bay Area Highlights, Oct 21-Nov 5
The Peninsula and South Bay Edition
Music and Comedy:
Jimmy Buffett and the Coral Reefer Band, 8:00PM-10/21
Rock/Pop Shoreline Ampitheatre, Mountain View
Disney on Ice: 100 Years of Magic, 8:00PM-10/23
HP Pavilion, San Jose
Craig Shoemaker, 8:00PM-10/23
Comedy Improv Comedy Club, San Jose
Palo Alto Philharmonic Orchestra, 8:00PM-10/25
Cubberley Community Center Theater, Palo Alto
Neil Young, Norah Jones, Wilco, ZZ Top, Death Cab for Cutie, Cat Power, Pegi Young, 9:00PM-10/25
Rock/Pop Shoreline Ampitheatre, Mountain View
San Jose Chamber Ochestra, 7:00PM-10/26
World premiere of Mimi Dye's One Beautiful Light.
Le Petite Trianon Theatre, San Jose
The Assads, 6:00PM-10/28
Brothers Sergio & Odair amaze on Brazilian guitar.
Community School of Music and Arts at Finn Center, Mountain View
English Beat, 7:00PM-11/1
Dave Wakeling tours across the States, Canada, & the UK.
Paris Piano Trio
Former Prize-winning students at Paris Conservatoire, 7:00PM-11/2
Classical Kohl Mansion, Burlingame
Phil Markowitz Trio, 4:40PM-11/12
Jazz Piano Bach Dancing and Dynamite Society, Half Moon Bay
More Things To Do:
Zappe Family Circus
An Italian Theatrical Circus since 1842
10/24-10/26, 4:00PM-6:00PM
Circus Tent, Redwood City
Haunted Hostel Halloween Festival
The 6th annual Haunted Halloween Festival at the Point Montara Lighthouse is a once-a-year spooktacular for kids of all ages!
10/25, 2:00PM--Point Mantara Lighthouse Hostel, Montara
Book Group Expo
Meet authors, eat chocolate, attend lively discussions, taste wine, have books signed, and savor fine tea.
10/25, 10:00AM--McEnery Convention Center, San Jose
Trick or Treat on Twin Pines Lane
Trick or treat room, carnival games, crafts, snacks.
10/31, 6:00PM-9:00PM, Twin Pines Community Center, Belmont
Halloween Bash!
Biggest Bash in San Jose. Listen to the sounds of Latin Affect, Jammin, Tortilla Soup, & special guest GQ
10/31, 6:30-12:00AM. Mexican Heritage Plaza, San Jose
Bail us out! How we can tell if the bailout's working
Congress has started tossing buckets of water overboard, but we still seem to be sinking. In the wake of the newly passed bailout bill, many people are left wondering if the bill really will help revitalize the economy. But before we get that far, it's important to know the answer to the question of what exactly the bailout is trying to achieve.
In last Sunday's San Francisco Chronicle, Kathleen Pender says of the bailout, "Although lawmakers tried to rebrand it an 'economic rescue bill,' experts say its real purpose is to create a more active and transparent market for mortgage-related securities and thereby help restore confidence in the financial system. It won't restore the balance in your 401k plan in short order or guarantee you won't get laid off."
Using clear, easily digestible language, Pender deconstructs the bailout plan and helps us understand why it happened, what the plan's intention is, and how we can tell if it's working.
This article is the best one I've read on the bailout, and it's a must-read for everyone worried about their finances in this difficult economic moment.
Saturday, October 18, 2008
C.A.R Market Matters, October 16
Thursday, October 16, 2008
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS
Wall Street Journal
Mortgage Lending for Sellers
Due to stricter loan underwriting standards and increased difficulty for some borrowers to qualify for a loan, even for those who are well-qualified, more sellers are offering financing to potential home buyers, which some believe can be mutually beneficial to both buyers and sellers, and can give sellers a competitive edge.
MAKING SENSE OF THE STORY FOR CONSUMERS
In addition to sellers receiving a steady flow of income by providing financing to home buyers, sellers also can profit from the interest payments. Sellers also may be able to sell the mortgage on the secondary market, thus reducing their risk. However, seller-financing is not always the best option. Sellers who need the equity from their current home to purchase their next one are advised to not offer seller financing.
Buyers, especially those who are self employed, work on commission, or have lower credit scores, but can explain the circumstances that led to it, also may benefit from seller financing. often times, these buyers do not qualify for traditional, conforming loans, reducing their ability to become homeowners.
To reduce the risk of possible loan default, most real estate professionals recommend that sellers request a down payment of at least 10%, especially if the buyer does not have an ideal credit score. Buyers who do not have a large financial stake in the home may be more likely to default than those with a more substantial down payment. It is also recommended that sellers work with a real estate attorney to draft a contract that includes possible implications if the buyer issues a late payment, defaults on the loan or neglects to adequately insure the property. Sellers also should work with an experienced loan servicer who can collect payments and keep records.
Los Angeles Times
California REALTORS forecast lower home prices, rising sales in 2009
The California Association of Realtors on WEdnesday presented its "2009 Housing Market Forecast," at California Realtor Expo 2008 in Long Beach, Calif. The annual forecast drew a crowd of more than 1,200 real estate industry professionals who learned what consumers and the real estate industry can expect for California's housing market next year.
MAKING SENSE OF THE STORY FOR CONSUMERS
Sales of existing family homes are expected to increase in 2009 by 12.5 percent, to 445,000 units. In August, sales were 85% above the monthly for the current cycle and for the first time this year were ahead of 2007 in year-to-date terms.
Although the median home price is expected to decline by 6% in 2009, to $358,000, the lower home price likely will increase the state's affordability rate, currently at 48%, enabling more first-time home buyers to enter the market. C.A.R anticipates home prices will stabilize once inventory thins out. In August, the Unsold Inventory Index stood at 6.7 months, down from 16.9 months in January 2008, meaning that it would take approximately 6.7 months to deplete the market at the current sales rate.
The ability of consumers to obtain financing continues to play a vital role in stabilizing home prices. Currently, buyers with at least 10% available for a down payment, proof of income and excellent credit scores may qualify for conforming loans--mortgage loans that are $729,750 or less.
Wall Street Journal
No quick fix for Housing Prices
The recently enacted government rescue plan, which includes the U.S government taking stakes in major financial institutions and temporarily guaranteeing new bank debt, is expected to stabilize the economy. However, some economists believe that additional measures are needed to help stimulate the demand for housing and reduce mortgage delinquencies and foreclosures.
MAKING SENSE OF THE STORY FOR CONSUMERS
In July, the government approved a permanent loan limit increase--from $417,00 to $625,000--on mortgages backed by the Federal Housing Administration (FHA), which some analysts believe is helping more homeowners obtain mortgages, especially in high-cost areas like California. In September, 28% of home purchases were financed with FHA mortgages, an increase from 19% in August. This year, more than twice as many home buyers sought government-backed mortgages than did those who did so last year.
Although the government program, Hope for Homeowners, aims to assist homeowners by helping them refinance their current mortgage loans into more affordable ones in exchange for the homeowners sharing price appreciation with the government, some experts believe that the program will not assist enough homeowners. Hope for Homeowners will help 400,000 homeowners who are in default or foreclosure; however, some estimates show that there are nearly 12 million Americans who owe more on their mortgages than their homes are currently worth. Homeowners at risk of defaulting on their mortgage should contact their mortgage company as soon as possible to explore options including loan modification.
Some economists believe that mortgage rates, although still at historic lows, need to decline to 5.25 percent in order to attract more home buyers and deplete the current supply of homes on the market.
In Other News...
San Francisco Chronicle
Sacramento Bee
CNN
Los Angeles Times
Wall Street Journal
Saturday, October 11, 2008
C.A.R Market Matters, October 09, 2008
Thursday, October 09, 2008
Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS
New York Times
Central Banks Coordinate Global Cut in Interest Rates
Hoping to thaw the current credit freeze, the Federal Reserve, the European Central Bank, the Bank of England, and the central banks of Canada and Sweden reduced their primary lending rates by a half percentage point on Wednesday. The Chinese central bank also reduced its key interest rate and lowered bank reserve requirements, while the Bank of Japan's rates remained unchanged.
MAKING SENSE OF THE STORY FOR CONSUMERS
The purpose of the rate cut is to increase consumer confidence, which in turn should help stimulate the economy. When consumers and businesses have more confidence in the economy, they usually spend more money, which bolsters the economy by enabling retailers to increase sales and prevent future layoffs.
The Federal Reserve controls the interest rate that banks charge each other for short-term loans. Usually this leads to banks lowering the rates they charge consumers and businesses. The short-term loan-rate reduction, from 2 percent to 1.5 percent, should have an almost immediate effect on credit card rates, according to financial analysts. Interest rates on automobile and business loans also should decline. Generally, the short-term loan-rate reduction also leads to reduction in mortgage rates; however, it is too soon to predict if that will happen in this case given the way the market has reacted to recent economic news.
Some credit card companies already have reduced their credit card rates. Although there may be room for further reductions for some consumers, many experts believe that only consumers with the best credit scores and payment history will benefit from the rate reduction. Most credit card companies deem consumers with high credit scores as providing the least amount of risk.
Consumers with fixed-rate mortgages will not benefit from the rate cut; however, those with adjustable-rate mortgages (ARMs) may. When banks receive an interest rate cut, they may pass along the savings to consumers. Homeowners with ARMs could receive a payment reduction.
MSN
Sell your home fast in any market
Due to the large number of available homes on the market, and the fact that the traditional home-buying season is coming to a close, sellers need to be aware of key factors that can determine whether their home sells quickly or lingers on the market.
MAKING SENSE OF THE STORY FOR CONSUMERS
Accurately pricing a home continues to be the number one factor to conclude a successful sale. Most REATLORS guide sellers in determining an accurate listing price for their home by tracking comparable properties in their neighborhood that have sold within the previous three to four months. Since the market can greatly fluctuate from one neighborhood to another, some REALTORS believe that setting a price based on comps older than three to four months will not accurately reflect the current market and could result in pricing a home at odds with current market conditions.
Even in today's market, sellers do have some control over many contingencies. Some buyers may request that their contracts include contingencies based on their ability to obtain financing. To avoid risks associated with this contingency, some REALTORS advise their clients to request buyers to provide a pre-approval letter from a well-established lender; a financial information sheet outlining the buyer's employment history, income, assets and liabilities; and a recent bank statement showing that the buyer has enough funding reserves for the required down payment. This ensures that the buyer is likely to be approved for a mortgage loan, and reduces the risk to the seller.
Some buyers may use a home's inspection report as a bargaining chip to negotiate a lower price. When this occurs, some sellers offer buyers a lump sum of money so the buyer can make the repairs, rather than the seller repairing each item listed on the report. Sellers may be able to avoid paying a lump sum to the buyer by having the home pre-inspected prior to listing. This enables the seller to obtain accurate estimates for the cost of repairs ahead of time and provides the seller with the option of making the repairs before listing the home.
CNBC
Brokerage Asks Sellers to Cut 10% off Home Prices
In an attempt to lure potential buyers off the sidelines, a nationwide real estate brokerage is asking its approximately 25,000 sellers who have homes listed with its brokers to reduce their listing prices by as much as 10% for its first national, 10-day sales event.
MAKING SENSE OF THE STORY FOR CONSUMERS
According to a recent Coldwell Banker survey, more than half of its real estate agents said listing prices in their market are still too high to attract qualified buyers. The brokerage is hoping that the 10-day price reduction will entice home buyers to venture back into the market and help reduce the current supply of unsold homes. In California, C.A.R's Unsold Inventory Index for existing single-family detached homes in August 2008 was 6.7 months. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.
Buyers who are uncertain if now is the right time for them to purchase a home should consider the price of the home, along with the recent reduction in mortgage rates, which could reflect a sizable savings. According to the primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 5.94% with an average .6 points for the week ending Oct.9. This is a decline from the previous week when fixed-rate mortgages averaged 6.10%. Last year at this time, the 30-yr fixed-rate mortgage averaged 6.4%.
In Other News...
C.A.R e-Blasts are published by the California Association of Realtors
Wednesday, October 8, 2008
Steve Papapietro's Weekly Mortgage Bulletin: Rescue Bill Passes to Protect Economy; Protect Yourself from a New Kind of ID Theft
For the week of Oct 06, 2008-- Vol. 6, Issue 41
Last Week in Review
TO PASS OR NOT TO PASS? That was indeed the question of the week.... and the final answer came on Friday, as the House of Representatives followed the Senate's lead and passed the $700 billion rescue plan.
The week began with the House initially voting against the plan on Monday, causing Stocks to plunge in their final minutes of trading to their single worst loss in the 112-year history of the Dow Jones. However, on Wednesday, the Senate passed a revised rescue plan that included some tax breaks and an increase in FDIC protection from $100,000 to $250,000. This was the version the House subsequently passed and President Bush signed into law on Friday.
Why was it important for the plan to pass? Simply put, the plan frees up some of the frozen credit that consumers and small businesses across the country need to survive. As examples, even auto loans were becoming harder for consumers to qualify for... and on the business side, many retail operations have had difficulty in financing their inventory. Credit issues like these are not good for the economy, confidence, and consumer spending, and the rescue plan was passed to help matters.
In other news from Friday, the Labor Department reported that 159,000 jobs were lost in September, which is much worse than the 105,000 lost jobs that economists were expecting. So far in 2008, we have lost 760,000 jobs. And while Bonds and home loan rates would have typically improved this weak economic news (remember weak economic news usually causes money to flow from STocks to Bonds, helping home loan rates improve), talk that the Fed and other Central Banks around the world may start cutting their benchmark rates kept Bonds and home loan rates from making a big improvement. Remember, a cut in Fed Funds Rate is inflationary, and therefore bad for Bonds and home loan rates.
When all was said, done and passed during this incredibly volatile and historic week, Bonds and home loan rates ended the week only slightly improved from where they began. I will continue to monitor this situation closely in the days and weeks ahead.
Just when you thought you had a handle on protecting your identity... there's a brand new kind of identity theft in town. This week's Mortgage Market View gives you the scoop, as well as tips to protect yourself--so don't let this opportunity to stay safe pass you by!
Forecast for the Week
With a light schedule of economic reports on the calendar this week, the financial news and headlines will likely have the biggest impact on the markets this week--particularly as we see how the markets react to the newly signed rescue bill. In addition, late breaking news from last week that Wells Fargo will acquire Wachovia, undoing a prior deal that had Citigroup acquiring Wachovia, and that Citigroup may file for a lawsuit, could impact the markets as well.
Another big news item will be the Meeting Minutes of September 16 Fed meeting, which will be released on Tuesday. If these Minutes give evidence that the Fed may cut rates at its next meeting on October 28-29, Bonds and home loan rates could worsen due to the inflationary implications.
Remember when Bond prices move higher, home loan rates move lower....and vice versa. As you can see in the chart below, Bonds and home loan rates managed to remain above an important floor of support. It will be important to see if this floor of support can hold through any news or possible hints of inflation.
SEE CHART AT TOP OF POST
The Mortgage Market View...
Medical Identity Theft
With identity theft on the rise these days, most of us are already taking steps to protect ourselves. But did you know that there's no a growing form of identity theft known as "medical identity theft" that can not only devastate victims' finances, but also compromise their health, too. According to Joy Pritts, JD, author of Your Medical Record Rights, here's what you need to know.
What is Medical Identity Theft?
Medical identity theft occurs when criminals access victims' medical records. Since medical records contain a person's social security number and credit card information (if bills have been paid via credit card), criminals can open accounts and make fraudulent charges. However, criminals can also gain access to victims' health insurance policy information and medical histories, and they can create forged health insurance cards to sell to people who are uninsured and need expensive medical treatment. A person who buys a fake health insurance ID card would then seek treatment using the victim's name and policy number, and then disappear, leaving the victim with the bills to pay.
Why Should You Be Concerned?
Victims of medical identity theft not only have to repair their credit and convince credit agencies and service providers that bills are fraudulent, they also have to correct inaccurate medical information that becomes part of their health records. Victims could be denied life insurance or individual health insurance if their records show treatments they didn't have. In addition, victims could receive treatments or medicines that could be harmful to them on the basis of inaccurate content in their medical records.
Steps to Take If You Suspect a Medical Identity Theft
1. Read all bills and "Explanation of Benefits" statements from your insurance company to verify they are for treatment you received.
2. If a bill or statement refers to treatment you did not receive, contact the employee in charge of investigating fraud at your insurance company and at the medical facility involved and explain the situation. Follow up with a letter sent via registered mail with return receipt once again explaining the situation, asking for any bills to be voided, and asking that your medical record be amended to state that you did not have this health problem or receive this treatment.
3. Report the identity theft to the police department and the state's attorney general's office.
4. Contact health providers you use, explain the situation, ask if the erroneous information has been added to the providers' records, and if so, ask them to correct the records.
5. Report the fraud to the major credit card bureaus and set up fraud alerts. Also, request free copies of your credit reports to make sure no new fraudulent accounts have been opened.
6. Review your medical records every few years to make sure there are no errors.
Brought to you Exclusively by Steve Papapietro
Tuesday, October 7, 2008
Bay Area Highlights, Oct 6-20
Music--
7:30PM, 10/7
Earth, Wind, & Fire, Rock/Pop, Mountain Winery, Saratoga
8:00PM, 10/9
David Byrne, Mountain Winery, Saratoga
9:00PM, 10/10
New Kids on the Block, Lady Gaga, Rock/Pop, HP Pavilion, San Jose
7:00PM, 10/12
Classical Pianist Garrick Ohlsson, McAfee Performing Arts and Lecture Center, Saratoga
9:00PM, 10/16
Russ Barenberg and Byron Sutton, Bluegrass/Country, Little Fox, Redwood City
8:00PM, 10/17
Jeffrey Siegal plays Grieg, This celebrated pianist returns to kick off Peninsula Symphony's 60th Season, San Mateo Performing Arts Center, San Mateo
7:00PM, 10/19
Tina Turner, HP Pavilion, San Jose
More Things To Do--
26th Annual Chocolate Fest
Twenty different vendors of chocolate wares: ice cream, gelato, brownies, cakes, cookies, truffles, and candy.
10/11. 7:30--10:00PM. First Congregational Church of Belmont, Belmont
San Carlos Art and Wine Faire
The San Carlos Chamber of Commerce's Art and Wine Faire will celebrate its 18th year.
10/11-10/12. 11:00AM, Downtown San Carlos
Campbell's Oktoberfest
Many cities across the U.S and world celebrate Oktoberfest. Campbell might well be mistaken for a German village during this event.
10/18-10/19. 10:00AM-5:00PM. Downtown Campbell.
Half Moon Bay Art and Pumpkin Festival
Pumpkins reign supreme on the picturesque terrain surrounding the charming coastal areas.
10/18. 9:00AM-5:00PM. Downtown Half Moon Bay
3rd Annual Midtown Fun Festival
Games giveaways, and fun for the family.
10/18. 11:00AM-4:00PM. Midtown Shopping Center, Palo Alto
Bay Area Highlights is brought to you by Cindy Solomon at North American Title Company.
Enjoy your week!
Why Should Anyone Buy a Home in This Market?
Owning a home can get complicated. Your home is often your biggest investment, a tax shelter, and that first giant step into adulthood. The most important and most overlooked aspect of home ownership is emotional--homes are the centerpieces of lives and families. Your home is your castle, a place to be with family, friends, and pets. It's where you make your mark on your internal world, not your mark on the outside world.
The values of home ownership aren't debatable--but in today's market, it's more important than ever to reflect on the pros and cons before making the big decision. Should anyone buy a home in this market? Is the economy too unpredictable? Should you wait?
These issues are plaguing many families right now, and there is no simple answer.
I've put together a list of essential questions to help you discover if now is a good time for you to buy. First there are the simple mathematical questions, and then there are the more existential ones:
1. Can you afford to put 20% down and carry a 30yr mortgage, or put 10% down, carry a 30yr mortgage, and pay PMI (private mortgage insurance), or put 5% down and get an expensive FHA loan? There are some shorter fixed periods than the 30yr fixed which may be good in some circumstances, but I am going to take the conservative route and ask you if you can afford payments on a 30yr fixed loan. Can you weather the economy's ups and downs? If no, then you should not try to buy now. If yes, move on to the next question. If you do not know, search out a good lender and talk with them. DON'T use internet calculations. They won't provide a dependable answer.
2. Are you planning on staying in this home for at least 5 years and maybe longer? If you have to move can you afford to to keep your home as a rental? If you don't know, don't buy. At this moment in the Silicon Valley I can't think of any homes worth less than they were 10 years ago. Most are still worth more than they were 5 years ago. If you can't commit to at least 5 years stop here. If not, move on to the next question.
3. Do you have a very specific goal in mind that can be achieved in a specific location? For example, are you trying to buy a home in Palo Alto so your children can attend schools there? Has the soft market enabled you to do that? If so, then this is a great time to buy. If you do not buy soon prices or interest rates could conceivably go higher and lock you out. It's also possible that prices could go lower, but are you willing and able to take that gamble with your children's education? If you are willing and able, then wait, and you might get a better deal.
4. Are you easily pleased, or specific about what you want and need in a home? If you are flexible regarding what you want in a home, and are more interested in getting the best prices, then there is no reason to rush into buying if you think prices will drop or inventory will skyrocket. However, if you are very picky or have specific needs that aren't found in many homes, when you find what you want, BUY IT. For example, if you're sound sensitive and find an affordable home where noise is not an issue in an area that has few quiet places to live, then you are a good candidate for buying now. Are you looking for a one story town home that has central air, a nice patio, and an attached garage? Trust me, these are not a dime a dozen. If you find what you want, buy it!
5. Do you want a new home in an area where there is not a lot of room to build? Right now there is a large inventory of new homes. If you live in a city where there is little room to expand this is probably a great time to buy a new home. Builders are very generous with their upgrades and a few years from now there may not be as many developments to choose from in centrally located areas. There are a number of new developments in San Mateo and Santa Clara counties right now, but there is not a lot of empty land. There may not be as much new inventory in coming years.
We're still left with the question: Why should anyone buy in this market? Clearly, the answer isn't simple, although hopefully my guide brought you closer to understanding your options. With some soul-searching and advice from a trusted Realtor and Lender, the answer will get clearer for you. Good luck!
Saturday, October 4, 2008
Emergency Economic Stabilization Act--Letter from C.A.R
Friday, October 03, 2008
Brought to you by the California Association of Realtors
Dear C.A.R Member;
Earlier today, the U.S House of Representatives approved the Emergency Economic Stabilization Act by a 263 to 171 vote. The legislation was quickly signed into law by President Bush, capping what has been a very tumultuous two weeks for the credit and financial markets.
This was a difficult decision for our elected representatives to make, especially given the abbreviated time period for review and debate that the gravity of the situation warranted. While passage of the Act should enable the credit markets and the U.S financial system to set the stage for their eventual recovery, this was only the first step in what will likely take weeks and even months to wend its way through the system before reaching Main Street.
But it was an important first step. The health of the nation's housing market is critical to the financial well being of every household in the country, and is front and center here in California.
Here's what the legislation does:
Helps American families keep their homes by requiring the Treasury Dept. and any federal agency that owns or controls troubled mortgages to modify those mortgages wherever possible; this may include reducing the principal or interest rate; and extends till the end of 2012 the exclusion from federal income tax of mortgage debt forgiveness.
Addresses the credit crisis by allowing financial institutions to immediately sell $250 billion in troubled assets to the U.S Treasury Department under the newly created Troubled Assets Relief Program (TARP). Another $100 billion would be made available upon the President's request. Should the President deem it necessary, and with Congressional review, the Treasury Dept. may utilize the remaining $350 billion;
Protects taxpayers by allowing the Treasury Dept. to take an ownership stake in participating companies. In addition, if after five years TARP has incurred a net loss, the President must propose legislation that would force participating companies to reimburse the government to make up the difference;
Sets up an insurance program, funded by the financial industry, to guarantee companies' troubled assets, including mortgage-backed securities purchased prior to March 14 this year;
Curbs executive pay for companies utilizing TARP;
Sets up two oversight committees, a Financial Stability Board, and a congressional oversight panel, to which the Financial Stability Board would report;
Creates renewable energy tax breaks for individuals and businesses, including a deduction for the purchase of solar panels; as well as continuing other tax breaks that were set to expire; and extends relief from the Alternative Minimum Tax (AMT by another year;
Allows the SEC to suspend the required mark-to-market accounting standards and orders a study to be done on the rule's impact on financial institutions;
Shields bank deposits by temporarily raising the FDIC insurance cap to $250,000 from $100,000; and temporarily increases the federal insurance level for credit union savings to $250,000, both till the end of 2009.
We're appreciative of the efforts of our congressional leaders in both houses as well as of our peers at NAR. Their efforts helped secure adequate protections for both consumers and taxpayers, as well as stricter oversight protocols than what were initially contained in the legislation. C.A.R will continue to study and report to you additional information and analysis through our weekly e-mail newsletters.
Sincerely,
William E. Brown
2008 President
California Association of Realtors
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