AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Living Off the Grid in a Mail-Order Homehttp://realestate.aol.com/blog/2012/05/25/living-off-the-grid-in-a-mail-order-home/http://realestate.aol.com/blog/2012/05/25/living-off-the-grid-in-a-mail-order-home/http://realestate.aol.com/blog/2012/05/25/living-off-the-grid-in-a-mail-order-home/#commentsFiled under:

Drew Kelly Photography

By Les Christie

House Arc may look like an egg-shaped antidote to McMansion mania, but this small mail-order home was really designed as a way to quickly provide housing to victims of disaster.

"We wanted to see how we could produce a house that would fit into a flat packing container that could be shipped to communities in need, like New Orleans after Katrina," said architect Joseph Bellomo, who worked on the modular home for 2½ years.

The result was House Arc, a 150-square-foot structure of hollow steel tubes. Not only can the 3,000-pound modular home withstand high winds, it can also be boxed into a 120-cubic-foot freight container and shipped off to its next destination.

House Arc is designed to be put together like a piece of Ikea furniture, according to Bellomo. In other words, anyone with moderate carpentry skills should be able to assemble it. If the home is no longer needed, it can also easily be taken apart and shipped somewhere else.

The curved design is so strong because it works like an arch, spreading the weight of any load, such as the pressure of a strong wind, across the surfaces rather than allowing it to concentrate on one spot.

For Bellomo, it was important for the home to be practical yet also attractive. Disaster victims are often relegated to substandard housing conditions, packed into trailers or even tents for months after they lose their homes, he said.

Bellomo was inspired to create the modular home after he made Bike Arc, a steel-arched shelter that riders could lock their bikes into.

Even though House Arc has a footprint of less than 100 square feet, it's roomier inside, thanks to walls that bow out and 9-foot-high ceilings.

The cozy mail-order home can also be added to a backyard to expand living space, say as a guesthouse. Or it could be used as a cabin in the woods.

But the cost is still high, at a base of about $55,000. However, Bellomo wants to automate the production process, which should cut the price at least by half, he said.

Options for the modular home include plumbing, ceiling fan and solar panels for the roof. At this point, customers would have to arrange for these installations themselves.

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]]>eco homeliving off the gridmail order homeprefab homeCNNMoney2012-05-25T16:30:00 00:00More Than 30% of Mortgage Borrowers Still Underwaterhttp://realestate.aol.com/blog/2012/05/24/more-than-30-of-mortgage-borrowers-still-underwater/http://realestate.aol.com/blog/2012/05/24/more-than-30-of-mortgage-borrowers-still-underwater/http://realestate.aol.com/blog/2012/05/24/more-than-30-of-mortgage-borrowers-still-underwater/#commentsFiled under: ,,,

underwater mortgagesBy Les Christie @CNNMoney

NEW YORK -- Despite rising home prices, more than 30 percent of borrowers, or close to 16 million homeowners, were underwater on their mortgage during the first quarter, according to Zillow.

The percentage of borrowers who owed more on their home than it was worth increased to 31.4 percent during the quarter, up slightly from 31.1 percent three months earlier, according to Zillow. In the year-ago period, 32.4 percent of all borrowers had negative equity on their loan.

The uptick in underwater homeowners occurred even though home prices have slowly started recovering. On Wednesday, the Federal Housing Finance Agency reported that national home prices rose a modest 0.6 percent during the first quarter, the first price gain since 2007.

Nevertheless, the percentages of homeowners who were underwater on their homes remained high as delays in the processing of foreclosures kept many delinquent borrowers on the balance sheets, said Zillow. Once a bank repossesses a home, the mortgage holder's negative equity is no longer considered part of the tally.

Most underwater borrowers, however, do not lose their homes. Nine out of 10 underwater borrowers are current on their mortgage payments and continue to make payments on time, Zillow said. Only one-tenth of these borrowers are seriously late on payments, by 90 days or more.

"[It's] important to note that negative equity remains only a paper loss for the vast majority of underwater homeowners," said Stan Humphries, Zillow's chief economist. "As home values slowly increase and these homeowners continue to pay down their principal, they will surface again."

Negative equity is still a big risk, however, since it makes homeowners more vulnerable to financial setbacks, such as a medical emergency, job loss or other unexpected expense. If they don't have their home's equity to fall back on, it increases their chances of spiraling down into foreclosure.

Having a high percentage of underwater homeowners is also bad for the economy because it can trap borrowers in their homes and prevent them from pursuing employment opportunities elsewhere, according to Humphries. That can make it more difficult for them to advance their careers and for companies to find skilled workers.

Where homeowners are struggling to stay afloat: Of the 30 large metro areas covered by the Zillow report, Las Vegas has, by far, the highest percentage of underwater borrowers at 71 percent. Home prices there are down a whopping 62 percent from peak, according to the S&P/Case-Shiller home price index. A quarter of Vegas borrowers owe more than double what their homes are worth.

Other big markets where more than half of borrowers are underwater include Phoenix (55.5 percent), Atlanta (55.2 percent), Orlando, Fla. (53.8 percent), Riverside, Calif. (53.4 percent), and Sacramento, Calif. (51.2 percent).

Cities with fewer foreclosures, including Pittsburgh, New York, Boston and San Jose, Calif., all had less than 25 percent of borrowers underwater.

Read more on CNNMoney:
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]]>am i underwaterowing more than home worthStan Humphriesunderwater americaunderwater homeownersunderwater homesunderwater mortgageunderwater nationunderwater usZillows chief economist.CNNMoney2012-05-24T12:46:00 00:00George Lucas Proposes Affordable Housing Planhttp://realestate.aol.com/blog/2012/05/16/george-lucas-plans-low-cost-housing-in-place-of-studio-project/http://realestate.aol.com/blog/2012/05/16/george-lucas-plans-low-cost-housing-in-place-of-studio-project/http://realestate.aol.com/blog/2012/05/16/george-lucas-plans-low-cost-housing-in-place-of-studio-project/#commentsFiled under: ,

George Lucas
By Les Christie

The film emperor may be striking back. For 25 years, filmmaker George Lucas tried to persuade his Marin County, Calif., neighbors to let him build a digital production studio on his ranch there, but the area's residents thwarted the plan.

So Lucas has come up with an alternative for his Grady Ranch property: To build low-income housing on it.

In a letter posted online, Lucasfilm wrote, "It is with great sadness that Skywalker Properties has decided to pull its application to build a studio facility.

Instead, the maker of some of the biggest box office successes of all time, including the "Star Wars" and "Indiana Jones" franchises, intends to sell the property to the Marin Community Foundation (MCF), a nonprofit that has already funded more than 2,500 units of affordable housing and will explore options for developing Grady Ranch.

Lucas had applied to the county planning commission for permits to build a 260,000 square-foot compound that would be used as a digital media production studio. The company claimed that the facilities would create about 600 high-paying jobs.

"The level of bitterness and anger expressed by the homeowners in Lucas Valley has convinced us that, even if we were to spend more time and acquire the necessary approvals, we would not be able to maintain a constructive relationship with our neighbors," Lucasfilm said in its statement.

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Opposition to the plan has come mainly from residents of nearby homes represented by the Lucas Valley Estates Homeowners Association, and from real estate developer Thomas Monahan, who owns a big property next to the Grady Ranch. The association did not respond to a request for comment and Monahan declined to comment.

The homeowners objected to several aspects of the project, according to Mary Feller, a member of a nearby homeowners association who attended many of the planning commission meetings. Among the concerns were traffic, noise and an outdoor stage that would be lit until 11:00 p.m.

Feller said that the Marin Conservation League also raised environmental objections, particularly when it came to plans for the disposal of dirt and rocks that would be excavated for the project. The conservation league did not respond to a request for comment.

Not all of Lucas Valley's residents were voting against the filmmaker, however. "The loss of that project is a major blow to the community," said Dale Miller, an area resident. "It would have provided a lot of jobs."

Land to build on in the Lucas Valley area -- which was named after a 19th century rancher, not the 20th century filmmaker -- is rare thanks to strict "smart growth" policies that limits the building of new homes. These policies encourage building in higher density areas while keeping undeveloped land open. As a result, much of Marin has been set aside for parks and recreational areas.

With the housing supply artificially compressed, home prices are high there. The median home price has hovered around $700,000 lately, according to Fred Silverman, a spokesman for the MCF.

"Affordability is so bad that many people, even with moderate income, can't afford to live here," he said.

It may seem as if the affordable housing project is a way for Lucas to stick it to his opposition, but Tom Peters, the CEO of the Marin County Foundation disagrees. "I know Lucas and checked with him on that point personally and directly. It was essential that I was convinced that it was not done out of spite. I would not have accepted the project if I thought it was," he said.

Back in the late 1970s, when Lucas was planning Skywalker Ranch, a studio about 10 miles west of Grady Ranch, he ran into similar opposition from homeowners. Local residents "feared helicopters landing with celebrities and tour buses coming down Lucas Valley Road," said Lucasfilm in its letter. "None of their fears materialized."

The company insists that Skywalker has been an exemplary neighbor and asset to the community, preserving 5,000 acres of woods and fields, establishing an 11-mile hiking trail, restoring a pond, helping wildlife to thrive, and providing aid to the local fire and rescue squads, not to mention creating hundreds of jobs.

It's still unclear how the community will react to the housing plan for Grady Ranch. Mary Feller said she believes the community will have no objection. Peters, on the other hand, expects a fight.

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]]>affordable housingGeorge LucaslucasfilmLucasFilmLtdMarin CountyCNNMoney2012-05-16T16:00:00 00:00Consumer Bureau Targets Predatory Lendinghttp://realestate.aol.com/blog/2012/05/10/consumer-bureau-targets-predatory-lending/http://realestate.aol.com/blog/2012/05/10/consumer-bureau-targets-predatory-lending/http://realestate.aol.com/blog/2012/05/10/consumer-bureau-targets-predatory-lending/#commentsFiled under: ,

Consumer Protection Bureau predatory lendingBy James O'Toole

The federal government is considering a new set of rules on mortgage origination that it says would make the process simpler and more transparent for borrowers.

The Consumer Financial Protection Bureau, created as part of the Dodd-Frank financial reform law, said Wednesday that the new rules will focus on mortgage points and fees, the current complexity of which can make it difficult for homebuyers to assess different loan offers. The rules would also include new standards for officials in charge of mortgage origination.

"We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them," CFPB head Richard Cordray (pictured above) said in a statement.

Mortgage origination is thought to have played a key role in the housing crisis, as so-called "predatory lenders" steered borrowers into complicated loans that they couldn't afford, which later went bust in large numbers. Originators are a focus of the Obama administration's mortgage crime task force, announced in January.

Among other things, the rules under consideration would prohibit incentive payments to mortgage originators who steer customers into higher-priced loans, following on a similar rule issued by the Federal Reserve Board in 2010.

Origination officials, such as mortgage brokers and loan officers, would be required under the new rules to go through training and undergo background checks. Origination charges that vary with the size of a borrower's loan would be banned.

The rules will likely be proposed formally this summer before being finalized in January of next year, the CFPB said.

Last month, the bureau outlined a set of new rules under consideration for mortgage servicers. These regulations would require clearer mortgage statements for borrowers and better disclosures about any fees or changes in a loan's interest rate.

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]]>consumer bureauDodd-Frank ActDodd–Frank Wall Street Reform and Consumer Protection ActFinancenew mortgage rulespredatory lendingpredatory lending practicesPresidency of Barack ObamaRichard CordrayCNNMoney2012-05-10T15:35:00 00:007 Questions for Your Next Real Estate Agenthttp://realestate.aol.com/blog/2012/05/09/7-questions-for-your-next-real-estate-agent/http://realestate.aol.com/blog/2012/05/09/7-questions-for-your-next-real-estate-agent/http://realestate.aol.com/blog/2012/05/09/7-questions-for-your-next-real-estate-agent/#commentsFiled under:

By Beth Braverman

After four years of sleepy sales during the traditionally busy spring and summer homebuying seasons, real estate experts are forecasting a pickup.

Record home affordability combined with a stronger economy may bring out bargain-hunting buyers and lure sellers who have been sitting on the sidelines. Already sales this winter were the highest since 2007.

If you're tempted to host or frequent an open house this year, keep in mind that navigating this market is not for the faint of heart. Sellers still face tepid demand in many areas and competition from banks unloading foreclosures and other distressed properties; buyers must grapple with tight credit.

Pairing up with the right real estate agent can help you close the deal at the price you want. To make a good match, gather referrals, check reviews on sites like Zillow, Yelp, and Angie's List, and pose these questions:


FOR BUYERS AND SELLERS


1. How long was your drive over here?

The less time the better. The crash has slimmed the ranks of agents (National Association of Realtors membership is down 26 percent from 2006); those who are left have more years on the job (a median of 12, up from seven). But not all experience is equal -- you want a Realtor with hyperlocal knowledge, if not a home nearby.

"If the agent hasn't closed deals on homes in your neighborhood recently, that could be a red flag," says Ginger Wilcox, head of industry marketing at Trulia.

Your ideal agent should be able to say off the top of her head how long homes in the area have been listed and why they have or haven't sold. If you haven't seen the agent's name on local FOR SALE signs, keep looking.


2. Can you tell me about your last three deals?

The description of the people and places should sound like you and what you're selling or buying. The marketing approach varies for a million-dollar listing and a fixer-upper. Investors and first-time buyers have different criteria. And when you're scooping up a short sale or foreclosure -- or buying with all cash -- you need an agent who has negotiated with a bank or cleared the legal hurdles before.


FOR SELLERS


3. What's your URL?

Almost 90 percent of buyers shop online for a home, says the NAR. You want a Realtor with his own homepage, as well as detailed and photo-filled listings on major real estate sites (Zillow, Trulia, Realtor.com).

"Photos are really important to buyers," says Dorchester, Mass., Realtor Julie Simmons, "and as a seller you want to have as many as you can."

While you're vetting the site, dig deeper. Lots of homes with multiple price cuts could be a sign that the Realtor isn't pricing them properly. What you want to see are homes that have been for sale for less than the norm in your area (ask other Realtors what's typical).


4. What's your batting average?

Make sure a Realtor is making sales, not just scooping up listings. Ask how many of his homes he closed on last year. There's no one right answer, especially in a slow market, but it's another data point for comparing agents.


5. Am I crazy to ask this much?

Probably. "In some cases sellers are not going to like what they hear," says Denise Riordan, an agent in Montclair, N.J.

Don't jump at the highest asking price. Better to get a frank assessment of changes you need to make and a price that would make buyers bite. Then verify by asking to see stats on comparable sales and the methodology behind the estimate.


6. What is this going to cost me?

The commission, paid by the seller and split by the buyer's and seller's agents, is traditionally 6 percent of the sale price. With homes sitting on the market for nearly 16 weeks, a listing agent who has to put in four months or more of work may not want to budge. But even now you can get it down to about 5% (your agent will typically still split it fifty-fifty and specify that on the listing). One way to bargain: Use the agent to buy your next home.
For buyers

8. Can you let me in on any secrets?

The home you'd really like may not be listed -- sellers take homes off the market when buyers are scarce; others don't want to advertise for privacy reasons. The most connected agents know the homes that aren't officially on the market but whose owners would sell, says Steven Berkowitz, CEO of Move Inc. For the most options, find an agent who has the scoop.


GOING SOLO

You'll save plenty, but only 10 percent of sellers bypassed an agent last year.

The costs of going it on your own include:

o. MLS listing for six months -- $300
o. Appraisal for pricing help -- $450
o. Consultation with stager -- $350
o. Lawyer to draw up contract -- $550

Versus a 5 percent commission on a $300,000 home -- $7,500

Net savings -- $5,850

Notes: Based on 5 percent commission; assumes seller pays 2.5 percent commission to buyer's agent. Sources: NAR, FSBO.com, Stagedhomes.com, MONEY research

See the original story, '7 Questions for Your Next Real Estate Agent,' on CNN Money.

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What Real Estate Agents Can't Tell You

 

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]]>choosing a real estate agenthow to choose realtorquestions for real estate agentsrealtor tipswhat to ask real estate agentsCNNMoney2012-05-09T13:00:00 00:00Buying a Home Won't Get Much Cheaperhttp://realestate.aol.com/blog/2012/05/03/buying-a-home-wont-get-much-cheaper/http://realestate.aol.com/blog/2012/05/03/buying-a-home-wont-get-much-cheaper/http://realestate.aol.com/blog/2012/05/03/buying-a-home-wont-get-much-cheaper/#commentsFiled under:



By Les Christie

Buying a home may never get any cheaper than this. Several housing experts are predicting that this year will be the last chance for bargain hunters to cash in on the best deals of the weak housing market.

With home prices down 34% nationally since 2006 and mortgage rates at historic lows, homes have never been more affordable -- but it won't stay this way for much longer.

Stuart Hoffman, chief economist for PNC Financial Services, said he expects home prices to flatten out by the third quarter and start climbing by next year.

A number of factors will help bolster the housing market, he said, including a decline in the number of foreclosures and continued job growth. In addition, homebuyers will have better access to mortgages as they get their finances in order and improve their credit scores.

"This is a strong indicator that we will start seeing home price indexes, like the S&P/Case-Shiller, start to report home price increases this summer," he said.

Prospective homebuyers who've been sitting on the fence shouldn't worry if they aren't quite ready to make the leap. Analysts are predicting that the initial price gains will be modest, at least, in most markets.

Read more at CNNMoney.

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]]>affordable homesbuying home wont get cheapercheap homeshomebuyinghomes never cheaperCNNMoney2012-05-03T13:02:00 00:006 Ways to Get a Great Mortgage Dealhttp://realestate.aol.com/blog/2012/04/30/6-ways-to-get-a-great-mortgage-deal/http://realestate.aol.com/blog/2012/04/30/6-ways-to-get-a-great-mortgage-deal/http://realestate.aol.com/blog/2012/04/30/6-ways-to-get-a-great-mortgage-deal/#commentsFiled under: ,,

mortgage great dealBy Ismat Sarah Mangla,
Money Magazine

Finding an affordable house is no longer a problem but qualifying for a mortgage can be. Here are six tips to getting a mortgage and a good rate.

1. Put your credit on ice.

The higher your credit score, the lower your rate: The best rates go to those with a 760 or more, says credit-score expert John Ulzheimer.

So keep that plastic in your wallet (and don't apply for new cards or other loans) for at least three months before you go loan shopping. One large balance -- even if it's paid off at the end of the month -- can ding your score by 20 points or more.

2. Ask for time.

Most sales contracts give you only 10 days to nab a loan or the seller can move on. Negotiate for an additional five to 10 days to give you some room to shop around.

3. Get at least six quotes.

Rates on a 30-year fixed conforming loan can vary at least as much as a quarter of a percentage point. Get quotes from national lenders at mortgagemarvel.com and find out what your local credit union or regional bank is offering as well. Inquire about fees; while lenders aren't required to give you a good-faith estimate of closing costs (which average 2 percent of the loan balance) until you actually apply, some will provide it if you ask.

4. Match the lock period to the loan.

You now need 60 days or more to close a loan, says Wharton professor and mortgage expert Jack Guttentag of mtgprofessor.com, and getting an extension on a lock will cost at least a couple of hundred dollars. Ask your lender how long it's taking to close loans like yours -- and don't lock for less.

Understanding Adjustable Rate Mortgages



















5. Opt for an ARM.

If you know you're not going to be in a house for more than seven years, adjustable-rate mortgages can mean big savings, says Guttentag. The monthly payment on a $300,000, seven-year ARM at the recent rate of 3.23 percent is $1,302, vs. $1,455 for a 30-year fixed at 4.13 percent.

6. Talk to a broker.

Those who need a jumbo loan or have an unusual situation (say, you're self-employed) will get the best deal from a mortgage broker who has access to and experience with a lot of lenders. Find a fee-only one at upfrontmortgagebrokers.org.

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]]>credit home mortgagegetting a mortgage dealJack Guttentagmortgage advicemortgage great dealshopping for mortgagetips getting mortgageCNNMoney2012-04-30T13:30:00 00:00Now on Sale at Costco: Mortgageshttp://realestate.aol.com/blog/2012/04/26/now-on-sale-at-costco-mortgages/http://realestate.aol.com/blog/2012/04/26/now-on-sale-at-costco-mortgages/http://realestate.aol.com/blog/2012/04/26/now-on-sale-at-costco-mortgages/#commentsFiled under: ,

By Les Christie @CNNMoney

NEW YORK -- Not only can Costco shoppers find bulk-packs of chicken wings, 24-rolls of toilet paper and large-screen TVs at a discount, they can now land themselves a mortgage.

After a year of testing, Costco is rolling out a full-service mortgage lending program on its website in partnership with First Choice Bank, a New Jersey-based community bank, and 10 other lenders.

Costco's partners have issued more than 10,000 mortgages to members under the program. But Lauren Kutschka, Costco's manager of financial services, expects that number to swell as the warehouse retailer markets the service more aggressively to millions of members in its stores and in its weekly publication Connection.

"I went in to buy some bottled water, big bags of chips, cereal and some Nutri-Grain bars that I eat on my route," said Ray Sheets, a FedEx courier from Canton, Ga. "I saw a home loan brochure on my way out and picked it up."

Sheets went onto Costco's site, put in his information and quickly accessed offers from four lenders. The rates, closing costs and terms were listed up front. And the closing costs -- of about $2,500 -- were about a third of what he would have had to pay through other lenders, he said.

Within a few weeks, Sheets refinanced his $170,000, 15-year fixed mortgage carrying a 4.25 percent rate into a 30-year loan with a rate of 4 percent. The move lowered his monthly payment by nearly $500 to $811 a month.

Mortgages are just one of several financial products available to Costco's members. The warehouse club also offers health and auto insurance, as well as stock brokerage services, said Kutschka.

"We've always known that our members wanted more financial services," she said. "Right now, we offer recreational vehicle and boat loans, and we're going to add auto loans to that. We're also looking to offer student loans."

Costco had started offering mortgages a couple of years ago, but the service provider it was using didn't share enough details about how it was dealing with Costco's members, said Kutschka. So Costco started over from scratch, partnering with First Choice Bank to build a new mortgage lending portal.

Much like LendingTree, the site gathers quotes from various lenders. However, there is one key difference. Under the Costco program, the borrower's identity is revealed only after they officially select the lender, said John Alexander, business development director at First Choice.

With many other lead-generation sites, the consumer fills out an application and any lender can make an offer and begin sending marketing communications to the applicant without restrictions.

Costco members will still need to do their homework and compare offers, though, said Keith Gumbinger of mortgage information company HSH.com. Even after a year of testing, Costco's service is still new.

First Choice said it will police the other lenders to ensure they comply with Costco's policies, which include giving accurate rates and terms, and following up quickly on questions and requests. The technology enables Costco to monitor individual applications and make sure that they are handled properly and expeditiously.

Costco takes no profit on the lending itself, but it does get paid to market the service.

In Sheets' case, his lender, Bank of the Internet, sent a representative -- an attorney -- to his home to close on the loan, he said. She answered all his questions and explained all of the legal terms in the contract.

"There were no surprises," he said.

Gumbinger said the service may prove better for people like Sheets, who are refinancing than those who are purchasing homes.

"The mortgage origination process is still a hands-on, face-to-face process," he said. "It involves a comfort level and you don't get that with an online service."

That may be true in the initial stages of the borrowing process, but once a Costco borrower has chosen a lender, the level of service steps up, as in Ray Sheets' case.

Given the size of Costco's footprint and its ability to squeeze great deals out of vendors, Costco members should at least "include the site in their search plan," said Gumbinger.

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]]>Bank of the Internet mortgageCostco financial servicesCostco mortgagesFirst Choice Bankmortgage shopping CostcoCNNMoney2012-04-26T13:30:00 00:00Pollution Report: More Americans Breathing Easierhttp://realestate.aol.com/blog/2012/04/25/pollution-report-more-americans-breathing-easier/http://realestate.aol.com/blog/2012/04/25/pollution-report-more-americans-breathing-easier/http://realestate.aol.com/blog/2012/04/25/pollution-report-more-americans-breathing-easier/#comments
By Les Christie

NEW YORK -- While dangerous pollutants still threaten the health of millions of Americans, the United States has made great strides in clearing the air, according to the American Lung Association.

In its annual State of the Air 2012 report, the organization said that between 2001 and 2010, ozone levels dropped 13 percent, year-round particle pollution declined 24 percent and short-term particle pollution 28 percent -- thanks to the Clean Air Act.

Particle pollution includes things like dust, metals, smoke, exhaust, and acids like nitrates and sulfates. Ozone, meanwhile, is created when a chemical or fossil fuel, like coal or gasoline, is partially burned and the unburned hydrocarbons, when combined with ultraviolet light, form a gas.

Amendments to the Clean Air Act in 1990, which included the promotion of the use of natural gas and low sulfur fuel, have resulted in 23,000 fewer premature deaths in 2010, averted 1.7 million asthma attacks, and prevented 4.1 million lost work days, according to The Environmental Protection Agency.

But pollution still takes a great toll on public health. More than 4 out of 10 Americans, 127 million people, live in counties with dangerous levels of either ozone or particle pollution, the American Lung Association said. The result: increased incidents of all sorts of health problems, especially asthma, bronchitis and cardiovascular disease.

"We've been paying for this pollution for a long time," said Janice Nolen, the national policy advocate for the ALA.

The ALA report ranked cities by particle pollution, both short-term and year-round, as well as by ozone levels.

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Many of the cities with the dirtiest air are located in the sunny valleys and basins of the West, where pollutants can stagnate and cook into photochemical smogs.


As a result, California lays claim to many of the most polluted cities. Bakersfield, in California's San Joaquin Valley, claimed the top spot as the most polluted city in the United States for 2012 for both types of particle pollution and was third in ozone levels. Los Angeles continues to be the worst city for ozone pollution, thanks to its heavy traffic and trade ports.

Outside the Golden State, the city with the highest ranking in any category was Pittsburgh, which came in sixth in both particle pollution categories and 20th in ozone levels. Philadelphia also ranked in the top 25 for all three pollutants.

One surprise was Fairbanks, Alaska. The city near the center of Alaska's vast and mostly empty territory recorded high scores in both types of particle pollution. Tailpipe emissions and wood smoke -- from the numerous stoves used for heating -- freeze in the sub-zero temperatures and hang around for weeks at a time. It's called ice smog.

Meanwhile, six cities managed to improve their year-round particle pollution by so much that they managed to fall off the list of the top 25 most polluted cities.

One-time major contributors to dirty air, like Detroit and New York, now rely on far less industry and are no longer among the worst offenders. Lancaster, Pa., York, Pa., Modesto, Calif. and Knoxville, Tenn., also improved enough to fall off the list.

Helping to clean up the air are stricter power plant controls, which force energy companies to use cleaner fuels and better exhaust scrubbers, said Nolen. Cleaner diesel engines have also helped a lot.

"The progress has been absolutely great," she said.

Those looking for the cleanest air can look no farther than Santa Fe-Espanola, N.M., which took the top spot for air purity in all three categories, according to the ALA's report.

Rounding out the top five for both ozone and year-round particle pollution are Bismarck, N.D., Duluth, Minn., Honolulu, Port St. Lucie, Fla., and Rapid City, S.D.

More From CNNMoney:
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Real Estate Investors Best Kept Secret: College Towns
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10 Fastest Growing Cities

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]]>CNNMoney2012-04-25T13:30:00 00:00'How Our Home Was Saved From Foreclosure'http://realestate.aol.com/blog/2012/04/24/how-our-home-was-saved-from-foreclosure/http://realestate.aol.com/blog/2012/04/24/how-our-home-was-saved-from-foreclosure/http://realestate.aol.com/blog/2012/04/24/how-our-home-was-saved-from-foreclosure/#commentsFiled under: ,



By Les Christie

NEW YORK -- Tamera Hewlett-Vallejo and her husband, Tom, came within a whisker of losing their Sacramento, Calif., home in a foreclosure auction last month. But as a result of the $26 billion national mortgage settlement, the Vallejos were given a last-minute reprieve.

Their mortgage lender, Bank of America, called off the auction, then offered to slash the couple's mortgage by more than $85,000 and cut their interest rate to 4.6 percent from 6.7 percent. As a result, the couple's mortgage payment would be $570 cheaper at about $2,100 a month.

The Vallejos are among the earliest recipients of one of the foreclosure settlement's biggest windfalls. As part of the deal, which was struck between the nation's five biggest mortgage lenders and the states' attorneys general, roughly 1 million borrowers will have their mortgage principal slashed by as much as $100,000.

Early last month, Bank of America said it had identified more than 200,000 borrowers who pre-qualified for principal reductions. The bank has yet to reach out to these homeowners, however, saying it will begin to send out letters to this group within a week or two, according to spokesman Rick Simon. It aims to reach most eligible borrowers within six months.

But there is a small group of homeowners, including the Vallejos, who are either already in the mortgage modification pipeline or in danger of losing their home, who have already been contacted by the bank.

A Last Minute Reprieve

The Vallejo's home was scheduled to be sold in a foreclosure auction at 9:30 a.m. on a Monday in early March. "We literally went to church on Sunday praying for help," said Hewlett-Vallejo.

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The day of the auction, however, the Vallejos discovered that their address wasn't on the list of properties on the block. Later that day, a representative from Bank of America called to tell them that they had qualified for a principal reduction under the settlement.

"I sat with tears running down my face," said Hewlett-Vallejo.

Tamera, a real estate agent, and Tom, who is a teacher, had bought the three-bedroom wood-frame cottage in 2001 for less than $240,000. In the midst of the housing boom, when their home's value had soared to more than $430,000, the couple refinanced in order to get a lower rate and take out extra cash for some home improvements.

Then, in 2009, a commercial real estate deal that Tamera invested in went sour and ended up in litigation. The couple soon fell behind on their mortgage.

By September 2010, the missed payments -- and ensuing fees -- brought their mortgage balance up to about $385,000. Meanwhile, their home's value had plunged by more than 30 percent to about $300,000.

For two years, the Vallejos tried to get Bank of America to modify their mortgage. But the bank kept denying the request, saying it needed additional paperwork.

"Each time, we started over with a new person and some new requirements based on that person's or the underwriter's perspective," she said.

By the day of the foreclosure auction, the Vallejos assumed that they were out of luck.
"We didn't know what we were going to do," said Hewlett-Vallejo. They hadn't even made new living arrangements.

A few days after finding out the auction was off, the Vallejos received the details of their modification from Bank of America. The bank offered to bring their balance to $300,000. They'd still be slightly underwater, but the principal reduction alone would save them about $400 a month.

Bank of America said its goal is to lower housing payments to no more than 31 percent of income. "If the payment is still above the affordable payment target, the second step is to lower the interest rate," said Simon.

In this case, the bank also offered to reduce their interest rate, which would reduce their monthly payments by another $170 or so, and to keep the term of their loan to the existing 23 years that the Vallejos had left to pay.

But there is a catch. "We're required to make three months of trial payments -- April, May and June," say Hewlett-Vallejo.

If they miss a payment, the deal is off and the Vallejo's home heads back to the auction block.

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]]>Bank of America mortgage settlementforeclosure auctionhome saved from foreclosurenational mortgage settlementprincipal reductionprincipal reduction programreduced mortgage principalCNNMoney2012-04-24T12:10:00 00:00It's Safe to Sell Your Home Againhttp://realestate.aol.com/blog/2012/04/20/its-safe-to-sell-your-home-again-9-steps-to-take-now/http://realestate.aol.com/blog/2012/04/20/its-safe-to-sell-your-home-again-9-steps-to-take-now/http://realestate.aol.com/blog/2012/04/20/its-safe-to-sell-your-home-again-9-steps-to-take-now/#commentsFiled under:

By Lisa Gibbs

Given everything they knew about the lackluster housing market, Meghann and Cort Battles didn't expect much when they listed their four-bedroom home in Centennial, a Denver suburb, for sale in January. So they were taken aback by the onslaught of interest.

Meghann, at home on maternity leave with their two sons, juggled 32 showings in the first month. "It's so exhausting trying to find somewhere to go for an hour two or three times a day," she says. The Battles even installed a special front-door handle to text them when buyers enter and exit so that they can return as soon as possible. "It's just crazy," she says.

Wait, isn't the real estate market still supposed to stink after five straight years of falling prices?

Turns out that while analysts debate when the market will hit bottom, for a surprising number of cities the turnaround has already begun. In December, prices rose in 109 of the 384 metro areas tracked by the data firm CoreLogic. Scrub out foreclosures, and that figure climbs to 169.

If you think that recovery means a return to the boom's double-digit price increases, forget about it. "The market won't suddenly snap back," warns CoreLogic economist Sam Khater, who has studied past housing busts.

And for harder-hit areas such as central Florida and the Rustbelt, improving may simply mean things are less bad than they were two years ago.

No matter where you live, though -- or where you want to live next -- the strategies you employ to sell your home must change to reflect the realities of what's now a healing market.

1. The higher your price, the more patient you must be.

Cheaper homes are affordable to more buyers and appealing to investors, so recoveries usually start there. Two years ago Denver properties above $210,000 were still falling. At the end of 2011 it was homes above $315,000. Also, jumbo mortgages that aren't government-guaranteed -- loans above $417,000 and up to $625,500 in high-cost areas like New York -- not only charge higher rates, they come with tougher underwriting standards, further slowing things down.

2. Screen your buyers.

Working only with buyers pre-approved for a sufficient mortgage has long been standard advice. But with more offers rolling in, a good agent will call loan officers for more information. There's an incentive for borrowers to grant their loan officer permission to talk. "If I'm going to speak with a listing agent to advocate on my borrower's behalf, I clear it with the borrower first," says mortgage consultant Kym Poladsky. "Most borrowers who are competing want you to help get their offer accepted."

3. Strike the right balance on pricing.

While you don't have to placate low-ballers anymore, you can't shoot for the moon either.

Adele Work and Jennifer Caldwell can attest to that. The couple have lived in their 1910 home in the desirable Washington Park neighborhood near downtown Denver for the past 12 years. They weren't thinking of selling their place, until they happened upon a farm in northern Colorado last August while visiting their son in college.

They wound up buying that property and put their Washington Park "baby" on the market in October for $734,999 -- even though their agent lobbied for a lower price. Sure enough, the buyers' feedback started to come in: "Love the house, but slightly overpriced." So they cut the price tag to $714,000. In February they dropped it again, to $699,000. "If we had priced our house lower to begin with we maybe would have sold it before the end of the year," Caldwell says. Adds Work: "We've let our heart lead us a bit."

4. Get it right the first time.

Set a realistic price from the get-go so your house doesn't look like a throwback to lousy price-slashing times. To do that, think like an appraiser. Analyze comparable sales for price-per-square-foot and see how long competing homes have been on the market.

Scouting active listings is also crucial, says appraiser Matthew George. "You have to know what you're competing against," he says. Arm yourself with a simplified evaluation of your home, called a summary or restricted-use appraisal, before listing ($150 to $200). To find professionals in your area, go to appraisalinstitute.org.

5. If you think you erred in pricing, act quickly and decisively.

Are you getting lots of showings but still no offers after 30 days on the market? Cut the price by at least $10,000, says Justin Knoll, chairman of the Denver Realtors organization. At that point, you can hold firm on price and try to negotiate offers up.

6. Let your home's value dictate the price.

This advice may seem self-evident, but owners may have lost sight of it during the bust. On the one hand, some sellers clung to the false hope of a return to boom prices, so they set prices unrealistically high. Others may have gone too far the other way -- by setting the price on their higher-end home below jumbo loan levels simply to draw more interest. In an improving market, that type of thinking isn't really necessary.

7. Understand that you're no long competing with gutted foreclosures.

Buyers are tired of looking at worn-down, neglected, distressed properties and often don't have much extra money to do a lot of fixing up. "Clients tell me all the time, 'I'll spend a little more for something that's ready to move into,' " says Knoll. "Sellers need to take advantage of that."

8. Take care of structural and cosmetic necessities -- but not much more.

In lean times, forking over $50,000 on a new kitchen may have seemed like a necessary move to stand out. That's probably the wrong thing to do now, says George, the appraiser. Instead, stick with basics like paint and flooring. And fix things that will come up in inspection. For instance, Kathy and Bruce Frank, of Golden, Colo., recently spent $1,600 to repair a sunken driveway before they put their house on the market.

In their 28 years there, the Franks -- she's a retired elementary school principal; he works at the University of Colorado -- have done a little of this and a lot of that. "Finished the basement, popped the top on the garage and added a master suite, new hardwood floors, moved the laundry room to the top floor, new roof," she says.

When the empty nesters listed their home, they focused on small stuff, like decluttering and packing up their personal stuff. They also brought in a stager to set the kitchen and dining room tables. The Franks' agent, Buss, says the house is shipshape but admits it reflects the longtime owners' tastes. "Blue," he says. "The house is very blue."

9. Respond quickly to feedback.

If an issue arises over and over in buyers' reactions, it needs to be addressed immediately. Buss, for instance, planned on giving the Franks 10 days or 10 showings. If buyers complained about the blue, he was going to have them paint. It turned out not to be necessary. Just three days after listing, the Franks had a full-price offer: $375,000. They're under contract.

Things aren't moving quite as fast back in Centennial, where Meghann Battles sits in her car, e-mailing on her iPad and playing the waiting game. Meghann is waiting for lots of things -- for her 32nd showing to end, for would-be buyers to realize how few homes are for sale in the neighborhood, and for families hoping to move in the summer to start searching. As husband Cort reminds her, though, "It takes only one showing for it not to be a waste of time."

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]]>home selling tipshomebuying tipshow to buy in current real estate markethow to sell your homereal estate marketrules for the real estate marketsafe to sell homeselling home in down markettip for buying homeCNNMoney2012-04-20T18:00:00 00:00Watchdog Blasts Housing Program for 'Hardest Hit'http://realestate.aol.com/blog/2012/04/12/watchdog-blasts-housing-program-for-hardest-hit/http://realestate.aol.com/blog/2012/04/12/watchdog-blasts-housing-program-for-hardest-hit/http://realestate.aol.com/blog/2012/04/12/watchdog-blasts-housing-program-for-hardest-hit/#commentsFiled under:



By Jennifer Liberto

A federal-state program aimed at helping homeowners in states hardest hit by the mortgage crisis is falling far short of its goals, a federal watchdog said in a report released Thursday.

In the report, the Special Inspector General for the Troubled Asset Relief Program, also known as TARP, said that just 3 percent of $7.6 billion available in the Hardest Hit Housing Markets program -- available for 18 states and the District of Columbia -- had been tapped as of Dec. 31.

The money has gone to help 30,640 homeowners, or about 7 percent of the 458,000 homeowners who officials estimated would be helped by the end of the program in 2017, according to the watchdog.

More than 75 percent of the program funds has gone to prop up state unemployment programs that pay mortgages of the unemployed -- not efforts such as mortgage modifications or principal reductions that would force banks to take a hit, according to the report.

Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, said the hardest hit fund has largely served to help the unemployed.

"It was supposed to be an innovative program intended to reach the unemployed and underwater homes," Romero said in an interview with CNNMoney. "It is important to reach the unemployed, but it's not reaching underwater homes like it was intended."

Treasury defended the hardest hit program. The program gives states the opportunity to "leverage their unique understanding of the conditions in their communities to create effective, locally tailored programs," Assistant Secretary for Financial Stability Timothy Massad said in a letter to Romero.

TARP is the $700 billion bailout program that Congress passed at the height of the financial crisis in the fall of 2008. In addition to keeping the big banks afloat, TARP gave money to programs to help struggling homeowners.

Other larger TARP-funded housing programs, including the Home Affordable Modification Program, have weathered criticism, especially from the special inspector general, for falling short in its goal of easing the national foreclosure crisis.

This new watchdog report focused on a different, smaller program, the Hardest Hit Housing Markets program. The hardest hit program was targeted to states with the largest numbers of homeowners drowning in negative equity and unemployment.

The money was supposed to give state housing officials incentives to come up with new and different ways to address the housing crisis in their states. But most states just used the money for programs that pay the mortgages, insurance and property taxes of the unemployed.

So far, the hardest hit program has kept up with mortgage payments for some 26,100 unemployed homeowners. These programs don't hit mortgage servicers or banks' bottom lines, Romero said.

When it comes to relieving housing woes, so far, only 436 homeowners in the program got the principal owed on their mortgage reduced. Another 170 homeowners got their second lien reduced.

A big problem, which the federal government faced with all its housing programs, was getting servicers on board, according to the watchdog. The states have far less leverage than the federal government in getting servicers to work with them on programs.


House Flipping Is Back

Treasury also took eight months to get the federal government-backed guarantors Freddie Mac and Fannie Mae to support the program, according to the SIGTARP report.

"Treasury failed to recognize the lack of bargaining power that states had for recruiting servicers," the report said.

Treasury's Massad disagreed with SIGTARP's conclusion, saying Treasury "actively and consistently engaged with servicers" and the government-backed housing guarantors in the earliest stage of the program.

Rep. Darrell Issa, a California Republican, asked the watchdog to review the hardest hit program.

See the original story at CNN Money.

See also:
Banks Neglect REO Homes in Minority Areas, Study Says
Home Costs: 4 Crucial Questions Reveal Hidden Expenses
Principal Reduction Plan for Fannie, Freddie Meets Resistance

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]]>CNNMoney2012-04-12T17:15:00 00:00Principal Reduction Plan for Fannie, Freddie Meets Resistancehttp://realestate.aol.com/blog/2012/04/11/principal-reduction-plan-for-fannie-freddie-meets-resistance/http://realestate.aol.com/blog/2012/04/11/principal-reduction-plan-for-fannie-freddie-meets-resistance/http://realestate.aol.com/blog/2012/04/11/principal-reduction-plan-for-fannie-freddie-meets-resistance/#commentsFiled under:

NEW YORK -- Allowing Fannie Mae and Freddie Mac to offer principal reductions may save money, thanks to enhanced government incentives, a preliminary analysis released Tuesday shows. But that doesn't mean their regulator, Ed DeMarco of the Federal Housing Finance Agency, is warming up to the idea.

DeMarco is facing tremendous pressure to allow the government-controlled mortgage titans to allow principal reduction on the mortgages they back. Some advocates say the best way to stabilize the housing market is to lower the balances for borrowers who owe more than their homes are worth.

DeMarco, however, has steadfastly resisted it, saying previous studies showed principal reduction would be too costly.

The Obama administration sweetened the pot earlier this year by tripling the incentive payments for Fannie and Freddie if they forgive principal. This prompted the firms to take another look at their analysis.

It turns out the increased incentives would make it more beneficial for Fannie and Freddie to offer principal reduction to homeowners who are deeply underwater and behind in their payments.

But DeMarco isn't backing down just yet. Speaking at the Brookings Institution on Tuesday, he brought up several other concerns and costs connected to principal reduction.

His primary worry is that providing principal forgiveness could prompt many of the 2 million borrowers who are current with their payments to fall behind. Having them default will hurt the housing market more than offering principal reduction will help it, he said.

"The far larger group of underwater borrowers who today have remained faithful to paying their mortgage obligations are the much greater contingent risk to housing markets and to taxpayers," he said, adding that these homeowners can lower their monthly payments through the government's refinance program.

$1.7 Billion Savings For Fannie Mae and Freddie Mac



















Also, he pointed out that no more than 600,000 borrowers would be eligible for principal reduction under Fannie and Freddie. This is the universe of folks who are delinquent in their mortgages and whose balances are more than 115 percent of their homes' value.

"This is not about some huge difference-making program that will rescue the housing market," the regulator said.

DeMarco touted a principal forbearance program that Fannie and Freddie already offer. It calls for the companies to defer payment of the underwater portion of the mortgage until the borrower sells the home or refinances. The homeowner pays no interest on the deferred principal.

The regulator said a final decision should be made in the next few weeks.

At least one analyst doubts that Fannie and Freddie will opt to reduce principal significantly, noting that DeMarco praised principal forbearance and warned that forgiveness would help relatively few people.

"We see this as a strong political attack against principal reduction," said Jaret Seiberg, an analyst with Guggenheim Washington Research Group.

Read more on CNNMoney:
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Multimillion Dollar Foreclosures
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]]>Ed DemarcoEd Demarco principal reductionfannie mae freddie mac principal reductionfannie mae principal reductionfannie mae principal write downsfreddie mac principal reductionfreddie mac principal write downsCNNMoney2012-04-11T17:51:00 00:00Consumer Bureau Proposes Strict Rules for Mortgage Servicershttp://realestate.aol.com/blog/2012/04/10/consumer-bureau-to-crack-down-on-mortgage-servicers/http://realestate.aol.com/blog/2012/04/10/consumer-bureau-to-crack-down-on-mortgage-servicers/http://realestate.aol.com/blog/2012/04/10/consumer-bureau-to-crack-down-on-mortgage-servicers/#commentsFiled under:

By Jennifer Liberto

The Consumer Financial Protection Bureau announced Tuesday that it's considering new rules aimed at mortgage servicers to help protect consumers against "costly surprises."

The bureau's new rules will require servicers to issue mortgage statements that are more clear, as well as better disclosures about any fees or changes in a loan's interest rate.

"We want to make sure that at all times consumers know how much they owe, what they are paying, and how their payments are being applied," said Richard Cordray, director of the consumer bureau in a Tuesday speech.

This would be the federal government's first major move to crack down on the entire mortgage servicing industry, including big banks that service mortgages, since the housing bust and resulting financial crisis.

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The new rules coincide with new standards set forth by a large settlement deal between states attorneys general and the five largest mortgage servicing banks. Those standards only impact the five largest banks and are aimed at halting robosigning and other improper foreclosure practices on homeowners who are late with payments.

The Consumer Financial Protection Bureau's rules would ask all servicers to ensure better transparency for all borrowers -- not just those whose loans are delinquent. The rules would take effect next January, according to the bureau.

The bureau is considering a rule to require all mortgage servicers to spell out more details in monthly statements such as a breakdown of mortgage payments by principal, interest and fees. Servicers would also have to itemize fees and charges, and warn about possible late fees.

Another rule would target interest rate changes. Servicers would have to explain how a new rate is calculated and when it will kick in, while warning of future interest rate changes and penalty fees on mortgages paid off early.

The rules would also tackle so called "force-placed" insurance, which is property insurance that the bank takes out for homeowners who either miss an insurance payment, allow their property insurance to lapse or just don't have as much insurance as the bank would like.

Among other things, the servicer would be required to ask homeowners for proof of insurance before charging for force-placed insurance.

Last week, New York Financial Services Superintendent Benjamin Lawsky said he is looking into whether forced-place policies cost more than they should.

See the original story at CNN Money.

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Obama Appoints Consumer Watchdog Chief

 

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]]>Consumer Financial Protection Bureauconsumers bureau crackdown mortgage servicersgovernment crackdown mortgage companiesmortgage fee disclosuresnew mortgage standardsnew rules morgage servicersRichard Cordrayrobosigning settlementCNNMoney2012-04-10T15:15:00 00:00Rents Rose in the Last Year, While Home Prices Sputteredhttp://realestate.aol.com/blog/2012/04/05/rents-increase-2011-2012/http://realestate.aol.com/blog/2012/04/05/rents-increase-2011-2012/http://realestate.aol.com/blog/2012/04/05/rents-increase-2011-2012/#commentsFiled under:

NEW YORK -- Renting used to be cheaper than buying. But in many U.S. cities that's no longer the case, as rents continue to climb and home prices stagnate.
While asking prices for homes declined 0.7% over the past 12 months through March, rents rose 5%, according to a report released Thursday by real estate listing site Trulia.

The median rent for all types of rental homes hit $1,350 a month in March, up from a median of $1,285 a month 12 months ago, Trulia reported.

"Buying a home is more affordable than renting now in almost every part of the United States," said Jed Kolko, chief economist for Trulia.

Several metro areas recorded double-digit percentage increases in rental rates.

In Sarasota, Fla., the average rent jumped 12.9% year-over-year, the biggest increase of any of the 100 largest metro areas Trulia surveyed. Miami and San Francisco saw the next biggest increases, with rent hikes of 12.1% and 11.1%, respectively.

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The metro areas that sustained the highest rent increases were a decidedly mixed bag, but obviously shared one factor: rising demand for a limited supply of rental units.

Low-ball appraisal: Mortgage denied

The national vacancy rate for apartments fell 0.3 percentage points during the first quarter to 4.9%, its lowest point since late 2001, according to a separate report from Reis Inc., a real estate research firm. With such limited availability, it has put pressure on rentals of all types.

In cities like Miami that were hit hard by the housing bust and recorded a high number of foreclosures, all of the displaced residents have to live somewhere.

"A lot of people who were owners lost their homes in the bust in these places," said Kolko. Many of them turned to the rental market, boosting demand and driving up rents, he said.

Other cities have put constraints on the construction of new multi-family housing, thereby limiting supply. For example, in San Francisco, where the median rent is a whopping $2,625, there are few tracts of land available to develop, raising demand for housing and pushing rents there higher.

Several Rust Belt cities also saw large rent increases in the past year, including Indianapolis, where rents went up 9.7 percent, and Columbus, Ohio, where they jumped 9.3 percent.

These cities have seen big gains in the industrial sector, which have led to a growing number of jobs and higher rents, said Kolko. As hiring levels off, he does not expect the big rent increases to continue.

Meanwhile, asking prices for homes nationwide crept lower over the past 12 months, according to Trulia.

That, along with record low mortgage rates, has made buying a home more affordable than it's ever been and a bargain compared to renting. However, many Americans will not be able to seize this historic opportunity to become homeowners, said Kolko.

Unemployed, too broke to come up with a down payment or with credit scores too battered to qualify for a mortgage, many people simply cannot qualify to buy a home right now, according to Kolko.

With fewer consumers able to make the leap into homeownership, rents could continue to climb higher, he said.

Read more from CNNMoney:
Low-Ball Appraisal: Mortgage Denied
The New American Household
10 Fastest Growing U.S. Cities
See also:
First-Time Homebuyer's Guide
How to Shop for Your First Home
How to Price a Home to Sell Fast

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Home Price Is 90% Of Sales, from Barbara Corcoran

 

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]]>city rentsrent in citiesrent increaserent riserent upCNNMoney2012-04-05T17:25:00 00:00Netizens Deride Foreclosure Settlementhttp://realestate.aol.com/blog/2012/03/15/cnnmoney-readers-deride-foreclosure-settlement/http://realestate.aol.com/blog/2012/03/15/cnnmoney-readers-deride-foreclosure-settlement/http://realestate.aol.com/blog/2012/03/15/cnnmoney-readers-deride-foreclosure-settlement/#commentsFiled under:

By Les Christie

NEW YORK -- The $25 billion foreclosure settlement has many Americans crying foul.

While some claim the deal helps too few homeowners, others say it gives irresponsible borrowers an undeserved bailout.

"This entire deal sucks! Keep taking away the chances for middle class America to get ahead and what good is our American system," wrote a reader with the handle Bushywalrus.

"So what the government is telling me is if I were to go break the law. LIE CHEAT and STEAL change all my morales. I would get away clean and not have to pay a cent," wrote nnmfam.

What about me? As part of the mortgage settlement, four out of the five major lenders -- Citibank, JPMorgan Chase, Wells Fargo and Ally Financial -- have promised to reduce mortgage balances for underwater borrowers who are behind on payments by as much as $20,000. While Bank of America plans to reduce principal on loans by an average of $100,000. But these reductions will only occur for a select group of borrowers.

"I'm under water, I've lost 10s of thousands in value. I may not be with one of these banks, but it is because of them that the market is where it is. So I get to pay for others' problems? Where's my bailout? Where's my refi? This stinks," wrote tet1953.

"[T]hink about this as well, BOA reduces someones mortgage by 100k... 3 years later market rebounds.. house prices go up.. that person sells home... they walk away with profit... all the while... Person B that didnt get bail out tries to sell.. they are still under water...," wrote mikesoda.

Those who have a mortgage held by Fannie Mae or Freddie Mac -- roughly half the market -- are also cut out of the deal. In addition, loans insured by the Federal Housing Administration are ineligible, leaving many homeowners feeling left out in the cold.

"It is just a ridiculous that we have no help for the government insured loan of FHA. So much for Fair Housing Administration," wrote AnneT1127.

The big banks are getting away with murder. "Once again the fat cat bankers lobbied long and hard to water this settlement down to nothing," wrote Bubingeorgia.

Many readers echoed that sentiment, noting that the $25 billion deal was not nearly enough compared to the amount of money homeowners have lost since the housing bubble burst.

"Still trying to figure how the banks got away with paying 26 billion, which is a fraction of a % of trillions of dollars. Now we find out the mortgages they sold at 100% profit are not liable to claim any part of the 26 billion. LOL," wrote gophacks.

Some commenters are angry with the government for not coming down harder on the banks for their foreclosure abuses.

"[I] bet the government thinks they have really done something great! what a bunch of losers. i want to know how much the banks made off their criminal actions and compare it to what they have given back," wrote 1ajs1.

They don't deserve a bailout. Many readers felt the settlement is a bailout for irresponsible borrowers that overleveraged themselves and who are now being rewarded for it. In fact, there are very few provisions to help those who are diligently paying their mortgage under the settlement deal. Only a small fraction of the settlement money -- $3 billion -- will go toward refinancing mortgages for those who are current on payments.

"If they bail out the morons who did NOT pay and screw us paying customers this is a slap in the face to ALL of us... You don't pay your mortgage you lose the home simple as that," wrote Jacknyd.

Calsfdude wrote: "Why should we or the government buy houses for greedy people who can't afford any house? It's their fault. They had no money. They thought that they could make a quick buck. They played and lost."

"The moral of the story is to borrow as much as you can, put zero down, and wait for bailouts," concluded J.d. Free.

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More from CNNMoney:
What the Foreclosure Settlement Means for You
Foreclosures: A 'Rising Tide Ahead'
One Man's Fight Against Foreclosures (video)

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US Mortgage Settlements

 

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]]>foreclosure settlement badforeclosure settlement weakmortgage settlement badmortgage settlement weakCNNMoney2012-03-15T12:55:00 00:00Home Remodeling: How to Find Your Sweet Spothttp://realestate.aol.com/blog/2012/03/13/home-remodeling-how-to-find-your-sweet-spot/http://realestate.aol.com/blog/2012/03/13/home-remodeling-how-to-find-your-sweet-spot/http://realestate.aol.com/blog/2012/03/13/home-remodeling-how-to-find-your-sweet-spot/#commentsFiled under:

home repairBy Josh Garskof @Money

Budgeting for a large remodeling project presents a bit of a chicken-and-egg problem: You won't have a feel for the cost until you get bids from contractors.

But unless you give pros a ballpark figure from the start, they'll have to guess at what to include in their bids -- and they'll come back to you with a huge range of prices for very different plans.

"A faucet can cost $200 to $900, a window can be $400 to $1,200," says Madison contractor Mike Gasch. "I need to know where to aim."

To solve this conundrum, do some calculations first.

1. Start with average costs.

When insurance companies need to pinpoint construction costs, they multiply the length by the width of the space and then multiply that by the project's typical cost per square foot.

Albert Paxton, an estimator who provides such data to claims adjusters and contractors, pegs average per-square-foot costs of remodeling jobs at this:

Kitchen: $174
Powder room: $133
Master bathroom: $160
Family room: $92

2. Tweak to fit the scope.

These numbers are for gut remodels, meaning the room is demolished right down to the framing and rebuilt.

With a less involved project -- in the kitchen, say, you might be refacing the cabinets and replacing the countertops and appliances instead of tearing out everything -- cut your number by about 30 percent, says Paxton.

For a cosmetic update, as in fresh paint on the cabinets plus new lighting and hardware, reduce it by about 60 percent.

3. Adjust for your location.

A plumber working in Manhattan might charge twice the hourly rate of one in Statesboro, Ga.

Same goes for everyone from laborers to architects. In a metro area along the Northeast or Pacific seaboards, add 30 percent to 40 percent (use your judgment about your market). In a rural area, especially in the South or Midwest, drop it by 15 percent to 20 percent.

4. Modify for style.

These figures assume you're buying mid-range fixtures and finishes. If you're going upscale, as in granite countertops and stainless-steel appliances, or stone bathroom tiles and a separate soaking tub and walk-in shower, raise your number by 30 percent to 40 percent, depending on how elaborate you're getting. For an economy job, say at a rental property, cut it by 25 percent.

Make your number fit your finances by adjusting items 2 and 4, then be upfront about your bottom line with contractors who look at the job.

"If I have a good feel for your budget," says Cambridge, Mass., contractor Charlie Allen, "I can deliver maximum value within your financing."

Money magazine is celebrating people, both famous and unsung, who have done extraordinary work to improve others' financial well-being. Nominate your Money Hero.

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Choosing a Good Contractor

 

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]]>best home improvementhome buying seasonhome improvementhome remodelinghome repairspring cleaningspring home buyingspring homebuyingCNNMoney2012-03-13T13:30:00 00:00Dick Clark's Flintstone House Rocks Onto the Markethttp://realestate.aol.com/blog/2012/03/08/dick-clarks-flintstone-house-costs-a-pretty-penny/http://realestate.aol.com/blog/2012/03/08/dick-clarks-flintstone-house-costs-a-pretty-penny/http://realestate.aol.com/blog/2012/03/08/dick-clarks-flintstone-house-costs-a-pretty-penny/#commentsFiled under: ,



By Les Christie

Dick Clark has listed his unique, one-bedroom Malibu home for $3.5 million, according to Coldwell Banker Residential Brokerage.

Whoever buys the place from the "world's oldest teenager" will likely feel as if they are channeling another celebrity: Fred Flintstone.

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The architect, Phillip Jon Brown, said the prehistoric design was dictated by circumstance. The 23-acre site is next to the Santa Monica Mountains National Recreational Area, which originally objected to Clark building a home on the property.

"[Clark] dug in his heels and said he was going to build a house there," said Brown, "I came up with the idea that if the house looked like a rock formation, the park conservancy would let us build on top. They liked the concept."

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]]>architectcelebrity real estateDick ClarkDick Clark homeDick Clark homesDick Clark houseFlintstone homeFlintstone HousePhillip Jon BrownCNNMoney2012-03-08T16:30:00 00:00Tax Lien Investing: An Investor Goldmine?http://realestate.aol.com/blog/2012/03/05/tax-lien-investing-an-investor-goldmine/http://realestate.aol.com/blog/2012/03/05/tax-lien-investing-an-investor-goldmine/http://realestate.aol.com/blog/2012/03/05/tax-lien-investing-an-investor-goldmine/#commentsFiled under:

money houseBy Les Christie, CNNMoney

NEW YORK -- Jean Norton's first foray into tax lien investing was hands-down a lucrative one.

Norton, who was a marketing director at a tech firm at the time, had bought and sold real estate for years. She had heard about investors who were making nice profits buying liens on homes with overdue property taxes. So in 2009, she attended a seminar to learn how to put her own skin in the game.

Soon afterward, she bought more than $20,000 in liens at auctions in foreclosure-riddled Florida that were promising to pay 17 percent to 18 percent in interest. Within two years, she got her entire investment back, plus double-digit returns.

"It was always a nice surprise to get a check in the mail," said Norton, now 55.

Now big institutional investors have joined individual investors. But like any investment offering tempting yields, the potential pitfalls of tax lien investing are pretty huge: Those who lose out could either end up saddled with a worthless property or with nothing at all.

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Between $7 billion and $10 billion in property taxes go delinquent each year, according to Brad Westover, executive director for the National Tax Lien Association. For many state, county and local governments, the failure to collect on these debts weighs heavily on their already-overburdened budgets. In 29 states, plus the District of Columbia, they turn to investors for help.

In these states, investors buy tax lien certificates at auctions, effectively owning a claim against the property until the homeowner pays the county or municipality back or until they default on the debt entirely. In return, the county gets the money it needs to fund schools, pave roads and pay for other infrastructure and services.

Ditch your 401(k) for vodka and habaneros?

Homeowners who pay back what they owe, pay the county, which then repays the investor the principal, plus whatever interest rate was set at auction.

The interest is where the real money can be made. States set rates that the counties can charge delinquent taxpayers on overdue taxes and they can range anywhere from 12 percent to 24 percent, according to Larry Loftis, an attorney, tax lien investor, and author of "Profit by Investing in Real Estate Tax Liens."

There are several different kinds of tax lien auctions. In one of the most common methods, the winning bidder is the one who will accept the lowest interest rate. That can lower the rate to far below what state laws allow, but it can still be much higher than other investments.

"I just [invested] $1 million last week and most of the liens I won were at 7 percent, with a handful at 8 percent, a few at 9 percent, two at 10 percent, and one at 11 percent," said Loftis.

The big gamble: Most homeowners pay off their back taxes within a year and nearly all of them pay what they owe eventually. According to local tax authorities in Colorado, about 95 percent of back taxes are paid off within two years, a rate that Donald Dinan, general counsel for the National Tax Lien Association, said generally holds true for the nation as a whole.

For the 5 percent of liens that don't get repaid, however, things can get pretty messy. Lien holders may have to pursue a foreclosure and, if that doesn't get the homeowner to pay their taxes, then the investor will likely have to take possession of the property. That means going through a legal process that often includes getting a sheriff to evict the old occupants. If an investor fails to do either of those things, the lien will eventually expire and it will become worthless.

In a foreclosure, the tax lien holder usually has first claim on the property, even over the bank that holds the mortgage (should the homeowner still owe money on the home).

Foreclosures go through the county, which has to notify the delinquent taxpayer that a foreclosure sale is pending and advertise the sale, usually online and in local newspapers.

In many states, the tax lien holder can get full title free and clear on the property in a foreclosure: The bank gets nothing. However, to protect its interest, the bank will often pay off the back taxes, plus interest.

If there's no mortgage, the lien holder can repossess the home. That's not a bad deal if the home is worth more than the amount the lien buyer has already put into the deal. In fact, some investors look for that potential when they bid on the debt.

However, wading into tax lien foreclosures -- on purpose -- is a tricky and time-consuming business that can easily backfire.

"Risks come mainly from not knowing what you're doing," said Loftis. "The biggest risk is getting a lien on a worthless property. Contrary to what you see and hear on the 'Get rich quick' infomercials on tax lien investing, the county government does not guarantee your investment."

Almost all counties that sell liens sell hundreds of them on worthless properties each year. That's especially true in blighted inner-city neighborhoods where foreclosures have wrecked the housing market and many homes are selling for $10,000 or less. If the property owner doesn't pay, there's no way for investors to get back their money by foreclosing and selling the house.

Buyers have to make sure that the total amount of debt the house carries is less than its market value. You don't want it to total much more than 60 pecent or so of the home's market value, said Westover, and, ideally, much less.

Other potential pitfalls include buying a lien on a home that also has an IRS lien on it (the agency also has a first claim on the assets), bankruptcy of the owner, which can delay a foreclosure even longer, and environmental hazards.

For intrepid investors, buying a tax lien can be a lucrative bet -- just be prepared for the fact that you may end up the unwitting owner of a home that could cost you your investment and then some.

More on CNNMoney:
'Losing our million-dollar home'
Uncle Sam wants your foreclosed home
Can I use my IRA to buy an apartment building?

Ilyce Glink on Investing in Residential Real Estate

 

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]]>CNNMoney2012-03-05T11:35:00 00:00Millionaire Foreclosures on the Risehttp://realestate.aol.com/blog/2012/02/23/millionaire-foreclosures-on-the-rise/http://realestate.aol.com/blog/2012/02/23/millionaire-foreclosures-on-the-rise/http://realestate.aol.com/blog/2012/02/23/millionaire-foreclosures-on-the-rise/#commentsFiled under:

million dollar foreclosureBy Jessica Dickler, CNNMoney

NEW YORK -- Five years after the housing bubble burst, America's wealthiest families are now losing their homes to foreclosure at a faster rate than the rest of the country -- and many of them are doing so voluntarily.

Over 36,000 homes valued at $1 million or more were foreclosed on -- or at least served with a notice of default -- in 2011, according to data compiled by RealtyTrac, which tracks foreclosures. While that's less than 2 percent of all foreclosures nationwide, it represents a much bigger share of foreclosure activity than in previous years.

"These properties are accounting for a bigger piece of the foreclosure pie," said Daren Blomquist, vice president of RealtyTrac.

Out of all foreclosure activity, the share of foreclosures on properties valued at $1 million or more has risen by 115% since 2007 while the share of multimillion dollar foreclosures -- or homes valued at more than $2 million -- jumped by 273 percent. Meanwhile, the share of foreclosures on mid-range properties valued between $500,000 and $1 million fell by 21 percent.

Until recently, many homeowners at the high end of the housing market were able to postpone the foreclosure process, Blomquist explained. With other assets and alternatives, "they had more financial means to hold out against default."

In addition, lenders are typically more amenable to working with homeowners that have other resources, said Ron Shuffield, president of Esslinger-Wooten-Maxwell, a real-estate firm in Miami where homes priced over $1 million represented 9 percent of all foreclosures last year.

But with a recovery in the housing market still years away, foreclosure has turned out to be a worthwhile option after all. Saddled with bloated mortgages after a long run up in property values, many high-end homeowners have chosen to pursue a "strategic default." Even though they can afford the monthly mortgage payments, they still decide to walk away from their home because they owe more on the property than it is worth.

See inside 8 multimillion dollar foreclosures

"In the lower-priced houses you'll see more people defaulting because they can't afford the payments and it's a choice between feeding their family and paying the mortgage on a home that's under water," said Stuart Vener, a national real estate and mortgage expert with the Florida-based Wilshire Holding Group.

"In million-dollar homes, you're looking at people who can afford it, but they have to make a business decision: Does it make sense to make payments on a mortgage when the home is worth less than they owe?" he said. In many cases, it often makes more financial sense to walk away.

At least they can take their time packing up all of their belongings. On average, it takes about 348 days for a foreclosure to be completed, Blomquist said. "They may get almost a year of free housing out of the deal."

But don't expect a few depressed mansions to bring down the neighborhood. A single foreclosure in an otherwise wealthy area is unlikely to impact surrounding values, Blomquist said.

"You're not going to see the weeds growing," Vener added. But there will be an opportunity for buyers to snatch up these impressive houses at bargain basement prices, he said, which could provide a much-needed boost to sales overall. "In a good way, this is going to drive turnover," he said.

More from CNNMoney:
See 8 Multi-Million Dollar Foreclosures
America's Hardest Hit Neighborhoods
What the Foreclosure Settlement Means For You

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]]>mansion foreclosuresmega mansionsmillion dollar forelosuresmortgage defaultstrategic defaultwalk away from mortgageCNNMoney2012-02-23T10:20:00 00:00