We’ve heard a lot about mortgage fraud after the last several years, yet it is still a problem even with stricter guidelines.  Mortgage lender Karen Burket-Bank of Medford, Oregon shares a story about one borrower who went from a salaried employee to self-employed – and that tripped up their loan,

Just weeks before the close of escrow date on the purchase, it was learned that this borrower had gone from being a salaried wage earner, to now being self employed.  You may ask yourself, “So, what’s the big deal?  If there’s still a job, why can’t the bank still lend the money?”  The answer to that may not be as simple as one would think.

In this case, the client remained in the same line of work.  So simple, right?  Actually, no.  The typical rule of thumb when lending to a self employed individual is that the lender will want to evaluate two years worth of tax returns in order to determine income eligibility.  So in the above case, because this client just recently put themselves on a self employed status, of course, there aren’t tax returns available to determine what newly self employed earnings even exist.

It is far easier – in my opinion – to get a loan as a regular employee.  However, being self-employed does not negate your eligibility to get a home loan.  Just be careful in not committing mortgage fraud – even unknowingly.

I am truly surprised we are not hearing more about people moving into tiny houses. People are downsizing to do more with less – lower utility bills, lower heating bills, etc.  Or perhaps they have lost their house and have converted a shed to live in on the back of their parents’ property.

Nevertheless, if you do live in a tiny house, here are some tips from a guest writer on Steve’s bripblap page,

When you live in a small space, especially a shared space, it can be difficult to find a way to create the appropriate setting for mindfulness or meditation. If you are persistent and creative, you can create a space that will allow you to meditate quietly in almost any location. The key is to discipline your mind so that your surroundings play a small part in your ability to remain mindful for a period.

Discipline. Your mind.

Photo from thistinyhouse.com.

Even in these years of a sagging economy and a pitiful mortgage atmosphere, staging a home remains an important part of selling a home.  From Offbeat Home, Ariel Meadow Stallings shows how important it is to stage with some great before and after photo shots,

Everyone says this, and it’s true. You have to basically move out of your home to stage it, or make your peace with living in a sparse, slightly twisted version of your home. You’re allowed bland art (not too much!) and one tchotchke per room.

Here was how our living room looked before I staged it:

Here’s what it looked like after I took all our stuff out of it:

Still funky and colorful, but way less cluttered. No My Little Ponies or sagging spider plants to distract potential buyers.

Fantastic article!

On the heels of yesterday’s post linking to a news story about the economy showing some improvement, another story today stated that the world economy is showing signs of distress. From Reuters,

Economists in Wednesday’s poll took an axe to the outlook for U.S. economic growth following a raft of dire jobs and industrial data this month, while keeping their long-held view for weak euro zone and UK growth until the end of next year.

Only the Japan saw an upgraded outlook in the latest poll thanks to reconstruction efforts that have gained pace since the March 11 earthquake and tsunami.

So who do you believe?  Are we recovering? Is the economy worsening? How about we just live. Function. Move forward. Spend time with our families.  Stop and smell the roses.  Hug a kid. Eat some chocolate.  Get on with life.

While the housing market crashed a couple of years ago – and the blame was shared by many – my personal belief is that the full depression recession began when gas prices jumped to over $4 p/gallon in middle America.

Relief (for now) seems to be in sight.  According to MSNBC.com, the Labor Department is reporting a fall in food prices.  Additionally, gas prices are coming down according to AAA.

Lower food and gas prices “should provide some near-term relief,” Vitner said, “but a sustainable pickup in spending will not likely occur until job growth picks up and the unemployment rate falls.”

There were some encouraging signs that hiring could pick up in the second half of the year.

An eternal optimist, I shall remain hopeful the economists are right!

The big supply of homes now for sale in the U.S. is driving home values down even more.  Double dip, anyone?

Although some areas still boast fairly competitive REO (or bank-owned) sales – there is plenty of competition as buyers try to snatch ones in good condition for low, low prices – other areas have some ugly price drops going on.

According to CNN Money,

But in some areas, the discounts were ever greater: In New York State, the discount for REOs was 53% during the first quarter. And it was nearly 50% in Illinois, Ohio, and Wisconsin.

Also weighing on market prices are “short sales,” homes where the selling price is less than what is owed by the borrowers. These sales sold at an average 9% discount.

Including both REOs and short sales, Ohio had the biggest discount of any state, at 41%.

Terrible news for sellers in those states.

New construction in my own area recognizes the overabundance of existing homes for sale. In my town, only three permits were pulled last month where in 2005 there were at least ten times that amount.  The waiting for a housing recovery continues.

Photo by Slideshow Bruce via flickr creative commons.