Given that the Federal government has offered a new program for refinancing, rates are again falling in what has been labeled as “wait and see,”

In the meantime, borrowers in the United States wait to learn if they really will be able to refinance their mortgages now that regulators made changes to a federal refinance program designed to help borrowers who owe more than their houses are worth.

Rates are now at 4.33 percent for a 30-year fixed mortgage.  It will be interesting to see if borrowers line up to take advantage of the program… more interesting to see if the program works!

I have had only one experience with dealing with a bank to contact the unknown owner of a home.  The person had lost her job and was behind on both home loans.  Foreclosure was imminent.  The bank I worked with was the second lien holder and in the end they lost everything – except the ability to sue the homeowner for breach of contract.

I had nothing to offer the homeowner and the lien holder really could not offer anything either.  However, if a  bank holds the FIRST lien on a property, they have more room to negotiate.  And what they banks are negotiating is “cash for keys” where they pay homeowners to move out without destroying the house.  They turn in the keys of a home in good condition for cash.  From MSNBC,

[A real estate agent] She’s typically able to offer them between $500 and $2,500, depending on the lender, if they agree to move out within 30 days, leaving the place “broom-swept” clean.

advertisement

Foreclosure experts note that “cash for keys” may become more mainstream not just for foreclosures but also for short sales, where an owner is trying to sell their home for less than they owe. In those cases, the lender must agree to accept the sale price.

It makes good sense to take the money and run, especially if you’re going to be evicted for non-payment of mortgage anyway.

Depending on your place in life, depending on how you look at the stats, you may be getting a good amount for your mortgage interest deduction.  Or maybe not.  From RealTrends,

For example, if the cutoff for where middle class ends and upper class begins is $100,000, then the group of people making over $100,000 represent 41 percent of people who claim a mortgage interest deduction, and they get 82 percent of the total benefit. Maybe it’s not surprising to anyone, but they also pay about 82 percent of all taxes. So, you would think, OK, the most benefit goes to people who make the most money (and probably have the more expensive homes and mortgages), and pay the most taxes. Fair, I guess.

Click through to the article for the other side of the story.

Photo by ktylerconk.

A good friend of mine has determined she just can not afford to sell her house through a real estate agent because of the cost of commission for a house with a value that dropped.  She is trying to sell her house on her own.  Meanwhile, more sellers are finding that the advise of agents is invaluable so there has been a drop in the number of “For Sale by Owner” houses on the market.  From Realty Times,

FSBO sales accounted for 14 percent of the market in 2003 and 2004 when the market was booming. Sellers took advantage of the fact that many times a simple sign or newspaper listing could sell a home in days, especially in highly desirable market.

2010 saw only 9 percent of sales originating from FSBOs. According to the report, the majority of FSBOs take place in rural areas and central city locations, both areas that experience less traffic. The boom of the mid-2000s is over.

Whether it’s through an agent or on your own, any sale with a fair price is a good deal today!

I once listed a house that was terribly vandalized, but not by the owner (as so many are these days as an angry reaction to foreclosures).  The home had been vandalized by neighborhood teens after it sat empty for several months.  They’d set off fireworks (it’s a wonder it hadn’t burned to the ground).  There were huge holes in the walls.  And there was paint on carpets.  The damage was so severe that the seller allowed a renter to come in for free for several months to make repairs in lieu of a lease payment.  Repaired, it sold a year later.

Today, though, finding damaged homes is common.  Fixtures are stripped from the home (lighting and plumbing), holes in walls, mold, the list goes on. From Zillow.com,

According to data from a survey by Campbell Communications, 13.9 percent of all real estate owned by a bank or agency in 2010 was so damaged by deliberate vandalism or harrowing neglect that the property would not qualify for a standard home loan. That has pushed the market for damaged properties toward investors, who often obtain the house at a more significant discount than undamaged foreclosures or short sales, according to the Campbell survey’s analysis.

“It’s been quite severe and drastic because so many homes don’t qualify for FHA (loans), which is the loan most people have,” explained Shaffer.

It hearkens – for me – back to why I will always leave a house clean when I move away… I don’t want my neighbor friends to hear about how awful I left my old house!  Today, though, perhaps this is no as important to people.

Note: The photo caption from Zillow says the homes in the wall were damage from a hammer.

With so many people living paycheck to paycheck, very few actually take the time to set achievable financial goals.  Someone who does is Tracey who writes Making Cents. In her fantastic blog, she displays what her goals are in the right column, but her writings reflect her little (and big) achievements. For example,

I put a few extra bobs through to my mortgage, but most of the rent money over the next 3 weeks-ish will have to go towards a lawn mower and wireless router (so we can both use the internet at the same time). After that, the Emergency Fund needs topping up, and that will likely take all my spare cash until January/February.

Bravo Tracey. Keep up the great job of being financially responsible for your future!

With Fall in full swing in most of the U.S., it’s time to start thinking about how to reduce your heating bill.

Some tips include:

• Make sure that windows and doors are properly caulked.
• Keep the refrigerator door closed unless you have to because that appliance drinks the most energy.
• Change your air filters monthly.
• Wrap your water heater in a blanket or other insulation.
• Invest in a programmable thermostat so the house is heated when you’re actually home.

Hopefully these simple tips will help you save at least a little bit of money as the months turn cold.