2011 was a year of pain, a year of gain.  Pain for people who lost homes or couldn’t qualify for loans.  Gain for those who could get loans or paid cash because of great rates and inexpensive houses.  Here are our top stories from 2011 that document some of this.

Rates Approach 1950′s Low – If you want to refinance your mortgage loan and you can qualify, this is a great time to do it!  Mortgage rates are approaching the lowest rates in history – the 3.94 percent average that was recorded in the 1950′s.

One in Four Homes Underwater – While I do not believe my family is underwater in the value of our home, after almost nine years of living here, we are only at the “break even” point.  That is absent any real estate agent fees that would be paid if we chose to sell.  That is if there is no further job loss.  That is barring any major medical problem and falling behind on payments.

Living in Small Spaces – 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.

Flipping Not Often Successful – If you decide to take on buying a house to flip, do so with your eyes wide open.  You must do a market analysis first and then get a solid estimate on what the repairs will cost (including the time investment).

What is Loan Fraud? – Loan fraud is one of the many reasons this country has been in a foreclosure crisis for the last few years.  But what is loan fraud?  It is when the truth does not prevail on a loan application… perhaps something is “whited out” or income is reported incorrectly.  Maybe a buyer says they will be occupying the house, but their intention is to rent.  This is all loan fraud.

Home Ownership After Foreclosure – As the job market slowly recovers, people again want to buy their own home.  The question arises about when they will be able to do this.  While foreclosures stay on a credit history for at least seven years, it could take only three years to qualify again to buy a home.

After looking at some of these highlighted stories, I’m pretty glad to say goodbye to 2011. So long!!

Photo by Tania Sheko.

Cash buyers accounted for a whopping 38 percent of home sales in 2011, up 4 percent since the previous year.  According to date compiled by Housing Research Pro, the cash trend is expected to continue,

Between tight lending standards and a desperate search for yield by investors, cash purchase of homes (especially distressed properties) became even more common in 2011 than last year.

Investors are the key buyers in the cash market as regular buyers are sticking with their current homes and opting to rent.

From our Shak to yours, wishing you a very Merry Christmas!

There are tons of home upgrades and renovations that can be made to a house, but some should be avoided if you are planning to add value to the home for when you sell.  Kitchen renovations are always a good choice.  Adding tile to the floors, new counter tops, and stainless steel appliances will certainly help the house stand-out to buyers.  However, adding a swimming pool could be a huge turn-off.

Moneyning has a great write-up about what type of home renovations will not add value to you home,

Adding green technology. Sadly, being good to the environment is one of those things that everyone wants but no one wants to pay for. Though the technology for solar and geothermal energy is getting less expensive, these are still projects that will cost you but won’t necessarily impress your future buyers. If you’re thinking of adding solar panels or radiant heating to your home, do it for your own reasons.

Read the full article to see what else you should avoid when renovating to sell.

Merry Christmas!

Photo by Michael Senchuk.

With the “Occupy Wall Street” movement in full swing, people are protesting the power that major banks and multinational corporations have over the democratic process.  Protesters maintain that Wall Street played a huge role in creating an economic collapse that has caused the greatest recession in generations.

It appears that perhaps their theories are not too far off, as evidenced by the charges brought against former executives of Fannie Mae and Freddie Mac by the Securities & Exchange Commission.  From CNN Money,

The suit claims that the executives knowingly approved of misleading statements, downplayed the size of their holdings of subprime loans and falsely claimed that their risky investments were minimal and manageable.

“Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was,” SEC enforcement chief Robert Khuzami said in a statement. “These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books.”

While I would never wish trouble on anyone, when someone commits fraud they should face consequences. Not only should regular people be watching the outcome, but I anticipate the world will watch as well.

If you want to refinance your mortgage loan and you can qualify, this is a great time to do it!  Mortgage rates are approaching the lowest rates in history – the 3.94 percent average that was recorded in the 1950′s.

First, lower payments. Second, you’ll get a month “off” making that mortgage payment – at least a month off at the beginning of the loan; you’ll still pay it at the end.   From MSNBC.com,

The average rate on the 30-year fixed mortgage fell back down to 3.94 percent, the record low set earlier in the fall.

Low rates offer a historic opportunity for those who can afford to buy or refinance. Still, few people are able to take advantage of the record-low rates or have already done so.

The rate on the 30-year home loan fell from 3.99 percent the previous week, Freddie Mac said Thursday. The 3.94 percent average is the lowest on records dating to the 1950s.

These really are incredible rates, but have not done much to help the housing market.  Time will heal that gaping wound.

Is it just me or am I seeing a new trend with Christmas trees?  I’m seeing gold and silver shiny decorations poking out of the top of trees.  Here’s one…

I also kinda dig the bulbs hanging above the fireplace.

Photo by Chris McFarland.

With 25 percent of delinquent mortgages across the nation belonging to investors, flippers played a big role in the housing implosion that began in 2006. According to MSNBC.com, purchases by people who owned other homes contributed significantly to the inflating housing bubble – ramping up prices across the nation.

By that same inflation of prices, values dropped just as precipitously when the bubble burst.

Investors defaulted in large numbers after home values began to drop in 2006. They accounted for more than 25 percent of seriously delinquent mortgage balances nationwide, and more than a third in Arizona, California, Florida, and Nevada from 2007 to 2009.

As a result, millions of homeowners saw their home values decline so that they were worth less than the original purchase price. Foreclosures skyrocketed as people couldn’t or refused to pay their underwater mortgages. Residential construction also languished, putting hundreds of construction workers in the hardest-hit states out of work.

Cash buyers are best positioned today to step in and save the housing market.