More people got bank loans and bought houses in November, but sales are still sluggish overall. Image from Wikimedia Commons.

The number of people getting bank loans for houses is increasing. Existing home sales crept up over November for the third increase in four months. However, sales are far below the levels that were seen last year.

More homes being sold and bank loans taken out for purchases

The housing market is still struggling to recover, but there are glimmers of hope in that the number of people taking out bank loans or going to a loan company to purchase a home is increasing, according to USA Today. The seasonally adjusted rate of existing home sales increased to a rate of 4.68 million units per year. The increase for November home sales was the third increase in the rate of home sales in four months. Western states had the largest increase, as sales in the West increased by 11.7 percent, though areas like Nevada and Arizona are still struggling. The Midwest had a boost of 6.4 percent. The Northeast and the South had the smallest increases, rising by only 2.7 and 2.9 percent, respectively.

The bad news

Despite an increase in home sales and more people willing to take out personal loans to buy a home, it isn’t all good news. Home sales over the past year, as opposed to just the past few months, are still dismal. November home sales for 2010 were actually a big drop. About 30 percent fewer homes sold in November 2010 than in November 2009. It’s harder to get a loan, and few people feel safe enough to buy. Home sales are on pace to record the lowest levels in sales since 1997. Applications for mortgage loan modification and new loans dropped in November, but that may be due to few people wanting to buy so close to the holidays.

Not the greatest signs

The real estate industry is still struggling to regain its footing, and the supply of available homes, more than nine months worth, is still more than it should be in a healthy market. However, as long as gains keep getting posted consistently, it will get there eventually.

Sources

USA Today

Bank of America could conceivably be paying for the mortgage loan modification mess for decades. (Photo Credit: CC BY-SA/Michael Gray/Flickr)

Waiting for mortgage loan modifications that banks fraudulently promised has thrown thousands of American families into foreclosure. Bank of America, perhaps the nation’s worst offender, has been a target of the Federal Reserve because of mortgage bonds for a while, and now the State of Arizona is stepping in on behalf of its homeowners. The Associated Press reports that state Attorney General Terry Goddard has filed a civil lawsuit against Bank of America for what he claims is multiple violations of consumer fraud law by “misleading consumers” who are seeking mortgage loan modification.

B of A lied to mortgage loan modification customers

Reports indicate that despite a string of assurances that the mortgage loan modification would go off without a hitch – a string of assurances that would last many months – Bank of America still foreclosed on hundreds of Arizona homes. Throughout the waiting period, many homeowners whose mortgages were underwater continued to make payments, only to find later that B of A had lied and would not grant a mortgage loan modification. Foreclosure was the next nasty step.

“Those people could have used that money for something else,” Arizona Attorney General Terry Goddard told the AP. “They were deceived into continuing to make mortgage payments when they had no hope of saving their homes.”

Consumer complaints spurred Goddard to action

After receiving a massive number of complaints from Arizona residents regarding Bank of America’s mortgage loan modification practices, Attorney General Goddard took action more than a year ago. There had been talk of a settlement dating back to April, but those talks dissolved yesterday. Today, the State of Arizona has filed suit against Bank of America in Maricopa County Superior Court. According to Goddard, the State of Nevada is expected to file a similar lawsuit.

Sources

Associated Press

A tale of B of A mortgage loan modification woe

Paying Mercedes rates on a Mercury budget? Look into auto loan refinancing. Image from Wikimedia Commons.

Some people might be led to believe that loan modification is just for mortgages, but that really isn’t the case. You can refinance your auto loans, too. In fact, right now could be a better time than ever to refinance car loans, as rates for car loans are lower than they have been in a while. You can turn your car loans into low interest loans if you refinance at the right time.

Refinancing not only for mortgages

You can refinance a car loan just like you can get mortgage loan modification. In fact, the rates available for car loan refinancing are low enough right now that you may not be able to afford not to refinance your car. According to the Washington Post, auto loan rates are trending lower. Lenders are looking to lend, and dealerships are looking to sell. However, bear in mind that there’s a difference between a loan you get from a bank and one from a dealership. Loans from a dealership often carry higher rates because they’re trying to make more money as the middle man between you and the bank.

What’s the catch?

There is, as there always is, a small catch. Auto loans are tied to your credit score; the higher your score, the lower the rate. So auto loans for bad credit may not be able to be refinanced or even modified. The same article in the Washington Post puts high credit score auto loans at 5.7 percent, but those for low credit score borrowers are as high as 18.5 percent. There are also fees and conditions imposed by each individual lender, so make sure you do your homework.

To refi or not refi?

Well, this is available more for people with great credit, rather than for those who aren’t. Also, you want to be careful of who advertises loan modification. The fastest growing type of scam around is the loan modification scheme, so make sure you know who you’re doing business with before you commit or hand over any cash.

Further Reading

The Washington Post

More mortgages are going underwater, and the government's modification program isn't working. Image from Wikimedia commons.

One of the first things the Obama administration did once in office was to offer a mortgage loan modification program called Make Home Affordable, or the Make Home Affordable Modification Program. The way it worked is that the government would work with the loan company to make a borrower’s mortgage more affordable. People who did get the modification on their loans also may be more likely to default on their loans anyway. More people have been dropped than have stayed in the program.

Tune in turn on drop out of mortgage mod

There were 96,025 people dropped from the program for this month, according to CNN Money. The number of people that have been dropped so far is 616,389, and the number of successful modifications is 434,717. That’s a failure rate of about 60 percent. That means a person is more likely to not have a successful outcome if they do enroll in the program. Essentially, that means that enrolled homeowners are ensuring a few extra pay days for loan lenders, possibly at the expense of the taxpayers.

Fewer people entering the program

A homeowner must first go through three trial months before a permanent modification can be made. According to the Wall Street Journal, there were 24,577 trial modifications granted for July, compared to 38,728 trial modifications in June. For homeowners who successfully completed the trial phase, 37,000 permanent modifications were granted in July compared to 51,205 permanent modifications in June. The program either needs more short term cash or fewer people can apply or need modification.

Not exactly a home run

There were also 12,912 people whose permanent modifications were canceled in July. But 272 had their permanent modification canceled because they paid off their mortgages. What this ultimately means is that the program has not been as successful as planned. This also means that if a person is thinking about entering into the program, they have around a 60 percent chance of failing if they get in.

Further Reading

Wall Street Journal

CNN Money

Mortgage closing costs are getting expensive for people looking to pay off mortgages or sell their homes. Image from Wikimedia Commons.

One of the costs of a mortgage loan is the closing costs, or the fee you pay when you finally pay your mortgage off or sell your home. The costs can be considerable, and the average closing cost nationally is several times more than the average payday loan. The average amount of a closing cost has risen nationally, although not universally. New regulations are in place, and with the turmoil of the real estate industry, it will be hard to tell when it has recovered.

States with high closing costs

According to Bankrate, the most expensive state in the union for closing costs is New York. The closing costs for paying off a mortgage in New York would have a king hurting for a cash advance. The average New York closing costs for a $200,000 mortgage is $5,623. It’s too bad there isn’t  closing cost modification to go with mortgage loan modification. Considering how strapped many people are these days, that sum will send most out to get a personal loan, as not everyone has that much instant cash socked away for a rainy day. Texas, Utah, California and Alaska were the five most expensive states to close a mortgage in.

Closing costs rise nationwide

Closing costs for mortgage loans rose 36.6 percent overall. Lender costs rose 22.8 percent, and third party fees went up 47.2 percent. Last year, the average cost was $2,739 and that rose to $3,741. That’s an increase of more than $1,000, which is about three times the typical loan until payday. Since the housing market is depressed, funding for a mortgage loan is harder to secure. There are also more rules governing many aspects of consumer finance.

Costs to lenders rising also

Part of the increased rates is the fact that costs have gone up for lenders as well. A mortgage lender now has to provide a good faith estimate of the closing costs, and penalties are assessed as of this year if the estimates come in under the actual costs. The Federal Reserve also banned bonus incentives for loan brokers who sell customers on higher rates than they might normally pay, according to the Los Angeles Times. However, if turning a profit depends entirely on bilking the consumer, then change is needed to a business.

Further Reading

Bankrate survey of closing costs

Los Angeles Times

Sometimes, getting out the calculator and getting creative with budgeting can create a little debt relief too. Image from Wikimedia Commons.

As the economy is not in the best of shape, a lot of people are looking to divest their debt. Getting a better interest rate thanks to mortgage loan modification is not a bad way to go, and some people looked to get some instant cash with a second mortgage to pay off other debts. When the market began to tank, that’s when those strategies started to backfire. True debt settlement relief may be harder than you think, and you have to be very careful about who you contract to help you.

Hard to fix debt with more debt

Before the real estate market took a nosedive, it was common for people to either refinance or take out second mortgages to pay other debts, such as their credit cards. This only borrows from Peter to pay the debt with Paul. If you can get a mortgage refinanced to the market rate, currently less than 5 percent, that can be helpful. However, according to Newsday, that is if you have the credit rating to qualify. So if you have any negative dings on your credit score, you may not be able to get a cash advance from your budget with a lower rate if you can’t qualify.

Beware wolves clothed as sheepish debt counselors

You also have to be careful of who you go through for debt consolidation. You may be better off if you get a personal loan to do it yourself. There are plenty of non-profit agencies, such as the National Foundation for Credit Counseling, that can help you out of debt. These services are often free, so you won’t necessarily be sent running for payday loans to pay for help getting out of debt. Also, getting a debt consolidation loan at a higher interest rate than the debt you already have because of your credit rating guarantees paying more in the end.

FTC to tackle dirty debt practices

Financial reform has been in the air for some time. One of the big projects for the Federal Trade Commission is quashing crooked debt relief services. According to the Washington Post, a debt consolidation service can’t charge a fee in advance and has to disclose all potential costs to customers.

Further Reading

Washington Post

Newsday

Some may need a submarine in this real estate market. Image from Wikimedia Commons.

A recent survey indicates that just more than 20 percent of American homeowners are underwater on their mortgages. That means that one in five people who own their homes would be no better off with mortgage loan modification, even if they could get it. The number of people who owe more than their homes are worth is slowly but surely declining. However, some areas are worse off than others, as large metropolitan areas are still experiencing greater numbers of foreclosures.

A fifth of all homes underwater

According to CNN Money, a real estate survey indicated that just more than 20 percent of American home owners owed more on their mortgages than their homes are worth. However, the 21.5 percent who are currently underwater is down from 23.3 percent from the previous quarter, which means some homes gained more than a payday loans worth. This means there is less negative equity. That said,  one in five people still probably won’t get offered mortgage loan modification, as it would do them no good. As less equity means less debt relief in a depressed market, some would be better off if they were to get a personal loan to get out of a house inching closer to foreclosure.

Values climb but so do foreclosures

Real estate values are starting to climb in some areas. Granted, one can never expect to buy a house for a cash advance, but home prices are starting to climb. Major metro areas where most homes are underwater benefited most. However, the number of foreclosures increased for 75 percent of all major cities despite home values creeping up. Las Vegas, Nev., is still the worst city in America for real estate. Unemployment there is higher than 14 percent, and almost 74 percent of homes in Sin City are underwater. About one in 15 homes are in foreclosure.

Slow and steady

There are few relative improvements to speak of. The unemployment rate has dipped slightly, and some people are not as bad off as they used to be on their mortgages. What recovery has taken place is doing so at a very slow pace.

Further Reading

CNN Money on Underwater Mortgages

CNN Money on Foreclosures

To get the funding they need, small businesses must rely on the only credit left. Image from Wikimedia Commons.

Contrary to popular belief, there is still credit for small businesses to obtain. Unfortunately, the credit they can obtain isn’t in the form of a business loan from a bank or the Small Business Administration as much anymore.  These days, more small businesses are having to rely on credit cards.  A lot of funding that used to be readily available for small businesses just isn’t there anymore, and unless you’re running a Fortune 500 company, it’s hard to get the help you need.

Small business credit cards booming

According to CNN Money, more small business owners are having to rely on their credit cards to get the funding they need.  Many who apply for business loans are getting denied, but getting approved instead for a credit card.  The first quarter of 2010 saw a reduction of $40 billion in lending to small businesses, which is the lowest level since 2008.   Less than half of small businesses looking for funding in 2009 were actually able to secure a loan of any sort, and as of June of this year, the portion of the stimulus package that was dedicated to small business lending lapsed into oblivion.

What is in the way?

The normal way a small business gets a loan to get off the ground, or help them expand, is through either a small or mid-size bank.  There is also the Small Business Administration.  However, smaller banks do not have as much liquidity as they used to, and the SBA stimulus funding has run dry.  When a business owner applies for a loan, to buy equipment or start a company, they can pledge certain things as collateral, like property.  Since property isn’t as valuable anymore, less credit is going to be made available. They are forced then to rely on the one source of credit that’s readily available, which is credit cards.  If a piece of property isn’t as valuable anymore, it’s hard for a business to get mortgage loan modification to free up cash.

Someone is reaping all the benefits

An installment loan from the SBA includes a minimum term of seven years.   Credit cards, on the other hand, can take forever to pay off if one gets locked into making only minimum payments.  The difference between the credit card that John or Jane Q. Public has and a business owner has is that a business credit card is not covered by the CARD Act.  The main source of funding for credit cards is the biggest banks.  Bank of America, JP Morgan Chase, Citibank and Wells Fargo all lend huge amounts of money on credit cards.   Wait a moment; who was it that got the most bailout funds again?

Further Reading

CNN Money

http://money.cnn.com/2010/07/14/smallbusiness/bernanke_lending_credit_cards.fortune/

NY Times piece about SBA loans

http://boss.blogs.nytimes.com/2010/07/11/s-b-a-lending-plunged-in-june/

Auto loan modification scams are multiplying online as con artists regulated out of the mortgage loan modification market prey on unprotected car loan consumers. Flickr photo.

Ads for auto loan modification scams are all over the Internet. Auto loan modification companies promise to negotiate with lenders to get customers lower car payments — for a hefty upfront fee. But consumer advocates and government regulators say most auto loan modifiers promising lower car payments will take your money and provide little or nothing in return. Consumer complaints about auto loan modification companies are increasing nationwide. In June, Florida’s attorney general shut down Auto Relief Group, a south Florida company that has an F rating with Better Business Bureau.

Auto loan modification: a cautionary tale

Pitches by auto loan modification companies offering vehicle loan modification services claim they have lender connections and expertise to negotiate dramatically lower interest rates or extended payments. WKYC in Cleveland reports that an unemployed student was looking for help with her $420.00 per month car payment when a television ad led her to Auto Relief Group. The auto loan modifier promised to lower her 13 percent interest rate to 8 percent and extend the loan, which would result in a lower monthly car payment of $290.00. They also claimed they often worked with Honda Financial Services, her lender.

Lower car payments never happened

The unemployed student provided her bank account information to Auto Relief Group and agreed to let it take a one-time advance fee of $298 from her checking account. WKYC reports that when she didn’t notice any reduction in her monthly car payment after a couple months, she contacted Honda directly and learned that Auto Relief Group had never contacted her auto lender. When she confronted Auto Relief Group, she was told that the $298 fee was for an “options report” the company provided and that if she wanted them to contact her lender, it would cost an extra $100.

Scammers charge for what you can do yourself

Other consumer complaints about Auto Relief Group indicate the information in the options report is nothing more than what anyone can get from free by calling their auto lender, such as the amount of the loan, the current value of the vehicle, current interest rate, balance, etc. The student in Cleveland also discovered that Auto Relief Group had made two additional $298 withdrawals from her account without her authorization.

Mortgage loan scammers migrate to auto loans

Some financial experts have said that auto loan modification scams are attracting some of the same scammers who modified mortgage loans until regulations shut them down. SunSentinel.com reports that claims on auto-loan modifier websites and ads — “We can help you keep your car, truck, boat or RV!” “Stop repossession and make your payments affordable!” — are almost identical to the promises mortgage loan modification scams once made to property owners facing foreclosure. Many of those promises weren’t kept and homeowners lost their homes and millions in upfront modification fees.

Auto loan modification companies unregulated

New laws that went into effect this year drove away most mortgage loan modification scams. The new laws require mortgage modifiers to get mortgage broker licenses and they can no longer charge upfront payments. But auto loan modifiers don’t need to be licensed, certified or even trained. The Federal Trade Commission is considering a new rule that would prohibit upfront fees for debt settlement services. However, the proposed FTC action would not include auto loan modifications.

So you’re on your own. Consider yourself warned.

Mortgage rates may be low, but that's meaningless unless people want to buy homes. Image from Wikimedia Commons.

As the real estate market has been closely watched, there are numerous indicators to keep an eye on, one of which is overall mortgage rates — the average interest rate charged on a mortgage loan.  Despite a slight spike in existing home sales, overall mortgage rates are staying down. This may sound like a prelude to greater numbers of home purchases. However, coupled with higher unemployment, it may mean a recipe for a longer road to recovery.

Mortgage rates down to historic lows

Industry mortgage rates are down to near historic lows.  According to the Wall Street Journal, it was anticipated that rates would rise after the Federal Reserve stopped purchasing mortgage securities, but that did not happen. Instead of rising to the predicted 6 percent, the rate dropped through the month of May to 4.86 percent.  In fact, by the middle of May, the number of applications for loans for purchasing new homes was at its lowest level in 13 years.  If rates continue to stay this low, people might be able to avoid needing mortgage loan modification.

Unemployment comes into play

The rates may be down at this point, and they are likely to stay that way if demand stays low because of high unemployment rates. According to CNN, it is believed that the spike in existing home sales had everything to do with the first time homebuyer tax credit, and once that expires, there will be less demand.  According to the WSJ piece, even if there are fewer people looking to borrow, those with existing mortgages would do well to refinance now, while rates are low.

The future for housing

For now, it is apparent that demand was temporarily boosted by the tax credit being offered for homebuyers.  The market currently has lower levels of demand, and as demand lowers, so does scarcity and therefore price. However, this lower demand is coupled with more difficult access and less willingness to commit to a mortgage because of the job market. This means that the housing market may stabilize at a lower point, and we may not see a real estate market at previous levels for years to come.

The Android vs iPhone battle got more interesting as Android phones outsold Apple's iPhone in first quarter U.S. sales. Flickr photo.

The iPhone vs. Android battle just got more interesting as the underdog Android phone outsold Apple’s iPhone in first quarter 2010 U.S. smartphone sales. Android won this most recent iPhone vs. Android battle, but Apple is still winning the iPhone vs. Android war. Apple enjoys a huge lead in total smartphone sales over Android. Blackberry dominates the field. However, the Android market is trending upward, while Apple iPhone sales are flat and Blackberry sales are down. Some analysts think those trends will continue, allowing the Android phone to tighten the iPhone vs. Android margin.

Android vs. iPhone milestone

The Android vs. iPhone matchup hit a milestone when the Android phone captured 28 percent of smartphone sales last quarter according to the NPD Group. NPD reports that Apple’s iPhone won 21 percent of smartphone sales, while Research in Motion’s Blackberry took 36 percent. According to ComScore, a digital market research firm, a key stat in Android vs. iPhone is that Google’s Android operating system had just nine percent of the market as of February 2010, compared with the iPhone’s 25.4 percent.

Android phone gains, others falter

In winning the latest round of iPhone vs. Droid, PC World reports that Google’s OS is the only smartphone OS whose share of sales grew over the previous quarter. The iPhone, meanwhile, is flat, while Windows Mobile, BlackBerry and WebOS quarterly sales shares are falling like a mortgage loan modification. If this trend continues, PC World’s J.R. Raphael said Android will catch up to its competitors for total market share in a hurry.

How did Android beat iPhone?

Android phone sales may have overtaken Apple’s iPhone, according to the Los Angeles Times, because of  Google’s freewheeling partnering tactics that have gotten the Android operating system onto as many phones, served by as many wireless carriers, as possible.  There are now more than 30 Android-powered devices from 12 equipment manufacturers. Android devices are available from every major wireless carrier, including T-Mobile, Verizon, Sprint and AT&T.

Is iPhone Verizon on the horizon?

The much speculated iPhone Verizon offering looms larger as Google wins the latest round of the iPhone vs. Droid scuffle. Apple is tied to AT&T in an exclusive partnership in what may be a saturated market. Ezra Gottheil, an analyst with Technology Business Research, told Computerworld,”That’s your classic technology acquisition curve. Of those in the U.S. who are interested in an iPhone and willing to put up with AT&T, pretty much all have already bought one. What’s left for Apple — as long as it’s tied to AT&T in its exclusive partnership — is largely the iPhone replacement market.”

Worldwide iPhone soars

Most analysts expect iPhone Verizon to happen eventually in the U.S., but Apple’s not saying when. Meantime, Apple is forging ahead in the iPhone vs droid matchup everywhere else. Last month Apple announced Worldwide iPhone sales were up 131 percent in the first quarter compared to the same three-month stretch in 2009.

Fannie Mae Headquarters. Image from Wikimedia Commons.

Mortgage giant Fannie Mae just announced record losses, and the company is asking for another $8.4 billion from the government to stay afloat. Fannie Mae has been in conservatorship — or possessed by the federal government — for some time.  Its losses have grown almost exponentially, and have posted the 12th consecutive quarterly loss.  Clearly, any fast cash from the taxpayers to prop up the mortgage house has not been put to good use, and this ship is sinking fast.

Fannie Mae posts 12th consecutive loss

For the 12th consecutive quarter, Fannie Mae has posted a loss. Not only that, but the mortgage financing giant has seen about $148 billion go down the drain over that time. That’s almost the entire GDP of Chile. Though it may seem the effects of the housing recession and bailouts are already forgotten by Wall Street, Fannie Mae and Freddie Mac are still troubled. The losses posted by Fannie Mae for this quarter, according to the Wall Street Journal, are only $11.5 billion, contrasted to first quarter 2009 losses of $23.5 billion.

Fannie Mae under conservatorship

In 2008, as the housing recession threatened to collapse the entire U.S. financial system, Fannie Mae and Freddie Mac were both placed in conservatorship. Essentially, they were seized by the Federal government because they couldn’t stop losing money.  Because Fannie Mae had assumed the risk for so many mortgages, as the numbers of defaults rose, so did the company’s losses. A recent article on CNN Money reports that the rate of foreclosure has slowed in some areas, but still managed to rise by 16  percent.

The impact

Fannie Mae and main rival Freddie Mac are huge mortgage lenders in the U.S., and they hold trillions in mortgage assets.  Portions of those assets have become toxic.  Mortgage loan modification will only do so much good, and if a mortgage becomes underwater, the homeowner and the bank lose money. If the trend of real estate losing value and massive foreclosures doesn’t reverse course, getting a mortgage loan will be difficult for anyone.

The silver lining

According to the same piece in the Journal, Fannie reported that 5.47 percent of its loans were 90 days past due in March. In February, it had been 5.59 percent. This means some modest improvements are beginning to happen. However, the question becomes how long before small improvements add up to a positive direction for the real estate market overall.

The S&P Case Shiller home price indexes have shown some gains, though still depressed. Photo from Wikimedia Commons

The S&P Case Shiller home prices indexes have reported gains, of sorts, in home prices.  The price indexes in February showed a rise in home prices compared with the previous February, showing a modest spike, but the prices were still technically modestly declining.  Though the housing market is not fully recovered, it is believe to be showing signs of improvement.  With home prices still somewhat declining, some people are looking into mortgage loan modification to get out from underwater mortgages.

Case Shiller reports first gain since 2006

According to MarketWatch, the current spike in February home prices in major metropolitan areas was the first month of climbing home prices since December 2006.  Home prices gained 0.6 percent in February compared to February of a year ago.  The bump in home prices is credited for that, as many improvements in real estate these days are, to the homebuyer tax credit. The prices aren’t low enough to buy a home with a small loan, but they are low enough to stimulate some into buying.

But there is also bad news

The bad news is that home prices are actually still declining.  The same study indicated that despite the increase in home prices between February present and past, home prices actually are still declining.  February home prices were actually down 0.9 percent from January. According to CNN Money, the Case Shiller home prices indexes for 18 of the 20 cities tracked experienced monthly declines in home prices, and six were at new lows.

Economic recovery can has no cheeseburger yet

David Blitzer, the chairman for the index committee at S&P said that the data would “point to a risk that home prices could decline further before experiencing any sustained gains.” He also indicated that true recovery of the housing market hadn’t truly begun, though it has shown some modest improvements.  There were recent spikes in home sales, but home sales at depressed prices only mean people are buying lower.  (Granted, as more people buy low, that will start trending prices upward eventually.)

So where are we now?

The S&P Case Shiller index of home prices is about where it was in fall of 2003.  The high point was June of 2006, and since June of 2006, home prices have fallen 32.6 percent.  It may be some time before a full recovery is realized.

Existing home sales rose sharply in March. Image from Wikimedia Commons.

Since the Great Recession had origins in real estate (at least partially), existing home sales have been of great interest. The existing home sales rose by 6.8 percent in March.  It’s believed the first time homebuyer tax credit had a hand in the spike.  Because so many people had been hard up to get the financing, and others went running for mortgage loan modification, any modest gains in real estate are welcome signs of relief.

Existing home sales reflect inventory

Existing home sales are defined as sales of single family homes that are not new construction — any single family residence not brand spanking new, in other words. The National Association of Realtors recently released its monthly report concerning existing home sales, and things are starting to look up.  More homes are available, which means lower prices.  Not that you’ll ever be able to buy a home for a couple of payday loans worth, but the sun is shining, and people are making hay, so to speak.

Inventory is up as well

According to CNN, home inventories rose by 1.5 percent, with an inventory of 3.58 million homes available.  The median home price rose 0.4 percent to $170,000.  The supply of homes (how long it would take to sell inventory at current pace) dropped from an 8.5 month supply in February, to an 8 month supply for March. Single family home sales rose 7.3 percent, to a rate (homes sold per year) of 4.68 million, up from 4.36 million in February.  According to the NAR report, 44 percent of sales were to first time homebuyers, up from 42 percent in February.

Why the sudden boom?

Late winter home sales are often affected by late winter storms, and January and February had some doozies.  Also, the first time homebuyer credit is believed to have affected sales.  An $8,000 credit off the tax bill may have encouraged some homebuyers who were on the fence.  NAR Chief Economist Lawrence Yun said the tax credit “has been a resounding success.”

Distressed homes or foreclosures

Foreclosed or distressed homes accounted for 35 percent of total sales.  Lower prices make them more attractive to first time buyers with hesitancy over the market.  Regarding foreclosures, Yun said, “In fact, foreclosures are selling quickly, especially in the lower price range that are attractive to first time homebuyers.”

So is the housing recession over?

The way markets work is that conditions constantly cause adjustments – supply and demand, Econ 101 kind of stuff.  However, depressed market conditions are guaranteed to eventually reverse – as demand lowers, supply increases, and prices lower. Lower prices mean people who want to buy will because they’re getting their desired commodity for a discount. Eventually, supply decreases and demand, and thus price rise again. The market is recovering naturally, as it always was going to.

Professor Snape may have likely gotten a set of very polarized ratings, if Hogwarts students used Rate My Professor. Image from Flickr.

When time comes to choose college class schedules, it can often feel like a shot in the dark – which is exactly where Rate My Professors comes in. Rate My Professor is an online service that allows students to anonymously rate and comment on the professors teaching at their colleges. The Rate My Professor system can be incredibly useful, but like most feedback systems, it has its flaws. No matter if you are funding your education with student loans or a mortgage loan modification, be sure you are informed about what you are getting yourself into.

Rate My Professor history

The web site Ratemyprofessors.com was created in 1999 and started as TeacherRatings.com. The web site has been sold twice and is now owned by MTVu, which is a subsidiary of the giant media company Viacom. The site was created with the idea of “enhancing your college experience, so you don’t end up taking classes that aren’t worthwhile.” Rate My Professor uses a 1-5 rating scale, with 1 being the worst and 5 being the best.

How Rate My Professor is helpful

Because Rate My Professor is an entirely anonymous web site, the ratings on it are very candid. The comments on Rate My Professor can also be very helpful to students who have no familiarity with a particular teacher or college, and gives at least some “inside information” about the professors they may not be familiar with. With more students than ever returning to school, the ratings on Rate My Professor can be like instant loans – very helpful in the short-term.

How Rate My Professor is suspect

The Rate My Professor system relies on students who are willing to rate their professors anonymously. While this could encourage more candid feedback, the anonymous system has also at times provided what could be inaccurate ratings. One study showed the the easier a class was and the more attractive the teacher, the more likely they would get a good rating on Rate My Professor. Others have expressed worry that Rate My Professor listings often give good ratings to teachers that may not provide the most comprehensive, educational or quality courses available.

Should you use Rate My Professor?

Like most other review and ratings tools, Rate My Professor can be useful. However, it is important to approach Rate My Professors with the same skepticism as other reviews. It is important to realize that the ratings on Rate My Professors are not statistically accurate, and unhappy students are more likely to rate their professors than happy students. Schools with a small number of students are also more likely to have skewed ratings, as there are not as many students to rate each professor.

Sources:

Inside Higher Education
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Shipping container homes have a long history of green building. Image from Flickr.

In countries recovering from natural disasters, such as Haiti and Chile, rebuilding housing is simultaneously one of the most important and most difficult tasks for recovery. In developed countries, there is always a demand for housing that is inexpensive, durable and environmentally friendly. Recently, UK company Affresol announced it was launching a line of modular homes made out of recycled plastic waste. If you are looking for a new type of house to buy with your mortgage loan modification, Affresol is claiming that these recycled waste homes can be put up in four days and less expensively than traditional building. However, is living in recycled trash a good option?

Affresol’s Thermo Poly Rock homes

The newest player in the recycled housing market is Affresol’s Thermo Poly Rock manufactured homes. As Business Wire reported, these homes use approximately 18 tons of recycled plastic waste in each full-size home. The patented process takes waste plastics and processes them into a rot-resistant, well-insulated, waterproof, fire-retardant material that is stronger and lighter than concrete.These homes are estimated to cost about 12 percent less than traditional construction, as well.

The estimated life cycle of these homes is 60 years – well above the Indiana University estimate of 14 years for traditional manufactured homes, but well below the 80-120 year life cycle of new construction. However, all the materials in these TPR homes can be recycled at the end of their lives, unlike new construction.

Other options for recycled housing

Affresol’s recycled TPR houses are not the only options for recycled housing, however. There are many options out there for recycled housing – some that have been fully realized and are being used around the world. Other recycled housing concepts are pretty much only concepts — but offer promise. Much life Affresol’s recycled plastic houses, these concepts each have their benefits and drawbacks

Recycled shipping container homes

Shipping containers are pretty much the definition of recycled living. Flexible, plentiful and relatively easy to move, shipping container homes have enjoyed quite a bit of press over the years. The incredibly sturdy steel containers are stacked and used in place of traditional wood framing. They still must be insulated, wired, and plumbed, but the $60 to $90-per-square-foot price tag is incredibly attractive.

Members of the U.S. Military have already had experience with offices and living quarters built in a similar method, and military payday loans are enough to start a recycled shipping container project. Traditional home building usually costs between $150-$300 per square foot. The Lego-like flexibility of shipping containers can also lead to a wide variety of designs, as the DesignCrave photo essay proves.

Earthship recycled homes

Much less flexible and portable than shipping container homes, but more insulated and airy than Affresol’s TPR houses, the Earthship design maximizes environmental factors.

First designed in the 1970s, a “classic” Earthship house starts with old recycled tires. To build the house, recycled tires are crammed full of soil and stacked as the north, east, and west walls of the house. The southern face of the house is usually made of glazed glass to make use of passive solar heating. These homes are made almost exclusively of recycled materials and most suited for climates similar to the Southwestern U.S.

Traditional homes out of recycled materials

Many builders are beginning to realize that, more than the construction of a home, it is the materials that truly make a difference. Many builders around the country are beginning to specialize in recycled material homes, proving that homes made with reclaimed materials can be just as safe, just as beautiful, and much less expensive than traditional building.

Recycled housing: Options for rebuilding devastated areas?

Of course, having a recycled and sustainable home only does good if it can actually be used and lived in. Obviously, we cannot ask countries, states or cities that are just beginning to rebuild from disasters to spend more money and time on using “environmentally friendly” construction techniques. However, with options such as the Thermo Poly Rock and recycled shipping containers that get cheap, safe housing up quickly and inexpensively, there doesn’t seem to be a reason to not consider recycled housing.

People without kids are more likely to walk away from their homes.

Many people have reasons for wanting to stay in their home, regardless of how much they’re paying. People don’t want to uproot their families or don’t want to go through the hassle of moving. However, some people are so fed up with the housing market that they’re willing to allow their mortgages to go into default and walk away from their property.

Those who choose this option generally don’t have a whole lot of money already invested in the home, don’t have kids or actually cannot afford the monthly payments anymore. Even those who got the best personal loan rates are looking at what their house is worth versus what they are paying for it and deciding that allowing foreclosure is the best decision. Here are some reasons people have chosen to do so.

10. Cheaper monthly payments

Some homeowners, realizing that it could be years before they’d be able to make a profit on their home, have decided to let their mortgages default in favor of paying less expensive rent each month.

9. Too long to wait for profit

People who purchased property before the recession and have owned it only a few years, believe they’ll save money in the long run if they simply let the bank take the house. One condo owner in Miami says he believes it could take until 2025, possibly 2040, for his condo to be worth what he paid for it again.

8. Need to move now

Many people who have to move because of employment or other reasons are finding that letting the bank take the house is simply faster and easier than trying to sell right now, in a market where no one wants to buy.

7. Political outrage

A lot of people simply are angry that the Wall Street executives who got bailed out by the government are getting bonuses again, while they are struggling to pay mortgages on practically worthless property.

6. Loan modification disappointing

The federal loan modification helped some people somewhat, but many feel it wasn’t enough. The New York Times says the plan “raised the expectations of many but satisfied only a few.”

5. Home is worth 75 percent of purchase price

Research cited in the New York Times says that once property loses 25 percent of its value, homeowners begin to seriously consider walking away.

4. Fear of future deflation

Though many economic experts believe the housing market will eventually return to normal levels, some people worry that their property will only depreciate in value. They don’t want to continue to pay for something that is losing value every day.

3. No encouragement or improvement

Though some economic indicators point to improvement, the housing market has stayed stagnant. Many people who aren’t planning to stay in one place for long, and thus foresee ending up trying to sell worthless property, would rather just let the bank deal with it.

2. No sentimental value

Sam Khater, a senior economist with First American CoreLogic, the firm that conducted the recent research, said part of what motivates people is that they simply become unattached to their homes when they decrease in value so much. “People’s emotional attachment to their property is melting into the air,” he said.

1. All of the above

For most people who decide to go through with walking away from their homes, it’s a combination. The frustration of “feeling like a sucker,” the  lack of government intervention, the high monthly payments, low property value and bleak outlook are too much. They’d rather simply mail their keys to the bank and walk away, free from future financial burden and a failed investment.

An Aerial view of the Silverdome. From Wikimedia Commons.

The Pontiac Silverdome, located in Pontiac (duh) Michigan, just outside of Detroit, has sold for a cool $583,000.  An entire sports arena, for between the cost of two and three average homes in America – that’s getting some big-time real estate on the cheap.  One wonders if the new owners will ever need mortgage loan modification.  It was bid on at auction by a private Canadian Real Estate firm out of Toronto, whose name isn’t available presently. They delivered the winning bid, but the sale isn’t final yet.  According to an article from the Detroit Free Press (See: http://freep.com/article/20091116/NEWS03/91116065/1318/Canadian-firm-submits-winning-bid-of-583000-for-Silverdome), it was costing the city of Pontiac about three times that much just to maintain the place per year, and the Detroit area isn’t exactly the land of milk and honey lately.

The former loud and proud home of Detroit Sports

A local college professor and high school sports star, C. Don Davidson, was the lynch pin.  He had grown up in the Detroit area and returned to the Detroit area in 1965, surprised to see the Pontiac area having declined since his absence.  He thought it would be a dandy idea to build a stadium for the Lions.

In 1966, he was hired by the University of Detroit in the architectural department.  (He held a Masters in Urban Planning and Architecture, and previously had helped design Jacksonville International Airport.)  His big project was an urban renewal of Pontiac, including a sports stadium.  He began with talks with William Clay Ford, owner of the Lions for a move.  By 1970, Pontiac was approved as the site for a new stadium, and he was hired as chief project designer by O’Dell, Hewlett and Luckenbach, an architectural firm.  The stadium was completed in 1975 – at a cost of almost $56 million – as the new home of the Detroit Lions.  They had previously been sharing Tiger Stadium with the Detroit Tigers, as was common even back then for professional football teams, and by fall 1975, the Lions’ new home was open for business as Pontiac Metropolitan Stadium.

Why “Silverdome?”

The top of the stadium was made of fiberglass coated with Teflon, which is white to the naked eye, but silver with reflection from the sun.  The roof was entirely supported by air pressure within the stadium.

From the ’70s until recently

In 1978, the Detroit Pistons moved in, and shared the building with the Lions until 1988.  It was the largest (it seats over 93,000; 80,000 for football) and loudest stadium in the NFL until 1997, and it’s still the third-largest stadium in the U.S.  (FedEx Field and Cowboy Stadium are second and first, respectively.)  The Lions moved out in 2001 to Ford Field.  It was largely empty afterward, though the parking lot was used as a drive-in cinema from ’03 to ’06.

The Present

The Silverdome has been host to many events, including WrestleMania III, the sporting event with the largest attendance ever (the record still stands). It’s also been host to legions of concerts – you name the huge band, they’ve played there.   By October 2009, the city of Pontiac put it up for auction.  The new owners, who will have a very reasonable mortgage on a HUGE building, plan to use it to host Major League Soccer games.  Granted, they paid more than a few payday loans, but they got an incredible deal.

If you're considering mortgage loan modification, do your research and see if it's right for you first. (Photo: photos.com)

Some consumers are looking for a mortgage loan modification now that the recession seems to be stabilizing. In the midst of the lending crash, many banks were closing their doors to even the highest-credit-scoring customers. Now that there seems to be some leveling off of the problems, consumers are trying again to procure modifications. Larry Flauter of Flauter Realty in Tampa, stated, “Now is a great time to get back into seeking modifications because prices are still low, so deals are still out there and there are safeguards built into the system.” Banks are once again moving toward underwriting, but this time with moderate interest rates and requirements. Thus, modifications are available to a wider variety of consumers. There are some things to watch out for during the process, however. Here are a few of which you should be aware.

Unlicensed Lenders

One major problem before the recession, and growing once again, is an explosion of unlicensed lenders. Almost everyone who has ever looked for a mortgage product has probably come in contact with a few. Because of the real estate bubble’s burst, many unscrupulous lenders lost their licenses. This was due to creating fraudulent paperwork or failing to disclose fees. Unfortunately, these lenders have returned with a vengeance to the real estate world. Many are now underwriting FHA-insured mortgages. For FHA-approval, they merely change their names and are able to register as a new lender. Dani Babb, founder of The Babb Group, stated, “The government doesn’t have time or manpower to track down these fraudulent lenders, so preventing borrowers from being lured into [these] mortgages will be difficult.”

Second Mortgages

Some consumers are looking for second mortgages to help them with homeownership. Although this may be helpful on the surface, they should be careful. This is a practice that occurs when homeowners need extra upfront cash. They use the extra money to pay off bills, to handle home repairs or buy necessary big-ticket items. Although there is an immediate payback, there are some long-term repercussions. These loans have substantially higher interest rates, sometimes as high as 25 percent. If consumers take a step back and look at the situation, it may be clearer. They are setting themselves up for one loan payment that is carrying the bulk of their loan. Then they’ll have another loan payment that is probably close to the first due to interest. The problem is that most consumers aren’t prepared financially or mentally to make two payments for the next few decades. If anything happens with their employment status or a disaster, they could be setting themselves up for financial ruin. It would be a better idea to put off their mortgage loan modification and save money with a second job or cut-backs. Second mortgages are almost always a bad financial idea.

Quick Claim Deed

If payments are completely unmanageable, some consumers are trying to avoid foreclosure by handing over ownership of properties with quick claim deeds. In this situation, a relative or friend agrees to make the mortgage payments until the owner can sell the home. Prospective sellers need to be careful with these types of transactions. There are some types of loans that will not sustain this type of purchase. The problem is that some government-backed loans don’t allow buyers to purchase homes that haven’t been owned by the same person for 90 days or less. A seller could find their perfect buyer, but in the end they may be unable to take the property due to restrictions on their loan agreement. The buyer not only is unable to make the purchase, but they also lose the loan.

Mortgages – A Pledge Until Death

Mortgages can be difficult to handle and mortgage loan modification plans can be equally as strenuous. Consumers need to be sure they understand the requirements for their loan, the changes they want and the changes they are being offered before they sign. Taking extra precautions will pay off in the long run.

That expires today, bucko. But don't worry: mortgage loan modification is available today and after 09/09/09. (Photo: flickr.com)

If you’re looking to do a mortgage loan modification or play the lotto, 9 9 09 (or 9/09/09 if you prefer, as I do) may just be the day to do it. Or perhaps you want to get your hands on the new game “The Beatles: Rock Band” or see the new apocalypse movie “9?” While 09/09/09 may not seem special to you, numerologists would beg to differ. To them, it’s a day to celebrate. Or, depending upon their point of view, it could be ominous stuff straight from the Mayan calendar. It’s lined upon the calendar with 1 Imix, which they consider to be the same day as the Big Bang. Are you ready to get caught in the contraction of the universe? Better bring an umbrella; things are getting awfully dense in here.

Seriously, 9/09/09 is a fun day to do the math. Wednesday and September each have nine letters. According to a Yahoo! News roundup at http://news.yahoo.com/s/livescience/20090908/sc_livescience/why090909issospecial, September 9, 2009 is the 252^nd day of the year, and the digits 252 add up to nine. 9+9+9=27, and 2+7=9. In fact, take nine and multiply it by any single-digit number. The two-digit answer produced will have digits that add up to nine. But it also works with two, three and four-digit numbers multiplied by nine. For instance, 9×62=558. If you add the digits of that answer, you have 5+5+8=18. And guess what? 1+8=9. For this fascination with numbers, we have Pythagoras to thank. Send him a right triangle thank you note, if you please. He loved that number nine.

Thank you, thank you. This train will return on 01/01/01 (January 1, 2101)

That’s the next time a single digit will repeat in triplicate by itself on the calendar. Or, if people who while away the hours awaiting the end of the world have their way, perhaps it won’t. People who believe in such things as 666 and the “mark of the beast” have been waiting for this day. Their prophecy that Armageddon would begin on 06/06/06 fell through, so they decided to turn that frown upside down. 999 is the real number of woe, so make peace today on 09/09/09 before the curtain falls on existence.

China, Japan and their love/hate of 9

As it so happens, ancient Chinese emperors were big fans of the number nine. Its pronunciation sounds similar to their pronunciation of “long-lasting.” It showed up in the construction of their buildings and details of their clothing (nine dragons displayed prominently). The palace at the Forbidden City was supposedly built with 9,999 rooms. And as it so happens, eight is also extremely important to the Chinese, as it sounds like their phrase for “wealth.” So you can understand why Beijing was so happy to host the 2008 Summer Olympics – which began at 8 p.m. on August 8, 2008 (08/08/08).

Japan is much less enamored with the number nine, however. They avoid it like some westerners avoid the number 13. In their language, the word for nine is a homophone for their word for suffering, so nine is considered to be unlucky. Only the number four is worse, as it sounds like death.

A good day to get hitched

All the math, marketing ploys and dreams of death and destruction aside, 09/09/09 has proven to be a popular day to get married. If you don’t think that’s a good enough reason to seek mortgage loan modification, then you don’t know what you’re in for.

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Seriously, Las Vegas hit the jackpot on 07/07/07 when it came to booking marriages, and 09/09/09 has proven to be no exception. Lots of places are offering $99.99 wedding specials (I guess $9.99 was considered to be too cheap), some of which include visits to museums and other frills. In Hollywood, the 99 Cents Only Store awarded 99 cent weddings to nine lucky brides. However, the real cost exceeded 99 cents by a large margin -  just in case you were worried that wedding gifts included squeegees and hair nets and the cake came straight from an imitation Little Debbies box.

But about that mortgage loan modification again

If you need help, click that button above. Personal Money Market can help you obtain the information you need. Do it on 09/09/09 and make it your lucky day.

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