Foreclosure Assistance Deadline Nears: How Will the Market React?
One of the primary goals of the Obama administration over the last two years has been to shore up the fractured and falling real estate market and help millions of Americans prevent foreclosures – the same foreclosures that have helped to sink housing prices year over year since 2007.
One program toward that solution – the Emergency Homeowners’ Loan Program – is set to end shortly, with the July 22nd deadline for pre-applicant screening worksheets merely one day away.
The program was designed to offer a zero-interest bridge loan for distressed property owners that is ultimately forgivable – which basically amounts to free money up to $50,000 to pay mortgage loans provided the homeowner meets the rules of the program. (A small percentage, based on income and other considerations, has to be repaid for two years.)
It sounds nice in theory, but the funds were only appropriated for a certain period of time. The deadline for applying is July 22nd – tomorrow – and there is no indication that the money will come close to being entirely allocated, due to a lack of knowledge and, in some areas, interest in the program.
How will the market handle the ramifications of this deadline and the program itself?
It is true that loan modification programs do provide some sort of tangible assistance to distressed property owners, which helps in delaying or preventing foreclosures. This in theory translates into a boost for the economy and the market because fewer foreclosures mean higher home prices (because foreclosures tend to depress surrounding home values).
Of course, the impact of EHLP will be marginal because it is not as expansive or widespread as it needs to be. Analysts expect only 1,500 homeowners to take advantage of the program, with an average loan of approximately $35,000. That is not enough of an impact to substantially change the status quo.
In fact, because EHLP will ultimately fail to cause the broad, substantive impact on the housing market that was intended, it could perversely dissuade buyers from entering the market at all – which would only serve to make the housing market worse.
With low home prices, an abundance of discounted foreclosures, REOs, and short sales, and rock-bottom interest rates, buyers have all the incentives in the world to enter the market and create a position. The presence of EHLP is too limited to make much of a difference to the market, so buyers should not worry themselves about any possible negative effects.
The market is primed for an influx of buyers and investors looking to stake out a profitable position with tremendous upside, and that time is now.
Michelle Obama and Extreme Makeover’s Ty Pennington Combine Forces for Military Families
We already know a lot about our First Lady, Michelle Obama. She has two lovely daughters, Malia and Sasha. She’s been compared to Jackie Kennedy Onassis. She even has bee hives on the White House lawn. But did you also know she is a budding TV star?
Truth be told, that is not unexpected; Mrs. Obama has been all but silent since she stepped into the White House in 2009. This incredible lady is known for her poise and passion for helping others, including advocating for various initiatives to assist those in need across the entire country. From helping in soup kitchens and homeless shelters to speaking out against unhealthy living, Michelle Obama has done it all and is not stopping there!
Most recently, Mrs. Obama has become known for her childhood obesity program “Let’s Move!” in which she advocates a need for better food choices and exercise in children to combat the rising childhood obesity rates. She even added a vegetable garden to the White House in an effort to be a role model for these children!
However, before her efforts to make a lasting impact on increasing healthier lifestyles for children, the First Lady provided, and continues to provide, a very strong voice for the needs of military families. Her focus on issues facing military families will culminate in an appearance on the popular television show Extreme Makeover: Home Edition.
Extreme Makeover: Home Edition is a fascinating and heartwarming reality television show in which host Ty Pennington and his team help those in need obtain better living environments. The families on these shows share one thing in common—a life-changing story! Now the First Lady herself will work with Ty Pennington as they fight to help the veterans that bravely served our country but have since faced hardships.
When is this occurring? Today! Michelle Obama and Ty Pennington will be in North Carolina today shooting the episode that we will all be able to enjoy in October when it airs on ABC. It is great to see two people with huge hearts combining their efforts to help military families that are currently homeless due to the economic downturn and other various circumstances.
Keep your eye out for this episode that is sure to pull on your heartstrings and inspire you do to your part to carry on the initiatives of those like Michelle Obama and Ty—to help people across the country have something to live for by changing their circumstances, one person at a time.
Robert De Niro, Actor and Real Estate Investor, Parts with his Big Apple Townhome
(Image Source: The Screening Room)
Mr. Robert De Niro has made a living on the big screen since the mid-1970s, with his most recent role in the 2011 film Limitless. Unlike other stars that will jump at any opportunity to be in the spotlight, De Niro is known for his poise and careful selection of acting jobs. However, he is also known for his careful selection of real estate properties, passing on some of his genius in this area to his son Raphael De Niro.
Are you a fan of this incredibly talented actor that has captured the essence of characters from popular films from Mean Streets to The Godfather Part II? If so, you can purchase his Big Apple townhome for a hefty $14 million! But do not think you can pull one over on Mr. De Niro, as his own flesh and blood— Raphael- is selling the property for his beloved father.
Why, exactly, is this townhouse listed for such a steep price?
First, the home is associated with a plethora of fame, including being the home of Marianne Moore (a published poet that associated with T.S. Elliot) in the ‘20s. De Niro himself has lived in the townhome for the last 30 years, adding his own claims to fame to the New York pad. Furthermore, The Cosby Show and Wait Until Dark filmed only a few townhouses down from the De Niro home.
Second, the location is unbeatable! De Niro’s New York pad is situated by the well-known locations of Sixth Avenue and Seventh Avenue. Furthermore, West Village is close to the Hudson River, providing immediate access to water activities, incredible restaurants, and unbeatable shopping areas. If you want a great home in New York City that is truly close to everything—you cannot beat this townhome’s fantastic location.
De Niro enjoyed his residency in this townhome for over thirty years and is now putting it on the market for $14 million, allowing someone else to take advantage of this great investment opportunity and enjoy the memories and fame associated its previous tenants.
Harry Potter Fan? Imaginative Author JK Rowling’s Childhood Home for Sale!
With the recent release of the final movie of the Harry Potter series, The Deathly Hallows Part 2, Harry Potter fanatics may be interested in learning that the childhood home of the incredible author of this fascinating series is currently on the market. That is right–you could be the proud owner of the home JK Rowling grew up in for a mere $343,000.
Rowling is known for her incredible plot twists, undeniable character development, and fascinating creation of a wizard world that has captured the hearts and minds of children to adults across the globe. But exactly where did Rowling obtain her inspiration to create such a great book series? There is no doubt that her Gothic-style childhood home, complete with attractive architecture and located on the border of Wales, greatly inspired her to dream big and create a fictional wizard world that has made her well-known across the world.
For example, one of the most loved parts of Harry Potter includes the Quidditch tournaments, a unique sport that includes seven players on each team. One of the teams is known as the Tutshill Tornadoes. Surely, this is just another creative name created by Rowling, a particular skill that can be identified in every book? Wrong—Tutshill is actually the name of the village that Rowling grew up in and where this fantastic home is located.
With an incredibly realistic price, I doubt this home will remain on the market very long. Harry Potter fans across the globe are probably keeping a keen eye on the home and are waiting for the prime time to make an offer and relish in the environment that Rowling herself grew up in. Imagine reading Harry Potter while being surrounded by the incredible views and astonishing architecture that inspired the creation of these world-renowned books.
Foreign Investors Snapping Up Cheap Homes
In most cities across the state, the story is almost the same. The enduring foreclosure crisis has resulted to declining home prices, equity loss and growing volume of distressed properties. But behind such dreary housing situation are investment opportunities waiting to be unearthed. In fact, many markets are being scoured by international buyers looking for cheap properties to invest in.
For seasoned real estate investors, news of foreclosures attracting international buyers is no longer surprising. Most investors are from China and India and who are currently flushed with cash from their country’s booming economy. They tend to buy repo properties, convert them into rental homes and then, later on, use as their own homes.
Meanwhile, in Los Angeles, sale of several multi-million dollar homes for the current year have given hope to the local housing market. Trends like this are what usually buyers look out for as it could indicate a housing recovery, which could tip the scale toward a real estate purchase. Many buyers and investors have been wary of making the decision to buy, waiting for the market to bottom out.
Making the Right Choice
With foreign investors seeing the opportunities these foreclosed properties offer, it is only a matter of time before local home buyers and investors also look at the impressive profit potential of these houses. Although right now, things are a bit challenging with lenders under close scrutiny and federal regulators working double time to ensure that history, particularly the mortgage collapse, will not repeat itself.
Still, market conditions are certainly favoring buyers and the success of a home purchase is dependent on whether or not the buyer will do his homework. Research is crucial when finding and buying for the right property especially with foreclosures since they are sold as-is. Title checks, insurance inquiries and home inspections are just some of the things you need to do in order to protect yourself.
Of course, there is also the matter of finding the right property. Yes, there is a large inventory of homes to choose from, but there is still competition among buyers in terms of who grabs the hottest deals. If you want to enjoy an advantage, there is always the option of subscribing to foreclosure listings. If you do your homework and you have a reliable search tool, you will be amazed with what you can accomplish.
The best foreclosure deals await you at ForeclosureListingsNationwide.com.
Paperwork, Paperwork, Paperwork! Why Documentation is Important in Buying Foreclosures
Buying foreclosures is not as complicated as it seems sometimes. Sure, some people recoil in fear at the idea of going to a foreclosure auction – a public place where investors and homebuyers clamor around for the opportunity to pick up steals – and actually placing a bid on a property. And sure, the idea of all the paperwork and red tape that is thought to be involved in buying foreclosures makes others reluctant to even consider the idea.
It’s not as bad as it seems, but that doesn’t mean paperwork and doing one’s due diligence on a foreclosure property isn’t worth it. In fact, doing one’s homework by researching a property is an all around wise choice that can make the profitable process of buying a foreclosure well worth the time it
Due diligence includes researching the title on the property, examining the property in person with a qualified inspector, and checking to see if there are any liens on the foreclosed home before bidding. It also means understanding what obstacles may arise in the process.
For example, finding who owns the mortgage is thought to be a simple, straightforward process. But due to the rise of mortgage-backed securities – in which the originator of the loan sells the mortgage to another entity, who uses it, along with other mortgages, to support securities that are then sold to investors – many banks have engaged in questionable practices involving the title that have made the situation a bit murky.
A recent study by Reuters discovered that in many cases, paperwork for foreclosures owned by banks and other entities was either incomplete or missing entirely. In fact, many foreclosures take place without any original documentation remaining at all. This is because banks, when they sell the mortgage, often dispose of the originals because they are no longer a concern for the lender.
Of course, when the foreclosure comes up for sale – or happens at all – these issues arise and cause a lot of headache for all those involved.
Paperwork on transfer of documents from one institution to another must be properly endorsed. This ensures that a chain of possession exists from the originator to whomever holds the loan at the time the property is foreclosed. This chain, in many cases, is often missing.
How should an investor or prospective homebuyer react? Doing the homework and putting in the time to take a look at the ownership of the mortgage that is attached to the property being sold is one of the necessary steps in buying a foreclosure, especially today. This small time investment could pay dividends when the investor is able to avoid nasty headaches and instead buy the foreclosure outright – and profit as a result.
Goldie Hawn & Kurt Russell Part with Malibu Home
(Image sources: Realtor.com & Flickr)
Beautiful Goldie Hawn and her talented partner Kurt Russell are very well known in show business for their incredible acting, stable relationship, and further connections to well-known actors Kate and Oliver Hudson (Hawn’s daughter and son). From The First Wives Club to Cactus Flower, Goldie Hawn has been noted for her stunning performances and has even spent some time exploring her vocal talent. Kurt’s perfected performances in Tombstone and other hit films like Trouble in Little China has made him a heartthrob since the 70s.
Amidst their powerful performances, this committed Hollywood couple has resided in their Malibu home for over 20 years, but have recently made the tough decision to put up for sale this 4,300 square-feet home complete with 4 bedrooms, 4.5 bathrooms, exercise room, and fascinating location with breathtaking views. The property is listed for nearly $15 million or can be leased for $80,000 per month.
Goldie Hawn and Kurt Russell are far from the only ones putting their homes on the market, despite the fact that buyers are clearly getting the better end of most deals. Why do your average Americans and celebrities put their homes on the market, despite the current buyers market? Simple—they know that buyers can spot a deal when they see one.
Fortunately, celebrities have a few things going for them. First, the homes they put on the market are near flawless. Second, they have their reputation and fame working for them. For example, who would not want to live in a home in which Goldie Hawn and Kurt Russell have made memories for over 20 years? Finally, just like your everyday American, these celebrities understand that if a buyer finds the home of their dreams then they will purchase that property if at all possible.
However, even celebrities understand that many people are opting for leasing as opposed to buying and therefore have stated that they will lease the property if they are unable to find a qualified buyer.
The Malibu home of Goldie Hawn and Kurt Russell is one to desire with beautiful views of the ocean and undeniably splendid architecture and elegance. If you want a Malibu home and you have the $15 million to invest—this could be a purchase of a lifetime!
Ashlee Simpson Chooses to Lease Instead of Buy
(Image Source: Real Estalker, Well Done Watches)
Ashlee Simpson is best known for being the kid sister of Jessica Simpson; however, she has started to stand on her own since the release of her album Autobiography in 2004. Like her sister Jessica, Ashlee also enjoyed her time in the spotlight with a reality television show, The Ashlee Simpson Show. Surely, the similarities end there? Absolutely not!
Jessica Simpson and Nick Lachey’s divorce was no surprise to the public, especially giving their up and down relationship on their show The Newlyweds: Nick and Jessica. However, now Ashlee Simpson and musician Pete Wentz are facing a divorce themselves after a short-lived marriage that included a new son for them both.
Along with a sour marriage and questionable talent with her singing career, Ashlee has been known to dabble in the real estate market, including her June 2011 sale of her Oak Pass Road home for $3.4 million. However, the pop star is now leasing, like many Americans, as opposed to buying. Simpson is currently renting a home in Beverly Hills and is living 90210-style as she works on a new record.
Why is Ashlee Simpson, like many Americans, deciding to rent as opposed to buying? Nobody knows the answer to the question; however, it is definitely a horrible decision.
The current real estate market contains a plethora of opportunities with the increase in foreclosures and therefore reduced home prices. It is undeniably a buyers’ market in which owning a home is less expensive than renting! Rental rates are increasing as a demanding for rental units is increasing; therefore, mortgage payments (including taxes and insurance) can often be made for less than the price of renting. Why, if given the choice, most people would choose to rent as opposed to buy is beyond logical.
Ashlee is showing that real estate may not be the best side job for her, especially with her recent decision to rent a home instead of purchase a great property at a once-in-a-lifetime value. I would say she needs to stick to the singing business; however, I am still unsure of how she continues to sell records with the lack of real talent.
In the end, Ashlee Simpson sells her home after her divorce and decides to rent as opposed to buy – a decision she will surely be kicking herself for when the housing market returns and she is then left paying significantly more for the same property.
Looser Lending Requirements? What the Government May Do for Homebuyers
Buying in this foreclosure market is a golden opportunity for investors and prospective homebuyers alike- people who are looking to snap up a dream home and take advantage of discounts and cheap financing with historically-low interest rates.
However, for many homebuyers, that path to the American Dream has been stonewalled by the banks they so desperately need for affordable financing.
The truth is, unless you are paying cash, or have significant assets at your disposal and a sterling credit rating, getting lending approved for a home purchase is difficult. Every reputable lender has tightened its restrictions on how it decides who gets funding and who doesn’t. The end result is that a record housing glut exists, with millions of homes sitting on the market and a vacancy rate of 11%.
And since the recovery of the housing market depends on allowing as many people to buy homes as possible, a conundrum exists: How do you entice lenders – banks, lending companies, and federal agencies – into loaning more money for more homes?
The solution may come from the federal government, and it may arrive sooner than you think.
Dealing with the Foreclosure Backlog with Fannie Mae and Freddie Mac
The federal government has been quietly discussing a proposal to help homebuyers and investors gain access to more loans and credit so they can start buying properties and reduce the extensive foreclosure backlog and housing oversupply that exists.
The feds cannot simply order banks to start lending, however, so the solution involves using federal agencies and government-sponsored entities (GSEs) to provide incentives and security for lenders. The policy idea that is taking shape in Washington today involves the two largest GSEs: Fannie Mae and Freddie Mac. Under the plan – still being actively yet quietly debated in D.C. – the two mortgage purchasing companies will be required to loosen their standards for loans to investors, which would help inject desperately-needed liquidity into the market.
The government can make this move because taxpayers own both enterprises, ever since they were placed into conservatorship three years ago.
Will the Foreclosure Backlog Shrink?
Even with this measure, it remains up in the air whether or not the foreclosure backlog – somewhere in the neighborhood of 1 million homes – and the foreclosure inventory – around 1.9 million – will shrink.
To do so, buyers would have to have access to credit and financing in order to take advantage of foreclosure deals from all across the country. Banks would also have to begin processing foreclosures again – instead of sitting on them like they are currently doing.
Looser lending requirements will help to take care of the first, while the pending foreclosure settlement will help to deal with the second. In fact, banks could begin wholesale foreclosure proceedings again as early as a month from now – assuming the terms of a settlement are finalized.
If the government has its way, both processes could be underway soon. When this happens, homebuyers and investors need to position themselves to benefit from the large injection of foreclosures into the market that is sure to happen over the next year. Indeed, many analysts are predicting the bottom of the market between now and the first quarter of 2012.
Finding prime opportunities for foreclosure deals will be easier than ever before, and with a bit of light at the end of the tunnel, the upside potential for investors and homebuyers is crystal clear.
Spelling Mansion Sells for $85 Million — But What Is It Really Worth?
What makes a home worth what it’s worth?
If you’re the person buying an $85 million mansion, that question is probably currently running through your mind over and over again.
Today it was announced that The Manor, a world-famous palatial estate built by entertainment moguls Aaron and Candy Spelling, just sold for a mind-blowing $85 million.
That’s 134 million Brazilian reals. Or 3.8 billion Indian rupees. Or…well, you get the idea.
Hearing that a house – which, at the end of the day, is just a hollow box where people eat, live, and sleep – is somehow worth $85 million makes many of us average Americans scratch our heads and wonder why.
What, exactly, makes a home worth what it’s worth?
Well, it doesn’t hurt that the home is a pretty nice one. The Manor is a 57,000 square-foot castle of a home containing somewhere in the neighborhood of 123 rooms (we’re not sure; even the builders probably lost count), 27 bathrooms, a beauty salon, “gift-wrapping” rooms, and even a bowling alley. (And not the plastic type you had as a kid – the real deal.) The garage – bigger than most normal homes – has room for 100 vehicles. The double staircase in the entryway of the home was inspired by the movie Gone With the Wind. Throw in a professionally-manicured monster of a back yard and you have an extremely lavish and luxurious place to hang your hat.
Not too shabby, although having a map to navigate your 123-room home probably gets frustrating.
Another major reason is the location. You’ve probably heard that in real estate, location is everything. In the posh, upscale neighborhood of Holmby Hills, the location is as prime as it gets. Holmby Hills is bordered by ritzy Beverly Hills and Westwood and is among the most desired private real estate in the world, much less the state. Even in Los Angeles – a city built on exclusive, highly-prized living arrangements – Holmby Hills is a cut above.
And of course, the glamour and fame of the mansion cannot be understated. The Manor is, after all, the Spelling mansion, the glorious estate of the late Aaron Spelling, creator of “Beverly Hills 90210”, “Melrose Place”, “7th Heaven”, and other notable television series and big picture works. He and his wife Candy were known for their high-profile lifestyle and extravagant abode, and for years, their home was considered the center of Los Angeles royalty.
So it’s really no surprise, after reviewing all of that, why the $85 million purchase by a 22 year-old Russian heiress Petra Ecclestone set a record for home sales in California. After all, who wouldn’t make that purchase?
(Well, provided they had $85 million to burn.)
Here are a few fun ways to compare the purchase price of The Manor to things we everyday Americans understand.
$85 million would buy:
-4,047 Toyota Camrys at $21,000 a pop (the best-selling car in the U.S.)
-37.28 million loaves of bread at $2.28 each
-2.15 million tanks of gas at $3.29 per gallon
-4.25 million DVDs at $19.99 each
-2.29 Major League Soccer franchises at $37 million each
-340 million Twinkies at a quarter apiece
-69,161 LG 60-inch plasma TVs at $1,229 each
$85 million stacked up in $100 bills would form a tower of cash approximately 304.5 feet tall. Placed end to end, these bills would stretch for 82.3 miles. If Ms. Ecclestone paid in cash, the entire amount would weigh 1,872 pounds – which is 75% of the weight of one Toyota Camry. (We hope she writes a check.)
In the end, a home is worth as much as someone is willing to pay for it. We’ll leave the mansion to its new billionaire owner and just hope she invites us to spend a night or two there.
She has 123 rooms to spare, after all.