Mykel's Blog

I just gave up on an exhausting search for a lost password for the Flickr.com account I established this time last year.  That exercise in futility sent me on a second quest looking for some secure method to store the plethora of passwords I have to remember on a consistent basis.  

We've all know the rules for a strong, safe password is that it be different for every destination. The passwords should not be easily deciphered.  They should consist of numbers, letters, and in some cases symbols.  They should be easily recalled so that they do not have to be written down and discovered.

In today technology driven environment, my Google search provided limitless choices.

NeedMyPassword.com, RoboForm.com, my Blackberry Password Keeper . . .

After hours of researching the pros and cons, I have come to his conclusion.

Storing passwords in a file on your computer or in your cell phone is risky.  What happens if that computer or phone is stolen or sent in for repair?  All your confidential information is compromised.  Not to mention an accidental file corruption would destroy your ability to access your passwords.  And heaven forbid, I forget the password to the online site that manages my passwords :-)

Instead of using outside solutions, I've decided on utilizing a tool that will always be with me and is very powerful when used correctly . . . my brain!  I'd like to share a plan my 16 year old daughter just shared with me:

Start by creating a system that you can easily remember.  Select a 4-6 letter word that you can remember.  Let's say that word is login. Now select a number that has meaning.  Let's say it is 20. Choose to capitalize one or more letters in the word login.  Your might choose to capitalize the 3rd letter and let it become loGin.  Now add this to your favorite number.  Your unique personal password now becomes loGin20.  You can now use this password as your own personal password anywhere a password is needed and it should meet most every requirement you come across.

But how do you address the fact that you need a unique password for every site?  Let's say you need to create a password for the ActiveRain.com.  One method would be to add 'ar' (for Active Rain) to the beginning or end of your personal password which would cause it to become arloGin20 or loGin20ar.  

There are endless variations on this method; the specific system you use is not really important. . . as long as you're consistent.  What is important is that you have a FREE system that is easily remembered without relying on outside aids.  You will only need to remember your personal password and then simply begin or end it with whatever specific site you are using it with. 

Why couldn't I think of that!  Gotta go and simplify my life by re-creating a ton of passwords.  If you have any other time saving tricks, please don't hesitate to share them.

Because of the massive and wide-spread use of sub-prime mortgages over the past five years, the foreclosure crisis has created an historic level of REO properties hitting the market; A trend that has contributed to declining housing prices and created a whole new level of affordability for buyers. Reports show that residential real estate investment activity in California has grown upwards of 65% in the past year alone with real estate investors the most rapidly growing population of buyers.

We try to make a significant effort to market REO properties to low to moderate income homebuyers that were previously priced out of the market.  First Time home buyers that want to get the most value for their first investment should consider REOs as an affordable housing option and turn these losses into new beginnings. 

There are real benefits to buying an REO:

• Affordability - Typically foreclosures are aggressively priced to sell. Banks are eager to sell them and will price them low to ensure a quick transaction;
• More bargaining leverage - Banks usually want to sell REOs within 90 days of listing and are usually willing to negotiate with buyers;
• Competitive pricing and today's low interest rates often make an REO purchase more affordable than renting;
• Buyers can purchase with 3%, If purchasing with FHA or VA loans, most banks are willing to pay reasonable closing cost;
• Qualifying homebuyers can finance both the purchase of an REO and the cost of its rehabilitation through a single mortgage loan;

If you decide that an REO is for you, we'd love to help make your purchase a successful one.

Times are certainly tough for sellers right now. And you probably won't sell your house for the amount you would like. The best strategy for now would be to stay put and wait out the crisis. But if you simply have to sell (for a job transfer or financial reasons), there are some things you can do to expedite the process.

The following tips will help you sell your house in these tough economic times we find ourselves in:

• I know you've heard it before, but it bears repeating. Pricing competitively is critical when selling a home in this kind of market.
• Creating curb appeal in today's tough real estate market is essential in getting your home sold fast. Sellers need every edge they can get in this economy, and presentation goes a long way in this regard. Curb appeal is a buyer's first impression to what's to come inside and with good curb appeal, you set the stage for an inviting place to call home.
• The key thing to remember when selling in foreclosure is Time Is of the Essence and hiring a realtor is highly recommended.  But don't just sit back be frustrated. Supercharge your Realtor's ordinary real estate marketing efforts by ensuring that they include an aggressive online marketing plan.  The key driver of marketing success nowadays is to make sure you get found online.

Did you know that you can sell your house and everything in it through eBay. While this may sound crazy, eBay allows buyers from all over the world the ability to lookup listings, including yours to buy. This effectively opens your market from your small local community into a much wider buyer audience.

Zillow is a lesser known site that is actually cutting staff due to the economy, but it's another great free resource that can help you expand your marketing reach and sell your house quicker. A good Realtor should know of several other online sites to list your house on like Google, Yahoo, Craigslist and Trulia...just to name a few others.

When you're in Foreclosure and have to sell, the faster you sell the better and incorporating these Internet options can often times make it faster.

To help clearly disclose the mortgage process, the federal government is giving their Good Faith Estimate document a makeover.  Effective January 1, 2010, the current 2-page form will be replaced by a newly revised standard 3-page version that will include an instructional page.

The biggest plus of this new Good Faith Estimate is that it uses everyday plain English to explain and clearly discloses the key loan terms and closing costs.  For instance, in one section titled Loan Summary, the Good Faith Estimate specifically addresses:

• What is your interest rate?
• Will your interest rate increase?
• Is there a prepayment penalty?

The new Good Faith Estimate includes educational elements that identify things like what charges are legally allowed to change at time of settlement and how a mortgage applicant can opt for higher fees in exchange for a lower mortgage rate.  In addition, HUD estimates this new regulation will save borrowers nearly $700 at closing.

Even with all of this disclosure, the Good Faith Estimate doesn't address the question of, "Is this the right loan for this borrower?"  Unfortunately, the new Good Faith Estimate won't prevent homeowners from choosing a bad loan; it only educates them about the facts of the loan.

That's why it's important to speak with a knowledgeable real estate professional so they can direct you to a trusted mortgage professional to help you meet your real estate mortgage goals.  Getting the best terms on a bad loan can be far worse than getting great terms on a loan that fits your needs.

How much impact do you think this will have?  Share your opinions.

According to Bloomberg's online this morning, 11-14-08

Realogy Corp., owner of the Century 21 and Coldwell Banker brands, is at risk of violating the terms of its bank loans and is trying to reduce debt by almost $600 million and stave off default at the Parsippany, New Jersey-based real-estate broker, according to a regulatory filing dated yesterday.

Realogy reported $209 million in losses over the last three quarters amid the worst housing crisis since the Great Depression.

Realogy is giving its noteholders the option to swap their securities at a discount for as much as $500 million in principal amount of new second lien loans that will mature in 2014, according to a news release dated yesterday- according to Bloomberg.

Investors can exchange their securities for as much as 50 cents of new loans. Owners of Realogy's so-called pay- in-kind toggle notes maturing in 2014 can swap their debt at a rate of 47 cents on the dollar.

Will this real estate giant be the next victim of this slumping economy and if so, what does this mean to us as realtors?

With foreclosures continually on the rise nationwide, prices declining, and inventories increasing to historic levels, investors with a discerning eye and knowledge of the foreclosure process can build a profitable portfolio of REOs.

Review this basic advice to buyers who want to become REO foreclosure investors:

• Become familiar with your market. The most important tool in your real estate investing toolbox is an intimate knowledge of the area where you plan to invest.
• Develop an investment strategy. Do some research to find a successful investment strategy that works in your market, then implement that strategy.
• Acquire a foreclosure niche that works for you. Decide what foreclosure buying technique works best with your investment strategy and your strengths as an Investor.
• Thoroughly research each deal. Don't incorrectly assume that just because a home is in foreclosure it's a good deal.
• Rely on a knowledgeable, trustworthy team. Don't get in over your head trying to tackle all the work involved in a successful foreclosure investment venture flying solo.
• Act quickly, but don't be in a hurry. Our current declining real estate market gives you the upper hand as a buyer, but you still need to be positioned to act quickly on acquiring the best deals.

President-elect Barack Obama, in his first news conference last week, called on the Treasury and other government agencies to "use the substantial authority that they already have to help families avoid foreclosure and stay in their homes."

A move by Citigroup is the latest by major lenders to get their own houses in order by helping borrowers to keep theirs.  Let me explain what this could mean to you:

Citibank has a new program out there for homeowners.  They are proactively going out into communities right now contacting and offering homeowners' new more affordable loans

A lot of the banks getting money from the Federal Government are acting in good faith to put a little something back in the community.  If you are a Citibank mortgage holder and have not been contacted, you might want to be proactive and call and inquire about this program.

Paulson has called the housing recovery central to the economy's revival and has urged Fannie Mae and Freddie Mac, who are now under government control, to play a bigger role.

Fannie Mae, Freddie Mac stands right in the center of the mortgage industry and have the ability to touch millions of lives.  It's rumored that they are working "with deliberate speed" to establish a program to help homeowners avoid foreclosures by reduce their existing mortgage loans. Under the proposal, mortgage servicers will work with borrowers to reduce monthly payments to 38% percent of their income, a level considered a threshold for affordability, using a combination of lower principals, interest-rate reductions and extensions.  That could make a very big difference for homeowners. 

These are all things that are in the works.  But what if you are in trouble today . . . and are worried about losing your home today.  What should you do today???  

Call your bank even if you've been turned down.  A new program may be out there that can help you.  There's new programs coming out every month; lenders are announcing something new trying to reach out and help people.  You definitely want to talk to your Lender.  You may also want to get some counseling help. People having trouble paying their mortgages are probably having trouble paying other bills.  If your financial troubles are bigger than just your mortgage contact these entities:

Nfcc.org                                                                                                                                         Hud.gov

California leads the nation in foreclosures and is one of the hardest hit by the housing-market collapse. California's Governor Schwarzenegger proposed a 90-day stay on home foreclosures in California last week.  

Although these new programs may help some homeowners avoid foreclosure, it won't alleviate all of the strain in the housing market.  But Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, and Bloomberg's most-accurate economic forecaster for 2008 says,  "If housing doesn't get stabilized, it's really going to continue to bleed the economy.''

Let me hear your feedback, Do you agree?

The declining home prices in the Inland Empire is creating one of the most vibrant markets in America for a niche product no one wants to claim: REO houses.

In September, over 3,000 foreclosed homes were resold in Riverside County and almost 2,500 in neighboring San Bernardino County, with a 37% decline in home sales over Sept of 2007.  According to Foreclosure Radar,  foreclosure homes appear to be on the continual rise and the growing list of REO foreclosures on the market threatens to drive prices down even lower in the Inland Empire.

In Moreno Valley, for example, the median sales price for existing homes is down 48% over last year; Prices in parts of Victorville have fallen over 49% in the past year. These price declines threaten to create a cycle of decline that will force more homeowners into the oversaturated foreclosure market.

The Inland Empire housing market is declining at a rate that disproves conventional wisdom that housing prices rarely fall as rapidly as they rise. Below is a chart of the median sales price for existing homes in Riverside County over the past 9 years:

August 2000 - $162,000
August 2001 - $185,000
August 2002 - $215,000
August 2003 - $260,000
August 2004 - $334,000
August 2005 - $388,000
August 2006 - $420,000
August 2007 - $394,000
August 2008 - $247,000

The current price declines have been dramatic and are predicted to continue for some time.  

Give us your thoughts?  Do you think the market is close to bottoming out?

This BREAKING NEWS report just came in from Mortgage News Daily.

Freddie Mac just threw a life raft to the Short Sale market.  The second-biggest provider of funding for U.S. residential mortgages, on Thursday said it is boosting incentives to mortgage servicing companies to help more borrowers renegotiate loans in an effort to curb rising delinquencies.

HMMMMMmmmm... Now, if I'm a lender and I just got DOUBLE the pay to help a borrower ... do you think that would motivate me a little more to complete a short  sale? 

 I THINK SO!

What do you think about this? Comment at the bottom of this post.

Freddie Mac Doubles Financial Incentives to Servicers Who Help Borrowers Avoid Foreclosure Report Source: Mortgage News Daily

Freddie Mac today told mortgage servicers it was doubling the amount of money it pays for each workout that keeps a delinquent borrower with a Freddie Mac-owned mortgage out of foreclosure. Freddie Mac also announced it will start reimbursing servicers for the cost of door-to-door outreach programs, give servicers more time to negotiate workouts in states with fast foreclosure processes, and make administrative changes intended to streamline the workout process.

"We are taking these steps because we want to reinforce the tremendous importance of workouts and reward their use," said Freddie Mac Vice President of Servicing and Asset Management Ingrid Beckles. "Giving our servicers more time and greater compensation to help troubled borrowers is fundamental to preserving homeownership and maximizing our efforts to minimize foreclosures."

 According to Beckles, starting August 1, 2008, compensation for repayment plans will rise from $250 to $500 while loan modification compensation will increase from $400 to $800. For short sales or pre-foreclosure sales, where Freddie Mac agrees to accept less than the full amount owed on a borrower's loan, compensation will go from $1,100 to $2,200. (The higher amount recognizes the greater servicer staff time involved when negotiating property sales.) Freddie Mac also said it will now reimburse the cost of leaving a door hanger up to $15 per mortgage and up to $50 per mortgage for a door knocking that results in the borrower contacting their servicer. Freddie Mac will also reimburse servicers up to $200 for additional fees paid to vendors for door knocking that results in successful alternatives to foreclosure. This policy is effective from August 1, 2008, through March 31, 2009.

To qualify for the reimbursement, the servicer must show that the mortgage was at least 90 days delinquent, the servicer had no prior contact with the borrower, and that the outreach was done by an independent third party vendor.

Freddie Mac also announced it is extending the time for foreclosures so servicers will have more time, if needed, to negotiate workouts with delinquent borrowers in Washington, DC, and 20 states with relatively fast foreclosure processes.

In addition to Washington, DC, the affected states include Alabama, Alaska, Arizona, Arkansas, California, Georgia, Hawaii, Maryland, Michigan, Minnesota, Mississippi, Missouri, New Hampshire, North Carolina, Rhode Island, Tennessee, Texas, Virginia, West Virginia and Wyoming.

Specifically, starting August 1, 2008, servicers are allowed up to 300 days (10 months) from the due date of the last payment to the foreclosure sale in these states to seek aggressive and sustainable workout solutions for the borrowers and still meet the standards set in Freddie Mac's Servicer Performance Profiles. The company uses the Servicer Performance Profiles to measure and reward the quality of a servicers' investor reporting and default management.

Even though the laws in these states permit a lender to foreclose in less than 300 days, this announcement means Freddie Mac will permit its servicers more time to complete foreclosures. The new policy won't affect borrowers in states where the foreclosure process already exceeds 300 days.

Well???  What do you think?

The Department of Veterans Affairs (VA) is raising ceilings on its no-down payment home loans from the current $417,000 to as much as $729,000.

The increases are effective immediately under legislation recently enacted with President Bush signing the Housing and Economic Recovery Act of 2008.

That law also improved VA's Specially Adapted Housing Program. It raises primary grants from $50,000 to $60,000 toward constructing a new home or modifying an existing home to meet adaptive needs of veterans or active duty service members with certain service-connected disabilities.

The increased limits in the general home loan program for all veterans' home purchases or construction will be based on local housing costs, tied to the similar locality adjustments of the Federal Home Loan Mortgage Corp., Freddie Mac.

VA home loans are available for veterans to purchase or construct single-family homes, and to purchase condominiums or cooperative apartments. There are about 2.3 million existing VA home loans, more than 90 percent made with no down payment.

Source: Department of Veterans Affairs (08/21/2008)