Refinancing is not Impossible

Homeowners are refinancing at numbers that we haven’t seen since 2004. Home purchases have also increased due to these low rates.

But, what if you can’t refinance due to job loss, poor credit or low property value?

Some homeowners find themselves on the outside of this new refi bubble and continue to struggle to pay mortgages with no help from their banks. Remember, banks will only start to modify a mortgage if the homeowner is 90 days delinquent. This is a double edged sword of course; the homeowner in this position has sacrificed his or her good credit after being 30 days late and has even less motivation to stop a foreclosure at 90 days. Acceptance of their dire financial situation may have already set in and they are less eager to do anything to stop the process.

If you are a homeowner who is making your mortgage payment, about to fall behind and could use a little assistance with a refinance, here’s some information that you may find useful. Part of President Obama’s housing plan is directed at you. If your house has decreased in value or your interest rate is high, the government is now enticing lenders to offer a rate as low as 2% in order to make your monthly payment affordable, within 31% of your monthly income. The lender will benefit by a government payment. If that does not work, then 40 year mortgages are now being set up. Help is here.

If you find yourself in this situation call the institution that services your loan and ask them what your options are. This is the company who you send your payment to. Also, call HUD at 888-995-4673. The government has set up a Web site: www.makinghomeaffordable.gov)

The Tale of the Incredible Shrinking Rate

Yesterday, mortgage interest rates significantly dropped below 5%.

The rate decrease came after The Federal Reserve purchased $750 billion in mortgage related securities. This was done in order to bring the rates under 5% and stimulate activity in the home purchase and refinance segments of the housing market. This action may even cause rates to decrease further as mortgage rates adjust in response to action in the bond market. Mortgage Tracker HSH Associates expect rates to level off at 4.9% and not decrease further.

30 year fixed mortgage products are now being offered by both local banks and national lenders in the 4.6% to 4.75% range with no points. There is so much refinance and new loan business that some banks are not reducing interest rates since they cannot handle the demand. Rates were already in the mid to low 5% range and many homeowners were already in the refinance process.

Mortgage brokers are indeed now reporting an overwhelming increase in just one day for refinance and purchase loans according to The Boston Globe.

There is an important side note: Homebuyers will, in most cases, have to put down at least 25% to benefit from these low rates. Also, jumbo loan rates remain around 6%. Jumbo loans start at $523,750 in the Greater Boston and Barnstable County areas.

Next week, it will be interesting to see what the rates are doing.

Friday the 13th ... Again

So, its another Friday the 13th second month in a row. This is indeed a rarity and it hasn’t happened in quite awhile. Do you suppose the fact that Friday the 13th has fallen two months in a row has anything to do with the state of the economy and poor housing market? Probably not, there are, however, plenty of nervous people trying superstitious things to stabilize their finances and stay afloat. It will be interesting to see what today brings with the recent three day rally of the stock market.

This week, since it is the 13th, we’ll veer away from the normal real estate news and talk about superstitious things people are doing to sell their homes.

I scoured the blogs and found some interesting ideas to use.

Saint Joseph is king, or should I say, saint of selling your home. One thing is certain, whoever makes these little statues probably doesn’t use the word recession a lot these days.

But what do you exactly do with this luck charm?

Dig a hole near your For Sale sign by the street approximately 3 inches deeper than the statue. If you have no yard, use a large plant pot.



Place the St. Joseph statue facing the street in the hole, upside down. Another site, says to face the statue west, another states face it away from your front door.



When covering the statue, prayers should be said. They are very often included in the packaging. These are simple Christian based prayers.



Once you have sold you home, remove the statue and place it in a prominent location in your new home. Most sites instruct cleaning the statue, others state leaving the dirt on it.





If St. Joseph doesn’t work then try a little energy balancing.

This includes putting a mirror in the hallway.
Put crystals and or colored stones in a clear brandy glass with some scented water and a flower. Scents can range from rose oil to any fragrant oil.
Add a single seasonal flower.

If that doesn’t work… try this:

Buy a small scented candle, the size of a votive, and a very large glass. Put the ice in the bottom of the glass and balance the candle on top. Light the candle and change ice daily. When the candle burns, the melted wax drips on the ice. This represents the elements of fire, ice and water and brings the luck of nature into your home.

If that doesn’t work… try this:

Put candles around your bathtub and fill the tub with water and ice. This way, the three elements are represented on a larger scale and will add to great energy.
If Saint Joseph, along with these energy inducing rituals don’t produce a buyer, one blogger shares this successful tip:

Stand in front of your house and wave your hands at your house and chant "mojo, mojo" Then wave at your neighbor’s house and say "double whammy double whammy."

Of course, if these don’t work, you can price your home properly, stage it for sale and be realistic. That can be all the luck you need in this market. Happy Friday the 13th.

Details of Obama's Housing Plan

This week, the finer details of the Obama Housing plan have been released.

If you are seeking to refinance or find yourself teetering on the edge of going under financially, waste no time in seeing if this plan can help you.

$75 billion will fund this strategy to keep 9 million homeowners out of foreclosure. Here’s who it will help:

Primary homeowners who are having a hard time paying their mortgages and homeowners who have not been able to refinance due to decreased property values.

If your loan is owned by Fannie Mae or Freddie Mac, you will be potentially able to refinance at current interest rate levels regardless of equity position. This will lower your monthly payment and hopefully provide relief. In order to refinance, homeowners must be current on their existing loans.
To find out if you are eligible for refinance contact:

- Fannie Mae at 1-800-7FANNIE , online at (www.Fanniemae.com)
- Freddie Mac at 1-800-FREDDIE, online at (www.freddiemac.com)


Also, please call your mortgage service provider to get more details as they pertain to you.

For more information on what you can do to modify or refinance and are not sure how Fannie Mae or Freddie Mac pertain to your loan, please visit www.financialstability.gov), that’s www.financialstability.gov).

New Stimulus Law and Outer Cape Cod Real Estate

The long awaited stimulus package is now law. But how will this impact our local housing market here in Provincetown, Truro and Wellfleet? Although the finer details of the housing plan will not be released until March 4th, there are definite components of this law that may help our local housing market.

Up to four million homeowners nationwide who have mortgages owned by Fannie Mae and Freddie Mac will be able to refinance to a mortgage product in the 5% range. This is directed at homeowners who are in negative equity situations and have not been able to refinance due to current strict qualifying criteria and low appraisals. There are homeowners on the Outer Cape who find themselves in this position. The double benefit here will be helping struggling homeowners keep their homes from foreclosure, thus protecting home values. The other plus is the potential extra monthly cash that may be spent at our local businesses.

The government will also step in to prevent foreclosures on millions of homeowners. There will be a potential modification of monthly payments for seriously delinquent homeowners to an estimated 31-38% of their income. Lenders who cooperate with this plan will receive a co-payment from the federal government. An additional incentive for homeowners to stay current and Lenders to participate is a potential yearly bonus set in place for five years of up to $1,000 per annually. This will serve our community by preventing foreclosures and preserving home values.

Fannie Mae and Freddie Mac will each receive $200 billion from the government. The US Treasury will continue to purchase their mortgage backed securities in order to keep rates low. This is good for the resort market. Low mortgage rates combined with low prices and the potential of vacation rental income make a second home purchase in Provincetown, Truro or Wellfleet palatable for many seeking an alternative investment to the faltering stock market.

There is a tax credit of $8,000 for first time homebuyers purchasing a primary residence. This isn’t as pertinent on the Outer Cape. However, for those of us who live here year round, you can qualify for this tax credit if you haven’t owned a home in three years. The definition of first time homebuyer has been adapted.

The next few weeks will be telltale and should provide a clearer picture of how all this will ultimately impact the real estate market. The true test will be in the months ahead.

Why Sell in this Market?

As a real estate broker I get the following same question asked at nearly every social function I go to these days. “Why would anyone want to sell their home in this market?”

Good question. There are three groups of sellers who have their properties on the market right now.

The first is one who has a large amount of equity in their home. They have identified a larger home, smaller home, waterfront, waterview, better location or whatever the reason, they want to move. Based on their equity position, they price the property right and sell it. 

The second seller is the homeowner who is in trouble and needs to sell. Let’s face it, the recession has claimed it’s victims and once you lose your job, your savings dwindle and you can’t make a mortgage payment, the options slim down. As loan modification is being worked on, some homeowner just want out. In most cases these days, the home is worth less than what the seller paid. Some sellers are facing foreclosure and are motivated to work a short sale or entertain any realistic offer. This is where the true opportunity is in today’s marketplace. 

The third seller is usually someone who just puts the house on the market in hopes of selling at an inflated, unrealistic list price. These homes practically never sell and become stale. You’ve seen them.

Ultimately, a seller sells when they need to. Whether it is financial, spiritual or life circumstances when a homeowner is ready to leave, the "for sale" sign goes up.

The Number 13

Oh my its Friday the 13th. Feeling superstitious?

In real estate the number 13 has been an interesting one to avoid by developers and realtors alike.

Next time you enter a building with more than 12 floors, check the elevator panel. Some developers avoid the 13th floor and create a 12A or go directly to the 14th floor. Even if the landlord or developer is not superstitious themselves, they realize that the value of square footage can be adversely impacted by a superstitious tenant. So, do you think this is all crazy tomfoolery and a bunch of hullabaloo? Are you loudly stating out loud or to yourself right now that every building you’ve been in has a 13th floor? Well, based on an internal study by Otis Elevators (click here), an estimated 85% of buildings surveyed with elevators did not have a 13th floor named the 13th floor. Hmmm, makes you think.

Realtors have also been known to move closing dates one day earlier or later than the 13th of the month. Especially in this market where deals are dying at the closing table, every bit of luck for the buyer and seller is needed.

On a brighter note, tomorrow is Valentines Day! So why not buy 12 roses today on the 13th and present them to your lover on the 14th.