Recent News

No Surprise : Foreclosure Rates Seem To Trend With Real Estate Speculation and Regional Job Losses

RealtyTrac published its Q3 2007 foreclosure statistics today and the data paints an interesting picture about the nature of home loan defaults. Of the Top 10 MSAs in terms of Foreclosures Per Household, eight represent areas in which real estate speculation was rampant in 2002-2006, and two represent areas whose...

Falling Prices And Adjusting ARMs : Real Estate Investors Have A Way Out

Unless you live on the moon, you've heard about the issues facing American homeowners with respect to mortgages. You've heard it on TV, in the papers, and on blogs. The good news is that relief is on the way (somewhat). Momentum to "help the homeowner" started with the states (Ohio),...

The Funny Thing About Opportunity Is That It Rarely Hangs Around For Coffee

I am a huge bird-in-hand guy. If there's something available now, I will almost universally take it instead of waiting to see if something better comes along. The only time I strayed from that rule was in the game of love and with respect to my wife. I hope she...

What Is Home Equity, And How Is It Made?

First, a definition: (Home Equity) = (Value of Home) - (Amount Owed On Home) There are two ways that equity is created: The homeowner pays down the principal balance on the mortgage. The home's value increases because of appreciation But just because both methods increase the equity position in a...

HELOC or HELOAN? It May Be Too Soon To Tell.

Okay, so you've seen me use this sort of graphic before. Published by the Federal Reserve Bank of Cleveland, this Fed Funds Rate Future chart is an analysis of what action market players think the Fed will take at its next meeting. The Fed next meeting is a two-day affair...

How Kiddie Condos Can Offer A Return On Investment For College Student Room And Board Expenses

I almost wish I found this video sooner; not many colleges are going into session in October. But... if you have college students in your family and want to increase your exposure to real estate, Barbara Corcoran has some interesting things to say. Parents buying homes near college campuses is...

Markets Take A Breather Before Friday’s Job Reports

Both the European Central Bank and the Bank of England left their respective interest rates on hold, relieving some of the pressure on the U.S. dollar. Had rates increased, it would have increased the relative return of investing in euro- or pound-denominated instruments versus investing in dollar-denominated instruments. This would...

Why Wednesday, Thursday, and Friday Should Be Wild Days For Mortgage Rates This Week

The last Fed meeting just finished up, but markets are already looking ahead to the next one, a two-day affair October 30-31. If you'll remember, in the immediate aftermath of the Fed's announcement to lower the Fed Funds Rate by 0.500%, mortgage bonds were the hit of the party and...

Foreign Nationals: Today’s Sign That Liquidity May Be Returning To The Market

I am working with a Dublin-based real estate developer, providing Irish real estate investors with mortgages for United States-based properties. A project on which we are currently working has been interesting in context of how the mortgage market is changing. When we started work on this Chicago-based condo building, the...

Interview with First Business: Will the Fed Cut Rates?

I interviewed with First Business anchor Anchor Beejal Patel this week. First Business produces news "shorts" that are syndicated nationwide. The story: "How would a Fed rate cut impact mortgage rates?" You all know my answer -- it's well-documented around these parts. I am a little embarrassed about having to...

What To Do If Your Home Is Losing Value And You Aren’t Planning To Sell

A few clients called me this week to share concerns about a declining housing market and how it would impact their long-term financial planning. "I need my home equity for retirement", one said. "What if foreclosures on my neighbors ruin my nest egg." Our ensuing conversation covers some basic facts...

How Sub-Prime and Alt-A Mortgage Markets Are Behaving Like NFL Draft Picks

Did you see the BNP Paribas press release last week that said it's halting withdrawals from some of its funds? My favorite part is how blunt the first sentence is below (bold added for emphasis): "The complete evaporation of liquidity in certain market segments of the US securitisation market has...

Once Again, Look Beyond The Headlines And Meredith Vieira’s Interviews For The Truth

I don't know what was stranger on The Today Show this morning: Meredith Vieira's back-to-back interviews with Jim Kramer and J.K. Rowling Jim Kramer looking like a fish out of water in front of a camera Watching Lester Holt and Matt Lauer (1) share the anchor desk and, (2) actually...

Unless You Watch CNBC During Your Lunch Break, You Missed A Must-Watch Video

Earlier this month, CNBC featured a segment on how sub-prime mortgages work. The shame of it, though, is that it aired at a time when the probable audience was already well-versed on the topic. This would be like holding a seminar on how to throw a baseball to the attendees...

Paying Down Your Mortgage Does Not Automatically Increase Your Net Worth

Mathematics is highly-relevant to financial planning. It helps us grasp concepts such as compounding interest, amortization schedules and return on investment. But, forget all of the complex equations. Basic math is all you need to get to the key point: (Net worth) = (Total value of assets) - (Total value...

Trying To Link Consumer Sentiment Surveys And Retail Sales Reports

As Retail Sales plunged 0.9% -- the steepest mark in two years -- and Consumer Sentiment surged by 8.3%, we have to (once again) question if the University of Michigan Consumer Sentiment survey is of any use at all. Assuming that there is a lag between a consumer's "improving feelings...

Who Would Have Thought That The Cubs Could Teach Us About Mortgage Bonds?

I just finished up a call with a client in which we discussed the current state of mortgage markets and why mortgage rates have risen so far, so quickly. 30-year fixed mortgage rates are up as much as 0.625% over 30 days. That's ridiculous given the relatively low volatility of...

How “Repair Credits” To The Buyer Can Sabotage Your Home Sale

When buyers and sellers look for common negotiating grounds, it's common for the buyer to request home improvements to be made prior to the sale. The request may be phrased in any number of ways: "The hardwood floors are warped and we think the seller should pay for it." "There...

How The IRS Gets Paid On Your Foreclosure Short Sale

In his weekly syndicated column, Kenneth Harney pulled back the curtain on a nasty piece of IRS tax code that can penalize homeowners with foreclosures and short sales. For those that don't know, a short sale is when a lender accepts a payoff amount that is less than the amount...

Mortgage Lenders : “We’re Not Using The VantageScore Credit Scoring System”

The much-hyped VantageScore credit scoring system seems to be getting a lot of press lately, so thank you to Holden Lewis at Bankrate.com for keeping it real. According to the VantageScore Web site, it is the "new standard in credit risk scoring". "Why did we create VantageScore? Simply put, the...