Jim’s Birthday Bash

September 30, 2008

Family, friends, colleagues and clients joined this past weekend to celebrate Jim’s 60th birthday with a surprise 1960’s themed bash at his Lakewood Ranch home.

You can view more photos from the event here.

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Rescue Plan Update…

September 26, 2008

Proposed rescue plan that was initially submitted by the U.S. Dept. of the Treasury last Friday and received numerous edits and additions throughout the week appears to have made significant progress today, with members of both parties announcing they have reached general agreement to move forward with a $700 billion federal rescue plan.

If the plan announced today is approved, it would allow the U.S. Dept. of the Treasury to purchase troubled residential and commercial mortgage-related assets, including mortgage-backed securities and loans – up to $700 billion, which would promote stability in the U.S. financial markets.

Some of the key components of the current federal rescue plan as outlined today include:

.  Providing the U.S. Dept. of the Treasury authority to issue up to $250 billion of treasury securities to finance the purchase of troubled residential and commercial mortgage-related assets, including mortgage-backed securities and loans, right away. If needed, the Treasury could request an additional $100 billion; however, the Treasury would need Congressional approval to receive the remaining $350 billion;
.  Cash received from liquidating the assets will be returned to the Treasury’s general fund for the benefit of taxpayers;
.  Funding for the program will be provided directly by the Treasury from its general fund by increasing its debt by $700 billion;
.  Help for troubled homeowners to avoid foreclosure;
.  Limiting compensation to executives of troubled firms receiving assistance;
.  Greater oversight than the limited bi-annual reporting mechanism in the current proposal; and
.  Allowing the government to take an ownership stake in companies

And what it means for consumers:

.  Although the rescue plan is not yet finalized, lawmakers and the Treasury would appear to agree on provisions that would provide assistance to many homeowners facing foreclosure. Earlier this week, the National Association of REALTORS® announced the creation of a Presidential Advisory Group to address this critical issue.

.  One of Congress’ primary goals as this proposal moves forward is to minimize the financial impact of this rescue on the U.S. taxpayers. The current proposal would allow the Treasury not only to sell the acquired mortgage assets at a later date, but also to acquire an equity stake in the companies that participate in the program. The stocks could be sold at a later date, which could enable Congress to recoup some – if not all – of the $700 billion.

What a week this has been for the financial markets! I’ve been following the tumultuous events on Wall Street, and the actions of our Congress and the federal government. No doubt you have as well.

To recap what’s happened — so far — this week:

U.S. Dept. of the Treasury Secretary Paulson today announced that Congress and the administration intend to take poorly performing assets, primarily mortgage-backed securities, off the books of financial institutions.  These assets have been a prime impediment to the ability of financial institutions to lend money.

The government also prohibited the short sale of nearly 800 financial institutions for 10 days, and may extend this prohibition to 30 days.

The U.S. Dept. of the Treasury also plans to increase the amount of mortgage-backed securities bought from government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, in an effort to increase the GSEs’ role in the housing market.

The Federal Reserve and other major financial institutions worldwide also made hundreds of billions of dollars in loans available to commercial banks in an effort to improve liquidity.

My expectation is that Congress and the administration will work together to craft legislation as early as next week addressing these critical issues. I expect to have a good sense of what the legislation will contain by this weekend, prior to financial markets opening Monday morning. Stay tuned…this could be what our real estate market needs to improve.

By contributor Anne Weintraub, Icard Merrill Attorneys & Counselors

 

Traditionally, when we apply for a loan of any kind, whether it is for a new vehicle, a home, credit card, or student loan, lenders heavily consider our credit history.   From time-to-time, most borrowers miss a payment or two, file bankruptcy, or have little or no credit, and thus their credit score is negatively affected. 

Lately, with the upswing in short sales and other foreclosure avoidance tools, most borrowers are experiencing a credit-related crisis when considering whether they can qualify for a new loan to assist them in starting over. 

Fear not! 

Alternatives to traditional credit are available with certain loan programs that are backed by the United States government.   Traditional credit requires a borrower to prove their credit history using the infamous credit score, which can range from 350 points to 850 points.  The higher your credit score, the more likely you are to obtain the loan you desire with a low interest rate.

Unfortunately, credit scores are not always reliable, are inconsistent, unforgiving, and sometimes nearly impossible to repair in time for the next creditor’s consideration.  Alternative credit is a tool for borrowers with poor or little credit history to help them obtain loans. 

When using alternative credit, a borrower can show the lender their history of payment to landlords, hospitals, day care centers, utility vendors, and other non-traditional creditors.   Our changing economy is opening the door to loan programs that cater to those with alternative credit.  A recent example is the use of alternative credit to qualify for a Federal Housing Administration loans, referred to in the business as FHA loans.   Borrowers tend to favor FHA loans because of their preferable loan pricing in contrast to conventional loans, and in the event of a default, FHA provides lenders with mortgage insurance that will cover the lender’s losses.  FHA loans are even more attractive to borrowers because they require less cash out of pocket, allow gifting of funds by friends and relatives, and unlike conventional loans, FHA loans give more favorable rates to borrowers with a history of poor credit and in some cases, bankruptcies.   However, FHA loans are limited in the loan amount you may to obtain and require borrowers to provide extensive documentation to verify that FHA loan guidelines are followed.  The concept of providing extensive documentation can be cumbersome for the borrower, loan originator, and eventually, the loan closing office.  On the bright side, most well documented loans have a much lower default rate than loans which require little or no documentation from borrowers-a fact we all now realize.  Ironically, Congress enacted FHA in 1932 when borrowers had a hard time qualifying for home loans or were laid off from their jobs, similar to what many borrowers are facing in today’s economy.  Since then, according to FHA, it has helped over 34 million borrowers realize their dream of home ownership. In all times, especially during tough times, it is important to explore your options for a second chance and look beyond the norm.  To learn more about FHA loans and alternative credit, you may visit www.hud.gov or contact your local mortgage professional.

 

This article first appeared in Living Out East magazine. Used by
permission of Living Out East. www.livingouteast.com

Lakewood Ranch developer SMR is hoping to submit plans late this year to construct a new LWR village community in Sarasota County. The Villages of Lakewood Ranch South is expected to become a 5,000 home residential community. Plans initially call for about 7,000 acres of land with up to 5,000 homes. The village design will follow the regulations of the county’s 50-year plan called Sarasota 2050. If the plans are approved by the county, SMR will become the first developer to build under the growth plan that was adopted by the Sarasota County Commission in 2001.

This fall could be a particularly great time for first-time or buyers long out of the market to jump in and make a purchase.

Here are the reasons why:

  • Interest rates are likely to decline as Freddie and Fannie get government help.
  • The Federal Housing Administration recently boosted its loan limits.

The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct. 1. People scraping dollars together for a down payment should try to set their closing for the end of this month.

  • The tax credit will shave $7,500 off a first-time buyer’s federal tax bill due April 15. Buyers who don’t owe tax, will get the money as a refund.

FYI: The government’s definition of a first-time buyer is anyone who hasn’t owned a home in the last three years.

 

Give me or any member of our team a call if you have any questions or if we can help you purchase a home.

 

 

 

 

Five Tips for Going Green

September 10, 2008

Eco-friendly. Carbon footprint. Global warming. Energy-efficient. These catch phrases have become part of our society as we have become more aware of our impact on the environment and our role in protecting it. As a homeowner, there are some simple, inexpensive steps you can take to make your home energy-efficient. Get started on the road to going green with these five tips:

1. Change Your Light Bulbs

By replacing just five incandescent light bulbs with compact fluorescent (CFL) bulbs, you can save $100 per year on electric bills while using up to 75 percent less energy and removing greenhouse gases from the environment.

2. Buy ENERGY STAR® Appliances

ENERGY STAR-qualified appliances, such as refrigerators, washers and air conditioners, meet a higher level of energy efficiency set by the Environmental Protection Agency and U.S. Department of Energy than standard models. According to ENERGY STAR, if just one in 10 homes used ENERGY STAR-qualified appliances, the impact could be compared to planting 1.7 million new acres of trees. And, switching to these appliances is not only good for the environment, but easy on your pocketbook. Although these appliances may costs more, you can reduce your energy bill by $80 per year.

3. Seal Up

Cracks and air leaks represent cash seeping from your doors and windows. Get rid of air leaks in doors, windows and other areas by caulking gaps and cracks. This will help decrease your heating and air conditioning bill. But make sure you use silicone sealants. Acrylic caulk tends to shrink, while silicone sealants are waterproof and wont shrink or crack, creating less waste.

4. Use Less Water

Did you know that roughly 60 percent of a home’s water consumption takes place in the bathroom, according to the California Urban Water Conservation Council? The largest culprit is the toilet, which accounts for 27 percent of your household supply every year. By installing low-flow toilets, showerheads and faucets, you can save thousands of gallons of water each year. In addition, replace leaky fixtures. That slow-dripping faucet can waste as much as 2,400 gallons of water per year.

5. Adjust the Thermostat

When adjusting your homes thermostat, the rule of thumb should be: turn up the dial in the summer and down in the winter. Lowering the temperature by just one degree will reduce your electrical costs. And if you use a programmable thermostat, you can program your air-conditioning and heating systems to reduce output while no one is at home or at night while you sleep. Ceiling fans are also helpful in circulating the air to keep the room cool in the summer and warm in the winter.

Going green doesn’t have to be overwhelming or costly.  By making just a few small changes within your home, you can help decrease energy consumption and help make the world a greener place.