Programs Offer Short Sale Alternatives for Struggling Homeowners

August 31st, 2010

As more home owners have fallen behind on their mortgage payments, foreclosures and short sales have become more of a common occurrence in the Greater Rochester region and across the nation. A short sale is a sale of a property where the sale price falls short of the balance owned on the loan. The lender must agree to and accept less than the total amount due. In some instances, a short sale may be a better alternative to foreclosure because it helps avoid hefty fees for the lender and has less of a dramatic impact on a borrower’s credit rating.

While there are loan modification and other programs that can assist homeowners, not everyone will qualify. For many who are at risk of losing their home through foreclosure, a new program from the United States Treasury Department may help.

In February 2009, the Obama Administration introduced the “Making Home Affordable Program.” The plan is intended to stabilize the housing market and help struggling homeowners remain in their homes. One option is to modify mortgages to make them more affordable through the Home Affordable Modification Program (HAMP). While many homeowners have received help through HAMP, far too many will not be able to keep their home even with a loan modification. For those homeowners, the Treasury Department has established a new short sales program called the Home Affordable Foreclosure Alternatives Program (HAFA). HAFA is designed to streamline short sales by providing a uniform process, standard forms, and incentives for families and their mortgage servicers to complete the process. It offers homeowners who sell their homes under HAFA, $3,000 to help cover their moving costs.

On June 1, 2010, Fannie Mae and Freddie Mac released guidelines for implementing the HAFA program. Servicers were required to implement these policies no later than August 1, 2010. While largely consistent with the HAFA guidelines for non-GSE mortgages, Fannie and Freddie have each made some important differences. To be eligible under the non-GSE HAFA program, the borrower must be delinquent or default must be reasonably foreseeable. Under Freddie’s requirements, a borrower must be more than 60 days delinquent and have cash reserves less than the greater of $5,000, or three times the current monthly mortgage payment. Fannie allows borrowers to be at imminent risk of default. Fannie also prohibits a borrower from participating in HAFA, if the borrower has the ability to continue making the mortgage payments but chooses not to do so (sometimes called strategic default); has substantial unencumbered assets or significant cash reserves equal to or exceeding three times the borrower’s total monthly mortgage payment or $5,000, whichever is greater; or has high surplus income. Fannie and Freddie allow for servicer incentives of $2,200 for a short sale and $1,500 for a deed-in-lieu of foreclosure (DIL). This is in contrast to the $1,500 servicer incentive for both a short sale and a DIL for non-GSE mortgages. For both Fannie and Freddie, each subordinate lien holder in order of priority may be paid no more than 6% of the unpaid principal balance of its loan, until the $6,000 cap is attained. This policy remains unchanged from the non-GSE HAFA program. Consistent with the non-GSE HAFA program, Fannie and Freddie guidelines do not permit subordinate lien holders to require contributions from the real estate agent or borrower as a condition for releasing its lien and releasing the borrower from personal liability. 2

The Greater Rochester Association of REALTORS® recommends that anyone who is at risk of foreclosure or considering a short sale to first seek the advice of a real estate attorney or financial advisor who can discuss various options and alternatives to ensure that their best interests are protected.

*Some of the information contained in this article was provided by the National Association of REALTORS®

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Could Hydroponics Be The Vegetable Gardening Method Of The Future?

August 31st, 2010

Simply put, Hydroponics is the growing of plants without soil. Plants are grown in an inert medium and fed a solution containing a perfected mix of primary, secondary and micro-nutrients. Hydroponics makes it possible to grow plants in locations where it had not previously been possible, for example on rooftops, or in rocky, barren locations. With the use of an appropriate HID lamp, it is even possible to grow successfully indoors.

Almost any kind of plant can be grown hydroponically, and because plants have access to the exact nutrients they need, they respond by growing more rapidly while producing bigger yields. Field tests have shown that hydroponically grown produce is packed with more vitamins and minerals than soil grown, either organic or non-organic. Not only are nutritional values higher, but it’s said that the flavors are also outstanding. Since plants start out in a disease and pest free medium, little or no pesticides
are necessary.

Although hydroponics might be the farming method of the future, it has been utilized for hundreds of years by many different kinds of people. As noted in Hydroponic Food Production (Fifth Edition, Woodbridge Press, 1997, page 23) by Howard M. Resh: “The hanging gardens of Babylon, the floating gardens of the Aztecs of Mexico and those of the Chinese are examples of ‘Hydroponic’ culture. Egyptian hieroglyphic records dating back several hundred years B.C. describe the growing of plants

in water.

Over the last one hundred years, scientists and horticulturists have experimented heavily with hydroponics. The goal has been to grow fresh produce in areas of the world without soil. Hydroponics was used to feed troops in WWII, and it has been integrated into the space program. More recently it has been adopted by farmers and hobbyists who see the value of hydroponic growing, including the ability to produce higher yields, with less pesticides and less water waste.

Plants grown in hydroponic systems maintain optimum nutrient and moisture levels, so they grow faster and healthier. And no soil means no weeds and no soil-born pests or diseases. Another advantage is that root systems stay smaller on hydroponically grown plants, allowing the plant to focus its growth energy on producing plant mass rather than roots. This means you can have more plants per square foot of growing space. And since hydroponic plants never get root bound, they don’t need to be repotted. Hydroponic produce has a longer shelf life than soil grown produce.

Learn more about Hydroponics and Home Brewing on Property Source Radio.  Saturday’s at 9am.  Call if with your questions, 222-6397.  PSR LIVE  on 950 am ESPN!

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Breakdown That Leads to Breakthrough

August 31st, 2010

What Separates the Winners From the Others? Your success does not depend on how you respond to the good days. Your success depends on how you respond to the bad days. Winners fail. In fact, winners fail more often than others. That’s how they become winners. They learn and grow from their failures. What separates the winners from the others is how they respond to their failures and setbacks.

Everyone suffers when they fail. After the failure do you get emotional and dwell on it? Of course, we all do that. The key is how long you dwell on it and what you do next to get past it.

Winners suffer deeply but they get objective and refocus quickly. They quickly consider what there is to learn from the failure or setback. They look for patterns and connections to see if there is a systemic problem that can be corrected and lead to a significant improvement. Then they get back into action. They take action on the correction if there is such action to take. Then, quickly, they get on with what has to be done next to move their business forward with little or no residual “drag or delay” from the failure or setback.

Consider Failures and Setbacks as Breakdowns: People have far more control over some breakdowns than others. A Real Estate Agent works hard to put a deal together and the Buyer is unexpectedly laid off from their job. You have less control over that than if the Agent had never asked about the Buyer’s employment and there was a problem that could have and should have been identified earlier. Either way, it’s a breakdown.

Some setbacks are much harder to get past than others.  My elderly neighbor’s teenage granddaughter was visiting.  When the teenager got up at night to use the bathroom she turned out all the lights, not knowing her grandma always left one on so she could see. The grandma fell down the stairs and will be recovering and rehabilitating from her injuries for many months. Think of the grandma in recovery; the granddaughter’s guilt, and her parents struggle to help the young woman get past it. Some setbacks are much harder to get past.

Creating Breakthrough Out of Breakdown: Like all successful strategies this is a system. It is a simple system. Do not confuse simple with easy.  It is difficult to put into practice. It is difficult to practice consistently. However, once it is mastered it becomes a path to a life of greater courage, filled with breakthroughs and less fear of breakdowns. When you have setback, a failure, a breakdown there is a five step process that turns that breakdown into breakthrough.

Acknowledge the error. Simply recognize and admit that, yes this happened or is happening. This may mean also recognizing and admitting the (sometimes dire) consequences of the error.

Take responsibility for it. This means that you accept that you caused it. You do this even if it is unreasonable; even if it seems completely inaccurate. You do not have to tell anyone else that you take responsibility.  You take this step for the purpose of taking control of your life and seeking the breakthrough.

Forgive yourself and/or anyone else for the error. Forgiveness is an act and a sign of strength and confidence. In this system it communicates that sense of strength and confidence to you. It builds and expands your self esteem.

Recommit to the goal…or not. In whatever endeavor the error occurred. Recommit to the effort. Or choose to end the effort. But, if the latter, make it a conscious choice. If you choose to recommit and in most cases you will, then if it is a lost Real Estate deal, recommit to your goals and career. If it is a habit or addiction recommit to your health and vision. As earlier if it is a tragedy, recommit to love and a life of purpose. As part of your re-commitment choose a deadline, a new deadline or timeframe.

Get immediately back into action. You may get immediately into action toward the goal. Follow the famous advice, “Never leave the site of setting a goal without first taking some form of positive action toward its attainment.” And once you have taken that action toward your goal get back into action in your life, whatever there is to do next.

The Real Estate business is one that can cause several areas of breakdown sometimes daily. A truly successful Agent can get past these opportunities for breakdown and learn from them to minimize the effect next time.

Print this article, now. Highlight or circle the parts that you want to remember.  Stick it on a wall or somewhere that you can find it so that when you have your next breakdown and you know it is inevitable. You can see whether there is a way to turn that difficult moment into the path to your next breakthrough.

Rich Levin is a Real Estate coach and teacher whose focus is teaching Agents to understand and control their business.Through that understanding Agents achieve satisfying, successful careers and lives.  For more information on Rich’s work; go to www.BestCoachingOnEarth.com. Rich is President of Rich Levin’s Success Corps Inc. Contact him at 585-244-2700 or rich@richlevin.com. From The Success Corps’ ‘Attitude and Psychology’ Series

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http://www.emeraldashborer.info/

August 28th, 2010

Visit this website for more info…

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Tree-Killing Beetle Makes It To Monroe County

August 28th, 2010

The green adult beetle lays its eggs on the bark of ash trees from May through July. Larvae hatch from the eggs then burrow into the bark of the tree. Those larvae feed on the interior tissue of the tree, growing and creating pathways under the bark. These damaged areas affect the tree’s ability to get water & nutrients needed from the soil. The larvae spend the winter inside the tree and mature into a beetle that emerges through a chewed hole in the spring to mate and lay a new set of eggs. The harm done by the larval feeding under the bark is hard to detect, and by the time tree damage is visible, it is generally too late to save the tree.

Learn how you can protect your trees from the Emerald Ash Borer Beetle on PSR, with Gary Raffel of Genesee Tree Service, Saturday at 9am.  950 ESPN.

http://ashborercontrol.com/

http://www.savenyashtrees.com/

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FHA Changes and How They Will Affect You

August 21st, 2010

FHA Changes and How They Will Affect You

The Government continues to tighten regulations on the Federal Housing Administration (FHA) implementing new legislation involving higher costs and stricter guidelines geared to keep FHA solvent.  While these new rules are still in a formulation process, these changes are expected to take effect as soon as next month.

FHA loans allow borrowers a more flexible avenue for Mortgage Lending, with lower credit score requirements and cash reserves needed to close.  As the economy is still reeling from bad mortgage loans, a sluggish housing market and high unemployment rates, FHA has become the primary source for first time homebuyers and for those who do not have the higher down payments and credit scores needed to go with Conventional Financing.

In order to cover the higher risk of these loans, FHA charges a one time upfront fee and a monthly fee to pool into one large insurance fund.  This fund is then used to secure and cover any default mortgages.  As of midyear of 2010, Capital Reserves for the FHA program are down to $3.5 Billion from $19.3 Billion in September of 2008.  Concerned with the loss of $15.5 Billion in available capital reserves, Congress has implemented new initiatives to prevent the need for taxpayer bailouts, as well as strengthening FHA’s overall credit portfolio.  While these new efforts by Congress are seen as the necessary direction needed to keep FHA solvent, many are concerned that these changes will stifle an already depressed housing market.

What does this mean for you?

Higher Monthly Fee’s:  FHA will raise the monthly MIP (Mortgage Insurance Premium) Fee from .55% to .9% initially; with plans to raise it as high as 1.5%.  The loan balance is multiplied by the MIP percentage and divided into 12 monthly payments.  On a $150,000 loan, this will potentially raise your monthly payment by $44 initially; $119 if or when Congress settles on 1.5%.

While the monthly MIP is increasing, Congress has decreased the Upfront MIP Fee from 2.25% to 1%.  This change will allow consumers to finance less money and thus lower their overall amortized payments.  Using the same example of a $150,000 purchase, consumers would finance $1875 less with this new change.  However, coupled with the monthly MIP increase, total overall payments will still increase.

These MIP initiatives project to generate $300 Million per month towards the FHA capital reserves, allowing it to replenish its funds much faster than under previous legislation.

Credit Score Requirements:  Since its inception, FHA has never placed a restriction on Credit Score Requirements, despite individual Lenders previously doing so.  New proposals require a minimum of a 500 credit score for FHA to insure the mortgage and a 580 to keep the Down Payment requirement at 3.5% of the Purchase Price.  Borrowers with credit scores under 580 will have to increase their Down Payment to at least 10%.

This change however, will not affect most consumers.  Lenders have long since placed their own credit score restrictions on top of FHA loans, usually requiring a 620-640 minimum.  Compared to Conventional requirements of 740 credit scores, FHA will still remain a flexible option for homebuyers.

Reducing Seller’s Concessions: Seller’s Concessions are a set percentage of the purchase price (represented in a dollar amount) that the seller agrees to contribute towards the closing costs.  These concessions will be financed into the mortgage and paid out of the Mortgage Proceeds to the Seller.  FHA currently allows 6% of the Purchase Price to be financed into the Mortgage and paid on behalf of the buyer.  New legislation will curtail Concessions to 3%, in an effort to avoid over inflation of home values in order to cover the contributions.

The reduction of Seller’s Concessions from 6% to 3% will affect homebuyers whose cash flow is tight to begin with.  In our example, the loss of 3% on a Purchase of $150,000 will yield $4500 less in Concessions available for the homebuyer.

While these changes will make it more difficult for the homebuyer, it should not affect too many consumers in their goal of homeownership.  However, higher monthly payments and less financial assistance for closing costs may place homeownership out of the reach of those buyers who just squeak by.  You should contact a Lender to see how these FHA initiatives will affect you, especially if you have already been Prequalified and have yet to put in a contract offer.

Tune in this morning at 9am to hear Robert Everhart
First Rochester Mortgage Corp./ Mortgage Consultant.  Call in with your questions and feedback. 222-6397.  PSR 950 ESPN!

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Clam Boil-Wow your guests with this easy dish!!

August 20th, 2010

Bag of Raw Shrimp

Bag of Clams

Bag of Mussles

Cooked Sausage

Corn on the Cob

Small Red Potatoes

Dry White Wine

Chicken Broth

2 TBS Old Bay Seasoning

Place all ingredients in Deep Foil Pan, Cover with Foil and place on hot grill for 30 mins.  Yum!!!

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Make Your Own Beer at Home with Sunset Hydroponics and Home Brewing!

August 13th, 2010

Home Brewing – Basically we like to say that if you can boil water you can make your own beer! With only a minimal investment on equipment (we recommend the Maestro K-1 Beer kit) that you will use over and over, it pays for itself in no time at all. It is a 2-week process from start to finish for most styles of beer, and with the kits we have in our store it’s almost fool-proof! The major thing we stress is STERILIZATION & CLEANLINESS! Contamination from not sterilizing equipment and bottles properly is usually the only major downfall of beginners.  If you’re a wine person, all you have to do is stir because there is no boiling involved! We recommend starting with the Gold Equipment kit K-2 or a K-5 (also a minimal investment that you will reuse for years), we always have a large selection of wine kits that include the yeast, chemicals & grape juice required to make a certain type of wine. Just pick your favorite and get started! All kits come with detailed instructions and as always our knowledgeable staff is here with any questions you may have.  Wine takes between 35 days and 3 months from start to finish depending on your selection.  In the end you will end up with a wine that has an award-winning taste for only a few dollars a bottle! You can make your own customized labels for the bottles and enjoy them anytime! Both the kits and finished bottles make great holiday gifts too!

Hydroponics -Hydroponics is a method of growing plants using mineral solutions in water, without soil. There are several different techniques for delivering this solution to the plant.  Which technique you use will depend on what you want to grow, how much space you have, etc. Have a green thumb? Well living in Western NY and having four seasons is great for everything but gardeners! Why not enjoy those fresh vegetables, herbs & flowers you have in the summer all year long? You can if you set up a grow room indoors. Our staff can help you design & set up the perfect year-round grow room! Just come in with a few ideas, such as: what you want to grow, how much space you have to grow in and how much you want to spend! We can help you fit something into just about any budget, not to mention all the saving you will be doing at the grocery store & in the kitchen! You can grow indoors with soil or hydroponics, although hydroponics does have many advantages over soil growing. Hydroponics is:
Faster – Supplying the roots with constant access to water & nutrients makes for a faster growing plant;
More Economical – The water & nutrient solution is recycled & reused; and
More Precise – You get to control the water & nutrient solution that the plant has access to.
Indoor growing also requires the use of HID (High Intensity Discharge) lighting or high-output fluorescent.

Join Pat and Brenna on Property Source Radio this Saturday at 9am to learn more about Hydroponics and Home Brewing with the experts from Sunset Hydroponics.  Call in with your questions 585-222-6397.

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Energy Basics: Understanding Your House

August 5th, 2010

True Energy Solutions with Tony Karpovich

There are a number of factors that lead to energy use & loss from your house. In the building sciences, we tend to look at the exterior of the house (the ’shell’ or ‘envelope’ of the house) in terms of how well it blocks drafts into & out of the house (air flow) & how well it slows heat loss (commonly…insulation).

The first step in saving energy in your house is to keep your heat/cool in the house as long as possible…we airseal to stop the hemoraging of air you paid to condition & we insulate to reduce heat loss through the walls & ceilings.

The next step is to look at high energy USE appliances in the house: inefficient Heating & Cooling, hot water systems, electrical appliances, lighting, ect.

Click on the link below to see diagrams showing some of the principles of energy loss in YOUR house:

http://www.trueenergysolutions.com/energybasics.html

Tune into Property Source Radio Saturday August 7, 2010 to hear the Energy Experts from True Energy Solutions.  Call in with your questions 585-222-6397

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What Should Be In A Contract!

August 4th, 2010

Right after the holidays many consumers will be thinking of that remodeling project that they want.

Whether it is roofing, siding, windows, that new kitchen or an addition it will be a costly investment and you should protect yourself before signing a contract.

New York State regulates the sale of home improvement goods and services and applies to most types of improvements costing more than $500 purchased by homeowners.

The law requires contractors to give you a contract that includes many provisions. The main ones are summarized below:

1. The name, address and phone number of the contractor must be on the contract. (Do not accept a P.O. Box number as the contractor’s address)

2. The exact amount of the project including progress payments.

3. A start and completion date, including any contingencies which would change the completion date such as bad weather. You may also want to have included a penalty clause for running over the completion date. A $100 per day deduction off the contract price is common for every day that the project runs over the completion date.

4. A clause that reads that “any progress payments received by a contractor from a customer can only be made if they bear a reasonable relationship to the work actually done, materials purchased or related costs.

5. Any payments received by a contractor from a customer prior to substantial completion of the job must be place into a escrow account in a bank located in New York State within five business days and the customer must be informed where the money is held within ten business days.

The contractor can only withdraw the deposit only in the following circumstances:

under the terms of the payment schedule agreed on by the contractor and the customers;

upon substantial completion of the job; or if the customer violates the contract, but only to the extent that the amount covers the contractor’s reasonable costs.

6. A complete specification description of the work and materials, including brand names, model numbers and other identifying information.

7. A consumer notice that reads as follows:

The customer has an unconditional right to cancel the contract until midnight of the third business day after the contract was signed.

Cancellation must be done in writing! If the contractor or subcontractor who does the work is not paid, he or she may have a claim against the customer’s property under the Lien Law.

8. Warranties and guarantees should be stated in the contract. Be sure to understand if the warranty or guarantee covers both the materials and labor and if they are prorated and transferable. For example a new roof job may warrant the materials for 25 years but the contractor may only warrant his labor for one year.

There are penalties against contractors and consumers may sue for actual damages, plus a $500 penalty and reasonable attorney’s fees if the contractor has used fraudulent written statements to get the contractor to sign the contract. The Attorney General is also authorized to go to court to stop illegal practices and order contractors to compensate defrauded customers.

Contractors can also face civil fines for violating the provisions of the law, especially with the protection of the customer’s payments.

TIPS FOR CONSUMERS:

Determine exactly what work you want done before you decide to get estimates.

Get three estimates from contractor companies that are similar in size. Be sure to check for verification of Liability and Workmen’s compensation insurance.

Check the contractor’s reputation with the Better Contractors Bureau, banks and suppliers.

Make sure when you decide on your final contractor to do the job that you are signing a contract that meets all the requirements of Article 36A of the NYS Business Law.

Do not pay a large deposit in advance of the start of the project unless it is for a specific reason such as special order cabinets or windows, etc. Instead negotiate a payment schedule tied to the completion of specific stages of the job.

Don’t pay the final payment unless you are satisfied and the job has been completed as per the contract specifications.

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