NEW YORK (CNNMoney) — Borrowers who were overcharged by Countrywide Financial more than three years ago are finally going to get what’s due to them.
The Federal Trade Commission said Wednesday that, as a result of a settlement reached with the mortgage lender more than a year ago, it is sending out checks totalling nearly $108 million to more than 450,000 former Countrywide borrowers.
Susan Goldfarb of Albany, N.Y. spent last summer avoiding her backyard. “Our mosquito problems were just above and beyond,” she says. “No matter what we did, from sprays to candles to bug zappers, we just couldn’t get them to stop breeding in our yard all summer long.” Goldfarb spent the winter reading up on ways to keep spring and summer rains from puddling in her yard. That way, by spring she was able to begin construction on a major home improvement: a drainage system. A Bed bug infestation is usually an opportunity , whether you reside in Canada, us , or Europe. This problem are some things that nobody wants to possess to affect , but it must be addressed immediately. the primary step to ridding your home of these pesky bedbugs will involve reading and studying every article you’ll find. Well, if you’re handling a bedbug infestation immediately , you’re in luck, because you’ve got landed within the perfect place. According the buyer , we are the simplest bed bug exterminator in Toronto, Ontario and that we don’t take this position lightly. Bed Bug Exterminator Toronto | Pest Control Experts are a licensed pest control company and will provide you with a copy of our licensure upon a verbal or written request.
Knowing what season-appropriate changes to make to your home is often hard to pinpoint. Here’s a list of seven top home improvements, repairs, additions and adjustments to make to your home to get the most out of it, and out of spring!
1. Inspect and fix your roof.
At the end of winter, once the snow and ice has melted, make sure you or someone sure-footed takes inventory of winter-damage. From fallen branches to cracks caused by ice, springtime is a great time to make sure things are in order no matter what winter threw at you. “Whether its shingles or tar, make sure there are no breeches,” suggests Steven Mazur, a contractor in New York City. “And if there are, have them repaired.”
2. Evict winter guests.
Once things begin warming up, take some time to walk the perimeter of your home surveying any obvious property damage. “Make sure you do a thorough inspection to make sure no animals have burrowed into your house over the winter.” Less-used spaces like storage basements and attics can sometimes invite houseguests of the inhuman variety by way of holes in the walls, window cracks and roof breaches you may not have noticed. “You can also help keep bugs away,” says Mazur, “by pulling weeds that are growing in or close to the foundation of your house.”
3. Grow your dinner.
While flowering gardens are best planted in the fall, vegetable gardens should be started in the spring. Earmark a section of your yard, and plant a few items that you and your family love to eat in the summertime. Tomatoes and herbs are easy to grow and can even be purchased as plants with existing edible growth. But any garden and supply store, like the one found at Lowe’s Home Improvement will be able to help you when deciding on the kind of garden you hope will flourish in the months to come.
4. Green your grass.
Brian Griffith, a landscape designer and the winner of the 2009 Oasis Award for outdoor kitchen design, says, “Look at your lawn; find the dead spots and seed them. Use the spring rains to your advantage, so you don’t have to stand over new seedlings everyday with a hose.” Griffith also suggests taking care of the rest of your lawn as well. “Give it fertilizer to keep it healthy.”
6. Repair drainage problems.
“Spring is a good time, especially with all the rain,” says Griffith, “to pay attention to what is happening to the movement of water through your yard.” Moving water often leads to erosion. Where standing water often makes it harder for things like grass to grow– not to mention the fact that it can easily become a mosquito breeding ground. Griffith suggests adding a French pump to poorly draining yards. “You can even do it yourself,” he says. “Any hardware store will have what you need.” Just make sure you connect the pump to your home’s already existing downspouts. But be aware: “You aren’t technically allowed to drain your yard to the street,” he warns.
7. Prepare outdoor spaces for summer.
The spring months are best for beginning any larger scale projects you have in mind for your outdoor living spaces. The earlier you begin, the sooner you may begin to enjoy them. So make sure that you spend time in the winter consulting with landscape designers and builders so that projects, like the construction of patios, decks and swimming pools, can be executed with the first signs of warmth. “As soon as the ground thaws,” says Griffith, “you can start building.”
Better credit score doesn't guarantee cheaper loan
Surprises in mortgage shopping
By Jack Guttentag, Monday, August 8, 2011.
Editor’s note: This is the first of a two-part series.
One of the unusual features of the U.S. mortgage market is that borrowers are obliged to select a lender before they know the price. They have a price quote from the lender they select, and the quote may be instrumental in their selection decision, but the price is preliminary. It is not final until it is locked by the lender.
Before the crisis, it was common to lock on the spot, which meant locking the quoted price. Today, that is the exception, reflecting tighter underwriting requirements and the increased risk to lenders of closing a loan that does not conform exactly to the rules. Locks are usually delayed for some days, sometimes for weeks.
Delays in locking mean that the lock price can differ from the price quote on which the borrower made a selection decision. The lock price can be higher or lower, but more often than not it is higher. These articles will explain why.
One reason the lock price can differ from the quoted price is that market conditions change. Mortgage prices are reset every morning, and sometimes during the day. Until the loan is locked, the price will change with the passage of time.
Because the market price is as likely to be lower than the quoted price as to be higher, borrowers should benefit from market-price changes as often as they are hurt. It doesn’t quite work out that way, however, because when prices decline, the lender may not pass it on — instead, it may lock at the previously quoted price. The lender can usually get away with this because the borrower is getting what was expected.
The lender may feel justified in not passing through price reductions because when the price rises by a small amount, the lender may absorb it by taking a smaller markup. The amount involved is not worth a hassle with the borrower. If the price rise is too large to absorb, however, the lender will require the borrower to pay it. On balance, therefore, borrowers are disadvantaged by market-price changes prior to a lock.
The quoted price can also change because the lender has not been able to verify one or more pieces of information on which the price depends, and has corrected them. These corrections may be reported to the borrower informally by the loan officer. They will also be contained in the documents the borrower receives within three days of receipt of the loan application. The documents include a corrected loan application, a credit score disclosure, and a Good Faith Estimate (GFE).
The critical items that may change are the credit score, property value and loan amount.
The credit score used to price a mortgage is the one received by the lender, not the one obtained by the borrower. There are a number of scoring models from which lenders make a choice. Each of the three major credit repositories has its own model, with multiple versions of each. Usually, lenders pull scores from three models and use the middle one, or they pull two and take the lower one.
The different models generate different scores, but usually the differences are not large. If one model score is 750, another won’t be 650, but it might be 740. Even a small difference, however, might be enough to affect the price.
The impact of credit score on price is based on score ranges that are 20 points wide on the most widely used FICO score models. The ranges are 620 to 639, 640 to 659, 660 to 679, and so on. This means that if the score reported by a borrower is near a break point, it takes only a small downward correction to drop him into a lower score bracket that could raise the price. An example would be a shift from 620 to 619. By the same token, if the score obtained by the borrower was 639, an increase to 640 would shift her into a higher score bracket that could lower the price.
In principle, credit-score corrections by the lender (like market-price changes) should lower the mortgage price as often as they raise the price. I am skeptical that this is the case, however, partly because borrowers are more likely to overestimate their score than to underestimate it.
Further, I am confident that some lenders do not pass on price reductions from an upward revision of the credit score when they don’t have to. Few borrowers are alert enough to catch it, especially if the lock price is the same as the price they had been quoted.
Next week: How corrections in property value and loan amount affect the price.
The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.
Contact Jack Guttentag: Letter to the Editor
Copyright 2011 Jack GuttentagAll rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.
Playing dress-up with luxury real estate
Mood of the Market
You might find this surprising, but I’ve never been a huge fan of houses, per se. I love real estate (no surprise there), but I when I got into the business years ago, I chose it more for its power to improve people’s lives, and for my love of contracts and negotiations.
Every home I’ve owned was either a reluctant choice or a home I just happened to stumble across while showing homes to clients and was able to score a great deal on — I’ve been very happy in the final analysis with every home I’ve owned, but I’ve also always prioritized location, comfort and value.
But the other day, I was thumbing though a book of luxury homes and had a “Eureka!” experience. I had found my house — the house in which I was destined to live. It even had a name: La Villa Contenta.
Or, as I said it when I told my friends and family about it, “La Villa Contentaaaaahhhhhh.” Sited on eight pristine acres of lawn rolling down to Malibu shores, La Villa Contenta is a Mediterranean fantasy, complete with 18th-century amethyst chandeliers, an orchid greenhouse, secret gardens, a Hermes fireplace, Hearst Castle-style indoor pool, and a private terrace hovering above the waves of the Pacific Ocean (the better to deliver Shakespearean soliloquies from, my dear).
My pals spouted objection after objection, but I overcame them all. They said that I don’t live in Malibu — and that I can’t stand Los Angeles-area traffic; I pointed out that I could telecommute from my library at La Villa Contenta.
They expressed concerns that I’m an empty nester and might not need so much space; I said that the guest suite in the fern grove could be theirs when they visit. They balked at the $75 million list price; I pointed out that (a) it’s a buyer’s market, (b) I’m a crack negotiator, and (c) Candy Spelling’s place a few miles away just sold for a 40 percent discount, and La Villa Contenta is listed for half her home’s asking price (what a bargain!).
Clearly these conversations were entirely tongue-in-cheek. But in some ways, just the fantasy and window-shopping experience I had with La Villa Contenta lived up to the promise of the home’s name.
Would it be amazing to live in a place like that? Sure! But if I actually had $75 million handy, do I think the incremental benefits to my life, compared to the already wonderful life I live in my current home, would be worth the expense? No.
I don’t know that I’d be all Warren Buffett about it, if I had that kind of wealth — the Oracle of Omaha (the world’s third richest man, according to Forbes), is famous for (among other things) still living in the same home he bought for $31,500 in 1958.
But I like to think I’d spend my disposable millions feeding Somalian kids, or educating American ones, or something in that vein.
It turns out that I am pretty “contenta” in my home now, and more consciously so after mentally trying on the high life at La Villa Contenta.
It also turns out that I’m not the only American housing consumer who is playing “house up” (that’s what I call this real estate version of dress-up) with luxury homes.
On the Web, some of the most popular real estate sites are those dealing exclusively in pics of celebrity homes, like the Real Estalker blog, and other outlets specializing in real estate eye-candy like HomesOfTheRich.net and PriceyPads.com.
Every once in awhile, these homes offer some inspiration in terms of design themes, paint colors or even little conveniences “normal” people can integrate into their lifestyles.But more frequently, the people I know who are addicted to this so-called house porn love it more for the opportunity it presents to ooh and ah, then to shake one’s head, stating a morally self-righteous position to the effect that you wouldn’t drop that kind of cash on a place even if you had it.
Rather than being green with envy, these days many smart homeowners who salivate over (or sneer at) uber-luxe homes leave their house-porn hobby more grateful than ever that they have such great lives and such great homes for such small fractions of these homes’ gargantuan price tags — especially in light of the short-sale and foreclosure epidemic that has hit celebrities and laypeople alike.
Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com
Demand for real estate rentals rises, homeownership rate drops
Homeowner vacancy rate stagnant in Q2
Editor’s note: This article is republished with permission of Builder magazine. View the original article: “Rental Vacancies Drop, While Empty Owned Units Stay Stagnant.“
In the teeter-tottering relationship between rental housing and homeownership, demand for rentals stayed up in the second quarter of 2011 while homeownership remained static, according to residential vacancy and homeownership data released by the U.S. Census Bureau at the end of July.
While the national vacancy rate for rental housing dropped to 9.2 percent — a decrease of 0.5 percentage points compared to the previous quarter and down 1.4 percentage points year-over-year — the homeowner vacancy rate remained at 2.5 percent, a mere 0.1 percentage points lower than the previous quarter and unchanged from the year before.
Overall, the homeownership rate dropped to 65.9 percent, down 1 percentage point from the previous year and down 0.5 percentage points from the first quarter. The Midwest bested the rest of the country with a homeownership rate of 70 percent, higher than any other region. The West had the lowest rate of homeownership, at 60.3 percent. Rates in all regions stood lower than they had in the second quarter of 2010.
“A lot of things are reverting to look like the late 1990s,” says Mike Montgomery, an economist at IHS Global Insight, pointing to the second quarter of 1998 when the homeownership rate stood at 66.1 percent. Even in the multifamily sector, while vacancy rates are dropping with increasing speed, the numbers are “not overwhelmingly low,” he says. “Between 2001 and 2010, rental had a vacancy rate of close to 10 percent. But before that, the number was closer to 7.5 percent to 8 percent.”
Both rentals and homeowner units fared better in suburbs than in cities. Urban vacancy rates among rental units stood at 9.6 percent, and homeowner units at 2.9 percent. In the suburbs, rentals registered a vacancy rate of 8.6 percent while vacancies among homeowner units stood at 2.4 percent.
By region, the South recorded more standing inventory that any other area of the country both in rental housing (vacancy of 11.4 percent) and homeowner units (vacancy of 2.7 percent). Vacancy rates for homeowner units in the Northeast, Midwest, and West were not statistically different, at 2.3 percent, 2.5 percent, and 2.5 percent, respectively. Among rental units, vacancies were second-highest in the Midwest (10.3 percent), followed by the Northeast and West (both at 6.8 percent).
Among population segments, homeownership was strongest among those 65 and older (80.8 percent) and weakest among those under 35 (37.5 percent). Ownership rates declined on an annual basis for all age groups 64 and younger, while the rate among owners 65 and up had no significant change.
Non-Hispanic white households reported the highest homeownership rate, at 73.7 percent. All other races combined stood at 56 percent, with black householders reporting a homeownership rate of 44.2 percent, and Hispanic householders at an ownership rate of 46.6 percent.
Mapping patent dispute may be headed for trial
REAL, Realtor.com operator Move Inc. fail to resolve differences in mediation
A legal battle to put to rest allegations that Realtor.com and other real estate websites infringed on now-expired patents could be headed for a jury trial next year, after court-ordered mediation failed to resolve the 6-year-old dispute.
Real Estate Alliance Ltd. (REAL) claims Realtor.com operator Move Inc. and dozens of other real estate companies, brokers and agents violated its mapping technology patents.
REAL, which sold licenses for its mapping technology to a number of real estate brokerages before the patents expired in 2006 and 2008, sued Pennsylvania Realtor Diane Sarkisian in 2005, claiming she had violated them.
When REAL attempted to expand the lawsuit into a class-action suit, Move, the National Association of Realtors (NAR), and the National Association of Home Builders (NAHB) responded by filing a lawsuit against REAL in U.S. District Court for the Central District of California.
REAL filed a counterclaim seeking triple damages against Move, NAR, NAHB and more than two dozen companies that employ map-based search, including multiple listing services, real estate brokerages and franchisors, and homebuilders.
The next generation of real estate agent teams
Meet boomer, Gen X, Gen Y consumers on their on terms
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The median age of first-time buyers is approximately 31 years of age. According to NAR, the median age of Realtors is 56. The issue for the real estate industry is: Will these two groups be able to bridge the gap and work together?
Intergenerational challenges
Until recently, the “I am the real estate expert” model dominated the industry. Before the advent of IDX (Internet Data Exchange) and third-party vendors that publish listings data, consumers had to rely on agents to access what was on the market.
Not only were the agents the experts in terms of what was on the market, they also controlled access to it.
This situation gave rise to the “expert model” in real estate. This is a perfect fit for people born before 1965 (boomers and traditionalists), who value expertise. As a result, real estate professionals have often marketed themselves as “Your local real estate expert.”
The next generation of real estate agent teams
Meet boomer, Gen X, Gen Y consumers on their on terms
The median age of first-time buyers is approximately 31 years of age. According to NAR, the median age of Realtors is 56. The issue for the real estate industry is: Will these two groups be able to bridge the gap and work together?
Intergenerational challenges
Until recently, the “I am the real estate expert” model dominated the industry. Before the advent of IDX (Internet Data Exchange) and third-party vendors that publish listings data, consumers had to rely on agents to access what was on the market.
Not only were the agents the experts in terms of what was on the market, they also controlled access to it.
This situation gave rise to the “expert model” in real estate. This is a perfect fit for people born before 1965 (boomers and traditionalists), who value expertise. As a result, real estate professionals have often marketed themselves as “Your local real estate expert.”
The next generation of real estate agent teams
Meet boomer, Gen X, Gen Y consumers on their on terms
The median age of first-time buyers is approximately 31 years of age. According to NAR, the median age of Realtors is 56. The issue for the real estate industry is: Will these two groups be able to bridge the gap and work together?
Intergenerational challenges
Until recently, the “I am the real estate expert” model dominated the industry. Before the advent of IDX (Internet Data Exchange) and third-party vendors that publish listings data, consumers had to rely on agents to access what was on the market.
Not only were the agents the experts in terms of what was on the market, they also controlled access to it.
This situation gave rise to the “expert model” in real estate. This is a perfect fit for people born before 1965 (boomers and traditionalists), who value expertise. As a result, real estate professionals have often marketed themselves as “Your local real estate expert.”
'Game Plan' for a tough real estate market
Technology company exec, industry researcher team up for book project
By Mary Umberger, Monday, August 8, 2011.
A couple of truisms:
- The more things change, the more they stay the same.
- You can’t be all things to all people.
Steve Murray believes that embracing both adages is central to how real estate brokerages and agents ought to go about positioning themselves for the day when the housing economy finally re-emerges from the valley of the recession.
"As long as I’ve been around, people have been saying, ‘This is what’s going to happen: technology is going to do this, consumers are going to do that, and if you don’t do this, you’re all dead," said Murray, a widely known figure in the real estate industry who heads the Real Trends consulting and research firm in Castle Rock, Colo.
But Murray doesn’t find, despite hearing more than three decades of prognostications — even prophecies of doom — that the real basics of the business have evolved much.
"Really, if you put aside the current housing market, in the past 35 years what has changed?" he said in an interview.
"Consumers — 75 to 80 percent of them — still use an agent to buy or sell a home," he said. "The homeownership rate is still in the mid-60 percent range. And two-thirds of consumers still choose an agent because they know one or someone refers them to someone."
Steve MurrayMurray and co-author Ian Morris, CEO for Market Leader, a real estate software and marketing firm, have written in their new book, "Game Plan: How Real Estate Professionals Can Thrive in an Uncertain Future," that though technology and the emergence of multiple business models have had a significant impact, the survival of brokerages today hinges on a single pressure:
"It’s the competition for agents, period," he said. "It’s internal competition that has driven the major changes — not external (forces)."
All other concerns in the coming years will stem from that, he said.
Murray and Morris spend a large part of their book recounting the unspooling of the modern era of the brokerage business, which Murray said began with the entry of Merrill Lynch into the real estate business in 1977.
The financial services firm’s business plan — backed by capital, technology and Wall Street clout — of providing a one-stop shopping experience for customers brought a new mindset to the business, he said.
Followed into real estate by other outside-the-industry players such as Sears and Prudential, two significant trends emerged among brokerages:
1. An "all things to all people" approach to services; and
2. The ability of agents to call the shots on how they’ll be paid.
Never mind that Merrill Lynch came and went, Murray said. It set in motion a series of changes that included the acceptance of the once-banned practice of solicitation of sales professionals, which eventually led to the emergence of the "professional-centric" age in brokerage.
The advance of the 100 percent sales commission model and the creation of new business networks (spurred by Merrill and others, and the entry of relocation companies) in the 1980s generated a handful of business models that emphasize various compensation systems for agents, Murray and Morris wrote.
Whichever compensation model a brokerage chooses now, Murray said, of paramount interest is the recruitment, development and retention of competent sales professionals — and it behooves them to invest in services that support their agents.
In turn, it falls to the agents to figure out how best to churn and service sales leads, he said. He said teams are emerging as the most promising business model for agents.
"Everybody who’s looking at the past sees the teams that arose 20 years ago, where two agents get together to combine their production so they get a bigger split," he said.
"But the teams of today are businesses unto themselves — they have people who generate prospects and people who handle listings and people who handle buyers and people who handle marketing and people who handle closings," Murray said. "They are true businesses: very disciplined, focused businesses."
And "one size fits all" doesn’t seem to work across the spectrum of agents, he said. After more than 180 interviews with individual sales professionals and brokerages in the course of researching the book, he said he believes that the most successful agents or teams will focus on a niche or market.
The same goes for their brokerages, he said.
"They have to choose a specific objective and build a business plan around that objective," he said. "They can’t expect to continue to say, ‘We just want to be big.’ "
Not that big is bad, he said — it’s just that in order to get big, a company must streamline its practices and overhead, accordingly.
"You have to make a choice. If you want to be the biggest, a la Wal-Mart, then you’re going to have to compete on that basis," he said. "You can’t be a large-market-share but high-cost brokerage and expect to do well in the future."
Another facet of the business that isn’t new — yet, it has evolved — is lead generation, Murray said.
"The need for lead generation and a system to manage leads — those are not new things, that’s no revelation," he said. "But to thrive you have to do it and have a system. Otherwise, you get run over."
"Lead generation is a numbers game," wrote Murray and Morris. "Contact management, lead cultivation and customer relationship management (CRM) systems can and will play a huge role in determining which agents and companies are most successful."
Ian MorrisMorris, who formerly oversaw the launch and operation of Microsoft Corp.’s MSN Home Advisor online real estate site, said during a presentation at the Real Estate Connect conference in San Francisco in late July that the linchpin for all of the above will be the cloud-based integration of such services — that is, making all the systems "talk" to one another.
"Integrated systems are going to be critical to the future of real estate," he said. "An agent enters a listing, the broker knows about it immediately, fliers are pre-populated, e-postcards set up, virtual tours — all of that information can be pulled from one entry in the (multiple listing service)."
"That’s what’s happening today — it’s not perfect yet, but it’s happening," he said. In turn, access to integrated technology will be a key part of a brokerage’s ability to attract and retain agents, he said at the conference.
And Morris’ Market Leader does have a horse in that race — the company worked with franchisor Keller Williams Inc., for example, to develop eEdge, an integrated technology platform used by its real estate agents.
In the book, Murray and Morris lay out two to-do lists — their "Game Plan" — for brokerages and agents, both of which boil down to defining their objectives.
"It may be three, four, five, six years before we see markets where we have double-digit sales increases, in volume, consistently," he said.
"This is not to say that those who keep doing what they’ve always done are dead today or next year. No, it means that the days when you can grow and be profitable doing those old things are coming to a close."
Mary Umberger is a freelance writer in Chicago.
Contact Mary Umberger: All rights reserved. This content may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this content without permission is a violation of federal copyright law.
