Category Archives: Lewisboro

Exec Who Looked Other Way As Countrywide Sold Off Bad Mortgages Is Now Running Chase’s Foreclosure Review Dept. | Katonah NY Real Estate

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The federal government recently filed a lawsuit over a Countrywide scheme dubbed “The Hustle” that removed impediments to a mortgage approval so the company could sell as many mortgages as possible to Fannie Mae and Freddie Mac. Now comes news that a Countrywide exec who ignored warnings about the Hustle is currently running Chase’s foreclosure review initiative.

At the time The Hustle was being put into action, Rebecca Mairone was the Chief Operating Officer of Countrywide’s subprime lending division Full Spectrum Lending. She apparently stayed on with Bank of America after it acquired Countrywide and only left earlier this year.

And according to the complaint filed last month by federal prosecutors, Mairone was “repeatedly warned… that the Hustle would generate excessive quantities of fraudulent or otherwise seriously defective loans that were ineligible for sale to [Fannie and Freddie].”

Even after the Hustle began to roll out and internal quality reviews allegedly showed that “the quality of the loans originated under the Hustle was exceptionally poor,” the complaint says that Mairone and FSL President Greg Lumsden “ignored this information, continued on with the Hustle as planned, and restricted dissemination of the quality reviews.”

Now Mairone has moved on to Chase, where sources tell Pro Publica she was put in charge of the Independent Foreclosure Review folks.

The review process, announced in late 2011 in the wake of the robosigning scandal that called a number of foreclosures into question, is intended to sort through the mass of foreclosures at the nation’s largest mortgage servicers to find out if borrowers’ loans were given the proper review.

Oh, the irony of taking an executive who looked the other way while her company removed every speed bump, road block, and toll gate to approving a mortgage, and putting her in position to review whether all the proper procedures were followed during the foreclosure process.

Neil Barofsky, the former special inspector general for the Troubled Asset Relief Program, doesn’t hold back about his feelings on the matter to ProPublica:

“Finding out that the person running it for JPMorgan Chase is a person whose conduct in the run-up to financial crisis was allegedly so egregious that she somehow managed to be one of the only people actually named in a case brought by the Department of Justice goes beyond irony… It speaks volumes to the banks’ true intent and lack of concern for homeowners when addressing the harm that they caused during the foreclosure crisis.”

Chase would only confirm that Mairone, who is not a defendant in the federal lawsuit, is working on the foreclosure review process, but would not comment on her involvement in the Hustle at Countrywide.

via consumerist.com

It’s not a fiscal cliff—it’s an austerity crisis. | Katonah Realtor

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Reading the headlines this week, you might get the impression that the country was hurtling towards a huge deficit catastrophe on Dec. 31. From the front page of Thursday’s New York Times (“Back to Work: Obama Greeted by Looming Fiscal Crisis”) to today’s Wall Street Journal (“Pressure Rises on Fiscal Crisis”), the rhetoric suggests that the U.S. is facing a crisis akin to problems that have engulfed Europe. (A Yahoo headline from 2011: “The U.S. Fiscal Crisis: Just Like Greece, With One Exception.”)

In fact, the problem with the fiscal cliff is precisely the opposite: The tax hikes and automatic spending cuts that would kick in after Dec 31 would sharply curb our federal deficit through enacting major, sudden austerity measures that would save the U.S. government about $720 billion in 2013 alone, according to the Bank of America’s estimates, which would be about 5.1 percent of GDP.

“If we let all of those changes [happen], there would be a sharp reduction in the budget deficit—in decline in debt to GDP, falling deficits as a share of GDP,” says Chad Stone, chief economist at the Center for Budget and Policy Priorities. “It’s all a dream for people who want really sharp austerity.”

So the reason that the fiscal cliff could push us into another recession in 2013 is because it enacts too much deficit reduction upfront, not too little. By contrast, the reason that Europe became mired in a fiscal crisis in the first place is because profligate nations haven’t done enough to curb their spending and raise revenue to their more fiscally responsible neighbors’ satisfaction.

The folks who want to avoid the fiscal cliff for fear of its impact on a still-faltering economy are effectively arguing that now isn’t the time to enact austerity measures: Instead of taking money out of government programs and people’s paychecks, the government should be putting that money into the economy. And certain parts of the fiscal cliff bring more bang for the buck than others, CBBP’s Stone points out: Payroll tax cuts and unemployment benefits are more effective way to boost economic growth in the short-term than the Bush tax cuts for upper-income Americans, according to a new report from the Congressional Budget Office.

So if it’s immediate austerity that we want to avoid, and stimulus that should take its place, why is there so much talk about the need for major deficit reduction as a solution to the fiscal cliff? It’s because lawmakers decided months and years ago that they wanted this austerity crisis to happen as a way of creating leverage for more sensible, long-term deficit reduction measures.

Despite all their hand-wringing over the fiscal cliff, it was Congress and the White House that decided in the summer of 2011 that we would raise the debt ceiling only on the condition of reducing the deficit by over $2 trillion, with some cuts upfront and the rest attached to the supercommittee with a sequester trigger. (As President Obama reminded us in his speech today, “Last year, we cut more than $1 trillion in spending that we couldn’t afford.”) It’s also because lawmakers decided nearly a decade ago that the Bush tax cuts would be phased out in 2010, which Obama and Congress then extended for another two years because of the weakness of the economy.

The essential dilemma, as both the U.S. and European countries like Greece have begun to discover, is that weak economies don’t respond well to immediate austerity measures. The deficit hawks arguing for a bipartisan “grand bargain” or similarly ambitious deficit-reduction plan want to replace the kind of austerity that we’re facing now with austerity that takes effect further down the road, not undo it altogether. Others simply want to put austerity off for at least a year by extending all the tax cuts and suspending the sequester.

All of these solutions affirm one underlying truth: The reason the fiscal cliff is so scary is that it’s an austerity crisis.

via washingtonpost.com

Obama holds onto “revenue” caveat in averting “fiscal cliff” | Pound Ridge Realtor

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Repurposing their respective arguments from Friday’s round of press conferences, President Obama and House Speaker John Boehner, R-Ohio, in this week’s addresses made their cases for and against extending tax cuts for the wealthiest two percent of Americans, with a view to avoid the so-called “fiscal cliff” at year’s end.

For his part, the president pointed at his reelection victory Tuesday as a message “loud and clear” that Americans “won’t tolerate dysfunction, or politicians who see ‘compromise’ as a dirty word – not when so many of your families are struggling.”

On Friday, Mr. Obama said that while he’s “open to compromise,” he won’t allow a deal to go through that extends the Bush-era tax cuts – set to expire at the end of the year – for the top two percent of high-income families. Both parties are scrambling to arrange a bargain before a series of tax increases and spending cuts go into effect Jan. 1, potentially hurling the United States into another recession.

“At the end of this year, we face a series of deadlines that require us to make major decisions about how to pay down our deficit – decisions that will have a huge impact on the economy and the middle class, now and in the future,” the president said. “Last year, I worked with Democrats and Republicans to cut a trillion dollars’ worth of spending, and I intend to work with both parties to do more.

“But as I said over and over again on the campaign trail… if we’re serious about reducing the deficit, we have to combine spending cuts with revenue – and that means asking the wealthiest Americans to pay a little more in taxes,” he continued. “That’s how we did it when Bill Clinton was president. And that’s the only way we can afford to invest in education and job training and manufacturing – all the ingredients of a strong middle class and a strong economy.”

The same budget battle in 2011 that eventually led to $1 trillion in cuts also brought the government within minutes of shutting down. On Tuesday, voters elected the same legislative makeup – a split Congress and Democratic White House – that has struggled over the president’s term to break free of partisan gridlock and move budget legislation.

While insisting he’s “open to compromise and new ideas,” and said he’s invited leaders of both parties to the White House to discuss solutions next week, the president issued a caveat: “I refuse to accept any approach that isn’t balanced,” he said. “I will not ask students or seniors or middle-class families to pay down the entire deficit while people making over $250,000 aren’t asked to pay a dime more in taxes.

“This was a central question in the election,” he continued, “and on Tuesday, we found out that the majority of Americans agree with my approach – that includes Democrats, Independents, and Republicans.”

But delivering the Republicans’ weekly response, Boehner, too, recycled his gist from Friday’s press conferences, arguing that allowing the top two rates to rise would be letting “our nation’s economy go off part of the fiscal cliff in January.”

Democrats “believe that doing that will generate more revenue for the federal government – but here’s the problem with that,” the House Speaker said. “Raising those rates on January 1 would, according to the independent firm Ernst & Young, destroy 700,000 American jobs. That’s because many of those hit by this tax increase are small business owners – the very people who are the key to job creation in America. I used to be one of them.

“This week, I offered congratulations to President Obama, along with an alternative to sending our economy over any part of the fiscal cliff,” he continued. The pillars of his own framework, Boehner explained, include tax reform “that closes special interest loopholes and lowers tax rates,” entitlement reform, and a rejection of “arbitrary” national defense cuts.

“A stronger economy means more revenue – which is exactly what the president is seeking,” he said, adding that a brief conversation with Mr. Obama this week left him “hopeful that we can continue those talks and forge an agreement that can pass both chambers of Congress.”

via cbsnews.com

In Westchester, 12,600 Con Ed Customers Without Power | Mount Kisco Real Estate

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From Con Edison:

NEW YORK – Con Edison, aided by utility workers from across the United States and Canada, continues to replace utility poles, string wires and install transformers to restore service to those affected by Hurricane Sandy and this week’s Nor’easter.

As of 5:30 p.m., Con Edison reported approximately 28,000 customers out of service. There were about 12,600 customers out of service in Westchester County; 8,700 in Queens; 5,100 in Brooklyn; 1,400 in the Bronx; 400 in Staten Island; and fewer than 100 in Manhattan.

Con Edison has restored service to more than 1 million customers since Hurricane Sandy, which was by far the most destructive storm in company history, struck the New York area. Crews are working around the clock to restore the remaining customer outages this weekend.

Many of the outages still left in the company’s service area involve small groups of customers.

It’s been a massive job. Crews have replaced 60 miles of electrical wiring and gone to tens of thousands of locations to make repairs or tend to emergencies.

The company is also working with the New York City Buildings Department to expedite the restoration of an additional 35,000 customers in Staten Island, Brooklyn and Queens whose electrical equipment may have been damaged by flooding and cannot be safely re-energized without repairs by an electrician.

The customers requiring inside-the-premises electrical work are not listed on the Con Edison Outage Map or included in the total number of outages reported by the company. Con Edison and the New York City Buildings Department are collaborating to guide customers through the process of repairing their own equipment. For information, click here: http://www.coned.com/es/Energy-Services-Flyer.pdf.

The safety of customers and workers remained Con Edison’s highest priority, as crews responded to thousands of downed wires and hundreds of blocked roads.

Customers can report downed power lines, outages, and check service restoration status by computer or mobile device at www.conEd.com. They also can call 1-800-75-CONED (1-800-752-6633). When reporting an outage, it is helpful if customers have their Con Edison account number available, if possible, and report whether their neighbors also have lost power. Customers who report outages will be called by Con Edison with their estimated restoration times as they become available.

The company urges customers to pay close attention to reports from city and municipal officials. Important information will be posted on www.conEd.com.. For instructions on how to report an outage, click here:http://bcove.me/6sx1yox5.

Con Edison offers the following safety tips:

·       Never operate a portable electric generator indoors or in an attached garage. Be sure to place the generator outside where exhaust fumes will not enter into enclosed spaces. Only operate a generator outdoors in a well-ventilated, dry area, away from air intakes to the home. The generator should be protected from direct exposure to rain and snow.

·       Use extreme caution before going into a flooded basement. Know whether there are electrified services or unsanitary conditions and wear high rubber boots. Also, know how deep the water is and probe it with a wooden stick, if necessary, to gauge the depth. Keep children out of basements where there is water.

·       Do not go near downed wires. Treat downed wires as if they are live. Never attempt to move or touch them with any object. Be mindful that downed wires can be hidden from view by tree limbs, leaves or water.

·       Report downed wires to Con Edison and your local police department immediately. If a power line falls on your car while you’re in it, stay inside the vehicle and wait for emergency personnel.

·       If your power goes out, turn off all lights and appliances to prevent overloaded circuits when power is restored.

The company is in constant communication with the New York City Office of Emergency Management and the Westchester County Department of Emergency Services and company personnel are working closely with city and municipal emergency officials. Con Edison is also getting strong assistance from numerous state and federal agencies.

via yorktown-somers.patch.com

Obama’s Housing Policy: Fix Is Crucial To President’s Economic Legacy | Katonah NY Real Estate

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President Barack Obama secured reelection while managing to talk around one area of economic policy in which experts frequently charge him with failure: managing the national housing crisis.

In a campaign dominated by talk of joblessness and what to do about it, the president hardly mentioned the epidemic of foreclosures, the fact that roughly one-fifth of all homeowners with mortgages owe the bank more than their properties are worth, or the uncomfortable reality that the American housing market is now largely propped up by taxpayers via public control of the mortgage finance giants Fannie Mae and Freddie Mac.

But while ignoring these issues was apparently a successful electoral strategy — Obama carried most of the “Foreclosure Belt” states, including California, Nevada, Colorado and Florida — that option is unlikely to be available to the president as he begins his second term. The stakes are high. Some experts see Obama’s ability to rejuvenate the housing market as directly influencing his legacy as a failed or successful steward of the American economy.

“There are very important questions left unresolved regarding the future of the housing finance system,” said Julia Gordon, the director of housing policy at the Center for American Progress, a left-leaning think tank. “The answers matter not just for the housing market but for the future of economic growth and the future of the middle class.”

Gordon and other housing experts say they expect that with the market stabilized — prices have ticked up 3.5 percent since the market bottomed out in October of last year — the administration will turn to the biggest unresolved housing conundrum: what to do with Fannie Mae and Freddie Mac, wards of the state since a bailout in 2008 that has cost $188 billion.

After the bailout, Congress created a new regulator-overlord, the Federal Housing Finance Agency, to limit further losses and get taxpayers off the hook. The financial bleeding has stopped, but Fannie and Freddie now hold even greater sway than before. Along with the Federal Housing Administration, which backs riskier loans, Fannie and Freddie own or insure more than 90 percent of all new loans made in the United States. In short: they are the mortgage market.

So what comes next? For a while, many Republicans clamored for rapid elimination of the companies, but the prospect of no housing finance system at all seems to have cooled their ardor, though Fannie and Freddie remain popular punching bags. Obama’s win all but guarantees some level of government support going forward, even if Fannie and Freddie don’t survive.

“There is a clear understanding that the government has to play a role in the mortgage finance system,” said Mark Zandi, chief economist at Moody’s Analytics. “Without that support, the 30-year fixed-rate mortgage, the mainstay of the system, can’t exist.”

Given the stark ideological differences between the president and a severely conservative House of Representatives, and the looming fiscal cliff that will dominate everyone’s attention for the rest of this year, a permanent fix to the Fannie and Freddie problem is probably still far off. In the meantime, the advocates for partial debt forgiveness, or principal reduction, for underwater homeowners will be watching closely to see what becomes of the enemy within: Edward DeMarco, a conservative career bureaucrat who has held the “temporary” job of acting director of the Federal Housing Finance Agency for three years.

DeMarco, in the past year, has resisted intense pressure from the Obama administration to allow principal reduction on Fannie and Freddie loans, even when a private bank or another arm of the federal government would foot the bill.

Debt forgiveness, when combined with other relief, such as a lower interest rate, can bring monthly mortgage payments down dramatically. A study by DeMarco’s own agency found that targeted principal reduction could save taxpayers as much as $1 billion.

Stan Humphries, the chief economist at Zillow, recently told The Huffington Post that the large supply of underwater homes means that fewer are on the market at any given time. As a result, despite the high foreclosure rate, inventory in many areas is actually very tight. Humphries compared it to a stock with few available shares for trade, a situation that can lead to price volatility and continued disruption in the housing market — and in the economy.

DeMarco, though, has said that bailing out homeowners poses a “moral hazard” that could encourage homeowners still current on their loans to intentionally default in order to cash in on the aid. His obstinance has delighted Senate Republicans, and all but ensures that the Senate will kill any nominee Obama puts forward to replace him as head of the agency.

Recently, some have speculated that Obama will fire DeMarco, though that course poses its own challenges. DeMarco is a bureaucrat, not a political appointee, and would need to be fired for cause. Moreover, those who work under him, and would be next in line to replace him as acting director, share his views, according to two sources familiar with the inner workings of the agency.

For all his power, it isn’t clear whether replacing DeMarco with an administration loyalist would move the scale much for underwater borrowers hoping to see some of their debt slashed. Banks pledged to spend at least $10 billion earlier this year as part of the national mortgage settlement to write down the debt on some of these loans.

By the time a replacement for DeMarco is found, there might not be much left for borrowers with Fannie or Freddie loans. Moreover, there doesn’t seem to be much inclination within the administration to use any of the $40 billion or so in unspent dollars from the Troubled Asset Relief Program that was pledged for housing support to jumpstart a new underwater relief program.

Instead, administration is promoting a bill before Congress that would expand its existing refinance program.

Still, housing advocates want to see DeMarco gone. One of their biggest beefs is that thanks to his effort to save every penny for taxpayers, Fannie and Freddie have abandoned their mission to provide broader access to the housing market for middle and low-income borrowers.

Under DeMarco, the two companies have tightened lending standards to exclude all but those with the very best credit from participating. The average Fannie Mae borrower credit score from 2001 to 2004 was 718, a few points less than the median credit score of all U.S. consumers. By 2011, the average score had soared to 762, which is at the very top end of the range and is considered “excellent” by the rating services.

This means far fewer people are qualifying for a Fannie or Freddie mortgage, and even those who do qualify report long waits for approval. The United States doesn’t need another housing bubble, but it needs a system that allows financing for people with the ability to repay what was borrowed, said John Taylor, president of the National Community Reinvestment Coalition, a group that advocates for low-income borrowers. That’s good for families and good for the economy, he said.

For more than 70 years, since Fannie Mae was established during the Great Depression, it and its later-arriving cousin Freddie Mac provided this vital role, Taylor said. It wasn’t until they tried to catch up with the Wall Street subprime machine that they went off course, he said. A readjustment given the horror of the housing crash makes sense, he said, “but the pendulum has swung too far.”

via huffingtonpost.com

Obama wins, fiscal cliff looms | Katonah Realtor

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President Obama thanked his supporters, spoke about unity and said he wants to work with Republicans and Democrats to move the country forward. He also said he plans to meet with Mitt Romney to discuss how they can work together.

President Barack Obama faces a new urgent task now that he has a second term, working with a status-quo Congress to address an impending financial crisis that economists say could send the country back into recession.”You made your voice heard,” Obama said in his acceptance speech, signaling that he believes the bulk of the country is behind his policies. It’s a sticking point for House Republicans, sure to balk at that.

The same voters who gave Obama four more years in office also elected a divided Congress, sticking with the dynamic that has made it so hard for the president to advance his agenda. Democrats retained control of the Senate; Republicans kept their House majority.

House Speaker John Boehner, R-Ohio, spoke of a dual mandate. “If there is a mandate, it is a mandate for both parties to find common ground and take steps together to help our economy grow and create jobs,” he said.

Senate Republican Leader Mitch McConnell of Kentucky had a more harsh assessment.

“The voters have not endorsed the failures or excesses of the president’s first term,” McConnell said. “They have simply given him more time to finish the job they asked him to do together” with a balanced Congress.

Obama’s more narrow victory was nothing like the jubilant celebration in 2008, when his hope-and-change election as the nation’s first black president captivated the world. This time, Obama ground it out with a stay-the-course pitch that essentially boiled down to a plea for more time to make things right and a hope that Congress will be more accommodating than in the past.

Even his victory party was more subdued. His campaign said Wednesday that 20,000 people came to hear his speech in downtown Chicago, compared with 200,000 four years ago.

The most pressing challenges immediately ahead for the 44th president are all too familiar: an economy still baby-stepping its way toward full health; 23 million people out of work or in search of better jobs; civil war in Syria; a menacing standoff over Iran’s nuclear program.

Sharp differences with Republicans in Congress on taxes, spending, deficit reduction, immigration and more await. While Republicans control the House, Democrats have at least 53 votes in the Senate and Republicans 45. One newly elected independent isn’t saying which party he’ll side with, and North Dakota’s race was not yet called.

Obama’s list of promises to keep includes many holdovers he was unable to deliver on in his first term, such as rolling back tax cuts for upper-income people, overhauling immigration policy and reducing federal deficits. Six in 10 voters said in exit polls that taxes should be increased, and nearly half of voters said taxes should be increased on incomes over $250,000, as Obama has called for.

“It’s very clear from the exit polling that a majority of Americans recognize that we need to share responsibility for reducing the deficit,” Maryland Rep. Chris Van Hollen, the top Democrat on the House Budget Committee, told CNN. “That means asking higher-income earners to contribute more to reducing the deficit.”

But Sara Taylor Fagen, who served as political director in President George W. Bush’s second term, warned the current White House to pay heed to the closely divided electorate, a lesson her party learned after 2004. With 98 percent of precincts reporting, Obama had 50 percent to 48 percent for Romney.

“It’ll be interesting if the Obama team misinterprets the size of their victory,” Fagen said. “I think if you look back at history, we pushed Social Security and the Congress wasn’t ready for that and wasn’t going to do it. And had President Bush gone after immigration, we may be sitting in a very different position as a party.”

Obama predicted in the waning days of the campaign that his victory would motivate Republicans to make a deal on immigration policy next year to make up for having “so alienated the fastest-growing demographic group in the country, the Latino community.”

Former Mississippi Gov. Haley Barbour agreed that a lesson of 2012 is for his Republican Party to change the party’s approach on immigration.

“Republicans say, ‘We don’t want to reward people for breaking the law,'” Barbour told CBS. “The way we need to look at it is, how are we going to grow the American economy and where does our immigration policy fit into that?”

Even before Obama gets to his second inaugural on Jan. 20, he must deal with the threatened “fiscal cliff.” A combination of automatic tax increases and steep across-the-board spending cuts are set to take effect in January if Washington doesn’t quickly reach a budget deal. Experts have warned that the economy could tip back into recession without an agreement.

Newly elected Democrats signaled they want compromise to avoid the fiscal cliff.

via chicagotribune.com

Troubleshoot home repairs and save | Mount Kisco NY Real Estate

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Book cover image courtesy of <a href=

Book Review
By the time you see this, I pray that Hurricane Sandy will have wound herself down, giving our East Coast friends and neighbors a moment’s rest before they begin putting their homes and towns back together again. There were many stories of heroism and rescue to come out of this disaster, but one that touched me personally probably failed to make many front pages.

Brooklyn, N.Y., writer Deanna Zandt realized early on in the storm that the wind had blown her home’s fire hatch wide open. In her own words:

“I went to the back of the house, slowly, and noticed light and a breeze coming through the cracks of the doors of my back closet. Opened the doors to find that the lid to the fire escape roof hatch had blown off. Here’s the problem with this whole lid-blowing-off thing: it’s not just the rain. An open window/door/whatever during a hurricane creates a pressurized situation that allows very little wind force to lift a roof right off of the house. Only thing we could do was take turns holding on. Holding on to our roof.”

Zandt and her landlords spent the next six hours — six hours! — taking turns holding their roof down, with a rope; she chronicles her household’s extraordinarily brave, smart and ultimately successful efforts in a comedic/terrifying blog post, here.

MacGyver wouldn’t be proud: He’d be in awe. Zandt detected the issue and was able to heroically avoid true disaster only because she and the others in her household (and some family members from afar) realized it presented a much graver danger, if not dealt with, than it would appear on the surface. They understood how a home works, and that positioned her to hold onto her roof. Literally.

When it’s time to study up on real estate, often in anticipation of buying a home, we tend to focus on the transactional and financial aspects of the experience. We read books and blogs on homebuying; we download lists of interview questions to ask agents; and we fixate on what to offer and when to lock our interest rates. We tend to leave the understanding of the literal nuts and bolts of our properties themselves to the inspectors, investing blind trust in them mostly because in this day and age where we focus on digital information and content, it’s much, much harder to wrap our heads around the physics, engineering, mechanics and myriad moving pieces of what is still legally called “real property.”

But this knowledge is essential — and it doesn’t have to be painful to acquire. I can’t tell you the number of times, as the owner of a home in pretty great condition, I have had to call on my relatively rudimentary knowledge of building basics, acquired through years of selling real estate, reading inspection reports and compacting myself into crawl spaces that my own clients, the owners-to-be, have never been in, alongside the inspectors.

If you are planning to buy or build a single-family home, or you already own one, listen up. I’m about to make a bold statement. You should own this week’s book: “How Your House Works: A Visual Guide to Understanding and Maintaining Your Home,” by Charlie Wing.

“How Your House Works” is precisely what it says it is: a beautifully illustrated, diagram-packed, no-frills guide to every component and system of your home complete with super-short, plain English mini-tutorials that explain each visual.

Don’t be intimidated by the idea of diagrams: Wing, a national home improvement and repair authority, strips back each one to no more than a handful of the most important elements you absolutely need to know to understand the basic function of whatever home system is being covered, from framing to faucets — no more, and no less.

“How Your House Works” is written on two foundational (pardon the pun) assumptions: (a) that most repairs your home will ever need are very, very simple; and (b) that understanding how to fix something requires that you understand how it will work. Wing is not seeking to inspire us each to channel our inner Bob Vila; rather, he’s trying to help us avoid stories like his friend’s, who had to pay a $150 site visit fee for the plumber to pluck a pistachio shell out of the dishwasher, instantly stopping the noise it was making.

Having even a basic understanding of how your home works empowers you to save potentially thousands of dollars during your time in the property on unnecessary repair visits and calls, positions you to speak knowledgeably about what needs to happen with contractors when you do truly need them, and minimizes downtime from supposedly “broken” appliances and systems that might not really require much more than a tightened screw, a replaced bolt or a new washer.

And “How Your House Works” does this, elegantly and manageably, for 10 categories of home elements: pluming, electrical, heating, cooling, air quality, appliances, windows and doors, foundation and frame, outdoors (think: lawnmowers, chainsaws, sprinklers and septic), and a more aspirational section on sustainable home elements, like timed thermostats and solar heating.

So, get this book. If you’re buying a home in an area where many sellers have prelisting inspection reports available, it’s not at all premature to buy the book before you even find “the one”; and it’s certainly not overkill to flip through it before you attend your own home’s inspections or while you’re reading the reports. And homeowners, consider yourself on notice: The knowledge in this book can save you money, drama and in the most dire of circumstances, immeasurably more.

via inman.com

Qualifying for a mortgage after an employment gap | Katonah Real Estate

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Q: My husband is quitting his job to stay home w/our three small children (we have twins!). But in two years, we would like to move and have his new job’s salary considered when we apply for a loan. I heard he has to be working for at least six months for his income to be considered. Is that correct?

A: You and your stay-at-home-dad-to-be hubby exemplify the flexible family roles of a modern American family. Kudos to you both for thinking ahead and being strategic about the road ahead. Let’s get right to your questions:

1. Six months should work. Based on current guidelines, which are subject to change, most lenders require that a gap of employment longer than three months be followed up by at least six months of employment before the income of the borrower with the employment gap can be considered toward qualifying for the home loan.

Lenders will still require your last two years of income tax returns, but will generally look to your average monthly income from the last few months so long as they are provided with verification that your husband’s been back to work for at least 180 days.

2. There are caveats. The six-month greenlight assumes that your husband goes back to work in the same field as he worked in before he took time off to stay home with the kids. Most lenders have a two-year “same line of work” requirement; the employment gap doesn’t disqualify his income from counting, so long as he’s been in the same line of work for at least two years.

If your husband is looking to change lines of work, he will need to prove that he’s been in the field for two years before they will count his income. Time spent enrolled in an educational course does count toward the two-year “same line of work” requirement.

So, for example, if he was a firefighter, then went to law school during his employment gap, then went back to work as an attorney for six months, the time spent in law school would count toward the required two years in the legal field, and the six months of lawyer work would allow his income to count toward your qualifications.

If, on the other hand, he was a firefighter, took two years off, then went to work in human resources, he would probably need to work for two years in the HR field before his income would count toward your loan qualifications.

3. And a few more caveats. Assuming he’s going back to work in the same line of work as he was in before, the lender will likely use only his base salary to count toward your loan qualifications. Commissions, overtime, bonuses and other employment compensation beyond the base salary cannot be counted toward your ability to repay your mortgage without a two-year paper trail documenting the extra income. Similarly, if he goes back to work in his own business, he might be required to document his self-employment income via two years of adjusted gross income as shown on federal tax returns, for that income to be counted toward your loan qualifications.

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.

via inman.com