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U.S. Warned by Fitch on Fiscal Cliff; Moody’s Stands Pat on View | Waccabuc Realtor

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Fitch Ratings warned that the U.S. may be downgraded next year unless lawmakers avoid the so-called fiscal cliff and raise the debt ceiling in a timely manner, while Moody’s Investors Service said it will wait to see the economic impact should the nation experience a fiscal shock.

Congress and President Barack Obama must confront more than $600 billion in tax increases and spending cuts set to take effect in 2013 or risk the economy tipping back into recession. Standard & Poor’s stripped the U.S. of its AAA credit rating on Aug. 5, 2011, after months of political wrangling that pushed the nation to the deadline an agreement to lift the debt ceiling.

Nov. 7 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan, Alice Rivlin, a senior fellow at the Brookings Institution, Mohamed El-Erian, chief executive officer of Pacific Investment Management Co., and Peter Orszag, former director of the Office of Management and Budget, talk about outlook for action to avert a so-called U.S. fiscal cliff following the election of President Barack Obama to a second term. This report also includes comments from former White House spokesman William Burton, Potomac Research Group’s Greg Valliere and Jefferies & Co.’s David Zervos. (Source: Bloomberg)

The U.S. rating depends on “a stabilization and then a downward trend in the ratio of federal debt” to gross domestic product next year, according to a Moody’s statement. Fitch also said that the nation may lose its AAA ranking next year if the government fails to reduce the deficit.

Moody’s would likely “await evidence that the economy could rebound from the shock” of the U.S. falling off the fiscal cliff before considering restoring the nation’s stable outlook from negative, according to the company’s statement.

The U.S. Treasury reiterated Oct. 31 that it expects to reach the federal debt limit “near the end of 2012.” The agency said in a statement that it can use “extraordinary measures” that would “provide sufficient ‘headroom’ under the debt limit to allow the government to continue to meet its obligations until early in 2013.”

Failure to reach even a temporary arrangement to prevent “the full range of tax increases and spending cuts implied by the fiscal cliff and a repeat of the August 2011 debt ceiling episode” would probably result in a downgrade, Fitch said.

via bloomberg.com

Great Recession creates 4.8 million renters | Waccabuc NY Real Estate

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The United States added 4.8 million renters in the past six years while losing 1.7 million owner households as the dynamics of the real estate space changed in the wake of the 2008 financial meltdown, according to the Mortgage Bankers Association.

The market experienced additional changes in the first nine months of 2012, creating unexpected outcomes in the housing finance sector, prompting the MBA to alter its forecast for 2012.

In brief, the MBA revised its estimate for 2012 mortgage originations to $1.7 trillion, up from $1.4 trillion a year earlier. Still, the trade group predicts total originations will taper off to $1.3 trillion in 2013, eventually hitting $1.1 trillion in 2014. However, mortgage rates are expected to hover below 4% through the mid-part of next year.

The MBA expects gross domestic product will inch up from 1.6% in 2012 to 2% in 2013. Meanwhile, the forecast suggests existing home sales will increase from 4.6 million in 2012 to approximately 4.78 million next year.

Still, economic growth is contingent on government tax policies and at least a temporary avoidance of the fiscal cliff in early 2013.

“The tax increase in particular would be devastating to economic growth,” said MBA chief economist Jay Brinkmann.  “We believe that the entire package of tax increases and spending cuts, if left unaltered, would cut 3.5 to 4 percentage points from our growth forecast.”

Another outlier is the final definition of the qualified mortgage rule from the Consumer Financial Protection Bureau, which will define what type of mortgage qualifies as safe from repurchase risk in cases of default. It’s unknown whether the final rule from CFPB, which is due out in  January, will contain a safe harbor provision to protect lenders from buy back risk if they follow the guidelines.

These forecasts are based on the idea that QM comes in with a safe harbor and legislatures get past the fiscal cliff without dramatic spending and tax changes, said Mike Fratantoni, the MBA vice president of research and economics.

If the nation moves past the QM rule and the fiscal cliff without the introduction of new risks, the MBA expects moderate economic growth and an uptick in home prices annually from roughly 1.2% in 2012 to 3.5% in 2013.

via housingwire.com

Waccabuc NY Real Estate | Mortgage delinquencies spike in September, report says

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While the nation’s foreclosure inventory continues to shrink, new delinquencies spiked sharply during September 2012, new data released Monday afternoon showed.

According to Lender Processing Services ($28.51 0%), the total U.S. mortgage delinquency rate — loans 30-plus days past due, but not in foreclosure — surged upward by 7.72%, reaching 7.4% in September versus the 6.87% reported one month earlier.

Despite the spike, September 2012 delinquency totals still remain below levels seen last year, LPS said.

While new delinquencies spiked in September, the volume of properties in foreclosure continues to shrink as banks and other financial instutions continue to work through a backlog of distressed real estate that remains well above historical levels of half of a percent or so, according to most industry experts.

LPS said that the nation’s foreclosure pre-sale inventory rate fell to 3.87% during September, down 4.05% from one month earlier and down 7.37% less than one year ago.

Florida, Mississippi, New Jersey, Nevada, and Louisiana represented the states with the highest percentage of noncurrent loans, according to the data report; Lousiana replaced New York, which had been in the top five for most of this year.

Despite the drop in foreclosure inventory, the surge in new delinquencies has led to something not seen this year until now: an increase in the amount of distressed properties, defined as properties 30 or more days delinquent or in foreclosure.

According to LPS, there were 5.45 million properties in distress during August 2012; for September, thanks to increasing delinquencies, that number now equals 5.64 million.

via housingwire.com

10 Strategies To Increase Your Credit Score In 24 Hours | Waccabuc Realtor

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When you are in a hurry to increase your credit score there is 10 things that you can do with in 24 hours that help immensly. Here are the 10 things to increase your score:

1. Order your credit reports online for each of the top three credit reporting agencies individually. Even though it may be cheaper to order a three in one report offered by one of the Agencies, ordering individual credit reports will grant you the access to initiate a dispute online with each agency. You can’t improve your score in 24 hours unless you know what it is! Knowing where to start is important.

2. Call your credit card companies and request to increase your credit lines. Increasing credit lines will improve your outstanding debt to-available-credit ratio amounts on your revolving accounts, and can improve your credit by as much as 60 points.

3. Rearrange your debt so that every one of your credit cards have the lowest possible outstanding debt-to-available-credit ratio. A ratio of 25%-35% is ideal.

4. If you have the ability, pay down the cards until that ratio is recognized on your credit report.

5. Borrow money to pay down your debts referenced on your credit reports from a lender that doesn’t report, such as friends and family. Unreported debts will assist you to decrease those debt to available credit ratios and boost your score. Your private lenders may even want lesser interest than you are paying on the cards! While this business deal doesn’t appear on your credit report, it’s still debt, so use it wisely. You don’t want horrible Thanksgiving dinners after failure to pay on a loan made by a family relative.

6. If you have freshly paid down or paid off debts and they don’t show corrected on the report, fax that information to the credit agencies. Providing them with the verification of payoff is much faster then initiating a dispute of the account information. In many cases, the agency won’t verify the payoff with the lender, and accept your proof as correct.

7. Begin your dispute approach online with each service. The online dispute will suspend the negative derogatory items from your credit report for the short term, increasing your score. When the dispute is resolved your score will change accordingly, but for the period in-between you get a momentary reprieve from the effects of the negative derogatory information.

8. If you must choose one credit score to work on, spotlight your focus on the middle score. For most major purchases such as real estate or a vehicle, the lender will pull all three credit scores and use the middle score, (all three scores in one is called the tri-merge score) so this is the one that matters the most. If you improve your middle score over your highest score, the formerly top score is the one that now matters most.

9. Have a close friend or family member with a solid credit history add you to their card. You don’t even need to have the possession of an actual card, but by adding you to the account, you get the benefit of their long credit history. This doesn’t hurt their credit history at all. A Credit report is a compilation of accounts with your social security number attached to them. When your social security number was added to their account, you agreed to be responsible for it, and their years of good credit history now show up on your credit report. The individual person who lent you their excellent credit didn’t add their social security number to any of your accounts with the negative or derogatory history, so there is no way for the bad information to appear on their credit report.

10. If you have recent collection account reporting to your credit file that haven’t been paid? If so call the collection agency and ask, “do you delete?” About half of all collection agencies will take away the item from your credit report if you pay it in full, or a generous portion of the debt. Sometimes the collection agency can remove the debt from the credit bureaus instantaneously.

There are other things that can help you improve your credit score that will take much longer to implement. I think this list will suffice for now because these things can be done in 24 hours.

via articles.submityourarticle.com

Does China build quickly and cheaply for a reason? | Waccabuc NY Real Estate

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Having spent a fair amount of time in China over the past 18 years, and having witnessed its spectacular rise, I’ve always been puzzled that this remarkable nation still cares so little about the quality of the things it makes. Today, more than 30 years after the Opening in 1978, China has yet to address this shortcoming: Everything from dime store trinkets to high-rise buildings continue to show an astonishing indifference to detail.

As a Westerner steeped in the Protestant work ethic, I’ve written thousands of words and done much hand-wringing about Chinese quality over the years, wondering when China would follow in Japan’s footsteps — when it would finally pull off a miraculous reversal in its attitude toward quality, as Japan did in the decades after World War II. It hasn’t happened, and from what I can see, it probably won’t.

All of which has gotten me to wondering if it’s my own Western concept of quality that’s become obsolete. Perhaps making things last has become pointless in a world that changes so quickly.

It wouldn’t be the first time there’s been a fundamental shift in the prevailing idea of what constitutes quality: America’s own early history furnishes a parallel. For obvious reasons, the relatively crude buildings and manufactured goods of the young United States couldn’t compare to those of the Old World — one reason wealthy Americans in the early 18th century still insisted on importing their building materials, hardware and dishes from Great Britain.

Naturally enough, the British remained more than a little condescending toward their renegade former colony, whose building and manufacturing efforts fell far below English standards. This was, after all, an England whose houses were built with cut stone and massive oak timbers, whose cabinets used fine hardwoods in places you couldn’t even see, and whose steam engines were routinely polished, painted and pinstriped in gold.

Yet by the time the Yanks showed off their latest products at the Philadelphia Centennial Exhibition in 1876, it began to dawn on the Brits that America’s mass-produced products, as coarse as they appeared, were overtaking their own. This passing of the torch was symbolized by the towering Corliss steam engine that formed the fair’s iconic centerpiece, but it was apparent in all kinds of exhibits, from to stoves to clocks to furniture.

From the British viewpoint, nothing had changed. They had scrupulously upheld their accustomed standards of quality, steadfastly insisting on the very finest workmanship even when — like those gilded steam engines — it had no conceivable purpose. The eventual result of this shift in perception was an end to Britain’s industrial pre-eminence, and the beginning of our own.

It’s likewise possible that the world is once again changing, this time in a way that’s unfamiliar to our Western frame of reference. Perhaps China builds quickly, cheaply and with indifferent quality because the pace of change no longer demands permanence.

Then again, perhaps the point is moot. China comprises nearly one-fifth of the world’s population and serves, by our own admission, as “America’s workshop.” Its attitude to quality — like it or not — will inevitably affect our own.

via inman.com

Mixed news for homeowners facing foreclosure | Waccabuc NY Homes

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So-called short-sales of homes are rising, according to HOPE NOW, a private-sector alliance of mortgage investors, servicers, insurers and non-profit counselors.

The number of short-sales — when banks accept less money for a home than is currently owed on the mortgage —  crept up in August from the previous month. In theory, that’s good news because an uptick in short-sales should fewer homes going into foreclosure.

But that’s not the case yet. August foreclosure sales increased 12 percent from July, and foreclosure starts grew 14 percent. Faith Schwartz, executive director of HOPE NOW, attributed the rise to lenders clearing their foreclosure backlog, noting that many of the foreclosures have been in process for at least a year.

“The incentives for short-sales continue to increase,” she said. “The $25 billion foreclosure settlement, and the fact that many servicers aren’t used to holding on to foreclosures or [real-estate owned properties] means incentive is increasing.”

The goal is to resolve foreclosures before homes end up sitting abandoned and blighting the surrounding community, Schwartz added.

The data also suggest that more homeowners are making mortgage payments on time. The number of homeowners delinquent 60 days or more on their mortgage fell 2 percent in August, down to 2.42 million. In July, 2.47 million homeowners were seriously delinquent on their mortgages. Fewer borrowers are falling behind at least 60 days on their mortgages, and there are fewer current (30 day) defaults.

“While this is almost 40 percent lower than the all-time high of 4 million homeowners seriously past-due on their mortgage, we cannot forget there are many more who remain at risk of foreclosure,” Schwartz said, noting that short-sales are an integral part of helping homeowners. Yet many borrowers don’t know a short-sale is an option.

While short-sales, foreclosure starts and foreclosure sales rose in August, the number of homeowners who got mortgage relief in the form of loan modifications fell. Roughly 76,000 homeowners got permanent loan modifications under both both lender programs and the federal government’s Home Affordable Modification Program (HAMP). That’s down from July, when more than 82,000 homeowners received modifications from both HAMP and private companies.

Most loan mods start as HAMP modifications. If the borrower does not meet HAMP standards, they may be considered for alternative, proprietary modifications.

In total, 5.75 million homeowners have received permanent loan modifications since 2007, with more than 543,000 of those modifications occurring since January. Most homeowners who have had loans modified since the beginning of the year have done so through a lender or loan servicer.

Only 143,420 homeowners have received loan mods this year under HAMP which has very rigid documentation and debt-to-income standards. Since 2007, most of the loan mods — nearly 4.7 million — have been completed via proprietary loan modifications. Comparatively, the government’s HAMP program has modified roughly 1.1 million loans since it began reporting in 2009.

via cbsnews.com