The ins and outs of Real Estate

30 Year Fixed Mortgage Rates even lower this week!

 

30 Year Fixed Mortgage Rates

Are at 5.33%

down from 5.41% last week

Not too shabby, but they could and should

be even lower, if the economy

is to be revived!

 

 

Realtors propose plan to revive the Housing Market

Jeffersonville houses under water, originally uploaded by SDWBJW.

 

Last Friday, The National Association of Realtors drafted a proposal to congress for a plan to get the housing market back on track. The proposal called for the government to spend $100 billion over the next 12 months buying loan points so that new home buyers buying a primary residence could get a low fixed rate for the life of the loan.

While some housing market economists disagree with the proposal and state that something should be done now for ailing homeowners vs future purchasers, I think the idea has some merit.

For one, it would instill more confidence in would be buyers who are waiting and sitting on the fence to see what's going to happen next. As they enter the market, the backlog of existing homes waiting to be sold would start to dissipate and the market would begin to recover.

So, while I don't always agree with NAR's proposals, I believe this one is a good start in the right direction. Additionally, it is so vitally important that present home owners are given some sort of immediate relief, in the form of loan modifications and interest rate reductions to lower fixed rate mortgages!

Also, with housing being such a vital part of our economy, the FED needs to tie the Federal Funds Rate to long term 30 year fixed mortgages (rather than the bond market and short term loans) and should require all rescued banks and member banks to give lower interest mortgage loans, to reflect the higher cost of housing.

I know many say that big government is bad and you don't want excessive Government interference in big business, but look at the Global financial Crisis we're in now due to a lack of government regulation and oversight!

http://www.time.com/time/business/article/0,8599,1857470,00.html

The other thing that we need to do as a country is support 'Protectionism' of American jobs and force big business to repatriate many of the off-shored jobs back to this country.

This could be accomplished by taxing multinational corporations and other off shore US companies much higher than they are taxed when they remain stateside. Businesses continue to propagate that protectionism is bad for America, but fallacy of that belief is evidenced in the current housing, credit and global economic crisis-es!

And very plainly, if Americans don't have well paying jobs, they can't pay hefty mortgages!

 

 

Lender Discrimination Help from HUD

No Black Folk Allowed, originally uploaded by war2d2.

For much of our country's history, it was common practice for banks to refuse to make mortgage loans to minorities, blacks, Hispanics, and even recently arrived white immigrant groups who were deemed 'bad' and to have not been 'fully integrated' into the American society.

Finally in 1974, in order to combat discrimination in lending, the government passed the Equal credit opportunity act, which prohibits discrimination in the extension of credit and lending based on the basis of�race, color, religion, national origin, sex, marital status, or age.

Yet, despite this law, during the Real Estate boom, many of the largest banks in the country, including Countrywide and Well Fargo Financial, have discriminated against borrowers based on their race!

Making mortgage loans to minorities (because the government mandates it) yet charging them higher fees, costs, and interest rates than Whites is almost as bad as not giving minorities mortgage loans in the first place.

Not only were Blacks and Hispanics given higher cost loans than Whites, but Chinese Americans were given more favorable and lower cost loans than Whites even when income and credit scores were the same.

So, not only do African American and Hispanic minorities have a vested interest in the fair and equal extension of credit, but Whites do as well!

http://cbrkelvinrealestate.typepad.com/the_ins_and_outs_of_real_/2008/03/blacks-hispanic.html

The foreclosure rate has risen to levels unseen since the great depression of the early 1930s and continues to grow In addition to economic factors, many of the problems associated with the foreclosure crisis were caused by lender greed and even discrimination (in the issuing of higher cost loans based on race). �If feel that you have been discriminated against and unfairly targeted for a high cost loan, call HUD at....

1-800-669-9777.

http://www.usdoj.gov/crt/housing/housing_ecoa.htm

�

30 Year Fixed Mortgage Rates

�

SubPrime Mortgage for Mr. Fish, originally uploaded by sujathafan.

30 Year Fixed Mortgage Rates

Are at 6.42%

from 6.09% last week!

Even with the steep declines

in housing prices, given the week economy

and the still elevated housing prices,

rates on 30 Year fixed Mortgages are

STILL TOO HIGH!

And don't even think about

an adjustable rate mortgage or

a sub-prime loan!

�

Even Village Trustees Traped by Mortgage Crisis!

Members of Congress raise their hands, originally uploaded by MatthewBradley.

The list of people caught in the mortgage crisis has continued to grow.  Now it appears that the village of Matteson, IL's trustee; Usher Sawyer III has been added to the list.  If Mr. Sawyer doesn't sell his home, which has already been on the market for 8 months without an offer and has had it's asking price fall from $445,000 to $378,000, he and his wife will loose their home.

Although the Smith's have a fixed rate mortgage, they have been victims of a weak and weakening economy as many have, with the intermediate result being Mrs. Smith being laid off in 2006.  If they don't sell the home (which took two incomes to purchase) soon, the end result will be that they will loose their home to foreclosure.  The Smiths say that 35 percent of the homes in their subdivision are in or have been in foreclosure recently! 

Nothing lasts forever, not booming economies and not dream jobs.  As i've stated before on this blog, buying a home that is cheaper than what you've been qualified for, or based on one income, is a great hedge against inflation and also a recession or depression!  However, if you have also been a victim of the economy or mortgage and credit crisis, don't feel bad, it isn't your fault, the guy next door, celebrities, and even village trustees are also victims!

  
The Chicago Sun Times ran a story on the Smiths on 7/24/08

 

 

30 Year Fixed Mortgage Rates

30 Year Fixed Mortgage Rates are at
5.81% up from last weeks

5.63!

Interestingly enough, The Fed has

reduced the Federal Funds rate

and is asking banks to help out

borrowers, yet, they raise the rate!

Go figure!  

30 Year Fixed Mortgage Rates

30 Year Fixed Mortgage Rates are at
5.62%

Always disclose your race on Loan Documents!

Countrywide Banner, originally uploaded by Countrywide Home Loans.

I have been writing about recent and upcoming investigations and litigation against banks that have discriminated against African Americans and Hispanics by placing them in high cost loans even when they qualified for better lower cost loan products, and even when they earned more than White borrowers!

Attorney General Lisa Madigan is focusing her investigation on Countrywide Home Loans, and Wells Fargo Financial Illinois, because she found them to be the most abusive.

The only way to stop the abuse is for government agencies to go after the predatory and abusive lenders to the maximum extent the law allows!  Since disclosing your race on mortgage loan applications is optional and not obligatory, the only way for investigators and law makers to track abuse, or even prove abuse is taking place is for borrowers to disclose their race.

The actual numbers of African American and Hispanic borrowers abused is almost certainly substantially higher than estimated! 

With that said, ALWAYS, ALWAYS, ALWAYS disclose your race on Mortgage loan applications.

http://www.chicagoreporter.com/index.php/c/Web_Extras/d/The_High_Price_of_Home_Ownership

http://www.responsiblelending.org/

   

Terrapin Properties LLC; Chicago-based Real Estate Development Company in the Hot Seat!

Burnham Pointe, 710 S Clark St, originally uploaded by YoChicago1.

Have you ever wondered why so many new projects are continually being built, when we are in the worst housing market since the great Depression!  Often with commercial real estate, contracts to design, develop, build, finance, and sell these properties exist long before the properties are built and ready for their first occupants. 

So, developers find themselves 'stuck' developing buildings that they may have to leave empty for so long that they can't restructure their construction loans, forcing them into bankruptcy!

Last month I wrote about New York Real Estate Developer Harry Macklowe and the problems that he is having with his creditors, his inability to refinance his short term construction loans or secure a foreign investor, and his creditors seeking private assets for short term interim financing that he personally guaranteed!

http://cbrkelvinrealestate.typepad.com/the_ins_and_outs_of_real_/2008/03/renowned-new-yo.html

Macklowe isn't the only big city developer "stuck between a building and the credit crunch!"  Terrapin could be dissolved as the result of a foreclosure suit filed against the company by Indymac Bank, over a new 162-unit condo development in Kenosha, Wisconsin called Regal Pointe.

Indymac Bank is suing Terrapin's principals; James Geleerd, Michael Ezgur, and Greg and Sherwin Braun whom the bank says all personally guaranteed the loan.  As with the Macklowe case, other Terrapin properties, including 'Burnham Pointe;' a 298-unit condo building currently under construction at 710 S. Clark, may be sold in order to repay their bad debt.

So, while on the surface the building and new construction appear to be unaffected by the current housing depression, the truth is that many builders around the country have been forced into foreclosure and out of business.

With property values projected to fall another 10-20% during 2008, the bottom of the housing bubble is still no where in sight, and no one knows for certain when the market will bottom out.

With that said, if you are a buyer and paying full price, even for a new construction luxury condo, you are probably paying too much!

http://www.communityinvestmentnetwork.org/single-news-item-states/article/terrapins-troubles-foreclosure-suit-threatens-condo-developer-with-possible-dissolution/?tx_ttnews%5BbackPid%5D=290&cHash=f6c857f0ea

African Americans & Hispanics Charged more for Mortgage Loans!

the parade of politicians begins in ernest, originally uploaded by displaced365.

Posted at 12:52 AM | Permalink

Illinois Attorney General Lisa Madigan is investigating both Countrywide Home Loans and Wells Fargo Financial Illinois for illegally steering Blacks and Hispanics into high priced mortgage loans, in violation of civil rights and equal lending laws!

Even relatively wealthy African Americans with stellar credit and six figure incomes were charged higher interest rates than their white counterparts who earned only a third their incomes!

Madigan's investigation follows on the heels of a The Chicago Reporter study which found that between 2004 and 2006, Countrywide Home Loans placed the following groups into high cost loans....

• 50.9% of African Americans earning over $100,000 
• 33.8% of Hispanics earning less than $35,000 
• 21% of Whites earning less than $35,000 
• 11.8% of Asians earning less than $35,000 

Additionally, The Chicago Reporter study found that during the same period, Wells Fargo Financial Illinois placed the following groups into high cost loans....

• 64% of African Americans earning over $100,000 
• 36.7% of Hispanics earning less than $35,000 
• 17.5% of Whites earning less than $35,000   

Also, even though National City Bank of Indiana is a prime-rate lender, in 2005 about half of its mortgages were high-cost loans, with African Americans accounting for high-cost loans three-fourths of the time, Latinos two-thirds of the time, and Whites one-third of the time!

These disparities weren't justified by credit worthiness, income, or other factors, but appear to be racially motivated and highly unethical and illegal!  Furthermore, these findings explain, at least in part, why Chicago-land leads the nation in high cost mortgage loans, and why the south-side of Chicago (with the largest concentration of minority home buyers in the city) has the state’s largest foreclosure rate! 

http://cbrkelvinrealestate.typepad.com/the_ins_and_outs_of_real_/2007/10/half-of-minorit.html   

Also, The New York Times published an article by Eric Eckholm on June 1, 2006 about racial disparities in lending which had been uncovered by a study done by The Center for Responsible lending.  The study found that even when African Americans and Hispanics had the same credit risks (as Whites) they were charged higher interest than White borrowers!

While the findings of The Center for Responsible lending were disputed by the Mortgage Bankers Association of America, their findings were endorsed by representatives of both the National Association for the Advancement of Colored People and the National Council for La Raza.   

Also, although Attorney General Lisa Madigan is focusing her investigation on Countrywide Home Loans, and Wells Fargo Financial Illinois, because she found them to be the most abusive, it is important to remember that the discriminatory practice of placing African Americans and Hispanics in higher priced loans than Whites representing the same credit risk is done by many banks and mortgage companies around the country, and is not restricted to the Chicagoland area!

http://www.nytimes.com/2006/06/01/us/01minorities.html

http://www.msnbc.msn.com/id/13081865/

Also, many Lenders go out of their way to be certain that you understand that disclosing your race on loan documents is completely optional, not mandatory, and that "you don't have to disclose your race if you don't want to."  Therefore, and since many African Americans and Hispanics don't disclose their race, the percentage of African Americans and Hispanics abused by predatory lending and placed in high cost loans may be much higher than actually reported! 

One of the things that these national studies prove is that just because a lender is large, reputable, has a huge staff, luxurious building and lots of money to lend, and just because you may not be aware of it, and even though racial discrimination in lending is illegal, that doesn't mean that banks and lenders both large and small aren't illegally discriminating against African Americans and Hispanics.         

When a Real Estate agent tells you that they sell x number of houses a year, maybe you should ask how many of those buyers contacted the Real Estate agent because a lender referred them to him, or ask the bank why they referred a particular Real Estate agent!

Because of the fact that I encourage my buyers to shop around for the best loan product, and I’m loyal to my buyer clients and not any particular lender, I don’t get buyer referrals from lenders!

Another thing that you aren't required to do when buying a home is disclose any details of your loan with your Real Estate agent, as your agent isn't a party to the loan!  I've had lenders refuse to tell me what  interest rate a client was getting, if there was a ballon payment due in several years, etc. because I was not a party to the loan.  But there are ways around this and I employed them on behalf of my buyer clients.

Lenders not sharing details of your loan with your Real Estate agent prevents the agent from advising you of the pros and cons of the loan, and robs you the buyer of the opportunity to shop around and find another more affordable loan! 

http://www.lisamadigan.org/release_details.asp?id=25

http://www.chicagoreporter.com/index.php/c/Web_Extras/d/The_High_Price_of_Home_Ownership