Tag Archives: Real Estate

Housing Affordability

For most of us we do not have a surplus of money to spend on our housing needs, we need to be smart and get value for every dollar spent.  So is it time to buy a home?  The answer is not as simple as most people think.  If you are in a financial position to purchase and you find a property that you like at a fair price then the answer is simple, yes it is time to buy.  Where is get more difficult is for people that have families that are renting.  Let’s face it, life gets in the way.  There are many financial challenges that get in the way.  For example, Divorce, Kids, Vehicle Needs, Medical Issues and any of hundreds of unexpected expenditures that all have their hands on the money we make. I have lived much of the above and why “I say life gets in the way.”

Here is a little more to think about,  home mortgage rates are going up and we are looking a rates in the mid 5% range most likely by the end of 2018.  For those of us old enough to have lived this we all know about the average rate of inflation running at 5%.  For a mortgage rate of 5% or less it is basically free money.  Below is the posted inflation rate table that pops up when “2018 inflation rate” is put into a website search engine.  For those of us living in Southern California this is way off.  Home values alone are going up much faster.

Capture            So the question comes down to housing affordability when considering purchasing a home.  Rents are going to continue to go up and housing affordability is going to continue to go down.  So do you move to a lower priced area or a smaller place?  I would consider looking at long term plans of 7 to 10 years and where do you see yourself living? The decision on housing is a personal choice that we most all make individually.  For most of us, the short term financial sacrifices are worth the long term benefits.  It is ok not to rush into purchasing a home.  Find a professional Real Estate Agent in your target area and get a full understanding of the homes values.  Then speak with a professional Mortgage Banker / Loan Officer to see if the cost is within your budget plans.  When armed with the financial facts the picture comes clear.

One last thing to think about, most people that invest in the stock market seem to lose money, why is that?  Have you ever considered that we seem to speak with family members or friends for our financial advice?  We all love our families and friends but there is a clear pattern here.  It is always good to talk things out with our families or friends but you should always seek out advise from professional people before making any larger purchases.


Stay Tuned…


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Does Tapering Affect the Real Estate Market?

How many people really understand what “Tapering” is?  When you hear finance person speak of the proposed Fed. Tapering they are speaking of the Federal Reserve and their effect on the financial markets.  So how does this affect real estate?  Simply put is affects the available low cost money to fund a mortgage.  So in order to get a mortgage funded your new mortgage is structured with a higher interest rate to bring in Private Money.  This “Private Money” is Wall Street money and frankly, in most cases, our 401K money.     

  In recent weeks It has been common to see the Mortgage Bond Market moving 60 bases points in a single day.  Bases points are a percentage of a single percent.  This does not sound like much but when you multiple bases points by your mortgage amount you can see how this adds up quickly.  With the large market swings and an unlocked mortgage rate you could see, in a single day, your month payment increase substantially.  So simply put higher rates equate to lower approved mortgages or reduced buying power.    

  When speaking with Michael Gillett of MN Capital I was informed that home buyers buying power is being reduced due to the increasing mortgage rates.  Gillett went on to say, with the flood of cash buyers in the real estate market it is difficult to purchase a property today with conventional financing and even worse with FHA financing.  With conventional financing an appraisal is required and the loan simply takes time to complete.  The cleaner the buyer the faster the loan will be approved.  With FHA the property must have everything working at 100%.  So simple little things such as a stove, water heater, HVAC unit, that the buyer plans to replace anyway, most be working 100% when the loan funds.  So you can see how this could be a huge issue when applied to everything on a property.  So an all cash buyer has a huge advantage as they take a property “as is.”  

  Sandy Cordery of Orangetree Realty indicates that the real estate market is very busy with most properties selling within two weeks once posted on the MLS.  Cordery went on to say, the bulk of these deals are all cash buyers.  With real estate selling so quickly property values are going up fast and appraisers are having a difficult time appraising a property at a selling price due to all of the historical short sell properties.  Short sell properties did allow people to purchase properties under value but they also depressed the values in the same area.  Cordery did said that not all areas are seeing equal increases in values in terms of percentage with some areas seeing as much as 30% increase in value over the past six months. 

  We have a free market system which is still the best way to operate.  It will not always benefit everyone but it will benefit most.  The more Banks, Mortgage Bankers and Brokers the better rates and terms will be available to the consumer.  Do not blindly think that your Bank, Mortgage Banker or Broker will give you the best deal. Shop your rate with at least two of the three.  You have to make the monthly payment so get the best deal you can. 

Stay Tuned….

You can reach the two interviewed at;

Michael Gillett – mgillett@mn-capital.com                                                                                                                                                       MN Capital Website – www.mn-capital.com

Sandy Cordery– scordery@otreehomes.com                                                                                                                                     Orangetree Realty Website – www.otreehomes.com


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Does The HARP Program Work?

  The H.A.R.P., Home Affordability Refinance Program, program offered to Fannie Mae or Freddie Mac mortgage note owners to refinance at today’s lower rates.  So simply yes the program works.  The program allows for home owners to refinance regardless to your loan to value.  The catch is your mortgage most be owned by Fannie Mae or Freddie Mac before May 31, 2009.  So who owns your mortgage note? 

  Most people do not relies that the bank they are paying their current monthly mortgage bill to does not own their mortgage note.  Most of the time the bank you make your monthly payment to is acting as a “Servicer” for that actual mortgage note holder.  You can do a web search for does Fannie Mae or does Freddie Mac own my loan and follow the steps.  If you have a loan match before May 31, 2009 then you are eligible for the program. 

  Here is the tricky part, you have to find the right Lender to meet your needs.  May people get discouraged because they get told their bank cannot do their loan.  Well this is correct more times than not.  The reason is because not all mortgage lenders offer the program as it is intended.  Banks, Brokers or Mortgage Bankers offer programs with what they feel is safe to them.  This is very complex but if you think of banks as car deals this makes more sense.  For example you would not take your Chevy to the Toyota dealer to get fixed.  Yes the people at the Toyota Dealer could get the job done in most cases but not efficiently.  So your cost would be much higher than if you just took your car to the Chevy dealer to begin with.  The average person simplifies the mortgage process and yes the banks take advantage of this lack of knowledge.  Was anyone surprised that Wells Fargo posted huge profits as few months ago?  All of the big banks are doing very well in a down economy, imagine that. 

  So what is the HARP program?  The HARP program is a refinance opportunity that allow you to refinance your current loan to a new 30 year fixed mortgage.  HARP is not a loan modification.  The program does not require you to be late on your mortgage payment and it does not damage your credit score.  Frankly if rewards those people that are keeping up with their mortgage payments.   

  There is only one company that I am aware of that offer the HARP program regardless to your loan to value.  It is MN Capital and you can visit them on line at www.mn-capital.com 

The HARP program is currently scheduled in terminate on Dec. of 2013.  If you are still considering taking advantage of the HARP program then you might want to get moving before the program is over.  With the rising real estate values there is little reason for Congress to extend the current HARP program or roll out the rumored HARP 3 program.    


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What is the HARP 2.0 Program?

I sat down with the Broker of MN Capital, Michael TenEyck, and we discussed the HARP program in detail.  We both came to the same conclusion that the media does not explain the program correctly so how is the average homeowner to even know it is an available option.  Most people seem to think that the HARP program is a loan modification program or it will damage their credit.  That could not be any further from the truth!  I will list several points to the program that are the most common misunderstood.

What is the HARP 2.0 Program?  The program allows mortgage note holders of Fannie Mae or Freddie Mac the option to refinance their existing mortgage regardless of your current loan to value.

I make my payments to Bank “X” so don’t they own my loan? – Well in many cases the Bank you make your payment to does not own your mortgage note.  Many mortgages are owned my Hedge Funds, Fannie Mae and Freddie Mac.

My Bank says I do not qualify do to my LTV – This is very common as many banks have self-imposed restrictions that they have placed on the HARP 2.0 program.  As stated above the program does not have loan to value restrictions.  Banks provide a service to the actual mortgage note holder as a “Servicer” much like a property manager does if you have every rented a place to live.

So how can MN Capital refinance my mortgage with the HARP 2.0 Program and my bank cannot? – If you are not in the finance business you most likely would not be in a position to understand that banks do not like all loan programs.  If you were to think of the banks as Car Dealerships then this makes more sense.  For example you would not take your Ford to the Chevy Dealer for repairs.  So for my auto metaphor your loan program is your type of vehicle.  The difficult part is to fully understanding the proper Lender or Broker that you need to use to max your benefit as there is no sticker price to start from.

Do I need an appraisal? – In most cases no.  The loan to value is not a factor for approval but with that said there are some restrictions in terms of rate if your LTV is over 125%.  The impact is generally within .125% in terms of rate.

The HARP 2.0 program is only available to property owners with mortgage notes that are owned by either Fannie Mae or Freddie Mac.  Currently Congress is working out the details for HARP 3.0 which should open up the program for all property owners.  The one unknown is will the current note holders participate in the program.  This would require the current note holders to take a reduced return on their investment.  As a property owner this sounds great as you benefit from a reduce payment but there is one serious issue.  Most of the additional mortgage notes are funded with 401K money.  So that right we will experience a reduced return on our 401K investments.  So at this time is it unclear how Congress will entice the Hedge Fund Managers to exercise the HARP 3.0 option.  Time will tell.

Stay Tuned…

MN Capital has answers to many questions on thier website at – www.mn-capital.com.  You can also ask property specific questions at info@mn-capital.com.

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Real Estate Agent Tips


  I have found a site that gives real estate agents some great tips.  The site is called the Real Estate Agent Community and can be found on Facebook.  I found the Real Estate Agent Community site to have informative information for all Real Estate Agents.   There is a link to the site in the blog roll on the right.

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The People Have Spoken….

A little off topic here but not really

   Last night was a strong message to all incumbent politicians.  This is not a Republican or Democrat issue but rather a clear message that we the people are tired of the same old song and dance.  It is time for all politicians to now walk the walk. Last nights defection of  Dede Scozzafava (R) is a perfect example of what I am talking about.  It does not matter what party they claim they are a lined with as most of them are working together behind the scenes regardless of party. 

  Al Gore, Nancy Pelosi & Barney Frank clearly are the front runners of hypocrisy.  Gore & Pelosi on their green issues alone show overwhelming proof that they are making millions pushing “Green Initiatives” and live their own life’s with complete disregard to this Green Doctorain.  If it walks like a Doctorain and quacks like a Doctorain then it is a Doctorain! 

  Barney Frank is single handily standing in the way of the Real Estate Market recovery.  Barney wants all “non banking institutions to be put out of their misery.”  Let’s put this into prospective, 80% of all mortgages originated today are done by “non banking institutions.”  This would clearly create a monopoly for the big four and the Fed’s will clearly misuse their power to make it so.  This would leave no mortgage competition between mortgage companies to keep cost fair to the consumers, which are you and I.  Needless to say that it would put several thousand people out of work too.  So ask yourself, is this yet another bonehead move in the works?   

  Barney is also the head guy that force feed us the HVCC, Home Value Code of Conduct, appraisal process.  The HVCC has increased the cost of an appraisal to consumers by 60% on average.  The HVCC went into affect on May 1st, 2009 and we have had sometime now to see how if is working.  Well the answer is not good.  The HVCC appraisal process does not work and there is even a large amount of appraisal fraud.  Imagine that!  So the Brokers can no longer have contact with appraisers and appraisal fraud is up.  This is yet more overwhelming proof that Brokers where not the problem.  The problem here still exists and Barney wants to help the problem makers to keep a lid on it.  The question here is does he relies that he is enabling the culprits. 

  I am in no way trying to say that Barney is knowingly using his authority to help anyone or business entities defraud consumers.  In my opinion I am saying this.  He is clearly demonstrating that he does not understand the mortgage industry as it results to consumers or the people that he serves.  So this makes him out of touch with the average person so his shelf life has expired and it is time to go. 

  Barney and Nancy are #1 and #2 on a long list of politicians that need to go.  Both clearly show the desirer to set themselves up financially with complete disregard to us the people that they took an oath to server.

  I am having another problem with a statement that continues to be repeated like it is a good thing.  The Fed’s have all ready spent 207 billion dollars and have saved 604,000 jobs.  How can anyone stand up make this statement and feel good about it?  Or even worse try to make anyone else feel good about it?  So was does this statement mean?  The Fed’s have spent $342,716 dollars per job that they have saved.  Are you kidding me?  I am sure it is safe to say that there is no way that all of these people where getting paid $300,000 plus salaries.  Hello, the money is not getting to the people.  Do something about! 

  History has shown that we are soon going to be looking at a 20% mortgage rates just like we did at the end of the Jimmy Carter years.  Does that seem hard to believe?  Then Google it and read about the debacle that was the Jimmy Carter administration for yourself.  Home ownership of becoming increasingly difficult and no one in the Media is even reporting on this.  Why? And why the double standard from the Media?



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HBMO Gets Picked Up Regionally

  Recently the HBMO put up a posting speaking about the problems with the HVCC appraisal process.  The Orange County Register picked up the story and posted it on their Real Estate blog.  The OC Register posted the story as “a push to scrap the new appraisal rules.” 

  The story once posted on the OC Registers blog site received mixed responses.  It is clear that people in support of the HVCC like the lower prices because they are not current home owners.  Let’s face it, anyone that currently does not own a home has a different prospective than someone that has worked many years to get the money saved to purchase a home.  Anyone that has worked hard to achieve a home only to have the value ripped out from under them is not happy and quite frankly feels ripped off. 

  Home Mortgage and Politics are two emotional topics but these two are so closely connected today.  Knee jerk reactions such as the HVCC are clearly not the answer.  The answer is very clear but no one is listening.  Reasonable guidelines and interest rates will correct the situation for the consumer.  There are several things that the Fed’s can do, which we have made many recommendations, but they seem to be caught up in some kind of popularity contest.  Worst of all if you do not agree with the president or the Democrats you are labeled a Racist or a Nazi?  As long as the Fed’s continue this playground behavior there will be little change in the Economy and the deficient will continue to increase.

  Soon we will hear that some new hyper Flu will kill 50% of Americans because the resent Healthcare Reform push is in trouble.  This kind of leadership is troubling and it is not just Obama it is all of them.  Maybe we should consider a shelve life for Congressmen.  Clearly Barney Frank thinks he is above us all by the way he talks down to all Americans like he knows what is best for everyone.  This type of thinking is not good for anyone.  If Congress and the White House want everyone to live on less money then why don’t they show the way by cutting their own salaries? 

  It is time to sit down and look at the problem of the Economy.  Without a strong Economy everything else means nothing because there will be no money to pay for any reforms, bailout, disasters, roads, schools, hospitals, ect, ect ,ect.             

  Ok we will start the ball rolling.  The HVCC is hurting the recovery of the Economy and the August home sales report will show that home sales will be down.  They will be down because all of the pre HVCC home sales will have cycled through.  We continue to support the reconsideration of the HVCC and urge everyone to get the details about the HVCC process so they fully understand.  Below is the link to learn more about the HVCC and to sign the petition.


Thank you for your support. 

Stay Tuned…

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