As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:

• Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
• Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.

Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream. If you have specific questions or need additional information, please contact a tax professional or the Internal Revenue Service at 800-829-1040.

Who Qualifies for the Extended Credit?

• First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
• Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.

Which Properties Are Eligible?

The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Is Available?

The maximum allowable credit for first-time home buyers is $8,000.

The maximum allowable credit for current homeowners is $6,500.

How is a Buyer’s Credit Amount Determined?

Each home buyer’s tax credit is determined by two additional factors:

1. The price of the home.
2. The buyer’s income.

Price

Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.

Buyer Income

Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009,  single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.

These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?

Yes, some buyers may still be eligible for the credit.

The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.

Can a Buyer Still Qualify If He/She Closes After April 30, 2010?

Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.

Will the Tax Credit Need to Be Repaid?

No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.

West Des Moines, Iowa, www.wdm-ia.com

RelocateAmerica, a website that provides relocating consumers and area residents with access to local community resources, has released its annual listing of “America’s Top 100 Places to live for 2009.” This year’s list included the City of West Des Moines.
“With the increasing concern on our nation’s economy and recovering housing market we approached this year’s list with a different lens than in previous years. We concentrated on the outlook for future growth & ability to rebound in the communities that we selected” said Steve Nickerson, president and CEO of RelocateAmerica. “We looked at the local government & the business leadership in each community as we considered this year’s winners. We selected communities with visionary leaders, improving or thriving economies including housing & realization of ‘green’ initiatives."
In order to be considered for the list a community must be nominated on the RelocateAmerica website. Relocate-America’s editorial team reviews nominations and selects the TOP100 cities based on interviews with local leaders, feedback from residents and economic, environmental, education, crime, employment and housing data for the past year.

The Iowa Finance Authority’s REOHome Program can help hard-working Iowans purchase the home of their dreams! The unique new program offers up to $10,000 in down payment/closing cost assistance to qualified Iowans who are purchasing a home that is Real Estate Owned. (Real Estate Owned properties are in the possession of a lender as a result of foreclosure of forfeiture.)

 
Eligible Home Buyers:
•Household income is restricted to 80% area median income per county.
•Must be purchasing an Iowa, foreclosed property for primary residence.
•Must qualify for IFA’s FirstHome Program.
•Must participate in pre-closing home buyer education.
•Eligible home buyers may also use IFA’s FirstHome Plus Program, which can offer an additional $2,500 for down payment assistance/closing costs.
Eligible Property:
•Home buyers must purchase foreclosed property or one that is in imminent foreclosure process.
•Limited to one unit, residential property on five acres or less,
•The property must be the home buyer’s primary residence.
Other Details:
•At closing, a lien is placed on the home equal to the amount of the REOHome assistance. The amount of the lien is reduced by 20 percent each year that the home remains the borrower’s primary residence. After the five years, the lien is eliminated entirely.

To learn more contact Pat (515.577.6040) or Beth (515.537.9922)

1. The pending marriage scenario:

If a single person qualifies for the FTHB credit at the time he/she buys a home with someone that is not a FTHB and then later that year they marry each other, is the credit still allowed?

Eligibility for the FTHB credit is determined on the date of purchase. If a FTHB buys a house and then later marries taxpayer B, not a FTHB , the credit is allowable at the maximum credit.

2. The Cosigner scenario:

Taxpayer A is a single first time home buyer – Taxpayer B cosigns for A and does not qualify for the credit – but both names are on the mortgage – can Tax payer A claim the credit?

Yes. Taxpayer B is not a FTHB and cannot claim any portion of the credit, but A may claim the entire amount if the home was purchased as Tax payer as primary residence.

Just a side note on this one: Remember the Credit doesn’t apply if the buyer purchases the house from an immediate relative.

3. The community property scenario

If a husband and wife wanted to sell the home the wife owned when they got married and the husband had  not owned a home within the last 3 years, could he qualify as a FTHB for the credit even though the wife wouldn’t?

No. The purchase date determines whether a person is eligible for the FTHB credit. Since the wife had ownership in a principal residence within the last three years, neither can take the credit. IRS tax code requires that the taxpayer and the taxpayers spouse not have an ownership interest in a principal residence in the last 3 years. The husband can’t take the credit even if filing a separate return.

4. When will the buyer get their money?

If the return and the 5405 were filed electronically – the IRS rule of thumb is 10 days from the filing

5. Will they get the entire 8K?

Remember the credit will be applied against any tax liability. So if the taxpayer owes taxes – the amount owed would be subtracted from the 8K credit leaving the taxpayer with the difference in a refund – or 8K less in liability.

6. Can a buyer qualify using any lender?

Qualification is not tied to the lender – so technically yes you may use any lender. However, the credit eligibility can be tied to certain products such as bond funded programs that would not allow the credit.

7. What are the terms to file an amended return?

To file an amended return you can electronically file form 1040X. Form 1040x must be filed within 3 years from the date of your original return or within 2 years from the date you paid the tax, whichever is later.

8. How about – would a buyer be considered a FTHB if they owned a primary residence outside the US within the last 3 years?

Yes – property outside the US isn’t used against the qualifications.

9. If two unmarried people buy a house together – how do they determine how the credit will be applied?

IRS Notice 2009 – 12 outlines allocation methods for those not married.

10. If I claim the credit – and stop using my house a principal residence before the 36 months is up – do I have to pay the credit back – is it prorated?

The entire amount of the credit would be required to be paid back and is due at the time you file the income tax for the year in which you ceased usage as a principle residence.

11. I buy a primary residence and qualify for the credit – but decide to rent out two bedrooms and report rental income on a schedule E – will I still qualify for the credit as a principal residence?

Yes – if you meet all other FTHB criteria.

The beer at Gritty McDuff’s might be enough to lure people to Portland, Me. Established in 1988, the downtown pub offers a smattering of small-batch ales brewed on the premises in addition to usual tavern treats. From the patio, customers can enjoy a pint along cobblestone streets or retire to the copper-topped bar for a second round.

Tasty microbrews aren’t the only reason to like Portland. Thanks to high marks in five key quality of life metrics, Portland tops this year’s list of America’s Most Livable Cities.

"It’s a very easy place to live," says Leon Perrin, 31, a manager at Gritty’s. "It’s small, so getting around isn’t too much of a hassle. And it’s a beautiful place throughout all four seasons."

In Pictures: America’s Most Livable Cities

Perrin, who has lived in Maine for 20 years, is one of 513,000 residents living the good life in the Portland metropolitan area. The region earned high marks for income growth and culture; it also has low levels of crime and unemployment. Residents can afford the relatively high cost of living because of a 6.3% income growth rate over the past five years.

Bethesda, Md., and Des Moines, Iowa., round out the top three, followed by Bridgeport/Stamford, Conn., and Tulsa, Okla.

Behind the Numbers
To form our list, we looked at quality of life measures in the nation’s largest continental U.S. metropolitan statistical areas–geographic entities defined by the U.S. Office of Management and Budget for use by federal agencies in collecting, tabulating and publishing federal statistics. We eliminated areas with populations smaller than 500,000 and assigned points to the remaining metro regions across five data sets: Five-year income growth per household and cost of living from Moody’s Economy.com, crime data and leisure index from Sperling’s Best Places, and annual unemployment statistics from the Bureau of Labor Statistics.

Modesto, Calif., ranks as the worst metro area with more than 500,000 residents. This crime-wracked enclave in the Central Valley demands the same moderately high cost of living as Portland with a third of the job growth and nearly three times the unemployment. Modesto ranked fifth on our roundup of the nation’s most miserable cities earlier this year.

Denver, Colo., No. 11 on the list, ranks in part for its culture rank (19 of 379) and 4.4% income growth (77 of 379). The crime rating of Cambridge, Mass.‘ crime rating (29 of 379) helped it to No. 7 on our list. And though Little Rock, Ark., landed at 15, it boasts a 6% income growth rate (18 of 379) and a 5.4% unemployment rate (59 of 379.)

To be sure, Portland isn’t perfect either. Its 5.9% unemployment rate is much lower than Modesto’s, but it’s still double its 2007 unemployment rate of 3.7%.

"There are less jobs to go around, but our main industry of tourism hasn’t been affected much," says Perrin. "People are still coming to Portland."

Residents remain optimistic that their easy-living city will retain its desirability.

"Portland draws so many people because it has a strong arts, cultural, contemporary music and foodie scene," says Janis Beitzer, executive director of Portland’s Downtown District. "It’s a place where people set their own pace of life and work."

By JOANNE BOECKMAN • jboeckman@dmreg.com • April 16, 2009

Ninety Des Moines homes will be renovated or razed to make way for new housing as part of a program using federal money to improve areas affected by foreclosures.
Des Moines received a $3.9 million grant to address the problem in designated neighborhoods.
The money comes from the Neighborhood Stabilization Program approved by Congress in August. Nationally, a total of $3.92 billion was set aside for the federal program. Iowa was allocated $21 million and the state awarded the $3.9 million to Des Moines on April 1.

The program is intended to limit the negative impact of a foreclosure on a neighborhood.
"The overall idea is to rehab properties that are still strong homes, still structurally sound, but just in need of some attention," said David Dunn, Des Moines senior city planner. "Those properties that are too far along, the idea is to get rid of those, to demolish them so they are no longer dragging down the neighborhood, and then to rebuild."
The city’s plan calls for 50 homes to be rehabbed. The other 40 would be demolished and new homes would be built on 20 of the properties within four years. The remaining 20 would be left as vacant lots until market conditions improve and there is a demand for them.

Properties must be purchased within 18 months and everything must be redeveloped by February 2019.
The money awarded to Des Moines is designated for several purposes, including costs for demolition, maintenance of vacant properties, construction and rehabilitation subsidies, wages for temporary program administrators, real estate experts as needed and other expenses.
Target areas for the project are those that are significantly affected by foreclosures. In identifying those most likely to qualify, preference was given to low- to moderate-income areas. There are 25 Des Moines neighborhoods that have been recognized as meeting the criteria.

Dunn said the city began working with local nonprofit housing providers to discuss their interest in the Neighborhood Stabilization Program and city officials are working on a plan to have for-profit groups submit bids.
The idea is to have the housing organizations purchase properties and receive a $25,000 subsidy from the city for rehabilitation of each one. The homes will be sold to low- and moderate-income families.
The plan has a two-fold effect, said Lance Henning, executive director of the Greater Des Moines Habitat for Humanity.

"It will have an impact on the neighborhoods by returning those homes to home ownership and usage," he said. "That’s one key aspect. The other is that it will benefit families by providing new home ownership opportunities for them."
A side effect of the housing crisis has meant that families with lower incomes, who already have few opportunities for home ownership, have even fewer with more restrictive lending regulations, Henning said. The new plan will make available affordable housing in good condition.

No houses have been identified for purchase yet, Dunn said. In January and February, more than 100 Des Moines homes were foreclosed upon. The city estimates that at that rate, about 1,200 properties could see foreclosure in 2009.
"We’ve been tracking foreclosures in Des Moines – every property sold off at a sheriff’s sale, the last step in a mortgage foreclosure," Dunn said. "We’ll be using our database and information from the Polk County sheriff to see what properties would be good candidates for this."

Residents can learn more at a meeting Wednesday in the St. Etienne Room of the Armory building, 602 Robert D. Ray Drive.

Learn about the Neighborhood Stabilization Program:
Des Moines residents are invited to find out more and to offer input about housing that might be eligible for the plan.

MEETING: 7 p.m. Wednesday in the St. Etienne Room of the Armory building, 602 Robert D. Ray Drive.
LEARN MORE: Call David Dunn at 283-4287 or e-mail dmdunn@dmgov.org.

This story was submitted by one of our readers and originally appeared at kcci.com

Freddie Mac (FRE) today released its Weekly Primary Mortgage Market Survey, which showed that the average rate of 30-year fixed-rate mortgage has dropped to a new low at 4.96% from 5.01% a week ago, the lowest point since Freddie Mac started rate tracking in 1971 . Mortgage rates have been falling since November after the Federal Reserve announced it plans to buy mortgage backed securities

(click on chart to enlarge).

However, despite the record low of mortgage rates, the housing market still doesn’t show any sign of bottoming, let alone improving, as house prices kept falling. On the other hand, lower mortgage rates did attract many homeowners to refinance their loans. According to The Mortgage Bankers Association, mortgage loan applications increased 15.8% for the week ending January 9, 2008 from a week early, while refinance jumped 25.6%.

While many took advantage of the 5% rate to save money on monthly mortgage payments, not everyone benefits from the low rates, especially those whose home value has dropped below what they owe on the mortgage. And let’s not forget that 3.6 million people lost their jobs since the recession began in December 2007.

A record low mortgage rate, but do you care?

The answer, according to the economists Carmen Reinhart and Kenneth Rogoff, is … “not much.” Here’s what they describe in a new NBER working paper about the causes and consequences of the current subprime crisis:

Our examination of the longer historical record finds stunning qualitative and quantitative parallels to 18 earlier post-war banking crises in industrialized countries. Specifically, the run-up in U.S. equity and housing prices (which, for countries experiencing large capital inflows, stands out as the best leading indicator in the financial crisis literature) closely tracks the average of the earlier crises.

As to the differences between this crisis and others, they offer some good news and some bad:

Among other indicators, the run-up in U.S. public debt is actually somewhat below the average of other episodes, and its pre-crisis inflation level is also lower. On the other hand, the United States['s] current account deficit trajectory is worse than average.

On the question of whether the current crisis will deepen and cause widespread financial harm, or level out and lead to recovery, Reinhart and Rogoff are — unlike every financial pundit you see on TV these days — mercifully not tossing out bold predictions:

Much will depend on how large the shock to the financial system proves to be and, to a lesser extent, on the efficacy of the subsequent policy response.

I am continually surprised at how widespread the perception is that our economy is in a complete nosedive, despite much evidence to the contrary. I recently saw a poll in which 12 percent of Americans said that we are currently in a depression, not just a recession.

If I were an insurance salesman — any type of insurance at all — I would like to find those 12 percent. I think they would be terrific customers.

Newspaper headlines earlier this week reported a dramatic 19 percent decline in housing prices based on the Case-Shiller index of real-estate prices.

Stan Humphries, writing on the Zillow blog, notes that Zillow’s price index didn’t fall as much as Case-Shiller.

The difference is that Zillow’s index does not include foreclosures, but Case-Shiller does. Humphries notes that a staggering percentage of the transactions being recorded are foreclosures. In Las Vegas, 79 percent of the observations going into the Case-Shiller index are foreclosures. In Phoenix it is 68 percent. In contrast, only 11 percent of Boston transactions are foreclosures.

FEDERAL HOUSING FINANCE AGENCY
STATEMENT
Contact:
Corinne Russell
(202) 414-6921
Stefanie Mullin
(202) 414-6376
For Immediate Release
September 7, 2008
STATEMENT OF FHFA DIRECTOR JAMES B. LOCKHART
Good Morning
Fannie Mae and Freddie Mac share the critical mission of providing stability and liquidity to the housing market. Between them, the Enterprises have $5.4 trillion of guaranteed mortgage-backed securities (MBS) and debt outstanding, which is equal to the publicly held debt of the United States. Their market share of all new mortgages reached over 80 percent earlier this year, but it is now falling. During the turmoil last year, they played a very important role in providing liquidity to the conforming mortgage market. That has required a very careful and delicate balance of mission and safety and soundness. A key component of this balance has been their ability to raise and maintain capital. Given recent market conditions, the 1
balance has been lost. Unfortunately, as house prices, earnings and capital have continued to deteriorate, their ability to fulfill their mission has deteriorated. In particular, the capacity of their capital to absorb further losses while supporting new business activity is in doubt.
Today’s action addresses safety and soundness concerns. FHFA’s rating system is called GSE Enterprise Risk or G-Seer. It stands for Governance, Solvency, Earnings and Enterprise Risk which includes credit, market and operational risk. There are pervasive weaknesses across the board, which have been getting worse in this market.
Over the last three years OFHEO, and now FHFA, have worked hard to encourage the Enterprises to rectify their accounting, systems, controls and risk management issues. They have made good progress in many areas, but market conditions have overwhelmed that progress.
The result has been that they have been unable to provide needed stability to the market. They also find themselves unable to meet their affordable housing mission. Rather than letting these conditions fester and worsen and put our markets in jeopardy, FHFA, after painstaking review, has decided to take action now.
2
Key events over the past six months have demonstrated the increasing challenge faced by the companies in striving to balance mission and safety and soundness, and the ultimate disruption of that balance that led to today’s announcements. In the first few months of this year, the secondary market showed significant deterioration, with buyers demanding much higher prices for mortgage backed securities.
In February, in recognition of the remediation progress in financial reporting, we removed the portfolio caps on each company, but they did not have the capital to use that flexibility.
In March, we announced with the Enterprises an initiative to increase mortgage market liquidity and market confidence. We reduced the OFHEO-directed capital requirements in return for their commitments to raise significant capital and to maintain overall capital levels well in excess of requirements.
In April, we released our Annual Report to Congress, identifying each company as a significant supervisory concern and noting, in particular, the deteriorating mortgage credit environment and the risks it posed to the companies.
3
In May OFHEO lifted its 2006 Consent Order with Fannie Mae after the company completed the terms of that order. Subsequently, Fannie Mae successfully raised $7.4 billion of new capital, but Freddie Mac never completed the capital raise promised in March.
Since then credit conditions in the mortgage market continued to deteriorate, with home prices continuing to decline and mortgage delinquency rates reaching alarming levels. FHFA intensified its reviews of each company’s capital planning and capital position, their earnings forecasts and the effect of falling house prices and increasing delinquencies on the credit quality of their mortgage book.
In getting to today, the supervision team has spent countless hours reviewing with each company various forecasts, stress tests, and projections, and has evaluated the performance of their internal models in these analyses. We have had many meetings with each company’s management teams, and have had frank exchanges regarding loss projections, asset valuations, and capital adequacy. More recently, we have gone the extra step of inviting the Federal Reserve and the OCC to have some of their senior mortgage credit experts join our team in these assessments. 4
The conclusions we reach today, while our own, have had the added benefit of their insight and perspective.
After this exhaustive review, I have determined that the companies cannot continue to operate safely and soundly and fulfill their critical public mission, without significant action to address our concerns, which are:
• the safety and soundness issues I mentioned, including current capitalization;
• current market conditions;
• the financial performance and condition of each company;
• the inability of the companies to fund themselves according to normal practices and prices; and
the critical importance each company has in supporting the residential mortgage market in this country,

Therefore, in order to restore the balance between safety and soundness and mission, FHFA has placed Fannie Mae and Freddie Mac into conservatorship. That is a statutory process designed to stabilize a troubled institution with the
5
objective of returning the entities to normal business operations. FHFA will act as the conservator to operate the Enterprises until they are stabilized.
The Boards of both companies consented yesterday to the conservatorship. I appreciate the cooperation we have received from the boards and the management of both Enterprises. These individuals did not create the inherent conflict and flawed business model embedded in the Enterprises’ structure.
The goal of these actions is to help restore confidence in Fannie Mae and Freddie Mac, enhance their capacity to fulfill their mission, and mitigate the systemic risk that has contributed directly to the instability in the current market. The lack of confidence has resulted in continuing spread widening of their MBS, which means that virtually none of the large drop in interest rates over the past year has been passed on to the mortgage markets. On top of that, Freddie Mac and Fannie Mae, in order to try to build capital, have continued to raise prices and tighten credit standards.
FHFA has not undertaken this action lightly. We have consulted with the Chairman of the Board of Governors of the Federal Reserve System, Ben Bernanke, who was appointed a consultant to FHFA under the new legislation. We 6
have also consulted with the Secretary of the Treasury, not only as an FHFA Oversight Board member, but also in his duties under the law to provide financing to the GSEs. They both concurred with me that conservatorship needed to be undertaken now.
There are several key components of this conservatorship:
First, Monday morning the businesses will open as normal, only with stronger backing for the holders of MBS, senior debt and subordinated debt.
Second, the Enterprises will be allowed to grow their guarantee MBS books without limits and continue to purchase replacement securities for their portfolios, about $20 billion per month without capital constraints.
Third, as the conservator, FHFA will assume the power of the Board and management.
Fourth, the present CEOs will be leaving, but we have asked them to stay on to help with the transition.
7
Fifth, I am announcing today I have selected Herb Allison to be the new CEO of Fannie Mae and David Moffett the CEO of Freddie Mac. Herb has been the Vice Chairman of Merrill Lynch and for the last eight years chairman of TIAA-CREF. David was the Vice Chairman and CFO of US Bancorp. I appreciate the willingness of these two men to take on these tough jobs during these challenging times. Their compensation will be significantly lower than the outgoing CEOs. They will be joined by equally strong non-executive chairmen.
Sixth, at this time any other management action will be very limited. In fact, the new CEOs have agreed with me that it is very important to work with the current management teams and employees to encourage them to stay and to continue to make important improvements to the Enterprises.
Seventh, in order to conserve over $2 billion in capital every year, the common stock and preferred stock dividends will be eliminated, but the common and all preferred stocks will continue to remain outstanding. Subordinated debt interest and principal payments will continue to be made.
Eighth, all political activities — including all lobbying — will be halted immediately. We will review the charitable activities.
8
Lastly and very importantly, there will be the financing and investing relationship with the U.S. Treasury, which Secretary Paulson will be discussing. We believe that these facilities will provide the critically needed support to Freddie Mac and Fannie Mae and importantly the liquidity of the mortgage market.
One of the three facilities he will be mentioning is a secured liquidity facility which will be not only for Fannie Mae and Freddie Mac, but also for the 12 Federal Home Loan Banks that FHFA also regulates. The Federal Home Loan Banks have performed remarkably well over the last year as they have a different business model than Fannie Mae and Freddie Mac and a different capital structure that grows as their lending activity grows. They are joint and severally liable for the Bank System’s debt obligations and all but one of the 12 are profitable. Therefore, it is very unlikely that they will use the facility.
During the conservatorship period, FHFA will continue to work expeditiously on the many regulations needed to implement the new law. Some of the key regulations will be minimum capital standards, prudential safety and soundness standards and portfolio limits. It is critical to complete these regulations so that any new investor will understand the investment proposition. 9
10
This decision was a tough one for the FHFA team as they have worked so hard to help the Enterprises remain strong suppliers of support to the secondary mortgage markets. Unfortunately, the antiquated capital requirements and the turmoil in housing markets over-whelmed all the good and hard work put in by the FHFA teams and the Enterprises’ managers and employees. Conservatorship will give the Enterprises the time to restore the balances between safety and soundness and provide affordable housing and stability and liquidity to the mortgage markets. I want to thank the FHFA employees for their work during this intense regulatory process. They represent the best in public service. I would also like to thank the employees of Fannie Mae and Freddie Mac for all their hard work. Working together we can finish the job of restoring confidence in the Enterprises and with the new legislation build a stronger and safer future for the mortgage markets, homeowners and renters in America.
Thank you and I will now turn it back to Secretary Paulson.

NAR is not involved in property management in any form or fashion. Anyone that spots this advertisement is encouraged to report the matter to the FBI’s White Collar Crime Unit.

Even the FBI is not immune from spam scams. Those Nigerians promising to share huge sums of money with any American willing to provide bank account information are now claiming the FBI has lottery or inheritance proceeds waiting to be claimed. Here’s the alert:

Consumers continue to be inundated by spam purportedly from the FBI. As with previous spam attacks, the latest versions use the names of several high ranking executives within the FBI and even the IC3 to attempt to defraud consumers.

Many of the spam e-mails currently in circulation claim to be an “official order” from the FBI’s Anti-Terrorist and Monetary Crimes Division, from an alleged FBI unit in Nigeria, confirm an inheritance or contain a lottery notification, all informing recipients they have been named the beneficiary of millions of dollars. To claim the large sum, recipients are instructed to furnish their personally identifiable information (PII) and are often threatened with some type of penalty, such as prosecution, if they fail to do so. Specific PII information requested includes, but is not limited to, the recipient’s name, banking information, telephone number, and a copy of their passport.

The spam e-mail allegedly from the IC3 states that the recipient has extorted money and will be given a limited amount of time to refund the money or face prosecution.

Do not respond. These e-mails are a hoax.

The FBI does not send unsolicited e-mails of this nature. FBI Executives are briefed on numerous investigations but do not personally contact consumers regarding such matters. In addition, the IC3 does not send threatening letters to consumers demanding payments for Internet crimes.

Consumers should not respond to any unsolicited e-mails or click on any embedded links associated with such e-mails, as they may contain viruses or malware.

It is imperative consumers guard their PII. Providing your PII will compromise your identity!

If you have been a victim of Internet crime, please file a complaint at www.IC3.gov.

For previous PSAs concerning e-mail scams targeting the FBI and other government agencies:

• http://www.ic3.gov/media/2008/081205-1.aspx
• http://www.ic3.gov/media/2008/081016.aspx
• http://www.ic3.gov/media/2008/080606.aspx
• http://www.ic3.gov/media/2008/080508.aspx
• http://www.ic3.gov/media/2008/080606.aspx
• http://www.ic3.gov/media/2007/071214.aspx
• http://www.ic3.gov/media/2007/070717-2.aspx
• http://www.ic3.gov/media/2007/070717-3.aspx
• http://www.ic3.gov/media/2007/070627.aspx
• http://www.ic3.gov/media/2006/061018.aspx
• http://www.ic3.gov/media/2006/061013-2.aspx
• http://www.ic3.gov/media/2006/060724.aspx
• http://www.ic3.gov/media/2005/051201.aspx
• http://www.ic3.gov/media/2005/051122.aspx

Click on the following link to reach the FBI website: http://www.ic3.gov/complaint/default.aspx

Home-price turnaround forecast in 2010

The median price of previously owned homes is expected to fall 5.1 percent this year, to $188,500, with sales rising 1 percent compared to 2008, according to the latest National Association of Realtors forecast.

The sales projection represents a slight bump up from a 0.3 percent rise in an earlier forecast, while the annual price decline is expected to be steeper than the 4.9 percent drop in the previous forecast.

The national Realtor trade group expects the median price of resale homes to rise 4.1 percent in 2010, with sales climbing 5.8 percent that year.

New single-family home sales, meanwhile, are expected to plummet 41.1 percent this year (compared with a projection last month of 39.6 percent) but to rise rapidly in 2010 — up 36.1 percent. The forecast anticipates that the median new-home price will fall 4.3 percent this year before rising 5 percent in 2010.

NAR expects the U.S. unemployment rate to hit 9.2 percent this year and to rise to 9.6 percent next year, with real gross domestic product dipping 2.5 percent for the year before rising 1.5 percent in 2010.

Also today, NAR reported that its index gauging pending sales of resale homes, based on contracts signed in February, rose 2.1 percent compared to January but was down 1.4 percent compared to February 2008.

Regionally, the Pending Home Sales Index dropped about 13.5 percent in the West from January to February while rising in the three other U.S. regions: 14.5 percent in the Midwest, 10.6 percent in the Northeast and 4.4 percent in the South.

The index was down 11.2 percent in the Northeast, 1.7 percent in the West, and 0.1 percent in the South year-over-year in February while rising 3.4 percent in the Midwest.

Three out of four Inman News readers participating in an online survey say housing markets in their area are improving or stabilizing — and most said they’ve noticed the change only in the last two months.

"Buyers are seeing inventory move, and that gets them moving. Interesting how that happens," said a Summit, N.J.-based respondent who sees improvement in a market where many homes are located near commuter train lines to midtown Manhattan. "Yes, there are actually bidding wars again on well-priced, staged homes in great locations."

Among 225 readers responding to the survey from March 23 to April 1, 48.9 percent said housing markets in their area were improving, 27.1 percent said they were stabilizing, and 12.9 percent characterized them as worsening.

Among those who are seeing improvement, 39.6 percent said the market changed "this month," and another 23.4 percent said the change had occurred within the last month.

The most often-cited reasons for improved market conditions were low interest rates (70.6 percent), more affordable prices (67.8 percent) and good deals (57.1 percent).

Rates on conforming, conventional loans are at lows not seen in half a century, but so far many of those moving to take advantage of those rates have been homeowners seeking to refinance existing mortgages

The latest S&P Case-Shiller Home Price Indices show the 20-city composite down a record 19 percent from a year ago in January, and off 29.1 percent from peak, as average home prices returned to levels last seen in late 2003.

The National Association of Realtors is forecasting sales of previously owned homes to rise 1 percent this year, with the median resale price declining by 5.1 percent, to $188,500. The Mortgage Bankers Association, however, sees sales of previously owned homes falling 2.5 percent from 2008 levels, to 4.79 million.

Among the 13 percent who said market conditions are worsening, 52.3 percent said the economy was a factor, and an equal number blamed "uncertainty." Less blame was placed on financing (28.4 percent), media coverage (28.4 percent), and declining home prices (27.3 percent).

"We still have not hit bottom," said one reader, reporting on conditions in the north metro Atlanta market. "Foreclosures are the predominate transaction that sells. Short sales come in at a close second, and then we have a lot of corporate housing in inventory. It is very difficult for the ‘normal’ resale seller to compete against these listings."

Buyers are "aggressive and wanting the best deal. It is much like … shark-infested water," this respondent said. Sellers are "still hung up" on what "the home down the street sold for."

In the San Francisco Bay Area, sales under $500,000 "are hot," said another respondent, with only an average sales rate in the $500,000 to $1 million range, and "slow and grinding above that."

The survey showed the mood of buyers and sellers is still far from carefree.

While 20.3 percent said homebuyers are "engaged" and 22.6 percent described their mood as "ready to buy," 74.7 percent said buyers are "cautious."

While 54.2 percent said sellers are "realistic," 40.4 percent said sellers remain "stubborn," and 27.6 percent called them "desperate."

In the Summit, N.J. area, buyers are cautious, and sellers are "desperate if they have lost their job, stubborn if they can’t get a reality check on pricing, and realistic if they listen to me."

Asked about the mood of sellers, a respondent from Las Vegas responded, "Real people or banks? Humans are either desperate or stubborn — who knows what asset managers really think?"

Although Las Vegas is coping with some of the highest foreclosure rates in the nation, the respondent said conditions began improving six months ago, with good deals available, inventory shrinking, and "engaged" homebuyers.

Many respondents complained that sellers are still not willing to get realistic about pricing.

"Sellers never, and I mean never, seem to understand that the market does include their home also," said one respondent, who said conditions in Newark, Del., are worsening because of uncertainty and the economy.

"Sellers know that they are not going to get what they want, but some are still struggling to get their prices in line with the market," said another report from Basking Ridge, N.J. "So they are continuing to lose equity when their houses take a long time to sell while they ‘chase the market’ with their price reductions."

Buyers remain cautious as all areas of the Basking Ridge market are declining, but some sectors are harder-hit than others, the respondent said.

While 45.4 percent said inventories are stabilizing and 22.6 percent are seeing them shrink, about one in three respondents said inventory continues to grow.

Reporting from Lancaster, Calif., one respondent complained that there were "A LOT of vacant homes in ‘pre-foreclosure’ in our area." While inventory is down by half from a year ago, a "false bottom" has been hit, with a "flood of foreclosures expected in our area" when a moratorium is lifted.

Get this and other real estate news from www.MyDesMoinesrealty.com

12:30PM Wednesday Apr 01, 2009

After months of being told to lower expectations, people trying to sell their homes are pushing asking prices up even higher – now asking for money not seen since the peak of the property boom in 2007.

Home sellers are now asking for prices not seen since the height of the property boom.

The national median asking price for listed homes in last month was $399,000, matching the pre-recession peak of October 2007, says property listing site Realestate.co.nz, in its monthly "NZ Property Report".

Realestate.co.nz chief executive, Alistair Helm said the "current state of flux" in the property market could be setting unattainable price expectations in the minds of vendors as to the worth of their properties.

"Contributing factors include recent media speculation that the market may be turning the corner, along with the lower interest rates that have been available through much of the first quarter."

Helm said the relative shortage of new listings in a competitive market "forces agents to secure new property listings by agreeing to list at what may turn out to be unrealistically high asking prices set by the vendor."

"It remains to be seen whether the market meets these expectations."

During March, new residential property listings were up 12 per cent from February – but these numbers were down 17 per cent on the same month last year

See the full report here

-HERALD ONLINE

by Peter L. Mosca

No matter it be read in a newspaper or an online thread, heard out of the mouth of our president or a talk-show host on the radio, or watched on your TV or PDA, the consensus is that the economy is going to get worse before it gets better. According to one industry-leading watchdog, this economic nightmare is negatively impacting our nation’s homebuilders as a review of 33 U.S. firms with more than $10M in revenue shows that more than 30 percent are in financial distress and in danger of filing for bankruptcy, according to an analysis by Grant Thornton Corporate Advisory and Restructuring Services.

“It’s striking when you see just how much cash flow has continued to decline for the better builders,” said John Bittner, partner at Grant Thornton Corporate Advisory and Restructuring Services. “This year it will be all about keeping cash flow positive by cutting operating costs and liquidating assets. It’ll get to a point, however, when builders get rid of the assets with the most value and expenses can’t be cut much further. After that, there’s not much they can do except wait for a turnaround in the housing market.”

Records show 143 U.S. homebuilders filed for bankruptcy last year versus 80 in 2007. To remain viable, many will be forced to continue to reduce expenses and cut prices on existing inventory to increase cash flow, in contrast to their previous focus on revenue growth for the better part of this decade.

“It wouldn’t surprise me to see one or two of the top 10 homebuilders filing this year,” said Bittner. “But in most cases, the current lending environment is unique in that as long as a builder has positive cash flow, the lender doesn’t want to foreclose or force a bankruptcy filing. Recovery is more likely if a bank can be patient with a borrower. Positive cash flow and ability to service interest on a credit facility provides for a better negotiation position with the lender.”

According to Grant Thornton principal Tim Skillman, southern California and Florida are key markets to watch for evidence of a national turnaround.

“We won’t begin to see a recovery until these regions bottom out,” he said. “The indicator will be not the quantity of sales, but the median price of homes sold.”

Skillman believes expense reduction will be critical. Average revenue per homebuilder declined to $1.9M last year versus its peak at $3.7M in 2006 — a nearly 50-percent drop. Homebuilders that significantly scale back new-land purchases and maintain both positive cash flow and maximum cash balance on hand will be in an improved position to combat distress.

“In this recession, the decline in housing starts up to this point has been largely a result of the contraction in the financing market,” said Skillman. “With unemployment rates rising across the country, we could see a ‘double dip’ in housing starts and home prices.”

“We will not effectively stabilize the nation’s banks and financial system until we stop the wave of foreclosures that continues to drive down the economy and harm millions of families,” Michael Calhoun, President of the Center for Responsible Lending wrote in a comment to Treasury Secretary Timothy F.At least 8 million families risk losing their homes to foreclosure in the next four years. These foreclosures drive down the value of all homes, and in turn prevent a recovery of the housing and financial markets. The financial crisis will not end unless these foreclosures are reduced.”

The Center for Responsible Lending notes that this year alone there will be 2.4 million foreclosures. The 75 million families who happen to live near those properties will see their home values drop an additional $435 billion. That amount could more than triple over the next four years to nearly $1.5 trillion. Declining property values means less tax revenue to support schools, police, and other essential local services – and ultimately all of these factors will result in less activity for homebuilders.

[Note: Grant Thornton’s Corporate Advisory and Restructuring Services team works with underperforming and transitional companies and their stakeholders. They evaluate the financial and operational issues adversely affecting performance, assess strategic alternatives and develop and execute comprehensive plans to address the challenges.]

Published: February 25, 2009

Peter L. Mosca is president and founder of BAK Communications, Inc. He has over 22 years of communications and media consulting experience, serving a variety of nonprofit organizations, including the CCIM Institute and the REALTOR Association on all three levels – national, state and local. He is the Spokesperson Trainer for the CCIM’s Jay Levine Academy and trains hundreds of residential REALTORS nationwide to be effective industry spokespeople. He is consistently ranked as “excellent” by about 90% of those who attend his presentations.

While his principal consulting focuses are public speaking and media relations development and content delivery and management, Peter is also the host of the Voice America Network’s weekly radio program, “Income Property Investment Talk,” a one-hour program that brings the powerhouses of commercial and residential real estate to property investors every Wednesday at 11 a.m. EST.

Peter is married 17 years to his wife Barbara. They have two children: Ashley, 15 and Kelli, 12. Hence, the name BAK Communications, Inc.

by Broderick Perkins

One holiday Blue Light Special appears to be working.

Interest rates are as low as they been since Freddie Mac started tracking them, refinancing applications are soaring and home buys are on the move.

Freddie Mac on Christmas Eve, bless them, said the 30-year fixed-rate mortgage (FRM) averaged 5.14 percent for the week ending Dec. 24, 2008. That’s the lowest the rate has been since Freddie Mac started the Primary Mortgage Market Survey in 1971.

The 15-year rate averaged 4.91 percent.

Five year hybrid adjustable rate mortgages (ARMs) were higher at 5.49 percent, but 1-year ARMs were below 5 percent at 4.95 percent nationwide and even lower 4.75 in the Northeast and Southwest.

Talk about visions of sugar plums.

With home prices in a trough, with all the money you’ve been saving on reduced holiday spending and gasoline conservation, with all those motivated sellers out there twisting in the frigid wind?

It’s a good time to consider refinancing your mortgage and it’s a good time to be thinking "Buy A Home — Now!"

Forget settling down for a long winter’s nap.

It’s obviously time to put on your refinance thinking cap or your buy-a-home lid, not that go-to-sleep winter topper.

Either way, you won’t be alone. Jack Frost can’t hold a candle to housing consumers who feel the heat.

On Dec. 24, the Mortgage Bankers Association’s composite index of mortgage applications to buy a home or refinance a mortgage — bless it also — rose to 1,245.4, the highest since 2003, from 841.4 a week earlier. The group’s refinancing gauge rose 63 percent and purchases gained 11 percent.

Low rates have you looking to refinance?

The average rates are so low, refinancing can benefit even those who purchased a home a year or two ago, even if they had a small equity stake in their home and used an ARM to buy.

The key, say the experts, is to examine your options.

• Visit your existing lender first, especially if your lender doesn’t sell loans and has a vested financial interest in keeping its portfolio intact. It will prefer to refinance you at the going rate rather than cut a loan modification and lose money.

  Also shop around at other banks, credit unions (especially credit unions) and other lenders that also retain loans.

• Trading an ARM for a fixed rate that’s slightly higher also isn’t a bad deal if that ARM rate will eventually explode with an upward adjustment.
• A 40-year mortgage also can help offset the cost of trading an ARM for a fixed rate, due to the longer term’s relatively smaller payments.
• If you have both equity in your home and pristine credit, bargain hard. You have the most options.
• Quickly pull your credit report from the only federally-sanctioned free service, AnnualCreditReport.com and check it twice for accuracy.
• Don’t overlook trading one ARM for another, especially if the new ARM is a hybrid that provides enough breathing room, say five or seven years or more before the first adjustment.
• A U.S. Housing and Urban Development-approved counselor, experienced mortgage broker or mortgage adviser can help you quickly sort through options from lenders, bailout programs and other sources to get you a refinanced mortgage — fixed or adjustable — that is most viable.
• Examine all potential options by comparing all loan costs of each refinance from a variety of sources — in-house lenders, secondary market lenders and brokers.

Low rates making you think about buying?

Budget. Know all sources of every penny and where every penny goes. You can’t know where you can cut costs until you know in detail what those costs are.

Save. Pinch Pennies. Save More. Being miserly isn’t lame. It’s a prerequisite to homeownership. If you don’t have a savings account worth three to six months of your net income, you are already a financial disaster waiting to happen should there be an emergency. In addition to money for the down payment, lenders today will expect you to have some cash left over for insurance, taxes, maintenance and other costs that come with homeownership.

Don’t just get your credit report, read the darn thing. Your credit report is a report card on your credit use — the good, the bad, the ugly — and, too often, the incorrect. Which is why you want to see it. If there are errors, follow the instructions to correct them.

Get professional help. Can’t determine what your credit report is trying to tell you? Not sure how to calculate what you’ll need to save for a down payment? Don’t know how to set up a budget? Most consumers don’t. It’s okay to ask for help. It’s smart to ask for help. You don’t know everything about buying a home, even if you are moving up, but especially if you are a first-timer. Save the pride for after the purchase.

Whether it’s a financial planner, financial counselor, real estate agent, mortgage broker, loan officer, or real estate market nerd, ask family, friends, co-workers and others you trust for references to find those who can help you. Get help in setting goals, sifting through mortgage programs, understanding the title and escrow process, finding a home and keeping a home — all well before you are actually in the market for a home.

Learn about market and economic conditions that could impact your decision. Learn about home prices, mortgage rates, home buying costs and other issues surrounding what’s likely to be your most complicated purchase ever.

Attend workshops, seminars and classes.

Browse for housing information from online content providers, including MyMoney.gov, the Better Business Bureau (search "Tips for Troubled Homeowners") and Deadline Newsroom’s home buyers search results.

Pick up a few books, or save some bucks in the library reading "Buying Your First Home" (Nolo, $24.99); "The National Association of Realtors Guide To Home Buying" (Wiley, $19.95) and "Let’s Get Real About Money" (Financial Times, $19.99), among others.

Above all — refinancing or buying — move fast. The mortgage market is as volatile as it’s ever been. Rates could quickly reverse course and head back into Scrooge territory.

Published: January 15, 2009

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home.

The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services.

The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home.

Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News.

Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake.

He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications.

In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo’s Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.

The continual drop of housing prices is expected to end but not before home prices slide a little more, according to a report by Moody’s Economy. This news along with the tax credit for eligible homebuyers, and further mortgage rate declines could mean now is the right time to buy.

"If you want to buy a house and are expecting to stay in the property for a long time — it’s not an investment property but a home — then now is probably not a bad time to be buying," says Chen, co-author and Senior Director of Housing Economics, Moody’s Economy.

According to the study, home prices in 381 US metropolitan areas have dropped on average 25 percent and will slip some more (another 11 percent) before stabilizing. The hardest hit markets include areas in California, Arizona, Nevada, Massachusetts, Florida, New York, DC, Virginia, Maryland, and West Virginia.

"Our finding is that we do expect on a national level that the housing correction will bottom by the end of this year. By bottoming we mean that home prices will have reached the lowest level and we expect that between the peak of the housing market in 2006 to the bottom that [housing prices nationally] will have lost 36 percent of their value," says Celia Chen, co-author of the report.

The bright side is that the "housing correction" is in sight, according to Chen; and may, in fact, close in faster with the help of the economic stimulus package.

"Our outlook depends heavily on policy measures that will help to shore up the economy and also to help mitigate foreclosures that are occurring right now," says Chen.

Chen says she believes that the stimulus package could help pull the economy out of a recession this year and "will help stabilize jobs which is a positive for the housing market."

She also expects that, "The Fed and the Treasury will work hard to keep mortgage rates low and, in fact, we do expect mortgage rates to fall to about 4.5 percent by mid-year. That will also help bolster demand for housing," says Chen.

"There is going to be some sort of foreclosure mitigation program put in place that will help forestall some of the foreclosures from happening. That’s not to say that all of the foreclosures will end. I think that we’ll still see quite a number this year but, at least, it will be better than if there is no policy at all," says Chen.

She says without this help from the government, prices could fall "even further than what we’re expecting."

The $789 billion economic stimulus plan aims to save and create 3.5 million jobs, pumping up consumer activity through spending programs, and tax relief efforts including a credit for homebuyers. (At the time of this writing, details are still being worked out but it appears the tax credit for eligible homebuyers will be around $8,000).

The National Association of Realtors predicts that the tax credit will stimulate an additional 200,000 home sales, according to reports by the Associated Press.

Published: February 20, 2009

Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website: www.LiveFitMagazine.com.

Phoebe’s articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today’s Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe’s writing is also featured in Donald Trump’s book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success.

Contact Phoebe at (858) 259-3646 or phoebe@livefitmagazine.com. Visit PhoebeChongchua.com for more information.

[Note: To follow is an excerpt of an interview with the professional team at RealSource: Kent Anderson and John Schmelzle, Equity Services and Kerby Petersen and Sean Gove, Client Advisors. To listen to the show archive or download an MP3, go to www.IncomePropertyInvestmentTalk.com/020409.]

Mosca: With most, if not the entire brokerage marketplace basically leaving tenancy in common or postponing their efforts in 2008, RealSource continues to be successful with tenant in common investments by placing investors into offerings, into opportunities, and this reflects a significant part of your business model. What is enabling RealSource to be so successful at a time when others are either backing out or postponing this particular part of their business model?

Anderson: It is a little eerie to watch some of the big names out there in the business back off over the last several months. RealSource is able to find deals because of our market approach. We have several economists on staff including a Ph.D. where we work on a model that has been developed since 1989 to help us find those markets that are at the right time and the right place and to find those deals within that market. In working with John Schmelzle and others, we are able to find much better deals than what many of our peers have been able to find, which makes our deals very attractive. While it is true there is not as much cash and 1031 money available, we have deals that make sense.

Schmelzle: In the past good sources for our investments were from our existing network of brokers and management companies. In the past, that was the preferred way of finding deals. However, now that the market is changing the better way to go through the process is to go through a bid process. A lot of the change is a result of a difficulty in obtaining financing. Fortunately, we have a very fine mortgage brokerage arm at RealSource and they do a great job finding us favorable debt not typically available to the majority of apartment owners.

Mosca: Can you explain how the company has been successfully put investors in the right place at the right time since 1989?

Petersen: The research of our economist. We research the 363 metropolitan statistical areas or MSAs each quarter. During those quarters, we are finding out where growth is going, where job potential is going, what new jobs and opportunities are going in, plus we are checking on inventory and the ability to raise rents in the certain markets that make economic sense. Then we are micro-marketing that down into very specific submarkets within the large MSA. That’s where we get the majority of growth and economic improvement on the property, rents, and the ability to have occupancy at 100%. We get down to the specific micro-market within a market to help our clients reach the best value possible.

Gove: The key is being really specific in a market. For example, we all know that where we live there are specific areas that are performing better than others. Every market is very similar to that. As client advisors we can add value because we are talking to property managers and the local brokers on a daily basis. We get a good feel for market trends, rents, concessions, all within a specific submarket of a larger market. That’s where we add value.

Mosca: Let’s talk specifics. Can you give us a quick overview of the tenant in common offering available to investors right now?

Anderson: It is a rather large, 264-unit Class A apartment complex in southwest Houston. We like this area for quite a number of reasons. Job growth is doing incredible things for the occupancy on this project that was built and completed in 2007. It leased up rather quickly and despite not granting concessions, they have been able to maintain occupancy since the mid ‘90s. The other thing we like about it is that it’s the right type of property. Lastly, we’re getting terrific terms on a non-recourse loan. Those are two reasons it is forecasted to do so well; job growth and the incredible loan we were able to get on the deal.

Schmelzle: It is in the Fort Bend submarket of Houston. It’s one of the fourth largest housing markets in the United States so it provides you exit liquidity. It’s one of the only markets in the United States that has shown year after year job growth but at the same time, Houston historically has gone through some periods of rebuilding. Right now I believe there are roughly 17,000 additional units expected to the Houston market as a whole, or about three and one-half percent of the current inventory. When you’re entering a market like Houston, you have to be really diligent on what submarket you go into. That’s what our economic staff does, it pinpoints what submarkets outperform others. In this case, we determined that the Fort Bend submarket, which is Fort Bend County in the southern part of Houston, has historically outperformed Houston as a whole. In this case, we were put in contact with a large national developer that was finishing up a project and had an interest in selling it. We were able to lock in a rate and our loan application in time. The asset is 95% occupied, is a brand new community with resort-style amenities, and sits on a scheduled four-lane highway connected to the US Highway 90. While we are seeing 95 percent occupancy, there’s going to be a lot more traffic generated to this property over the next few years and that’s ultimately what is going to allow us to increase rent and maintain traffic at the property.

Mosca: Why is important for investors today who are holding cash, equity, and IRA funds and are sitting and doing nothing because they are scared of the Bernie Madoffs of the world to get off the fence and invest?

Gove: One of the main thing investors are worried about is risk. Consider, if the economy continues to fall and everything went bad, and the property is unable to perform. What will happen to you as an individual investor financially? Is the bank going to be able to come after you? A nonrecourse loan states that an individual investor is not liable if the property does fail. The bank has no recourse to come after an individual investor’s asset.

Petersen: Each one of the properties has its own expectations. As the investor gets involved in this, he purchases a fractional ownership based on the amount of money they put down on the property or a percentage of the total invested. The real benefit of being a member of a TIC is that you don’t have to do the day-to-day management tasks, that’s being done by a roup, and the returns that typically come back. Cash on cash and appreciation varies per project, and today that varies per market more than it does per project. We expect to get a higher return on appreciation than most areas because of the due diligence we put into our market research.

Gove: That (due diligence) has made all of the difference. Remember, money is made on the buy side.

Mosca: Is there a profile or certain characteristics of the typical investor?

Petersen: It starts with the client and diversifying their portfolio. When I first started working with investors, more of them were entrepreneurial, wanting to hold property on their own. In the seven years that I have been associated with RealSource, that number has dropped because more are willing to diversify into triple net leases or TICs opportunities. They like the returns and the simplicity of not having to do the day-to-day operations.

Gove: Every portfolio should have some form of a triple net lease investment. A triple net lease is similar to a CD as far as in the world of real estate investment. A multifamily investment is going to fluctuate; the income can fluctuate based on occupancy and expenses. In a triple net lease you don’t have that issue; you have consistent cash flow. You know exactly what you’re getting over a certain period of time whether it’s a 5, 10, or 15-year lease. There are no hiccups as far as expenses are concerned. Everything is thrown on to the tenant.

Mosca: What is your golden nugget for today?

Schmelzle: My golden nugget has to do with real estate investing as a whole. Keep in mind as a long-term investment, 33% of the U.S. population is made up of ecoboomers, the children of the baby boomers. The majority of this generation is still living and supported by their parents so within the next 5 to 20 years we’re going to see roughly 80 million people in the United States in need of housing, office space, retail shops, etc. Demand will continue making real estate the most appealing long-term investment.

Anderson: There is going to be opportunities in different types of markets, be sure to have the information and tools readily available to be able to determine when to get in and when to get out.

Petersen: Financing writes the rules of how a property is sold and negotiated upon. Negotiating the best terms possible means having actual numbers on today’s properties.

Gove: IRA funds, IRA funds, IRA funds. Don’t let an old 401(k), an old employer sponsored plan slip through the cracks. I have too many clients that forget that the have 50, $75,000 in an old 401(k) or even if it’s 10 or 20,000 and even an active traditional IRA, a Roth IRA, whatever the case may be. You don’t just have to stay the course in the old style of investing and watch your life savings go away. It’s a very simple process. Don’t be intimidated by it. We can work through the process of self-directing those IRAs into real estate.

Published: February 26, 2009

I’ve been saying it for months, and I’ll say it again.

NOW is the time to get off the fence and buy!

And you’re doing a huge disservice to your clients if you don’t make sure they hear that message loud and clear!

Why am I so convinced that the time is now?

Well, it’s a combination of things. Regardless of whether you’re building a new deck, or whipping up a batch of cupcakes, you need the right ingredients in order to ensure success. For the buyer considering a purchase, the right ingredients are at hand.

Today, right now, is the time to act. Here’s why:

Mortgage rates are low, lower than they have been for many years. In fact, they’re approaching historic lows! Yes, you actually have to qualify for a loan now. But I guarantee you there are lenders out there who are ready, willing, and able to lend you mortgage money at very attractive rates.

Inventory levels are high. Unfortunately for sellers, buyers have an enormous number of homes from which to pick. In many markets, inventory is at an all-time high. As a result, buyers no longer have to "settle" on a home that’s not what they want.

Sellers are motivated. Whether they are in trouble with their financing, worried about their employment, or having to make lifestyle changes as a result of losses in the stock market, many sellers need to sell and are willing to negotiate accordingly.

First-time buyers can also get a $8,000 non-repayable tax credit from the government. And you can apply it to either your 2008 or 2009 taxes.

We may already have reached the bottom of the market. Some buyers are still waiting, trying to buy at the very bottom of the market. Funny thing about that – you never know you’ve hit the bottom until prices are on their way back up. And many buyers don’t realize that an increase in their mortgage rate will completely eliminate any advantage they may have gained by waiting for prices to decrease by a few thousand dollars more.

So, yes, I feel strongly that buyers who don’t make a move right now are missing a huge opportunity. Be the agent that encourages them to make what could be a very wise move!

Published: February 26, 2009

The founding partner of The Lones Group, Denise Lones, brings over two decades of experience in the real estate industry. With expertise in strategic marketing, business analysis, branding, new home project planning, product development, and agent/broker training, Denise is nationally recognized as the go-to for all things "real estate.” Denise can be reached at 369.527.8904 or at www.thelonesgroup.com.