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Fannie Mae Announces Foreclosure Prevention Program

July 17, 2012 2:22 am

Fannie Mae launched Know Your Options Customer Care, a customer engagement strategy and training program for servicers aimed at preventing foreclosures by developing consultative relationships with struggling homeowners. Under the program, Fannie Mae personnel conduct trainings for servicers' call center employees, provide scripting for interactions with homeowners and help implement ongoing quality control measures.

Fannie Mae has been developing the Know Your Options Customer Care program for approximately one year and is already implementing it with 18 of its largest servicers. One of the key elements of the program is creating a single point of contact in the call center for each customer to ensure that rapport is built with the homeowner, regular contact is maintained through the loss mitigation process, and that foreclosure prevention options are properly presented and pursued. Servicers that have participated in the program have typically seen 20-30 percent increases in workouts. The training is now being made available through online webinars and program materials so all servicers may participate and implement Know Your Options Customer Care. The program is available free of charge to servicers.

In addition to Know Your Options Customer Care, Fannie Mae reports taking a number of steps to help prevent foreclosures, including:
  • Launching the KnowYourOptions.com website to provide educational tools and resources for homeowners
  • Opening 12 Mortgage Help Centers in areas hardest hit by the housing crisis to provide individual assistance to Fannie Mae homeowners
  • Implementing the Servicing Alignment Initiative with the Federal Housing Finance Agency and Freddie Mac to require early outreach by servicers to struggling homeowners
  • Requiring servicers to reduce timelines for short sales
  • Developing and implementing the Servicing Total Achievement and Rewards (STAR) program to evaluate and motivate servicers' performance in helping homeowners
  • For more information, visit knowyouroptions.com.
Source: Fannie Mae

Published with permission from RISMedia.


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How to Protect Yourself from Tornadoes

July 16, 2012 2:22 am

Most people take fire safety seriously and have fire extinguishers handy and escape routes pre-planned should a blaze threaten their home. Yet while tornadoes and the violent storms surrounding them are far more common than homeowners realize, many homeowners don't take the necessary steps to prepare for these destructive storms. According to the Hanover Insurance Group, on average, some 1200 tornadoes appear each year in the U.S.

While tornadoes can occur in the United States during any month, weather conditions produce a peak season that runs through October. In areas of the country subject to the harshest storms, winds can far exceed those of even the strongest hurricanes, averaging between 110-205 mph.

"Tornadoes can form in every state east of the Rockies," explains Mark Desrochers, president of The Hanover's personal lines business. "Preparing for a tornado is a practical safety precaution that should be taken by all households in these states. This also enables homeowners to recover quicker."

To help prepare for a tornado and respond in the event one strikes, The Hanover suggests doing the following:
  • Make an action plan. Prepare in advance so that when a tornado watch is issued, you already have an existing plan of action. Unlike hurricanes, which tend to be closely monitored for days, tornadoes can spring up quickly. In many cases, you will have to take shelter within minutes in your own home or a below-ground storm shelter. Experts advise never trying to outrun a tornado by car. Instead, move to the basement or to an inner windowless room or interior hall. Protect your head and neck with your arms and hands. Ensure everyone knows the action plan.
  • Create a survival kit. After a storm, it may be impossible to use roads for several days. You may be forced to live in your home for a while even if it is wrecked or you're without electricity and water. So, it's wise to assemble a survival kit containing a week's worth of non-perishable food, bottled water, paper plates and cups, eating utensils, medicines, first aid handbook and bandages, blanket, a radio, batteries, flashlight, soap and toiletries, bleach for disinfecting, and spare clothing. Store the kit in the basement or other safe area.
  • Have debris removal tools on-hand. There may be a significant amount of debris following a tornado that will have to be moved just to exit your structure. Some of this will be splintered wood and glass. With this in mind, store helpful items - including heavy soled shoes, gloves, eye protection and a small shovel to safely move debris. This should be kept in the same area as your survival kit.
  • Create a home inventory. Tornadoes can destroy your home and its contents, making it difficult to document your property losses, which can impede your recovery. With a proper home inventory you will have an acceptable means of documenting ownership and value in the event of a claim. Photograph or shoot video of your entire home or business, including the contents of each room, and store these with a written inventory and serial numbers in a fireproof safe or safe deposit box.
  • Create and share contact info. All family members should have personal and business contact information (phone/email) for quick communications. Also ensure you have your agent and insurer's claims office numbers stored in your mobile phone. After a storm, cell service may be more accessible than local land lines. Have important numbers on hand to help expedite your recovery after the storm. It's important to keep your cell phone charged in advance, as power may be out for days.
  • Wait for official notice before returning home. If there is an evacuation after a storm, wait for official notice that it is safe to return to your home. When returning to your home, be cautious when entering a damaged structure. Stay away from damaged or weakened walls.
  • Take photographs and/or video documenting claim damage. Should your home or business be damaged in a tornado, take pictures of the entire scene and document all damage - provided it is safe. Try not to remove items until an insurance adjuster has had an opportunity to visit the property and assess the damage.
Source: The Hanover Insurance Group, Inc.

Published with permission from RISMedia.


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New Rental Assistance Proposal Could Help Low-income Families

July 16, 2012 2:22 am

The Center on Budget and Policy Priorities will hold a conference call briefing on Tuesday, July 17 at 11:00 a.m. (ET) to discuss a new rental assistance proposal that has the potential to make housing affordable for 1.2 million low-income renter households.

Barbara Sard, vice president for Housing Policy and former senior advisor on Rental Assistance to Housing and Urban Development Secretary Shaun Donovan, and Will Fischer, senior policy analyst, will discuss the new proposal — a federal renters' tax credit — that could help reduce rents for over a million poor families at a modest cost and advance a more balanced housing policy.

The new proposal, which could be considered as part of a larger tax reform proposal to improve the efficiency of the tax code and help reduce deficits, would complement existing programs to help address the growing need for rental assistance. Under the proposal, states would administer and implement rental assistance credits through a public-private partnership with property owners and banks. States could award families credit certificates to help them rent a modest unit of their choice or could allocate credits to owners or lenders to make units affordable to low-income families. The proposal has the potential to reduce rents by an average of $400 and lift 250,000 families out of poverty.

After initial presentations, the panelists will field questions. The call will be moderated by CBPP President Robert Greenstein.

Source: Center on Budget and Policy Priorities

Published with permission from RISMedia.


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Data Shows Negative Equity Decreases in First Quarter Of 2012

July 16, 2012 2:22 am

Recently released data shows that 11.4 million, or 23.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2012. This is down from 12.1 million properties, or 25.2 percent, in the fourth quarter of 2011. According to the report from information and analytics provider, CoreLogic, an additional 2.3 million borrowers had less than 5 percent equity, referred to as near-negative equity, in the first quarter.

Negative equity, often referred to as "underwater" or "upside down," means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

Together, negative equity and near-negative equity mortgages accounted for 28.5 percent of all residential properties with a mortgage nationwide in the first quarter, down from 30.1 percent in the fourth quarter of 2011. More than 700,000 households regained a positive equity position in the first quarter of 2012. Nationally, negative equity decreased from $742 billion in the fourth quarter of 2011 to $691 billion in the first quarter, a fall of $51 billion in large part due to an improvement in house price levels.

"In the first quarter of 2012, rebounding home prices, a healthier balance of real estate supply and demand, and a slowing share of distressed sales activity helped to reduce the negative equity share," explains Mark Fleming, chief economist for CoreLogic. "This is a meaningful improvement that is driven by quickly improving outlooks in some of the hardest hit markets. Reducing the number of underwater households is an important step toward reducing future mortgage default risk."

Further highlights from the first quarter of 2012 include:
  • Of the 11.4 million upside-down borrowers, there are 6.9 million first liens without home equity loans. This group of borrowers has an average mortgage balance of $212,000 and is underwater by an average of $47,000. For all first-lien-only borrowers, the negative equity share was 19 percent while 42 percent of all first-lien-only borrowers had a loan-to-value (LTV) ratio of 80 percent or higher.
  • The remaining 4.5 million upside-down borrowers had both first and second liens. The average mortgage balance for this group was $299,000, and they were upside-down by an average of $82,000. The negative equity share for all first-lien borrowers with home equity loans was 39 percent, more than twice the share for all first-lien-only borrowers. More than 60 percent of borrowers with first liens and home equity loans had combined LTVs of 80 percent or higher.
  • Nearly 17 million borrowers were between 80 percent and 125 percent LTV in the first quarter of 2012 and, purely from an LTV perspective, eligible for the Home Affordable Refinance Program (HARP) under the original requirements first introduced in March 2009. The removal of the 125 percent LTV cap via HARP 2.0 means that more than 22 million borrowers are currently eligible for HARP 2.0 when just considering LTV alone.
  • The low end of the market is where the bulk of the negative equity is concentrated. For example, for low-to-mid value homes valued at less than $200,000, the negative equity share is 31 percent for borrowers, almost twice the 15.9 percent for borrowers with home values greater than $200,000.
  • As of the first quarter of 2012, there were 1.9 million borrowers who were only 5 percent underwater. If home prices continue increasing over the next year, these borrowers could move out of a negative equity position.
Source: CoreLogic

Published with permission from RISMedia.


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Survey Reveals Waterside Code of Conduct

July 13, 2012 2:18 am

Many of us seem to forget our manners when it comes to lounging by the pool or spending the day at the beach. In fact, according to the result of TripAdvisor’s annual beach and pool etiquette survey of more than 1,400 U.S. travelers, 83 percent of respondents believe people often violate some form of beach or pool etiquette, up from 74 percent in 2011. Thirty-one percent have asked a stranger to stop behaving rudely at the beach or pool, up from 26 percent last year.

According to the survey, the top three beach violations are: blasting loud music (18 percent); people not picking up after their dogs (11 percent); and beach chair hogging (9 percent). Top pool violations are: pool chair hogging (29 percent); blasting loud music (11 percent); and smoking (10 percent).
Other interesting survey results include:
  • 84 percent get agitated when others save beach or pool chairs by leaving belongings on them.
  • 37 percent maintain there should be a 30-minute limit on seating being saved, while a further 30 percent will tolerate up to one hour – and just 14 percent think chair hogging for any longer than that is acceptable.
  • 19 percent maintain that saving chairs should not be allowed for any time period.
  • The closest acceptable distance to sit next to another stranger at a crowded beach is three feet, according to 27 percent – while a further 26 percent set a boundary of six feet, and 15 percent say four feet meets their comfort levels.
  • On non-crowded sands, 34 percent consider 20 feet to be the closest acceptable distance to sit next to a fellow beach-goer, while 24 percent say seven to ten feet is appropriate, and 18 percent say 11 to 14 feet.
  • 89 percent think smoking at the pool should be prohibited.
  • 69 percent think that smoking at the beach should not be allowed.
  • 35 percent consider it a breach of etiquette not to rinse off before entering the pool – although 80 percent confess to not always doing so.
Source: TripAdvisor

Published with permission from RISMedia.


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Bankrate: Mortgage Rates Hit New Record Lows

July 13, 2012 2:18 am

Mortgage rates moved lower once again, with the average 30-year fixed mortgage rate setting a new record low of 3.79 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.40 discount and origination points.

The average 15-year fixed mortgage rate fell to 3.05 percent, while the jumbo 30-year fixed mortgage ticked lower to 4.44 percent, both record lows. Adjustable mortgage rates were mixed, with the average 3/1 ARM rate inching higher to 3.08 percent while the rate on the popular 5/1 adjustable dipped to a new record low of 2.95 percent.

A disappointing jobs report raised further concerns about the U.S. economy and helped push mortgage rates to the 10th new record low in the past 12 weeks. The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 3.79 percent, the monthly payment for the same size loan would be $930.78, a difference of nearly $311 per month for anyone refinancing now.

Survey Results

  • 30-year fixed: 3.79% -- down from 3.87% last week (avg. points: 0.40)
  • 15-year fixed: 3.05% -- down from 3.13% last week (avg. points: 0.35)
  • 5/1 ARM: 2.95% -- down from 2.96% last week (avg. points: 0.35)
Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

Source: Bankrate

Published with permission from RISMedia.


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Downsizing 101: Where Do I Start?

July 13, 2012 2:18 am

There are many reasons to consider downsizing your living space. Maybe you just want less house to maintain and less "junk" to look after. Perhaps your nest is empty and you just don't need all that space. Or you may be looking for a change of venue; moving to a more urban setting will likely mean a smaller home.

Whatever the reason for your move, downsizing your home and your stuff can be overwhelming to contemplate. Boston real estate sales professional Peggy Patenaude says that the best approach is to take it in steps. “The first step is to hone in on what you want,” she advises. “Ask yourself what-when-where questions to get to the heart of what you really want in your new space.”
Patenaude suggests you ask yourself the following:
  • Consider your needs. What type of home will best suit you? A smaller house? A condominium or townhome? A retirement residence or assisted living community?
  • Location, location. Where do you want to live? Is a suburban setting right for you, or are you seeking an environment closer to the attractions of a big city? Do you want to be near family? Good schools? Shopping?
  • Timing. When are you hoping to move? If you don't need to make a change immediately, you can afford to take a more leisurely approach.
  • Inventory. Once you decide on the where and the when, it's important to look at what is out there on the market. Peruse the ads in your targeted area and see what types of homes are available as well as pricing and the kind of space you will have.
  • Go shopping. Attend open houses, book showings, pore over photos on the Internet. Take a close look at the possibilities, and the enthusiasm you generate will help you tackle the next step in downsizing.

Published with permission from RISMedia.


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Tips for Calculating Car-Loan Payments

July 12, 2012 2:18 am

In an effort to empower car buyers with below-prime credit, CarFinance.com released the following auto-financing tips which provide advice on calculating potential auto loan payments by identifying the car, and monthly loan payment, they can actually afford.

1. Monthly payment:
Understand what level of monthly payment you can afford by doing a detailed, hyper-honest, budget-setting exercise. Take your monthly income minus all payroll tax or estimated monthly tax deductions, then subtract everything: monthly mortgage payments or rental costs, credit card and other loan payments, health and car insurance (calculating how much more the latter will be with the new car) and get serious about estimating real-world living expenses (from food to fun, etc.) by looking at the last six months of your real spending (bank statements, withdrawals, checks, etc.) from your monthly income. What is left over is what you can afford each month.

2. Know your APR up front: The higher the APR (Annual Percentage Rate - the cost you will pay on the loan, including your interest rate), the higher the monthly payment – and the more you will ultimately pay for the car. Waiting until you get to the dealership to find out your APR could mean you drive off in a vehicle that you can't afford. The good news is that today you can get pre-approved online for a loan in minutes, providing you with key numbers, including your APR, to help you make a rational decision on which cars you should be looking at.

3. Length of loan:
For a given amount financed, the lower your monthly payments, the longer the term of your loan, but the longer the term, the more interest you pay, meaning you will ultimately pay more for your vehicle. Calculate what you will be paying overall to determine if you are willing to pay extra in the long run in order to pay less each month, or if you should look at a lower-priced vehicle.

4. Rebates vs. rates: Understand the difference between the benefit of a cash rebate versus lower monthly interest rate before including it in your calculations. In many instances, you have the option of a manufacturer cash rebate or a low APR. While a low APR sounds enticing, remember that a cash rebate decreases the price of the vehicle, thereby lowering the amount you need to borrow, reducing your interest expense and less overall money spent in the long run. If you trade your vehicle in early, you can lose much of the benefit of the low interest rate. Plus, if you have less than perfect credit, you may not be eligible for the low interest rate anyway.

5. Total price of the vehicle you can afford: This is the holy grail and to calculate this using one of the many calculators you can find online, you will need to allow for your down payment, monthly payment, APR, and the realistic price of the vehicle you are interested in, as well as trade-in (be sure to do your research to get a realistic sales price, whether you are selling the car yourself or trading in), rebates, sales tax, and loan term. You also need to allow for title and licensing fees; a good rule of thumb is 10-15 percent on top of the selling price. But remember, fees vary by state, from as little as $50 to as much as several thousand dollars depending on the state and the value of the vehicle.

6. Go shop: Now that you know what you can afford, you can research online on sites like Edmunds.com to find vehicles that fit your budget. Many online sites offer a search by monthly payment or search by the amount you plan to spend; just be sure you are using the amount that you can afford and that their formulas take into account all the information you have accrued. Once you have found the vehicle that you can afford and want to buy, go ahead and get financed online so your conversation at the dealership is about the vehicle itself, and not the financing.

Source: CarFinance.com

Published with permission from RISMedia.


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Tips for a Healthy Roommate Relationship

July 12, 2012 2:18 am

Creating a harmonious relationship with your roommate can be an arduous task, often falling prey to a lack of communication, pent-up frustration or selfishness. Here are a few helpful tips from Rent.com to get you and your roomie back on track.
  • Make it known. Don’t skirt the issue when it comes to describing your day-to-day activities. Before you sign a lease, it’s important for your roommate to understand your schedule to avoid conflicts later. If you are an “early to bed, early to rise” kind of person, a roommate who works on mixing his DJ tracks at night may not be your best bet.
  • Talk it out. Working to communicate your needs and expectations to one another is crucial for a happy roommate relationship. For example, if your roommate is a student and wants to use the kitchen table to study, decide not to watch TV loudly in the same room during study hours. Likewise, if you’re hosting a “Bachelorette” season-finale party at your apartment, give your roommate fair warning to make other plans.
  • Give a little. By speaking with your roommate about both of your priorities and interests, you can find the greatest common ground and meet somewhere in the middle. Giving a little on both sides shows mutual respect, which makes for an ideal living situation.
  • R-E-S-P-E-C-T. One secret to roommate success is creating boundaries between public and private space. Bedrooms should generally remain off limits to the other roommate, and personal items should not be borrowed without permission. Make sure to talk with your roommate about what is meaningful to you and set clear boundaries together.
  • Clean up your act. As indicated by Rent.com’s survey, keeping clean is a must. While some people are naturally tidier than others, it’s important to divide cleaning responsibilities so the burden is shared. Be sure to discuss expectations for cleaning before you sign on the dotted line. Talk about who will clean what and how often, and what’s acceptable in terms of daily and weekly up-keep.
  • Bills, bills, bills. Make sure you decide on when and how bills and rent will be paid for before making the roommate bond permanent. For instance, if one person is in charge of utilities, make the other in charge of submitting the rent check each month. Designating bills as a shared responsibility helps foster timeliness when it comes to deadlines.
Source: Rent.com

Published with permission from RISMedia.


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Baby Boomers Moving Forward on Retirement Plans

July 12, 2012 2:18 am

In a survey of still-working adults age 55 and older, the majority of the respondents say they are not delaying retirement and believe they will be financially prepared to retire when the time comes.

According to the most recent PulteGroup Home Index (PGHI) survey conducted by national homebuilder PulteGroup, Inc., 61 percent of the respondents plan to retire in less than 10 years, including 46 percent who believe they will be financially prepared to retire in the same time period. Among this same group, 59 percent said that they are either not delaying retirement or plan to retire at a younger age than originally anticipated.

"The survey results seem to defy expectations that the economic slowdown of the past five years has forced many baby boomers to rethink their retirement plans," says Deborah Meyer, senior vice president of PulteGroup, Inc. "On the contrary, these results suggest that future retirees are likely making financial adjustments now so that they can enjoy the full benefits of the next chapter of their lives.”

When comparing previous consumer surveys, Meyer reports there is an upward trend in the percentage of baby boomers becoming more financially prepared for retirement. In the 2010 Del Webb Baby Boomer Survey, approximately 46 percent of the respondents said it would take 10+ years before they would be financially prepared to retire, compared with only 14 percent of the respondents polled in this quarter's PGHI survey.

Other survey highlights include:
  • 32 percent plan to retire in less than five years
  • 49 percent of respondents’ expected age of retirement has not changed
  • 10 percent of respondents expect to retire at a younger age than originally anticipated
  • 27 percent believe they will be financially prepared to retire in less than five years
  • Only 12 percent of those who are delaying retirement say that selling their home and/or the value of their home is a barrier to retirement
Additionally, for today's 80 million boomers, the choices vary on where to spend their retirement years. Some consumers surveyed choose to stay in place in the city where they currently live; whereas others move to seek warmer climates, such as Arizona, the Carolinas and Florida.

In a significant shift, 62 percent of survey respondents think their home in retirement will be within the same state they currently live. This represents nearly a 20 percent increase compared to just two years ago when Del Webb asked the same question in the 2010 Del Webb Baby Boomer Survey.

Another key trend is a desire to continue working. “We've seen the desire to continue to work. To better accommodate the work and play needs of baby boomers, Del Webb has opened communities near large metropolitan cities and employment corridors, better allowing customers to stay in place and continue to work," Meyer says. "With more than 50 percent of our Del Webb residents working part-time, starting new businesses or new careers, it's not surprising that they want to stay connected to their current community, but still take advantage of the active lifestyle at a Del Webb community."

Source: Pulte Homes, Inc.

Published with permission from RISMedia.


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