Quote from Thomas Jefferson -1802

‘I believe that banking institutions are more dangerous to our liberties

than standing armies. If the American people ever allow private banks to

control the issue of their currency, first by inflation, then by

deflation, the banks and corporations that will grow up around (the banks)

will deprive the people of all property until their children wake-up

homeless on the continent their fathers conquered.’ The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Thomas Jefferson - Letter to the Secretary of the Treasury Albert Gallatin (1802)
3rd president of US (1743 - 1826)

It is 200 years since..we just do not heed to History.

Another one that I found profound :

“It is dangerous to be right when the government is wrong” - Voltaire, 17th Century.

The World of finance - 401K & Housing

Is this title too complicated to understand? That's how I, and perhaps a million others feel in trying to keep up with today's ever changing times.
It is October 10th, 2008, and many of us wonder what turn the real estate market will take, as well as where our economy is destined to go.
One thing that occurred to me after watching the 401K lose value was that now, more than ever, it's safer to purchase a home than to have your money tied up in a 401K! The tax reductions you’ll receive will supercede what you’re not going to make on your 401K, and the home values will only increase.
Of course, there are lots of iiff's.... But where is the certainty? Let's find a home together so we can build equity and a brighter future!

Congress Passes Housing Bill

WASHINGTON -- U.S. Senate lawmakers on Saturday overwhelmingly passed a broad package of housing legislation, hoping to send a calming message to financial markets and voters amid the ongoing deterioration of the housing market and a growing number of bank failures.

¹

Meeting in a rare weekend session, the Senate voted 72-13 in favor of the bill, which includes tax breaks for homeowners, a $300 billion program to refinance loans for struggling borrowers, and a dramatic rescue plan for embattled mortgage finance firms Fannie Mae and Freddie Mac. Other provisions include an increase in the federal debt limit to $10.6 trillion and long-sought reforms to the Federal Housing Administration.

"For Americans out there today with distressed mortgages and worried about their economic future, we hope this legislation could be the first piece of good news in a long time," Senate Banking Chairman Christopher Dodd (D., Conn.) told reporters after the vote.

Treasury Secretary Henry Paulson said provisions in the bill dealing with Fannie and Freddie, including the creation of a new regulator, were especially important. "These components are orders of magnitude more important to turning the corner on the housing correction," Mr. Paulson said in a statement.

The vote completes congressional action on the legislation, which is the result of months of political wrangling and negotiations between the House and Senate, Treasury Department, and other federal regulators. The House voted 272-152 to pass the bill on Wednesday.

It will now be sent to President George W. Bush, who the White House has said will sign the bill despite voicing earlier misgivings about certain provisions of the legislation. Senate Majority Leader Harry Reid (D., Nev.) said Saturday the bill could reach the White House on Monday.

The White House has made no plans to have an official signing ceremony for the bill, though most major pieces of legislation typically receive such treatment. When asked about it Saturday, Mr. Dodd said he was disappointed and said a public ceremony with lawmakers and Mr. Bush would "reassure the American people we're on the job trying to make a difference."

"I think that's a moment you don't want to miss by just having a secret, closed-door signing ceremony as if you didn't do it," Mr. Dodd said. "I think it's more important for him to stand up and be heard on this and express through that office the importance of making a difference for people."

The presumptive presidential nominees from both parties weighed in following the Senate vote, though neither Sen. Barack Obama (D., Ill.) nor Sen. John McCain (R., Ariz.) attended the vote.

McCain spokesman Taylor Griffin said in a statement that "relief for struggling homeowners is overdue."

In a statement released by his office, Mr. Obama said the bill would help prevent hundreds of thousands of foreclosures and "provide critical support to communities that have been hard hit by the housing crisis."

Policymakers hope the wide-ranging bill will help invigorate a housing market that continues to collapse and has roiled financial markets worldwide. Data released in recent weeks reveal that home sales have hit a 10-year low and home prices continue to decline around the country. Importantly, the number of homeowners facing foreclosures continues to rise, raising the specter of vacant homes and neighborhood blight.

Foreclosure-tracking firm RealtyTrac said Friday that 740,000 properties received some form of foreclosure filing in the second quarter, a 14% jump from the previous quarter and soaring 121% from the second quarter of 2007. More breathtaking: One in every 171 households received a filing in the second quarter, and all but five of the nation's 100 largest metro areas experienced year-over-year increases.

The omnibus housing package completed Saturday attempts to deal with the housing crisis on a number of fronts. It includes $180 million for "pre-foreclosure" counseling for cash-strapped homeowners, creates an affordable housing trust fund to increase the supply of rental housing, and would raise the size of loans eligible for purchase by Fannie Mae and Freddie Mac to 115% of the local area median home price, with a nationwide ceiling of $625,000 for loans.

The centerpiece of the legislation is a program of up to $300 billion of FHA-insured mortgages to help refinance cash-strapped borrowers into affordable loans. The program would rely on lenders voluntarily writing down the value of a distressed loan for the homeowner to qualify for the new FHA-backed loan, and in return borrowers would have to share future price appreciation with the federal government.

Lawmakers hope the program will help avert foreclosures, with Democrats estimating it could help up to 400,000 borrowers that now face defaulting on their loans. To encourage lenders to work with borrowers, the legislation also provides some legal protections for mortgage servicers and lenders who modify the terms of loans.

Also included is an emergency plan authored by Mr. Paulson over the last two weeks to provide a federal backstop for Fannie Mae and Freddie Mac. Hatched in the wake of financial market concerns about the firms' solvency and capital, the plan would expand the $2.25 billion lines of credit the firms have with the Treasury, as well as allow the Treasury to take an equity stake in the government sponsored entities. Importantly, it also gives the Federal Reserve a "consultative" role to work with the firms' new regulator to ensure their safety and soundness.

It also includes tax relief for future homebuyers and current homeowners. First-time homebuyers purchasing a home between April of this year and through June of next year would receive a tax credit for 10% of the value of their home, up to $7,500, while current homeowners who do not itemize their tax returns would be able to deduct up to $1,000 for property taxes.

Other provisions include nearly $4 billion in grant money to state and local governments to buy up and rehabilitate foreclosed homes. Intended to avoid community blight in areas hard hit by foreclosure, the program directs that homes purchased through the program be offered to low- and moderate-income families.

Write to Michael R. Crittenden at michael.crittenden@dowjones.com²

By MICHAEL R. CRITTENDEN
July 26, 2008 3:05 p.m.

Houses are Appraising for less

With everything else going on in the housing market, I have personally come across a situation and heard from other Real estate agents that the house did not appraise for the agreed price and all the work upto that point will be washed away.

What are the options? As far as I know:

a) Buyer brings in the difference money (if he has it) in the appraised value to the price he/she is paying,
b) Seller gives a discount to the settled price,
c) The Buyer pays a PMI (private mortgage insurance) to the difference and gets the loan(if he can).

Please come up with suggestions that you know for the benefit of others.

Thank You.

Zillow Quarterly Report

I found this report interesting and easy to view and understand. I wanted to share it with you all. Click on Boston at the left to see what had happened in our area, towns & suburbs.

Not taking a high priced listing

Recently, I have come across situations where the would be Sellers are upside down or they will have to bring money to the table as they have no hardship and are selling because of better opportunities or changes in their life situations. Hence, there cannot be forgiveness (if they think there will be from Banks/Lenders & I say otherwise).
I have given a price at which their house will be in the market versus just taking the listing to put it in the MLS , a price they did not want to hear and therefore, the listing has been taken by another agent.
Of course, It's not gone under agreement. But tell me, Should I have taken the listing or am I better off without that listing...

Mortgage & Implications on Housing

Although the rates are low, I have come across situations where 100% financing is almost non existent, jumbo loans are difficult to get & if you are qualified, the rates on the second loan is almost 7.5 % - 8 %.
With this situation, would it be fair to say that the drop that we have seen in prices of houses in Massachusetts, will be somewhat offset by the monthly mortgage payments.
Any thoughts!!

Current Mortgage Rates

The Fed has slashed rates & the mortgage rate is still not down. Also, it's tougher to get a mortgage. It would be wise to start shopping for a mortgage when you start looking for a house as typically, you do not get more than 2/3 weeks between the signing of the P&S and the mortgage commitment. And of course, you typically have 10 days to sign the P&S after the accepted offer.

However much we have discussed all this with our clients, we do not give it that extra thought, & could end up paying more!!

Due diligence will get us the best in any given situation.

Better Priced Houses are not sitting in the market

You hear all the bad news! Of course, the foreclosures are up to record numbers and when the loans are reset for people in the next 2 years, these numbers will be up.
The economy is also not showing a very promising picture what with job cuts in manufacturing and also service industry (as they mentioned as of Feb 4th 2008).

But for the first time home buyer, the interest rates are low, Sellers who have to move have become realistic and are pricing their houses right and there are choices. You do not have to make the offer almost immediately.

No one has the crystal ball to predict and therefore, if you like something and can afford it, A good time to buy across the board.