Single-Family Homes a “Very Attractive Asset Class Now” – Warren Buffett



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The news spread like wildfire.  No, it’s not another politician’s sex scandal or the latest (definitely not greatest) gas prices.  It is the monumental statement made by Warren Buffett that he would buy up “a couple hundred thousand” single-family homes.  The catch is that he would do that if it were something he could practically manage. He may not be able to practically manage it but individuals certainly can.

Think about that.  For months, if not more than that, countless Realtors have been urging their clients and potential clients that now is the perfect time to buy.  Now that it comes from one of the biggest investors of our time, it brings new light to the subject for many investors and has generated widespread industry buzz from the moment the billionaire uttered those words.

In an interview where he discussed several topics, soon into the discussion with Becky Quick of CNBC’s Squawk Box, he said that in addition to equities, single-family homes are probably the most attractive investment there is out there right now.  With the low rates that seem to be heading further down still, he suggests buying at these low interest rates and then for homeowners to refinance if and when the rates dips even more. 

He cited that the only reason he has not purchased as many homes as he would have liked is because of the practicality of managing the transactions and properties.  Apartment units might have been more manageable and in his words, he said he would “load up on them” had that been the case. But for the everyday investor it makes perfect sense to seize this opportunity and Warren Buffett highlights this repeatedly in his most recent discussion on CNBC.

Mr. Buffett shared his perspective on the idea of buying homes at distressed prices, fixing them up and renting them out as an ideal way to get a solid return on investment.  Referring to the changing trends and attitudes within the housing market, he also said this is the perfect way to “short the dollar” because with a 30-year fixed rate mortgage it can go two ways; either the interest rate is too high down the line after which you can go and refinance or if it’s too low the other guy’s stuck with it for 30 years.  Could this be the return of the house-flipping craze that we saw boom in the mid 2000s?

Mr. Buffett’s statement brings new light to something that so many agents and mortgage consultants have been saying all along.  Buy now.  At a time when stocks are just now rebounding after four years of inching their way back up, he says that consumers should acquire 30-year fixed rate mortgages and then refinance when rates go down further. 

If homeowners can hold on to their property for a long time after purchasing it at the lowest rates the industry has to offer they are sitting on the best investment possible of our time.  Of course equities are still very strong but they have come up quite a bit and Warren Buffett says owning a home is a “leveraged way of owning a very cheap asset”, making it quite possibly the most attractive investment that you can make.

Foreclosed Homeowners May Be Eligible for Financial Remediation



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Ever since the robo-signing scandal took off, it seems that the government is watching with keen interest the workings of many mortgage-related processes throughout the nation.  One of the organizations to be scrutinizing past practices to determine whether any wrongdoing was done is the Office of the Comptroller of the Currency, or OCC.  The OCC, a division of the US Treasury, ensures proper function while overseeing the nation’s banking systems.  As part of this function the decision arose to allow homeowners that were treated unfairly during the foreclosure process in 2009/2010 a chance to request an independent review of their foreclosure process.

Foreclosure Review – Free of Cost to Homeowners

The Board of Governors of the Federal Reserve System and the OCC have established the requirement that an independent consultant will identify eligible homeowners that have potentially faced financial hardship as a result of misappropriated foreclosure processes for their primary residence.  If review indicates that the applicant was indeed financially injured during the foreclosure process as a result of wrongdoing, some form of retribution (either compensation or otherwise) will be afforded.

The program is free of cost to potentially eligible homeowners who were sent a review form beginning in November 2011.  To find out more about the process or to request a form if you feel this may be applicable to you, contact 1-888-952-9105 Monday through Friday from 8am to 10pm or Saturday from 8am to 5pm Eastern Standard Time.

Eligibility Requirements for Review Process

There are some eligibility requirements that review participants must meet in order for their foreclosure to undergo the review process.  First, the home that was foreclosed must have been the primary residence of applicants.  Further, the foreclosure must be one managed by one of the mortgage servicers listed on the site linked below in order to qualify.  Finally, the foreclosures that come under this umbrella of review fall within January 1, 2009 and December 31, 2010.

Little Regulation Means Consumers Should Be Beware of Scams

Since independent reviewers will manage the review process and since there is little to no regulation for the program consumers should be aware of companies claiming to be affiliated with the program. There is a lot of potential for fraud since the number of foreclosures that will be under review is expected to be very high.  If anyone asks for a fee to be paid to provide the service of conducting a foreclosure review it should raise a red flag since the official review is free of charge to eligible consumers.

Situations Leading to Qualified Financial Grievance

One of the most frequently asked questions about the independent foreclosure review is about the types of situations qualifying as “causing financial injury”.  One scenario would be a foreclosure occurring despite homeowners complying with loan modification agreements. Similarly, if homeowners had applied for assistance with their loan and were awaiting a decision at the time foreclosure occurred, there is potential eligibility of the program. In cases where there was bankruptcy protection yet the foreclosure still took place, homeowners might be eligible for redemption through the review.  Discrepancies on the mortgage amount owed versus what the balance showed if in favor of the homeowner are also cause for financial injury according to the program.
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The recently extended deadline to request review is July 31, 2012 so homeowners are encouraged to carefully consider whether they may potentially be able to receive some rectification to problems that may have occurred during their foreclosure.

For further information or if you just want to know more, you can visit www.IndependentForeclosureReview.com or ask your Realtor for some guidance.

10 Great Tips as to Why and How to Buy in Florida!



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1. Interest rates are incredibly low
2. Prices of many Florida homes have fallen nearly 50%
3. Rental income potential allows investors to have positive cash flow
4. Perfect time in Florida to upgrade
5. Florida is beautiful this time of year
6. Many properties in Florida are beginning to appreciate again
7. The second home market is alive and well
8. Rent your property or use as a vacation home
9. Florida is a great place to relax or retire
10. You can buy your property at below today's market prices

Exploring the Main Differences That Makes a Short Sale a Better Choice Than a Foreclosure?



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Just a couple years ago, most people usually thought they had to give up their home in a foreclosure when they faced a financial stonewall.  However, since then the phenomenon of short sales has been on the rise, leaving homeowners a bigger, better and brighter option for the present and future.  In this article, we explore the comparative differences between the two so you can gain an edge when deciding which is better for you.

Purchasing Power


After walking away from your mortgage through a foreclosure, you can expect to feel the negative impact of it for five years, in terms of being able to purchase another home.  Even then, like a bankruptcy, a foreclosure is something you will perpetually have to report no matter how long it has been since the home went into foreclosure.  

Though these days you see a lot of talk about the financial and credit impact foreclosures have on homeowners, the unseen part of it is something to be dealt with.  Going through this process can leave a lasting emotional hole in people who otherwise were law-abiding citizens, going about their normal lives when all of a sudden they are faced with severe financial hardship and must resort to extreme measures.  That, or if the value of their home has dropped well below the amount they paid for it and they see very little hope for the future.

Short sales are much simpler.  They will affect your purchasing power for a mere two years, often just the amount of time it takes to get back on one’s financial feet.  Not only that, there is no requirement to report a short sale transaction.

Credit Outlook


There are two main areas that are of concern when it comes to your credit – your credit score and your credit history.  In case of a foreclosure, credit scores drop a whopping 200 to 300 points.  This can have a significantly negative impact on your ability to purchase big-ticket items or secure loans in the future.   Not to mention it takes years to rebuild a credit score that has dropped that low.   In terms of credit history, a foreclosure remains visible on your credit report for anywhere from ten years or more, rendering each future potential lending transaction either useless or very hard-pressed at getting approved.  The overall impact you will see on your credit will be for about three years.

Short sales are far easier on your credit outlook, in that the point drop is only about 50 on average and the transaction itself will impact your credit profile for as relatively little as 12 to 15 months.  The one thing to keep in mind is that if you have defaulted on any payments or if you already have a weak credit profile, the post-short sale point drop on your credit report can be more than just 50.  Also, there is no formal reporting or declaration of a short sale on your credit report like a foreclosure although the transaction will show up as either settled or not paid in full.

Amount Still Owed


Usually there is a gap in the amount owed after owners walk away from a property and the bank assumes responsibility.  In case of a foreclosure, given the amount of processing time and resultant vulnerability and exposure of the property, the value can and often does drop greatly after vandalism and from sitting there unused.  The Deficiency Amount (also called Judgment Amount) is the difference that remains after the bank calculates what was owed on the property at the time of foreclosure and when they sold the home. Because of this vandalism and vulnerability, the amount of value drop is far more than with a short sale, when the homeowners are still residing in the property during processing.  The bank has the legal right to pursue homeowners for the amount difference.  

Short sales differ in that not only is the deficiency amount much less but also, your Realtor can negotiate a waiver of that amount so you don’t have to pay for it.