Central Florida Real Estate Blog

On this date in history...

English astronomer Edmund Halley sees his namesake comet in 1682.

Robert Fulton began operating his steamboat in 1807.

General Robert E. Lee invaded the North with 50,000 Confederate troops in 1862.

George Eastman patented thefirst roll-film camera and registered the name "Kodak" in 1888.

1st transcontinental TV broadcast by President Harry S. Truman addressing the opening of Japanese Peace Treaty Conference in 1951.

Mark Spitz became the first athlete to win seven Olympic gold medals in the 1972 Summer Olympics in Munich, Germany.

Palestinians hijack KLM DC-9 to Cyprus in 1976.

Today is Newpaper Carrier Day - Barney Flaherty became the 1st newsboy (10 years old for the NY Sun) in 1933.


Mortgages

There are definitely mortgages to be had out there and some very good ones at that. You just won't be able to find the easy no documentation, low down payment & stated income mortgages of the past.

The reasoning is quite obvious. Goodness knows we've heard the news. And this is all understandably so. People need to properly qualify for mortgages. This is a major part of the breakdown of the mortgage industry. In the recent past, people with borderline credit were afforded mortgages. Some of these were low down payments; some ARM's in which they were only able to qualify at the initial rate not the fully indexed rate. This should have been common sense all along, but 20/20 hindsight does not prove anything. Hopefully, the lesson will be learned from this and we will not see a repeat of such.

Don't get me wrong, I am all for helping someone achieve homeownership. I consider that the crux of my job. I get such a thrill out of helping people achieve this goal - the supposed American Dream. But I can not in all good consciousness afford someone this fully knowing that they will probably have an issue repaying this debt and putting them in a position of possibly losing their investment, savings & home. The thought of that is abhorrent to me.

But there are some very good loan products out there. Yes, most of these are for people with good credit. But then this might be a wake up call for someone with marginal credit to try to work on improving that. This can be done, but let me warn you about credit counseling services. Firstly, the use of these usually ruins your credit to begin with. Secondly, what they are doing, you should be able to do yourself.

It's called discipline.

Til next time...Marc It Sold!

On this date in history....

Treaty of Paris that ended the Revolutionary War was signed in 1783.

Labor Day was celebrated as a legal holiday for the first time in 1894.

First professional football game was played in Latrobe, PA in 1895.

The First U.S. bowling league was established in 1921.

In 1939 World War was II declared when England and France declare war on Germany.


Labor Day

Labor Day differs from other holidays in that it celebrates the working man. Unfortunately, now a days, the meaning of this holiday has been greatly lost. It used to be that it was generally a day off for workers. It was to be a celebration with parades and picnics. Today, our commercial society has morphed this holiday into a sales extravaganza and the people that this holiday was to honor are now forced to work. Years ago you would not find a store open, but today...

Unfortunately, this is somewhat a sad testament to our society and how we treat our workers.

Anyway, enough of that. The founding father of Labor Day is a little murky, but it appears that the Central Labor Union in New York adopted a proposal for such. The first Labor Day was celebrated on Tuesday, September 5, 1882, in New York City. In 1884 the first Monday in September was selected as the holiday.

The first state to pass legislation making Labor Day a legally recognized holiday was Oregon on February 21, 1887. They were followed that same year by Colorado, Massachusetts, New York & New Jersey. It became a national holiday June 28, 1984 when Congress passed an act making the first Monday in September of each year a legal holiday.

Happy Labor Day to all & may yours be Safe & Fun!

Til tomorrow...Marc It Sold!

On this date in history....

The Great Fire in London destroys 13,000 houses & kills 8 in 1666.

Last day of the Julian calender in US & England (no Sept 3-Sept 13th) in 1752.

US Treasury Department established by Congress in 1789.

Machine gun 1st used in battle in 1898.

National Commission recommends a best-of-9 World Series in 1919.

1st non-stop airplane flight from Europe to US (37 hrs) in 1930.

Holocaust diarist Anne Frank was sent to Auschwitz in 1944.

V-J Day - Japan signed a formal surrender in 1945.

Alabama Gov. George C. Wallace prevents integration of Tuskegee HS in 1963.

Philips introduces CD-video in 1987.


Til tomorrow where we will have more on this date in history....Marc It Sold!

Today on this date in history...

First federal tax was levied on tobacco in 1862.

Emma M. Nutt Day, she was the first woman telephone operator in 1878.

Labor Day was declared a U S national holiday by Congress in 1894.

World World II began when German troops invade Poland in 1939 at 5:30AM.

Lead in paint is declared illegal in 1977.


The Mortgage Debacle, The Market & The Fallout!

Several things have been in the news. Yesterday, I touched briefly on the possible expanded role of the FHA in helping people to be able to refinance before they lose their home to foreclosure. I think that this is a necessary step by the government to help people and especially our economy, but my concern comes down to part of the criteria.

To qualify, homeowners would have to prove they paid their loan on time before it reset to a higher rate and must have at least 3 percent equity in the home. That is fine and also the fact that Pres. Bush is asking Congress to raise the present loan limits. But part of the criteria for one of these loans is that to compensate for the added risk, the borrowers would have to pay higher premiums on the loans and also some of the closing costs. Right then and there you are going to eliminate a lot of people who might be in dire need of help. They are already tapped to the limit. If they can't afford their present loan, how might they afford one with a higher interest rate & possibly having to come up with some of the closing costs, nevermind 3% if they do not have enough equity.

I agree that help is needed, but have to be concerned about the repercussions of this. There was an article in USA today in which Peter Wallison of the American Enterprise Institute said, "If you're going to help someone to refinance, you're going to bail out the person who financed him in the first place.... This will only cause the problem to arise again." Yes, this may be true and is a concern, but that all depends on how the government handles the whole situation.

Another major group of foreclosures is coming from the investor group. We've all heard about the investors trying to grab a piece of the pie/cake. Unfortunately, this cake didn't rise as anticipated. The numbers are quite large in comparison. Nevada leads the pack of investor defaults followed by Arizona, Florida & California. Yes, all four of these states have been in the news quite a bit due to the change in real estate market conditions. They all have had incredible growth, but with that growth also comes some fallout as we are seeing now.

It was recently noted that even though Florida has shown a year over year price decline of almost 1%; the overall 5 year stats show a price gain of over 95%. Granted, this bodes well for most of us. The people that are obviously being negatively affected at this point are the sellers, especially those who've purchased within the past two years; those with ARM's that are being adjusted to higher rated; those with 100% financing, which I've always tried to dissaude people from getting involved in; and, especially investors.

Now, there is another group of people that are feeling the brunt of all this, and that's renters. According to another article that I've recently read, rents are projected to rise about 4 percent this year and next. This is being affected on many levels. Many previous owners that are finding themselves in foreclosure are turning into renters again. Additionally, more renters are also renewing their leases because they can no longer qualify for mortgages.

The only good part of this, is that some landlords are renting for less than their present mortgage on their investment properties, basically looking to just cut their loses. These people are avoiding foreclosure by doing such and because they have the present ability to afford it as well.

Anyway, till next time...Marc It Sold!

Today (8/31) in history....

US Naval Observatory was authorized by an act of Congress in 1842.

1st US men's single tennis championships 1881 in Newport, RI.

1st major earthquake recorded in eastern US, at Charleston SC, 110 die in 1886.

FDR signs an act prohibiting export of US arms to belligerents in 1935.

US National Guard assembles in 1940.

1st microwave TV station operated in Lufkin, Tx in 1955.

1st sun-powered automobile demonstrated, Chicago, Ill in 1955.

Malayasia (formerly Malaya) gains independence from Britain in 1957.

Former Teamsters' president Jimmy Hoffa reported missing in 1975.

Emily & William Harris plead guilty to 1974 kidnapping of Patty Hearst in 1978.


Mortgages

With the advent of the subprime market and more stringent controls in the mortgage industry, it was only a matter of time before more government-backed loans would be making a return. We are now seeing more FHA & VA loans. These loans went out of favor during the past several years because sellers had their choice of offers and didn't have to accept an FHA loan (which usually cost the seller more in closing costs) than a conventional loan.

As of tomorrow, Sept. 1, the VA will allow military veterans access to loans that exceed the present $417,000 loan limit thanks to Ginnie Mae, the Government National Mortgage Association. This will allow veterans to purchase homes in higher-cost areas, such as California, where the median home price is $568,000.

Now, FHA, another HUD agency which insures mortgages for low-income borrowers, may be allowed to guarantee mortgages for homeowners in default who are refinanced into lower-rate loans as well as also increase its limit to $417K if proposed legislation is passed.

Here's a link to a great article, U.S. faces deep economic downturn but recession unlikely, says Nobel laureate, Joseph Stiglitz . The long and short of it is that we are spending more than we are making and that holds true for us as well as our country. Joseph Stiglitz, a Nobel economics laureate, was quoted in this article stating that "... if it is not carefully managed, the fiscal consolidation will further depress the economy."

Til next time... Marc It Sold!