Thanks to our government (You, the tax payers), the banks are still making astronomical profits today. The only observable difference between Wall Street and the Banking Industry is the compensation packages today are structured differently ( Though not noticeable any smaller in $$$$$$ ).

I would like to suggest to every home owner who is upside down in their home, and who only owe on their original purchase loans – not those of you who refinanced and paid off other bills and your credit cards – to let the bank / lender live with a bad business decision they made in making that loan. No one had a crystal ball 5 years ago or we all would have made different business decisions – not only about our housing, but investing… and life in general. You may have made a great business decision when you bought that home.  However, now may be the time to make another great decision: let the bank own it.  You can probably rent the one next door for half of what you’re paying now.

Ed Henne
Office: (520)918-5989
Cell: (520)465-8000
ed@edhenne.com

~ Below is an article fro the Arizona Daily Star by Dale Quinn.  It addresses the opinions of U of A Law Professor Brent T White.  This is a must read…

Real estate: Stiffing lenders: the moral argument

Walking away from an upside-down mortgage doesn’t only make financial sense, in some cases it might be the right thing to do.

So says University of Arizona law professor Brent T. White, who’s now beefing up the moral side of his argument that homeowners could benefit financially by defaulting on their mortgages.

Critics of White have said it would devastate the economy if people listen to him. It’s also morally questionable, they say, for people to stop paying for their homes just because they’re worth less than what’s owed.

But Friday, at an ethics symposium hosted by the University of Arizona’s Eller College of Management, White delved deep into the morality of making such a choice. He argued there could be a social benefit if families walk away from homes that have plummeted in value – especially if those homeowners were counting on the investment to support them and their family into old age.

“It might be more responsible, in such a case, to put the money saved from renting, instead, into a retirement account,” White said. “So that one is not a burden on society or one’s children in old age – or so that someone can fund their children’s chance at a higher education. In other words, things aren’t so black and white.”

White, it seems, has become the spokesman on behalf of walking away from a mortgage. After the seminar he said he never really expected to play such a role. He thought the paper on underwater mortgages would fade into obscurity, like most academic works.

Of course, White isn’t the only one with an opinion about walking away from a house that’s dropped in value. Two of the other panelists at Friday’s event, a Tucson banker and the head of a local real-estate company, don’t stand to gain if the practice becomes widespread.

“I do have some conflicts with Professor White’s view of using the opportunity of not paying your mortgage, and preparing yourself for that act, only because the negative equity situation – the investment side of the home ownership – may hamper future wealth creation,” said Rosey Koberlein, the CEO of Long Companies.

Koberlein declined to make a blanket statement regarding the morality of walking away from a home. She said the circumstances that lead up to that choice vary with each case. She did point out that when homeowners sign a mortgage contract, nothing in the document gives them relief just because their house drops in value.

Also, a homeowners should understand that there may be legal repercussions if they used their homes’ rising value to make other investments.

“For many, many years, up until this long, hard meltdown, the borrower enjoyed the appreciation of the value of the home,” Koberlein said. “And enjoyed it without an equity share by the bank.”

And “banks themselves can be in a tough spot,” said John P. Lewis, the president and CEO of Southern Arizona Community Bank, which is in the process of combining with Bank of Tucson.  Federal regulations can make it tough for them to work with a borrower even if they want to, he said, because banks can get dinged and have to put up more cash to back up a modified loan.

On one point, Koberlein seemed to agree with other critics of White, saying if underwater homeowners start walking away from their mortgages en masse the economic consequences would be devastating.

“But why should homeowners bear the burden of the entire economy,” White asked? “Big corporations can walk away from a bad investment, so why not homeowners?”

A real-estate company in New York defaulted on $4.4 billion in loans even though it had the cash to pay its bills. And no one, said White, questions whether that company – Tishman Speyer Properties – took the moral course of action.
So why should it be different for a family of four that’s juggling bills, stuck in a house that’s worth half what they paid for it, and still trying to put a few bucks away for the future?

“It is unfair, in my view, to ask individual homeowners to prop up the housing market on their back, something they actually can’t do anyway,” White said. “It’s especially unfair if it means sacrificing their family’s financial security.”

You can view the article by Clicking Here!

I really want to know what you think.  Please sound off in the comments section below.

Despite the fact that he has some of the lowest approval ratings among recent presidents, history will see Barack Obama as the source of America ‘s resurrection. Barack Obama has plunged the country into levels of debt that we could not have previously imagined; his efforts to nationalize health care have been met with fierce resistance nationwide; TARP bailouts and stimulus spending have shown little positive effect on the national economy; unemployment is unacceptably high and looks to remain that way for most of a decade; legacy entitlement programs have ballooned to unsustainable levels, and there is a seething anger in the populace.

That’s why Barack Obama is such a good thing for America .

Obama is the symbol of a creeping liberalism that has infected our society like a cancer for the last 100 years. Just as Hitler is the face of fascism, Obama will go down in history as the face of unchecked liberalism. The cancer metastasized to the point where it could no longer be ignored.

Average Americans who have quietly gone about their lives, earning a paycheck, contributing to their favorite charities, going to high school football games on Friday night, spending their weekends at the beach or on hunting trips – they’ve gotten off the fence. They’ve woken up. There is a level of political activism in this country that we haven’t seen since the American Revolution, and Barack Obama has been the catalyst that has sparked a restructuring of the American political and social consciousness.

Think of the crap we’ve slowly learned to tolerate over the past 50 years as liberalism sought to re-structure the America that was the symbol of freedom and liberty to all the people of the world. Immigration laws were ignored on the basis of compassion. Welfare policies encouraged irresponsibility, the fracturing of families, and a cycle of generations of dependency. Debt was regarded as a tonic to lubricate the economy. Our children left school having been taught that they are exceptional and special, while great numbers of them cannot perform basic functions of mathematics and literacy. Legislators decided that people could not be trusted to defend their own homes, and stripped citizens of their rights to own firearms. Productive members of society have been penalized with a heavy burden of taxes in order to support legions of do-nothings who loll around, reveling in their addictions, obesity, indolence, ignorance and “disabilities.” Criminals have been arrested and re-arrested, coddled and set free to pillage the citizenry yet again. Lawyers routinely extort fortunes from doctors, contractors and business people with dubious torts.

We slowly learned to tolerate these outrages, shaking our heads in disbelief, and we went on with our lives.

But Barack Obama has ripped the lid off a seething cauldron of dissatisfaction and unrest.

A former Communist is given a paid government position in the White House as an advisor to the president. Auto companies are taken over by the government, and the auto workers’ union – whose contracts are completely insupportable in any economic sense – is rewarded with a stake in the company. Government bails out Wall Street investment bankers and insurance companies, who pay their executives outrageous bonuses as thanks for the public support. Terrorists are read their Miranda rights and given free lawyers. And, despite overwhelming public disapproval, Barack Obama has pushed forward with a health care plan that would re-structure one-sixth of the American economy.

Literally millions of Americans have had enough. They’re organizing, they’re studying the Constitution and the Federalist Papers, they’re reading history and case law, they’re showing up at rallies and meetings, and a slew of conservative candidates are throwing their hats into the ring. Is there a revolution brewing? Yes, in the sense that there is a keen awareness that our priorities and sensibilities must be radically re-structured. Will it be a violent revolution? No. It will be done through the interpretation of the original document that has guided us for 220 years – the Constitution. Just as the pendulum swung to embrace political correctness and liberalism, there will be a backlash, a complete repudiation of a hundred years of nonsense. A hundred years from now, history will perceive the year 2010 as the time when America got back on the right track. And for that, we can thank Barack Hussein Obama.

~ Excerpt from the Aspen Times Weekly by Gary Hubbell

Ed Henne
Office: (520)918-5989
Cell: (520)465-8000
ed@edhenne.com

Many times I’ve heard homeowners lament, “This place has never been this clean.”  And of course they get to enjoy the “freshening” of their home while it is for sale.  We have become a very visual, hands on society.  The traffic that an open house brings through a property provides important exposure and excitement.  Holding a home open also provides an opportunity for prospective buyers and people who know prospective buyers to see first-hand what photographs can’t show… spatial relationship.

Finding open houses can be a challenge in some communities.  Most jurisdictions do not allow open house signs to be placed in the public right-of-way.  They often overlook the minor infraction because it poses little threat to the security and safety of a community.  Oro Valley Arizona is taking a proactive stand on the matter, much to their credit.  By establishing a licensing program for right-of-way advertising, specifically aimed at temporary real estate signage, Oro Valley is working with the community to find balance.

Each community is a bit different but all homeowners should enjoy the benefit of a high standard of care when it comes to selling their home.  Knowledgeable professionals and homeowners prefer the Sign Ordinance language, “No sign shall directly impede pedestrian, bicycle or motor vehicle traffic when placed in the public right-of-way.  Signs may be placed between curb and sidewalk where space is available.  Signs may not be placed on any paved surface.”  This language provides a thoughtful, reasonable solution to signs placed everywhere along a road side.  After all, a temporary open house sign with home buyer traffic is a much better “brand” for a community than foreclosure and short sale signs.

Mark Finchem
Office: (520) 808-7340
MFinchem@longrealty.com

The next step is to contact a REALTOR and ask for the current comparable properties.  The difference between what you financed and the price you paid for your home is the Loan to Value Ratio.  When the value of your home increases and the debt you have against it decreases the Loan to Value Ratio increase.  So, if you put 10% down on a $200,000 home ($20,000) and the value of the home has increased to $218,000 plus you have paid down about $2,000 in debt the Loan to Value Ratio has grown to 20%.

Now you can turn to your lender and present your case.  Most mortgage notes will have a condition that allows the mortgage insurance to be lifted when the Loan to Value Ratio rises above 80%.  You can now add about $105 a month to the principal in what is called a PIP Reduction Plan.  Basically it is Principal + Interest + more Principal.  That is one way you can accelerate your mortgage loan pay off and build equity faster.

Make it a habit to contact your REALTOR once a year for a PMI checkup.

Mark Finchem
Office: (520) 808-7340
MFinchem@longrealty.com

Terms on the other hand are usually what happens after the closing action; not always, but usually.  Interest paid to the Buyer’s Lender would be one of the terms.  It was not dictated by the Seller, but it is part of the transaction nonetheless.  Over the life of a 30-Year, 5% Fixed Rate Mortgage on a $250,000 home the homeowner will pay approximately $434,825 (based on a 10% down payment).  While it is true that in most cases the home mortgage interest can be claimed as a deduction on the homeowners income tax filing, is there an alternative?

PIP (the payment of Principle + Interest + Principal) can save big money over a short period of time.  Paying the current months payment plus the following months principal in effect cuts the term of the loan in half just a little at a time.

At one time in the not too distant past homeowners celebrated the payoff of a mortgage with a mortgage burning party. What a great time to return to that tradition!

Mark Finchem
Office: (520) 808-7340
MFinchem@longrealty.com

OOOOOOOOOOOOOOHHH  the seller was notified today that the lender was foreclosing the property on Friday, the 25 of June.

I took it upon myself to e-mail the office of senator Jon Kyl both last week and again today to ask for assistance, and no response from there either. Last week I was told Senator Kyl wouldn’t be in Tucson again until vary late in the fall. To add an additional insult his Phoenix office told me the only way to communicate would be through his web site!! I guess I’ll  have to find some one who gave large amounts of money to his last campaign  before I can speak to the Senator in person!!  Our elected officials wonder why the public is so pissed off at them.  Maybe, just maybe they should take the time to talk with the average voter (By the way, Senator Kyl isn’t up for reelection this year.  He has a couple of years left on this term.)

If your thinking of selling your home on a short sale DON’T!! The time and brain damage isn’t worth it!!! Make a smart business decision and give it back to the lender, or let them take it!! Your purchase was a business decision just as it was the lender’s to make the loan and take the home as their security.  If I’m not mistaken, in just two years you’ll be able to purchase another home under the new purposed government guidelines.

My last word for today is your government has given the banks Billions… what help has been offered to you?

Ed Henne
Office: (520)918-5989
Cell: (520)465-8000
ed@edhenne.com

Feel free to comment below.  We love hearing from you.

Some of the common items you can buy and integrate into your energy efficient renovation include:

-Insulation systems and materials
-Roofs that resist heat gain
-Biomass burning stoves
-Energy-efficient windows
-HVAC systems with the highest efficiency tier
-Solar panels
-Fuel cells
-Geothermal heat pumps
-Wind energy systems

Some of these improvements to your property also carry a premium.  They may be eligible for grants or tax incentives.

Mark Finchem
Office: (520) 808-7340
MFinchem@longrealty.com

Just as regulators, lawmakers and all forms of financial oversight boards are talking about new regulations to guard against mortgage fraud and another mortgage meltdown, there appears to be yet a new mortgage fraud out there today, allegedly perpetuated by agents of, yes, the big banks.

I was first alerted to this by Jeremy Brandt, the CEO of several companies that bring short sale agents, investors and sellers together.

His companies include 1800CashOffer, HomeFlux.com and FastHomeOffer.com. Brandt has a huge network of short sale real estate agents, and over the past several months he’s been receiving all kinds of questions and complaints about trouble with second lien holders.

As we all know, during the housing boom, millions of Americans pulled cash out of their homes in the form of home equity loans and lines of credit. They also used “piggy back” loans in order to get even lower interest rates on their primary mortgages. Now, many of the borrowers in trouble, and many who are so far underwater on their loans that they don’t qualify for any refi or modification, are choosing short sales as a way out…

Read the Rest…

Each week Real Estate Agents and Investors weigh in on the current market and how you can make the most of the real estate market in Tucson, Marana, Oro Valley and the surrounding areas. You can listen to previous shows by visiting our Radio Show page.

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