Capitulation: The Bear has Rolled Over

December 21, 2008 – 7:19 am

As I read the papers this morning, it appears that the one common theme is “in this horrible economy everyone is and should cut back, spend less, live less.” I say Bah-Humbug! There is little proactive advice about how to make things get better. The media has spun how the governments of the world have just injected Trillions (even Canada announced a $4B auto bailout for US firms) as a bad thing, it is not it an incredible vote of confidence in the future.

How consumer demand has now been pent up for over 19 months, again not a bad thing, it sets the stage for a great boom ahead.

How some first home buyers are snagging the deals of a lifetime on property, not mentioned. How real estate investors are buying ‘RTC on steroids’ type property deals, no one wants to brag about making big money right now.

The seeds of the last great economic boom came from the ‘last’ RTC give away. If history does repeat itself, these are the days that fortunes are made. Do you believe history repeats itself, or is ‘this time different’. Whenever I hear a mass of people saying ‘this time is different’ I remember the great loss I took in the dot-com bust - “everything is never different”.

The Bear has rolled over, and capitulated to the wolves. The Bulls left a year ago. Capitulation is the first step in any 12-step healing process.

Consider a couple facts: 1.) all the government money, will eventually bring inflation. 2.) real property throughout history is a hedge against inflation. 3.) the supply of new housing has been frozen for 18 months. 4.) It is unlikely that the supply of new housing will begin again anytime soon. 5.) the world’s population keeps growing at record rates. Demand rising, Supply decreasing, prices rising. Not complex math.

If you connect these dots, it is fundamental to conclude that at some point in the future (near) housing values will rebound, and in my (lonely) perdiction, will rebound much faster than anyone is presently perdicting. You will see double digit gains in housing values soon. The supply of ‘bank giveaway’ homes will cease sooner than late 2010 as many experts perdict. The banking industry is getting a handle on the flow of foreclosures, and reducing payments and amending/modifying mortgage terms at an unprecedented rate. This will allow millons to realize lower monthly payments than they signed up for.

Last week we refinanced a lady who said “wow! I’m saving $200/mo. Now I can buy a new car!” Now that my friends is economic stimulus and a sign of things to come. One of our bank partners told us that last week they took in $1 BILLION in new loan applications for refinance. Many of these people will see their savings in 30 days or less, and more than $200 a month.

You do the math. December 2001 was a pretty sad Christmas. It felt awfully similar to this year. We were all scared, waiting for the next terrorist attack. Wary of the massive economic blow to our economy. The only difference was Americans were acting like Americans - flying flags, smiling at neighbors and buying American products in a salute to our common goal of being winners not winers.

I’m headed to my local downtown shopping area www.enjoybirmingham.com today to buy some Christmas gifts, hope you to see you there!

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By bwaun | Posted in Personal Experience | Comments (0)

Foreclosed Timeshare Weeks: huge discount

December 19, 2008 – 8:01 pm

We hold several weeks of timeshare for resale at 1/6th of the original price, and we will finance the buyers.

12 weeks available at 4 star resort in Hawaii. 3 weeks available in St. Maarten.

Contact us for details? Info@vacation-finance.com

By bwaun | Posted in Timeshares | Comments (0)

Reverse Mortgages can Stop Foreclosure

December 19, 2008 – 7:59 pm

Do you know a senior citizen who is struggling to stay in their home? Please have them call us 248.722.9286. A reverse mortgage is an incredible financial tool that used in conjunction with a ’short payoff’ to the existing mortgage lender could save a senior’s home from foreclosure.

The reverse mortgage I closed this week had a 2.9% interest rate, cashed out $138,000 and paid up back taxes and future insurance for another year. The seniors will be in enourmously better financial health.

It is important to learn about this option. www.H4HNow.com 

By bwaun | Posted in Reverse Mortgage | Comments (0)

New Lending Rules make getting a Second Home Loan Tougher

December 19, 2008 – 7:56 pm

This from Business Week, and it’s true, new Fannie/Freddie mortgage lending rules will make getting a vacation home loan harder, and more expensive. The time to buy is now, before it gets even more difficult? 

MORTGAGE LENDERS make no bones about it: They are tougher on second-home loan applications than on primary-home loans. Why? Because the finances of a second-home buyer are, by definition, stretched thinner. The result is that second-home rates traditionally run one-quarter to one-half point higher than those for first residences. Ditto for origination points on vacation-home loans.

Using a Home-Equity Loan
With interest rates at historically low levels, many lenders will encourage you to take out a home-equity line of credit on your primary residence to fund all or part of your second-home purchase. Watch your step here. Most home-equity lines of credit float a point or two higher than the prime rate, so you could end up repaying this piece at a much higher interest rate than if you had simply taken a mortgage for the entire amount. Plus, unlike mortgage interest, which is deductible on up to $1 million of debt on your first and second homes combined, the home-equity cap is $100,000. (You get a break on $1.1 million total.)

Whatever you do, don’t bank on starting with a home-equity loan and taking out a mortgage at a later date. A little-known IRS rule states that you have just 90 days from purchase to secure a mortgage against a principal or vacation residence. Do it later and you can’t deduct it at all.
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Landlording and Mortgages
Lenders are still sticky when it comes to renting out your second home. Some lenders won’t even write those kinds of loans; they have a hard time selling mortgages on investment property in the secondary market. If you find a lender that will, expect it to scrutinize you more carefully than if you were not a landlord.

At a minimum the lender will want to see proof that you’re actually going to generate a decent cash flow. Often, the lender will ask for a cash flow statement for a property showing its rental history. In condo communities, management companies often provide them. If one isn’t available, you’ll need to get a second appraisal, comparing the rents and occupancy rates at similar homes. This will run an extra $300 to $600.

And don’t count on your bank to take all of a home’s estimated rental income into consideration. Even for a property with a long rental history, most lenders will only consider 75% to 80% of it. Some even take 75% after netting out your costs.

If you don’t need the rental income to meet the mortgage industry’s ratios, you may not want to mention to your lender that you’re thinking of renting. We’re not suggesting that you lie on your mortgage application. That’s a federal offense. But if you happen to change your mind, well, that’s another story. “A lot of people go in under the guise of buying vacation property for personal use only to turn around and rent it out,” says Keith Gumbinger, of mortgage-tracker HSH Associates. “I have never heard of people getting caught.”

By bwaun | Posted in Mortgage | Comments (0)

Spire in Chicago would have been an Ultimate Second Home

December 19, 2008 – 7:52 pm

I’m finding myself reading www.DeveloperImplode.com often lately… this story was posted there, and it’s disappointing that this incredible work of architecture will not be built.

Chicago’s Spire In Trouble

Santiago Calatrava’s planned Chicago Spire has earned its share of nicknames, among them “The Drill Bit” and “The Twizzler.” Now it has a new one: “The Lien-ing Tower of Chicago.” Crain’s Chicago Business coined that phrase after Calatrava in October filed a lien against the Irish developer of the 2,000-foot condominium tower seeking $11.3 million in payment. While major construction on the tower has stopped, the liens keep coming.

In addition to Calatrava’s lien, filed through his Lente Festina Ltd. against Shelbourne Development Group Inc., Perkins+Will, the Spire’s architect of record, is seeking nearly $4.85 million from Shelbourne. Meanwhile, New York-based Thornton Tomasetti, whose Chicago office was working with Calatrava on the project’s structural engineering, has filed its own lien for $1.3 million.

Kim Metcalfe, a spokeswoman for Shelbourne president Garrett Kelleher, says the liens were anticipated and that the developer is working with Calatrava and the other consultants to resolve the payment issue. Just how much the firms might be paid, however, is a matter of debate. About 30 percent of the tower’s 1,200 condominiums are sold, including the penthouse, originally priced at $40 million and snapped up by Beanie Babies magnate Ty Warner.

Since it was unveiled in 2005, the Spire captivated Chicagoans with an audacious design that made the tower appear to twist as it rose, an effect achieved by having each floor rotate slightly over the one below it. Calatrava became the project’s public face, disarming opponents by drawing his trademark watercolors on an overhead projector at public hearings. Seeking to create a total work of art, he even designed two model apartments, right down to the custom-designed doorknobs. His aim was to humanize the gargantuan project, which was to have been the tallest building in America and one of the tallest in the world.

Although construction began on the Spire last June, work ground to a halt this fall, leaving a circular hole on the 2.2-acre lakefront site, ringed by caissons that were to have supported the tower’s cylindrical concrete core. Kelleher’s spokeswoman insists that construction will resume and that the global credit crunch is to blame for the pause. “We’re waiting for the banks to start acting like banks again,” she says. Some real estate analysts, however, argue that the developer did himself in by starting work without a construction loan that would have carried him through the entire project. In the meantime, the hole, 76 feet deep by 110 feet across, is inspiring commentary of its own. Among the uses dreamed up for it by architecture buffs: an oversized golf hole guaranteed to produce a hole in one.

Original Story - Business Week

By bwaun | Posted in Developments | Comments (0)