Real Estate Windfall » Finance

Defaulting Homeowners: Fannie Mae Gets Tough Finally

admin — Mon, 19 Jul 2010 12:14:49 +0000

Defaulting homeowners are getting more than a slap on the wrist from Fannie Mae.

Fannie is taking them to the wood shed, so to speak and it is probably about time.

Borrowers who are walking away and could have paid the mortgage will be held accountable for their actions.

Punishment: They won't be able to get future insured mortgages.

Get tough politics? Common sense, if you're asking.

However, another sticky point arises. How can the government really determine who could have paid vs who didn't?

It gets curiouser and curiouser as Alice would have said.

Read Fannie Mae get tough on 'strategic mortgage defaults'

Property Taxes Going Up in Philidelphia: Smart Move?

admin — Fri, 14 May 2010 23:16:26 +0000

Property taxes are going up in Philadelphia. Is that really smart?

: Image by K. Todd Storch via Flickr

Nope.

Raising property taxes is of course, one of our main soap box issues on this blog. Not only are property taxes too easy to raise in many places, we think property owners are reaching a saturation point.

We can't predict where that saturation point will be, but we can see signs of unrest. Let's look at it from a business stand point.

Real estate investors and landlords must bring in enough revenue to make their bottom lines. Rents must be high enough to cover expenses but not so high to drive your tenants away and you out of business.

There are improvements we need to do to some of our properties right now, and we can't because we are paying very high property taxes here in Davidson County. Perhaps our city stressed out city leaders don't need reminding about our recent '500 Year Flood', but we're stressed out too.

Which brings us back to Philadelphia. A 9.9 percent jump in property taxes is huge. And can Philadelphia property owners really believe it will be for only two years. Please…

Here's the story about the tax increase

Here's another bit of bad news from Detroit.

Mayor Dave Bing is planning to demolish 10,000 structures, one of which is Massachusetts Gov. Mitt Romney's childhood home.

Maybe this is one of the tragic things that can happen when people can no longer pay high property taxes because of the economy. Current news is that nearly 30% of the city's housing stock is vacant.

Detroit to Demolish 10,000 Structures

Project to Demolish 450 Houses Starts in Detroit (abcnews.go.com)
Detroit Begins Demolishing Hundreds Of Vacant Homes (huffingtonpost.com)

Morgan Stanley's MSREF: Biggest Loss of Private Equity Real Estate?

admin — Sun, 18 Apr 2010 13:07:13 +0000

: Image via Wikipedia

Biggest loss in history of private equity real estate investing?

Morgan Stanley's loss of 2/3 of $8.8 billion real estate fund may be setting a very dismal record.

Their Morgan Stanley Real Estate Fund, or "Msref" as it is nicknamed, is basically on life support and needs reviving- stat, according to reports.

Can Owen Thomas, the new doctor, pull it off?

Read Morgan Stanley Property Fund Faces $5.4 Billion Loss

What does all of this have to do with us?

It all goes back to fundamentals. Were the real estate deals just too complex?

Morgan Stanley Loses $5.4B in Real Estate Fund – Biggest Loss in …

Losses at a Morgan Stanley real-estate fund could wipe out nearly two-thirds of its $8.8 billion investments. It likely will rate as the biggest dollar loss in the history of private-equity property funds. Morgan Stanley said to take …

Jingle mail spreads to Wall Street property funds | John Gapper's …

The FT this week reported two cases of international property funds run by big investment banks – Morgan Stanley and Goldman Sachs – getting into trouble. Henny Sender has details of a Goldman-managed fund that has lost almost all of …

Short Sales: Will Obama's New Incentive Program Help Investors?

admin — Tue, 09 Mar 2010 03:38:10 +0000

Short Sales just got a small incentive from the government. Or at least that is what we're being led to believe. Will this new treasury program really help speed short sales up?

Image via Wikipedia

Exactly how will it affect real estate investors? Will housing inventories move faster? How are we supposed to believe banks will actually go along

Here are some very strong opinions from around the net.

New Treasury Program to Encourage Short Sales | Ryan and Schwarz LLP

Up to now, the Obama administration has had a pretty clear goal of doing whatever it could to keep struggling homeowners in their houses. Today, however, the.

Housing: More Short Sales Coming? | www.bullfax.com

John Lounsbury submits:David Streitfeld has an interesting article this morning in The New York Times discussing the outlook for an increase in the number of housing short sales and government efforts to facilitate these. …

Image via Wikipedia

Great Article About Short Sales in New York Times by David …

I have done a number of short sales and I do believe we will have a lot of them over the next few years but my experience has been good, it takes patience and time but all of mine has worked out well for both sellers and buyers. …

Foreclosure.com Blog · The $1500 short sale incentive for sellers

The U.S. Department of the Treasury will soon offer lenders and distressed homeowners $1000 and $1500, respectively, motivating all parties to consummate short sale deals and, in the process, stem the foreclosure tide, according to the …

Will Short Sales Help the Housing Market – The Curious Capitalist …

I was taken aback this morning when I read in the New York Times that there is a new federal program that will look to put many thousands of mortgages-gone-bad back to the banks through a short-sale process.

Housing: More Short Sales Coming? (seekingalpha.com)
NYT: Plan to pay homeowners to sell at loss (msnbc.msn.com)
Will Short Sales Save Housing? (curiouscapitalist.blogs.time.com)

Roth IRA: They're Still Very Popular

admin — Tue, 02 Mar 2010 02:56:15 +0000

Do you have a Roth IRA? If your IRA is a traditional one, are you being advised to transfer to a Roth?

: Image via Wikipedia

What about a 401K? Can you use that for investing in real estate?

One of the biggest advantages for a Roth is that the taxes have already been paid.

(Always seek professional advice before you make a move, but these articles show some of the possibilities.)

Distribution Rules for the Inherited Roth IRA – Financial Web

The estate tax applies to all inheritance, including any funds inherited in a Roth IRA. Roth IRA's are not exempt from taxes, but there is one reason why they may be preferable to traditional IRA's in terms of taxes owed upon …

Real Estate Investing With Your IRA | Life & Money | Minyanville.com

Low-risk opportunities abound, you just have to know where to look.

How To Benefit From 401 And Real Estate Investing | Viva Blog !

Another option for using 401K and real estate investing together is to put the money into an IRA, or individual retirement account. Sometimes this is not allowed, but it if is allowed, you have more flexibility on what you can do with …

Will Obama Delay All Foreclosures?

admin — Fri, 26 Feb 2010 02:14:53 +0000

Obama may not only delay all foreclosures, but he may ban them, until they've been screened by the Home Affordable Modification Program or HAMP.

: Image via Wikipedia

Wwhat? Is this for real?

Apparently, but it hasn't been made public yet, officially. That's according to Meg Reilly, Treasury spokeswoman.
Okay, so how did we find out about it?
Also- what will happen next? Will the banks balk? How far can the government really go on this? Why have only a little over 100,000 distressed homeowners been helped by HAMP so far?

Here is some more news and reaction from around the Net.

Obama Foreclosure Program Shows Slight Gains, Though Troubling …

But with another 754000 homeowners enrolled in temporary plans, nearly three out of five homeowners eligible for the Home Affordable Modification Program have received at least temporary help in staving off foreclosure. "HAMP is doing …

Obama's HAMP Misery Continues | Mother Jones

Now while HAMP wasn't created to address all kinds of foreclosures (which is arguably one of its flaws), a program with $75 billion in taxpayer funds behind it should do far more than help a meager 116000 homeowners almost a year later. …

The Jawa Report: Obama May Prohibit Home-Loan Foreclosures Without …

Obama May Prohibit Home-Loan Foreclosures Without HAMP Review. Isn't this interferring in a private contract? Bloomberg. – The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans …

: Image via Wikipedia