GDP Revised Lower

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Real Estate Industry News

‘Boomerang’ Buyers Expected to Boost Recovery in the New Year

Housing foreclosure authorities and have created a new website to help people re-enter the housing market after having been through a previous foreclosure.

The website is called and helps those most affected by the housing crisis take charge of their financial future and own their own home again.

Based on a poll of their combined members, and are confident that these potential buyers will make 2014 the year of the “boomerang” buyer.

Changes in lending guidelines and population shifts make these buyers essential to the recovery of the housing market. Jon Maddux, co-founder of says: “Alienating this large and growing pool of potential buyers does not bode well for the market in an environment where natural housing advancement has been largely disrupted.”

College graduates are laden with student debt and experience limited employment options, while baby boomers are aging. Maddux continues: “There are literally millions of ex-homeowners who may be qualified to buy a home again but are unaware of the help that is readily available to them through existing and new loan programs.”

According to a poll of and’s members:

79 percent of those who lost their homes are interested in buying again.

41 percent have incomes higher than when they first purchased.

63 percent report that their other debt obligations are lower (30 percent said “significantly lower”).

46 percent report the desire to purchase in a lower price range, and 29 percent report wishing to purchase in the same price range.

“Boomerang” buyers are investing more into the purchase of a new property than in the past by putting down more than the minimum required. Over half stated that they plan to make a down payment of 10 percent or more on their next home purchase. The zero-percent down payment programs of the past made it easier for homeowners to walk away from properties. Higher down payments, however, suggest that “after foreclosure” buyers are in for the long haul and don’t intend to make the same mistakes the second time around.

In the past, rapidly rising prices led many to believe that they’d get “priced out” of the housing market altogether, leading to hasty purchases that may not have happened under less duress. “Boomerang” buyers will likely be more careful on their next purchase.

Considering the importance of “boomerang” buyers, the Federal Housing Administration recently implemented the “Back to Work” program. This program allows the purchase of a new property as soon as twelve months following a foreclosure or short sale provided that the borrower can prove that their prior default was the result of a financial hardship. “Financial hardship” is strictly defined as an employer-driven loss of at least 20 percent in income for six months or more.

Although the program is definitely a step in the right direction, it leaves those who were self-employed out in the cold.

Sadly, word of the FHA program is not getting out. According to a poll of the former foreclosure demographic, 81 percent had never heard of the program.

By: Howard Goldthwaite,


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Rehab Loan Commerical

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Tax Refund

One of the biggest struggles facing potential homebuyers is saving for a down payment.  We live in an instant gratification world and we are used to spending our disposable income for what we want today instead of saving.  I review many budgets in determining whether a potential borrower can afford an increase in housing expense or save for a down payment because they have no savings.   What I have found is that there are so many unneeded expenditures just because the money is there.  They have the ability to save and afford the higher payment if they wanted to.  I encourage these people to take a look at their spending habits, find things to cut out and start saving so they can show the ability to handle a higher payment and work towards a down payment.  In saying that, there is another way Americans choose to save and that is by letting the federal government hold their money until tax time.

There are a lot of people that use the federal government as a savings plan and make substantial purchases in their life during the springtime after they receive their beloved tax refund back. 

Due to this windfall we should see an uptick in the real estate market. What better way to invest in your future than to use this money to invest in Real Estate.   We as mortgage and real estate professionals should be promoting using this opportunity for homeownership. 

So dust off your databases, find an apartment complex to farm, talk to your friends and family and let’s get the word out!


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Renovation Loans Part 1

Wouldn’t you love to buy the perfect home in just the right neighborhood?  It seems impossible doesn’t it?  You either find the home that meets all of your wants and needs but isn’t anywhere close to where you want to live or you search the neighborhood you desperately want to live in but cannot find a property that meets your family’s needs.

What if I told you that you could make any home in your preferred neighborhood the home of your dreams?  All you need is a renovation loan.  There are many benefits for a homebuyer to renovate a home.

  1. It increases the inventory of the homes available for you to look at.
  2. It is more cost effective to renovate a home with a renovation loan than to take out home improvement loans or use credit cards to do what you want after closing.
  3. You won’t need to take months or possibly even years to complete your home improvements.
  4. You will be increasing the value of your home from the start.

Think of the possibilities of being able to negotiate a better price on a home that needs work but not have to ask the seller to do any repairs. Renovation loans allow you to do all the work after you close on the home.  Depending on the extent of the renovations and the livability of the property, you may even be able to finance up to 6 months of rent payments so you can live elsewhere until the renovations are complete.  But more about that later when I explain how it all works in my next blog.

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Manufacturing Activity Improves

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Are You Ready To Buy A Home Part V

Getting to the closing table is not the last step in owning a home.  As a homeowner, you now have the responsibility to maintain your property.  Establishing a reserve account can be an excellent way to prepare and save for future repairs and improvements.  You need to realize that mechanicals in a home do not last forever.  Consider the remaining life for Items such as roofs, furnaces, AC units and water heaters.  These can be large expenses you need to be prepared for, either by saving or having the capacity to borrow the funds on a short term basis.

If you have made yourself aware of the age of major items in the home and understand that minor issues arise on an ongoing basis, you are on the right track in creating a plan of action to becoming a successful homeowner.  Being able to comfortably afford to maintain and update your home will alleviate financial stress and allow you to enjoy homeownership.

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Jobs Fall Short

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Congress Reaches Deal

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Are You Ready To Buy A Home Part IV

This week we are going to address debt to income ratio.  What this is referring to is the percentage of your monthly income used for housing and other creditor obligations.

We can look at it in two different ways.  The first is based on the guidelines per the loan program you have chosen.  The second, and what I feel is the most important way to look at the debt to income, is your comfort zone ratio.  All the lender sees and takes into consideration are the obligations on your credit report.  It is up to you, the borrower to fill in the rest of the household picture.   All borrowers living habits are not create equal.  Some people are home bodies and frugal and are willing to spend more on a housing expense than say another person who prefers to eat out and spend more on clothing.  Even if the credit profiles where similar, these people have different preferences as to how they want to spend their disposable income.  In other words, if I used the program guidelines to qualify one individual, they may feel they would have no problem making the payment while another individual may gasp and feel that there would be no way a payment like that would fit into their budget.  The key here is to review your monthly obligations and spending habits to evaluate what you are willing to change or what you are not willing to change in order to afford a home.

Have the conversation with your lender as to what really fits for you!

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