| |  | Your Guide to Nyack and Rockland County
Move-to-Nyack.com is a real estate website that provides comprehensive professional services and advice for buyers and sellers in the greater Nyack/Valley Cottage area, and all of Rockland County. | |
| Call Me Day or Night
John Kovencz
Prudential Rand Realty
46 South Broadway
Nyack, NY 10960
Mobile: 914-523-2953
Email: john@movetonyack.com
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BUYERS: You can now search for homes and pull up property listings on your cell phones and other mobile devices while you are on the go. Go to RandMobile.com anywhere, anytime to view detailed property listings in the Hudson Valley. You can also access current mortgage rates.
SELLERS: Present your home in it's best light. Get a FREE 1 hour consultation on decorating tips and advice on staging your home from "Home Staging Plus" with my compliments. Then expose your listing here to the many buyers coming from a multitude of search engines such as Yahoo, Google, MSN and others."
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| Thank you for visiting my online real estate resource and I hope you find it to be a useful tool in your search for real estate and that it answers some of those questions you might have about the process. Whether you are a first time buyer, an experienced investor or selling your home, you will find this combination of current, clear information, exceptional service and solid expertise, invaluable when the time comes for you to make that all important decision. Welcome to Nyack/Valley Cottage and Rockland County.
FOR ALL MY REAL ESTATE FRIENDS:
click on www.realestatejournal.com for general real estate info. Saw a house and want to know the price? Want to ask me a question about the local market here in Rockland County? No question too silly. Send your question to:john@move-to-nyack.com
RECENT NEWS:
Top-Down Solution. April 10, 2008
by Lawrence Yun, Chief Economist, NAR Research
The most recent data indicates that, yes, foreclosures rose again in the 4th quarter of 2007. A number of government agencies are trying to help reverse this trend. There are several policies proposed and some already being implemented to address rising foreclosures. But nearly all are attempting to alleviate the problem from the “bottom up,” rather than from the “top down.” The bottom-up approaches involve a work-out plan of current problematic loans. Let’s look at several of them.
The FHA Secure Program offered through HUD allows borrowers to get out of their high-interest rate, subprime loans into a lower-interest rate FHA loan if they meet certain conditions. Those conditions include having some level of housing equity and having demonstrated timely mortgage payments prior to the time when interest rates reset at a higher level.
Sheila Bair of FDIC was one of the first to call for voluntary loan remodification. Lenders' profit margins will be lower, but remodification is still better for their bottom line than a foreclosure. Recently, she called for systematic lowering of those resetting rates on 2/28 and 3/27 subprime hybrid loans.
Henry Paulson, Treasury Secretary, called for essentially the same after bringing key financial institutions together and putting the voluntary loan restructuring into more concrete form. There are a lot of hoops a borrower has to go through to qualify for the relief, however.
Ben Bernanke, Chairman of the Federal Reserve, has suggested lenders give a break to distressed borrowers by lowering some portion of the loan amount. A lower remaining principal will permit more manageable monthly mortgage payments for borrowers. More importantly, the write-down of the principal changes the homeowner’s position from being under water (negative housing equity) to above water. The idea is that borrowers can still make payments rather than walk away.
Senator Chris Dodd (D-Connecticut) has proposed legislation that would permit bankruptcy judges to modify the terms of the loans in order to make payments more manageable.
Martin Feldstein, Harvard University professor, made an intriguing proposal of immediately converting 20 percent of the existing loan balance into very low interest-rate loans. The federal government will provide the exceptionally low rates.
All of these proposals are well-intended and most will help mitigate foreclosure problems for mortgagees. But in addition to some aspects of these programs, what is also needed – and could well be far more effective – is a top-down solution: raising the housing demand. As I have written in this column previously, there exists a significant pent-up demand. What we need now is to get the home sales rolling. Rising home sales will lower housing inventory. Lower inventory will help quickly stabilize home prices. A recent Boston Fed study showed that home price movements – and not interest rate resets – are the primary determinant of foreclosures. If households have less or negative housing equity, then they have more of an incentive to default on mortgages and simply walk away.
The challenge is unleashing this pent-up demand into the marketplace. Consumer pessimism is pervasive. The raising of the loan limit on FHA and Fannie/Freddie backed loans will likely help unleash some of this demand as more households will have access to lower interest rate loans. And while lower home prices can also work to bring buyers to the market, they are no guarantee because lower prices can also add to excessive pessimism and consequently hold off buyers.
So, what do I think we should do? What is critically needed at this important point in the housing cycle is a measure to assuredly and quickly raise home buying activity. This can be accomplished by providing a home buyer tax-credit. A nationwide $5,000 tax credit (the same amount currently in existence for home buyers in Washington, D.C.) would cost the federal government $40 billion. Factoring in rising economic activity and accompanying rising tax revenue, the true cost could be minimal or even positively favorable. A reversal in the weakness in the housing market, which has been subtracting about one percentage point off GDP growth, can add $40 billion to the U.S. Treasury – essentially offsetting the cost of the tax credit. If the initial $40 billion cost is hard to swallow, how about a more targeted tax credit for only first-time home buyers? That would cost the government about $15 billion.
The ongoing subprime loan mess and related foreclosure problems are due to past lending mistakes. Current home buyers fortunately are not exposed to these “errors in judgment.” And these fresh buyers will also help save the day for existing homeowners who are either defaulting or facing foreclosure. Rising demand lifts all boats. There is a wide selection of safe mortgage products for today’s home buyers. Combine those safe mortgages with a home buyer tax-credit and we have the makings of a solid housing market recovery. Because housing nearly always leads the economy, a solid economic recovery will not be far behind.
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