Thursday's bond market opened flat but has since slipped into negative ground following early gains in stocks. The stock markets are rebounding from yesterday's afternoon sell off that pushed the Dow down over 500 points and the Nasdaq down 80 points. I suspect that this morning's rally may be short-lived so we should be looking for afternoon volatility again.

The Dow is currently up 180 points while the Nasdaq has gain 13 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point. If the stock markets due give back their current gains, we may see improvements to mortgage rates later in the day.

The only economic news released this morning was last week's initial unemployment claims from the Labor Department. They reported that new claims rose to 478,000 last week, which was an increase of approximately 15,000. Analysts were expecting to see lit tle change form the previous week, meaning that the employment sector is still showing signs of weakness. This is good news for bonds, but this particular report is not considered to be of high importance because it tracks only a week's worth of claims.

Tomorrow morning brings us the release of September's Existing Home Sales data from the National Association of Realtors. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.

The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push prices lower and mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not th is is the bottom for the stock markets. It appears there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result. That means that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com

Thursday's bond market opened flat but has since slipped into negative ground following early gains in stocks. The stock markets are rebounding from yesterday's afternoon sell off that pushed the Dow down over 500 points and the Nasdaq down 80 points. I suspect that this morning's rally may be short-lived so we should be looking for afternoon volatility again.

The Dow is currently up 180 points while the Nasdaq has gain 13 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point. If the stock markets due give back their current gains, we may see improvements to mortgage rates later in the day.

The only economic news released this morning was last week's initial unemployment claims from the Labor Department. They reported that new claims rose to 478,000 last week, which was an increase of approximately 15,000. Analysts were expecting to see lit tle change form the previous week, meaning that the employment sector is still showing signs of weakness. This is good news for bonds, but this particular report is not considered to be of high importance because it tracks only a week's worth of claims.

Tomorrow morning brings us the release of September's Existing Home Sales data from the National Association of Realtors. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.

The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push prices lower and mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not th is is the bottom for the stock markets. It appears there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result. That means that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com

Top Ten Tips to Avoid Foreclosure

Watch How to Avoid Foreclosure - Top Ten Tips in How to Videos  |  View More Free Videos Online at Veoh.com
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/

Top Ten Tips to Avoid Foreclosure

Watch How to Avoid Foreclosure - Top Ten Tips in How to Videos  |  View More Free Videos Online at Veoh.com
Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/

15 River Ridge Road - Home for Sale at Lake Monticello

One of the best prices at Lake Monticello!!
Offered at 294,900
15 River Ridge Road Video Tour of Home

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/

15 River Ridge Road - Home for Sale at Lake Monticello

One of the best prices at Lake Monticello!!
Offered at 294,900
15 River Ridge Road Video Tour of Home

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.theaverygroup.com/

Bond Market Update October 16th

Technorati Profile

Thursday's bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday's sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday's record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.

This morning's economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August's level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were bel ow forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.

The biggest surprise came from September's Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.

The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week's worth of claims, it had little impact on trading this morning.

The remaining two reports are both scheduled for release tomorrow morning. September's Housing Starts is the first, but is the week's least important piece of monthly data. It gives us an indication of housing sector strength and mortgage cre dit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.

The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September's final of 70.3.

Bond Market Update October 16th

Technorati Profile

Thursday's bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday's sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday's record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.

This morning's economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August's level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were bel ow forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.

The biggest surprise came from September's Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.

The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week's worth of claims, it had little impact on trading this morning.

The remaining two reports are both scheduled for release tomorrow morning. September's Housing Starts is the first, but is the week's least important piece of monthly data. It gives us an indication of housing sector strength and mortgage cre dit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.

The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September's final of 70.3.

Rate Lock Advisory

This week brings us the release of seven economic reports that are of interest to the mortgage market. The week also gets heavy in quarterly earnings releases for companies, which could cause significant movement in the stock markets again. The earnings results could affect bond trading as investors move funds into stocks if the reports are good. The other possibility is that the earnings reports would generally disappoint, meaning investors may move funds out of stocks and into bonds as a safe-haven. The latter would be good news for the bond market and mortgage rates.

The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first pieces of data come Wednesday morning, which are two of the week's more important releases. The first is September's Retail Sales report. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. S ince consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 0.4% decline in sales.

September's Producer Price Index (PPI) is the second report of the day. This index measures inflationary pressures at the producer level of the economy and is also considered to be of high importance to the markets. Analysts are expecting to see a decline of 0.3% in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. But, weaker than expected readi ngs should lead to lower rates, especially if the sales report doesn't give us stronger than expected results.





Also scheduled for release Wednesday is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.

Thursday morning also brings us two economic releases. The first is September's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading coul d raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates.





September's Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August's level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.

The remaining two reports are both scheduled for release Friday morning. September's Housing Starts is the first, but is the week's least important piece of data. It gives us an indication of housing sector st rength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.





The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 69.0, down from September's final of 70.3.

Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday's PPI and Retail Sales reports and Thursday's CPI data. But as we saw last week, we certainly don't need factual economic releases to see mortgage rates move. I am thinking we may still see plenty of volatility in the stock markets that may affect bond prices also. Accordingly, please proceed cautiously if you have not locked an interest rates yet.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Rate Lock Advisory

This week brings us the release of seven economic reports that are of interest to the mortgage market. The week also gets heavy in quarterly earnings releases for companies, which could cause significant movement in the stock markets again. The earnings results could affect bond trading as investors move funds into stocks if the reports are good. The other possibility is that the earnings reports would generally disappoint, meaning investors may move funds out of stocks and into bonds as a safe-haven. The latter would be good news for the bond market and mortgage rates.

The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first pieces of data come Wednesday morning, which are two of the week's more important releases. The first is September's Retail Sales report. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. S ince consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 0.4% decline in sales.

September's Producer Price Index (PPI) is the second report of the day. This index measures inflationary pressures at the producer level of the economy and is also considered to be of high importance to the markets. Analysts are expecting to see a decline of 0.3% in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. But, weaker than expected readi ngs should lead to lower rates, especially if the sales report doesn't give us stronger than expected results.





Also scheduled for release Wednesday is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.

Thursday morning also brings us two economic releases. The first is September's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading coul d raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates.





September's Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August's level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.

The remaining two reports are both scheduled for release Friday morning. September's Housing Starts is the first, but is the week's least important piece of data. It gives us an indication of housing sector st rength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.





The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 69.0, down from September's final of 70.3.

Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday's PPI and Retail Sales reports and Thursday's CPI data. But as we saw last week, we certainly don't need factual economic releases to see mortgage rates move. I am thinking we may still see plenty of volatility in the stock markets that may affect bond prices also. Accordingly, please proceed cautiously if you have not locked an interest rates yet.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Credit Scoring Part IV

Credit Scoring

Part IV: Credit Remediation

If you are in need of credit remediation, and especially if you live in an area where this is an overall problem within the population, you should seek to align yourself with a credible referral source for credit repair. While government web sites will suggest that self-help may be the best option, keep in mind that for the most part people lack discipline when it comes to spending and making payments. They are not likely to have the diligence to research and remedy their own credit problems.

The Federal Trade Commission regulates credit repair services, and they provide free information to help consumer’s spot, stop, and avoid businesses with fraudulent, deceptive, or unfair practices. Be familiar with the Credit Repair Organization Act http://www.ftc.gov/os/statutes/croa/croa.htm as you seek out a genuine ally in this area. Research their background and make sure this company will cast a good reflection on you when you refer your clients to them.

written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

Credit Scoring Part IV

Credit Scoring

Part IV: Credit Remediation

If you are in need of credit remediation, and especially if you live in an area where this is an overall problem within the population, you should seek to align yourself with a credible referral source for credit repair. While government web sites will suggest that self-help may be the best option, keep in mind that for the most part people lack discipline when it comes to spending and making payments. They are not likely to have the diligence to research and remedy their own credit problems.

The Federal Trade Commission regulates credit repair services, and they provide free information to help consumer’s spot, stop, and avoid businesses with fraudulent, deceptive, or unfair practices. Be familiar with the Credit Repair Organization Act http://www.ftc.gov/os/statutes/croa/croa.htm as you seek out a genuine ally in this area. Research their background and make sure this company will cast a good reflection on you when you refer your clients to them.

written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

A Lenders Response to the Bailout Rescue Plan

The Chinese have a proverb: "May you live in interesting times." And we are living through interesting times indeed.

Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".

Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.

Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices.

And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.

Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

As always – please keep in touch during these volatile times. I am here to help you and your clients in any way that I can.



Sincerely,
Leonard Winslow
Gateway Bank Mortgage
434-220-3409
leonardwinslow@gwfh.com

A Lenders Response to the Bailout Rescue Plan

The Chinese have a proverb: "May you live in interesting times." And we are living through interesting times indeed.

Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".

Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.

Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices.

And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.

Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

As always – please keep in touch during these volatile times. I am here to help you and your clients in any way that I can.



Sincerely,
Leonard Winslow
Gateway Bank Mortgage
434-220-3409
leonardwinslow@gwfh.com

700 Billion Dollar Bailout for who??

So Congress passes a seven hundred billion dollar bailout...but who is going to benefit from this "bailout"? It appears the bill is more designed to jumpstart a struggling world market and not individual homeowners. Foreclosures are rising, short sales are becoming more prominent, more homeowners are looking at ways to afford their payments and reduce their debt, and stocks continue to struggle. All in all, not good. What we are waiting for is a trickle down effect. We will probably see the government give money to banks to encourage lending between banks. This should increase confidence and make banks more willing to lend again. Hopefully, this extra capital will become available to people trying to make their payments, ease the burden, but only time will tell...

700 Billion Dollar Bailout for who??

So Congress passes a seven hundred billion dollar bailout...but who is going to benefit from this "bailout"? It appears the bill is more designed to jumpstart a struggling world market and not individual homeowners. Foreclosures are rising, short sales are becoming more prominent, more homeowners are looking at ways to afford their payments and reduce their debt, and stocks continue to struggle. All in all, not good. What we are waiting for is a trickle down effect. We will probably see the government give money to banks to encourage lending between banks. This should increase confidence and make banks more willing to lend again. Hopefully, this extra capital will become available to people trying to make their payments, ease the burden, but only time will tell...

To finance or not to finance....

Tuesday's bond market has well in negative territory following a stock rebound that has shifted funds back away from bonds. The stock markets are rebounding after yesterday's walloping with the Dow up 260 points and the Nasdaq up 30 points. This means that the major stock indexes have recovered approximately one-third of yesterday's losses. The bond market benefited form yesterday's stock sell-off but is suffering today as investors move funds back into stocks. The result is the bond market down 13/32 that will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

Today's only economic news was September's Consumer Confidence Index (CCI). It showed a reading of 59.8 that was much higher than forecasts had called for. Analysts were expecting to see a reading of 55.0, meaning that consumers had more confidence in their own financial situation than was expected. This is considered bad news for bonds and mortgage rates because it indicates that consumers are more willing to make large purchases in the near future.

Tomorrow only relevant data is the Institute for Supply Management's (ISM) manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting to see a 0.4 decline from last month's 49.9 reading. The 50.0 benchmark is extremely important because a reading below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall tomorrow morning.

We need to keep an eye on the stock markets and Fed bailout attempt. I don't think we will see much come today as the markets take a breather, but we probably will see more volatility in stocks before the end of the week. This could affect bond prices and mortgage rates. Generally speaking, look for stock weakness to lead to bond gains and lower mortgage rates as investors move funds into the safety of bonds. If the stock markets continue to move higher, we should see bonds suffer and mortgage rates move higher.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

To finance or not to finance....

Tuesday's bond market has well in negative territory following a stock rebound that has shifted funds back away from bonds. The stock markets are rebounding after yesterday's walloping with the Dow up 260 points and the Nasdaq up 30 points. This means that the major stock indexes have recovered approximately one-third of yesterday's losses. The bond market benefited form yesterday's stock sell-off but is suffering today as investors move funds back into stocks. The result is the bond market down 13/32 that will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

Today's only economic news was September's Consumer Confidence Index (CCI). It showed a reading of 59.8 that was much higher than forecasts had called for. Analysts were expecting to see a reading of 55.0, meaning that consumers had more confidence in their own financial situation than was expected. This is considered bad news for bonds and mortgage rates because it indicates that consumers are more willing to make large purchases in the near future.

Tomorrow only relevant data is the Institute for Supply Management's (ISM) manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting to see a 0.4 decline from last month's 49.9 reading. The 50.0 benchmark is extremely important because a reading below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall tomorrow morning.

We need to keep an eye on the stock markets and Fed bailout attempt. I don't think we will see much come today as the markets take a breather, but we probably will see more volatility in stocks before the end of the week. This could affect bond prices and mortgage rates. Generally speaking, look for stock weakness to lead to bond gains and lower mortgage rates as investors move funds into the safety of bonds. If the stock markets continue to move higher, we should see bonds suffer and mortgage rates move higher.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Credit Scoring Part III: Dealing with Challenges

Part III: Dealing with Challenges

Typically, a person with a low credit score is in this position because they lack structure in his or her life. There are, of course, cases where unplanned health or employment complications are to blame, but for the most part, these are individuals who lack the discipline to pay their bills on time or curb their spending.
Let's take a look at some examples that can help to quickly improve less-than-perfect credit scores for the potential homebuyer:

Let's say we have a borrower with a credit score of 664. She has a concentration of credit card debt on one card; let's say $17,000 on a card with a $20,000 limit. At the same time, she has four or five additional credit cards, all with a zero balance. I would advise the borrower to distribute the debt over a number of her cards. Remember, a borrower's credit to debt ratio represents 30% of his or her overall score. By simply changing the ratio of available credit to debt, the borrower in this example could possibly increase her credit score to something closer to 700, saving thousands of dollars on her mortgage.

Another thing to take into consideration in a case like this is what percentage each of the five factors measure in the resulting credit score. Let's say we have a borrower with a "credit high" (the maximum debt allowance on all cards, combined) of $20,000. He has one card that is used for business purposes that is pushing the limit. I would advise the client to get two new cards and, once again, spread the debt out over all of his cards, leaving at least 30% available credit on each card. This will positively affect his overall score, based on the five elements of the FICO scoring model.

Conversely, the borrower should be advised not to close any existing credit card accounts, even if they are at a zero balance. Some people think they are doing themselves a favor by having fewer cards, but they lose out on the credit history factor. Even if the borrower does not have a good rate on an old credit card, they are rewarded for having the long-term credit history, and from time to time they should make a small purchase to keep the account in an active status.
These are just a few examples of what borrowers can do to improve their credit scores when they consider buying a home. If you are disappointed by the fact that you cannot get the most desirable loan up front, monitor your payment history and in time your school will rise so that you can purchase a home or refinance at a more favorable rate.

Stay tuned for Credit Scoring, Part IV: Credit Remediation

written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

Credit Scoring Part III: Dealing with Challenges

Part III: Dealing with Challenges

Typically, a person with a low credit score is in this position because they lack structure in his or her life. There are, of course, cases where unplanned health or employment complications are to blame, but for the most part, these are individuals who lack the discipline to pay their bills on time or curb their spending.
Let's take a look at some examples that can help to quickly improve less-than-perfect credit scores for the potential homebuyer:

Let's say we have a borrower with a credit score of 664. She has a concentration of credit card debt on one card; let's say $17,000 on a card with a $20,000 limit. At the same time, she has four or five additional credit cards, all with a zero balance. I would advise the borrower to distribute the debt over a number of her cards. Remember, a borrower's credit to debt ratio represents 30% of his or her overall score. By simply changing the ratio of available credit to debt, the borrower in this example could possibly increase her credit score to something closer to 700, saving thousands of dollars on her mortgage.

Another thing to take into consideration in a case like this is what percentage each of the five factors measure in the resulting credit score. Let's say we have a borrower with a "credit high" (the maximum debt allowance on all cards, combined) of $20,000. He has one card that is used for business purposes that is pushing the limit. I would advise the client to get two new cards and, once again, spread the debt out over all of his cards, leaving at least 30% available credit on each card. This will positively affect his overall score, based on the five elements of the FICO scoring model.

Conversely, the borrower should be advised not to close any existing credit card accounts, even if they are at a zero balance. Some people think they are doing themselves a favor by having fewer cards, but they lose out on the credit history factor. Even if the borrower does not have a good rate on an old credit card, they are rewarded for having the long-term credit history, and from time to time they should make a small purchase to keep the account in an active status.
These are just a few examples of what borrowers can do to improve their credit scores when they consider buying a home. If you are disappointed by the fact that you cannot get the most desirable loan up front, monitor your payment history and in time your school will rise so that you can purchase a home or refinance at a more favorable rate.

Stay tuned for Credit Scoring, Part IV: Credit Remediation

written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

Credit Scoring Part II

Part II: The Five Factors of Credit Scoring
There are five factors that comprise the credit score. They are listed below in order of importance, just as an underwriter would look at the score:

· Payment History: 35% impact. Paying debt on time and in full has a positive impact. Late payments, judgments and charge-offs have a negative impact. Missing a high payment has a more severe impact than missing a low payment. Delinquencies that have occurred in the last two years carry more weight than older items.
· Outstanding Credit Balances: 30% impact. This factor marks the ratio between the outstanding balance and available credit. Ideally, the consumer should make an effort to keep balances as close to zero as possible, and definitely below 30% of the available credit limit when trying to purchase a home.
· Credit History: 15% impact. This marks the length of time since a particular credit line was established. A seasoned borrower is stronger in this area.
· Type of Credit: 10% impact. A mix of auto loans, credit cards, and mortgages is more positive than a concentration of debt from credit cards only.
· Inquiries: 10% impact. This quantifies the number of inquiries that have been made on a consumer's credit history within a six-month period. Each hard inquiry can cost from 2 to 50 points on a credit score, but the maximum number of inquiries that will reduce the score is 10. In other words, 11 or more inquiries in a six-month period will have no further impact on the borrower's credit score.

Remember, a computer that's not taking any personal factors into consideration calculates these scores. When a credit report is generated, it is simply today's snapshot of the borrower's credit profile. This can fluctuate dramatically within the course of a week, depending on the individual's own activities. The borrower should be made aware of this when they enter into the loan process, and know that it's not in their best interest to go out on a shopping spree. They need to make sure they are not creating a negative impact on the score while the lender is reviewing their file.

Secondly, it is often beneficial to compile a tri-merge credit report. This provides scores from the three credit bureaus, Experian®, TransUnion®, and Equifax. The lender should be provided with this rounded profile because these three scoring systems can vary in their results. The lender is going to look at the middle score and throw out the other two. In many cases, this works to the borrower's advantage.

Stay tuned for Credit Scoring, Part III: Dealing with Challenges
written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

Credit Scoring Part II

Part II: The Five Factors of Credit Scoring
There are five factors that comprise the credit score. They are listed below in order of importance, just as an underwriter would look at the score:

· Payment History: 35% impact. Paying debt on time and in full has a positive impact. Late payments, judgments and charge-offs have a negative impact. Missing a high payment has a more severe impact than missing a low payment. Delinquencies that have occurred in the last two years carry more weight than older items.
· Outstanding Credit Balances: 30% impact. This factor marks the ratio between the outstanding balance and available credit. Ideally, the consumer should make an effort to keep balances as close to zero as possible, and definitely below 30% of the available credit limit when trying to purchase a home.
· Credit History: 15% impact. This marks the length of time since a particular credit line was established. A seasoned borrower is stronger in this area.
· Type of Credit: 10% impact. A mix of auto loans, credit cards, and mortgages is more positive than a concentration of debt from credit cards only.
· Inquiries: 10% impact. This quantifies the number of inquiries that have been made on a consumer's credit history within a six-month period. Each hard inquiry can cost from 2 to 50 points on a credit score, but the maximum number of inquiries that will reduce the score is 10. In other words, 11 or more inquiries in a six-month period will have no further impact on the borrower's credit score.

Remember, a computer that's not taking any personal factors into consideration calculates these scores. When a credit report is generated, it is simply today's snapshot of the borrower's credit profile. This can fluctuate dramatically within the course of a week, depending on the individual's own activities. The borrower should be made aware of this when they enter into the loan process, and know that it's not in their best interest to go out on a shopping spree. They need to make sure they are not creating a negative impact on the score while the lender is reviewing their file.

Secondly, it is often beneficial to compile a tri-merge credit report. This provides scores from the three credit bureaus, Experian®, TransUnion®, and Equifax. The lender should be provided with this rounded profile because these three scoring systems can vary in their results. The lender is going to look at the middle score and throw out the other two. In many cases, this works to the borrower's advantage.

Stay tuned for Credit Scoring, Part III: Dealing with Challenges
written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

Good Credit Translates into Lower Rates for the Consumer

Credit Scoring

Part I: Good Credit Translates into Lower Rates for the Consumer

In the 1960s, Fair Isaac Corporation started working on a system lenders could use to evaluate the likelihood of receiving repayment on loans. Prior to that, it was really a matter of trusting an individual to be a "man of his word," so to speak. Fair Isaac sought to take human error out of the equation with a reliable system that could determine whether or not consumers were truly worthy of credit, and thus FICO was born. This evolved to become the standard for lenders by the 1980s.
Credit scoring has an enormous impact on a borrower's ability to purchase a home. It can mean the difference between getting a good interest rate and the home of their dreams, or whether they even qualify at all. For this reason, it is important for borrowers to understand the credit scoring process, and to know what their credit score is when they look to obtain mortgage financing.
What the credit scoring model seeks to quantify is how likely the consumer is to pay off their debt without being more than 90 days late on a payment at any time in the future. Credit scores can range between a low score of 350 and a high of 850. The higher the client's score is, the less likely they are to default on their loan. Only a rare one out of approximately 1300 people in the United States has a credit score above 800. These are the clients that walk away with the best interest rates even though they may fall out of the box in some degree. On the other hand, one out of eight prospective home buyers are faced with the possibility that they may not qualify for the loan they want because they have a score between 500 and 600.

Stay tuned for Credit Scoring, Part II: The Five Factors of Credit Scoring

written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

Good Credit Translates into Lower Rates for the Consumer

Credit Scoring

Part I: Good Credit Translates into Lower Rates for the Consumer

In the 1960s, Fair Isaac Corporation started working on a system lenders could use to evaluate the likelihood of receiving repayment on loans. Prior to that, it was really a matter of trusting an individual to be a "man of his word," so to speak. Fair Isaac sought to take human error out of the equation with a reliable system that could determine whether or not consumers were truly worthy of credit, and thus FICO was born. This evolved to become the standard for lenders by the 1980s.
Credit scoring has an enormous impact on a borrower's ability to purchase a home. It can mean the difference between getting a good interest rate and the home of their dreams, or whether they even qualify at all. For this reason, it is important for borrowers to understand the credit scoring process, and to know what their credit score is when they look to obtain mortgage financing.
What the credit scoring model seeks to quantify is how likely the consumer is to pay off their debt without being more than 90 days late on a payment at any time in the future. Credit scores can range between a low score of 350 and a high of 850. The higher the client's score is, the less likely they are to default on their loan. Only a rare one out of approximately 1300 people in the United States has a credit score above 800. These are the clients that walk away with the best interest rates even though they may fall out of the box in some degree. On the other hand, one out of eight prospective home buyers are faced with the possibility that they may not qualify for the loan they want because they have a score between 500 and 600.

Stay tuned for Credit Scoring, Part II: The Five Factors of Credit Scoring

written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

First Ever Video Walkthrough Tour by The Avery Group

The first video walkthrough tour by The Avery Group. This is a home we have listed in Gordonsville, VA. 19408 Lovers Lane.



I have some work to do to get this all perfected, but it is coming along and before you know it, video walkthrough tours will be a permanent part of Avery Group listings!

First Ever Video Walkthrough Tour by The Avery Group

The first video walkthrough tour by The Avery Group. This is a home we have listed in Gordonsville, VA. 19408 Lovers Lane.



I have some work to do to get this all perfected, but it is coming along and before you know it, video walkthrough tours will be a permanent part of Avery Group listings!

Avery Group to Start Video Tours of Homes!

With the addition of a Sony Full HD 1920x1080i Handycam to the Avery Group, we will start doing video walkthroughs of homes. This should be a serious step up from the old fashioned Virtual Tours. Especially since Virtual Tours are, more often than not, glorified slideshows. This should give more information and more detail of a home than still pictures stitched together. This will be a huge step forward for the technology that is already incorporated in the Real Estate Practices of the Avery Group. The first tour should be ready by the end of this week and we will be walking through 19408 Lovers Lane. I will keep you posted...

Avery Group to Start Video Tours of Homes!

With the addition of a Sony Full HD 1920x1080i Handycam to the Avery Group, we will start doing video walkthroughs of homes. This should be a serious step up from the old fashioned Virtual Tours. Especially since Virtual Tours are, more often than not, glorified slideshows. This should give more information and more detail of a home than still pictures stitched together. This will be a huge step forward for the technology that is already incorporated in the Real Estate Practices of the Avery Group. The first tour should be ready by the end of this week and we will be walking through 19408 Lovers Lane. I will keep you posted...

A Lender's Views on the Short Sale, Foreclosure

I was speaking with a mortgage loan officer today about the short sale, foreclosure, and mortgage "crisis" and his point of view was so interesting, I got him to put it in writing so I could share it. Here it goes:
FANNIE MAE AND FREDIE MAC TAKE OVER:
"The government is spending our dollars again"
"The mortgage companies have caused this debacle"
"The loan officer is a cheat and thief"
"My Realtor made me do it"
"It wasn’t explained to me"
"ITS NOT MY FAULT"-----------BALONEY
Lets put the blame where it truly belongs. It was and is the general public who is at fault. More specifically all those poor little folks who are having their homes taken from them because they can’t make their payments because they bought more than they should have, never paid their bills on time and want to have everything handed to them on a silver platter. SORRY you have been screwed blued and tattooed. In other words you deserve what you got or are getting. Grow up. Learn to pay your bills on time; learn to be honest about how much income you make, disclose the proper income on your tax returns... In my 20 years I have never seen more people think they deserve to have a home and therefore it should be handed to them. How any times have you wondered how your friend who has all the expensive toys yet works with so you know what they make, yet they can buy the 500,000 home. Guess what they don’t have that home now do they. And guess again who is paying for it one way or the other. That’s right, YOU ARE. Whose fault is it? Not mine. It comes down to Greed. Greed of the homeowner for wanting the mansion, GREED of the Realtor for wanting the commission, GREED of the loan officer for making the sub prime loan for the commission, Greed of the investors you wanted more income and GREED of the bond traders that gave the loan officers the guidelines.
I may sound harsh and unfeeling, it some ways I am, but in others I want to show the compassion to the hard working folks that have worked for what they have and take pride in that. Those hardworking folks that are having there homes taken because of the dishonesty of others should be helped, those people that are having there homes taken due to a loss of job or medical reasons should be helped, but the greedy home owners, they have gotten what they deserve.
Leonard Winslow, Mortgage Loan Officer
Gateway Bank Mortgage, INC.

Wow, those are some powerful words. Let us know what you think by posting comments!
Charlottesville Real Estate
Avery Group
Forest Lakes Real Estate
Charlottesville Real Estate Blog

A Lender's Views on the Short Sale, Foreclosure

I was speaking with a mortgage loan officer today about the short sale, foreclosure, and mortgage "crisis" and his point of view was so interesting, I got him to put it in writing so I could share it. Here it goes:
FANNIE MAE AND FREDIE MAC TAKE OVER:
"The government is spending our dollars again"
"The mortgage companies have caused this debacle"
"The loan officer is a cheat and thief"
"My Realtor made me do it"
"It wasn’t explained to me"
"ITS NOT MY FAULT"-----------BALONEY
Lets put the blame where it truly belongs. It was and is the general public who is at fault. More specifically all those poor little folks who are having their homes taken from them because they can’t make their payments because they bought more than they should have, never paid their bills on time and want to have everything handed to them on a silver platter. SORRY you have been screwed blued and tattooed. In other words you deserve what you got or are getting. Grow up. Learn to pay your bills on time; learn to be honest about how much income you make, disclose the proper income on your tax returns... In my 20 years I have never seen more people think they deserve to have a home and therefore it should be handed to them. How any times have you wondered how your friend who has all the expensive toys yet works with so you know what they make, yet they can buy the 500,000 home. Guess what they don’t have that home now do they. And guess again who is paying for it one way or the other. That’s right, YOU ARE. Whose fault is it? Not mine. It comes down to Greed. Greed of the homeowner for wanting the mansion, GREED of the Realtor for wanting the commission, GREED of the loan officer for making the sub prime loan for the commission, Greed of the investors you wanted more income and GREED of the bond traders that gave the loan officers the guidelines.
I may sound harsh and unfeeling, it some ways I am, but in others I want to show the compassion to the hard working folks that have worked for what they have and take pride in that. Those hardworking folks that are having there homes taken because of the dishonesty of others should be helped, those people that are having there homes taken due to a loss of job or medical reasons should be helped, but the greedy home owners, they have gotten what they deserve.
Leonard Winslow, Mortgage Loan Officer
Gateway Bank Mortgage, INC.

Wow, those are some powerful words. Let us know what you think by posting comments!
Charlottesville Real Estate
Avery Group
Forest Lakes Real Estate
Charlottesville Real Estate Blog

How to Choose a Realtor for a Short Sale

When a homeowner makes the tough decision to do a short sale, there is another tough decision to make. Representation. Who are they going to use to represent them in the sale of their home, negotiate on their behalf, and do whatever it takes to close the sale (within legal parameters, of course). Most people would prefer to turn to a friend, but is that the right call? Sure, you trust them, you are more comfortable sharing personal information, and its easier. However, it takes a lot more to move a short sale than a regular home sale. Choosing the agent is crucial. The agent needs to be aggressive in both marketing and negotiating. The Realtor will not only have to negotiate offers that come in on the property, but the Realtor will also have to show, prove and negotiate with the bank to lose money. That is key. The Realtor will be on hold ALOT. The Realtor will need patience, and have the ability to be firm. This is not a case where you can leave a voicemail and expect a call back. The Realtor will have to be relentless at all hours of the day, especially if the bank is in California. This means negotiation during dinner, before bed, when the agent first wakes up. I have been on the phone negotiating offers at 1AM Eastern Standard Time. You have to seize every opportunity to reach an agreement, pushing them to voicemail is NOT an option. Think about these things when you think about calling someone to list a short sale. You need a bull dog, someone who will fight for you. If your friend can do that, great, if not, CALL SOMEONE ELSE.

How to Choose a Realtor for a Short Sale

When a homeowner makes the tough decision to do a short sale, there is another tough decision to make. Representation. Who are they going to use to represent them in the sale of their home, negotiate on their behalf, and do whatever it takes to close the sale (within legal parameters, of course). Most people would prefer to turn to a friend, but is that the right call? Sure, you trust them, you are more comfortable sharing personal information, and its easier. However, it takes a lot more to move a short sale than a regular home sale. Choosing the agent is crucial. The agent needs to be aggressive in both marketing and negotiating. The Realtor will not only have to negotiate offers that come in on the property, but the Realtor will also have to show, prove and negotiate with the bank to lose money. That is key. The Realtor will be on hold ALOT. The Realtor will need patience, and have the ability to be firm. This is not a case where you can leave a voicemail and expect a call back. The Realtor will have to be relentless at all hours of the day, especially if the bank is in California. This means negotiation during dinner, before bed, when the agent first wakes up. I have been on the phone negotiating offers at 1AM Eastern Standard Time. You have to seize every opportunity to reach an agreement, pushing them to voicemail is NOT an option. Think about these things when you think about calling someone to list a short sale. You need a bull dog, someone who will fight for you. If your friend can do that, great, if not, CALL SOMEONE ELSE.

Short Sale in Charlottesville

Not too long ago, we took a listing for a woman, for confidentiality we will call her "A". She had a home in the city of Charlottesville and was falling behind on her payments. We took her listing and proceeded with a short sale. Come to find out, her loan was for $90,000 more than the market value of the home. There is no way this house every got an appraisal for that much over what the home was worth, especially since it didn't have a HEAT SOURCE!!! By the way, homes without a heat source should never approve for a mortgage, especially a mortgage with a value greater than the market value. Anyway, we were able to sell her house, prevent foreclosure, save her credit AND get a great deal to an investor.
What's the point you ask? Well, there are a couple. One - there are options out there for people looking to prevent foreclosure. Two - in my opinion, any time you help people you are doing a service for the community. In this case, we helped one lady save her ability to follow the American Dream and borrow money when needed. We also got an investor, whose plans for the house will be great for the neighborhood as a whole, the right price to move in.

Short Sale in Charlottesville

Not too long ago, we took a listing for a woman, for confidentiality we will call her "A". She had a home in the city of Charlottesville and was falling behind on her payments. We took her listing and proceeded with a short sale. Come to find out, her loan was for $90,000 more than the market value of the home. There is no way this house every got an appraisal for that much over what the home was worth, especially since it didn't have a HEAT SOURCE!!! By the way, homes without a heat source should never approve for a mortgage, especially a mortgage with a value greater than the market value. Anyway, we were able to sell her house, prevent foreclosure, save her credit AND get a great deal to an investor.
What's the point you ask? Well, there are a couple. One - there are options out there for people looking to prevent foreclosure. Two - in my opinion, any time you help people you are doing a service for the community. In this case, we helped one lady save her ability to follow the American Dream and borrow money when needed. We also got an investor, whose plans for the house will be great for the neighborhood as a whole, the right price to move in.

Short Sales Becoming Common in Charlottesville

Myself and my group (the Avery Group) have been working short sales for a while now. We have successfully closed 5 short sales this year, have two more under contract, and have three more being listed. Most of them have been in Albemarle County. Despite what people think, or because they can only find 8 or 9 of them in the MLS, foreclosures and short sales are becoming more and more prevalent in our area. Even the Daily Progress has had a couple of articles about them in the newspaper. A short sale is a method of preventing foreclosure. With the exception of loan modification, it is usually the best option. 95% of the time you see a short sale, there is a foreclosure looming. Don't be fooled by terminology. Also, look for key terms in the MLS. For example, "subject to bank approval" is usually a good one to look for if you are looking for a possible foreclosure or short sale.

Short Sales Becoming Common in Charlottesville

Myself and my group (the Avery Group) have been working short sales for a while now. We have successfully closed 5 short sales this year, have two more under contract, and have three more being listed. Most of them have been in Albemarle County. Despite what people think, or because they can only find 8 or 9 of them in the MLS, foreclosures and short sales are becoming more and more prevalent in our area. Even the Daily Progress has had a couple of articles about them in the newspaper. A short sale is a method of preventing foreclosure. With the exception of loan modification, it is usually the best option. 95% of the time you see a short sale, there is a foreclosure looming. Don't be fooled by terminology. Also, look for key terms in the MLS. For example, "subject to bank approval" is usually a good one to look for if you are looking for a possible foreclosure or short sale.

Let Us Help You Stop Foreclosure

Stop Foreclosure Help Available Today. Eliminate The Stress. Salvage Your Credit.

We specialize in helping our clients stop foreclosure. We understand that there are many reasons why homeowners sometimes are unable to pay their mortgages and every situation is unique. At The Avery Group we take the time to meet with our clients and explain all of their options to provide comprehensive foreclosure help. We help you determine if you can Keep Your Home or if you have to Sell Your Home to avoid foreclosure. We provide you with a personal consultation based on your unique situation. One of the reasons The Avery Group has been so successful is that we have local representatives in Central Virginia who can offer comprehensive solutions to foreclosure problems on a local level.

Let Us Help You Stop Foreclosure

Stop Foreclosure Help Available Today. Eliminate The Stress. Salvage Your Credit.

We specialize in helping our clients stop foreclosure. We understand that there are many reasons why homeowners sometimes are unable to pay their mortgages and every situation is unique. At The Avery Group we take the time to meet with our clients and explain all of their options to provide comprehensive foreclosure help. We help you determine if you can Keep Your Home or if you have to Sell Your Home to avoid foreclosure. We provide you with a personal consultation based on your unique situation. One of the reasons The Avery Group has been so successful is that we have local representatives in Central Virginia who can offer comprehensive solutions to foreclosure problems on a local level.

Charlottesville Real Estate Market Update June 2008

The number of sold properties in June rose slightly from May. There was 253 sold properties in May, compared to 264 in June. Our inventory remained virtually the same. These are both steps in a positive direction for our Charlottesville Real Estate Market. Higher sales and lower inventory reduces our months of inventory considerably to around 10 months of inventory. Its a good time to be a buyer right now.

Charlottesville Real Estate Market Update June 2008

The number of sold properties in June rose slightly from May. There was 253 sold properties in May, compared to 264 in June. Our inventory remained virtually the same. These are both steps in a positive direction for our Charlottesville Real Estate Market. Higher sales and lower inventory reduces our months of inventory considerably to around 10 months of inventory. Its a good time to be a buyer right now.

Charlottesville Real Estate Market Update May 2008

The number of sold properties in May rose significantly from April. There was 190 sold properties in April, compared to 253 in May. Our inventory also dropped a little bit from 2513 to 2456. These are both steps in a positive direction for our Charlottesville Real Estate Market. Higher sales and lowe inventory reduces our months of inventory considerably to around 10 months of inventory. The buyers are out there for the correctly priced homes.

Charlottesville Real Estate Market Update May 2008

The number of sold properties in May rose significantly from April. There was 190 sold properties in April, compared to 253 in May. Our inventory also dropped a little bit from 2513 to 2456. These are both steps in a positive direction for our Charlottesville Real Estate Market. Higher sales and lowe inventory reduces our months of inventory considerably to around 10 months of inventory. The buyers are out there for the correctly priced homes.

Charlottesville Real Estate Market Update April 2008

Charlottesville Real Estate Market Update for April 2008

New Listings in April
Number of New Listings: 526
Median Price: $299,000
Average List Price: $458,705

Contingent Listings in April
Number of Contingent Properties: 252
Median Price: $275,000
Average List Price: $389,872
Average Days on Market:123

Pending Listings in April
Number of Pending Listings: 89
Median Price: $289,500
Average List Price: $403,414
Average Days on Market: 135

Sold Listings In April
Number of Sold Listings: 190
Total Sold Volume: $58,567,425
Median Price: $266,250
Average List Price: $322,273
Average Sold Price: $308,250
Percentage of Sold Price to List Price: 95.65%
Average Days on Market: 125

Currently Active Properties in our MLS: 2,513
Median Price: $324,000
Average List Price: $611,124
Average Days on Market: 143
Months of Inventory: 17.33

**All numbers reflect data from the CAAR MLS in the areas of Charlottesville, Albemarle, Greene, Fluvanna, Louisa and Orange

Our months of inventory dropped again. It's down to 17.33 from 18.90 in March. This means that Real Estate is picking up, which isn't a surprise since this area has always seen an increase in activity in the Spring. Just like in March, most people are selling their home about 5% less than their asking price. Keep that in mind while you are negotiating your offers.

Charlottesville Real Estate

Charlottesville Real Estate Market Update April 2008

Charlottesville Real Estate Market Update for April 2008

New Listings in April
Number of New Listings: 526
Median Price: $299,000
Average List Price: $458,705

Contingent Listings in April
Number of Contingent Properties: 252
Median Price: $275,000
Average List Price: $389,872
Average Days on Market:123

Pending Listings in April
Number of Pending Listings: 89
Median Price: $289,500
Average List Price: $403,414
Average Days on Market: 135

Sold Listings In April
Number of Sold Listings: 190
Total Sold Volume: $58,567,425
Median Price: $266,250
Average List Price: $322,273
Average Sold Price: $308,250
Percentage of Sold Price to List Price: 95.65%
Average Days on Market: 125

Currently Active Properties in our MLS: 2,513
Median Price: $324,000
Average List Price: $611,124
Average Days on Market: 143
Months of Inventory: 17.33

**All numbers reflect data from the CAAR MLS in the areas of Charlottesville, Albemarle, Greene, Fluvanna, Louisa and Orange

Our months of inventory dropped again. It's down to 17.33 from 18.90 in March. This means that Real Estate is picking up, which isn't a surprise since this area has always seen an increase in activity in the Spring. Just like in March, most people are selling their home about 5% less than their asking price. Keep that in mind while you are negotiating your offers.

Charlottesville Real Estate

The Real Estate Mexican Standoff

Here is a quote from the First Quarter Market Report written by Dave Phillips CEO of the Charlottesville Association of Realtors.

"Simply put, there are too many homes on the market right now. This surplus of inventory should keep prices low as sellers are forced to offer “good deals” in a very competitive marketplace. There is a direct, inverse relationship between inventory and prices. The more homes we have on the market, the more pressure there is on sellers to keep prices down. For this reason, we do not expect home prices in the area to increase in the near future.

Currently, we have 3,673 homes on the market, compared to 3,100 at this time last year. The median price of these homes for sale is $319,000. The average DOM (days on market) of these homes is 147 days. It is a great time for first-time buyers, because there are 663 homes for sale under $200,000 with an average DOM of 130. There are 576 homes currently on the market priced at a million dollars or more, with an average DOM of 200."

This is a very accurate statement about the status of our market. It's almost as if buyers and sellers are in an old fashioned Mexican Standoff. Buyers continue to wait for prices to come down, while sellers are resisting the trend. I do have to take this opportunity to say THIS IS A GOOD TIME TO BUY REAL ESTATE.

Play the game, there are a number of people out there trying to move their money out of Real Estate and just want anything they can get. Make an offer, if they reject, move to the next one. In the words of NIKE, Just Do It. You can find really good deals in a market such as this.

Read the entire 1st Quarter Market Report

The Real Estate Mexican Standoff

Here is a quote from the First Quarter Market Report written by Dave Phillips CEO of the Charlottesville Association of Realtors.

"Simply put, there are too many homes on the market right now. This surplus of inventory should keep prices low as sellers are forced to offer “good deals” in a very competitive marketplace. There is a direct, inverse relationship between inventory and prices. The more homes we have on the market, the more pressure there is on sellers to keep prices down. For this reason, we do not expect home prices in the area to increase in the near future.

Currently, we have 3,673 homes on the market, compared to 3,100 at this time last year. The median price of these homes for sale is $319,000. The average DOM (days on market) of these homes is 147 days. It is a great time for first-time buyers, because there are 663 homes for sale under $200,000 with an average DOM of 130. There are 576 homes currently on the market priced at a million dollars or more, with an average DOM of 200."

This is a very accurate statement about the status of our market. It's almost as if buyers and sellers are in an old fashioned Mexican Standoff. Buyers continue to wait for prices to come down, while sellers are resisting the trend. I do have to take this opportunity to say THIS IS A GOOD TIME TO BUY REAL ESTATE.

Play the game, there are a number of people out there trying to move their money out of Real Estate and just want anything they can get. Make an offer, if they reject, move to the next one. In the words of NIKE, Just Do It. You can find really good deals in a market such as this.

Read the entire 1st Quarter Market Report

Charlottesville Real Estate Market Update - March 2008

Let's take a look at the Charlottesville Real Estate Market for March:

Number of Homes Listed for Sale: 3642

Number of Homes Sold in March: 195

Months of Inventory: 18.90 (down from 20 at the beginning of the year)

Average Sold Price in March: $322,206

Average List Price in March: $338,517

Average Days on Market: 130

Percentage of Selling Price to List Price: 95.18%

Total of Sold Properties in March: $66,830,132

Conclusions:
With over $66 million dollars in Real Estate sold last month, people are buying. This is a good trend compared to the start of this year, with total monthly sold properties in the $50 million range. This shows more people are getting involved in the Charlottesville Real Estate Market. This probably has a lot to do with Match Day at UVA and the NGIC expanding. A couple things to note here as well, the Months of Inventory went down as well, so the Charlottesville Real Estate Market is leveling out just nicely. Most sellers are ratifying offers within 5% of their asking price, so keep that in mind if you are currently selling a home or thinking about selling a home.

Charlottesville Real Estate Market Update - March 2008

Let's take a look at the Charlottesville Real Estate Market for March:

Number of Homes Listed for Sale: 3642

Number of Homes Sold in March: 195

Months of Inventory: 18.90 (down from 20 at the beginning of the year)

Average Sold Price in March: $322,206

Average List Price in March: $338,517

Average Days on Market: 130

Percentage of Selling Price to List Price: 95.18%

Total of Sold Properties in March: $66,830,132

Conclusions:
With over $66 million dollars in Real Estate sold last month, people are buying. This is a good trend compared to the start of this year, with total monthly sold properties in the $50 million range. This shows more people are getting involved in the Charlottesville Real Estate Market. This probably has a lot to do with Match Day at UVA and the NGIC expanding. A couple things to note here as well, the Months of Inventory went down as well, so the Charlottesville Real Estate Market is leveling out just nicely. Most sellers are ratifying offers within 5% of their asking price, so keep that in mind if you are currently selling a home or thinking about selling a home.

Foreclosure Lesson #7 - Types of Foreclosures

There are many types of foreclosures, so we will start by defining foreclosure. A foreclosure is a legal process in which a lender sells or seizes a person's property to recoup and repay the debt attached to that parcel. When this happens, there are a few crucial steps.

First, the lending institution notifies the owner in writing that they are in default of payment. This is known as the Notice of Default (NOD). After 3 consecutive payments are missed, the lender will bring in an attorney and the attorney will send a letter. If no payments are made, the lender may request to have the property sold at auction.

The first type of Foreclosure is a Judicial Foreclosure. This is when the lender brings a lawsuit against the borrower. It starts with a summons and complaint served upon the borrower. If the borrower doesn't respond or pay the fees, the lender gets a judgement by default. The lender must advertise a notice of sale in the newspaper for a certain period of time, then the public sale is conducted and the property goes to the highest bidder.

The second type of Foreclosure is a Nonjudicial Foreclosure, also known as a power of sale. This is when the borrower gives a deed of trust to a trustee to hold for the lender. Upon default, the lender simply files a notice of default and a notice of sale, which is published in the newspaper. It then gets sold to the highest bidder.

The third type of foreclosure is a Strict Foreclosure. In this scenario, there is no sale required.
The borrower has a certain amount of time to pay what is owed. After that date, the title reverts to the lender.

Check with your state to find out which foreclosures are practiced. Virginia only does Judicial and Nonjudicial Foreclosures. Its about a 45 day process, and the lender is only required to advertise the sale for 14-28 days. Of course, there are a multitude of ways to find foreclosures, not just the newspaper. Depending on the interest I get from these articles, I might get into that as well. Good Luck!

Charlottesville Real Estate

Foreclosure Lesson #7 - Types of Foreclosures

There are many types of foreclosures, so we will start by defining foreclosure. A foreclosure is a legal process in which a lender sells or seizes a person's property to recoup and repay the debt attached to that parcel. When this happens, there are a few crucial steps.

First, the lending institution notifies the owner in writing that they are in default of payment. This is known as the Notice of Default (NOD). After 3 consecutive payments are missed, the lender will bring in an attorney and the attorney will send a letter. If no payments are made, the lender may request to have the property sold at auction.

The first type of Foreclosure is a Judicial Foreclosure. This is when the lender brings a lawsuit against the borrower. It starts with a summons and complaint served upon the borrower. If the borrower doesn't respond or pay the fees, the lender gets a judgement by default. The lender must advertise a notice of sale in the newspaper for a certain period of time, then the public sale is conducted and the property goes to the highest bidder.

The second type of Foreclosure is a Nonjudicial Foreclosure, also known as a power of sale. This is when the borrower gives a deed of trust to a trustee to hold for the lender. Upon default, the lender simply files a notice of default and a notice of sale, which is published in the newspaper. It then gets sold to the highest bidder.

The third type of foreclosure is a Strict Foreclosure. In this scenario, there is no sale required.
The borrower has a certain amount of time to pay what is owed. After that date, the title reverts to the lender.

Check with your state to find out which foreclosures are practiced. Virginia only does Judicial and Nonjudicial Foreclosures. Its about a 45 day process, and the lender is only required to advertise the sale for 14-28 days. Of course, there are a multitude of ways to find foreclosures, not just the newspaper. Depending on the interest I get from these articles, I might get into that as well. Good Luck!

Charlottesville Real Estate

Foreclosure Lesson #6 - Local Factors that Affect Foreclosures and Real Estate

Aside from National Factors that affect Real Estate and the Foreclosure Market, there are also Local Factors that affect our market. Again, there are five factors.

The first Local Factor that affect your Real Estate Market and the money you can make is Migration and Job Growth. If the area has an increase in jobs and people come to the area, Real Estate prices go up. The reverse happens if the area loses jobs and people leave. This is one of the reasons that Charlottesville is doing so well in a market that is bleak right now. The area keeps expanding in jobs with the University of Virginia to the NGIC expansion. Like anything else you want to track the results. Right now, Virginia's population is increasing by 6%, while the Charlottesville population is increasing by 25%. These things affect the "demand" side of the Supply and Demand Curve of Real Estate.

The second local factor that affects Real Estate are Development Plans. Is there new construction panned for the area? Shopping malls, restaruants, offices, etc? Get to know someone at the Planning Commission and attend the meetings. Find out the answers to these questions, they have a lot to do with where the market is going to go.

The third local factor that affects Real Estate is New Construction. New construction of any type means that the area has positive future potential. New Construction affects the supply side of the Supply and Demand Curve in Real Estate. Property owners will have a hard time increasing prices if new construction is selling for much less. Check with local building departments to find out home many new permits are filed each month. Then compare them to last year and the year before.

The fourth local factor that affects Real Estate is Supply and Demand. Supply and demand create the local business cycle. During an up cycle, the demand is greater than the supply, driving prices upwards. During a down cycle, the supply is greater than the demand, driving prices downwards. Again, track results. Keep track of the area's monthly home sales. That's sales, the number of homes that actually sold. Then compare homes bought in the current month to previous months to see buyer demand and use the MLS (Multiple Listing Service) to figure out the current supply. Understand that Real Estate can be seasonal. For example, more homes are sold during the summer than the winter. Currently in Charlottesville, the supply outweighs the demand.

The last local factor that affects Real Estate is Neighborhood Trends. If you are looking at buying a foreclosure or an investment property, drive around the neighborhood at different times of the day. Are there a lot of broken down cars? Are the yards maintained? Is it a few homes or the entire neighborhood that needs work? Are some houses being fixed up? What are the local employment statistics? Has the population grown? What is the median income? And so on. Use a combination of objective data and instinct.

Keep in mind that a single Local Factor can outweigh multiple national factors. Know your area throughly and invest where you live. If you don't know the streets, you don't know the area. Do your research up front and have your ducks in a row. All these will help minimize the risk of investing.

Here is a list of people you might need during the process of buying a foreclosure or investing"

Mortgage Broker

Real Estate Agent

Attorney

General Contractor

I can make suggestions on any of these if you need them. Just let me know.

Charlottesville Real Estate