December 6, 2011 9:48 pm
The Department of Housing and Urban Development (HUD) recently released its annual report to Congress on the financial status of the Federal Housing Administration (FHA) Mutual Mortgage Insurance (MMI) Fund.
This insurance Fund is the backbone of the FHA single-family and reverse mortgage programs. In reporting on findings of the annual independent actuarial study, HUD indicates that, in the midst of continued weakness in housing markets across the county, the MMI Fund capital ratio remains positive this year at 0.24 percent.
The independent actuaries predict the Fund will return to the Congressionally-mandated threshold of two percent capital more quickly than was projected by last year’s review. The economic value of new insurance endorsements in FY 2011 for the Fund was nearly double that of FY 2010 endorsements, being close to $11 billion.
As was the case last year, the new actuarial study shows that FHA is expected to sustain significant losses from loans insured prior to 2009, and thus its capital reserve remains below the congressionally mandated threshold of two percent of total insurance-in-force. However, the actuaries’ report concludes that, barring a further significant downturn in home prices, the MMI Fund will start to rebuild capital in 2012, and return to a level of two percent by 2014—outpacing last year’s prediction. The actions taken by this Administration have put FHA into a position where the actuaries expect rapid growth in capital once the housing market begins a broad-based recovery.
FHA’s capital reserve ratio measures reserves in excess of those needed to cover projected losses over the next 30 years. The independent actuarial reviews of the MMI Fund estimate FHA’s capital reserve ratio to be 0.24 percent of total insurance-in-force this year, falling from 0.50 percent in 2010. FHA’s total liquid assets (cash plus investments) grew by $800 million since last year, to $33.7 billion. That amount is $1.9 billion higher than at the end of FY 2009, and is also $7.7 billion higher than was predicted last year by the independent actuaries. At the same time, the economic net worth of the Fund fell by $2.1 billion this year, from $4.7 billion to $2.6 billion, as FHA continued to build loss reserves to prepare for greater claims in the coming years.
Losses on loans insured through the first quarter of fiscal year 2009 continue to place a significant strain on the Fund and are expected to reach $26 billion within a few more years. Though they were prohibited in 2009, the ongoing effect of so-called “seller-funded down payment assistance loans” is still significant. The net expected cost of those loans, as projected by the independent actuaries, grew by $1.8 billion over the past year to $14.1 billion. Conversely, the actuaries found that the FY 2010 and FY 2011 books are expected to be very profitable, providing significant net revenues to offset losses on earlier books. Loans insured to-date under the Obama Administration are providing $18 billion in economic value for the MMI Fund. Under the base-case forecast used by the independent actuaries, the FY 2012 book will add an additional $9 billion in economic value to the Fund.
Over this past year, FHA:
• Served more than 1.2 million households and insured $218 billion in single-family mortgages, bringing the active single-family portfolio to more than $1 trillion.
• Enabled more than 585,000 families to become homeowners for the first time. This represents 56 percent of all first-time buyers in the nation.
• Helped more than 362,000 families avoid foreclosure through loss mitigation actions.
• Helped 440,000 families to refinance their mortgage at lower interest rates, saving households an average of more than $160 per month.
• Provided access to credit for close to 40 percent of all homebuyers needing mortgages, including 60 percent of all African-American and Hispanic homebuyers.
• Reduced mortgage payments for 142,000 distressed homeowners through loan modifications. While standard modifications reduced typical payment burdens by 11 percent ($85), FHA HAMP actions reduced average mortgage costs by 24 percent ($218).
For more information, visit www.hud.gov.
December 6, 2011 9:48 pm
The biggest nemesis to many a household budget is the seemingly ever-growing grocery bill. While many food-related cost increases are beyond our control, there are many strategies and habits you can develop to help bring your food bill down, in addition to the traditional and somewhat cumbersome coupon-clipping process. Try putting the following into action:
• Plan ahead – Plan meals based on what’s on sale…and what’s currently about to go bad in your fridge. Make it a point to use the ingredients that you already have on hand and that may otherwise go to waste.
• Look around – The highest priced items on store shelves are usually at chest level. Look up or down to find less expensive brands or unadvertised specials.
• Leave the kids home – Those little hands can add many dollars in unneeded items piling up in your food basket. If you must keep the kids in tow, allow them to choose one item only.
• Shop the perimeter – The most value is found on the store’s perimeter – fresh produce, dairy, meats and breads. Avoid the middle aisles if you can. That’s where the priciest items are.
• Don’t shop when hungry or tired – When you’re hungry, everything looks too tempting. And when you’re tired, you just want to get out of the store fast and will make quick decisions.
• Stock up on items when on sale – Something like butter can be stored in the freezer for up to six months. Pack the butter in an airtight container so it doesn’t take on the flavor of whatever else you’re freezing.
• Buy generic/private label products – Private label products have come a long way. Give them a try to find out which you like best.
• Take a quick inventory – Before leaving for the store, take a quick look through the fridge, cabinets and freezer. Chances are, something on your list is already buried in the freezer or hiding on the top shelf of the cabinet.
• Make meals in advance – Prepping a meal in the crock pot or doubling a recipe and freezing half will have an impact on your food budget. Many dollars are wasted at grocery stores and restaurants on last-minute meals.
• Shop wholesale clubs with caution – The big-box warehouse stores can take a big toll on your wallet. What seems like a great deal often ends up going to waste. Only shop there for items you truly use in great abundance.
December 5, 2011 9:46 pm
Last year, Americans bought a total of 28.2 natural Christmas trees to decorate their home, with one in five families opting to cut their own. Visiting a tree farm to pick one out can be a wonderful holiday tradition for the entire family to partake in. Regardless of where you purchase your tree, here is some information regarding a few tree types to help you pick the perfect tree for you and your family.
Balsam fir. These trees are known for their wonderful fragrance and needle retention. Easy on the house and on the eyes, Balsam firs are also one of the least expensive trees you'll find. A Frasier fir is a nice tree to consider as well. They have a nice blue-green tint to them, and with its branches turn slightly upwards, they ship nicely even after being tied up. Since they're in the fir family, they also share the Balsam's nice aromas and strong branches.
Blue spruce. Many consumers consider blue spruce trees to be the best looking tree you can buy. The downside: they're infamous for needle shedding. The branch structure may not be as sturdy and dependable as a fir, but if visual aesthetic is what you're looking for, a blue spruce is high on your option list.
Scotch pine. Yet another popular choice, scotch pines are known for their exceptionally bright green color and excellent needle retention (they rarely fall, even when dry). The branch structure can be questionable. If you have many remarkably heavy or expensive ornaments, choose a different tree.
Additional tips: When picking out a tree, be sure to run your arm along the branches to test their strength. Avoid any tree that appears to have bugs or rotting. Make sure to keep in mind that your tree be at least one foot shorter than the ceiling in the display room (the stand will always add extra height). Keep your tree away from any heating vents, and as always, be sure to turn off the lights whenever you leave the home or go to sleep.
Source: National Christmas Tree Association
December 5, 2011 9:46 pm
While most people see the holidays as an opportunity to enjoy more time with their family and friends, thieves see it as a time when there's more to steal. This time of year especially, break-ins increase because it's dark early and there is new merchandise from holiday shopping to steal.
Today, thieves have gone high-tech using social sites to find their victims. In fact, one of the newest ways burglars are deciding who to target during the holidays is by simply going onto social media sites. Burglars have gone digital and homeowners should be cautious before posting statuses. These statuses are common ways people accidentally reveal their house will be unoccupied for several days or weeks at a time, essentially advertising their home as a sitting duck and making the job much easier for burglars looking for a quick target.
Another mistake that people make during the holiday season is not being careful enough to protect their identity and falling for phony charity scams. During the holidays, donations seem the right thing to do. Many collecting monies are not what they appear to be and this impacts millions of seniors every year who fall prey to scams. The tough economic times make it even more difficult to know who is legit. Many are eager to steal your ID or worse, so it's always better to be safe than sorry.
Here are a few tips on how you can better protect yourself this holiday season:
-Stick to reputable charities and do not get mixed up in emails, letters or scammers who knock at your door or come to you in person.
-Password protect all accounts. The new year is a great time to notify banks and change passwords online and offline to add that layer of protection that many forget about. It is free and easy to do and worth the trouble.
-Think of passwords that won’t be guessed by savvy predators. Do not use your birthday, high school or maiden name. Be creative!
-Educate your children regarding online safety. Talk to your children, young and old, about their sharing and behavior online and off.
Stage your home properly throughout the holidays:
-Invest in buying timers for a few lights in separate rooms throughout the home to keep the interior well lit and seemingly occupied from 6 p.m.-12 a.m.
-Cancel your newspaper and arrange for a neighbor to collect mail and packages that arrive while the family plans to be away.
-Have a neighbor remove all snow from walkways and driveways while you’re away. If this is not possible, have a friend put tire tracks in your driveway to make it appear that someone is there.
-Make sure to keep big-ticket items, such as gifts, out of windows.
-Have a friend move your car occasionally if it is parked in the driveway.
-Take care when disposing of product packaging, so that you aren’t “advertising” recent, high-dollar purchases or gifts.
It is all about making your home appear active. If burglars believe you are home, they are often deterred by the increased chance of being caught and less likely to break in.
For more information, visit HomeSecurityGuru.com.
December 2, 2011 9:42 pm
By Paige Tepping
As today’s economy continues to struggle, homeowners across the country are looking for ways to make ends meet, and many are taking on the role of landlord. While jumping into the rental scene may seem enticing, it is important to make sure you are prepared for the task before you get started.
The following tips will help homeowners looking to buy rental property find success, no matter what the market.
Do your homework and find a reputable agent or broker. Taking the time to find a reputable real estate agent or broker before you begin searching for a rental property is crucial. The agent or broker that you ultimately choose to work with should know the neighborhood(s) where you are interested in buying, in addition to helping you choose properties that fit your needs.
Make sure your finances are organized. Going through your finances and making sure everything is in order is a crucial part of the purchasing process that shouldn’t be overlooked. If there is any chance that you will be taking out a mortgage in order to finance your rental property, it is important to do your research early to make sure there are no discrepancies on your credit report. If you find that your credit report is inaccurate, report it immediately so you can get the problem resolved quickly.
Set a maximum amount you can afford to pay. Before you even begin looking at properties, you should carefully examine your finances and your current situation to establish the maximum amount of money you can afford to spend. By not coming up with a number beforehand, it is easy to get carried away and spend more money than you should have.
Schedule a home inspection. Before you buy a rental property, be sure to call in a professional home inspector who will come and evaluate the home. Home inspectors will be able to tell you if the home is safe to live in, and if there are any problems that need to be addressed. This is a great way to avoid expensive repairs down the road.
Take a close look at the neighborhood. Once you have found the property that will best suit your needs, be sure to take the time and get to know the neighborhood. It is usually a good idea to visit the neighborhood during the day and at night so you can get an accurate feel for what the area is like.
Stay up-to-date. If you are looking to purchase a rental property in an area in which you aren’t familiar, you should do your homework and get to know the local real estate market. The agent or broker you are working with will be able to provide you with current information about the area as well.
Ask around. These days, people are turning any situation into a networking opportunity, so be sure to take advantage of those around you when looking for a rental property. It doesn’t hurt to ask friends, family, business owners and individuals who live in the area whether there is anything available or if they know of anyone who may be leaving the area at some point. Initiating this dialogue will keep you top of mind when something does come along.
Don’t settle. Just like you wouldn’t settle if you were in the process of buying your primary residence, it is important to treat the rental property search the same way. It may take a while to find the perfect rental location, so be patient with the process.
Ask for comparables. Your agent or broker can provide you with information regarding comparable properties in the area. It is important to take notice of the rental income, sales price, square footage and other relevant information to be sure you are getting a good deal.
December 2, 2011 9:42 pm
According to an online house price estimator and economic model just updated by the National Association of Home Builders (NAHB), a third full bathroom is the one feature that can have the greatest impact on the value of a standard, new, single-family detached house in a Southern suburb, increasing the estimated price by about $43,000.
The estimator enables builders, developers, prospective homebuyers and homeowners to see the impact that various physical features might have on the price of a home.
“In an economic environment where consumers are particularly price-and value-conscious, this is an important resource for assessing key features and characteristics that help determine housing prices,” says NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.
“To get the most out of the estimator, those using it need to understand that the nation’s housing marketplace is actually comprised of thousands of local markets and submarkets, with their own dynamics,” he says.
The estimator “shows what households are looking for in their homes and zeroes in on basic factors that enable Americans to shape and improve their lives through their individual housing choices,” Nielsen says.
The standard, new, single-family detached home is defined by features based primarily on averages or medians from the Census Bureau’s Survey of Construction. Among those features: the home has 2,150 square feet of living space, two full bathrooms and one half bath, three bedrooms, a garage, central air conditioning, a fireplace, a separate dining room and three miscellaneous rooms. The home is also in a neighborhood where satisfactory shopping (such as grocery or drug stores) is available within 15 minutes.
In general, the estimator finds that suburbs show higher prices than their companion central cities, which include the areas inside the city limits and not just a central business district or downtown area.
“Because the model uses data from the Census Bureau’s American Housing Survey, which contains somewhat limited geographical detail, the results show averages across a broad region rather than estimates for a particular house in a specific location,” says Paul Emrath, NAHB’s vice president for survey and housing policy research.
“The model captures the impact of various features in considerable detail, but no model or database can capture all the features that influence house prices,” he says. “For that reason, a homeowner shouldn’t think that the addition of a certain feature will necessarily increase the cost of their home by the amount specified by the estimator.”
The price estimator, which can be accessed on computers with Microsoft Excel, can be useful in a variety of settings, he says. Possible uses include: helping builders determine if the cost of providing a particular amenity will be valued by consumers, giving prospective home buyers a rough idea of likely price differences for various home sizes and amenity packages, enabling customers of remodelers to approximate how much a job would add to the value of their home and helping developers price neighborhood characteristics to evaluate the desirability of potential building sites.
The economic model for the price estimator shows that with no modification, the estimated average price of the standard new home in a Southern suburb is $203,874. Moving that home to an otherwise similar neighborhood on the waterfront increases its estimated price by nearly $90,000. And proximity to adequate public transportation raises the estimated price by about $26,000.
Other neighborhood features, the model finds, can reduce the price of the home. The presence of an abandoned building within half a block, for instance, reduces the estimated price of the standard new home in a Southern suburb by about $28,000. Bad roads, odors, lack of adequate shopping, buildings with metal bars on their windows and litter each reduce the estimated price by more than $6,000.
Looking at the physical features of the home, adding 500 square feet of living space with no other changes increases the estimated price of that home by roughly $13,000. Adding another bedroom or miscellaneous room increases the estimated price by less than $10,000. Eliminating the fireplace reduces the estimated price by about $24,000.
For more information, visit www.nahb.org.
December 2, 2011 9:42 pm
Fannie Mae has announced that it will suspend evictions of foreclosed single family and 2-4 unit properties from December 19, 2011 through January 2, 2012. During this period, legal and administrative proceedings for evictions may continue, but families living in foreclosed properties will be permitted to remain in the home.
"The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure,” says Terry Edwards, executive vice president of Credit Portfolio Management, Fannie Mae. “No family should have to give up their home during this holiday season. Fannie Mae is committed to helping borrowers avoid foreclosure whenever possible and we encourage any homeowner who is having difficulty making their payment to reach out for help.”
Homeowners with Fannie Mae-backed loans can call 1-800-7FANNIE or visit www.knowyouroptions.com for information and resources on foreclosure prevention options, including contact information for the Fannie Mae Mortgage Help Center or a HUD-approved counseling agency in their area.
For more information visit www.twitter.com/FannieMae.
December 1, 2011 9:42 pm
Winter is almost here, but there is still time to protect homes and wallets from its harsh blow. Homeowners can use the time that remains in late fall to complete a critical weatherizing project: filling gaps and cracks with silicone caulk. It's an easy, quick, and affordable DIY project that can seal in valuable energy, trim heating bills, and save money for the long term.
According to EnergyStar, properly sealing and insulating can save more than $200 a year in heating and cooling costs, or up to 10% on total energy bills – a significant annual savings that many American families can appreciate during challenging economic times. Following are a few tips on how to master the caulk gun, an often underrated ally in the yearly tug of war to keep the thermostat low and the energy and cost savings high.
1. Find the Leaks –A critical first step is to find the hidden leaks that allow cold air to sneak inside.
• Leaks usually occur around the outside of a home and in non-regulated temperature areas like attics and basements that are exposed to harsh elements throughout the year.
• Obvious areas include the frames around windows and doors. Be sure to pay close attention to where the floor frame rests on the foundation on the inside of a house and where siding meets the corner boards on the exterior.
2. Choose the Right Caulk – Go beyond the advice to simply "caulk gaps and cracks." Not all caulks are created equal, and not all caulks provide long-lasting energy savings.
• Acrylic caulk is vulnerable to the very elements it is supposed to seal against, meaning it can break down over time allowing energy to escape. A silicone caulk, on the other hand, protects for the long haul.
• Leaks frequently occur in and around homes in places prone to extreme temperature fluctuations and heavy rain, snow, ice or wind. Impervious to these damaging conditions, silicone has excellent flexibility and is 100% waterproof.
3. Get to Work – Master the caulk gun to reap measurable energy savings. Work with caulk in above freezing temperatures and clear off snow or ice.
• Remove old caulk, dirt, and loose particles with a caulk-removing tool or wire brush. Make sure the surface is dry. Apply painter's tape to either side of the joint to create a straight edge.
• Cut nozzle to desired bead size. Pierce the inner seal with a stiff wire or other similar object. Insert the cartridge into the caulking gun. Hold the caulking gun at a 45-degree angle and seal around unsightly cracks or spaces inside and outside the home. Keep a steady, constant grip and try to get as long of a bead as possible; then repeat.
• Use a finger or a wet caulk-smoothing tool within two to five minutes of application. Remove painter's tape immediately after smoothing caulk. Wipe hands with a dry cloth before washing with soap and water. Use mineral spirits to clean up.
By taking the time to properly seal and caulk any air leaks in your home, you will be able to reap the benefits on your utility bills all winter long.
December 1, 2011 9:42 pm
As December begins and the holiday season and spirit of giving move into full swing, why not make a few tax moves now that could give you added savings when you file your 2011 tax return? The year-end is an ideal time to lower your 2011 tax liability and increase the size of your refund when tax time arrives early in 2012.
There is still time for a final push to claim several tax benefits before 2011 winds to a close. Many taxpayers will be doing things like giving to charities and pre-paying January tuition, but the key is knowing how these and other common expenses may count as tax deductions if you qualify. There are five key considerations taxpayers should be thinking of before December 31 to reduce taxable income and increase deductions or credits to claim:
1. Save more for retirement – By increasing retirement plan contributions, you can reduce your income for tax purposes. Taxpayers can contribute up to $16,500 to a 401(k), 403(b) or Federal Government Thrift Savings Plan; those over age 50 can contribute an additional $5,500.
2. Prepay January payments in December – Taking care of your January mortgage payment, 4th quarter state tax estimate, or winter semester tuition now lets you claim these payments on your 2011 tax return.
3. Get to the doctor! – If you are holding off on a major medical procedure until after the holidays, stop procrastinating and make an appointment now to increase your 2011 medical expense deductions.
4. Give to charity – Giving cash and non-cash donations to charity can give back on your taxes. And volunteering time counts too, which means the more than 80,000 volunteers who lent a helping hand to the Joplin, Mo. tornado victims may be able to deduct their out-of-pocket expenses on a tax return.
5. Save energy, save $500 on your taxes – If you are planning to buy an energy-saving, hot water heater or install energy efficient windows or insulation to your home, do it now. Up to $500 in credit may be available for making energy-related home improvements.
December 1, 2011 9:42 pm
The International Window Film Association (IWFA) is educating the public about the harmful impact that strong winter sunlight has in the United States and it is urging consumers to consider installation of window film on their homes before the energy tax credit expires.
"People in northern states may not know that because of the low angle of the winter sun, more ultraviolet rays may come through a window into the living space than in the summer in Florida," says Darrell Smith, executive director of the nonprofit IWFA.
The IWFA is also making the public aware of the expected end of the government home improvement energy tax credit on December 31st, 2011. Consumers are eligible for up to a $500 home improvement energy tax credit for the installation of window film.
"Easily installed window film blocks up to 99% of harmful UV rays and reduces solar heat gain to save consumers on cooling costs in warmer months as well," says Smith.
"With unrestricted access to your home's interior, the winter sun's in-line position with windows can literally make a home's furniture, drapes and artwork a faded memory," adds Smith. "Now is the time to invest in window film. The purchase provides returns year-round by protecting furnishings from fading, creates a consistent home temperature and keeps you and your belongings safe from UV exposure."
The IWFA shares facts on UV protection, when comparing window film to alternatives:
• Single-paned normal glass blocks only 25% of UV rays
• Double-paned normal glass windows block 40% of UV rays and low-e glass windows block up to 75% of UV rays
• All quality solar control window films for residential use block 99% of UV rays