Club Chaos Agents - All Things Hollish, Wacked, and Jacked

Feb 9, 2010

 Based on the snow fall that started last night, many people will likely head off to Austin Peay State University - Emerald Hill. This was the place to be just over a week ago when Clarksville had 7 inches of snow fall on Jan 30, 2010.

 If you are looking for Another Fun Snow Day in Clarksville Tennessee, you will probably not be alone.  Emerald Hill was the place to be. People took their sleds, snow boards, air mattress, inner tubes, trash can lids, toy airplanes and even plastic to venture down Emerald Hill.

If you are going to venture out to Austin Peay State University - Emerald Hill, be sure to bundle up and think safety as you have fun going down the hill.

 Be on the watch for others and share the hill. Watch out for the Huge tree and try to obey the posted speed limit of   20 MPH.......  I'm sure you can put on the brakes as you zoom down the hill right.

On a serious note, just be aware of your surroundings and have a safe fun day in the snow if you decide to venture out.

See more photos below.

I have been writing about the Pine Bush Central School District budget planning process.  At tonight's Budget Forum there were many wonderful people who showed up to express their concerns about and offer suggestions to help with the school budget. I heard a lot of great ideas and I was encouraged to hear a lot of  "we are in this together".  There were energy saving suggestions, town supervisors who offered the schools use of facilities, parents who volunteered to help, students who spoke eloquently about their passion for various school programs, and so much more.  

It all comes down to finding new ways to do what we already are doing and it is going to take the cooperation.  One of the things that needs to be said is that everyone will have to give a little.  We are living in a different world then we were just a few short years ago.  I urge the administration, teachers, and support staff to consider making concessions to cut back on expenses.  As I said at the meeting most of us in business have had to economize and adjust our expenses while trying to deliver the same service.  Many of the small business owners who spoke at the forum said the same thing.  Business owners have adjusted and made the cuts.  In order to maintain the school programs and keep many of the staff from losing jobs all together concessions will be necessary.  Let's face it if the school quality and desirability goes down there is certainly the potential for more job loss.

Well tomorrow night is the School Board meeting and they will be discussing the administration and transportation parts of the 2010-2011 budget plan.  I urge you to get out and show your support for our district.  Wednesday is scheduled to be another School Budget Forum at Circleville Middle School, but with the snowstorm forecast, they may have to postpone the Forum.  Currently there are two more Forums planned in addition to several Regular Board of Education meetings prior to the budget presentation, hearings, and school board elections and budget vote.  

Upcoming Budget Forums

Wednesday, February 10, 2010 Circleville Middle School Auditorium
PTA Parent Forum - 5:30pm
Budget Forum - Approximately 6:00pm

Monday, March 1, 2010 Pine Bush Elementary School Cafeteria - 6:00pm

Wednesday, March 10, 2010 Crispell Middle School Cafeteria
Crispell PTA - General Meeting at 7:00pm
Budget Forum - Approximately 7:30pm

1000 pictures in 3 days. What was I thinking?

If we keep this up I'm going to have to buy a lock box just for the wee people simm cards (LOL). Did we have fun? Yup. Are we having fun now trying to figure out what to write about? Yup. Will we be taking you guys on a tour of upstate? Eventually... once we sort it all out (LOL).

We're also still painting the apartment because Stephen is giving us a run for our money (if he's not being a crayon bandit he is laughing while ruining our clothes). I remember feeling really pleased about the faux finish on my hall walls. Now I have to paint that puppy over with white primer because I missed chucking out a marker and the green shorty used is bleeding through, driving me crazy because I can't glaze it out. It was custom colors (banana cream, applesauce and jasmine white) layered in a series of thin glaze overlays by hand with a linen cheese cloth. Now I gotta start from scratch to match the wall with the painting I created to hang there. Bummer...

Maybe I should (a) switch paintings, (b) not hang a painting or (c) buy a giant clock (LOL). I am such a pain in the a$$ when it comes to painting my apartment. Gotta get back to work. The shorties are helping me. :-)

You might find buying a house in the Greater Hudson Valley of New York's Orange, Ulster, or Sullivan Counties is a little different than buying a home in other states and even in different areas of New York State.  This series will prepare you for searching for and buying real estate in my neck of the woods.

When you are looking for a house you should first speak with a mortgage representative.  You can speak with someone at your own bank, credit union, or a mortgage company.  It is my recommendation that you work with a lender who is at least familiar with the area you are planning to search in.  With the different practices in different states and even within areas of states the local representatives will know how best to help you.  

The mortgage representative will give you the amount you are qualified for but remember to ask how much your monthly payment will be including principle and interest and also remember that you will need to add 1/12 of the taxes plus insurance to each payment.  Make sure you feel comfortable with the amount of your monthly payment.  You still need to pay for the other things you need to buy like food and clothing.  Once you know your target amount you can start your search.

Most home-buyers start their search on the Internet.  They will go on a real estate search engine or to a broker's website and search through the available homes in the area they want to live in.  Once they find some homes that they like they will start calling the agent's that have those houses listed.  They will make appointments to see those houses with the listing agents and will go to see homes without representation. WHAT???? Yes, the agent who is showing them the house works for the seller.  A Listing Agent is looking out for the best interests of the people who hired them.  I can't understand why anyone would want to make one of the most expensive purchases they will ever make without representation.

If you choose to work with a Buyer's Agent you will have someone on your side.  A good buyer's representative will do the search for you, put together a tour so you can see a variety of houses in your price range, and provide you with all the information and resources you need to make the right decision. 

I wish you luck with your search and hope you will give me a call if you are looking to purchase a home in Orange, Sullivan, and Ulster counties of New York State or if you would like a referral to a good buyer's agent in your search area.

Have we been in a crumbling economy in the last few years?  What about a crumbling real estate economy in the last 2 years?

In my opinion, I would say yes to both questions.

In some cases, do we have too much government prevention or regulation at times?  Jason Crouch wrote an excellent article the other day :

Is Congress Working to Create Yet Another Potential Hurdle to Real Estate Recovery?

In this post, Jason makes a great point about how the government seems to intervene and over regulate, thinking that it will help our economy and potentially our real estate economy.  So what is it that Jason brings up and what the government wants to try now?  It's eliminating the YSP, which is called yield spread premium. 

I wanted to write this post because there was so much information being tossed around that was misleading when it comes to who the government is trying to shut out with eliminating YSP and the fact that a lender could just add more costs.

This post might seem boring, but if you read Jason's post, this could open your eyes even further. If you haven't read his post, please read it before you read this one.

Let's first define YSP - Yield Spread Premium as defined by wikipedia - A “yield spread premium” (YSP) is the money or rebate paid to a mortgage broker for giving a borrower a higher interest rate on a loan in exchange for lower up front costs... This “may [be used to] wipe out or offset other loan costs,.....  The YSP is derived through the realization of a market 'price' for a loan that is above 100%.

Myths and Misconceptions about Yield Spread Premiums -YSP-

Major misconception - Congress in the last year has gone after YSP in general, and not just those brokers. Yes, this was true in previous years that the mortgage brokers were the main target by the larger banks, but their focus has changed 100%.

Mortgage Brokers aren't the only ones that receive yield spread premiums. Mortgage Bankers receive the same. The difference is that the mortgage broker has to disclose the YSP that they make on each loan and the mortgage banker doesn't. There are a few different types of mortgage bankers. Two examples :

Infinity Home Mortgage Company, a company where I work, we underwrite our own loans and close them in our name. But we sell the loan on the secondary market.

Mortgage companies such as Wells Fargo or Bank of America do the same as we do, except that they service their own loans.  But no matter who you use, we all still have to abide by the same regular guidelines that are set out for such types of loans as FHA loans, conventional loans, VA loans, and USDA loans.

Overall, the yield spread premium (YSP) is based on how the pricing is mandated through the investors on Wall Street who sell pools of loans. Each of these pools are sold as being securitized on the secondary market. All it comes down to is who wants to sell what rate at what price or profit margin to the originating mortgage company, no matter if they are a broker or banker.

The bottom line, the higher the interest rate, the higher the rebate that the lender will receive for such mortgage interest rate. And let's not confuse this with SRP's, which are called service release premiums that banks and brokers also receive.

Misconceptions on the fact that lenders could just charge more fees

Another misconception that I read in Jason's post and in many of the comments was that if the mortgage broker or the mortgage banker couldn't charge the yield spread premium, that they would just raise the costs of the loan.  Which would mean to add more lender fees and or points. This might sound good in theory and could happen, but depending on the State or the loan amount, that lender might not be able to add more costs. Or in some cases, refuse lending to that specific person based on the loan amount. 

What I am talking about is what is called a high cost loan. There is a term,  section 32 loans, which stated that any loan that resulted in anything over 7.99 percent in fees and costs to the borrower, that this was illegal.  In the last 7 years or so, many states have reduced this on a state level and not on a federal level.  Let me explain further.

In the state of New Jersey, our high cost is considered anything over 4.25 percent in total lender fees or costs. In other states such as Florida (5.00%), Pennsylvania (5.00%), and Georgia (4.99%), you can see that it varies and is much lower than the Federal Government's definition of High Cost loans.

One thing that many of you must realize is that there are some other fees that are associated with my percentage when it comes to high cost loans. Two fees that jump out are settlement/closing fees and any lawyer fees. So it's just not fees charged by the lender.

Summary : So how can this change on how some mortgages could possibly be refused to certain borrowers? Let's safely assume that every lender has a $4,500 profit margin on every loan, and this is to include all lender fees that are associated with mortgage financing.

Example : A borrower trying to obtain a $100,000 mortgage as opposed to a $300,000 mortgage.

If my high cost is 5%, that means that I can't make more than 5%, to include the closing fee associated with the title company and or a lawyer's fee.  Let's say the lawyer's fee was $500.  So in this example, if I was getting an additional 1 point, aka YSP, for an interest rate of 5.5%, which would keep the borrower's cost down, I would now have to charge this additional 1 point. But wait, my high cost is 5%, so that means I can't charge anything extra without going over the mandated high cost of 5%.  Hey, good for the borrower, because they might get a cheaper mortgage.  But what happens if the mortgage profits are driven down far enough to where it doesn't make sense for that lender to even do the deal. Then what happens to the borrower?  No financing options?  Maybe so....

If the government steps in and regulates YSP, as Jason stated in his post, this could have another major affect on our housing economy and on our economy in general.   

Your thoughts?

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Experience & Knowledge at its BEST !!!

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

Copyright © 2010 by Jeff Belonger of Infinity Home Mortgage Company, Inc

It is crucial for home buyers to understand about agent commissions in real estate transactions. The compensation is discussed between the Seller and real Estate Broker and has nothing to do with the Buyers - even though buyers may feel that they can buy the house for less, with a smaller compensation model for the Seller to net the same.

So, what if it's possible for buyers to also be involved in the real estate contract negotiation? Can you imagine what chaos this will cause?

A listing agreement is signed between a seller and the broker. It is a legal binding document.

The buyer has no rights to the compensation model - whether it was too little or too much. If you didn't think you (the buyer) got a fair deal based on the sales price you offered, then you have the option of moving on. You cannot look at the approved HUD-1 to say, nope - I think you, Mr. Seller agreed to pay too much on closing fees and agent compensation.

Hence, home buyer's education is crucial in understanding how do you really get a GOOD DEAL? It's based on the sales price, not how much others are making on the transaction as service provided to the transaction. Can you imagine if this was allowed? Every transaction will still be on the table because you, the buyer stripped every service provider out of their fair share of value? When enough is enough? Why don't you buy stuff from Walmart and say, I think you clearly made 300% profit and that's not allowed in my books. I need you to lower your price. Walmart will ask you to leave the store.

Why in the world would people negotiate their value and worthiness?

Here's a prime example on home buyer's ignorance about what goes on in a real estate transaction and a listing agreement:

Buyer wrote this:

With the detailed information presented to us by the bank, I've told my agent that the maximum commission that I'm willing to pay is THIS AMOUNT (insert a number here). This can be done in 2 ways. Either bring down the commission to THIS AMOUNT which would make it to THIS PRICE or if your problem is around going back to the bank to change the numbers, then keep the contract as the agreed sales price and the agents pay back THIS AMOUNT towards my mortgage on the day of closing (if my mortgage lender agrees).

In this market nobody pays THIS AMOUNT (insert percentage here) commission and most home builders are willing to give away homes. See FHA guidelines below. The sales price is 93% of the bank assessed price because of the bloated commission rate.

2 problems here:

(1) The buyer clearly doesn't understand who determines the agent compensation. "I'm willing to pay THIS AMOUNT" to the agent compensation model doesn't fly. Willing or unwilling - it doesnt matter. You only evaluate it based on the sales price.

(2) Buyers do not understand the value of real estate agents. They look at us as pretty door openers. "Nobody pays THIS AMOUNT commission". Clearly, the buyers do not understand the challenges of the market. A good agent is worth its weight in gold - if you ask me. To help them save a foreclosure, in a heart beat!

(3) Most home builders are willing to give away homes. Buy it from them then. Why do a short sale?

I'm taking this as a good eye opener to educate my buyers about the compensation model. Where is their line and where they shouldn't step. Clearly, this is buyer's ignorance and not knowing better. This lesson taught me to further educate buyers which should not lead to this ugliness of the transaction. Some buyers are better (nicer) and understand that people work for a living. Others (clearly like this one) just wants the world to work for him.

In the end, if they understood how hard we work for our money (like they do), they will have no problems giving that compensation.

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Contact:

Loreena Yeo
Realtor®/ Broker of 3:16 team REALTY
(214) 783-2210
loreena@loreenayeo.com

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Copyright © 2009 by Loreena Yeo (3:16 team REALTY)
Educating Home Buyers about Agent Compensation

Maywood Library Offers Valentines Arts & Crafts For Kids Day !

More fun at the Maywood Library this week just in time for Valentine's Day !

On Weds Feb 10th 2010, Children from 4-11 yrs old and who are Maywood residents are invited to come by for a fun filled afternoon creating Valentine's Day related Arts and Crafts from 3:30pm to 4:15pm.

Preregistration is required so the hosts can be prepared for the correct number of attendees :o)

For more info, contact Erin Hughes, programmer and publicist, at maywprog@bccls.org, or MaywoodLibrary@gmail.com.

Happy Valentine's Week !

Funerals make you hungry. Either that, or they make you cry. Last Saturday, I attended a funeral with my husband in downtown Sacramento. After the service, we went to Jim-Denny's Hamburgers Chili for lunch. This is a little hole-in-the-wall restaurant that has been a 76-year tradition in Sacramento. We've been meaning to go there for years and, in fact, did stop by a few years ago but it was too crowded, so we left.

Now, if you go to a Catholic funeral, they generally feed you. But the funeral we went to was Lutheran. I actually have very little experience with funerals. I realized that fact when I reached my mid-30s. I don't know how a person can be on this planet for 30-some years without going to a funeral, but I had managed it.

As a result, I reached out to my girlfriend who had more experience than me. I asked her to guide me through funeral etiquette. Clearly, somebody I knew would die soon, and I didn't want to be caught off-guard. I thought it would be easier to attend a funeral for a person I did not know, so I picked a death notice out of the newspaper, circled the date of the funeral on my calendar and considered that my practice funeral.

Here are some of the things that I learned:

• A death notice is generally an invitation in disguise to go to a funeral
  
• You don't have to wear black.
• Stuff some tissues in your pocket.
• If you don't know the family, don't sit with them.
• It's OK to cry.
• It's OK to sing, but not all by yourself.

I was pretty sure it's not a good idea to leave your cellphone on, so when we walked into St. John's Lutheran Church on Saturday, I turned my phone to "silent." The cantor had a beautiful voice, and I was mesmerized. But not so much that I didn't feel my cellphone vibrate. No, no, no, don't touch it. Bzzt. Bzzt. But I couldn't help myself. I looked around. We were sitting in an end pew. People would probably think I was praying with my head bowed. I did the unthinkable. I slowly slipped my cellphone out of my pocket and glanced at my email. Now, I'm probably going to hell for that.

But soon the guilt was overturned by the sense of hunger. Which is what led us to Jim-Denny's Hamburgers Chili. Going there just seemed appropriate for some reason. This little restaurant is located on 12th Street between H and I Street. Here is a photo of the interior. It's the size of a cable car and dates back to 1934. The signs on the wall advertise fancy ham, fancy hamburgers, back when anything better than ordinary was called fancy.

A handwritten sign next to the old wall phone warned customers that if they sit next to the phone and it rings, they must answer it and take an order. I was glad my husband had that seat. We arrived at 11:45, 15 minutes before lunch. Everybody at the counter, which is the only place to eat, were busy stuffing gigantic omelets into their mouths. The servings were humongous, along the lines of what you get at the Market Club in Land Park.

I ordered the 5-cent hamburger with raw onions, lettuce, tomatoes and no pickles. You can see it in the photo above. Well, you won't see the onions because the waiter forgot to give them to me. He also put mustard on the bottom bun but the top bun was dry. My husband got the Superburger with bacon and requested no cheese. They gave him a burger with cheese.

The french fries were pretty good, though. Sliced very thin and crispy without being too crunchy. The fries reminded me of those served at the drugstore where I used to go after school in the 1960s. In fact, the hamburger brought back those memories, too. Pretty tasty food for a 12-year-old. But now that I'm an old goat, my taste buds have matured. I prefer thicker hamburgers, like the Waterboy Deluxe Burger, made from ground chuck. Perhaps I should have ordered the megaburger?

By the time we slid out of our seats, $20 poorer and a bit fatter than when we walked in the door, there were so many people standing behind us that I couldn't reach my bag on the floor. I grabbed the handle and tugged it between the stools, almost knocking some guy in the face. That's when I realized my cellphone was still turned to "silent." Ah, the sweet bliss of no phone calls about my Sacramento short sales for two solid hours. It was back to business. If we go back to Jim-Denny's, though, I will definitely order the megaburger.

I should also mention that the funeral was for a real estate agent who worked at my midtown office of Lyon Real Estate. I suspect he forgave me for looking at my cellphone. He was the type who would understand. He was a good egg and will be missed. You know, we just don't have enough good eggs in this world.

Photos: Elizabeth Weintraub

In our market, there are many homes that have been for sale for over a year, As a matter of fact, there are quite a few that have been for sale for over two years, and when your product is in a declining market, it is essential to know how your property is affected.

There is an old real estate adage that states that there is only one reason a property will not sell, and that of course is PRICE! And if your home has not sold in nearly 700 days, it is time to examine the market again and make any necessary adjustments.

Real estate is a commodity, and price is governed not only by the laws of supply and demand, but also by the availability of ready financing. Even if a seller successfully “chases” the market and gets an above average offer, the deal is often thwarted by a less than generous appraisal.

All serious sellers should get a new CMA every thirty days and make the necessary adjustments. A correctly priced property will sell.

And that’s the bottom line.

One thing that is great about having a blog is that you can go back and pull old posts to refer clients and associates to.  A recent comment on one of my posts by Elva Branson about the look of my blog posts led me to send an email with a link to an old tutorial I did a full year ago.  I am no tech wizard so once I figure something out I like to explain it in easy to understand step by step instructions.  Well Ms Elva has taken the steps and the result is this lovely thank you note post.

I have also reworked an entire series on Moving Out To The Country that I did almost two years ago to update it so I could send it to a new client.  I keep pulling old posts on the process of buying a home in New York State to send out to clients and will be updating those next.  Your own blogs can be a gold mine for you.  Don't forget to use them.

I hope you can also see how what you write here stays here unless you delete it.  The good as well as the bad.  Make sure you think about everything you put out there.  It can come back to bite you at some point in the future just as easily as it can be a treasure for you.  

There's Gold In Them There Posts

So fill your mine with lots of precious words and use them to build your networks and your business.  Speaking of business I have some things to attend to so that's all for today.