Top-10 List of New Year’s Resolutions for Your Home

By: John Riha

Published: December 30, 2011

When the new year arrives, promises and resolutions abound. Here’s the top-10 list of what the resolute home owner should accomplish this year.


Ready for 2012? Here it comes:

1. Lose weight (cut energy use)
2. Quit smoking (purify indoor air)
3. Get out of debt (budget for improvements)
4. Learn something new (educate yourself on home finances)
5. Get organized (de-clutter)
6. Volunteer (support your community)
7. Drink less (curb home water use)
8. Spend more time with the family (share home improvement projects)
9. Get fit (exercise your DIY skills)
10. Be less stressed (use maintenance-free materials)

1. Lose weight (cut energy use)




Your house is a glutton, gobbling energy like a starved elephant. Gain control by trimming energy use.

A good place to start is your HVAC ductwork. Ducts are notorious energy-wasters, leaking your heating and cooling air through holes and loose connections.

Sealing and insulating your ductwork can improve the efficiency of your heating and cooling system by as much as 20%, saving you $200 per year or more, according to Energy Star. You’ll make your home more comfortable, and a more-efficient system helps extend the life of your furnace, air conditioner, or heat pump.

Because ducts are usually hidden inside walls, ceilings, attics, and crawl spaces, sealing and insulating them may be a difficult and time-consuming DIY job. If you can’t reach all your ducts, concentrate on those that are accessible.

Use duct sealant — called mastic — or metal-backed tape to seal the seams, holes, and connections. Don’t use the confusingly named “duct tape,” which won’t provide a permanent solution. Be sure to seal connections at vents and floor registers — these are likely places for leaks to occur.

After sealing your ducts, wrap them in fiberglass insulation. Most hardware stores and home improvement centers have insulation wrap products made for ducts.

A professional heating and cooling contractor will charge $1,000 to $4,000 for the work, including materials, depending on the size of your home and accessibility to your ducts.

Insulating your ductwork may qualify for a rebate from your state or local municipality. Check the Database of State Incentives for Renewables & Efficiency.

2. Quit smoking (purify indoor air)




The EPA lists indoor air quality as one of the top environmental health hazards. That’s because indoor air is full of potential contaminants, such as dust, mold spores, pollen, and viruses. The problem is at its worst during winter, when windows and doors are shut tight.

You can help eliminate harmful lung irritants in your home with these maintenance and improvement tips:

Maintain your HVAC system and change furnace filters regularly. Use the highest-quality filters you can afford ($10-$20) and change every month during peak heating and cooling seasons.
Keep indoor air pristine by using low-VOC paints when you remodel your rooms.
Use localized ventilation in kitchens and bathrooms to remove cooking fumes, smoke, and excess humidity. Make sure ventilation systems exhaust air to the outside of your home, rather than your attic crawl space or between ceiling joists.
In fireplaces and wood stoves, burn real firewood rather than pressed wood products that may contain formaldehyde.
Use a portable air cleaner to help cleanse the air in single rooms. Portable air cleaner types include mechanical air filters, electrostatic precipitators, ion generators, and ultraviolet lamps.
Note that each type of air cleaner is designed to remove specific pollutants; no portable air cleaner removes all pollutants. Be wary of air cleaners that generate ozone — a known lung irritant.

3. Get out of debt (budget for improvements)




Creating a yearly budget for home improvement and maintenance helps prevent overspending, and encourages you to put aside money for major replacements — such as new roofing or a kitchen appliance — that come up every few years.

Protect your home finances by knowing how much you’ll probably spend each year. Data from the U.S. Census Bureau says that average annual maintenance and home improvement expenditures are about $3,300 per household. Leading lending institutions agree; HSH Associates and LendingTree.com place average costs of yearly maintenance and upkeep at 1% to 3% of your home’s initial price.

That means the owner of a $250,000 home should budget between $2,500 to $7,500 each year for upkeep and replacements. Have extra at the end of the year? Save it for more costly upkeep and replacement items down the road — you’ll probably need it then.

4. Learn something new (educate yourself on home finances)




Want a little education that goes a long way toward your financial health? Learning how to improve your insurance score can help you keep your home insurance premiums from getting out of hand. Here are a couple of easy lessons:

Letting credit card debt build up is a black mark on your credit history — and an indicator that you’re likely to file an insurance claim. The more claims, the higher risk you appear to be to insurance agencies, which lowers your insurance score. Low scores mean higher rates for home insurance.
Keep payments on loans up-to-date. Don’t miss payment deadlines; if you do, notify your lender that your payment is forthcoming. Delinquent payments signal insurers that you can’t manage your money — resulting in a lower insurance score.
Need some Home Owner 101? Any time is a good time to bone up on basic home maintenance skills.

5. Get organized (de-clutter)




No excuses — that clutter has got to go! Start by creating more storage space so you can stash stuff easily.

At wit’s end for new storage space? You’ve probably got storage solutions you didn’t know you had. Put up a high shelf between the walls of a narrow hallway, and tuck storage in out-of-the-way nooks, such as under-stairs spaces and between wall studs.

If your small home is pinched for space, don’t despair: There’s still room for storage. Shoe organizers ($20) do more than hold shoes — use them to store keys, notepads, and cell phones. At about $300 per drawer, have a cabinetmaker install drawers in the toe kicks of your kitchen cabinets for napkins, cookie sheets, and appliance manuals.

More: Resolution: Put Your House on a Diet

6. Volunteer (support your community)




In a world that often seems topsy-turvy, a little altruism helps restore balance. You can volunteer your time and energy to help others, and at the same time help promote safety and preserve the value of your neighborhood.

A neighborhood watch program fosters a sense of community and helps stop crime. Set up a meeting with neighbors to discuss concerns and priorities. Gather facts to present at the meeting: What kinds of crimes happen nearby? Are there patterns? Ask a local police representative to come to your first meeting to answer questions.
Start a community garden. Bring together neighbors for bonding, eating healthier, and saving on groceries. A 4-by-16-foot raised bed garden plot provides $200-$600 worth of food annually. As the organizer, you can expect to spend 20-30 per month for six months getting your community garden going.
7. Drink less (curb home water use)




Our houses are thirsty. The average household uses about 400 gallons of water each day, or almost $700 per year in water and sewer costs. Making a few simple changes, such as installing EPA-certified WaterSense products, could trim up to $200 from your annual water bill. Add to that energy savings from reduced costs to heat water, and your yearly savings could reach $300 or more per year.

Low-flow showerheads include technology that reduces the amount of flow yet keeps pressure up, resulting in shower streams that are powerful and satisfying. They cost from $10 to $150, and installation is an easy DIY job that takes only minutes.
Replacing your pre-1994, water-guzzling toilet with a low-flow toilet prevents $90 worth of water costs from being flushed away. HE (high-efficiency) toilets use compressed air and electric water pumps to flush with less than 1 gallon of water; older models required up to 8 gallons.
8. Spend more time with family (share home improvement projects)




Spending quality time with your family takes quality planning — but it’s worth the effort. Rally your family around these fun-to-do projects to make every minute count:

Plant a tree. Pile the clan into the family wagon and shop for a tree that’ll become a new member of your family. Have your kids name it and help care for it. You might have to dig the hole, but everyone can take turns adding mulch and watering it. A bonus: planted where its shade will protect your house from summer sun, a $50-$100 tree cuts your yearly energy bill by $100 to $250.
Make a home emergency preparedness kit. Make a scavenger hunt of gathering up all the necessary supplies, such as flashlights, toilet paper, and duct tape, and assemble your kit during an evening together. It’s a good, non-scary way to teach small children about what to do if there’s an emergency.
9. Get fit (exercise your DIY skills)




Looking to trim a little of the old spare tire? Routine home maintenance and repair is a double win — you’ll burn calories while keeping your house in tip-top shape. Try these essential fix-ups and improvements from CalorieLab:

Building a fence: 340 calories per hour
Caulking windows and doors: 280 calories per hour
Cleaning rain gutters: 272 calories per hour
Installing ceramic tile: 238 calories per hour
Interior painting: 136 calories per hour
Chopping firewood: 340 calories per hour
Mowing the lawn: 306 calories per hour
Planting shrubs: 238 calories per hour
General gardening: 204 calories per hour
10. Be less stressed (use maintenance-free materials)




If you want less to worry about, install low-maintenance materials and products designed for durability and long, trouble-free service.

Fiber-cement siding lasts for 50 years or more. It’s weather-proof, and resists dents, fire, insects, and rot. It’s exceptionally stable, even with changes in humidity, so that paint jobs last longer than on wood and wood-fiber siding products.
LED bulbs last a phenomenal 20,000 to 50,000 hours between changes, or about 18 to 46 years when used for 3 hours each day. Although the initial cost is high (about $40 per bulb), LED bulbs pay for themselves in energy savings in about 10 years.
Classic ceramic tile comes in many colors and textures, but at its heart it’s incredibly tough, stain-resistant, and impervious to moisture. You can count on ceramic tile’s good looks to last for decades on floors and walls without needing repair or replacement.

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Saving Money with Salvaged Building Materials

Salvaged building materials allow you to improve your home inexpensively—but might require an extra investment of time and energy.

Recycled building materials are getting easier to find

According to the Building Materials Reuse Association, recycling is becoming more common in the construction industry. That means reclaimed building elements like doors, windows, plumbing fixtures, and wood flooring are increasingly easy to find.

Habitat for Humanity’s nationwide chain of ReStores sells recycled items, and many cities have architectural salvage yards. Online, neighbors advertise unwanted items on community bulletin boards, such as Craigslist, and national directories of recycled materials, such as EcoBusinessLinks, can be great sources for hard-to-find elements. And the price is right: reused pieces can be 50% to 75% cheaper than their new counterparts.

Searching for salvaged materials

Sounds terrific, right? But it’s not that simple. Using recycled building elements is like shopping at a thrift store: You can’t be certain you’ll find exactly what you’re looking for. Anyone interested in a good deal to spruce up their home—an ornate wood mantelpiece or a set of Victorian doors, for example—has to be willing to compromise on some of the details and commit some time to the endeavor.

If you live in or near a city and have access to a salvage yard, you’re in luck. Many receive multiple new shipments daily, and some, such as Seattle’s Second Use, post their offerings online.

But in most cases, there’s no substitute for regularly showing up in person to check out what’s available. If you’ve got something particular in mind, plan on spending a few afternoons at the salvage yard trying to track down what you’re looking for. The same is true if you’re exploring online: locating the right piece may take longer than you’d expected.

Before beginning your search, make sure you’ve got measurements in hand. It’s useful if you can allow for some wiggle room: unlike big home improvement stores, the items on sale are usually one-of-a-kind pieces. So while a recent truckload might have dropped off a beautiful old mantelpiece, the size might not be an exact fit; know in advance if you can manage with a slightly larger or smaller size.

Dealing with lead paint

Some old items need to be treated with serious care. Ruthie Mundell of Community Forklift, a salvage yard in Edmonston, Md., says that the staff tries to flag items that appear to be lead paint hazards–that is, anything painted prior to 1978, when the Consumer Product Safety Commission (CPSC) banned lead in paints.

Nevertheless, buyers of old painted items need to be aware of the potential hazards. Older paint doesn’t mean the pieces are unusable, but the paint must be thoroughly removed or sealed—never scraped or sanded. The CPSC offers guidelines for treating lead paint in the household.

Finding savings

Some salvaged pieces are better deals than others. The best is often flooring: careful shoppers can find used floor boards from quality old wood that’s difficult to come by these days. Sat Jiwan Ikle-Khalsa, a green living consultant in Takoma Park, Md., scoured a local salvage yard and found maple, white oak, and rare heart pine flooring at a low price for his renovated 1940s-era home. He estimates he saved more than $2,000 over the cost of new flooring.

Other useful finds are doors, particularly those already on a frame, and plumbing elements. Antique light fixtures can be a great bargain, but check whether they’ve been recently rewired before you buy; otherwise, you may have to do it yourself, or pay an electrician for the service.

Windows are common, but many older widows are single-pane and not energy efficient. These are better used for interior walls to add light and air flow between rooms. Stained glass panels are relatively common at salvage yards and cost from $50 to $500.

Sample price comparisons for various salvaged materials

Salvaged oak flooring: $1 to $3 per sq. ft.
New oak flooring: $4 to $10 per sq. ft.
Average savings for 12×16-foot room: $960

Salvaged interior solid panel door (basic): $20 to $50
New interior panel door: $100 to $200
Average savings: $115

Secondhand pedestal sink: $20 to $250
New pedestal sink: $100 to $800
Average savings: $315

Recycled crown molding: $.30 to $1 per lineal ft.
New crown molding: $.90 to $3 per lineal ft.
Average savings for 12×16-foot room: $72.80

Don’t forget to add in transportation costs. Not all salvage yards deliver, and those that do aren’t necessarily cheap: the cost of getting materials across town could be $100 or more. It might make more sense to borrow or rent a truck on your own.

The value of salvage building components

Salvaged elements may not add to a home’s appraised value, according to Chicago appraiser Tim McCarthy, president of T.J. McCarthy and Associates. An appraiser probably won’t include a home’s reclaimed heart pine beams in the kitchen or the bathroom’s antique plumbing fixtures when calculating the house’s value.

But that doesn’t mean the seller can’t use those amenities as selling points and boost the asking price accordingly. “It’s very market-specific,” McCarthy says. In higher-end neighborhoods, homebuyers may be willing to pay more for authentic elements that give a house personality.

McCarthy recommends talking with a local realtor before making changes; they’ll have a good sense of the housing market’s current demands and should be able to tell you whether a vintage element will boost your home’s market value.

Working with salvage

To effectively integrate salvaged items, Arne Mortensen, owner of Mortensen Design/Build in Seattle, recommends choosing a contractor who has a particular interest and experience in working with recycled building materials. Salvage yard staffs may be able to recommend someone; other sources for ‘green’ contractors include online sites like Angie’s List.

Nonetheless, the time-consuming legwork of finding good pieces generally falls to the homeowner. To make the process easier, spend time thinking about and researching online what you want before you begin to shop. And be prepared to be persistent; happy hunting takes patience.

Inspector General bashes TARP Program

By Steve Beede,

Through the 2009 Troubled Asset Relief Program (”TARP”), the American taxpayers invested hundreds of billions of dollars in hundreds of financial institutions, the auto industry, and certain markets for asset-backed securities. To oversee this, Congress established a Special Inspector General as a watchdog to protect those investments and report on their performance. In practice, this has meant prosecuting those financial institutions that commit crimes involving TARP funds and to make recommendations to the Department of Treasury.

For real estate owners, the TARP monies fund the HAMP loan modification program, HAFA short sale/Deed in Lieu program, and the HARP refinance Progam, plus many other programs. On October 27, 2011, the Special Investigator released a 306 page Quarterly Report to Congress which unveiled several important facts affecting the real estate industry:

1) Only $2.5 billion - or 5.4% 0 of the $45.6 billion in TARP funds earmarked for housing support programs has been spent. Calling the lender participation in the HAMP program “disappointing”, the Report indicates that as many as 600,000 eligible homeowners will be left out. For those who have been struggling with getting lenders to respond to their HAMP applications, this Report suggests that the problem was in part a lack of willingness of the government to push the lenders to act. The Inspector General made four recommendations to Treasury to improve servicer performance which could keep more people in their homes. Treasury has refused to act on any of the recommendations. As stated in the Report, “Treasury is giving up a chance at meaningful change and sadly, it is struggling homeowners who have the most to lose”.

2) The lenders who received the TARP bailout money are required to particpate in these housing programs. Given the huge number of homeowner complaints the Investigator has received, the Special Investigator urged Treasury to set benchmarks for servicer performance and to impose fines and withhold payments to violators. However, Treasury is leaving it up to the lenders to voluntarily comply and refuses to compel the lenders to do so. As the Report points out, “Compliance with program guidelines is not, and must not, be voluntary”.

3) As of September 1, 2011, the 20 largest loan servicers (including BofA, Chase, Wells Fargo, and Ocwen) are required to designate a Single Point of Contact. The single point of contact, referred to as the “relationship manager,” will have the sole primary responsibility for communicating with the borrower (or the borrower’s authorized advisor) about options to avoid foreclosure, his/her status in the process, coordination of receipt of documents, and coordination with other servicer personnel to promote compliance with timelines and requirements. This single relationship manager will be responsible for managing the borrower relationship throughout the entire delinquency or imminent default resolution process, and if the loan is subsequently referred to foreclosure, must be available to respond to borrower inquiries regarding the status of the foreclosure. The relationship manager’s proactive responsibilities end when a homeowner completes a loan modification or when all loss mitigation actions have been exhausted.

4) Many homeowners are denied a HAMP modification because they fail the “Net Present Value” (NPV) test. The NPV test is used to enable investors to determine whether they would recover a better value from modifying the loan or from foreclosing. This has caused great confusion and questioning as to what data was used for the test. Now homeowners can run this test themselves online at www.CheckMyNVP.com. This can be used to check data after an NVP denial or even before applying for HAMP.

There is a lot more information within the pages of the Report which I’ll be sharing in subsequent postings. In the meantime, if you have been wrongly denied a loan modification or other relief allowed under the TARP program, contact your Representative or Senator and demand that they take action to compel lenders to comply with TARP requirements. Otherwise, at least 600,000 more homeowners are likely to lose their homes.

If you are a California property owner, consider our $200 Attorney Consult program that will help you determine all of your options and choose the best strategy to enable you to move forward as intact as possible. To learn more, contact me at sjbeede@bpelaw.com or call us at 916 966-2260.

The information presented in this Article is not to be taken as legal advice. Every persons situation is different. If you are upside-down on your loan(s), especially if you’re facing a lender lawsuit, get competent legal advice in your State immediately so that you can determine your best options.

WHAT’S ALL THE HYPE ABOUT HARP ?

We have had questions on what HARP is (since the enhancements were just announced), so here you go:

On Monday, October 24th, 2011, The Federal Housing Finance Agency (FHFA) announced their enhancements to the Home Affordable Refinance Program (HARP). The HARP program came about during the credit crisis to help borrowers refinance who may be “under water” on their homes.

What's Really New?

First, it's important to realize that the president's proposal is not a new program, but a revision to the current Home Affordable Refinance Program (HARP). However there are some big changes that you can let people know if they ask you.

Refinance…No Matter How Underwater

Now homeowners can refinance no matter how underwater they are! Before homeowners could only refinance if they were 25% or less underwater, and even then many banks only let people who were 5% or less underwater refinance.

No Appraisal Necessary?

With the program's revision, it's possible that an appraisal won't have to be performed. That's great news because it can help people save time and money. But this is only the case if Fannie Mae or Freddie Mac can electronically estimate the value through their valuation models.

But Keep in Mind…

These updates to HARP apply only to people whose mortgage is currently secured by Fannie Mae or Freddie Mac...and whose loan was securitized by Fannie Mae or Freddie Mac prior to May 31, 2009. So the chances are that people who have refinanced since May 2009 will not qualify to refinance under the HARP revision.

What's Next?

As of now, the revisions to HARP have been proposed by President Obama and the Federal Housing Finance Agency (FHFA), which regulates Fannie Mae and Freddie Mac. This directive has been given to Fannie Mae and Freddie Mac, and they now have until November 15, 2011 to give guidance and details regarding how these changes will be run.

Check out these websites to see if a loan is owned by Fannie or Freddie http://www.fanniemae.com/loanlookup/ or http://www.freddiemac.com/corporate/.



Link to the FHFA press release:

http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf .

GNN Supplemental 10/6/11: REALTORS Expect 1% Rise in Calif. Home Sales

GNN Supplemental 10/6/11: REALTORS Expect 1% Rise in Calif. Home Sales

Rebounding from a Bankruptcy

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Why Your Green Home Improvements Aren't Paying Off

If you made green home improvements over the last few years with high hopes for lower energy bills and a quick recoup of your initial investment, you got an awakening: Your monthly bottom line likely held steady—or, worse, went up.

Before you shun green, recalibrate your thinking from expecting fat returns to understanding the new bottom line: Smart retrofits help you hold your ground against rising energy costs.

Why have my green home improvements fallen flat?
Energy prices as a whole have gone up over the last decade, especially in certain regions of the country.

Although natural gas prices have dipped a bit since 2008 and electricity prices have stayed level, the trend line goes up for both from 2011 forward.

The U.S. Energy Information Administration estimates an average annual increase in residential energy costs of 2.3% through 2035.

So…if energy cost projections hold, and assuming an average annual American energy bill of $2,200, you’ll pay 2.3% more each year (that’s $50 the first year) if you do nothing to reduce your consumption. Your bill will inch closer to $4,000 by the year 2035. Ouch.

3 energy saving retrofits that pay off
If the only reason you’re making retrofits is to manage energy costs, look for projects with maximum bang for the buck.

Rule of thumb: Try to beat the 2.3% annual average with green home improvements that reduce your energy consumption by 5% or more but have a modest initial investment. And don’t forget to ask whether your utility or state government offers rebates or tax credits for these improvements.

1. Seal and insulate ductwork that runs through unheated spaces—the attic, a crawl space, a garage. It’s not glamorous, but it can improve the efficiency of your heating system by 20%—a 5% bill reduction overall. If you hire an HVAC pro for this job, you’ll invest a few hundred dollars for labor and materials.

2. Buy a programmable thermostat. Is it possible you haven’t done this yet? For just $25 to $250, the you can save, on average, around 8% on energy bills simply by programming it properly.

3. Add attic insulation and seal air leaks. One of the best energy-saving improvements out there, because insulating and sealing your home can reduce your energy bills by 10%. Upgrading your attic insulation to the R-value recommended for your region costs anywhere from $.25 to $1 per square foot, including materials and labor; it’s less if you do it yourself.

But you won’t get the maximum savings if you don’t seal air leaks, so plan this as a combo job. Caulking and weather-stripping typically costs from $50 to $350, depending on the size of your house.

Karin Beuerlein in more than a decade of freelancing, has covered home improvement and green living topics extensively for HGTV.com, FineLiving.com, and FrontDoor.com. She and her husband started married life by remodeling the house they were living in. They still have both the marriage and the house, no small feat.

Welcome to the most current Housing Trends eNewsletter.

JULY - 2011 Newsletter Housing Trends eNewsletter

Welcome to the most current Housing Trends eNewsletter. This eNewsletter is specially designed for you, with national and local housing information that you may find useful whether you’re in the market for a home, thinking about selling your home, or just interested in homeowner issues in general.


The Housing Trends eNewsletter contains the latest information from the National Association of REALTORS®, the U.S. Census Bureau and Realtor.org reports, videos, key market indicators and real estate sales statistics, a video message by a nationally recognized economist, maps, mortgage rates and calculators, consumer articles, plus local neighborhood information and more.

Please click here to view the JULY - 2011 Newsletter Housing Trends eNewsletter.



If you are interested in determining the value of your home, click the Home Evaluator link for a free evaluation report.

The Carbon Monoxide Poisoning Prevention Act

As of July 1, 2011, all single family homes with a attached garage or a fossil fuel source will be required to install carbon monoxide alarms.
See attachment for frequently asked questions on the devices.

Roseville & Rocklin Ca Homes For Sale Including Nearby Cities

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Former Model Home

Solving Your Mortgage Crisis Just Got Easier

5 Steps for a Successful Short Sale
Lenders and the federal government, prompted by the sheer volume of loan modification and short sale requests, have overhauled their systems and programs, making the foreclosure avoidance process much easier than in the past.
If you are considering short selling your home to avoid the financial and emotional fallout of foreclosure, you should be aware of the five steps you should take to increase your chances of a successful transaction.

First, do you qualify?
You must:
1. Have a verifiable hardship, like unemployment, medical bills, or relocation
2. Must have a monthly income shortfall
3. Be insolvent (you have no cash or assets that can be sold to pay down the mortgage), or headed towards insolvency

If you meet these qualifications, follow these five steps to a successful short sale:
1. Contact me so we can identify your servicer, fill out a short sale packet for the lender, and assemble all the required information needed to list your home for sale
2. Gather financial information (i.e., bank statements, pay stubs) from at least the last three months
3. Keep your house in showcase condition for showings, and make as many repairs as necessary and that you can afford
4. Expect the lender, junior lien holders, and private insurance companies to request more paperwork, and try to gather requested information quickly to ensure transaction efficiency
5. Set realistic expectations and work with me, the lender, and the buyer to the satisfaction and benefit of all parties involved

For more information about how the short sale process works, or about any other foreclosure alternatives you may qualify for, call me today. I can help you alleviate the burden that the threat of foreclosure brings, and we can develop a strategy to help you breathe a little easier.

IMPORTANT GOVERNMENT DISCLOSURE: You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will not have to pay us for our services. The above brokerage is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.

Nearly Half Of All Real Estate Investors Had An Annual Income Of Less Than $75,000

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6 tips for a higher credit score

By Jack Guttentag
Inman News™

Your credit score, calculated from information in your credit report, is a measure of how good a risk you are to a credit grantor. A large proportion of borrowers who can’t qualify for a mortgage would qualify if their credit score was higher.

The theme of this set of articles, that many borrowers can repair their own qualification credentials, applies as much or more to credit score than to down payment or income.
Any lender to whom you apply will obtain your score and provide it to you. As noted below, however, inquiries by lenders may have a negative effect on your score, whereas inquiries by you do not. Hence, it is a good idea to find your score before you apply, so you can make an informed decision on whether you want to apply at that time.

You can obtain your score from many firms in the business, including www.equifax.com, www.transunion.com, www.experian.com and www.myfico.com.
At some point, I expect to have a program on my website that indicates how particular applicants can improve their credit score using data from their credit reports. The suggestions below, however, are necessarily general in nature.

Pay on time: The core rule is to meet your debt obligations on-time, every time. If you have had payment lapses in the past but your habits have improved, time is on your side. The credit scoring rules weight recent experience more heavily than older experience.

Correct mistakes in your credit report: Your score should not be reduced by reporting mistakes, which are all too common. I have an article on my website on How to Correct Mistakes in Your Credit Report.

Detach yourself from the “wrong vendors”: Because finance companies lend to relatively poor risks, the credit score of any borrower owing money to a finance company is lower than it would be if the creditor was a bank. By the same logic, borrowers who have credit cards of department stores are penalized, relative to what their score would be if they had cards issued by banks.

Reduce balances on revolving credits to less than 50 percent of the maximums: A high utilization ratio is read as a sign of weakness and potential trouble, reducing your score. Credit cards are the most important type of revolving credits, but HELOCs belong in this category as well. A HELOC used to purchase a house or to refinance a mortgage, where the initial utilization ratio is 100 percent, will jolt your credit score.

Note that utilization ratios can be reduced by getting the maximums raised, as well as by paying down the balances. In many cases, credit card issuers are willing to raise the maximum at the borrower’s request.

Minimize the number of “hard inquiries”: Hard inquiries are requests to a credit agency for your credit score from a credit grantor, insurance company or other entity to which you have applied and to which you have entrusted your Social Security number. “Soft inquiries” made by you or by firms looking to sell you something for which you have not applied don’t require your permission and don’t impact your credit score.

The credit-scoring systems may or may not penalize borrowers who shop multiple credit grantors within a short period — unfortunately, you can’t be sure.

The credit agencies tell you that multiple inquiries within a 15-day period count only as a single inquiry, but in fact inquiries for mortgage, auto and student loans would probably count as three inquiries, and even three mortgage inquiries could count as three inquiries, depending on how the credit grantors are identified to the credit scorer. I will have an article abut this in the near future.

The bottom line is that in applying for credit, find your own score that you can deliver to the vendors you are shopping who need the score to set the price. The vendor you select will verify the score through his own inquiry, but it will be only a single inquiry.

Pay off collection accounts: This may actually reduce your score in the short-run by converting the account from an older entry with a low weight to a new one with a higher weight. However, you can’t get a loan with a collection account on your record, so you must pay it off — the sooner the better.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania.

LAWSUITS TO STOP FORECLOSURE FIND LITTLE SUCCESS

By Steve Beede

Upside-down borrowers, frustrated with a lack of lender willingness to modify their loans and desperate to keep their homes, often turn to lawyers who promise to stop foreclosures and force lenders to modify loans. But all too often what appears to be a meritorious Complaint gets quickly thrown out by the Courts and the borrower ends up still losing their home… plus thousands of dollars in legal fees.

Significantly, in these cases the borrower typically requests and is granted a Temporary Restraining Order (TRO) to stop the pending foreclosure sale. It appears as a quick victory. But a TRO is just a short-term stoppage for approx. two weeks at which point the borrower must convince the court to grant a Preliminary Injunction stopping foreclosure for the entire time it takes to get the case to trial which could be two years or more. Here is where the lenders are winning the war.

The following analyzes several of the legal arguments raised against the lenders and what has happened in the Courts. The cases cited all originated in California state courts but were decided in the Federal courts. The decisions appear consistent with what is happening in other states.

1. I MADE ALL THE TRIAL MODIFICATION PAYMENTS AND GAVE THEM ALL THE DOCUMENTS THEY ASKED FOR. THE COURT SHOULD COMPEL THEM TO MODIFY MY LOAN – This argument is often raised as part of a lawsuit to stop a foreclosure from occurring. The underlying arguments are: 1) the lender did not handle my HAMP modification application properly (Negligence claim); or 2) I met the lender’s or HAMP’s loan mod requirements but the lender denied the modification anyway (Beach of Contract claim) ; or 3) the lender never intended to give me the modification, they just wanted to get my Trial Mod payments (Fraud claim). Most loan modifications on homes are being done under the government’s Home Affordable Modification Program (HAMP). Where a borrower doesn’t fit HAMP’s guidelines, many lenders have their own “proprietary” modification programs. The legal question is whether a borrower can force the lender to modify if they fit within the guidelines. The courts routinely are saying: “No”. In January, 2011, in the case of Phipps v Wells Fargo Bank, the Federal Court ruled that a Borrower has no right to sue a lender to force a HAMP modification. Even before this, in the 2009 case of Pantoja v Countrywide Home Loans, the Federal Court ruled that California laws do not impose a duty to modify a mortgagor’s loan.

2. THE LENDER PROMISED ME THEY WOULD EXTEND THE FORECLOSURE SO I COULD COMPLETE MY MODIFICATION BUT THEY THEN FORECLOSED ANYWAY. THE COURT SHOULD UNWIND THE SALE AND GET MY HOME BACK – Again the courts are routinely saying: “No”. In the 2010 case of Mehta v Wells Fargo Bank (Fed Ct decison 3/29/2011), the Court ruled: a gratuitous oral promise to postpone a sale is ordinarily unenforceable. Typically the loan agreements require that any modification be in writing and signed by all. Alternatively, the borrower must have proviuded the lender with some “consideration” to which the lender is not otherwise entitled. Merely submitting modification application documents is not consideration nor is it enough to have continued making Trial Mod payments. Without a written agreement with the lender extending the sale, the foreclosure will not be rescinded.

3. IF THE LENDER CANNOT PRODUCE THE ORIGINAL PROMISSORY NOTE, THE COURT SHOULD BAR THEM FROM FORECLOSING – This “standing” argument has received extensive publicity natonwide, especially concerning the rights of MERS to foreclose. Although early rulings tended to vary, Courts are more generally ruling in favor of the foreclosing lenders. As stated in Pantoja v Countrywide Home Loans, under California law there is no requirement to produce the original note prior to completing a non-judicial foreclosure (Trustee’s Sale). A different result could possibly arise in a Judicial Foreclosure although that process is extremely rare in a home foreclosure. Similarly, the courts agree that MERS has a right to foreclose when MERS is named in the Deed of Trust (which is most often the case).

4. I WOULD HAVE PAID BUT THE FORECLOSURE NOTICE WAS DEFECTIVE – California has a “Tender Rule” which requires the borrower to allege and to prove not that they “concievably” could have paid, but it was “plausible” that they would have paid. Simply put, actual proof of real capacity to pay is needed. Court rulings are consistent: If you couldn’t pay anyway, a defective notice was not the cause of the foreclosure.

The bottom-line in all of this is to be wary in believing that just because the lender may have mishandled your loan modification, a court will help you out. At a basic level, a loan is a contract between the lender and borrower in which the lender gives the borrower money in exchange for the borrower promising to repay the loan on the terms in the written agreement. Courts will generally not interfere in the contractual agreements of parties unless one of the parties breaches the agreements or does some other illegal action.

Obviously the above analysis just touches the surface of where the law is today. Hundreds and perhaps thousands of cases are moving through the courts as borrowers seek to keep their homes. In some cases, different courts will reach different rulings from those stated in this Article. However, it does appear that these decisions are likely to be widely followed. In fact, just yesterday a Sacramento Superior Court judge denied a Preliminary Injunction after having granted a TRO and allowed the foreclosure to continue. The judge’s legal reasoning cited all of the cases identified above and more.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are upside-down on your loan(s), especially if you’re facing a lender lawsuit, or if you are considering suing your lender, get competent legal advice in your State immediately so that you can determine your best options.

If you have specific questions about your upside down loans or real estate, feel free to contact me at kbrazil@earthlink.net. Steve offers a $200 flat fee attorney consultation to review your situation and help you evaluate and choose the best opportunities. This can be done in person or by phone. If interested, please call me at 916-791-9073 and I can give you Steve’s contact information.

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