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Homeownership

Americans deserves more than an apology for a history of illegal foreclosures

(HOMEOWNERSHIP) Taking a look at how the foreclosure fraud that took so many homes away, and why illegal foreclosures deserve more than a flippant blanket apology.

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I’m not sure what the American Dream is anymore. A white-picket fence? A chicken in every pot? For a lot of individuals, the American Dream is owning a home. My own personal American Dream is that the government is working for and protecting me and won’t jerk me around.

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Those ideals apparently tie into owning a home because for thousands of home owners, the “dream” turned into a “nightmare” as a result of mortgage and foreclosure fraud.

Who owns what

David Dayer lays it all out in his latest book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud.

“A house with borrowed money has always required two main contracts. The first is the loan itself, the borrower’s promise to repay the lender. The second is the mortgage, which gives the lender a lien on a house if the borrower defaults. In the old days, the lender would keep both. But in modern markets, the lender typically passes off both the loan and the mortgage to another bank, and then that bank might pass them on to another.”

This then is the process of what is referred to as “Securitization.”

The bottom line, points out writer Frank Partnoy in a NYTimes Literary Review, is that “both loans and mortgages require pen and ink: a loan requires an endorsement; a mortgage, an assignment.”

Without a signature from a human being, neither can legally be transferred.

That signature requirement might seem outdated today says Dayer, but in the aftermath of the financial crisis of xxxx, “Many bankers were dismissive of the requirement, foreclosing on millions of borrowers without regard for process.”

The thing is, if there isn’t clear proof of each transfer, it becomes impossible to tell who actually holds the property, and therefore impossible to tell who has the legal right to foreclose.

Who owns what (part II)

Banks took advantage of the fact that nobody knew who owned what. And as a result more than 9.3 million American families gave up their home between 2006 and 2014, either in a foreclosure or a short sale or some other transaction. That translates to about 14 million people.

That’s 14 million people who, like myself and many others, feel the government should be protecting their interests. In this particular case it didn’t happen.

David Dayen’s book makes for an absorbing read and certainly can’t be taken as a template for each case of foreclosure. But the foreclosure process itself is an eye opener and maybe Dayen’s account, on some level, has provided the stimulus for more current legislation, which seems to have the home owner’s best interests at stake.

#Foreclosure

Nearly three decades living and working all over the world as a radio and television broadcast journalist in the United States Air Force, Staff Writer, Gary Picariello is now retired from the military and is focused on his writing career.

Homeownership

How buyers are competing in a tight housing market

(HOMEOWNERSHIP) It’s a seller’s market with housing supply at an all-time low. Here’s what buyers are doing to increase their chances of buying a home.

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family in their living room with moving boxes during the competitive housing market

Home inventory is at an all-time low in most places around the country. Most people believe that the COVID-19 pandemic is responsible. Families are staying put in their homes, rather than looking for a new place to live. Sellers and realtors are winning in this highly competitive market, making us wonder how buyers are faring.

Cash is king

According to the NAR, cash sales are up by an average of 21%. Buyers are hoping that cash makes their offer more attractive. Closing without a loan has a lot of benefits to the seller. The sale is more likely to close, as it isn’t dependent on a loan. Plus, there are fewer costs involved in the closing. Since 2013, cash sales haven’t been trending upward, so this is an interesting turn for sellers. Buyers who make cash offers reduce the risk of getting rejected by the seller.

Buyers making larger down payments

Sellers also benefit when buyers make a 20% down payment or more. A higher down payment increases the chance of getting a loan. According to the NAR, almost 50% of buyers are making a down payment of at least 20%, which is up from 40% of buyers in 2011. Buyers avoid mortgage insurance premiums, which makes it a win-win for everyone.

Buyers aren’t even offering or negotiating

The third way buyers are coping in this market is to back off and not even make an offer when they know a home already has competition. Why get your hopes up, only to have them dashed when you can’t negotiate?

Will supply return?

The good news is that the housing supply outlook is on the increase. As vaccinations roll out and people feel safer to show their home, more homes should come on the market. Housing permits are up, too. This should help even out the market and give buyers a better chance to find a home.

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Homeownership

Bank of America helps income-restricted homebuyers with $5B program

(HOMEOWNERSHIP) Bank of America is offering assistance to low to moderate-income homebuyers by reducing their mortgage and upfront home-buying costs.

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Front of Bank of America location

The Bank of America announced that it is expanding its affordable homeownership initiative to help low to moderate-income homebuyers find their dream home. The Bank of America Community Homeownership Commitment® started in 2019 with $5 billion.

According to the press release, the program has already helped almost 21,000 individuals and families purchase homes by helping with down payments and closing costs through grants. When combined with other programs designed to help first-time homebuyers, the upfront costs of owning a home are significantly reduced. This information is beneficial for Realtors working with first-time or low to moderate-income homebuyers and can help provide more options for this clientele.

Bank of America’s grant programs

Bank of America features two grant programs to help homebuyers. Grants do not require repayment, giving homebuyers with lower incomes a foot in the door.

Down Payment grants – eligible homebuyers can receive 3% of the home’s purchase price up to $10,000 (whichever is less) toward the purchase of their home.
America’s Home Grant® program – credit towards closing costs of up to $7500 or to buy down the interest rate.

According to Bank of America, these two grant programs can be used together. The average homebuyer receives about $14,000 toward their home purchase, but some can receive up to $17,500 towards their dream home.

Homeownership is the American dream

Maya Angelou said, “The ache for home lives in all of us, the safe place where we can go as we are and not be questioned.” Homeownership doesn’t just benefit families, it benefits communities. Bank of America isn’t the first financial institution to offer programs to help homebuyers with down payments and closing costs.

The housing market might be competitive right now, but homebuyers can still find houses where they can set down roots. It pays to look around for options to help low- to moderate-income shoppers find resources that assist them in reducing their mortgage and homebuying costs.

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Homeownership

Supply chain shortages Realtors need to know about to help their clientele

(HOMEOWNERSHIP) The supply chain shortage hasn’t just affected cars, computer chips, and medical equipment – what home goods are scarce and for how long?

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Down one aisle of a large warehouse.

Most experts are predicting that supply chain shortages won’t end anytime soon. What started with a rush on toilet paper at the beginning of the pandemic has become a supply chain nightmare across multiple industries, including homes themselves, new cars, computer chips, and medical equipment. While there are many reasons the supply chain has been disrupted, the fact remains that it has been pushed to the brink and homeowners may be impacted as they purchase a house or invest in remodeling to sell their home. This is also important information for Realtors to have a grasp on in order to better help their clientele during the home buying process. Without an end in sight, here are some goods that might be scarce next year:

Paint

CNN Business reported in September that the demand for paint is strong, but the industry has seen raw material cost increases. Between Hurricane Ida and the winter cold snap in Texas earlier this year, suppliers have not recovered to their pre-storm operating levels. One solution is to buy leftover paint or use wallpaper to update a room.

Appliances

According to Consumer Reports, the wait for some appliances is 4-8 weeks, with luxury appliances taking up to 4 months. Homeowners may need to compromise on the model they really want or buy a used model. If repairs can make the appliance run for a few more months, order a new one and hope for the best.

Furniture

Large ticket items have been impacted by shipping delays from Asia – Furniture is on that list. Homeowners may want to order furniture now for redesigning in 2022. Another alternative? Buy previously owned pieces or talk to local artisans who reupholster and repair furniture.

Bottled Water

It’s not the water that’s in shortage, it’s the plastic products used to bottle the water that is causing the supply chain to be disrupted. This could be a good thing for the environment. Suggest homeowners turn to water filtration systems, from an in-home installation to a pitcher you put in the fridge.

Power Tools

The freight industry is experiencing multiple issues, which is adding to the supply chain problems in the US. Power tools may be in short supply over the next few months. Fortunately, there’s an easy solution. Borrow from a neighbor, just make sure to return it quickly. Rent tools from your local big-box hardware store.

Don’t let the supply chain disruption put home projects on hold. Revamp your ideas. Compromise on materials, maybe a different pattern or color than planned. Or find creative solutions to keep moving forward.

Large cargo ship with many multi-colored bins representing the supply chain.

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