Overdue Bailout for Unemployed Homeowners

The administration unveiled major expansions to its foreclosure prevention plan Friday – expansions designed to help underwater and unemployed homeowners and push it closer to meeting President Obama’s goal of helping 3 to 4 million borrowers save their homes.
Treasury Assistant Secretary Herbert M. Allison pointed out “nature of this housing crisis has changed over the past year,” from a subprime crisis to problems stemming from unemployment and negative equity. Allison says these new program adjustments will give mortgage servicers and originators the flexibility they need to assist “responsible homeowners who have been affected by the economic crisis through no fault of their own.” Faith Schwartz, executive director of the HOPE NOW industry alliance, called the announcement “an important step forward for homeowners, who will now have more options to retain homeownership.” According to ABC News, to qualify for this program, out-of-work homeowners must be eligible for HAMP and be receiving unemployment benefits. The monthly payment would be no more than 30 percent of the homeowner’s unemployment benefits.
To expand the use of principal write-downs as part of the Home Affordable Modification Program (HAMP), participating servicers will be required to consider an “Alternative Modification Waterfall” in their evaluations, which includes writing down some principal for loans that are over 115 percent of the current value of the property (LTV). This alternative modification approach will include incentive payments for each dollar of principal write-down by servicers and investors.

Bailing Out Main Street. What's Up With B of A?

Bank of America is introducing a program to offer homeowners who owe significantly more than their homes are worth the opportunity to have their loan balances reduced. The program, which starts in May, would potentially help about 45,000 homeowners nationwide. In launching the effort, Bank of America is jumping into the debate about how to address millions of homeowners whose mortgages exceed the value of their homes and who have complicated government efforts to reduce foreclosures. The B of A plan is limited in scope. Borrowers must have missed at least two mortgage payments and be significantly underwater to qualify, owing 20 to 30 percent more than their homes are worth. It is also limited to borrowers with certain types of risky loans, including subprime mortgages or other loans with a two-year adjustable rate.
Bank of America expects to forgive about $3 billion in principal on loans as part of the program. The effort expands a settlement agreement that the bank made in 2008 with several states to modify thousands of mortgages. So what happens now? Homeowners who up till now has managed to make all their payments in time, learn that they don't qualify precisely BECAUSE they made all their payments on time. Wonder how long will that $3B goal will last...

The Big Bailout off Main St.

Our Century 21 Office is just up Main Street from the worst of March Madness in Little Falls. Down Main, at the lowest level in the Signac section, is where hundreds of residents have been forced out for most of the past week. Over the years a tight community has developed among flood prone residents that has resulted in an increasingly active online forum. A couple of posts say a lot about how they are coping:

I am also hoping it misses the 1st floor because that is a whole lot more damage to deal with. I think in 1984 it just missed by a few inches. It also depends where you are on the street, every house is different. Some houses sit in dips along the street. Some of my neighbors only a couple of houses away are a lot higher than me. Unfortunately, it's very hard to say how high it will go in each house. Good Luck!! (Monday 11:49AM)
Three times in 5 years is just ridiculous!!!

Basic clean-up steps involved.... #8 03/15/10 12:41 PM

This is a very basic list and clean-up can be very involved, but just so you have an understanding of what the basics are:
1. When flood levels drop low enough the town will turn on the pumps again. Once the pumps are turned on the water drops rapidly and you can usually go back to the house within hours.
2. Once home, take lots of pictures of the damage. Call your flood insurance right away and notify them that you are going to start removing materials. They should not have any objections and will ask you to take pictures.
3. Next start ripping out 4' high of drywall, insulation and carpeting. The insurance company usually covers materials up to 4' high. If the water level went beyond that speak to your insurance. While you are doing this, ask someone to go out and get plenty of bleach. The Red Cross usually comes around with some, but you are going to use a lot. Also, if you don't have a dehumidifier, go out and get one now.
4. If you have a powerwasher, use it to wash the crawls space, studs, etc. I know it seems crazy to be spraying water when you just got rid of it, but since everything is already soaked you might as well get it cleaned right. The water is sometimes muddy and you don't want that stuff sticking around. This is also a good time to start making calls to your plumber and HVAC to have your furnace fixed or replaced.
5. Mix bleach and water in a big spray can (the big pump kind), ventilate the area really well and spray everything down. I usually do this 3 times over a two day period.
6. Next you want to start drying everything out with dehumidifiers and fans.
7. If the water made it to the air ducts you are also going to want to call someone in to clean them out.
Hope this helps a bit. To answer you question, you usually can move in right after your utilities are back up and running. March is too cold to be living with now heat and hot water.

House Logic

Houselogic.com is one of the newest of the dozens of homeowner oriented web sites, yet it is one of the few that requires no registration or password to access nearly all of its resources. It also covers perhaps the widest range of subject matter. Whether you are a homeowner or an aspiring homeowner, this site can help resolve any problem that comes to mind -- from financing and taxes to maintenance, repairs, and improvements.
Sponsored by our own National Association of Realtors, it's stated mission is to "help you become the best, most responsible homeowner you aspire to be, we want to provide you with free information and tools you can use to make smart and timely decisions about your home."

The Ultimate Solution for Housing Market?

Fred Glick is an outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR's Marketplace. His latest idea could help steady the shaky real estate market AND create thousands of new longer term jobs.
The downward pressure on housing prices is largely due to the rising tide of lower priced foreclosures. The main purchasers of these foreclosures are investors with cash -- not the buyer who needs a home. He is rarely able to get a mortgage for such distressed properties. The buyer usually ends up paying a retail price after the investor flips it.
Why not let the government have these properties fixed up to standards that an owner occupant can finance properly before moving in? This would provide jobs for the construction trades that are hurting and recoup the "bailout", with interest, when the home closes. Fred's bottom line:
 "We gave people jobs, we moved property faster and for more money, we added to the number of mortgages in the system with quality property that made mortgage backed security investors happy and to top it off, we stimulated an economy with the taxpayers making money"

Maybe the Fed Should Listen to Fred.

Greener Gadgets for the Home

For four years, the Greener Gadgets Conference has explored sustainable alternatives for the electronics we use in our homes and workplace every day. It has served as a forum for discussing green technology solutions for communication, poverty and education across the globe. Examining eco-friendly products and energy efficient gear, the conference shows off the best ideas from designers worldwide. Each year seems to produce the ultimate in useful innovations. Participants are invited to vote online for their favorites.
The 2010 event, held February 25 in NYC, offered ideas for an entire green lifestyle beginning in the home. The winning design from India(above) was The Go Mechanical Charger)