Queercents

Imagine you’re a renter. You’ve been paying your rent faithfully every month. Then you come home from work one day to find an eviction notice on your door. Your landlord has defaulted on the property, a bank is the new landlord, and they’re forcing you to get out. What do you do?

For the past two years, the headlines have been dominated about housing foreclosures. One of the aspects of the foreclosure crisis that has received very little attention, however, is the role that rental properties have played in the housing slump. Many landlords have seen their properties go into foreclosure, and as a result, many tenants have found themselves in very dire straights. In Minneapolis alone, 65% of foreclosures have been on rental properties. Nationwide, it is estimated that 40% of people to lose their homes to foreclosure are renters. And according to a report by the Center for Responsible Lending, the number of rental properties going into foreclosure is expected to rise.

Fortunately, renters have very specific rights when it comes to the foreclosure process, thanks to a bill passed in April.

Protecting Tenants at Foreclosure Act of 2009
According to the Protesting Tenants at Foreclosure Act of 2009, banks or owners who obtain a property through the foreclosure process do not have the right to evict a tenant if a lease is still in effect. The exception is if the new owner wants to live in the property. In this case, tenants have to be served 90 days notice – which is much longer than the typical eviction process. In summary:

• Leases would survive a foreclosure — meaning the tenant could stay at least until the end of the lease.  The lease survives and ends as it would had there been no foreclosure.
• Month-to-month tenants would be entitled to 90 days’ notice before having to move out
• Any state legislation that is more generous to tenants will not be preempted by the federal law
• These protections apply to Section 8 tenants, too

Relocation Assistance
If Fannie Mae or Freddie Mac owns the mortgage on a foreclosed property, renters should consider themselves lucky. Both agencies have vowed to assist renters with the relocation process by providing money to help renters pay security deposits and first months’ rent on a new place to live. The only way that a tenant would know the details of their landlords’ mortgage is to wait for Fannie Mae or Freddie Mac to contact them. That can be a bit unsettling, because you may not have an exact time frame for that knock on the door. One real estate appraiser I talked to said that their office is so backlogged with foreclosed properties that it can often take 9-12 months before Fannie Mae takes action on a foreclosed property. However, the standard is that Fannie Mae will contact the tenant within 30 days of the property going into foreclosure.

To find out if you are eligible for rental or relocation assistance from Fannie Me, click here. Although Fannie Mae will allow you to sign a new month-to-month lease in order to keep people on the property, you should be aware that the property will be on the market, and that you would have to be willing to allow real estate agents to show the home.

If you’re living in a rental property that has undergone foreclosure, here’s wishing you the best as you and your family relocate.

Additional Resources:
NOLO
Legal Assistance Resource Center

With housing prices and interest rates plummeting faster than interest in watching more Michael Jackson coverage, the savvy investor/home buyer sees a thrilling opportunity that at first glance, may seem just out of reach. As a financial advisor, I work closely with mortgage brokers who are facing a daunting challenge of helping their clients find that pesky 3.5% minimum down payment in order to qualify for an FHA loan. While some exceptional circumstances allow for 100% financing, the days of placing nothing down on our home loans are all but history. It may now be time for us to capitalize on a market strategy for locating the path to the keys to our new home.

Now, the search for a down payment acts as a major caveat clouding the vision of both the homebuyer and the mortgage broker. I have discovered a strategy that assists both to their goal. We know it may be a good time to buy, but our problem is no longer the price or interest rate, it happens to be the ability to come up with the seed money required to get that price or interest rate. And time is of the essence with the new offer of a tax credit for first-time home-buyers!

Enter the Single-K.

With most mutual fund companies offering a product that allows an individual, couple (married or domestic partnership) and their immediate family to start a plan that is essentially an equivalent to a larger company’s 401(k), the Single-K works for those who own a business and it carries a number of distinct benefits. First, the Single-K has a very handsome contribution limit should your business be profitable. But contributions are not the point of this piece. The access to a down payment is. And what if you don’t own a business? Read the rest of this entry »

Most people shopping for a home this year are keenly aware that a special $8,000 new home buyer credit is being offered as part of the government’s emergency economic stimulus legislation. But the clock is ticking toward the expiration date and unless the provision is amended or renewed to extend the deadline, buyers only have until the end of November to finalize their purchases. First timers are urged to do whatever they can to streamline the real estate shopping experience, and working with a gay-friendly Realtor and lender can often save valuable time for LGBT new home buyers.

A gay or lesbian couple may need to seek legal and financial advice in order to help them better understand their rights as owners, for example, since many of the benefits related to real estate ownership are only available to those couples who are legally married according to state and federal statutes. An experienced Realtor accustomed to working with LGBT clients will either know the answers immediately or be able to quickly refer the buyers to a reputable real estate attorney who is well-versed in complex LGBT legal issues.

Similarly, those who want to buy together gay may encounter complications along the way when trying to secure mortgage financing. They may need guidance regarding whose credit report or income to submit on the loan application, or they may need reassurance that, for example, the mortgage documents and deed are crafted in such a way that they reflect equitable sharing of assets and liabilities. For a loan processor unfamiliar with mortgage financing for LGBT partnerships this may create confusion, and when mortgage applications encounter people who are confused that usually translates into frustrating delays. Read the rest of this entry »

Burn baby burn. That’s our goal! Jeanine and I want to pay off our mortgage in the next ten years. If I had my druthers, it would be sooner. Why? Living in a home that’s paid for will alter our life. Here are five reasons why:

1. I gain peace of mind. There is something to be said about owning our most significant asset outright. Until this happens, this asset is technically a liability.

2. I no longer have to worry about job loss. Our biggest monthly expense is our mortgage. If Jeanine or I lost our job, we’d have to dip into our savings to cover this cost. If this expense was eliminated then our ability to survive without income increases dramatically. This is a true freedom.

3. It reduces my cost of living. There are two paths to wealth. Increase income or reduce your expenses. Do both and you’re set. Read the rest of this entry »

In March 2009, there were reports of lenders getting back into the jumbo loan business (this time for their own investment portfolios and not for bond traders on Wall Street):

Bank of America, the country’s largest mortgage lender, is rolling out a large program to finance jumbo loans between roughly $730,000 and $1.5 million, with fixed 30-year rates starting in the upper 5 percent range.

According to Inside Mortgage Finance, the jumbo sector showed signs of life in the second quarter of 2009 with Bank of America and Citigroup leading the way. Home-Account (the mortgage-finding service with a little twist) noted on its blog last week, “Welcome back jumbo. Too bad most of us can’t qualify.” They explained there’s a catch if you need one of these loans today (which is still most of coastal California):

Want a jumbo loan? Then be ready to make a 30-40 percent down payment on your new house.  This immediately eliminates refinancing most of the older jumbo loans in California, for example, where more than half of the mortgages were already of jumbo size. If your jumbo mortgage is underwater don’t expect to be able to refinance — or even to apply for a mortgage modification, since the Obama plan, for example, doesn’t even cover jumbos. Read the rest of this entry »

Mortgage rates continue rising at a much faster than expected pace, and that has put many homeowners into a quandary regarding whether or not to go through with refinance plans. Some lucky homeowners snagged rates as low as 4.65 percent in April and May, as extremely affordable mortgages inspired a tremendous surge in new home loan applications as well as mortgage refinances. But then interest rates on 30-year fixed-rate mortgages jumped nearly a percentage point within just two weeks between May and June, climbing from 5.0 percent to 5.79 percent. Now the big question on everyone’s mind is whether or not it is too late to take advantage of rates and save money by doing a refinance.

Here are some “refi” tips to help you decide:

• First calculate your closing costs with the help of a knowledgeable mortgage broker. Any reputable lender should be able to give you a rather close approximation, despite the fact that fees and costs may vary slightly from the original estimate.
• Be sure to figure in any incidental savings or costs such as tax deductions for mortgage interest or private mortgage insurance payments. If you can recoup the additional expenses within two years, it is probably a good idea to refinance because you’ll break even quickly and start saving money.
• Look for a rate that is at least one and a half to two percentage points lower than the current one. Those now paying seven percent or more are almost guaranteed savings, while homeowners with mortgage rates closer to 6.25 percent should crunch the numbers carefully, because they may be on the borderline. Read the rest of this entry »

In the Vanity Fair article about Fannie Mae’s Last Stand, the slang term “housers” was used to describe the Fannie people who believed that better housing is the cure to all of society’s ills.

Most housers were likely supportors of the ownership society; a model encouraged by George W. Bush that values personal responsibility, economic liberty, and the owning of property. Some would argue this was purely a political strategy. For example, see this article in The Nation:

Well before the ownership society had a neat label, its creation was central to the success of the right-wing economic revolution around the world. The idea was simple: if working-class people owned a small piece of the market–a home mortgage, a stock portfolio, a private pension–they would cease to identify as workers and start to see themselves as owners, with the same interests as their bosses. That meant they could vote for politicians promising to improve stock performance rather than job conditions. Class consciousness would be a relic.

While others (this article at Cato.org), define an ownership society in economic terms: Read the rest of this entry »

Part 3 of 3: Buying A Home?

To close this series on housing I interviewed a woman named Ann Metzger. She is a practicing Real Estate Agent in southern California and she is very successful in her line of work. Although I initially asked Ann the following five questions I later thought that it would be interesting to add another professional’s perspective on the same questions, so I did. This ex-agent wanted to remain anonymous. For the purpose of presenting his answers below I refer to him as David. I met this tall and handsome gay man a few years ago and had been to his lovely home in Mission Viejo several times. I loved his backyard with the stunning views of the mountains in addition to the pool.

Unfortunately, David lost his home in this housing crisis and he is no longer a practicing Real Estate Agent—a career that once was lucrative for him for at least ten years. Due to his personal experience, David represents many Americans who have lost their home from the mortgage crisis that Martha previously shed light on in her role as an Eviction Coordinator (refer to part one of this three part series). While David’s view on home buying is quite different from Ann’s view it is a perspective that is certainly worthy of being heard, especially by people considering that BIG move to purchase a property. I hope readers appreciate the yin-yang angles that are presented below.

Lana: How has the fallen housing market affected your real estate business?
Ann: There was a lull and definitely a stall in my business from September 2008 through March 2009. I have seen many agents leave the industry, as they could not financially survive. In particular were those agents that had families and those agents that jumped into the business during the height of the market (Spring 2006) as they thought selling property was easy money.  Business has picked up dramatically for me and that seems to be the case for the industry in general. Read the rest of this entry »

Part 2 of 3: Saving Your Home?

In part two of this three part series I spoke with a Loan Modification Officer who works in an office in Irvine, California. While she was eager to answer my questions her company wanted both her and their business name to remain unknown. We don’t know why that was the case. In any event, for people struggling with their mortgage and who are also heading toward foreclosure, Loan Modification may be the saving grace. A word of caution: Legitimate loan modification programs don’t take your money upfront; they charge you only after they have confirmed they can help you. Below is my interview with a Loan Modification Officer whom I have called Ingrid.

Lana: What is Loan Modification?
Ingrid: It is a NEW contract between the borrower and the lender modifying the original terms.

Lana: How does Loan Modification work?
Ingrid: The Mortgage Loan Modification process provides for either a permanent change in one or more of the terms of a borrower’s loan. This change allows a loan to be reinstated if the loan is behind or past due and results in a payment the borrower can realistically afford.

Areas of change can include:
1. Extending the length of the mortgage loan, as appropriate.
2. Reducing the mortgage loan interest rate.
3. Deferring a portion of the principal, which will require the borrower to make a balloon payment when the loan matures, is paid off, or is refinanced. Read the rest of this entry »

I wrote this blog post because buying a home has been on my mind and I wanted to know what was really going on in the housing market.

This past week I had the opportunity to interview three working women in Orange County, California: an Eviction Coordinator from a million dollar REO law firm, a Loan Modification Officer, and a Real Estate Agent. All three ladies work in the housing industry but at very different ends of the business. All three aspects are fascinating in their own regard. The Eviction Coordinator deals with foreclosures, the Loan Modification Officer helps to keep homebuyers in their home, and the Agent, well, she sells houses.

For confidentiality purposes, I changed the name of the Eviction Coordinator to Martha, as she can be a negative target for homeowners who have just lost their home and I didn’t want that to happen. The Loan Modification Officer also requested that her name and company remain anonymous. The Agent, however, requested that her name and contact information be presented. This series is written in three parts, starting with the Eviction Coordinator’s story, below.

Part 1 of 3: Losing Your Home?

Lana: Martha, please tell me what your main job responsibility is at the law firm.
Martha: My main responsibility is that I take phone calls from the Sheriff’s Office to schedule the lockout date on a property. In order to complete the eviction process I notify the clients, the bank, and the broker (agent) of the lockout date and time to meet the sheriff. The sooner we can engage the lockout process the sooner the agent can get the property back on the market and make money again. Read the rest of this entry »