Gunning Daily News

Q: Why do lenders require a down payment

March 11, 2011 9:41 am

A: It protects them should you default on the loan, especially if you fail to make payments in the early years of the loan when more is owed on it. Foreclosure, property fix-up, and resale costs could result in a loss on the mortgage loan.

That is a bad situation the lender wants to avoid. So they have historically required cash down payments of 20 percent of a home's purchase price.

However, if you purchase private mortgage insurance, the down payment requirement can drop to 5 or 10 percent of the purchase price.

Few lenders will lend the full value of a home unless they have special guarantees, such as that offered by the Veterans Administration (VA) under its mortgage assistance program.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Simple Tips to Clean Your Closet, De-Clutter and Refresh Your Wardrobe

March 11, 2011 9:41 am

RISMEDIA, March 11, 2011-Many of us can relate to having an overstuffed closet or trunk filled with clothes in great condition that we rarely wear. But as you begin to comb through and update your winter wardrobe for spring, consider giving your old clothes new life by donating them to those in need.

To help people clean out their closets for a good cause, The Glad Products Company has teamed up with style editor and author Bobbie Thomas to share tips on maximizing the purging process to benefit those who need it most.

"Twenty percent of U.S. children live in poverty and one in 10 has needed to borrow or receive a donated winter coat for their child," said Thomas. "So it's important to give back through charities like One Warm Coat, a national non-profit that provides free coats to people in need. Winter fashion may change from year to year, but giving back never goes out of style."

Thomas suggests these tips to help you clean your closet, de-clutter and refresh your wardrobe in 2011:

Find motivation for your mission. Gather inspirational images from magazines and catalogs and collect them in a folder, or create an easy to find desktop file filled with photos from surfing the Web. This will help you develop your own spring style, giving you a fresh perspective on what you should keep in your closet as well as what you should store or donate. Include a list of most-wanted items that stand out, and basics that seem to repeat in your inspirational images. You may already have similar items in your closet, and if not, this list will keep you on track through the season.

Start with a section. Make sure you're realistic with your time and schedule. Plan to clean your closet in shifts, and zone in on one area or category. For example, focus on one drawer or just your dresses to get started. After all, it's always less overwhelming to tackle one thing at a time. Organize by color and length. You'll want your wardrobe to welcome you the way a beautifully merchandised department store does.

Donate and do good. The reward of feeling freshly organized is fantastic, but you'll feel even better knowing that your unused items are helping others in need. Although warmer days are on the way, One Warm Coat is still eager to help your old favorites find new life. Beyond coats, the organization also accepts clothing and has teamed up with Glad's Bag Bank. Go to TheBagBank.com to find out how you can receive free Glad ForceFlex trash bags to donate your unwanted clothing and accessories.

For more information, visit www.familyfeatures.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Don't Let Spring Break Become Spring Break-In Tips to Protect Your Home while You're Gone

March 11, 2011 9:41 am

RISMEDIA, March 11, 2011-If your family is counting down the days until your much-needed spring break getaway, the following tips will provide peace of mind and ensure that your home is safe while you're away.

Don't publicize your vacation. Your kids are really, really excited, but they must resist the urge to post details about vacation on their Facebook pages. It is too easy for the information to find its way to a burglar, or someone who might take this opportunity to become one.

Don't leave obvious signs that the house is unoccupied. Stop the mail and paper, or have a neighbor take it in. Arrange for snow removal or lawn care as needed. And don't leave notes on the door.

Make your home look lived-in. A light on a timer is a great first step. You can buy a small device called "FakeTV" that simulates the light output of a television, making it look like you are home watching TV each evening. The effect is so convincing that your neighbors may later ask if you really went on vacation. A loud radio on a timer, tuned to a talk station, can provide signs of life during the day.

You need good locks. Your hidden outdoor key is probably not as cleverly hidden as you think it is. So, get to know your neighbors, and leave a key with them. Let them know you will be gone, and have them keep an eye out during your absence. If you have an alarm system, by all means use it. Amazingly, many people forget to set the alarm when they go away. Conversely, do not think that an alarm system makes you invulnerable. Burglars can still cause you a great deal of misery in a smash-and-grab robbery, leaving before the police can respond.

Take a walk around your property and make sure you cannot see any easily pawned valuables through uncovered windows. Are there any ladders left out, or particularly easy or well-concealed access points?

Park a car in the driveway, but be sure to take out the garage door opener first.

For more information, visit www.faketv.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


5 Insurance Mistakes to Avoid

March 11, 2011 9:41 am

RISMEDIA, March 11, 2011-Too many Americans believe that the coverage limits of their homeowners insurance policy are linked to the market value of their home, according to the Insurance Information Institute (I.I.I.).

In the I.I.I.'s 2011 Insurance Pulse Survey, conducted by the Opinion Research Corporation, nearly half (48%) of survey respondents came to that mistaken conclusion.

"The real estate value of a home-the price you can buy or sell it for-has absolutely nothing to with the amount of insurance needed to financially protect the homeowner in the event of a fire or other disaster," said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. "Reducing insurance coverage because the market value of a home has decreased can result in being dangerously underinsured."

One out of three respondents to the Pulse Survey reported that they purchased less homeowners or auto insurance as a way to save money. A better strategy would be to take a higher deductible, which can substantially reduce insurance costs. Home and car owners can then put the savings into purchasing the right amount and type of insurance for their specific needs, pointed out Salvatore.

Another way to save money is to comparison shop, something that seven out of 10 Pulse Survey respondents said they utilized as a strategy to save on both their home and auto insurance needs.

Following are the five biggest auto, home, flood and renters insurance mistakes consumers can make, with suggestions to avert those pitfalls while still saving money:

1. Insuring a home for its real estate value rather than for the cost of rebuilding. When real estate prices go down, some homeowners may think they can reduce the amount of insurance on their home. But insurance is designed to cover the cost of rebuilding, not the sales price of the home. You should make sure that you have enough coverage to completely rebuild your home and replace your belongings. A better way to save: Raise your deductible. An increase from $500 to $1,000 could save up to 25% on your premium payments.

2. Selecting an insurance company by price alone. It is important to choose a company with competitive prices, but also one that is financially sound and provides good customer service. A better way to save: Check the financial health of a company with independent rating agencies and ask friends and family for recommendations. You should select an insurance company that will respond to your needs and handle claims fairly and efficiently.

3. Dropping flood insurance. Damage from flooding is not covered under standard homeowners and renters insurance policies. Coverage is available from the National Flood Insurance Program (NFIP), as well as from some private insurance companies. Many homeowners are unaware they are at risk for flooding, but in fact 25% of all flood losses occur in low risk areas. With the significant snow fall this winter, spring related flooding may be particularly severe, thus increasing the importance of purchasing flood insurance. A better way to save: Before purchasing a home, check with the NFIP to determine whether the property is situated in a flood zone; if so, consider a less risky area. If you are already living in a designated flood zone, look at mitigation efforts that can reduce your risk of flood damage and consider purchasing flood insurance.

4. Only purchasing the legally required amount of liability for your car. In today's litigious society, buying only the minimum amount of liability means you are likely to pay more out-of-pocket if you are sued-and those costs may be steep. A better way to save: Consider dropping collision and/or comprehensive coverage on older cars worth less than $1,000. The insurance industry and consumer groups generally recommend a minimum of $100,000 of bodily injury protection per person and $300,000 per accident.

5. Neglecting to buy renters insurance. A renters insurance policy covers your possessions and additional living expenses if you have to move out due to an insured disaster, such as a fire or hurricane. Equally important, it provides liability protection in the event someone is injured in your home and decides to sue. A better way to save: Look into multi-policy discounts. Buying several policies with the same insurer, such as renters, auto and life will generally provide savings.

For more information, visit www.iii.org.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Home Sellers Fare Better in Getting Their Homes Sold Using a REALTOR , According to Survey

March 11, 2011 9:41 am

RISMEDIA, March 11, 2011-HomeGain.com, a leading online real estate resource that connects home buyers and sellers with real estate professionals, announced the results of its For Sale By Owner (FSBO) vs. REALTOR survey. HomeGain surveyed over 1,000 homeowners asking whether they used a REALTOR to sell their home or whether they attempted to sell it themselves. Eighty-three percent said they used a REALTOR to sell their home and 17% said they tried to sell their home on their own.

Fifty-nine percent of homeowners that used a REALTOR to sell their home were successful vs. 39% of FSBO's, reflecting a 50% higher closing rate for those home sellers using a REALTOR .

Eighty-one percent of homeowners that used a REALTOR to try and sell their homes said they would use a REALTOR again for their real estate needs.

Eighty-eight percent of homeowners who sold their homes using a REALTOR said they would use a REALTOR again.

Seventy-one percent of FSBOs who managed to sell their homes on their own said they would try and sell their home on their own again.

"It is especially striking that homeowners fare significantly better in selling their homes using a REALTOR than selling on their own," said Louis Cammarosano, General Manager of HomeGain. "Due to that relative success, the level of satisfaction in the home selling process is also higher for home sellers utilizing the services of a REALTOR than those who try to sell their homes on their own."

The survey also pointed out that 24% of FSBOs eventually enlisted the aid of a REALTOR to help sell their homes.

For more information, visit www.HomeGain.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Word of the Day

March 10, 2011 9:09 am

Option. The exclusive right to purchase or lease a property at a predetermined price or rent at some future time.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Q: How do you decide whether to add on to an existing home or purchase a new one?

March 10, 2011 9:09 am

A: There are a few things to consider, including cost, individual needs, and what will add value down the road. Also important: your emotional attachment to the existing home.

As designer and builder Philip S. Wenz, the author of Adding to a House: Planning, Design & Construction, notes, an addition is much cheaper than building a new home and can offer a "new" home without the heartache of moving.

Other considerations:

Can you finance the home improvement with your own cash or will you need a loan?

How much equity is in the property? A fair amount will make it that much easier to get a loan for home improvements.

Is it feasible to expand the current space for an addition?

What is permissible under local zoning and building laws? Despite your deep yearning for a new sunroom or garage, you will need to know if your town or city will allow such improvements.

Are there affordable properties for sale that would satisfy your changing housing needs?

Explore your options. Make sure your decision is one you can live with either under the same roof or under a different one.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


5 Tips for Organizing Paperwork for a Smooth Tax Filing Process

March 10, 2011 9:09 am

RISMEDIA, March 10, 2011-There's no better time to sort through the growing pile of papers in your home office than when you're preparing to file year-end taxes. While organizing paperwork and personal files can seem like a daunting task, it certainly doesn't need to be. Master Lock has provided the following tips for organizing and safely storing important documents for a smooth tax filing process and more organized year.

"Eliminating unnecessary paperwork and storing tax files in one organized, secure place is vital to a stress-free tax filing process," said Rebecca Smith, vice president, marketing for Master Lock. "By creating and maintaining a master storage system, individuals can not only ease the tax filing process, but also enjoy a feeling of preparedness year-round."

1. Purge the paperwork

First things first-clear the clutter. Go through all of your paperwork and eliminate anything you no longer need, shredding identifying documents to protect against identity theft. Get rid of expired warranties and year-old receipts and bank statements.

2. Safely store crucial records

Designate a specific storage space for vital documents including birth certificates, marriage licenses, passports, wills and social security cards. These items, as well as any important memorabilia, should be stored in a locked, fire retardant box. Not only will you always know where these items are, they'll be safe from home mishaps.

3. Create a tax file

Create a separate file for all of your tax documents. Organize this file into 10 categories: income (pay stubs, W-2s, interest statements), medical (medical expenses and health insurance out-of-pocket), donations (cash and non-cash donations), real estate (interest statements from mortgage, tax assessments), child care (payment receipts), tax correspondence (important IRS or state revenue service letters), student loans (statements of payment), miscellaneous receipts (any receipts that might be needed for deductions), payments (records of advance payments) and old tax papers (old tax returns). Continue to use your tax file year-round, and you won't have to scramble for these documents when it comes time to file next year.

4. Back up everything

Make digital copies of important documents and store them in your fireproof box on a zip or thumb drive. Use a secure online organization and security solution to store log-in and password information for bank accounts and credit cards as well as lock combinations or key numbers to your file boxes. Consider appointing a guardian as an additional security measure who knows where and how your records are stored for easy access in your absence.

5. Make it a tradition

Select a specific time of year (perhaps when tax time rolls around again) and make your review of these records an annual occurrence. This will ensure your information is streamlined and up-to-date and that finding or organizing this information is never an overwhelming process again.

For more information, visit www.masterlock.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


Foreclosure Homes Account for 26 Percent of All 2010 Residential Sales, According to RealtyTrac

March 10, 2011 9:09 am

RISMEDIA, March 10, 2011-RealtyTrac, a leading online marketplace for foreclosure properties, released its Year-End and Q4 2010 U.S. Foreclosure Sales Report, which shows that foreclosure homes accounted for nearly 26% of all U.S. residential sales during the year, down from 29% of all sales in 2009 but up from 23% of all sales in 2008. The report also shows that the average sales price of these foreclosure properties was more than 28% below the average sales price of properties not in the foreclosure process-up from a 27% average discount in 2009 and a 22% average discount in 2008.

A total of 831,574 U.S. residential properties either owned by banks or in some stage of foreclosure-default or scheduled for auction-sold to third parties in 2010, a decrease of 31% from 2009 and a decrease of nearly 14% from 2008. Meanwhile, sales volume of non-foreclosure properties in 2010 decreased nearly 19% from 2009 and nearly 27% from 2008.

A total of 149,303 foreclosure sales were recorded in the fourth quarter, down 22% from the previous quarter and down 45% from the fourth quarter of 2009-despite a 21% monthly uptick in foreclosure sales volume in December. Mirroring the year-end statistics, foreclosure sales in the fourth quarter accounted for 26% of total sales, and foreclosure properties sold for an average sales price that was 28% below the average sales price of properties not in foreclosure.

"Foreclosure sales in the fourth quarter faced the twin headwinds of the expired home buyer tax credit-which began to stifle sales volume during the third quarter-and the foreclosure documentation controversy, which hit in the fourth quarter and temporarily froze sales of foreclosures from several major lenders," said James J. Saccacio, chief executive officer of RealtyTrac. "Given those factors, it's not surprising that in the fourth quarter foreclosure sales volume hit its lowest level since the first quarter of 2008.

"Still, foreclosures continue to represent a substantial percentage of all U.S. residential sales and continue to sell at an average sales price that is significantly below the average sales price of properties not in foreclosure-the result of a bloated supply of foreclosures and weak demand from home buyers," Saccacio continued. "The catch-22 for 2011 is that while accelerating foreclosure sales will help clear the oversupply of distressed properties and return balance to the market in the long run, in the short term a high percentage of foreclosure sales will continue to weigh down home prices."

Foreclosure sales by type

A total of 512,886 bank-owned (REO) properties sold to third parties in 2010-down nearly 32% from 2009-at an average discount of 36%, up from an average discount of 33% in 2009. REO sales accounted for 16% of all sales in 2010, down from nearly 18% of all sales in 2009 but still higher than the 13% of all sales they accounted for in 2008.

In the fourth quarter, a total of 95,683 REO properties sold to third parties, down 17% from the third quarter and down 43% from the fourth quarter of 2009. Fourth quarter REO sales accounted for nearly 17% of all sales during the quarter at an average discount of nearly 37%.

A total of 318,688 pre-foreclosure properties-in default or scheduled for auction-sold to third parties in 2010, down nearly 30% from 2009. Pre-foreclosure properties in 2010 sold at an average discount of 15%, down from an average discount of nearly 17% in 2009. Pre-foreclosure sales accounted for nearly 10% of all sales in 2010, down from nearly 11% of all sales in 2009 and virtually the same percentage of sales as in 2008.

In the fourth quarter, a total of 53,620 pre-foreclosure properties sold to third parties, down 29% from the previous quarter and down 49% from the fourth quarter of 2009. Fourth quarter pre-foreclosure sales accounted for nearly 10% of all sales during the quarter at an average discount of nearly 13%.

Nevada, Arizona, California post highest percentage of foreclosure sales in 2010

Foreclosure sales accounted for 57% of all residential sales in Nevada in 2010, the highest percentage of any state, but still down from a peak of 67% of all sales in 2009. Fourth quarter foreclosure sales accounted for nearly 59% of all sales in the state, up from nearly 54% in the third quarter.

Arizona foreclosure sales accounted for 49% of all sales in 2010, the second highest of any state but down from a peak of 54% in 2009. Fourth quarter foreclosure sales accounted for 55% of all sales in the state, up from 46% in the third quarter.

California foreclosure sales accounted for 44% of all sales in 2010, the third highest of any state but also down from a peak of 57% in 2009. Fourth quarter foreclosure sales in California accounted for 45% of all sales, up from 40% in the third quarter.

Other states where foreclosure sales accounted for at least one-quarter of all sales in 2010 were Florida (36%), Michigan (33%), Georgia (29%), Idaho (28%), Oregon (28%), Illinois (26%), Virginia (25%) and Colorado (25%).

10 states post foreclosure discounts of more than 35 percent in 2010

Ohio foreclosures sold for an average discount of nearly 43% in 2010, down from an average discount of nearly 47% in 2009, but still the highest of any state. Kentucky foreclosures sold for an average discount of more than 40% in 2010, the second highest of any state and up from nearly 38% in 2009.

Eight other states posted average foreclosure sale discounts of 35% or more in 2010: Tennessee, California, Pennsylvania, Illinois, New Jersey, Michigan, Georgia and Wisconsin.

For more information, visit www.realtytrac.com.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.


National Consumer Protection Week Learn What a Mortgage Servicer Does and Understand Your Rights as a Consumer

March 10, 2011 9:09 am

By John Voket, RISMedia Columnist

RISMEDIA, March 10, 2011-For some people it's the Super Bowl, for others it's the Oscars, but I spend the month of March celebrating consumers.

Every year around this time we stand with federal agencies, consumer groups and national advocacy organizations, in conjunction with state, county and local government agencies to promote National Consumer Protection Week. We also highlight Spring Cleaning Week or what some identify as National Cleaning Week-we'll get to that in an upcoming segment.

According to our friends at the Federal Trade Commission (ftc.gov), National Consumer Protection Week is a coordinated campaign to focus attention on the importance of consumer information and steer people to free resources about their rights in the marketplace.

One of the many compelling subjects tied to this year's Consumer Protection Week promotion is an important reminder for all home and property owners to stay up-to-date on what mortgage servicer is handling your payments and that your mortgage account is properly credited.

A mortgage servicer is responsible for the day-to-day management of your mortgage loan account, including collecting and crediting your monthly loan payments and handling your escrow account if you have one. The servicer is who you contact if you have questions about your mortgage loan account.

This punch list from the FCC can help you learn what a mortgage servicer does and understand your rights as a consumer:

-A mortgage servicer is responsible for collecting your monthly loan payments and crediting your account. A servicer also handles your escrow account if you have one.

-An escrow account is a fund that your servicer holds. You pay money into this fund to cover charges like property taxes and homeowners insurance. The escrow payments typically are included as part of your monthly mortgage payment. The servicer pays your tax bill and your insurance bills as they become due.

-If your mortgage servicer administers an escrow account for you, the servicer is generally required to make escrow payments for taxes, insurance and any other charges on time. Within 45 days of establishing the account, the servicer must give you a statement that clearly itemizes the estimated taxes, insurance premiums and other anticipated charges to be paid over the next 12 months, and the expected dates and amounts of those payments.

-The mortgage servicer has to give you a statement every year that details the activity of your escrow account. This statement shows your account balance and reflects payments for your property taxes, homeowners insurance, or other charges. There is no charge for this statement.

Copyright 2011 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.