Federal Reserve Chairman Watching Inflation - Watch What Happens to Interest Rates!

In the press recently, the Federal Reserve Chairman, Ben Bernanke, said a number of things relating to the Fed's watching of inflation in this country. Here are a couple quotes:

"Some survey-based measures of longer-term inflation expectations have edged up, on net, in recent months, as has the compensation for inflation and inflation risk implied by yields on nominal and inflation-indexed government debt.... These developments bear watching."

"The Committee will be vigilant to ensure that the recent pattern of elevated monthly core inflation readings is not sustained."

These two quotes make it seem especially evident that the Fed Open Market Committee, which has been steadily raising interest rates over the last couple years, will not hesitate to continue raising them if they think it will keep inflation from increasing.

What this means for homeowners who have adjustable rate mortgages, home equity credit lines, and even anyone with credit cards should watch what happens to their interest rates as the Fed increases the rates they control. For the ARMs (adjustable rate mortgages) it means that when the lock expires and their rates can adjust up, the increase can be even higher (up to the annual max in the mortgage agreement), with the resulting (sometimes quite large) increase in the monthly payment. Of course HELOC and credit card interest rates (and minimum payments) can increase virtually at any time (subject to your loan/card agreement).

People who find themselves unable to make their payments when these increases happen may find themselves in danger of a mortgage default. See my other posts and articles on how to cut expenses if you need to in order to keep making that most important mortgage payments.

Here's the link to my article on this topic:

Five Ways to Cut Back on Your Expenses to Help Avoid Foreclosure

If your family is facing this situation, PLEASE, before it's too late, give us a call so we can give you our FREE NO-OBLIGATION FORECLOSURE AUDIT. Every month people wait till the last minute to call, and by then it's too late. The banks have made up their mind to proceed to the auction and there's no time to change their mind.

If you want to listen to an excerpt from our "Consumer's Guide to the Foreclosure Process" that deals with this situation, please call 1-800-433-8563 extension 86136. Then, please call us so we can see how we can work together to prevent the foreclosure from happening!

Here's a New One - Comedian Sells T-shirts to Prevent Foreclosure!

I've never seen this before - a comedian is selling T-shirts on the Internet to raise money to save his house from being foreclosed! I must admit, this is taking action! You can read all about this story at the following link:

90s TV Star Faces Eviction

Unfortunately, most of the families we work with that are facing foreclosure do not have fans that would pay money for a T-shirt commemorating their effort to save their house from foreclosure. But, there is still realistic proactive action that can be taken. Our Consumer Awareness Guide to the Foreclosure Process has a number of chapters, one of which is "4 Steps to a Proactive, Positive Solution". If you'd like to hear that section, you can call our free 24-hour educational message for that section. Just call 1-800-433-8563 ext. 86166 right away!

After listening to the message you can follow the prompts to receive a fax copy of the entire Guide, leave us a message, or be direct connected to one of our staff. We're anxious to work with you to prevent the foreclosure so that you can move on to a brighter future!

New Phoenix Area Sales Data from MLS - What a Difference a Year Makes!

What a difference a year makes! The white-hot sellers' market of a year ago has changed to a definite buyers' market for this summer. Here is the link to the Phoenix area sold price and number of sales data going back to 2001. This link will open up a new browser window that will take you to the Statistics page for Arizona Regional Multiple Listing Service (MLS). Just look under the heading "New Charts Available" and click the links there to bring up the reports. The data was compiled by Arizona Regional Multiple Listing Service (MLS) and is copyrighted by them. This data is updated every month and new charts put on their page, so you can come back to this post in the future and click this same link to see the new data that ARMLS has put on their site.

http://www.armls.com/stats.html

As of today (May 2006 data), the data shows more houses being listed over last year (more competition for buyers), the number of sales per month are down - roughly to 2003 levels, but the sold prices are up from last year. This all translates to a market where a seller can get their price, but there is more competition out there, and it will take longer to get that price.

This data means that it will be very difficult for a family facing foreclosure to sell their house on the open market in time to sell it and CLOSE the sale before the house is sold out from under them at auction. If that happens, they will be ordered out of the house and a foreclosure will be on their credit for at least 7 years.

If a house takes 90 days to sell and another 45 days to close, most families will have had their house sold at auction by then by the Trustee (it's called a Trustee's Sale). An "I Buy Houses" investor can close more quickly, sometimes as an all-cash sale, but they will more than likely want a very big discount, usually at least 20% off. If the family facing foreclosure doesn't have much equity in their house, they can't sell this way because they would not even be selling the house for enough to pay off the mortgage (plus back payments, interest, penalties, fees, etc.). Many families find themselves just letting the house go back to the bank at auction, with the foreclosure on their credit report to follow them around for years.

Our company can help families in this situation, when it seems like nothing at all will work, but it's critical that we get started on the solution as early as possible in the process. If you would like to talk to us about working together to resolve the situation, please call our 24-hour free educational message and leave a message or follow the prompts to be direct connected to us. You can also send me an email by clicking this link: Email Me!. We really can help, and we really DO care. To hear a recorded message on why you definitely DO want to stop the foreclosure, just call 1-800-433-8563 ext. 86146 right away!

Okay, Phoenix is a Buyers' Market Now!

I was listening to all the real estate shows this weekend, and realtors on all the shows are now saying that the Phoenix metro area is now a buyers' market. They were all saying that sellers are slowing coming to realize that the insane days of last summer when you could list a house and have multiple offers above list price, some waiving the appraisal contingency are OVER! Several were saying that to sell a house in a reasonable time in the Valley right now, it has to be priced right, must "shine like a penny", and even then it will take about 45-60 days to get a contract (add another 30-45 days to that to actually close). One realtor was saying that it was not uncommon to see offers of 15-20% below list price right now. This was unheard of just nine months ago.

What this means to families facing foreclosure, unfortunately, is that the option to quickly list the house and sell it before the foreclosure auction is pretty much off the table, especially so if the house is overleveraged. By overleveraged I mean that more is owed on it than it could be sold for in today's market. Most families facing this unfortunate situation don't have the cash to withstand having to accept a wholesale offer at 20% under list price, and then pay 10% at closing for realtor commissions and closing costs. Unfortunately, these families often have no choice but to let the house go back to the bank, and then they have the big FORECLOSURE on their credit record for years to come.

But all is not lost, even in situations like this, WE CAN HELP! Our company specializes in working with families facing foreclosure, working with the banks, and negotiating with them to allow the house to be sold at a price that will satisfy the mortgage company, prevent the foreclosure action and the credit report destruction it causes, and let the family move on to a brighter future. If your family is facing this situation, PLEASE, before it's too late, give us a call so we can give you our FREE NO-OBLIGATION FORECLOSURE AUDIT. Every month people wait till the last minute to call, and by then it's too late. The banks have made up their mind to proceed to the auction and there's no time to change their mind.

If you want to listen to an excerpt from our "Consumer's Guide to the Foreclosure Process" that deals with this situation, please call 1-800-433-8563 extension 86136. Then, please call us so we can see how we can work together to prevent the foreclosure from happening!

Interesting Article on Family Financing

I saw an interesting article today by Eve Mitchell of the Oakland Tribune about how some families are financing mortgages for their children or other siblings themselves. They call this family or private financing. They are drawn up like a normal mortgage with a promissory note secured by the real estate being purchased. Some families use this technique for the entire first mortgage or as a second mortgage to help with a down payment or closing costs, etc. One thing to keep in mind is that if this is done as a second mortgage, the first mortgage lender will consider this amount as additional debt when qualifying the borrower for the first mortgage.

An advantage to doing this is that, although in case of non-payment the family member could foreclose, typically the loan is restructured instead. Can you imagine how awkward it would be for a parent to foreclose on their child? Another advantage is that the interest rate can be low. The IRS minimum is less than 5%, which would be less than what's available out there commercially. A third advantage is that parents could forgive the loan if they wanted to as a gift over time, subject to gift tax exclusions. For example, if a couple made a loan to their child and his or her spouse, the maximum exclusion amount is $12,000 time 4 or $48,000! If you're considering this option, you should of course consult your tax advisor, since I am not giving tax advice here. There are services that can set this up for a fee, and the complete article talks about one of them.

If you would like to read the entire article, click here:

Family Financing Article