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Archive for September, 2009

REO Property Investing 101

REO or Real Estate Owned properties offer some of the BEST opportunities to grab a property at a great price. At the tail end of the foreclosure process REOs are those properties that failed to sell at auction after they were foreclosed upon. If you do your homework and are a good negotiator you can make a killing by investing in REOs in todays volatile real estate market.

There is a reason why there are so many REO properties. In fact most large banks have entire departments dedicated to REO properties. Heres why: most properties that go to foreclosure auction in fact do not end up being sold. Most dont even get any bids. This is because if the property was easily worth more than the mortgage amount that was owed on the property the previous owner would have simply sold it themselves and pocketed the difference. Instead the auction results in an unsold property and the bank is now left a property on their hands to sell in the open market.

At this stage the bank will go through a process of providing clear title. This includes removing the loan balance from the property clearing other liens and any back taxes owed on the property as well as making sure there are no outstanding law suits that might hold up the sale. Often the bank will make minor repairs in order to ensure the property complies with necessary statute and inspection requirements. When the property is sold the buyer will receive title insurance provided to guarantee that title is clear on the property. This is a huge advantage over the large risks involved in purchasing something during a foreclosure auction.

Before you make an offer on an REO property make sure you do your homework on the property. Keep one important thing in mind; banks are not property management companies and they WANT to sell this property. Often if they do not receive an offer at a listed price they will be willing to drop their price in order to make the sale. There is tremendous incremental cost for a bank to continue to manage a property and they would much rather negotiate a fair price and take a small loss than be responsible ofr long term upkeep and administrative costs of holding the property. At the same time dont expect the bank to dump the property for an outrageously low sum. That rarely if ever happens.

There are many places to find out about REO properties. Most major banks have REO departments and there are real estate agents that specialize in REO sales that have a good relationship with the bank. There are also several websites that specialize in listing REO properties from numerous banks and categorized in areas. For links to these and other great strategies on purchasing REO and foreclosure properties please visit www.PropertyWorkouts.com.

About the writer:nbsp;nbsp;With Degrees in Film Real Estate Finance and Development as well as Psychology Robert Levin writes expert articles covering a broad range of issues. Some of his websites include: www.toptenmba.comwww.MBAonline.me www.lawdegree.me www.selfawareness101.com and www.tvwriter.me

Make 2009 The Year Of Financial Freedom

If youre anything like most Americans money is at the root of your New Years resolution. Most of us bid goodbye to 2008 with our wallets a bit thinner and our spending habits a bit humbler. Maybe youve pledged to cut back on expenses get out of debt or start saving for a house or your kids college education. Here at DebtStoppers weve got the tools to make 2009 the year you reach those goals.

Let’sstart with credit cardsmore specifically credit card debt. I have it you have itin fact the average American carries nearly 10000 of it. It was a huge factor in last years economic meltdown and its also the reason most of us struggle to pay our bills.

But dont take a pair of scissors to your wallet just yet. Credit cards arent exactly evil. Well maybe they are but theyre somewhat of a necessary evil. If you didnt use one at all you wouldnt be able to build up a credit history. And without a history lenders wouldnt trust you enough to loan you the money to buy a car or house or to pay for a college education.

The problem arises however when we use credit for everyday purchases. Because plastic doesnt require cash upfront its tempting to spend a little extra at the grocery store or on gifts for the kids. And its hard to say no to credit when the car or heating unit needs repair. Why wait until you get the money right?

But unlike cash check or debit credit comes with strings attached. Creditors arent giving you a waiting period to pay out of the kindness of their hearts. For the favor of loaning you money they want something in returninterest. So that 1000 flatscreen TV you just put on your card this Christmas? At 25 interest annually it will actually cost 1250 well probably more because most interest rates are not flat but compoundingbut thats another story.

Most cardholders get caught up in a vicious cycle. You want to stop spending more than you make but youre paying so much in interest that you cant afford to make necessary purchases without your cardtherefore you continue to rack up debt.

So what can you do to break free? Start paying down your debtit will be much easier to wean yourself off the plastic if you do. I cant guarantee the process will be painless but it can be done. And it will save you money and stress in the long run.

Best yet you dont have to do it alone. We can walk you through it. Visit our blog for a wealth of tips and advice. Consider signing up for a free oneonone debt analysis with one of our debt relief attorneys. Or get a crash course in money matters at our free community workshops Jan. 15 in Chicago or Jan. 22 in Atlanta where youll also be eligible to win a laptop or GPS system don’t worrywhen these fill up we’ll schedule more. This can be the year you free yourself from debt. Lets get the ball rolling.

About the writer:  Are you struggling with debt? Is the bank threatening to foreclose on your home? DebtStoppers can help. Contact us for a free oneonone debt analysis at http://debtstoppersusa.com or join our blog community at http://debtstoppersusa.com/blog

Understanding Rising Mortage Rates

It’s not uncommon to see mortgage rates misspelled as mortage rates I’ve made the mistake myself many times. Anyway we both know what is meant and right now I want to talk about the possibility of rising mortgage rates.

Current mortgage rates are lower than historical averages even though those with short memories and those that are young wouldn’t know this because rates have been so low for so long. Currently there are a lot of experts predicting that rates will finally begin to rise perhaps sharply after the November presidential elections. Now that may be in question because of the recent bailout of mortgage giants Fannie Mae and Freddie Mac coupled with the Federal Reserve’s bias towards lowering interest rates going forward. While we would all like to see the low mortgage rates continue forever it’s inevitable that they will one day rise. Here are some reasons to think that rise will come sooner rather than later.

1. Rising Inflation
You’ve all seen prices for nearly everything rising lately. Gas food transportation energy and a host of other prices have jumped dramatically in the past year. If this continues we will start to feel the pressure of inflation in the form of increasing interest rates. It’s simple economics that as the prices of goods and services rises so will the cost of money in the form of higher interest rates for everything from personal loans to credit cards to your home mortgage rates.

2. Falling US Dollar
The U.S. dollar has been falling steadily for several years now and the sub prime mortgage crisis here in the U.S. has helped to keep that fall continuing. As the crisis spreads from the housing and mortgage markets into the rest of the financial sector the U.S. is perceived as an unstable financial country and a risky place to invest. This causes a further weakening of the dollar as investors around the world sell dollars to buy investments in other countries. In order to attract world investors to put their money in the U.S. we need to entice them with higher returns on their investment and that means higher interest rates.

Until we see the dollar strengthen and stabilize at higher levels we will continue to have upward pressure on the interest rate in the U.S. and thus on the mortgage rate here as well.

3. Increased Risk
Because of the sub prime mortgage crisis mortgage lending is more risky than it’s been in decades. This has been compounded by sharply falling home prices in some areas and defaults on loans that once were considered safe by the mortgage lenders. Because of the higher risk in lending we will also see increasing mortgage rates as a hedge against this risk.

These three factors combined will serve to drive mortgage rates up from their unusually low levels. It’s inevitable that we see a return to average historical rates which will likely be a shock to many especially those who have never seen or can’t remember double digit interest rates on mortgages. When interest rates begin to rise to combat inflation and the falling dollar we will likely see a sharp spike in mortage rates here in the U.S.

About the writer:  Learn more about how mortage rates are determined and why refinancing lenders are hungry for your business by visiting the authors website.