In your opinion, who benefits most from deducting mortgage interest, and should the soon-to-expire deduction be extended? Do you believe having this deduction in place helps the real estate market? I'm curious to know how many of you have calculated your taxes both with and without the deduction.

Are You On the Fence?

I'll keep this short and to the point. Mortgage interest rates have been trending upward for a while now. If you've been on the fence, GET OFF QUICK! There's no predicting what will happen next.

Do You Like Surprises ?

Very little about this business surprises me anymore. But surprised I was!!

It’s very well known that Homeowner's Associations are struggling. You don’t need to be a rocket scientist to figure that out, it’s all over the news and obvious in some neighborhoods. This whole foreclosure and short sale circus has really taken a toll on their budgets and in many cases there is no recovering those lost funds. (Ok, I know there probably isn’t one of you that’s not thinking “well payback’s a ..#&%*!, those weren’t weeds they were wildflowers”) And believe me, I’m right there with you! HOA management is not at the top of my Christmas card list. But, and this is a BIG but, no matter how nice your property may be, its value is fundamentally dependent on the condition of your community… the HOAs job.

HOAs have been frantically scrambling to reclaim dues that owners of short sales and foreclosures have been unable to pay, for years in some cases. When these homes are sold, the HOA submits an invoice theoretically directed at the Seller. Sometimes that seller is the owner who clearly has no disposable cash, sometimes a bank and your guess is as good as mine when it comes to banks paying… well, anything. How many buyers are aware that those delinquent HOA dues, certainly not their responsibility, could come down on their head like a ton of bricks? In the case that prompted this blog, over $3,500 worth. Odly, this isn’t the surprise I was talking about.

As I’m sure you can guess, this was not anywhere near OK with the buyer. But the HOA wasn’t budging. It was paid in full or the property wasn’t closing. So here’s the thing… there really are some surprises left in this business. After a few unproductive phone calls and one desperate e-mail, the manager of the HOA called me back! Well, that was surprising! Surprise turned to genuine shock when she then agreed to bring our plea to the board, and I nearly fell out of my chair when she called back the next morning with a completely reasonable mediation, an amount acceptable to both the HOA and the buyer.

This world is full of surprises, some good, some very bad. But today I can honestly say that I LOVE surprises!

A Warning About Your Credit Report

You know, you wouldn’t think being vigilant would be a bad thing. You’re SUPPOSED to keep an eye on your bank accounts and your charge cards, correct? As a courtesy, you’re even warned of possible misuse or fraud, it’s called “red flagging”. When this happens, you need to immediately call the bank and discuss the charges or accounts in question. You are advised to file a dispute of anything that you feel is suspicious or in error. It's hard to imagine circumstances under which you would not want to dispute fraud… except one.

Let me get off the subject for just a minute and tell you a little about what’s been going on in the credit reporting industry. There are three major credit reporting services. Each seems to operate a little differently, which in itself isn’t a problem, until you need something corrected. Mortgage regulations have tightened up in almost all areas including entries on your credit report so correction of errors is critical, and of course there is a fee for each supplement or correction. In the recent past, documentation could be sent to correct the records for all three agencies at once, but lately that hasn’t been the case. Each agency is requiring different documentation, and every time you send in separate documentation there is another charge. Hmmmm, who’s idea was that?

OK, so back to you being vigilant. Here’s where things have gotten very sticky. A new mortgage regulation requires that there be no DISPUTES on your credit report. The scenario goes like this: Someone uses your charge card fraudulently, your bank informs you and advises, wisely I might ad, that you dispute the charges. While you do the right thing and fill out the paperwork, your bank reports to the credit agencies that you are disputing your account. Still not bad, right? Now you’ve found your dream home and applied for a mortgage. Very exciting! You are told that the dispute must be removed from your credit report. OK, no problem, it’s been settled and that can be done. You send in the required documentation, you speak directly with the credit reporting agency, you pay your fee, and, oops, not enough. There are different requirements for one of the three reporting services. You take a big breath and request the new documentation from your charge card company, it’s sent to credit reporting, you pay your fee, and that’s it. Except that the third reporting service still refuses to remove the dispute. Keep in mind, every time you send in separate documentation there is another charge. This one had us shaking our heads. A “reality check” pow-wow with our mortgage Underwriter produced an acceptable solution. But do you really think you should have had to jump through so many hoops? Not I. Something is definitely amiss when credit reporting services can bring your life to a screeching halt, and all because you’ve done the right thing.

Here we go again!!

OH NO here we go again. If you're currently in the market for a mortgage, or if you are a Realtor you need to know this. As of Monday11/1/10 the minimum credit score for FHA was increased from 620 to 640. The new minimum will apply to purchases, refinances, streamlines and 203K loans. As of today this only affects FHA, not Conventional, VA, or USDA.

On a more positive note. Interest rates are still favorable, so much so that even people who've owned their home for less than a year are considering a refinance. Definitely worth checking out!

Phew... it wasn't scary after all

What a weekend! I’m always amazed at the creativity of small children and their parents. I love Halloween, always have and still do. It’s like throwing a huge block party without a clue who’s on your guest list. If only for a few hours, your neighborhood becomes one big, very happy, very friendly family.

If you're anything like me you make a fair attempt to keep up with whatever is going on in your neighborhood. Between work and a house full of kids this isn't always practical, but the past weekend presented an especially eye-opening opportunity to do just that. Whether you were on the hunt for goodies with the kids, or joking with the neighbors while you handed out treats, (most of my duties were of the "hunting" variety this year) you can't help but notice that your immediate community is dotted with a lot of new neighbors, and more than a few For Sale signs. Correct me if I’m wrong, but this wasn’t always the case. Just a short time ago, if a neighbor moved in or out we all noticed, or at the very least were aware of it. Not so much anymore. True?

I’ve gotta tell you, it really was a pleasure seeing all the new folks, though I was a little embarrassed that I hadn’t met them before. But I couldn't say the same about all the For Sale signs, they were the scariest thing I'd seen all evening, that is until I actually gave it some thought. Remember back to that time when you  noticed your neighbors moving? Remember around the same time, news reports about first-time-buyers being priced out of the market? Again… Not so much anymore. I guess I’ve formed a new opinion about all those For Sale signs. A lot of my clients now are first-time-buyers. No longer blocked out of the market, they’re thrilled, and life is good for them.

My take-away from the Halloween weekend? The bag of tricks that our real estate market has become is not all horrifying, dig around a little and you’ll find some very sweet stuff in there.

Do you have a sweet story or a scary tale to share about real estate in your neighborhood? I'd really love to hear it!