Frederick Md Homes For Sale – The Historic District

Friday is Link Roundup Day.   Some articles I’ve read this week that I think you will find useful:

Three Steps to Financial Security:   Save, Save, Save   CNN Money.com  

Best Places to Buy an Affordable Vacation Home   CNN Money.com

Debt Snowballing from Fair Loan Rate

Where Did All the Bailout Money Go?   Christian Science Monitor

Home Prices Fall, But is Stabilization Near?   Housing Wire

Mortgage Rates Stay at Record Lows   Inman News

And one of our favorite sites:   http://www.hulu.com   to watch all our favorite TV shows when we want to.   Have a great weekend!

                                                                 
                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                  The Highland Real Estate Group                                            
               Chris & Karen Highland *  Frederick County MD Real Estate Agents
                                                               Specializing in Frederick County Real Estate  
                                                                                                301-831-9947
                                                                                      Real Estate Teams, LLC
                                                                                            isell4u2@msn.com                                
                                                                 
                                                                              Pictures of Frederick

The details of the Making Home Affordable Plan were recently released.   There are 3 key components:

1.   The Home Affordable Refinance Program.     Homeowners who have loans owned or backed by Fannie Mae  or Freddie Mac (GSEs) may be able to refinance, depending on the value of their homes.   The program can help homeowners who occupy  their homes  and are current in making loan payments and have loan-to-value ratios (LTVs) between 80 percent  and 105 percent.    The program ends in June 2010.

2.   The Home Affordable Modification Program.   This program is for homeowners who occupy their homes and are in default or at risk of default.   The loan amount must be at or below the maximum conforming loan limit of $729,750.   It is a $75 billion program with lender, servicer, investor, and borrower incentives to make it work.   Loan modifications under the program may be made until December 31, 2012.

3.   More Support for the GSEs.    This includes doubling of potential Treasury investment from $100 billion to $200 billion for each GSE, to maintain their positive net worth.   The plan also raises the cap on mortgages that the GSEs may hold in their portfolios by $50 billion to $900 billion.

Read NAR’s detailed Study of the Plan.   Find out if you are eligable by calling your mortgage servicer today.

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                                               The Highland Real Estate Group                                            
                                          Chris & Karen Highland *  Frederick County MD Real Estate Agents
                                                                   Specializing in Frederick County Real Estate  
                                                                                                    301-831-9947
                                                                                        Real Estate Teams, LLC
                                                                                            isell4u2@msn.com  

If you hear that line, then you know it’s time to be concerned.   Government and Help are two words that, when used together, define an oxymoron.   But we (the taxpayers) have been hearing that line ad nauseum these last few months.   The newest round of “help” is the Loan Modification program being proposed by the FDIC.   The details of the proposal can be read at the FDIC website. It’s estimated that this would cost us in the neighborhood of $24Bil.   All this is, of course, an attempt to limit the number of foreclosures, which is absolutely neccessary to stop the bleeding. According to the article referenced, though, the recidivism, or re-default  rate in a normal, healthy market is 40%.   Those are not very good odds.

There are some advocates of the loan modification solutions, who are saying that it could restore consumer confidence.   NAR, National Association of Realtors, has not formally endorsed the plan, but has not opposed it either.   (very politically astute of them:)   The program goes along with   NAR’s 4-pronged stimulus plan, in general.   But there are also objections to not just the plan, but the idea in general.

Some feel that bailing out these folks with  bad mortgages, the majority of  whom made bad decisions, encourages bad behavior.   ie. the bad folks get rewarded, those  who played by the rules get hosed.  But that’s the common sense crowd arguing common sense, which I guess is not so common these days.   I’m not sure that the common sense crowd is being heard.

I have been in conversations with people, good old-fashioned common-sense capitalists, who are poised and ready with some solutions.   But no one is listening to them.   This investment group that my friend is a part of  is ready to buy up some troubled mortgages for about .70 cents on the dollar.   They believe they can sell them for .80 cents.   Not as much profit as they could have made a few years ago, but as much as can be expected in this market.   Viola!  A win-win solution from the private sector.   But they cannot get the time of day from anyone.   Banks are waiting in anticipation to see what goodies the  government is going to offer them, keeping entrepeneurs on the sidelines, reluctant to entertain their offers.

This is a very real example of how the government’s “help”, even though it’s still just a rumor,  is preventing the private sector from providing a solution.   A solution that costs the taxpayers nothing, and actually makes a tiny profit for the capitalist who  takes the risk on himself.   The vitriole against the private sector is all that more damaging because it is so unfounded.   The government is to blame for the mortgage crisis, for its quasi intervention and for the politicization of the mortgage industry in the first place. For more information on the mortgage crisis, read Karen’s full article.

There is much evidence that the Great Depression was prolonged by government intervention.   It wasn’t until World War II that our economy came fully out of  it, and it was the private sector,  responding to the needs of the war effort that did the trick.   I’m pleading for some true historians to speak out, but I fear they are not being heard either.

After this round of help, we all need to keep our eyes on  something even more scary, the so-called Mortgage Cram-Downs, introduced once again by Sen. Dick Durbin.  This legislation would allow judges to modify the terms of distressed mortgages on primary residences in bankruptcy cases.   Totally usurping the banks who own those mortgages, and giving the decision to someone who more than likely knows nothing about the real estate market.   This is absolute tyranny from the bench and frighteningly damaging to the free market.   But the “inside sources” are saying that it will most likely pass in 2009.

So, the question is, how much ‘help’ are we going to be forced to take?   Here’s the links to our representatives:   Senators Barbara Mikulski, Benjamin Cardin   and Congressman Rosco Bartlett.   I’d encourage you to let them know what you think, one way or the other.

Thanks for letting me rant! Leave me a comment if you want to rant too, pro or con, either way is ok with me!

                                            The Highland Group – Real Estate Teams                                        
                Chris & Karen Highland *  Frederick County MD Real Estate Agents
                                                                                      301-831-9947
                                                                   Real Estate Teams, LLC
isell4u2@msn.com
Pictures of Frederick

Do you find yourself confused about the Subprime mortgage crisis we are facing, awash in disinformation from a the mainstream  media?   I certainly was! so I did some googling, and researched to find out for myself.

I recently published an article on Frederick.com entitled “The Mortgage Meltdown:   A Realtor’s Perspective”   Here are some exerpts:

 ——————————————————————————————————————————————–

*Disclaimer*
This content is prepared for those outside the current “sound bite” culture.

The Culprit:  The Subprime Mortgage.  Before we begin our detective work, let™s define some terms.  Subprime means just what it sounds like, less than prime.  A subprime loan, given to a subprime borrower, is for the person who does not qualify for a prime loan, either because of bad credit, or not enough credit, or high income to debt ratio….  The problem started when subprime lending began to grow to a very risky level.  It is estimated that 21% of current loans are subprime loans…

The Accesory to the Crime:   The Political Climate.   The Political Climate of our time repeats the mantra:   “Affordable Housing“, the highest and best outcome, even at the cost of common business sense….

Willing Accomplice #1:  The Real Estate Boom and Bust.  In hindsight, we see many factors that contributed to the Boom, and inevitably caused the ensuing Bust….

Willing Accomplice #2:   Securitization. Securitization has been used in different forms since the middle ages. In this country, we’ve experienced crisis no less than 6 times because of securitzation between the Civil War and WWII.  …

Willing Accomplice #3:   Credit Rating Agencies.   Credit rating agencies are now under scrutiny for giving investment grade ratings (BBB – AAA paper) to these MBS’s with subprime loans (C paper)….

Willing Accomplice #4:  Fannie Mae and Freddie Mac:  Fannie Mae buys loans from mortgage originators, repackages the loans and sells them on the secondary market…
Willing Accomplice #5:  The Community Reinvestment Act:  The Community Reinvestment Act,…The CRA gave ratings to banks based on the amount of loans they gave to create affordable housing.  

Willing Accomplice #6:  Congress.  The Real Culprits,  who should have done something, could have done something, but wouldn™t….

Read the rest of my article:   The Mortgage Meltdown:   A Realtor’s Perspective

                                     The Highland Real Estate Group                                            
                Chris & Karen Highland *  Frederick County MD Real Estate Agents
                                               Specializing in Frederick County Real Estate  
                                                                             301-831-9947
                                                                   Real Estate Teams, LLC
                                                                           isell4u2@msn.com  
                                                                      Pictures of Frederick

Several important tax provisions were extended in the Rescue Bill.   These have been continued on an annual basis for several years now, but a few got multi-year extensions.  

• The 2008 fix temporarily increases the Alternative Miminum Tax exemption for joint-filing married couples to $69,950 (up from $66,250 in 2007) and for single taxpayers to $46,200 (from $44,250). Without the fix, the permanent exemptions  were $45,000 (joint) and $33,500 (single).
  

• Several tax provisions got two-year extensions, through 2009, including: (1) the deduction for state and local sales taxes,  (2) the deduction for qualified tuition and related expenses ($4,000 joint and $2,000 single); (3) thededuction for up to $250 of out-of pocket expenditures by elementary and secondary school teachers; and (4) authority for IRA holders 70 1/2 or older to make tax-free charitable contributions from their accounts.
  

• Homeowners who don™t have enough deductions to make it worthwhile to file an itemized return, like older homeowners who have paid  down or  off their mortgage and don’t have the interest decuctions they once had,  can now take an additional standard deduction for the amount of property taxes they have paid, up to $500 for single filers or $1,000 for joint return filers. This tax change will be in effect for 2008 and 2009 returns.
  

• First-time homebuyers have a limited amount of time to take advantage of a federal tax credit of up to $7,500. The credit is 10% of the cost of a home, up to $75,000 or more qualifies for the full credit. The credit is refundable, which means that the government will pay you if your tax liability is less than your credit, but the credit generally must be paid back (with some  exceptions). You must have œmodified adjusted gross income of $150,000 or less if you file a joint return, $75,000 or less if single, to get a full credit. To qualify, the home must be purchased before July 1, 2009.
  

• The 30% tax credit for residential solar energy systems, due to expire this year, has been extended through 2016 and the $2,000 maximum has been lifted.

• When a lender discharges debt,  as in a short sale,   the amount that is short  previously had been treated as taxable income. The rescue bill extends an override of the discharge rule through 2012.

• And one last bit of good news for homeowners:   The provision that allows homeowners to treat mortgage insurance premiums the same as interest has been extended through at least 2010.

   See Homes in the Historic District for Sale                                                             *                   *                   *                   *                   *                                                                                                      

                                                                                                       
                                         

       
                                         The Highland Real Estate Group                                            
                  Chris & Karen Highland *  Frederick County MD Real Estate Agents
                                                 Specializing in Frederick County Real Estate  
                                                                               301-831-9947
                                                                     Real Estate Teams, LLC
                                                                             isell4u2@msn.com  
                                                                        Pictures of Frederick

   

People are waiting to see how the bailout will effect their local real estate markets.   From a realtors perspective, I don’t think we’re going to see any major effect for a little while.  

One of the purposes of the bailout was to inject cash into the credit markets, hopefully loosening up the tight credit markets and increasing confidence of banks and investors.   The effect of that should be more availability of loans for qualified buyers.   The effect of this should be more homes being bought.   All of this “cause and effect” is like a ripple in the pond when a pebble is tossed in…it will take time.

The “experts” are saying that the rescue plan, ie. bailout, will not help much until home prices level off and the real estate market mends.   With foreclosures on the rise, nationally they increased 14% in the second quarter, the effect is to continue to place negative pressure on home prices.   With a 10 month inventory in most places, including the Frederick Market,
we won’t see a leveling off in prices  for sometime.

As we head into the winter months, when the market typically slows down, we’ll see sales decrease, and only serious buyers and sellers in the market.   The good news: Interest rates continue to stay low, and the outlook is that they will probably go lower.   Winter will be a great time for first-time buyers to get into home ownership:   low rates + decreasing home prices = home ownership….with one caveat…can they get a loan?   Time will tell.

See Homes in the Historic District for Sale                                                            
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