Archives

October 2007

Sharpen Your Mind

Webster's Dictionary defines intelligence as the ability to learn and understand, or to deal with new or trying situations. Simply put, it's the degree of one's mental sharpness.

It's easy to believe that your intelligence is set, meaning there's no way to "boost" your brainpower. However, many scientific studies have proven the exact opposite. A combination of lifestyle adjustments and mental exercises has been shown to not only increase intelligence, but also to improve general brain health and help to prevent disorders associated with aging, such as Alzheimer's disease.

According to most neurologists, the key is to stay mentally active, despite your age. The brain is a complex organ, able to create new connections between nerve cells when it is properly stimulated. These connections lend themselves to optimal brain function and increased intelligence.

Whether you're a Generation Xer, a baby boomer, or an octogenarian, the following ten tips will help to boost your mental activity and increase your intelligence:

Get Some Sleep
An adequate amount of restful sleep is an important component of brain function. While scientists argue over its effect on memory and learning, restful sleep provides energy as well as the ability to focus. Both are vital factors in achieving mental stimulation. Some studies have also shown the reverse to be true. More mental stimulation during the day equals better sleep at night.

Notice that we used the term, "restful sleep". The reason is that for many of us, sleeping can be an uneasy experience. While some people suffer from sleeping disorders, most of us can improve the quality of our rest by making a few lifestyle changes. We'll talk about some of them later, as several have positive effects on both sleep and intelligence. For now, we suggest that you do what it takes to make your bed comfortable and your bedroom peaceful. It also doesn't hurt to drink a cup of chamomile tea right before bedtime.

Increase Your Exercise
Exercise benefits our bodies in many obvious ways, but it's also been shown to increase mental sharpness. To begin with, it helps to reduce stress, anxiety, and depression, all major obstacles in terms of learning... and sleeping.

Regarding its physical effects, exercise brings oxygen-rich blood to the brain, an important component to overall brain health. Exercise also regulates blood sugar levels. Some recent studies have shown a correlation between impaired glucose tolerance and an undersized hippocampus, the portion of the brain that controls the conversion of short-term memory into long-term.

Forms of exercise such as aerobics, dance, and martial arts all require memorization and are great for promoting mental stimulation. They also help to develop the rhythm and timing circuitry that runs through multiple regions of the brain. During these types of exercise, neural pathways that connect the regions are invoked and stimulated.

Improve Your Diet
Just like exercise, a good diet is critical to both physical health and intelligence. For babies, brain development is highly dependent on diet, especially in terms of the intake of essential and non-essential fatty acids. But as adults, these fatty acids play a major role in how our brains function.

It's important to first understand that essential fatty acids are components of fat particles that our bodies cannot produce and, as a result, they must be ingested. Non-essential fatty acids are fat components that our bodies can produce.

ALA (alpha-linolenic acid) is an essential fatty acid that's part of the Omega-3 family. Thousands of studies over the last few decades have shown ALA to have a positive effect on everything from arthritis and cardio-vascular health, to learning and IQ.

The highest quantities of ALA are found in flax seed and flax seed oil. Smaller amounts can be found in walnuts, wheat germ, and cold-pressed canola oil. Trace amounts are found in dark green, leafy vegetables.

DHA (docosahexaenoic acid) and EPA (eicosapentaenoic acid) are also part of the Omega-3 family, and they are primarily found in oily, cold-water fish such as salmon. Because of the body's ability to convert ALA into both DHA and EPA, they are considered to be non-essential. But, there's a catch. Anyone who has low levels of ALA, or is deficient in the vitamins necessary for conversion, may also have low levels of DHA and EPA.

The lesson here is to eat more of the good stuff and a lot less of the bad. Stick to fresh fruits and vegetables, whole grains, legumes, lean meats, fish, and natural fats. Eat more whole foods as opposed to processed foods and, when consuming sugar, caffeine, or alcohol, do it in moderation as they are known to affect both brain function and quality of sleep.

Read More Often
We've all heard the term "reading is fundamental", but the question is, does it make you smarter? Well, for starters, reading has been shown to increase vocabulary quicker than either talking or direct teaching. The benefits of having an enhanced vocabulary are rather obvious and too numerous to mention.

The second benefit of reading is its ability to increase general knowledge while minimizing the absorption of misinformation. The resulting knowledge, along with the accompanying confidence it generates, contributes greatly towards becoming a more skilled speaker and conversationalist. Lastly, reading helps to sharpen both memory and reasoning abilities. As we age, the positive effects are even greater.

Write More Often
Writing is beneficial to your intelligence, as well as your perceived intelligence. Unlike conversation, a written communication is memorialized in physical form. A written document not only gives the reader more time to scrutinize your thoughts, it can also be used as proof of your grammatical and spelling abilities. These factors elevate the importance of your overall writing skills. The bottom line - the more you write, the better writer you'll become.

Writing also helps to nurture creativity by way of exercising the imagination. From "thinking outside the box" and problem solving to creating and conceptualizing, an enhanced imagination has many practical applications. A good tip for increasing your writing is to keep some sort of a daily journal. You can improve your writing skills, exercise your imagination, and reflect on your day, all at the same time.

Watch Less TV
We've all heard the expression, "TV rots your brain!" While it is somewhat of an exaggeration, watching TV doesn't do much to sharpen your thinking. The main problem is that viewing television is a completely passive activity. After plopping yourself onto the couch, the majority of your mental stimulation will come from fighting over the remote.

We are not suggesting that anyone cut out television altogether, but we do recommend limiting it. Better yet, take control of your TV watching as opposed to the other way around.

VCRs are a little outdated. DVRs (digital video recorders), on the other hand, are a great solution, as they give you the ability to record a multitude of shows without videotape. This practice accomplishes three very positive things. First, it allows you to watch what you want, when you want. No more being held captive by network programming. Second, it cuts down on channel surfing, a major contributor to frivolous viewing. Third, it allows you to bypass all commercials.

Play Games
Crossword puzzles, Sudoku, certain board games, and card games are great for mental stimulation. Each of them will exercise various brain functions such as lexical recall (memory for words that name things), attention, memory, logic, and pattern recognition. They are accessible to almost everyone, and some only require one player. The key here is that as you advance in skill, you should seek out harder, more challenging versions.

Keep Memorizing
There is no shortage of contemporary studies that show a powerful correlation between a strong working memory and overall intelligence. A good memory has also been shown to slow down mental aging. Ergo, memorizing almost anything is one of the best exercises you can give your brain.

Start small by memorizing your shopping list or your daily schedule. Step it up a notch and memorize a poem or two. Take it to another level by learning a musical instrument or a new language. Doing any of these exercises can potentially lead to quick and substantial improvement in your mental sharpness.

Get a Hobby
Gardening, bird watching, collecting, flying model airplanes, etc.; taking on any new hobby is good for mental stimulation as well as your overall mood. Finding activities you really enjoy allows you to learn and have fun, simultaneously. It provides both an escape and a passion. All of these traits are components to living a happy and rewarding life, and remaining mentally sharp.

Challenge Yourself
One enemy of intelligence and mental sharpness is our propensity to fall into overly rigid, daily patterns. It is one thing to keep a schedule, or to plan out the events of your day. What we're talking about is having the exact same routine, nearly every day.

Falling into rigid patterns promotes mental passivity, or the opposite of stimulation. At the top of this article we spoke about neurologists agreeing that the key to sharpening your mind is to increase mental activity. Same old, same old is no way to accomplish this.

Instead, we recommend mixing things up a bit. Challenge yourself by participating in new activities. Join a softball league, a reading club, or even a theater group. At the very least, play around with your daily schedule. The point is that too much regimen can dull the senses.

5:08 PM - Oct. 31, 2007 - comments {0} - post comment

What's up with the new FHA loans?

Not long ago, FHA lending was just another government-sponsored program unworthy of political attention or media limelight. Now, with no less than three new reform initiatives, FHA is generating excitement, confusion, speculation, and even venom for political pundits and the media.

Fixing Broken ARMs
FHASecure is a new federally-insured (temporary) lending program announced by President Bush on August 31, 2007, and released to FHA-approved lenders on September 4. Qualified homeowners seeking payment relief from their adjustable rate mortgage (ARM) may be able to use FHASecure to restructure their loan into a more stable, fixed-rate program, even if they are already delinquent on payments. "Risk Based" fee schedules, which are to be released shortly, will help price these loans appropriately.

Do You Qualify?
To qualify for an FHASecure loan, borrowers must meet the following five criteria:

1. A history of on-time mortgage payments before the borrower's teaser rate expired and loan reset;
2. 3% equity in the home; or cash to compensate (see your mortgage professional to find out about other methods of meeting this requirement);
3. A sustained history of employment;
4. Sufficient income to make the mortgage payment; and
5. The loan application must be signed no later than December 31, 2008.

Even if you do not meet these criteria, you should still contact a qualified mortgage professional because he or she can often provide you with other resources to help overcome your current challenges and reach your financial goals.

The House Takes Initiative
Last month, the House overwhelmingly passed FHA reform bill HR 1852 (The Expanding American Homeownership Act of 2007). The next step is the Senate where a vote is expected within the next few months.

As the bill stands now, there are a number of significant changes that could dramatically impact home lending, including making FHA loan limits as high as $729,750 in high-cost areas, such as California and Florida. It's uncertain if the Bush administration will support the bill in its current form, but it has several features that could easily reshape FHA lending as we know it.

• Lower Down Payments: Authorizes zero and lower down-payment loans for borrowers who can afford mortgage payments but lack the cash for a required down payment. (In fact, options are now available which may help to expand or stabilize certain programs for those who have little to no cash.)
  
  
• Subprime Borrowers: Directs FHA to provide mortgage loans to higher risk (but qualified) borrowers without authorizing unnecessary fee hikes on such borrowers.
  
  
• Reverse Mortgages: Enhances the FHA reverse mortgage loan program to help seniors pay for health and other expenses by removing the loan cap to avoid program shutdowns, raising loan limits, and reducing the maximum fee lenders can charge for these loans.
  
  
• Multifamily Loans: Raises FHA multifamily loan limits so these loans can fully fund construction costs in high-cost areas, and enhances sale of foreclosed FHA rental housing loans to localities so that affordable housing can be maintained in local communities.
  
  
• Higher Loan Limits: Raises the FHA loan limit in each area to the lower of (a) 125% of the local area median home price or (b) 175% of the national conforming loan limit.

Senate's Blueprint for Reform
Read twice and approved by a Senate banking panel on September 19, this is the Senate's version of FHA reform. Again, further steps are necessary before this initiative is to become law. Following are some issues that the legislation is attempting to address:

• Increase loan limits across the board;
• Reduce down payment requirements;
• Simplify FHA requirements for condominiums and housing co-ops;
• Expand reverse mortgage programs;
• Enhance home buyer counseling before and after purchase;
• Establish alternative credit scoring pilot program;
• Enhance fraud protection;

Bottom line
By updating and expanding FHA, lawmakers are clearly invested in removing some of the current limitations in FHA lending. All politics aside, this new flexibility will likely help many homeowners.

5:03 PM - Oct. 29, 2007 - comments {9} - post comment

Keep your finances in order

1. Have your paycheck automatically deposited. Why would you bother getting a check in the mail when you can circumvent the paper trail altogether? Holding the check in hand still gives some of us a sense of security, says Weston - but it's a false sense of security. A paper check may seem less ephemeral but that's an illusion. If you happen to misplace your paycheck, it's likely to take you at least a week to get a duplicate. With direct deposit, you never run into this problem.

2. Take advantage of automatic bill paying. If you've avoided signing up for it because of an aversion to technology, get over it, urges Weston. Even the most conscientious money managers are likely to miss a payment now and again. Once upon a time, this wasn't a huge problem, because banks and other lenders were more lenient, offering grace periods and extensions. But times have changed and the fees and penalties for late payments have soared. Even worse, one missed payment can lower a good credit rating by as much as 100 points, warns Weston. With automatic debit, your bills are guaranteed to be paid on time as long as you have enough money in your account.

3. Track your accounts online. If you're on a tight budget and covering your bills requires carefully managing your cash flow, it's time to trade in your checkbook for an online bank account. It will allow you to access your financial information 24 hours a day. In a matter of minutes, you can get an accurate account balance by checking to see which debits have gone through and which are still pending. This will help you avoid bloated overdraft fees. Hint: When you have several payments pending, be aware that many banks now put your largest check through first. Why? Because they stand to make money on overdraft fees if you're remaining balance doesn't cover the smaller checks.

4. Pad your checking account. Worried about exceeding your limit? Commit to building a realistic safety net. Experts have long cautioned people to save at least three months worth of salary in case of calamity. But let's face it: that's just not an option for some us. Instead, try to cushion your bank account just enough to avoid late payments and bounced checks. Weston advises starting out by making $100 of the money in your checking account off limits. This is money you don't spend no matter what, so always remember to subtract it from your available balance before you go on a spending spree!

5. Customize due dates. For many of us, cash flow varies depending on the time of the month. If you're having trouble paying bills that come due long after payday, you may want to consider customizing your due date.

"Most major lenders will work with you to find a due date that's reasonable for you," says Weston. Renegotiating your due date can help you keep a handle on your finances and limit fees.

12:58 PM - Oct. 27, 2007 - comments {0} - post comment

Support repeal of "phantom tax"

"NAR is encouraged by today's House Ways and Means Committee vote to adopt this measure and send it to the full House for consideration," said NAR President Pat V. Combs of Grand Rapids, Michigan, and vice president of Coldwell Banker-AJS-Schmidt. "Changing the IRS code for these situations will relieve a tax burden for families who are already in financial distress and are most likely unable to pay additional taxes."

With many families affected by resetting interest rates on subprime mortgages and the ongoing rise in foreclosures, NAR has been working to help more homeowners and their families keep their homes.

"Clearly it is unfair to tax people on phantom income when they most likely have no cash with which to pay that tax," said Combs. "Realtors® don't just sell homes; we build communities, and NAR is committed to efforts that will help make the nightmare of losing a home less burdensome for families."

The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement relieves the borrower of the obligation to pay some portion of his or her debt. If the property is sold at foreclosure or is sold for less than the amount borrowed, that difference is considered income and is subject to the tax.

H.R. 3648 would ensure that any mortgage debt secured by a principal residence will not be taxed. "NAR stands strongly with Chairman Rangel, D-N.Y., and Ranking Member McCrery, R-La. Their relief proposal addresses a fundamental unfairness that affects the lives of those who find themselves in truly unfortunate circumstances. We must all work together to prevent the dream of homeownership from becoming a nightmare," said Combs.

The legislation includes a provision to safeguard against abuses. The provision, similar to one that already exists for commercial real estate owners, would treat commercial and residential property equally. In addition, NAR supports the proposed offset, which tightens the requirements for taking advantage of some tax benefits while retaining all of them.

1:01 PM - Oct. 25, 2007 - comments {1} - post comment

30 year fixed mortgages ARE still available

With support by Genworth Financial, Dr. Wachter released her third quarter 2007 U.S. Mortgage Payment Index, reminding buyers that safe home financing options still exist despite widespread fluctuation in the mortgage market.

"It's encouraging to see that consumers have not been scared off by the 'credit crunch' and 'mortgage meltdown' talk, and are returning to secure, tried-and-true home financing," Wachter said. "This trend emerged in the first half of 2007, and I expect it to continue as home buyers become more informed about their mortgage options and lenders reign in risky products."

Dr. Wachter's Index shows that both borrowers and lenders steered clear of risk and opted for safer mortgages in the first half of 2007. Adjustable-rate mortgage applications dropped 46.9% from September 2006 to September 2007, while applications for fixed-rate loans climbed 30.2% in the same period. Borrowers who put down less than 20% on a home are flocking to insured, single mortgages rather than risky piggyback loans. The number of borrowers using private mortgage insurance jumped 36% in the second quarter, and is up 69% since the outset of 2006.

"There is particularly good news for first-time and low down payment home buyers in the second half of 2007," said Wachter. "Long-term, fixed-rate mortgages are still widely available and affordable, even in today's market. My advice to these borrowers is to stick with a traditional fixed-rate loan with mortgage insurance. That way, they will be sure to keep their payments stable and affordable over time."

Published quarterly by Dr. Wachter, and in association with Genworth Financial Inc., the U.S. Mortgage Payment Index evaluates which mortgage products offer borrowers the best value, comparing payments for various mortgage options. Wachter's third quarter analysis finds that monthly payments on long-term, fixed-rate loans with mortgage insurance remain steady over five years - with one product dropping by 9.3%. Since combination, or piggyback, loans are subject to rate resets, payments can jump as much as 148% in five years.

"By locking in an affordable rate now with a fixed-rate mortgage, new buyers and refinancing borrowers can avoid the payment shock that is imminent for an estimated 2 million American homeowners, as their adjustable-rate loans reset in the coming months," Wachter said.

The following mortgages are featured in the new Index for September. The first amount reflects the payment in month one, the second amount reflects the payment in month 61:

- 30-year Fixed with monthly mortgage insurance: $1,400 / $1,270 (drops 9.3%)
- 30-year Fixed with Single Financed Premium mortgage insurance: $1,306 /$1,306 (no change)
- Combo: 30-year Fixed and HELOC: $1,321 / $1,428 (rises 8.1%)
- Combo: 30-year Fixed and Closed-End Second: $1,327 / $1,327 (no change)
- Combo: 10/1 Interest-Only ARM and HELOC: $1,196 / $1,303 (rises 8.9%)
- Combo: Pay Option ARM and HELOC: $714 / $1,771 (rises 148%)

12:47 PM - Oct. 23, 2007 - comments {0} - post comment

New HUD rules proposed

According to the Wall Street Journal online, in 2004 the administration backed down amid fierce opposition from the housing industry and members of Congress from both parties. After spending two years trying to “simplify, improve and lower costs associated with obtaining home mortgages,� the Department of Housing and Urban Development tabled its proposed rule “due to the significant number of questions raised.�

The renewed emphasis on loan disclosure is prompting some head shaking among consumer groups, who say at least some of the current problems could have been avoided if HUD had succeeded in overhauling the rules. While parts of its original proposal were heavily criticized, there has long been widespread agreement that the paperwork borrowers receive when they reach the settlement table is opaque and confusing.

“Home buyers, particularly among those taking out subprime loans, all too frequently find that when they show up at the settlement table…their loan terms are different from what they understood,� said Allen Fishbein, Consumer Federation of America’s director of housing and credit policy.

Now, the administration plans to revive the proposal as one way to prevent a recurrence of some of the problems roiling the housing sector. The White House says it will announce new rules this fall. Mr. Bush, in a radio address this month, said his administration “is working on new rules to help our consumers compare and shop for loans that meet their budgets and needs.�

Those efforts, along with the administration’s overall response — which also includes helping distressed homeowners refinance through the Federal Housing Administration and private lenders — are expected to be discussed at a House Financial Services hearing today where HUD Secretary Alphonso Jackson, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke will testify.

HUD has long agreed the settlement process is confusing but has been stymied in its efforts to make changes that would affect a huge, powerful industry that has grown up around the current rules. After its original proposal in 2002, HUD was deluged with more than 40,000 letters. In February 2004, Sen. Wayne Allard (R., Colo.) told Mr. Jackson — who was then the nominee to head HUD — that he couldn’t support his nomination because of the proposed changes.

One month later, Mr. Jackson pulled the rule, saying the agency would “re-examine� and repropose it. HUD held a series of roundtables in 2005, but the issue moved to the back burner, administration officials said.

Brian Montgomery, assistant secretary of HUD, said the agency knows borrowers need better information and is working to improve disclosure. “If we can help consumers understand the fine print, we can help prevent them from getting in over their heads in the first place,� he said in a written statement.

The biggest change is expected to be to the Good Faith Estimate, a document given to borrowers that lists costs such as title insurance, appraisals and other fees. The administration wants a more explicit detailing of mortgage-broker fees and loan terms, such as whether the interest rate increases or is there is a prepayment penalty.

At the same time, HUD plans to drop one of the more controversial aspects of the original proposal: allowing banks to handle the settlement in a single package at a set price, according to a HUD document. HUD viewed the provision as a way to bring down costs, but it ran into stiff opposition from smaller businesses, such as title companies and appraisers, who feared they would be squeezed by big banks and forced out of business.

The housing industry is bracing for HUD’s revised proposal — in particular, mortgage brokers, who are barraged with criticism in the current housing crisis. Members of Congress, consumer groups and others have accused mortgage brokers of steering individuals, including those with good credit, into subprime loans with higher interest rates that benefited them financially.

Brokers often receive fees from the lender when the borrower agrees to pay a higher interest rate than he or she qualifies for. The higher the rate, the higher the fee for the broker, though some lenders cap the amount they will pay. HUD is expected to require more explicit disclosure of broker compensation so borrowers clearly understand the relationship between broker and lender.

President Bush singled out the industry in a speech last month, saying his administration “will soon issue regulations that require mortgage brokers to fully disclose their fees and closing costs.�

Mark Savitt , president-elect of the National Association of Mortgage Brokers, said his industry already provides adequate compensation information. “I don’t know of anybody else in our industry where you completely disclose every dime you make in a transaction, so I don’t know what more we could disclose,� he said.

10:28 AM - Oct. 21, 2007 - comments {0} - post comment

eBay hints

GOING ONCE...GOING TWICE...SOLD ON EBAY!

The garage sale season is coming to an end, but if you haven't had a chance to clean out your closets or spare rooms yet, don't fret. One of the most powerful sales is taking place right this minute...actually every minute of every day...on eBay!

The online auction site has quickly become a convenient way for consumers to buy the goods they're looking for--and for sellers to actually make money by auctioning off items they don't need or want. Even though listing and selling items may be easy, the tips below can help you increase the number and size of the bids you receive!

What You See Is What You Get. Believe it or not, many buyers won't even look at your ad if you don't provide a picture of it...they still want to see what they're buying. To increase your number of potential bidders, make sure you include a quality photo for every item you're selling.

How Low Can You Go? It sounds a little counter-intuitive, but the lower you start the bidding, the more money you may get. In fact, starting the bidding at 99 cents--versus a dollar or more--attracts a larger number of bidders. This larger pool has two powerful impacts. First, the more bidders you have, the more new bidders will be drawn to your ad, believing that you've got a red-hot item. Second, many bidders will continue the bidding game once they've begun it, which means they may bid more in their third or fourth round then they would have been willing to offer if you started that high in the first place. Finally, remember that your profit isn't just determined by how much you sell your item for...you also have to consider how much you will have to spend in order to sell it. By listing your item at 99 cents, you'll qualify for the lowest eBay listing fee.

Don't Get Carried Away With Shipping. In order to receive an item, the buyer must pay for shipping in addition to the winning bid amount. Those shipping fees aren't determined by the post office...they're actually determined by you. To make sure you don't drive buyers away, clearly list the shipping fees that apply. And don't get greedy and run up those fees. Smart shoppers will know you're trying to take advantage of them and they'll walk away. So, be clear and be fair!

Consider the Alternatives. Potential buyers will find your ad through searches. To make it easier for them to find it, consider alternative spellings--such as "videogame" and "video game." Also, once buyers find your ad they may have questions. To make sure they can contact you, consider providing a second e-mail address, in case your primary one is only checked while you are at work.

Everybody Loves Options. Some buyers prefer paying for their online purchases through a secure Internet payment service; others prefer using credit cards. Increase the number of bidders interested in your item by offering a variety of payment options.

Know When to Post 'Em and When to Hold 'Em. The day that you post your ad makes a difference. For instance, if you post a 10-day ad, the best day is Thursday. That way, your auction will end on a Sunday...which happens to be a big day for eBay bidding. Plus, your ad will be up for two full weekends, thus increasing your exposure on active bidding days. If you're getting ready to list an item, take a minute to consider how the listing day will impact your sale. It's better to wait a few days and get a better price in the long run, rather than rush into a situation that might mean fewer--and consequently lower--bids.

10:24 AM - Oct. 19, 2007 - comments {0} - post comment

College students want it their way

This year’s report finds a massive 94% of respondents expressing plans to head to the polls in 2008 to vote for a specific candidate for President and offers an intriguing peak as to who might win their vote.

Empowered to make a difference personally, students continue to push for a socially responsible Corporate America and name their choices for the Top 10 “Most Socially Responsible” brands with the announcement of the annual “Alloy U” Awards.

Samantha Skey, EVP, Strategic Marketing, Alloy Media + Marketing commented, “College students have shown interest in rewarding “good” brands and corporations for a few years now. It’s fascinating to see how students define corporate social responsibility and to hear how far that ‘good works’ perception moves the needle in purchase intent.”

My World, My Way

According to responses in this year’s study, the majority of college students do not hold a positive view on the state of affairs in the country, nor do they give high marks to the current administration. Asked to rate the state of things in the U.S. today, 58% (net) responded that the current situation is only fair or poor and similarly, their feelings on President George W. Bush’s performance in the White House garnered only fair or poor marks with almost three-quarters (73%) expressing dissatisfaction.

Interestingly, this educated and reported politically disillusioned group appear confident in their ability to do something about their discontent. When asked which group has the greatest ability to make positive changes in the world, ranking at the top, a resounding 35% expressed that people their age have what it takes to impact positive world change, more so than the U.S. Government, with only 24% reporting, and Fortune 500 Companies at 12% confidence.

My Vote Will Count

With students expressing gaining confidence in their own voice and appearing optimistic about the impact their contributions can make on the world, this years class appears to value their right to vote and the importance of being a participant in choosing our next leader.

Remarkably, a whopping 80% of students (ages 18-30) surveyed report being registered to vote, and further, 94% of those registered voters have indicated they plan to vote for a specific candidate for President.

Dana Markow, VP, Youth Research, Harris Interactive stated, “Though historically, actual participation in elections is lower than what is self-reported, it will be interesting to see the effect of this passionate generation’s turnout in 2008 as this could potentially be the term that we will see the largest voter turnout among the college population to date.”

Who Will Get My Vote

So, who’d get the vote if the election were today? With a large number of students expressing intent to vote in 2008, candidates are well aware of the influence this politically aware bunch will have on the outcome of the coming presidential election.

And, they should also pay attention to the sources this increasingly mobile group are tapping for information. Today, 70% of students who say they have an issue that will impact their vote in 2008 claim they are getting their information about these issues online, almost equal to information viewed on TV - and more than half (55%) rely on good ol’ word of mouth from friends, more so than parents’ influence.

If votes were tallied today, Barack Obama is the apparent frontrunner, getting the majority vote with 22% of students naming him our next President. Hillary Clinton comes in a close second, getting 19% of the student vote. Though it appears students today are leaning heavily Democratic, the Republicans are garnering their attention with Rudy Giuliani trailing close behind Hillary with 11% of the vote, and Senator John McCain squeezing in with 6%. Al Gore still gets students support. With 5% of the students choosing him, it appears they think he should be on the ballot.

Candidates - Listen up!

And what’s on students’ minds as they contemplate our next leader - the War in Iraq is top concern for students, with two-thirds (66%) reporting that this issue will most influence their vote. The economy plays an equally pivotal role with 54% reporting significance, followed by healthcare issues (48%), social security (47%), the environment (46%) and immigration (43%). Candidates’ stance on gay marriages (40%) and homeland security (37%) garner considerable attention as well.

My Money Where it Matters

This year’s report finds students avidly aware of where their $198 billion dollars in consumer power is being spent and they continue to show commitment towards brands that are improving and contributing to the issues that matter to them. Social consciousness among this group heightens, with 37% (net) of respondents stating they prefer brands that are socially conscientious. That’s a slight 4% increase over last year’s figures.

The study asked students what indicators are most important to them in determining a company’s social responsibility. Significantly, 74% list a company’s fair labor practice as most important, followed by eco-friendly or green practices at 66%. Philanthropy holds import as well - companies that donate to a charity or cause rank high, with 63% reporting its significance.

The College Explorer study continues with it’s annual “Alloy U” awards in this category, asking students to name the brands they perceive to be most socially responsible. Among the top finishers were several companies garnering top honors again; Ben & Jerry’s, creator of the “Lick Global Warming” campaign, Yoplait which produces “Save Lids to Save Lives” in support of breast cancer, and Burt’s Bees, a company at the forefront of earth-friendly practices. While some brands dropped off the top list this year, notable newcomers hitting a mark with students include Target and Whole Foods Market.
“Social responsibility continues to be a focal point for this generation. Good will branding, if consistent, relevant and authentic, has great potential to influence both purchase intent and longer term loyalty,” said Skey.

The 2007 Alloy U Award winners for Top Socially Responsible Brands as recognized by college students are:

1) BEN & JERRY’S
2) WALMART
3) COCA-COLA
4) NEWMAN’S OWN
5) TARGET
6) YOPLAIT
7) WHOLE FOODS MARKET
8) BURT’S BEES
9) STARBUCKS
10) KASHI

“It’s an honor to be recognized by Alloy and its many devotees for what we set out to do every day as a values-led business: To be a progressive force for the environment and social and economic justice everyday and everywhere we do business,” said Walt Freese, Ben & Jerry’s CEO (a.k.a. Chief Euphoria Officer). “Being awarded this recognition two years in a row is the cherry on top of our ice cream sundae!”

“Active participation in our communities and caring about our environment is a core value at Whole Foods Market,” said Kate Lowery, Whole Foods Market spokeswoman. “It’s energizing to be recognized for walking our talk, especially among a growing segment of young shoppers who seem more committed than ever to natural and organic foods.”
“The insights gained from the Alloy College Explorer continues to be an invaluable key to understanding what moves and motivates a class that not only is growing in size and number, but also appears increasingly able and ready to prove their worth,” concluded Skey.

9:44 AM - Oct. 17, 2007 - comments {0} - post comment

When to buy that car - or that table

TIMING IS EVERYTHING...ESPECIALLY WHEN IT COMES TO SAVING CASH!

Did you know that the fiscal year for Japanese companies ends in March? Do you care? You SHOULD...if you want the best deal on a new television for your home theater system.

That's because new models and products are scheduled for release at the beginning of the new fiscal year--which for Japanese electronics companies is April. And the release of the new models means...you guessed it...huge discounts on the previous year's models. So if you're shopping for a television, stereo or other electronics, your best bet is to watch for sales in spring.

Looking for Even More Savings?

You can save on just about every item you need...if you know what season or day of the week to purchase it. Below are some tips to help you save the most on your shopping list.

Airplane Tickets: Your best chance for saving is Wednesday morning. That's because airlines introduce their savings over the weekend and during the first few days of the week, subtle price wars begin. By early Wednesday, the savings have usually hit their peak...and there are still plenty of seats left for you to capitalize on.

Furniture: Unless you need to replace your sofa or dining room table right away, those "HUGE" weekend and holiday sales aren't the best time to buy. Instead, you should plan ahead and do your furniture shopping in October or April. That's when new lines of furniture are unveiled at industry trade shows...which means you can save big on the in-store stock that needs to be sold before the new inventory takes a seat on the showroom floor.

Cars: You probably already know that you can save on car purchases in early fall when new models are released and the current models go on sale. And you may also know that your best chance to negotiate a better price is at the end of a month when car dealers need to make their monthly quotas. But did you know you can drive home a great deal early in the week, especially during the morning? At that time, the dealerships aren't overflowing with shoppers like they are on the weekend, so you'll get more personalized attention. Plus, salespeople are more likely to negotiate when they don't have three or four other buyers waiting in the wings to pay full price.

Gas: We've all seen gas prices jump as travel weekends approach. It's a common occurrence...but it can be avoided. Whether you're planning to travel or not, the best time to top-off your tank is early Thursday morning. Then, watch the prices rise and calculate your savings!

Toys: The winter holiday season is a no-brainer for toy sales. But you can also save some serious dollars at the end of summer. Think about it...department stores only have so much room to store their merchandise. And by the end of the summer, they're starting to stock up for the big holiday push...which means they have to get rid of their current inventory of fun. So for savings of 60 percent off and more, try toy shopping as summer winds down in August.

Clothing: By the time the weekend rolls around, just about every dressing room is filled...and the best deals have been picked over already. Why? It's simple. With the large number of special promotions to be marked and shelves to be stocked, most clothing stores get started early. And savvy shoppers, like you, can get the best deals and the best selection by Thursday evenings. As an added bonus, the stores, dressing rooms, and checkout lines aren't nearly as crowded--so you save on stress too!

The moral of the story--plan ahead on your purchases and you'll be rewarded! And be sure to forward on this article to your family, friends, and coworkers too - they'll thank you for it!

9:26 AM - Oct. 15, 2007 - comments {2} - post comment

What's your home worth today?

Closely mirroring the national median price appreciation are the Raleigh-Cary, NC, and Charleston, SC, metro areas with 41% and 40% respectively. The median price in the Raleigh-Cary area went from $160,100 five years ago to $225,100. The median price for Charleston went from $159,400 to $223,200, according to second quarter data compiled by the National Association of Realtors.

But, like politics, all real estate is local. Median prices are a guideline at best because the median is a typical market price where half of the homes sold for more and half sold for less.

The burning question for the vast majority of homeowners, home buyers and home sellers is, “What is my house worth today in my local marketplace?” And, where can I easily and quickly find this and other critical information, such as the Top 20 most expensive and most affordable U.S. housing markets.

One company, HouseHunt.com says they provide a simple solution. When you visit HouseHunt.com, enter the street address and Zip code to find out “What Is My Home Worth?” A list of recent home sales in the neighborhood will appear on the screen. They will be listed by property address, number of bedrooms and baths, price and sold dates.

Next, visitors to the site will be asked to type in their name, e-mail address and phone number to validate the inquiry. Once completed, an estimated value of the home will appear on the screen, taking into account such things as square footage, lot size and age of the home, along with a locater map. A self appraisal tool is also provided to recalculate the value the home. This takes into consideration such things as prime locations, view lots, buyer activity, pools, upgrades and other amenities.

9:19 AM - Oct. 13, 2007 - comments {0} - post comment

Getting your kid through college

This article by Marshall Loeb, former editor of Money Magazine, gives everyone who has a child in college some ideas to make sure they graduate.

In today’s highly competitive work world, the importance of a college education can’t be underestimated. Not only do six out of every 10 jobs require a postsecondary education, donning that mortarboard also boosts a person’s annual income by an average 80%.

Yet only around 40% of the students entering public four-year colleges now are destined to graduate. For those attending private institutions, graduation rates hover around 57%.

So how can you keep your prospective college freshmen from ending up on the wrong end of this bell curve? Helping them adjust to life outside the nest is critical, reports Scientific American Mind contributor Yvonne Raley, associate dean at Felician College.

She writes: “Entering college is a rite of passage in which students must make a transition from the community of their childhood — their family, high school and hometown — to that of college, in which roommates stand in for siblings, trusted teachers for parents, and a dorm in a new town for home.�

Here are four things parents can do to help ensure their kids successfully matriculate:

1.) Stress the importance of studying and time management. A review of more than 100 retention studies in 2004 determined that strong study habits and time-management skills were better predictors of who would go on to graduate than high school grades or test scores.

2.) Make sure that students address gaps in their education. Incoming students who lack basic reading, writing or math skills risk getting in over their heads. If your children need extra help, suggest that they use their first year to take some remedial classes. It’s important that they take steps to fill these gaps early on, as most college dropouts leave by the end of their first year.

3.) Encourage them to get involved. Students who join clubs or participate in other campus activities early in their freshman year are more likely to effectively assimilate, according to Raley. “One of the key influences on a student’s commitment to completing college is whether the student successfully integrates into social circles,� Raley writes.

4.) Don’t disengage. Entering college is a challenging transition, so take the time to ask your child about grades, social network and general state of mind. If you find that they are having a hard time connecting with peers or faculty, it may be time for a reappraisal. Students sometimes falter when they find themselves surrounded by people who don’t share their values or culture, Raley warns. Perhaps your child should consider moving to a different dorm — or even a different school?

12:17 PM - Oct. 11, 2007 - comments {2} - post comment

To buy or not to buy....

This article from the Wall Street Journal on-line expresses many of the frustrations today's buyers face.

t’s not a decision to be taken lightly. Prospective home buyers who aren’t likely to be in their homes long enough to weather the downturn could end up “under water” — owing more on a mortgage than a home’s market value.

My husband Gerry faced a similar decision 16 years ago. He started shopping for homes in early 1991, after the late ’80s housing-market implosion. Gerry was sitting on $50,000 in a low-interest savings account and older friends whom he respected were urging him to invest in a house. Prices were still declining from the bust and interest rates on a fixed 30-year mortgage were hovering around 9.5% — not bad when compared with double-digit rates in the ’80s.

Gerry’s parents urged him to wait — they felt home prices would go a lot lower than the $120,000 listed for three-bedroom, one-and-a-half bath homes he had his eye on in our central New Jersey community. Because Gerry was such a diligent saver, he had a substantial down payment and didn’t worry so much about being underwater on his mortgage.

We talked it over and despite his parents’ concerns, Gerry decided to buy a home. Because he intended to stay put for at least seven years, he decided not to worry about where prices were heading. It worked out: After eight years, when he sold the house to buy his father’s home, he walked away with about $75,000 in profit.

So how likely is it that Gerry’s scenario will play out for today’s would-be home buyers? It’s tough to say, since the housing market is facing a downturn that is steeper than we experienced in the early ’90s.

Indeed, recent data on the housing market paints a stark picture. Home prices are declining in many regions nationwide. Last month the National Association of Realtors projected, that existing-home sales will fall 6.8% this year, while new-home sales are likely to fall 19%.

At the same time, foreclosures are soaring. According to data provider RealtyTrac, foreclosure filings are up 93% in July from the previous year — or one foreclosure filing for every 693 households.

Foreclosed homes are hitting many housing markets already saturated with unsold inventory. Inventories of homes for sale in July rose 5.1% to 4.59 million, or about 9.6 months of supply at the current sales pace. A six-month supply of homes for sale is generally the norm in a balanced market.

For homeowners trying to sell, the news is expected to get worse. Wall Street has been burned by bad subprime loans and is curtailing new investment in mortgage lenders. As a result, consumers without stellar credit may be unable to get mortgages at reasonable rates.

All of these factors combined are expected to continue to weigh on home prices.

So what does this all mean for buyers sitting on the fence?

If you’re unsure whether you’re ready to buy, first consider your outlook. Conventional wisdom says that homeowners who are likely to be in a home for at least seven years will see prices rise. If you’re going to want to (or have to) sell the home in the next three years — when some markets may still be suffering the mortgage mess fallout — consider renting.

It’s true, renting has its own costs. But you won’t pay closing costs, real-estate agent fees and myriad other expenses incurred when buying, owning and selling a home. Renting also may allow you to save for a larger down payment, potentially eliminating the need to pay for private mortgage insurance when you’re ready to buy.

If the only way to afford the home you want is to finance it with an adjustable-rate mortgage, I’d be wary of buying now. Some readers over the years have taken me to task for being overly conservative by recommending fixed-rate mortgages. ARMs worked for many during the housing boom, when home-price appreciation built enough equity to allow homeowners to refinance. Amid the bust, many ARM holders are finding they can’t refinance because they’re underwater with their mortgages. Sadly, many are losing their homes in foreclosure because they used ARMs to buy homes they really couldn’t afford.

If your finances are solid and you can afford the home you want with a conventional mortgage — and you’re buying for long haul — the time may be right. And for some buyers, the market is secondary to the reality of family life — the impending arrival of a new baby may be the deciding factor to whether now is the “right time” to buy. (One big factor in Gerry’s decision to buy a home was the desire to start building our lives together.)

When shopping for homes where the market is weak, consider buying a newly built home. Home builders are hoping to lure buyers with discounts of as much as 20% and other valuable incentives, such as granite countertops, luxury appliances and in-ground pools. The National Association of Home Builders reports that 56% of builders are offering financial incentives, up from about 45% a year ago.

The best deals will often be found where home price declines are the worst. But given the severity of the conditions behind the current downturn, the regions that saw the most heady gains during the housing boom — particularly Arizona, California and Florida — may take more time to rebound. In other areas of the country, most notably Detroit, the local economy is contributing to home price declines. In these areas it’s particularly important to know whether you’ll need to sell quickly or not.

There are markets where home prices continue to show steady growth, including Seattle, Atlanta and Dallas, according to Standard & Poor’s. If you’re shopping in these regions, you’ll find the best values if you prove yourself to be a qualified buyer who can quickly close the deal. That means getting your mortgage pre-approved, where you have a written guarantee that you’ll get the loan for the amount you need. Also it would help to avoid placing contingencies on the sale, such as the need to sell an old home before closing on the new one.

There are enough contingencies in the market right now without adding too many more.

12:10 PM - Oct. 9, 2007 - comments {0} - post comment

Planning a trip abroad?

Many Americans spend a lot of time preparing and planning trips to other countries, be it a winter vacation in the Caribbean or a once-in-a-lifetime trip to Europe. Here are a few important travel tips to make sure your trip is as smooth as possible, and suggestions for what to do if the unexpected happens.

Is my destination a safe place?

As we all know by watching the news, there are a number of places in the world that are not safe for travel. The Department of State (DoS) issues travel warnings that recommend Americans avoid traveling in certain countries.

In addition, the DoS also offers fact sheets, called Consular Information Sheets, on every country in the world. These sheets describe general health, safety, and travel tips, as well as contact information for the local US Embassy, which is a critical piece of information when traveling abroad.

Passports - are they needed everywhere?

A passport is now required when traveling anywhere outside of the USA. Due to this recent change in policy, the time required to receive a passport has dramatically increased to approximately two months. You can pay an additional fee to request expedited service, but even then you'll wait nearly a month to receive it.

Helpful Tip: Even if you don't currently have plans to travel out of country, it's a good idea to apply for your passport today and keep it in a safe location until it is needed.

Where do I apply for a Passport?

Many county or municipal offices handle passport applications and photos. A complete list can be accessed at: http://iafdb.travel.state.gov/. If you're traveling within two weeks and need a passport or foreign visa for travel, you can contact one of the thirteen Passport Agencies who will be able to assist you.

What if my Passport is lost or stolen?

If lose your passport while you're in the US, you must report the loss or theft immediately to the State Department and you should also file a local police report. If you lose your picture ID while traveling domestically by air, contact your airlines immediately as there are other ways to document your identity for the airline and TSA that can be used on a case-by-case basis.

Losing your passport while traveling overseas is a dramatically different problem. The first step is to contact the nearest US Embassy or Consulate. The State Department's website has a complete listing sorted by region and country. Alternatively, you can contact the Department of State Overseas Citizens Service at 1-317-472-2328. Generally, you will need to travel to the embassy, prove your identity, and reapply. Expect to pay more for this passport than the one obtained in the standard fashion.

Helpful Tip: Keep a photocopy of your passport with you while you're traveling, but in a separate place than your other travel documents. You may even consider storing digital copies on your PDA, IPod, or laptop to keep this info with you. You can also ask a trusted friend or family member to keep a copy of passport, birth certificate and driver's license with them at home. That way you have a backup copy in case you need it.

What is the best way to pay for purchases while traveling abroad?

While many of us may remember the Karl Malden voiced American Express Traveler Checks commercials that were popular over the past several decades, Travelers Checks are not the best or most cost-effective way to pay for purchases overseas. Many retailers either no longer accept them, or they charge a very substantial markup to the exchange rate.

Helpful Tip: The best way to pay for items while traveling overseas is with your credit card, where with several card issuers you pay only the wholesale exchange rates without additional markups.

12:05 PM - Oct. 7, 2007 - comments {0} - post comment

Looking for something to read?

10. In His Steps: “What Would Jesus Do?�

Author: Rev. Charles Monroe Sheldon
Copies sold: 28,500,000

The compilation of two original novels about living a “deeper discipleship,� this book about Christianity has been on the shelves for years (over 100, to be exact). It makes frequent reference to a book you’ll see later (much later) on our list, and how to better interpret it and so forth. The questions, “What would Jesus do about global warming?� and, “What would Jesus do about those Mentos ads?� are not covered in the book, but just ask yourself . . . what would He do?

9. Valley of the Dolls

Author: Jacqueline Susann
Copies sold: 30,000,000

When it debuted in 1966, this novel shocked (and titillated) audiences with its depictions of sex, drugs, and go-go culture, but would now probably be considered quaint, or at least tame. Susann knew whereof she wrote, having lived the life of a Broadway starlet and hobnobbing with the famous. The three characters in the book are rumored to be based on Judy Garland, Ethel Merman, and Marilyn Monroe at an early point in their careers. Yes, it’s trashy, but like junk food, oh, so delicious.

8. The Common Sense Book of Baby and Child Care

Author: Dr. Benjamin Spock
Copies sold: 39,200,000

How many copies of this book have been sold to erstwhile Trekkers, wandering the aisles at Barnes and Noble with slightly glazed looks in their eyes, mumbling Klingon phonics under their breaths? Let us be clear. This is not a book about Vulcans, Vulcan culture, Vulcan language, or Vulcan babies. Well, maybe the Vulcan babies part applies. Dr. Spock’s “instruction manual� for child care has been flying off shelves since 1946, giving parents useful advice such as what milestones infants should reach at which ages, how to discipline an obnoxious child, and why dirty diapers smell so bad.

7. World Almanac

Author: Who knows?
Copies sold: 40,000,000

This is not your Farmers’ Almanac here. You will not be able to tell the weather from a variety of on-target predictions. Uh-uh. Ever since 1886, this book has provided tons of facts, collected together and organized for quick and easy reference. Yep, facts. Lots of them. Nothing but facts. Let’s move on.

6. A Message to Garcia

Author: Elbert Hubbard
Copies sold: 40-50,000,000

This book started out as an essay written all in one night in 1898 by Hubbard, who had a magazine to get out the next day and needed the material. It tells the story of a soldier who is given the task of bringing a message to (guess who?) Garcia, an insurgent leader deep behind enemy lines. But at the same time, it doesn’t tell this story, but rather uses it as a launching pad for its diatribe against lazy workers and how best to serve corporate America. Managers loved it and printed thousands of copies for distribution to their staff as a motivational tool. One can only imagine the number of proto-Dilbert cartoons this must have spawned.

We must feel some pity for the author, however, as it must have been traumatic growing up with his mother always going to the cupboard, worrying more about the dog’s needs than those of her only son. And Elbert’s own son, L. Ron, spawned the whole Scientology cult. Scary stuff.

5. The McGuffey Readers

Author: William Holmes McGuffey
Copies sold: 60,000,000

The McGuffey Readers have been referred to as “the most influential books in the history of American education.� In the nineteenth century, these readers were supposed to teach kids reading skills, but taught more about middle class values and McGuffey’s ideas about the social order. Originally published in 1879 in six volumes, they were at first a requirement, and later a curiosity for educators across the country. Take that, Dick and Jane.

4. The Guinness Book of Records

Author: Who knows?
Copies sold: 81,000,000

You don’t attract charming people with characteristics like “the world’s longest fingernails� or “the world’s heaviest ball of earwax� unless you’re a freak yourself. The fact that this book started out as a collection of barroom boasts and bets (and is published by a beer company) doesn’t hurt. Without disgusting pictures, though, would it have been as popular? We think not.

3. American Spelling Book

Author: Noah Webster
Copies sold: 100,000,000

Here’s another oldie. Around since 1803, the aptly titled American Spelling Book teeches people to spell. The guy who proceded to write the famous Webster’s Dicshunary started out just with the speling, and then mooved on to what the words ment. The styel may be a little wooden, but the plot development is griping. Two big thums up.

2. Quotations from the Works of Mao Tse-tung

Author: Mao Tse-tung
Copies sold: 800,000,000

Formerly known as The Red Book, these are quotations from the Chairman himself, and the foundation of today’s Communist society in China. We say, read and enjoy, but do not let yourself be lulled into a love of Communism. The danger that lurks there is far worse than even secular humanism. Joe McCarthy knew that.

1. The Bible

Author: God
Copies sold: 6,000,000,000

OK, maybe not 6 billion, but a WHOLE lot. The Bible was clearly a page-turner from the start, and it benefited from good word of mouth publicity, flying off the shelves. The basic plot is that there’s this omnipotent deity who creates a planet and some beings to inhabit it. These beings screw everything up, He washes them out with a flood, and then they come back and screw everything up again. He’s a vengeful first then He’s answering prayers.

The first chapter is “Genesis,� then comes “Exodus,� and in no time we have plagues, sacrifices, miracles, and holy wars all over the place. You may know how the stories go in this, one of the most popular books ever sold.

12:02 PM - Oct. 5, 2007 - comments {0} - post comment

Fall landscape tips

Convince yourself that raking leaves can be fun. Rather than wait for a single weekend, break this chore into stages. Matted leaves can lead to insect and disease problems and smother your turf, especially cool season grasses like Kentucky Bluegrass.

2:32 PM - Oct. 4, 2007 - comments {0} - post comment

A short course in short sales

Tim Ray from Apollo Mortgages gives us this short course in short sales.

Economic experts have said that the real estate market is not a major factor in the Federal Reserve's true goal of keeping inflation in check – and its recent activity seems to bear this out. By strategically infusing billions of dollars into the banking system and unexpectedly cutting its discount window rate for 30 days, the Fed has clearly attempted to "bail out" the financial and credit markets. The real estate market, however, continues to suffer nearly double the number of foreclosures as it did this time a year ago – one in every 693 US households. In some states, the statistics are even worse, with foreclosures claiming one in every 199 households!

If you or someone you know has an ARM that is scheduled to adjust in 2007 or 2008, please schedule an appointment with a mortgage specialist right away. Don't let a foreclosure or default situation sneak up on you. Remember, even if the Federal Reserve does lower its Fed Funds Rate later this month (which does seem likely), the majority of these ARMs borrowers will not be positively affected or "saved" by this move. For many borrowers, a short sale or a foreclosure will be the only available option.

What is a Short Sale?
A short sale, defined as an "agreement" to allow a home to be sold for less than the amount that is owed, can be a helpful compromise for everyone involved. For debt-ridden homeowners or those who owe more than the house is currently worth, a short sale could save them some of the enormous pain, embarrassment, and major credit challenges associated with bankruptcy and/or foreclosure. For lenders, it helps avoid some of the hassle and expense of seizing and auctioning off delinquent real estate. Lastly, for potential homebuyers and real estate investors, a short sale offers a great opportunity to purchase property at a significant discount in today's tight-fisted credit environment.

And, while short sales are not by any means common or easy, inventory levels of unsold homes are now exceeding a 36-month supply in some parts of the country. Add to that the increasing number of foreclosures, and lenders are much more eager to negotiate with borrowers who are having trouble paying their mortgages.

Short Sale Requirements
It's important to note that short sales occur at the sole discretion of the existing lender or servicing company. This is not like negotiating the price of a home under normal circumstances. Would-be buyers need to accept and understand this concept completely prior to entering into any purchase agreement on a short sale transaction. While a buyer and seller may come to some sort of agreement on their own, the lender in a short sale will ultimately have final approval of this legally-binding arrangement.

Remember, lenders are not looking to bail out borrowers who simply overextended themselves during the recent real estate boom. In most cases, a lender will only consider a short sale if a borrower has clearly suffered a serious financial hardship that directly caused him or her to default on the mortgage. This means the loss of a job, a serious illness, or the death of a loved one – something devastating and "unforeseen" that can justify such a state of financial disrepair. If you're a "flipper" with 2 or 3 homes that you weren't able to unload before the market turned, or if you have other assets or income that could easily cover your mortgage debt, it's not likely that a lender will accept a short sale proposal.

A written declaration and supporting documentation demonstrating financial hardship and an inability to make payments will definitely be required by the lender in order to even consider a short sale. This may include pay stubs, tax returns, and liquid asset statements – including those for retirement accounts – among other documentation. In addition, the borrower must be at least 91-days delinquent before a lender will even discuss a short sale.

In some cases, the lender's hands may be tied, depending on how the borrower's loan was sold into the open market through mortgage-backed securities. If the mortgage in question was not sold by the lender, but rather retained in its own portfolio, the lender may have more flexibility. However, don't expect a lot of help from the lender without first providing a sales contract from a qualified buyer and all the information required by the lender's loss mitigation department. This is where an experienced real estate professional becomes invaluable to your cause. A good real estate agent has not only successfully negotiated short sales in the past, he or she will also have access to qualified investors who are well-versed in the substantial risk and reward involved in this extremely complex and often drawn out process.

Important Additional Considerations:

• The lender will likely issue a 1099 to the seller for the difference between what is owed and the final amount the lender collects after the costs of the sale, including real estate commissions and possibly other charges. This means that the "deficiency" (the difference between the short sale price and the original loan amount) can be considered as taxable income to the borrower. Some lenders may even attempt to get the existing homeowner to sign a note for the remaining amount due.
  
  
• If there are currently multiple liens against the property, all lien holders will have to be involved in the negotiation process, not just the first lien holder. Therefore, communication and patience are essential components of any short sale.
  
  
• There is no guarantee of success. With several parties involved, it's difficult to please all sides all of the time. Short sales require expert advisors who know precisely what is to happen at every stage.
  
  
• A number of scams resembling short sales currently exist and, because of the obvious intensity of emotion involved with this process, borrowers can quickly become vulnerable to new scams.

In other words, be proactive. If you have an ARM that is scheduled to reset in the near future, or if you're facing foreclosure because of unexpected life events, don't wait until a short sale is your last viable option – and don't count on the Fed to "bail out" the real estate market any time soon.

12:57 PM - Oct. 3, 2007 - comments {0} - post comment

Problems for today's sellers

Steve Harney is a mortgage and real estate expert gives his view on the problems faced by today's sellers.

The days of quick home sales, selling for top dollar and pricing wars on homes are gone.  The challenge is the homeowners' perception of what their home should sell for. As recent as June 2007, a survey by the Boston Consulting Group found that fifty-five percent of American homeowners believe their home is worth more today than it was one year ago. In reality, in many locations, home values have gone down.

Following are the five pricing considerations you need to educate yourself on. By taking these points into consideration when pricing your property, you'll be able to put that sold sign on faster.

1. Increased Inventory

Yes, more houses are for sale right now than in recent years, meaning buyers have a lot more choices and negotiating room. But why are there so many houses for sale today? Because we are witnessing the consequence of a pent-up selling demand. In other words, a lot of sellers waited to list their property because they wanted to catch the top of the market. They waited and waited and waited. Now that they see the market declining, they list their homes in an attempt to still sell at a high price before the market bottoms out. As a result, we have an overabundance of inventory, up approximately thirty-nine percent than at this time last year.

2. Increased Mortgage Rates

News and advertising tells us mortgage rates are at an all-time low, and that's true in a historical context. But short-term, over the past three months, mortgage rates have been increasing. And every time the mortgage rates go up, even a quarter of a percent, a large number of potential buyers are disqualified from the marketplace. Additionally, a number of mortgage companies are going out of business, with American Home Mortgage company - the tenth largest in the country - as the latest to close their doors. Mortgage companies are getting nervous about what's taking place in the mortgage market, and that's making money tighter. When money gets tighter, sellers are affected because buyers have less buying power. Less buying power means fewer home sales. It's as simple as that.

3. Increased Mortgage Restrictions

During the past few years, mortgage companies granted mortgages to just about anyone, including those who couldn't or wouldn't prove their income, those with no down payment and even those with very poor credit. But today, with foreclosures climbing steadily, almost all mortgage companies have re-enacted the tight lending restrictions that were common decades ago. John M. Robbins, Chairman of the Mortgage Bankers Association, says that he's happy about the restrictions, but that this is a strong statement that will help curb abuse and will likely constrain consumer credit choices. Because mortgage companies are nervous about the current real estate market, buyers do need down payments now. A co-signer may not be enough, and credit scores need to be high. Each one of those factors and many more disqualify some people from buying, which in turn affect sellers.

4. Increased Vacancy Rates

During the real estate boom, many people and investors bought spec homes with the hopes of flipping the house for a big profit. Today, vacancy rates on these homes are up over fifty percent. Since most of these people don't want to act as landlords, they have a strong desire to sell the home rather than rent it out. As a result, many are selling these vacant investment properties for rock bottom prices, grudgingly taking a loss. This greatly affects other sellers in the neighborhood, because when one home sells for a low price, it sets a precedent for the other sales to follow suit. With the surrounding comps having low sales prices, the current listings in that same neighborhood decline in value.

5. Increased Foreclosures

Statistics from First American Real Estate Solution show if one house forecloses in a neighborhood, the average house in that neighborhood loses five percent of its value. If eight percent of the houses in the neighborhood foreclose, the value in that neighborhood goes down twenty percent. No one can deny that bank-owned properties drive prices down. Unfortunately, the real estate and mortgage market is now bracing for the tsunami of foreclosures that is expected to hit. According to the web site www.foreclosures.com, three out of every one thousand homeowners have already lost their home to foreclosure in the first half of 2007.

Experts predict that there's going to be a crash of foreclosures over the next two-and-a-half-years of more than two million homes. So if your clients get a flood of foreclosures in their neighborhood, it's going to lower the home values drastically. Additionally, no neighborhood - no matter what the geographic location - is immune from the foreclosure fact. Simply go to http://realestate.yahoo.com/foreclosures to see all the foreclosures in your city or area.

The New Era of Real Estate Sales

The bottom line is if someone wants to sell their home for a decent price, they have to list now - not three months from now and certainly not a year from now. In fact, no one is predicting the market will be back before the end of 2009.

12:45 PM - Oct. 1, 2007 - comments {0} - post comment

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