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Casual Articles - What's the Cause of the Massive Increase in Foreclosure Buying and Will It Persist? - Part I
In a recent article I wrote about the four influencers in a B2B sale. I then wrote an article about the Financial Influencer. In this article I want to focus on the User Influencer. As a quick revue, the four influencers are again.1. The Financial Influencer(s)2. The User Influencers3. The Gatekeeper(s)4. Your Champion or SponsorThis article will focus on the User Influencer.The User InfluencerAs you can readily surmise, this influencer is the person or group that will directly use your product or service. The role of this influencer is to make judgments on the impact your product and service will have on their job performance. It will either affect his job directly, and at least the people that work for
At this point Jim and Sue may consider selling their %HOUSE%. If they live in a rapidly appreciating market, they may be able to get out by the skin of their teeth. In most areas, after only a year or 2, most homes have not appreciated enough to sell quickly. With a realtor commission and accepting a discount from the purchaser, they'd have to come out of pocket to go through with the sale-money they don't have.
So depending on their state, unless an investor steps in, buying the foreclosure by negotiating a short sale with the lender, the property will be sold at auction on the courthouse steps according to state foreclosure laws.
In the next part, I'll discuss the insidious nature of Home Equity Loans for the unwary borrower.
SUMMARY The rate of foreclosures is at an all time high, and many real estate investors are buying foreclosures,
People are learning how to use Squidoo to create online traffic coming to their web pages. This is because Squidoo is different from form sites that offered Internet marketers solutions for promoting their web pages.Squidoo in short is similar to MySpace.com. Like My Space users can login to an account and post their pictures and information.How to use Squidoo to create online traffic is evident by its capabilities. In short, when you open an account at Squidoo rather than giving a short bio of you only, give this short bio that leads the audience to your web page.At Squidoo you can visit Bugs and Feedback, Squid Blog, Day Lens Blog, read free e-books, learn from developers, and more.Reread this last sentence because in the body is a set of keyword
It's a fact that the number of real estate foreclosures is skyrocketing. All over the US Real estate investors are buying foreclosure homes and homes in preforeclosure at firesale prices. A quick scan of the legal part of your newspaper will reveal the large list of properties scheduled for the foreclosure auction. Statistics indicate that over 1% of the today's homeowners will be behind on their payments or this year will face mortgage default and foreclosure. Just think, almost every neighborhood in this country will have 2-3 homeowners not being able to make their house payments. So it's not surprising that some savvy homebuyers with cash, and real estate investors make low offers for buying foreclosures and preforeclosure homes.
Lenders Lure Homebuyers and Pay the Consequences
This is bad news for the homeowners and bad news for the banks and institutional lenders who are looking at billions of dollars of loans that they're not getting interest payments for. It is of course, great news for investors buying foreclosures, because when the supply is high, the prices go down. Banks are even taking less that what they're owed for the loan by accepting short sales offered by investors and at foreclosure auctions (for more information on short sales see resource box).
So why is this happening? Here's 3 acronyms that tell the story:
ARM 's - Adjustable Rate Mortgage
HELOC's - Home Equity Line of Credit
80/20 - 80/20 no down payment loan
ARM 's are the chief culprit. Those who are not familiar with these types of mortgages, the way they work is that when the loan is first issued there is a very low (below market) interest rate. Then after a set period (from 1 - 10 years), the interest rate adjusts upward as much as 2% based on an interest index. The rate then adjusts annually by as much as 2% until the cap is reached which can be 10-12%, although caps can be in the 12-16% range.
Of course
Adjustable Rate Mortgage Lures Unsuspecting Buyers
However, this apparent good fortune for the new home purchasers was often just a foreclosure waiting to happen. A day of reckoning was coming, and these homeowners would have no idea what hit them.
Here's an example of what started happening and is continuing to happen today. Let's say Jim & Sue Tenants have a fairly low income of about $2000/month. A general lending rule of thumb is that your mortgage monthly debt should be no more than 30% of your gross income. So based on this, Jim & Sue could afford a %HOUSE% monthly debt of about $650/mo. Now let's say they could get an ARM with a 1% starting percentage value and a cap of 12%. They could qualify for a $200,000 loan with monthly debts of $643/mo. And let's also suppose the lender does not escrow the taxes or insurance. Typical taxes & insurance let's estimate to be about $2400 or $200/month. (By the way, the following scenario will play out the same, no matter what the starting percentage is).
Jim & Sue move into their new home, purchase a bunch of furniture on their credit cards, a new TV, and stereo, and some window treatments, etc. After about 6 months Sue gets pregnant. The tax bill comes due in September, and Jim and Sue are in a bit of shock. They haven't been putting away money for taxes, and it takes most of their meager savings to pay the bill.
Payment Trouble Leads to Unavoidable Foreclosure Default
Then around November, the mortgage company sends them a letter informing them that the value is adjusting upward by 2% and their monthly debt starting January will be $843 per month-a $200 increase. With their credit card debt, a new baby on the way and monthly living expenses, they're really living on the edge. When their next tax bill comes due-Jim decides the county is just going to have to wait for it's money. (In reality what will happen is that the county will put a lien for back taxes on the property and sell that lien at a tax sale auction. The real estate investors purchasing the tax lien or tax certificate (in many states) will eventually have the right to foreclose if they're not paid the back taxes and interest. Essentially buying the foreclosure for the cost of the tax lien!).
Then in November of that year, they get another letter informing them of another increase in their interest value-this time to 5% (still pretty low), and this raises their monthly mortgage monthly debt to $1074/mo - a $230 increase!
Now, Jim & Sue are in over their heads. Come January, they send in the old monthly debt amount. The bank doesn't accept it and considers them in default. They think they only owe the difference-in fact, the bank considers it as if they hadn't made any monthly debt at all. After several months, they get a foreclosure warning letter.
At this point Jim and Sue may consider selling their %HOUSE%. If they live in a rapidly appreciating market, they may be able to get out by the skin of their teeth. In most areas, after only a year or 2, most homes have not appreciated enough to sell quickly. With a realtor commission and accepting a discount from the purchaser, they'd have to come out of pocket to go through with the sale-money they don't have.
So depending on their state, unless an investor steps in, buying the foreclosure by negotiating a short sale with the lender, the property will be sold at auction on the courthouse steps according to state foreclosure laws.
In the next part, I'll discuss the insidious nature of Home Equity Loans for the unwary borrower.
SUMMARY The rate of foreclosures is at an all time high, and many real estate investors are buying foreclosures,
Office furniture procurement and purchasing departments can have similar responsibilities. Generally, procurement departments are more prevalent in large corporations, universities, and governmental agencies.In addition to purchasing responsibilities, procurement staff can determine standards for the office furniture used in their facilities. This office furniture procurement staff could work with a combination of their own design and planning department, an architectural firm, a design firm, their office furniture dealership, or furniture manufacturers to determine standard furniture products.Setting standards can be beneficial to your organization. It is a time consuming process, but it will save you a great deal of time later on. Some of the benefits are:
So why is this happening? Here's 3 acronyms that tell the story:
ARM 's - Adjustable Rate Mortgage
HELOC's - Home Equity Line of Credit
80/20 - 80/20 no down payment loan
ARM 's are the chief culprit. Those who are not familiar with these types of mortgages, the way they work is that when the loan is first issued there is a very low (below market) interest rate. Then after a set period (from 1 - 10 years), the interest rate adjusts upward as much as 2% based on an interest index. The rate then adjusts annually by as much as 2% until the cap is reached which can be 10-12%, although caps can be in the 12-16% range.
Of course
Adjustable Rate Mortgage Lures Unsuspecting Buyers
However, this apparent good fortune for the new home purchasers was often just a foreclosure waiting to happen. A day of reckoning was coming, and these homeowners would have no idea what hit them.
Here's an example of what started happening and is continuing to happen today. Let's say Jim & Sue Tenants have a fairly low income of about $2000/month. A general lending rule of thumb is that your mortgage monthly debt should be no more than 30% of your gross income. So based on this, Jim & Sue could afford a %HOUSE% monthly debt of about $650/mo. Now let's say they could get an ARM with a 1% starting percentage value and a cap of 12%. They could qualify for a $200,000 loan with monthly debts of $643/mo. And let's also suppose the lender does not escrow the taxes or insurance. Typical taxes & insurance let's estimate to be about $2400 or $200/month. (By the way, the following scenario will play out the same, no matter what the starting percentage is).
Jim & Sue move into their new home, purchase a bunch of furniture on their credit cards, a new TV, and stereo, and some window treatments, etc. After about 6 months Sue gets pregnant. The tax bill comes due in September, and Jim and Sue are in a bit of shock. They haven't been putting away money for taxes, and it takes most of their meager savings to pay the bill.
Payment Trouble Leads to Unavoidable Foreclosure Default
Then around November, the mortgage company sends them a letter informing them that the value is adjusting upward by 2% and their monthly debt starting January will be $843 per month-a $200 increase. With their credit card debt, a new baby on the way and monthly living expenses, they're really living on the edge. When their next tax bill comes due-Jim decides the county is just going to have to wait for it's money. (In reality what will happen is that the county will put a lien for back taxes on the property and sell that lien at a tax sale auction. The real estate investors purchasing the tax lien or tax certificate (in many states) will eventually have the right to foreclose if they're not paid the back taxes and interest. Essentially buying the foreclosure for the cost of the tax lien!).
Then in November of that year, they get another letter informing them of another increase in their interest value-this time to 5% (still pretty low), and this raises their monthly mortgage monthly debt to $1074/mo - a $230 increase!
Now, Jim & Sue are in over their heads. Come January, they send in the old monthly debt amount. The bank doesn't accept it and considers them in default. They think they only owe the difference-in fact, the bank considers it as if they hadn't made any monthly debt at all. After several months, they get a foreclosure warning letter.
At this point Jim and Sue may consider selling their %HOUSE%. If they live in a rapidly appreciating market, they may be able to get out by the skin of their teeth. In most areas, after only a year or 2, most homes have not appreciated enough to sell quickly. With a realtor commission and accepting a discount from the purchaser, they'd have to come out of pocket to go through with the sale-money they don't have.
So depending on their state, unless an investor steps in, buying the foreclosure by negotiating a short sale with the lender, the property will be sold at auction on the courthouse steps according to state foreclosure laws.
In the next part, I'll discuss the insidious nature of Home Equity Loans for the unwary borrower.
SUMMARY The rate of foreclosures is at an all time high, and many real estate investors are buying foreclosures,
When UK Chancellor of the Exchequer Harold Macmillan announced the introduction of Premium Bonds in his budget on April 17th 1956, first reactions were unfavourable. The church condemned the proposed draw and opposition chancellor Harold Wilson dubbed it a “squalid raffle” that would lead to “national demoralisation”. But 1950s Britain was ready for a bit of luck. After the hardships endured in World War II, many saw the opportunity to invest in the chance to win dividends of up to ?1,000 in the monthly prize draw as a welcome distraction from the daily grind.Officially launched on November 1st 1956 by the National Savings Committee, the first Premium Bond was bought by the then Lord Major of London, Sir Cuthbert Ackroyd. Other dignitaries followed suit across the UK.
Jim & Sue move into their new home, purchase a bunch of furniture on their credit cards, a new TV, and stereo, and some window treatments, etc. After about 6 months Sue gets pregnant. The tax bill comes due in September, and Jim and Sue are in a bit of shock. They haven't been putting away money for taxes, and it takes most of their meager savings to pay the bill.
Payment Trouble Leads to Unavoidable Foreclosure Default
Then around November, the mortgage company sends them a letter informing them that the value is adjusting upward by 2% and their monthly debt starting January will be $843 per month-a $200 increase. With their credit card debt, a new baby on the way and monthly living expenses, they're really living on the edge. When their next tax bill comes due-Jim decides the county is just going to have to wait for it's money. (In reality what will happen is that the county will put a lien for back taxes on the property and sell that lien at a tax sale auction. The real estate investors purchasing the tax lien or tax certificate (in many states) will eventually have the right to foreclose if they're not paid the back taxes and interest. Essentially buying the foreclosure for the cost of the tax lien!).
Then in November of that year, they get another letter informing them of another increase in their interest value-this time to 5% (still pretty low), and this raises their monthly mortgage monthly debt to $1074/mo - a $230 increase!
Now, Jim & Sue are in over their heads. Come January, they send in the old monthly debt amount. The bank doesn't accept it and considers them in default. They think they only owe the difference-in fact, the bank considers it as if they hadn't made any monthly debt at all. After several months, they get a foreclosure warning letter.
At this point Jim and Sue may consider selling their %HOUSE%. If they live in a rapidly appreciating market, they may be able to get out by the skin of their teeth. In most areas, after only a year or 2, most homes have not appreciated enough to sell quickly. With a realtor commission and accepting a discount from the purchaser, they'd have to come out of pocket to go through with the sale-money they don't have.
So depending on their state, unless an investor steps in, buying the foreclosure by negotiating a short sale with the lender, the property will be sold at auction on the courthouse steps according to state foreclosure laws.
In the next part, I'll discuss the insidious nature of Home Equity Loans for the unwary borrower.
SUMMARY The rate of foreclosures is at an all time high, and many real estate investors are buying foreclosures,
This article answers the following questions: How do most companies look at return on investment (ROI) for their sales compensation expense?What portion of sales compensation expense do companies allocate to managing existing accounts versus pursuing new accounts?Do most companies expect their salespeople to generate new, additional gross profit each year that is equal to or greater than their compensation? One conclusion I have reached after working with many different kinds of companies is that there is little commonality in how they establish the desired return on investment (ROI) from their sales compensation investments. Every company's circumstances are diffe
Then around November, the mortgage company sends them a letter informing them that the value is adjusting upward by 2% and their monthly debt starting January will be $843 per month-a $200 increase. With their credit card debt, a new baby on the way and monthly living expenses, they're really living on the edge. When their next tax bill comes due-Jim decides the county is just going to have to wait for it's money. (In reality what will happen is that the county will put a lien for back taxes on the property and sell that lien at a tax sale auction. The real estate investors purchasing the tax lien or tax certificate (in many states) will eventually have the right to foreclose if they're not paid the back taxes and interest. Essentially buying the foreclosure for the cost of the tax lien!).
Then in November of that year, they get another letter informing them of another increase in their interest value-this time to 5% (still pretty low), and this raises their monthly mortgage monthly debt to $1074/mo - a $230 increase!
Now, Jim & Sue are in over their heads. Come January, they send in the old monthly debt amount. The bank doesn't accept it and considers them in default. They think they only owe the difference-in fact, the bank considers it as if they hadn't made any monthly debt at all. After several months, they get a foreclosure warning letter.
At this point Jim and Sue may consider selling their %HOUSE%. If they live in a rapidly appreciating market, they may be able to get out by the skin of their teeth. In most areas, after only a year or 2, most homes have not appreciated enough to sell quickly. With a realtor commission and accepting a discount from the purchaser, they'd have to come out of pocket to go through with the sale-money they don't have.
So depending on their state, unless an investor steps in, buying the foreclosure by negotiating a short sale with the lender, the property will be sold at auction on the courthouse steps according to state foreclosure laws.
In the next part, I'll discuss the insidious nature of Home Equity Loans for the unwary borrower.
SUMMARY The rate of foreclosures is at an all time high, and many real estate investors are buying foreclosures,
Want to make a ton of money and have a fulfilling career? Well read on but be warned it’s tough. Actually it is fairly easy, I just wanted to get rid of all the namby-pamby’s. That’s right most people have actually stopped reading already.This is the one of the reasons it is easy to get a career that pays well, most people just do not follow through. Here is an example about how just showing up gets you ahead of 50% of the crowd. A large sales company is looking for a sales person. Lots of perks, big commission, great product. You still have to sell it to people and the studies show most sales happen after you ask for the order six times.The prospective employer will make the interview process in a way that you have to follow up with them six or more times. Just
At this point Jim and Sue may consider selling their %HOUSE%. If they live in a rapidly appreciating market, they may be able to get out by the skin of their teeth. In most areas, after only a year or 2, most homes have not appreciated enough to sell quickly. With a realtor commission and accepting a discount from the purchaser, they'd have to come out of pocket to go through with the sale-money they don't have.
So depending on their state, unless an investor steps in, buying the foreclosure by negotiating a short sale with the lender, the property will be sold at auction on the courthouse steps according to state foreclosure laws.
In the next part, I'll discuss the insidious nature of Home Equity Loans for the unwary borrower.
SUMMARY The rate of foreclosures is at an all time high, and many real estate investors are buying foreclosures, looking for big discounts by negotiating short sales with lenders and buying foreclosures at the courthouse steps. The reason for the high rate of foreclosures are lending practices such as ARM's (adjustable rate mortgages), HELOC's (Home Equity Lines of Credit) and 80/20 (nothing down loans) that allow home buyers to borrow more than they can afford. In part I, how ARM's create this problem is analyzed. In parts 2 and 3, the consequences of home equity loans, and no money down loans are analyzed.
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