Deadline Newsroom

Thursday, July 17, 2008

Arizona Mandates Licensing For Originators

Arizona is getting tough on loan originators with new regulations that will effectively put violators out of work in the industry in a region with the nation's highest rates of foreclosure.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Arizona is getting tough on loan originators.

In one of the areas hardest hit by foreclosures, the Grand Canyon State has signed into law legislation to regulate those on the front lines of mortgage making.

Effective January 1, 2010 some 10,000 employees of banks, brokerages and other lenders will have to comply with the new law.

About 30 other states already have similar laws.

The new law will allow only those who are licensed to work as loan originators.

Arizona is still hammering out administrative procedures for the new regulations. But, licensed loan originators will have to undergo background checks, pass a home loan knowledge exam and complete continuing education on the subject each year.

Arizona's Department of Financial Institutions, which already regulates mortgage brokers and lenders, received a record number of complaints about bad loans last year.

Arizona also had the third highest rate of foreclosures in the nation in June this year, behind nearby Nevada and California, according to RealtyTrac. In June alone, the nearly 13,000 foreclosures, in what's also called the Copper State, reflected an increase of nearly 127 percent from a year ago.

Foreclosures can undercut the social fabric of whole communities.

Critics blame the high rate of foreclosures on consumers granted mortgages they couldn't afford. In many cases the loans were approved with loan applications containing incorrect and unverified information about the home buyer's income.

A 2007 law in Nevada made it a crime to knowingly make or use false information on a loan application.

A high rate of subprime mortgages share some of the blame for turmoil in Arizona's housing market. Pew Charitable Trusts reported that one in every 18 homeowners in Arizona could face foreclosure in the next two years because of their subprime loan.

The new regulations for loan originators allow the state to revoke the license of originators who break the rules. That would effectively put the violator out of work in the industry.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's where all the news really hits home.

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Wednesday, July 16, 2008

Paint Primer

Choosing and using exterior paint is not as simple as choosing the best rated paint, but also considering regional differences, cost savings, preparations and more.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Painting the exterior of your home the right way can boost the value of your home, add a positive new color scheme or slather on a protective coat of loving care.

Paint wrong and, well, the opposite is true -- your home value could suffer, neighbors could scream at the sight and you may have to repaint sooner than planned (Then, of course, neighbors would rejoice).

But how do you choose and use paint when you want to refinish your home's exterior?

Consumer Reports' recent "torture test" of dozens of paints provides some guidance. The trusted, independent, non-profit rating service recently tested dozens of exterior paints for dirt and mildew build up over time, the color-changing effects of sunlight and cracking to determine the best paints.

The smaller California brand's 2010 line and Kelly-Moore came out on top, but the recommended findings aren't all you'll have to consider for the best job.

You'll also have to choose the right paint for the job.

• Consider regional differences. If you live in a cool, damp or shady climate you want paint with mildew resistance. In urban and industrial areas you want paint that resists dirt. For sunny locales, colorfast paint is best.

• Know what your house painter is using. The painter's choice may not jibe with what Consumer Reports found to be tops. Your contract should designate the brand, line and cost of the paint used, how many coats will be applied. One coat of primer and two coats of paint are recommended.

• Look for cost savings. For example, two five-gallon containers of paint instead of 10 one gallon cans and save you 50 percent or more, Consumer Reports says. Ask the paint retailer for volume discounts if you, rather than the painter, will make the buy.

Once you have the best paint at the best cost, here's how to make sure the job gets done right.

• Finesse spot repairs. Along with priming, complete spot repairs so surface difference don't show through the coating. Two coats help accomplish this.

• Never paint over mildew and dirt. Treat and remove mildew with a bleach (one part) and water (three parts) solution. Leave the solution on for 20 minutes, then rinse. Use detergent for remaining mildew and bleach and expect to wait a week for drying.

• Replace cracked siding boards. Cracked or split boards should be replaced rather than repaired. Otherwise water intrusion can ensue, expanding, contracting or blistering the board and cracking the paint.

• Paint a test patch. If you paint a sample board or area with each color you can see how each looks before you complete the job and perhaps regret your color choice.

• Check the forecast. Paint on windless days when temperatures range from 60 to 85 degrees. Don't paint in direct sunlight or when it's raining.

• Store and dispose paint properly. Transfer extra paint into a labeled glass jar with a tight seal. Keep low-VOCs (Volatile Organic Compounds) out of the cold. Check with your local sanitation/recycle department for proper disposal. In areas where you can dispose of dried latex paint with your trash, add unused cat litter to help dry the paint.

• Also see "Painting Your House", information from the Rohm and Haas Paint Quality Institute and Jackie Craven, About.com's resident architect.

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Tuesday, July 15, 2008

Mortgage Rate Locks Critical

Use a mortgage interest rate lock to put the brakes on the interest rate roller coaster ride and be sure your mortgage remains affordable until you sign on the dotted line.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation - a federal crime

Deadline Newsroom - An interest rate lock is always a good idea in any market.

But it becomes a better idea when it's crucial to lock in an interest rate and other loan costs at a level you can afford.

A changing market -- especially when the change is for the worst -- is one of those crucial times.

During the first half of 2008, nearly a full percentage point separated the high of 6.45 percent in recent weeks and the low of 5.48 percent in January, according to Freddie Mac.

Get off the interest rate elevator ride with an interest rate lock.

A traditional rate lock is a lender's guarantee that your mortgage will come with a specific interest rate, points, other costs and terms.

Most locks are designed to protect home buyers from rising rates, but those refinancing can also benefit.

A rate lock's terms include a specified period for the lock. If you fail to complete your home purchase or refinance before the clock runs out, and interest rates rise, brace yourself for higher costs.

Those higher costs could come in the form of more up front cash to keep monthly payments in line with what you can afford or what you lender will allow.

With a refinance, if your home ownership isn't at stake, you have more wiggle room and can wait out the market, take less cash out or otherwise cope.

Of course, those refinancing to stave off foreclosure could also find higher rates, without a rate lock, to be just as problematic as for home owners.

In an up-and-down interest rate market, falling interest rates are another strong reason for a rate lock.

If interest rates fall during the lock period you can't take advantage of the lower rate unless you rewrite the lock at additional cost or include a "float down" provision in the original lock.

The "float down" option grants you a lower rate if rates fall within a given window of time. Again, unless specified otherwise, float downs stick you with the higher rate if rates rise during the lock period.

All these rate lock variations underscore the importance of being sure the language of the lock contract gives you the options you need, for a sufficient term.

Get it all in writing. It's difficult to enforce a verbal agreement.

The contract should lock should lock in the interest rate, points and other costs, where possible. The agreement should include your name; the lock's effective date; lock cost; what terms are locked; the lock's expiration date and time; and any post-lock options.

Lock as soon as you see the desired rate or "on application" -- when you first apply for the mortgage -- so that your rate is locked as you spend time getting the application approved. That's particularly important if you barely qualify at today's rates, and an increase would make buying unaffordable.

Of course, you can choose to set the lock on approval, especially in markets where loan applications are prolonged due to heavy demand for housing.

In any event, the lock period should be long enough to allow for settlement, contingencies, and other potential delays. Locks average 30 days, but can range from 15 to 60 days.

Also consider:

• Locks cost money. Shop around for both the terms of the lock contract and its cost, which varies from lender to lender. Some lenders want up-front lock fees. Others take them at settlement. There are non-refundable fees, flat fees, and fees based on a percentage of the mortgage, among the variations.

• Before choosing a lock-in period, determine the average time for loan processing. Ask your lender to estimate the time necessary to process your loan and verify the information with other realty professionals. If the loan doesn't close on time, lenders can extend your lock for free, charge more for the extension or charge an additional percentage of the loan amount.

• Once you lock-in a rate, if you haven't already, quickly submit the application and other required documents. You should have previously checked your credit report, prepared income, job, debt, asset and other documents to back up your application information.

• If you have a floater, it's your job to keep an eye on the market.

• The Federal Reserve's A Consumer's Guide To Mortgage Lock Ins" offers more information.

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Monday, July 14, 2008

Credit Scores Remain Misunderstood

Consumers who obtain their credit scores are more informed about the scores and more consumers than ever are credit score savvy, but too many still just don't get it.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Too many consumers still don't get it when it comes to credit scores.

And what you don't know about credit scores can hurt you when it's time to buy a home -- especially in a tight credit market.

• Only 28 percent of consumers are aware they need at least a 700 credit score to qualify for a low-rate mortgage.

• Three of every four consumers incorrectly believe that credit scores are influenced by income.

• And even more, 79 percent, erroneously believe that credit scores can be obtained for free once a year.

Those are among the findings of a new report, "Consumer Understanding Of Credit Scores Improves But Remains Poor" commissioned by the Consumer Federation of America (CFA) and Washington Mutual Bank (WaMu).

First, your credit score is a number assigned to your creditworthiness.

Your credit score indicates how well or how poorly you'll repay a debt. The higher the number, the more likely you'll repay on time.

Your bill paying information on credit reports provides the basis for your credit score.

Consumers who take the time to obtain their credit score, for only about $15 under most circumstances, are more likely to have a better understanding of the scores.

That includes knowledge that mortgage lenders rely heavily upon credit scores to approve or reject home loan applications.

Informed consumers also know they can generally raise their credit score by consistently paying bills on time every time; by paying off debt and closing those paid off accounts; by not coming close to maxing out credit cards and by regularly checking their credit reports to make sure they are accurate.

Your credit report is free from AnnualCreditReport.Com. For more information about your credit score go to MyFICO.com.

The study also found that consumers could save $28 billion a year in lower finance charges if they improved their credit scores by 30 points.

"Lack of consumer knowledge about credit scores not only increases the costs of their credit and insurance, but also reduces the availability of these and other services," said CFA Executive Director Stephen Brobeck.

The study's findings include:

• When asked to define "credit score," only 31 percent correctly identified the answer "risk of not repaying the loan" in a multiple choice question that also included "financial resources to pay back loans" (21 percent), "amount of consumer debt" (16 percent), "knowledge of consumer credit" (15 percent), and "attitude toward consumer credit" (9 percent) as other options.

• Consumers typically fail to understand that a credit score reflects only how they use credit, not factors such as income and age. Significant percentages incorrectly believe that credit scores are influenced by income (74 percent); age (40 percent); marital status (38 percent); the state in which they live (29 percent); level of education (29 percent); and ethnicity (15 percent).

• Majorities correctly understand that they can learn their credit scores if they are denied a mortgage loan (72 percent) or declined for a credit card (65 percent). But, an even larger group, (79 percent), incorrectly believes that credit scores can be obtained for free once a year. Only credit reports are free every year.

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Friday, July 11, 2008

Sharing The American Dream

Equity sharing could hit the main stream as an important stepping stone to home ownership if the Federal Housing Finance Regulatory Reform Act of 2008 creates an equity sharing program to help bail out home owners facing foreclosure.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - Federal legislative relief for the nation's housing crisis contains a provision that could turn a rarely-used home financing option -- equity sharing -- into a key stepping stone on the path of home ownership.

Along with other provisions, the federal legislation would create a Federal Housing Administration-sponsored equity sharing program to refinance loans at a discount for home owners facing foreclosure. In return, home owners would share future equity gains with the FHA.

"The feds are about to take equity sharing to the next level," says Jeff Langholz, founder and CEO of HomeEquityShare.com, an online network that matches equity sharing partners.

Not only would the government effort save an estimated 400,000 homes from foreclosure, federal backing could raise the profile of the unconventional creative financing tool and push it into the mainstream of housing finance.

"Every transition in life comes with intermediate stages. Before you are married you get engaged, before you get your driver's license you get a learner's permit. Before you get to homeownership what intermediate transition is there?" he asks.

Langholz is banking on the equity sharing provision in the federal relief package. That may be a safe bet.

Both the U.S. House of Representatives (H.R. 3221 by Rep. Nancy Pelosi, D-CA) and the U.S. Senate (the unnumbered bill known as the "Federal Housing Finance Regulatory Reform Act of 2008" by Sen. Chris Dodd, D-CT) this summer passed versions of the same relief package. Both versions contain the equity-sharing provision.

In late July, federal legislators were reconciling differences for final approval, which is expected "certainly before the August break," said Pelosi spokesman Brendan Daly.

Equity sharing basics

Equity sharing is a symbiotic relationship -- as well as a legal agreement -- between two or more parties holding title to one home. Two or more parties share title in order to share the risk, thereby reducing the risk for both parties. Inevitably, however, home price appreciation is the bottom line. The property must grow in value over the term of the deal for it to really pay off.

Parties in the mutually beneficial relationship, and their roles are:

• The seller. The seller can use equity sharing as a way to quickly sell in a slow market. The seller can also become the investor and retain a stake in the property.

• The investor. Typically a non-resident owner, the investor provides the initial financial leverage in the form of a down payment or larger stake. He or she can be a family member of the occupying home owner (see below), a trusted friend of the occupying home owner or some private entity, say a professional investor. The investor gets tax deductions for his or her prorated share of the deal. With time, provided equity grows, the investor enjoys a joint venture-like return on the bulk of the investment.

• The occupying home owner. Often savings-poor, but income-rich, one person, with little or no money down, becomes the occupying home owner. He or she pays the mortgage and other costs associated with owning and occupying a home -- including taxes, insurance, maintenance and the like.

The occupying home owner gets to deduct a prorated share of the mortgage interest and property taxes, along with other tax breaks that come with home ownership. With enough equity growth, the occupant can eventually cash out, buy out the investor, keep the home or use the equity gain to buy another.

• Title to the home can be held in a variety of ways -- joint tenancy with right of survivorship, tenancy in common, partnership or as a living trust.

Variations on equity sharing

Like its creative financing cousins -- seller financing and lease options -- equity sharing often makes the news as an alternative financing tool buyers and sellers turn to in tough, cash- or credit-tight markets. That's because equity sharing lessens the upfront costs buyers face in any market. When buyers can buy, sellers can sell.

"In today's market, equity sharing makes sense for buyers because it allows them to buy a home which they couldn't buy on their own. Because the equity sharing an investor contributes to the down payment, the buyer needs to borrow less lowering his or her payment and risk. In exchange, the buyer gives up a portion of any home appreciation. This is a worthwhile bargain for people who would not otherwise be able to afford to buy," says Andy Sirkin, attorney/partner with Sirkin Paul Associates in San Francisco.

However, a tight market isn't mandatory.

• Equity sharing also can be strictly business -- an investment purely for financial gain, provided the investor and buyer are willing to risk they'll realize enough appreciation to make the deal pay off.

• The federal legislation points to equity sharing as a tool to help stave off foreclosure. Even without federal backing, a defaulting homeowner can privately bring in an equity share investor to buy a lump sum stake in the property or subsidize monthly payments over time, that is, pay some or all of the monthly mortgage for some period. Again, for the effort, the investor gets an equity stake.

• Equity sharing can also be used by a financially secure seller who doesn't need to drop his or her home price, but wants to move. With an investor buying an 80 percent stake, the seller could retain 20 percent ownership, and get another home. Then, say five years down the road, the seller and investor sell the home, each taking an appropriate share of the equity. Again, and always, appreciation must be sufficient for the deal to pay off.

• Some local governments offer equity sharing deals. The City of San Jose, for example, offers an equity-sharing, deferred-payment loan program for qualified, first-time, low- and moderate-income households.

The program provides housing from select, targeted properties in new housing developments.

Qualified buyer-occupants pay zero. They live mortgage-payment free. There's no down payment, no monthly payment and no interest payment, until it's time to sell or the loan is due in 45 years.

However, when the home is sold, the sale price goes to the city, which has been picking up the monthly mortgage tab. The city (in exchange for also paying the interest) and occupant share any equity gain on a prorated basis based on the terms of the mortgage (to say more here about those terms gets really involved. I'd have to give examples). If the gain is sufficient, the occupant can use it to buy his or her own home.

The occupant can also stay put for the 45-year term of the mortgage again, cost free. However, the loan is due at the end of the term, and again, any proceeds go to the city. If the occupant remains until the end of the term, the city relinquishes any and all claims on equity gains.

Either during a sale before the end of the term or at the end of the term, the occupant is not obligated to use the equity to buy a new home, but can choose to use that gain as he or she wishes.

In the past several years, San Jose has housed hundreds of families with variations of its equity sharing program.

The devil's in the details

Equity sharing is not a silver bullet.

They are most often short term contracts of five, seven, ten years or so -- to make sure the period of risk exposure is short. At the end of the term, the net proceeds from the sale are split, doled out according to contract.

Because the deal relies upon appreciation within a short term, equity sharing can be a tough sell in a depreciating market. They are perhaps better suited for a bottom market or market already on the rise.

The current market also makes the deals dicey because, as of yet, there's no federal backing.

Equity sharing is also a two-sided coin when it comes to the lender.
Risk averse lenders have put a squeeze on all credit and may not look favorably on all but the most "plain vanilla" mortgages.

On the other hand, if the investors has cash for his, say, 80 percent stake and the buyer-occupant needs a mortgage of only 20 percent of the value of the home, the lender might bite.

"Obviously if you are only going to borrow, say, a 30 percent loan (because the investor antes up 70 percent) and there are two people, you have a better chance. You are always better off if you have another person, but lenders are really spooked," said David Hofmann, a San Jose real estate attorney with Hoge Fenton Jones & Appel, Inc.

"Even people who recently qualified are having a tough time. Lenders don't want to see anyone on any loan with any credit issues. Most lenders faced with a default will just take the property back, " Hofmann added.

Equity sharing also remains obscure because the deals can be complicated.
The deals must be legal and binding contracts designed to provide an equitable means to an end. It must include provisions for any disputes or disagreements that might arise during the term. The contracts typically don't allow extracting any returns until the term is up, unless there's an escape clause. Escape clauses come with provisions that include stiff cash penalties for early outs and other resolutions.

Finally, even if the equity sharing deal is designed to create a home owner, its' underlying investment approach triggers a different set of underwriting and tax rules, compared to a conventional home buy.

Buyers will almost always need an equity sharing-experienced team -- real estate agent, attorney and tax professional -- to set up the transaction's contract.

"These deals can give some new lenders heartburn, but there is surprising interest from senior lenders who were around when shared appreciation mortgages (SAMs) were around in the 1980s," said Langholz.

Here's a list of equity sharing resources

• The HomeEquityShare.com network
for home equity match ups between sellers, buyers and investors, based in Monterey, CA.

• Larkspur, CA-based Marilyn D. Sullivan's "The New Home Buying Strategy," (Venture 2000, $25.95)
equity-sharing manual.

• San Francisco, CA-based Andy Sirkin, Sirkin Paul Associates and "Basic Equity Sharing Structure" manual.

• In San Jose, CA, real estate attorney David Hofmann with the Real Estate Group at Hoge Fenton Jones & Appel, Inc.

• The Don Reedy, Peter Haglund, Howard Schwartz and Richard Borkowski BuyHalfAHouse.com team.

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Thursday, July 10, 2008

As The California World Turns

California's housing market is acting like a rudderless ship. Sales are riding the waves, but prices are sinking -- the exact opposite of conditions when the market first began to take on water.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - California's median home price sank at a record level in May, but home sales came hard about in the state's choppy sea of housing.

The median price for single-family homes in the Golden state in May, about $385,000, was down 35 percent from a year ago.

That's the largest year-to-year price drop ever recorded by the California Association of Realtors.

Association President William E. Brown blamed the decline on the depressed values of short sales and foreclosures entering the market. California has one of the highest foreclosure rates in the nation.

But as we reported last month from the Deadline Newsroom, sales activity is picking up in the Golden State. Home sales rose 18 percent in May, exceeding 420,000, at an annualized rate, for the first time since 2007.

Some of the smoother sailing in the sales sector is due to those sinking prices and rising affordability.

Eric Nelson, broker/owner of The Honte Group in Campbell, CA said the ever resilient market is luring investors along with speculation that recovery may be on the horizon.

The summer market will offer clues about how much strength the market truly has, Nelson says.

Nelson, a mortgage advisor, has some real grounds for optimism. He works in Silicon Valley, one of only a few major metro areas that saw month-to-month price increases from April to May.

Silicon Valley also came in with the smallest year-to-year home price decline in May when prices were down only 10 percent.

Otherwise, for the year ending in May, the largest home price declines were in the beach front counties of Santa Barbara, down more than 55 percent and Monterey, down more than 48 percent.

"Sales also rose above their year ago levels for the second month in a row after 30 consecutive months of year-to-year decreases. The lower prices associated with distressed sales along with favorable interest rates both contributed to higher sales levels," said CAR's Brown.

"With the statewide median in the $585,000- to $595,000-range through August of last year, we expect the market to continue to experience large year-to-year adjustments through the summer, even if the median price holds steady over the next few months," he added.

Statewide, the 10 cities with the greatest median home price increases in May 2008 compared with the same period a year ago were: Sonoma, 61 percent; Cupertino, 16.7 percent; Mill Valley, 14.6 percent; Los Gatos, 10.2 percent; Sunnyvale, 4.7 percent; Fullerton, 3 percent; Burlingame, 2.1 percent; Santa Barbara, 2 percent; Los Altos, 1.8 percent; Folsom, 0.5 percent.

Cupertino, Los Altos, Los Gatos and Sunnyvale are all in Silicon Valley.

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Wednesday, July 9, 2008

Towns To Get Up And Go For

Outside magazine's spin on the best towns is a rundown of places for great alfresco living. DeadlineNews.Com put the list to the home value test and found healthy real estate markets in many of the towns.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - When Outside magazine asks its readers to come up with a list of the best towns in America, chances are they won't be skyscraper canyons or commuter suburbs.

The magazine is pretty much about what its title implies -- living the active life -- without a roof overhead.

Every issue lays it on pretty thick for the thin with stories about buff people working up a sweat with their hot gear.

However, when DeadlineNews.Com took a closer look at this spin on best places, it discovered the towns featured in the magazine's August issue were a lot more than living large al fresco style

Towns where the fit want to get up and go to also often include housing markets in pretty good shape.

While some towns listed for their outdoorsy appeal are pricey resorts, others are affordable places that didn't see skyrocketing home prices during the boom. Most of them were still enjoying home price appreciation this year.

Along with the possibility of developing a hard body, there's also the potential for buying into a healthy real estate investment.

Here's a quick look at some of the top towns, a bit about how they made the list, Outside magazine's own "median home value" for each and, where available, home value growth (or not) for the past year ending in the first quarter 2008, according to the Office of Federal Housing Enterprise Oversight.

• Washington D.C. tops the list. The new major is ultra-buff, the new National's MLB stadium is the first LEED-certified one in the nation, young entrepreneurs are flocking to the northwest and Chinatown and there's lots of inner-city revival. Rock Creek Park hosts 40 miles of trails, there's another stretch along a scenic canal towpath, and there's even Class V rapids at Great Falls, baby. Median value, $437,700, down only 1.5 percent.

• Chattanooga, TN is a former manufacturing town turned waterfront gem. LEED-certified urban renewal along the Tennessee River flows through town with a ten-mile river walk, an aquarium, pedestrian pier, public boat slips and the aptly dubbed Renaissance Park. Locals are planting trees, hanging out at the Riverbend music festival and spending more time in the verdant Appalachians. Median value, $119,900, up 2.75 percent.

• Ogden, UT, once a railroad junction in the foothills of the Wasatch, has become a Main Street America town with a self-proclaimed moniker "Adventure Sports Capital of America." Skiing, kayaking parks, mountain biking and a rec center with climbing walls, a vertical wind tunnel and standing surf wave make it so. Twenty outdoor gear manufacturers headquarter in the town where two rivers flow. Median value, $14,700, up 6.64 percent.

• Portsmouth, NH, no longer a ship building center from the 18th century, has turned a run down waterfront into a preservationist's dream home. Cobblestone paving remains endearing and emerging musicians and artists are populating independent theaters, a restored Music Hall, galleries, a film fest and live music venues. The beachfront town boasts the first stretch of the 3,000 mile East Coast Greenway planned to run from Maine to Florida. Median value, $318,000, down 1 percent.

• Tacoma, WA, long overshadowed by Puget Sound neighbor Seattle, is now a vibrant art center with a University of Washington campus, reborn Union Station, and plenty of waterways for water sport junkies. Don't forget Mount Rainier's snow cone. Median value $228,300, up 1.64 percent.

• Ithaca, NY offers ivy league education from Cornell University and Ithaca College, for those who want to their brains a work out. Cardio pumping happens at the walkable mall, around the Finger Lakes and in Treman State Park. Sustenance is legendary at famous Moosewood eatery and sustainability is found in EcoVillage with two organic farms. Median value, 183,500, up 10.63. That's not a typo.

Rounding out the Top 10 were:

• Bourbon, bluegrass and Kentucky Derby's Louisville; $141,600, up 2.73 percent.

• Home to half the globe's old-growth redwoods (and, in the county, one other infamous cash crop), Eureka, CA; $262,250, down 5.8 percent (the figure is according to the Humboldt County Association of Realtors).

• Considered Colorado's last great ski town, Crested Butte; $301,100, up 4.91 percent (according to OFHEO's statewide figure).

• Embraced by the foothills of the Ozarks, Columbia, MO; $164,700, up 3.28 percent.

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Monday, July 7, 2008

Reexamine Your Risk For Flood

Are you aware that everyone lives in a flood zone? Do you know floods are the most common U.S. natural disaster? Do you understand that your home is more likely to suffer flood damage than fire damage?

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Flood insurance is only mandated for properties in high-risk flood zones, but even if you live in a low- or moderate-risk area, you should bone up on the National Flood Insurance Program (NFIP).

To help get you started, here's a quick primer on floods and flood insurance.

• Floods are the most common natural disaster in the U.S. If you live in a flood plain, your home has a 26 percent chance (more than one in four) of being damaged by a flood during the course of a 30-year mortgage, compared to a 9 percent chance (less than one in ten) for fire damage.

• Your regular homeowner insurance policy typically does not provide benefits for losses caused by a flood, yet the NFIP says one in four flood insurance claims come from areas with low-to-moderate flood risk.

• That's because while everyone does not live in a flood plain, everyone does lives in a flood zone, says the NFIP.

If you live in a low- to moderate-risk area made so by a system of levees, dams and dikes -- as Midwestern and Gulf of Mexico area residents have learned -- the risk may be reduced but it is not removed. Levees, dams and dikes are not impervious to nature's worst.

Flooding can be caused by heavy rains, melting snow, inadequate drainage systems, failed flood control structures and tropical storms and hurricanes.

Even if you have a hillside home and you think you are out of harm's way, there's a risk of mudslide or debris flow which is covered by flood insurance.

• The share of claims from low- to moderate-risk homes and the overall risk for flooding could increase. A recent U.S. Climate Change Science Program report "Weather and Climate Extremes in a Changing Climate" said flatly, global warming-spawned climate change is increasing the intensity, duration, frequency, and geographic extent of weather events.

For example, 15 years ago, after the Midwest was previously inundated by what was pronounced a "100-year" or a "500-year" flood, some residents believed they'd seen the worse and dropped coverage.

This summer, uninsured homeowners got soaked.

• The term "100-year" flood doesn't mean there's a major flood every 100 years. It means a 100-year flood would have a 1 percent chance of occurring again in any given year and a 500-year flood a 0.2 percent chance.

• In non high-risk areas you could qualify for the Preferred Risk Policy that provides contents coverage beginning at $39 per year and building plus contents coverage beginning at $119 a year, according to the NFIP.

• If the relatively small premium doesn't get you to at least learn more about flood insurance, keep in mind, if you don't move fast you could lose. Once you decide to buy flood insurance, there's a standard 30-day waiting period, from the date of purchase, before a new flood policy goes into effect.

There is no waiting period provided:

The initial purchase of flood insurance is in connection with the making, increasing, extension, or renewal of a loan in a high-risk zone by a regulated lender.

The initial purchase of flood insurance occurs within one year of a flood zone map change.

• You could have to wait even longer for related coverage. Insurers in the Midwest currently have moratoriums on sewer and drainage coverage, which is part of your homeowner's policy, but can protect you from flood induced sewer and drainage problems. Moratoriums on selling disaster-related insurance coverage are common following a disaster.

• If you aren't required to have flood insurance and choose not to buy it, it's a good idea to have as much as $20,000 socked away for self-insurance. For just one inch of water in your home, expect an estimated $8,000 in damages, according to the NFIP's "Cost of Flooding" estimator. A foot of water -12 inches -- will cost you nearly $19,000.

• Residential NFIP coverage provides up to $250,000 of insurance to protect your owner-occupied home and up to $100,000 to protect your belongings. In a high-risk area, federally insured or regulated lenders will require you to have flood insurance for the amount remaining on your mortgage, or $250,000, whichever is lower. Renters can get up to $100,000 coverage for the contents of their home.

For more information, visit the consumer-friendly NFIP web site at FloodSmart.gov.

Also see the Federal Emergency Management Agency's (FEMA) flood information Web site and FEMA's NFIP Web site.

• And don't forget storm and flood related news that really hits home in DeadlineNews.Com's "Storm Warning" section.

Forewarned is forearmed.

© 2008 DeadlineNews.Com

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Sunday, July 6, 2008

American Dream Deferred

Call it the "American Dream Deferred." Home prices are down, but not enough to offset shrinking incomes, higher interest rates, tight credit and the economic pressures of fuel and food costs.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Yes, home prices are falling in virtually all major metropolitan areas. There's no question about it.

Unfortunately, buyers looking to cash in on those lower prices may have to postpone their dream of home ownership a little longer.

Call it the American Dream Deferred.

And it's not just because of tight credit.

Higher gas prices, higher food prices and the still high cost of shelter are all taking a toll on the American Dream.

After nearly two years of falling home prices, incomes still just are not a match for the cost of housing.

That's one of the major findings in the grim "2008 State of the Nation's Housing" report from the Joint Center for Housing Studies at Harvard University.

From the beginning of the housing boom in 1999, to 2006, when prices peaked, home owner incomes actually declined about 1.5 percent as home prices skyrocketed by 48 percent.

At current interest rates, the national median home price would have to fall 12 percent from the end of 2007 to make housing even as affordable as it was in 2003, according to the report.

That's not likely. Not only are interest rates up slightly since December 2007, so is the median price of homes -- believe it or not -- by 1 percent.

Before buyers can really return to market in droves, incomes, home prices and mortgage rates will have to cooperate. And even if they do, tight credit stands in the way of all but the most creditworthy home buyer.

The Harvard report says in 40 metros, prices would have to drop by more than 25 percent to roll back affordability levels to 2003.

During the housing boom, the dramatic run-up in home prices was fueled by buyer access to cheap financing and lax underwriting. That combination allowed borrowers to negotiate more competitively. And that, of course, drove up prices beyond true income-based affordability levels.

Is there a silver lining?

Yes. If you have good credit and can migrate to an already affordable market where home prices haven't skyrocketed, you've got a shot.

© 2008 DeadlineNews.Com

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Friday, July 4, 2008

Duct Cleaning Often Unnecessary

Forget duct cleaning as regular maintenance. What the duct? Experts say only clear ducts of vermin infestations; clogging levels of dust or debris and substantial amounts of mold.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Here's one less thing you have to regularly clean -- ducts.

There's growing evidence duct cleaning may be a solution in search of a problem rather than cure for what ails the air in your home.

Consumer Checkbook (subscribers only) research released this year says the dust you see in your ventilation ducts pretty much stays where it is. It likely won't become airborne unless disturbed -- say by duct cleaning. Under most circumstances duct dust is inert and harmless.

Federal and private health officials back up Checkbook -- an independent operation that rates services much like Consumer Reports rates goods -- and stop short of recommending against duct cleaning, but they also do not endorse the work as routine maintenance.

"Should You Have Your Air Ducts Cleaned?" the latest U.S. Environmental Protection Agency information on the subject says succinctly, "Duct cleaning has never been shown to actually prevent health problems. Neither do studies conclusively demonstrate that particle (e.g. dust) levels in homes increase because of dirty air ducts. This is because much of the dirt in air ducts adheres to duct surfaces and does not necessarily enter the living space."

Likewise, a Canada Mortgage and Housing Corporation report includes before and after duct cleaning test results from 33 homes in Montreal. It found no significant air quality or energy efficiency improvements. In some cases, particle levels increased immediately after a duct cleaning job. In other cases, particle levels went down after the cleaning but returned to previous levels within weeks.

Research also has not scientifically demonstrated the effectiveness of chemical biocides, "sealants" and other duct applications cleaning service provides may offer.

There are no chemical biocides registered by the EPA for use in internally-insulated air duct systems.

The EPA does recommend servicing for fuel burning furnaces, stoves or fireplaces before each heating season to protect against carbon monoxide poisoning. And you should regularly have fireplace and wood burning appliance fire boxes and flues cleared of potentially flammable sooty deposits and creosote, the by-products of incomplete combustion.

The EPA only recommends duct cleaning if:

• Ducts are infested with vermin (including rodents or insects), in which case you may also need a licensed pest control operator.

• Ducts are clogged with excessive amounts of dust and debris and/or particles that are actually released into the home.

• There is substantial visible mold growth inside hard surface (sheet metal) ducts or on other components of your heating and cooling system.

Beware of important considerations about mold detection in heating and cooling systems.

• Many sections of your heating and cooling system may not be accessible for a visible inspection, so ask the service provider to show you any mold he or she says exists.

• A positive determination of mold's existence can be made only by a certified microbiology expert and that may require laboratory analysis for final confirmation.

• If you have insulated air ducts and the insulation gets wet or moldy it cannot be effectively cleaned and should be removed and replaced.

• If moisture is allowed to remain for more than 48 hours or other conditions causing mold growth are not corrected, mold will return.

If you decide to go ahead and hire a duct cleaner, follow these EPA recommendations.

• Consider hiring National Air Duct Cleaners Association (NADCA) members who are locally regulated, licensed or certified. Talk to at least three different service providers, get written estimates and only then decide if you want your ducts cleaned. When the service providers arrive have them show you the contamination that would justify having your ducts cleaned.

• Whenever possible, check duct cleaners' references with other customers and with local or state consumer protection authorities or the Better Business Bureau for complaints.

• Don't hire duct cleaners who make sweeping claims about the health benefits of duct cleaning, who say you need routine duct cleaning or who say they are certified by the EPA or other government agency. The EPA does not establish standards for, certify, endorse or approve duct cleaning companies.

• Do not allow anyone to use chemical biocides or sealants without a thorough understanding of the pros and cons outlined in "Should You Have Your Air Ducts Cleaned?"

• Get a written agreement outlining the total cost and scope of the job before work begins. Don't sign anything you don't understand.

© 2008 DeadlineNews.Com

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Wednesday, July 2, 2008

Mind Your Star Spangled Manners

Even Americans who regularly pledge allegiance by flying the flag at home aren't always practicing correct flag etiquette. Here's how to mind your star spangled manners.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - Given the long and bloody fight that culminated in the nation's independence way back in 1776, Americans still have a lot of patriotic U.S. flag flying to do in 2008.

We are still at war for independent, though not our own. We go to the polls this year to elect a brand new president for the nation -- though one is a little newer than the other. And there's always that good old American Dream.

It's not surprising then, that the 4th of July is one of the hottest flag flying days of the year, even though those who regularly pledge allegiance by flying the flag at home aren't always practicing correct flag etiquette.

The correct flag displaying and handling rites are outlined in United States Code, Title 36, Chapter 10 -- in what amounts to codified patriotic behavior, rather than federal law.

Any law that imposes penalties for bad flag manners were nulled by a Supreme Court decision in 1990 which struck down as unconstitutional any fines or imprisonment for those convicted of mutilating, defacing, defiling or otherwise desecrating Old Glory.

That makes the code less of a legal mandate and more of a manual of customs for handling and displaying the Stars and Stripes. Hard-nosed patriots, however, still consider it sacrilege to disrespect the flag.

And, by the way, anyone can fly the flag wherever they live in the nation, according to the "Freedom To Fly The American Flag Act of 2005" enacted largely because some homeowner associations enforced architectural rules with near dictatorial dogma to stop some home owners from flying the U.S. Flag.

So, according to federal code, here's how to honor those broad stripes and bright stars as you fly them at home on Independence Day and on other flag flying days to come.

The Patriot's Guide To Flying The U.S. Flag At Home

• Many holidays are designated "flag flying days," but you can fly the flag everyday from sunrise to sunset. At night it must be illuminated.

• Do not fly the flag outside during inclement weather unless you use an all-weather flag.

• Do not fly another flag above the U.S. flag, or if the other flag is on the same level, do not fly another flag to the right of the U.S. flag.

• Fly the flag with the "union" (the blue field of white stars) at the peak of the staff (unless the flag is at half staff) when flying the flag from a staff projecting horizontally or at an angle from the window sill, balcony, or front of a building.

• When you suspend a flag over a sidewalk from a rope extending from a house to a pole at the edge of the sidewalk, hoist the flag, union first, from the building.

• When you display the flag over the middle of the street, suspend it vertically with the union to the north in an east and west street, to the east in a north and south street.

• When you display a flag horizontally or vertically against a wall or in a window, place the union uppermost and to the observer's left or the flag's right.

• Display the flag with the union down only as a distress signal.

• Fly the flag at half-staff (positioning the flag one-half the distance between the top and bottom of the staff) at times specified, often according to presidential instructions.

• When flying the flag at half-staff, it should be first hoisted to the peak for an instant and then lowered to the half-staff position. The flag should be again raised to the peak before it is lowered for the day.

• Never allow the flag to touch anything beneath it, including the ground, the floor, water or other items.

• Never carry the flag flat or horizontally, but always aloft and free.

• Never use a flag as wearing apparel, bedding, drapery, ceiling covering or decorative element. It should never be festooned, drawn back, nor up, in folds, but always allowed to fall free.

• Never use the flag for advertising purposes. Don't embroider it on articles, print or impress it on disposable items.

• Don't use a part of the flag as a costume or athletic uniform. A flag patch may be affixed to the uniform of military personnel, firefighters, police, and members of patriotic organizations. A lapel flag pin should be worn on the left lapel near the heart.

• Protect the flag from display, use or storage that will cause it to be easily torn, soiled or damaged.

• Never place things on the flag or attach marks, insignias, letters, words, figures, designs, pictures, or drawings

• Don't use the flag as a receptacle for receiving, holding, carrying, or delivering anything.

• Aged flags no longer fit for flying -- like those wind whipped ones often found on personal vehicles -- should be destroyed in a dignified way, preferable by safely burning it.

• How to fold Old Glory

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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Tuesday, July 1, 2008

Free Credit Score, Credit Monitoring Services

A class action suit settlement gives consumers free access to credit scores, but not the most widely used score which still costs a few bucks to obtain. Still, the settlement also comes with a useful free credit monitoring service. (In another case, to address concerns over missing data, another financial institution is offering customers free daily credit monitoring of all three major credit bureaus.)

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - There's perhaps nothing more important than your credit report and your credit score when it comes to buying a home.

Lenders scrutinize both before approving -- or rejecting -- your mortgage application.

Before you apply for a mortgage, before you search for a home, you should know what's on your credit report and you should know the score.

That's because you may need to correct errors or make some adjustments to your credit habits to improve your credit, raise your score and increase your chance of landing the mortgage you need.

With a credit monitoring service it's easier to keep tabs on any corrections or changes you may need to make.

Now, both your credit report and your credit score are free -- with a few caveats -- thanks to a recently settled class action suit involving TransUnion. TransUnion, along with Equifax and Experian, is one of the big three credit reporting agencies.

Your credit report is your fiscal fitness report on your credit habits. It names your credit accounts, identifies them by type and tracks balances, credit limits, available credit, open-or-closed status and payments, all to reveal how well or how poorly you pay each account.

The report also documents your applications for credit as well as notices of liens, judgments and other "derogatory" remarks, remarks from the consumer, credit freezes, identity theft actions, dispute notices and other information.

And it contains your legal name, current and recent addresses and place of employment, Social Security number, date of birth, driver's license number, telephone numbers and other identifying information.

All the information on your credit report is also factored heavily into your credit score, a statistical analysis or numerical value placed on your credit behavior. Your credit score is commonly used to nay or yea your requests for credit. The higher the better.

Under the settlement, anyone who has ever had a credit report on file with TransUnion between Jan. 1, 1987, and May 28, 2008, is eligible to receive certain credit score and credit monitoring benefits. That's pretty much anyone with a credit card account or loan during the period