The New York Times reported today that the Obama administration is to
meet with Treasury Department officials to try to streamline the
paperwork for homeowners who are seeking to use the Making Home
Affordable program- which was designed to provide relief to homeowners
in danger of losing their homes through foreclosure, and has been
widely regarded as a huge failure. While reducing paperwork is always a
good thing, I don't believe that this adresses the real issue facing
many emperiled homeowners.
Here in South Florida, I believe that the biggest problem is not the
mountain of paperwork that homeowners must provide (although that
admittedly doesn't help), but the facts and figures that must be put on
those papers.
In the hey-day of the real estate frenzy, lenders would do whatever
they could to "get the business". As we now know, a lot of what
happened really amounted to fraud. Home buyers got their loan and
trusted the lender- probably a little too much. Many loans, especially
here in what has often been called the "Fraud Capital of the U.S."
should never have gone through. Why did they?
It's not enough just to say that the banks made bad loans. There were
actually guidelies in place to prevent unqualified borrowers from
getting loans, but they got them anyway- often by mortgage brokers
creating outright works of fiction on the paperwork submitted to the
lender's underwriter. Padded incomes, bank balances that appeared to
magically increase overnight by thousands of dollars, unverified
everything. Yes- the Wild West was alive and well- on paper at the
mortgage broker's and lender's file cases!
That's where the problem lies. People that should never have been
granted a loan now have to not only prove that they qualify for one
now- at a reduced rate- but they also have to submit the paperwork from
their original loan- which often has fraud written all over it.
What to do? It really is like being between a rock and a hard place.
You can't afford your current loan due to fraud, and you can't submit
your old paperwork to government scrutiny to get a modification because
they will detect the fraud- and you may have to face the penalties.
I wish that I could come up with the solution for these homeowners. We
know there is plenty of blame to go around, and if the money was there,
I would take a little from those I hold responsible- the dirty mortgage
brokers, the lenders that often intentionally turned a blind eye to
what was going on, the Federal Government that allowed the banks to
feed thier greed by any means (until it crashed the whole country), and
even many borrowers and property appraisers who knowingly played the
fraud game.
Now as a disclaimer- I have to say I'm not including everyone from all
these sectors- there are plenty of good honest mortgage brokers and
other professionals- I'm happy to say that I work with many of them.
The same is true about homeowners- many were just plain duped- some got
wise and refused to play the game. 'Nuff said...
Back to my question- Can Obama (and the Treasury) fix the Making Home
Affordable program? Sadly, I don't think so. Unless some kind of policy
is put into place which would, in essence, forgive some level of fraud
(which I think is a very bad idea) the program is doomed to its'
continued failure no matter how streamlined the paperwork may become.
I know that in many situations that, as a Realtor, I can help
distressed homeowners by doing a short-sale, but if there's a way for
someone to keep their home and make it affordable, that's obviously the
best case scenario.
I'd like to know what you think about this issue, and especially what
you think can be done to help the honest, hardworking homeowners that
are stuck with few choices, and little hope. Should we allow a little
fraud, or even a lot of fraud to pass by without consequences (other
than the bind the homeowners are now facing), or is their pain itself a
sufficient consequence?
I hope we can come up with a responsible, workable solution that helps
our neighbors relieve their pain- and allow them to keep their homes
and their dreams alive.
I hope that this won't wind up sounding like a commercial-
but it might! I have been using my new BlackBerry Bold for a couple of weeks
now and I am amazed how it has not only helped me, but my customers too. Now
that I have it, I don't know how any professional Realtor can do their business
without one, or at least, something similar.
Now, I have to say that I loved my old cell phone, but I
never knew what I was missing. The ability to read and respond to e-mails
anywhere, anytime is amazing. We all know that the Real Estate world is moving
more and more online, and the ability move with it is a necessity. Either you
go where you customers are, or you run out of customers.
Let me give you some examples- until I got the BlackBerry, I
would wait until I got to my office or home before responding to inquiries from
my websites or listings. I have always tried to be diligent in getting to them
as quickly as possible, but this business is all about customer service-
especially service to the person standing directly in front of you. Often, to
accommodate a customer, that means evening appointments that sometimes go
longer than planned, and that pushes back the time to answer e-mails until very
late in the evening. Today- that's unacceptable.
We all go on online because we want the info- and we want it
now! Waiting half a day or more for an e-mail just won't work. Potential customers will
move on- just as I would if I were in the same situation. Now, I can usually
respond immediately or at least within a few minutes. THAT'S A HUGE IMPROVEMENT!
That is a signal to my customers that I am there for them, and that they have
no need to look somewhere else! I think that's a powerful statement!
Just today, I had a problem scheduling a showing for a
listing of mine. I was able to send a text message to coordinate an appointment
with the buyer's agent. What's so great about that? The relative unobtrusiveness
of text messages. There's a big difference between calling another Realtor
while they're with a customer and interrupting their "quality time" by playing
"phone tag" to try to take care of something routine like a meeting time change, and being able to accomplish the same thing with
a couple of short text messages. I know when I'm with a customer, I hate to answer
the phone, even if it's important, because I value my customers- they deserve
to have my full attention while I'm with them. It's better for everyone when I
can handle the minutia of my business as discreetly as possible.
Of course, there's so much more than just the email
capabilities. The ability to access the MLS anywhere, GPS mapping, taking and
sharing pictures, and all the usual PDA stuff- but like it's on steroids! I
can't believe how much more efficient I've become with my new toy! I spent a
lot of time researching which Smartphone to get, and for my purposes- there is
absolutely none better than my BB Bold. If you're a Real Estate Professional, I
highly recommend the BlackBerry Bold.
If you're not a Real Estate Professional, and you are
looking towards working with one, I would ask them about their capabilities with
regards to addressing website and e-mail inquiries in a timely fashion, and
maybe even them ask about their ability to get online remotely. If they can't,
maybe they are missing out on opportunities to serve you better; maybe they
aren't the right Real Estate Professional for you.
Today is tax day
here in the U.S., and it seems appropriate to discuss tax issues that
impact homeowners here in Miami-Dade County. Either by accident, or on
purpose, the Realtor® Association of Miami-Dade County (of which I am a
proud member) hosted a presentation today with representatives of
Miami-Dade’s Property Appraiser and Tax Collector’s offices. We
discussed some local issues in their areas of expertise. I’d like to
pass along some of the info I learned today.
Miami-Dade County
residents should know that there are a number of programs available to
owners of homesteaded property to help them with their tax issues. I’ll
go through some of them briefly here- but for details- please see the
website of the Miami- Dade Tax Collector.
Installment Plan
This
program allows homeowners to pay their property taxes quarterly. Like
any government program, there are restrictions and forms- which you can
find here,
but it seems like a straightforward process. For many people who have
problems budgeting (like me!) or who are used to having a lender
escrowing their taxes for them, this is a way to not have to worry
about that big tax bill at the end of the year. I know I like it better
when I can plan on a certain fixed amount of a bill every month or two,
or even every quarter. My mind just doesn’t like to think about paying
a big expense once a year.
Deferment
This
program isn’t for everyone- nor should it be. If you have serious
problems paying your taxes, then this may be an option for you- for a
while. This program is deferment- not forgiveness! You will have to pay
the entire amount of your taxes at some point, and you will also incur
some fees and interest- and that interest could go as high as 9.5%!, so
use this plan wisely. For someone having a short to medium duration
cash-flow problem, this might just be the ticket. The program details
and forms are here,
but some of the important things to remember are that this program is
for people eligible to claim a homestead exemption, there are strict
limits on the homeowner’s income for eligibility, and the deferral
becomes a lien on the property until it is payed off in full. Also-
there are other limits dealing with the ratios with respect to the
assessed value. Specifically:
The
total amount of deferral plus accrued interest and the balance of the
primary mortgage cannot exceed 85% of the assessed value.
The applicant’s primary mortgage cannot exceed 70% of the assessed value.
There
are other requirements as well, including maintaining fire and
homeowner’s insurance, but I won’t go into more detail here. All the
info is on the Tax Collector’s web site.
Full Payment Discounts
Of
course, paying your debts in full as soon as the bill comes gives one a
great feeling of satisfaction and serenity, and the Tax Collector will
reward you if you do. If you pay your tax bill in November, you can
take 4% right off the top! The percentages decrease the longer you
wait, until the end of March when the bill is due, then the late fees
start! Check out these rules here.
Remember that if
you think that your assessed value is wrong (and doesn’t everybody?!)
you can discuss the matter with the county’s Value Adjustment Board.
I was surprised to hear that 55% of the people that challenged their
assessment- won! Now I don’t know exactly what “won” means in this
context, but it tells me that if you think you have a case, you should
give it a try.
As a final thought,
remember, if you think you are in danger of falling behind in paying
your tax bill (or any other bills for that matter) be proactive. Do not
wait until you start getting nasty certified letters and phone calls,
or knocks on the door. Many government agencies and financial
institutions have programs in place to help people who recognize their
situation early and are trying to do the right thing. Often, if you
wait, you find that you will not be eligible for a lot of the programs
that would have helped you if you only knew about them a few weeks or
months ago. It’s human nature to procrastinate, and to be in denial
about financial problems, but the results will always be better if you
act earlier instead of later.
I’ll have some more info about assessment and taxation in future blogs- so stay tuned!
In the mean time- if there’s a
question or issue you think I can help you with, don’t hesitate to get
in touch with me. I’ll do my best to find you some answers- or at least
I’ll try to point you in the right direction!
After sitting on the sidelines watching other bloggers out there, I’ve finally decided to start my own. Now- you probably don’t know me from a hole in the wall and are wondering why you should read my blog. Well at least I’m wondering why- so I wanted to tell you about my thoughts on blogging (at least my own blog) and I would like to introduce myself.
My initial thoughts on blogging were that it was self-serving. I think many blogs are. I have seen a lot of fluff turned into blog posts that I really didn’t think made good copy. A lot of stuff I consider to be a waste of electrons- and I get upset that I wasted the time to read them. I won’t go into specifics, but I know you know what I’m talking about. I realized that since I started my career as a Realtor in 2003, I have learned A LOT! I have to admit- sometimes I’d rather sponge up knowledge than deal with an ornery customer (even though some of those ornery customers can lead to some nice bucks in my pocket). Maybe a lot of what I’m going to say may not be new, but I think it’s great when you can learn from the experience of others. I love learning, and I love teaching. I especially love it when I can explain something to someone and they get one of those “A-ha!” moments- when the light bulb goes on over their head. I hope that I can do that at least once or twice for you. I’m going to try to provide you with useful, useable information that will make you a better property owner, buyer, or seller, especially here in my home market of South Florida.
OK- that’s my thoughts- now who am I?
I’m Ray Manners- a Realtor® in South Florida. My office is in Coconut Grove- which is one of the nicest areas of one of the greatest cities in the country- Miami, Florida. My path to becoming a Realtor (like many of my colleagues) has been long and circuitous. Prior to moving to Miami full time I lived most of my life on Long Island, New York. I have worked in a retail clothing store (actually- that job was in the Florida Keys), owned my own business (a hobby shop on Long Island), appraised damaged cars for insurance companies, worked in air freight at Kennedy Airport, and I have been a Flight Dispatcher for TWA, Swissair, and other airlines. By the way, just so you’re not confused, a Flight Dispatcher is not the same job as an Air Traffic Controller- although we were both underpaid! A Flight Dispatcher plans and monitors the flights, and works for an airline. An Air Traffic Controller is responsible for making sure planes don’t crash into each other, either on the ground or in the air, and usually works for the government. OK- those are really simplified descriptions of the jobs, but most people think I’m an Air Traffic Controller when I tell them I was a Flight Dispatcher- I just wanted you to know that they’re different jobs.
I have had jobs where I paid into a 401k, and, when I was at TWA, part of my salary was paid with company stock. I guess you can see what’s next… I got screwed! I have seen my 401k tank and my stock in TWA was never worth more than the day it was issued to me. Actually, my TWA stock only has value as a piece of recyclable paper now. After these experiences, I figured it was time to go in a different direction financially.
After doing some research, I came to the conclusion that the secret to becoming financially stable was to be independent (at least to an extent) and to invest in Real Estate. After reaching this conclusion, I read everything I could find about Real Estate investing, and decided to do what I could to get started. At the time, that was very little! With virtually no money to invest, and no clear strategy (it’s nice to have a goal- but a strategy to achieve that goal is pretty darn important too!) I decided I would get in on the ground floor- as a Property Manager. I went to interview as a Property Manager, and was told that my talents might actually be better used elsewhere- in Real Estate sales. From there, I hit the ground running and haven’t looked back. The boom and bust markets have hit, and I’m still standing! Actually, one beneficial aspect of our recent slow market has been that I have been able to take more classes, and learn more about how I can better help the people I work with.
Now- I never considered myself a salesman, and actually to a large extent, I still don’t. I really look at myself as a matchmaker, and as partner. In my heart, I think of myself as a Good Samaritan (I hope that doesn’t sound like I have an overblown ego, but it’s true). You see, I grew up in a nice house, with a great family in a nice community, and I think that experience has shaped my life. As a Realtor, I feel as if I’m doing my part to “pay it forward” by helping people to achieve their dreams- whether it’s finding their first home, a vacation condo, or achieving their financial goals through investing in Real Estate. I’m glad that my knowledge and expertise can help people achieve their goals, and I hope that my blogs here will help you in the same way.
In short- I think I have a lot to give, and I’m looking forward to helping in any way I can. Right now, I think this blog will be a great opportunity to help some of you, a least that is my hope. I’m going to end this blog the way that I think I’ll probably be ending most of my blogs- with an invitation. If you think there is something I can help you with, please let me know. I’ll try my best to get you the answers or information you need, or at least, I’ll try to get you pointed in the right direction.
Thank-you for taking the time to read about me, and for hopefully allowing me the opportunity to help you. Please read my future blogs, and give me some feedback. Constructive criticism is more welcome than the other kind! Thanks again- and good luck!