American are a little less upbeat about economic prospects . Event the Economic Optimism Indes fell 2.2 points to 53.5 for the week. 50 is neutral, so we are still in the good news range.
In response to the increasingly slow housing market, mortgage companies are adjusting their businesses and layoffs are increasing.
Interestingly, according to the National Association of Realtors, existing-home sales, finishing the third-best year on record, are projected for 2006 at 6.47 million, a decline of 8.6 percent. In 2007, they’re expected to rise steadily from the current cyclical low and reach an annual total of 6.40 million, which would be 1.0 percent lower than this year’s total.
Also worth noting, Congress recently passed a new tax deduction that allows low- and moderate-income homebuyers to deduct mortgage insurance premiums from their federal taxes if they make less than $100,000.
The Student Loan Program works by participating banks in the Federal Family Education Loan Program guaranteeing a return that is 2.34 percentage points over the market rate on commercial paper to banks. It’s a sweet deal for banks.
Student loans are risky loans, but not for banks. When the student defaults, the government reimburses lenders for up to 98% of the principal and accrued interest.
New federal student loan originators totaled $69 billion in the 2005 – 2006 school year. First year projections for the US just to send a rocket to the moon in order to build a base are estimated to run over $104 billion. That expense is projected to increase with construction and re-supply shipments.
Enter alter reality
Privately built and financed, SpaceShipOne Wins $10 Million Ansari X Prize in Historic 2nd Trip to Space (The Ansari X Prize is a $10 million purse for the first privately built vehicle that could safely haul a pilot and the equivalent weight of two passengers to the edge of space — then repeat the feat within two weeks.)
SpaceShipOne technology is currently owned by a Paul Allen company called Mojave Aerospace Ventures (MAV). Allen is a Microsoft co-founder and for $20 million, bankrolled the design and building of SpaceShipOne.
Instead of wasting fuel to send up tons of metal into the stratosphere, they simply sent an airplane to the stratosphere, pulled a lever that tilted back the wings and lit the rocket fuse that propelled it into outer space; simple, energy efficient. That leaves NASA’s government bureaucracy bogged down with expensive antiques and primitive concepts funded by taxpayers paychecks.
Enter Sir Richard Branson and his Virgin Galactic Enterprise – SpaceshipOne. Virgin Galactic is the world’s first off-the-planet private airline. Business plan: 50 passengers a month for space flight, paying $190,000 each. Core product: a two-hour flight beyond Earth’s atmosphere, wrapped in a three- day astronaut experience. Time frame: 2009.
Private enterprise will insure commercial space flights that will let ordinary individuals go into outer space with resorts projected showing up in about 25 years. Lunar resorts? You bet, they'll be no vacancy rate until the next ship.
NASA could be disbanded and scarce money be spent on a free US education for anyone that wants it.
Fannie Mae provides financial products and services that increase the availability and affordability of housing for low-, moderate- and middle-income families.
Fannie Mae is withholding and will not pay 44.4 million in bonuses to executives who caused and led the company into faulty accounting practices for the mortgage finance company giant.
The former CEO was forced to resign in 2004 and lost a 11.2 million dollar bonus. The CFO Timothy Howard lost a 3.4 million dollar bonus. Doesn’t it want to make you rant to hear of the gross overcompensation paid these honchos!
Fannie Mae and Freddie Mac are two of the nation's largest sources of financing for residential mortgages.
Appealing your property taxes is done because of inequities in market assessments, which incidentally runs 40-60 percent because of constant errors in blanket re-valuations that don’t get market values right.
The only way to fight your property taxes is to get rid of all municaple elected officials that live in the fantasyland of tax and spend. By electing a culture of conservative tax cutting, budget reducing legislatures.
Property tax re-valuations, contrary to many peoples opinion, do not increase the total amount of revenue raised by property taxes. Whatever the tax bill generated by the various schools, county government and municipal governments spending programs is divided up to spread the tax property tax burden based on the market value in the open market for your home. The municipality collects the amount of tax dollars for the expenses of local government based on their expenses. If the expenses go down, so do your taxes.
Nationwide, one in every 92 households is in foreclosure with Nevada having the highest foreclosure rate! According to RealtyTrac, more than 1.2 million foreclosure fillings were reported in the U.S. last year. Foreclosures could rise as some 1.5 trillion in adjustable-rage mortgage get repriced this year. Couple that with declining home prices and increase property taxes and one can be whistling some sour notes.
Home prices fell in 17 out of 20 cities in November compared with October 2006 data according to a recent MacroMarkets and Standard and Poors report. Although home prices in some cities did rise, nation wide there is no sign of the downtrend in real estate prices slowing down.
Property tax rates continue to skyrocket in many areas because of weak-kneed elected officials not reigning in expenses or living within town budgets. Many municipalities are soft on curbing excesses or cutting budgets. Rising property tax payments make many homeowners budgets too tight and they are not able to keep up.
Many banks have promoted hybrid and adjustable mortgage loans some with no and others with low down payments. With delinquent mortgage payments and foreclosures far above year-ago levels, indications are that hard financial times are gaining on many. Ballooning interest rates often surprise those who hold an adjustable-rate or sub-prime mortgage and when it is time to refinance, many are left with no option but foreclosure.
Some banks were, in some cases, even selling houses and forgiving debt. Do some of these banks feel some culpability for some creative loans they have saddled the homebuyer with? If they studied their customers' financial profile, they might never have made those loans. Do these banks fear scrutiny given the strong likelihood that their customers mortgage interest rate would be higher and unaffordable upon the refinance period? It's not unreasonable to expect mortgage rates to return to that double-digit territory as the economy cycles through a downturn.
A hybrid mortgage may be an appropriate choice if one plans to live in their house only for three or four more years. The first years of a hybrid loan are generally charged at a lower rate than traditional fixed-rate loans and if one plans to move and sell the home in a few years, it makes sense. If, for some reason, one don’t sell the home, they’re gambling using any form of a hybrid mortgage loan since it converts to an adjustable rate.
Hard times and rising payments make for tight budgets. If one wants predictability and the security of paying the same interest rate for the life of the loan, a fixed-rate mortgage is the smart choice. Rates are still low, by historical comparisons and given many economic forecasts of a weaker dollar and predictions for higher interest rates, locking in a fixed rate will reward one with peace of mind.
When make an appraisal for a home mortgage the bias is for a higher appraised value. When engaging in a property tax appeal the bias is for finding a lower home value.
That, however, does not address the mass appraisal process that communities engage in. Mass appraisals are done cheaply. Often it is the lowest cost service that will hire college students to take the measurements and make observations. Past data is frequently rolled forward. The most expensive property on the block may be used as the point of reference. In equalities are abundant.
Consumer Reports (Nov.1992 v57 nil p.723) published that property tax records show an error rate of 40% exists in estimating property taxes.
The National Taxpayers Union ("How To Fight Property Taxes" 2004 p.1) writes that as many as 60% of all homeowners are over-assessed and not in line with their home value.
If your mortgage payment reflect a surge, it may be because your property taxes have increased. An excellent and inexpensive eBook that can guide you with the calculations you’ll need in the process can be found at http://www.housetaxax.com
According to the Appraisal Institute, problems with appraisal fraud could be addressed if lenders used only competent appraisers to begin with, and if mortgage broker and appraiser licensing standards were tightened.
