December 2009 Vol. 4 No.12
• Reflections on a Crazy Housing Year and A Look to 2010 • December's Home Value Improver • About Us

Reflections on a Crazy Housing Year and A Look to 2010

2009 bought us a new presidential administration, new economic stimulus packages, and homebuyer tax breaks.

It seems that everyone, from the top levels of government down to the local business owner, is trying everything possible to goose the American economy. How is it going? And, where will 2010 lead us?

The homebuyer tax credit seemed to do its job in encouraging some people to get into the real estate market. Though some experts say that less than 10% of first-time homebuyers were triggered by the credit, it certainly helped if you were one of those people!

Enter President Obama's loan modification plan, which aimed to help stem the flood of real estate foreclosures. A lot of people are still wondering where all the money went from Obama's loan modification plan, which has been rather complicated.

Below is a paragraph from U.S. News and World Report:

"At the heart of the President Barrack Obama's ambitious plan to rescue the housing market is the conviction that restructuring distressed mortgages will keep struggling borrowers in their homes and help insert a floor beneath plummeting property values. With $75 billion dedicated to reworking troubled loans, that's a big bet-especially considering that a top banking regulator said last December that almost 53 percent of loans modified in the first quarter of 2008 went bad again within six months. But supporters argue that mortgage modifications need to be properly engineered to work-and many early ones weren't. To that end, the Obama administration unveiled fresh details on its plan to restructure at-risk loans and help as many as four million home owners avoid foreclosure."

The current loan modification plan calls for banks to rework the mortgage payments of people who are at risk of defaulting on their loans. Some people have high interest rates and are unable to refinance because their homes are "under water," meaning that they owe more than the home is worth. Others simply lost income and are having a hard time making payments. Talk to your lender to see if you qualify for a loan modification.

Whatever the answer is, let's hope someone figures it out soon. Foreclosure is bad for everyone. It's obviously bad for the people losing their homes, but it's also bad for people left in the neighborhoods, as the houses can sit vacant and blight, and real estate values may plummet. They're bad for the banks, too.

Looking to 2010
So Obama's Housing stimulus, rescue plans, bailouts and tax credits aren't helping enough people and aren't working fast enough. Looking forward to 2010, we are all hoping for brighter days. I'd love to be able to tell you we are through the crisis, but I'm not sure that is true. While some experts believe we are, others are unclear. What is the average homeowner or homebuyer to do?

Like I always tell clients, don't worry too much about the big picture. Base your financial decisions on your individual situation. The tax credit has been extended, so you can still enjoy a fantastic $8,000 tax credit if you buy a new home.

In other 2010 financial news, lots of money experts are advising people to convert their traditional IRAs to Roth IRAs.

One of our accountant friends, Fran LoPresti of Weiner & Rice, explains, "Beginning in 2010, the IRS has relaxed rules allowing taxpayers with certain types of retirement accounts to convert those accounts into much more favorable ROTH IRA accounts. The benefit of a ROTH IRA is that the invested funds continue to accumulate tax free and at point of withdrawal, those funds are also not taxable. I repeat, NO TAX. There have always been limits to conversion rules, based on income, and beginning in 2010 those rules have been favorably changed to assist taxpayers and make conversions to ROTH IRA accounts much more attractive."

As I always advise people making mortgage-related decisions, Fran says that the best thing to do is to talk with your tax advisor to see if converting funds to a ROTH IRA makes sense for you.

One of the most important things you can do in any real estate market is to keep your financial house in order. Have a plan, and make sure it includes a monthly budget and a rainy day fund. Be conservative! You never know how long or how hard it will rain. Preparation is key.

December's Home Value Improver

Enjoy Holiday Scents without the Work

Chestnuts roasting on an open fire - one of my favorite holiday songs, and also one of my favorite scents. This and other holiday scents make us think of warm things like home, family, and freshly cooked food. Of course, not everyone has time for a day-long cookie-baking extravaganza to fill the house with delicious scents. Even if you did, you probably want the smell to last longer than that day. So here are some tips to making your home smell as wonderful as the holidays can make you feel.

Apple spice.
There are as many mulled apple cider recipes on the Internet as there are holiday traditions. I think the most simple is to put some apple cider in the crock pot with some cinnamon and cloves, and leave it on low all day.

There a lot of things you can do with peppermint, and they are all great! Peppermint brownies, candy cane fudge, and cake icing. It's a soothing and therapeutic scent, and you can fudge the smell in your house by brewing up some peppermint coffee. Sure, coffee may not be a holiday scent, but who doesn't love that smell?

Sure, you could spend the afternoon baking gingerbread from scratch for a gorgeous gingerbread house. The place would smell divine! If you don't have the time or energy for that, whip up a quick batch of gingerbread from a mix in the store.

Perhaps the greatest scent of the holidays is the smell of a freshly cut Christmas tree. If you don't put up a Christmas tree, you can always get some dried balsam and fill a muslin bag with it. If all else fails, break out the pine-scented cleaners. You can enjoy the pine smell, and a clean house.

Orange and clove.
Try studding an orange with whole cloves. You'll get an absolutely dreamy smell, and a cool looking holiday decoration.

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What a year! Lots of ups and downs in my industry, that's for sure! One thing has stayed the same, however, and that is my commitment to making sure that my clients receive the information they need to make the best housing and mortgage decisions.

With more changes than ever in tax breaks, loan changes and the economy, it's easy to get caught up in the media hype and make rash decisions. Staying calm and focused on your individual situation is always the best approach.

I hope you're also able to enjoy some calm, relaxing time with your loved ones this month. Enjoy the holidays and I'll see you in 2010!

Best regards,
Debbie Siegel
Westchester Mortgage

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