Maple Grove, MN

USA Today ran this 2008 Foreclosures By State heatmap last week, reminding us of a simple truth: Headline statistics can be misleading.

According to data compiled by RealtyTrac, 1 in 8 U.S. homes were in various stages of default or delinquency at the end of 2008. This is a fact and it was widely reported by the press.

However, as the heatmap plainly shows, in stripping out just 35 of the nation's 3,232 counties, we can decrease the number of foreclosures nationally by half.

In other words, yes, 1 in 8 U.S. homes face mortgage trouble. In your neighborhood, though, the ratio is likely much, much lower. Real estate is a local phenomenon. National statistics rarely apply

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Yesterday, the U.S. Department of the Treasury released details on their new "Making Home Affordable" program, which is expected to aide up to 9 million homeowners. Below is an excerpt from their new website, www.FinancialStability.gov:

"The deep contraction in the economy and in the housing market has created devastating consequences for homeowners and communities throughout the country. Millions of responsible families who make their monthly payments and fulfill their obligations have seen their property values fall, and are now unable to refinance to lower mortgage rates. Meanwhile, millions of workers have lost their jobs or had their hours cut, and are now struggling to stay current on their mortgage payments...

"The Obama Administration's Making Home Affordable program will offer assistance to as many as 7 to 9 million homeowners making a good-faith effort to make their mortgage payments, while attempting to prevent the destructive impact of the housing crisis on families and communities. It will not provide money to speculators, and it will target support to the working homeowners who have made every possible effort to stay current on their mortgage payments. Just as the American Recovery and Reinvestment Act works to save or create several million new jobs and the Financial Stability Plan works to get credit flowing, the Making Home Affordable program will support a recovery in the housing market and ensure that these workers can continue paying off their mortgages."

The first arm of this program is to help those who are near foreclosure, by lowering their current rate, and in some cases doing a principle reduction. The current mortgage servicer will analyze each homeowner on a case-by-case basis. Not all homeowners will qualify.

The second arm of this program is designed help those homeowners who have paid their mortgages on-time and simply have not been able to refinance due to a loss of equity. Homeowners could potentially refinance into lower rates even if they owe up to 105% of the value of their home. In some cases, an appraisal may not even be required.

Time will tell how this program will actually play out in the real world. Historically, we've seen the government proudly make announcement that, "We are now going to help..." But, at the end of the day, some lender will need to stick their neck out and take the risk. However, there is a ray of hope in the fact that there are some built-in incentives for the lenders who are willing to participate. We will see soon enough.

Ben Olson, Mortgages Unlimited, Maple Grove, MN 763-416-2620

As a result of the American Recovery and Reinvestment Act of 2009 (ARRA), which was signed into law on February 17, 2009, the Federal Housing Administration (FHA) has increased their loan limits for 2009! To read the most recent Mortgagee Letter released on February 24th (along with Mortgagee Letters from previous years), please visit:

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/

Also, for a complete schedule of FHA loan limits in your current area, please click below:

FHA Mortgage Limits

For the 7 county metro area of Minneapolis and St. Paul, including Hennepin County, the FHA loan limit has been increased back up to $365,000 (up from $318,550). This means with a 3.5% down payment (required by FHA in most cases), you could purchase a $378,000 home! This is going to help a lot of Pre-Approved homebuyers.

Please, call me if you have further questions regarding this change.

Ben Olson, Mortgages Unlimited, Maple Grove, MN 763-416-2620

There was an interesting editorial on CNNMoney.com today titled, "Why I Hate Facebook" by Paul R. LaMonica. He ranted a bit about a few "annoying" aspects of the social media website. One of his arguments was Facebook's Popularity vs. Profitability:

While it's impressive that it took Facebook only 5 years compared with 7 years for Apple to "sell" 150 million iPods, who has the better business model?

Facebook merely signed up people to use their service...for free. Apple sold a product...and a pretty pricey one at that. What's more, Apple (AAPL, Fortune 500) makes money when people buy music from iTunes for their iPod.

Now, whether you agree with Facebook's business model or not, be sure to understand that you can make money on Facebook, even if Facebook itself is not making money. I am reminded of the memorable quote by author and trainer Bob Berg:

"All things being equal, people will do business with and refer business to those people they know, like and trust."

This quote is just another reminder that we're ALL ultimately in the relationship business. Isn't this the core reason why we engage in online social media and blogging in the first place? We want people to find us, to get to know us, to like us, and to build trust with us.

Though I feel that it is important to "play by the Facebook rules" (i.e. upload family photos, comment on your friend's Wall, and update your personal status), there is certainly room to remind people what you do. Here are some thoughts:

• Photos - Upload photos of your newest listing. Upload a picture of your most recent marketing flyer or brochure.
• Status Updates - "Ben Olson is Pre-Approving another First-Time Homebuyer!" "Ben Olson is excited that Mortgage Rates Dropped Today!"
• Wall - Find your clients, become their friends, and write on their Wall! "John, Congratulations again on your new home. I am very excited for you and your family. I had fun working with you!"

But wait, here's the caution... DON'T OVER DUE IT!!! Don't forget why people are there... to connect and to have fun. If you honor the culture of Facebook, there will be more than enough opportunities to remind people about what you do. If you work Facebook and other social media outlets into your marketing strategy, and if you do it properly, people will begin to know you, like you, trust you and eventually want to work with you.

Want to be my Facebook Friend? :)

Ben Olson, Mortgages Unlimited, Maple Grove, MN 763-416-2620

The chart below was forwarded to me by a colleague. It lays out the primary differences between the original $7,500 Tax Credit for First-Time Homebuyers, which was created on July 2008, and the new $8,000 First-Time Homebuyer Tax Credit. I hope this helps to clarify how the new Stimulus Package will affect First-Time Home Buyers.

Please call me if you have further questions regarding these new changes.

Ben Olson, Minnesota Mortgage Specialist, Mortgages Unlimited, Maple Grove, MN 763-416-2620