Esko Kiuru - Las Vegas NV Mortgage Consultant

The extra time that Washington took to hammer out the much-anticipated rescue plan may have produced something that will make distressed mortgage borrowers feel a little better about the whole exercise. In the original blueprint their plight wasn't very important at all but according to the revised version they have a good chance of receiving help that could allow many to keep their homes. Some months ago the government introduced the Hope Now program that had a major weakness in it, namely that it was voluntary for the lenders and by many accounts it hasn't provided that much relief at all.

If properly structured this new measure could make a real difference, though. The government owns mortgages and mortgage-backed securities worth a decent pile of money and the bill directs it, the government, to come up with a program to help distressed homeowners meet their payment needs and also to urge mortgage servicers to use any available means to minimize foreclosures. That all sounds very promising. Since many of the details are still to be worked out, it'll take probably a few weeks before any type of a concrete document will be published and then everybody will know how far it goes.

One of the key elements in this is that if the government buys under the bailout plan home loans in one piece it'll have much more control over amending the loan's terms. It could include lowering the interest rate, cut down on the principal balance or perhaps extend the loan period. On the other hand, if it purchases only slices of mortgages packaged into complex securities, the modification task with the servicer becomes much more complicated. So, in essence, homeowners whose mortgages were sold undivided have a better chance of getting a meaningful workout done.

The success of this well-intentioned provision depends now on how the details turn out. And how aggressively the program will be run. The task force working on the fine print is undoubtedly already being circled by interest group lobbyists who want to have their flavors plastered all over the outcome.

The answer is maybe. Time will tell what its short- and long-term effects are on the battered financial sector. The first read indicates that Wall Street wasn't all that impressed as it dropped 157 today after the measure was approved in Washington. There are many skeptics about its potential to cure the ills that were mainly caused by irresponsible mortgage lending practices on all levels and speculative real estate investments and schemes.

For one, everyone should have taken more time in putting the complex plan together. A week or two isn't anywhere near enough time to come up with a comprehensive, well thought-out blueprint for a massive project like this. Congress did hold off the initial Treasury request for a quick approval, mostly motivated by politics, which would have been by many accounts disastrous. The delay did give those who were aiming at a broad-based, responsible outcome to get some kind of a handle on what they were supposed to do. Yet, as it now stands, there seem to be a gazillion details that still need to be worked out and that leaves the door open for all sorts of abuse and mayhem. Haste is the enemy of lasting solutions.

Some of the measures appear to be taking the plan in the right direction, toward restoring confidence in the financial arena and also protecting the taxpayer who is footing this mammoth rescue bill. Federal agencies, supposedly meaning Fannie Mae and Freddie Mac, can modify mortgages in distress. Details on this won't be known for at least a few weeks but it could become a helpful outlet for many struggling homeowners.

A must point was to get an oversight function for the entire effort. Without it the Treasury Secretary would've been pretty much the only authority calling the shots and that would've been potentially very hazardous. After all, he is the one who has been watching the marketplace come unglued for the last several years and didn't have the capacity to correct it. How could anyone trust him to fix it now? Hopefully it has all the needed power to act in the best interest of the taxpayer. And the government can through warrants get equity positions in companies so that if and when bailed-out firms have future gains taxpayers will also benefit from that.

As more details are worked out in coming days and weeks, the picture will become clearer and preferably will yield true results.

It is really nice to hear upbeat news for a change. The attention lately in Southern Nevada has been trained on the mortgage industry struggling with a load of foreclosures and the housing market trying hard to get its supply and demand in balance that would then stop prices from sliding any further. Those are generally the big issues of the day in the valley that people talk about.

But bring in The Robb Report Vacation Homes and change the topic, at least for a while. The magazine conducted hours of research on over 50 international destinations in an effort to find where it's worth while to purchase a vacation home now. When all was said and done, three principal criteria rose to the top to influence how these locations were ranked in the worldwide real estate arena. One, the area is an up and coming one, still lacking mainstream exposure. It's already well established. And third was that it now boasts nice value because of soft real estate market conditions.

It's easy to see how Las Vegas made their list of only five places selected in the U.S. Sin City's fundamentals manage to cover two of the benchmarks very thoroughly. It's already rather well established, many would agree to that, and the current housing market here offers buying opportunities wherever one cares to look. They are available in the condominium and townhouse segment as well as in the single-family side. By the way, the other four American destinations The Robb Report identified were Aspen/ Snowmass Village in Colorado, Coeur d'Alene, Idaho, Maui in Hawaii of course and Miami. Nice company to be associated with.

The report obviously is looking a few years into the future, at least what comes to Las Vegas, and then it makes fairly good sense. Eventually the mortgage sector will recover and be able to again offer a full selection of products to spur buying activity. The same goes for the ravished housing market. Once it works out its imbalances it'll be back. The magazine's website can be accessed at vacationhomesmag.com.

The Department of Housing and Urban Development, or HUD, has received a grant package that totals almost $4 billion to aid cities and states embroiled in mortgage foreclosures. These funds actually were put aside for this purpose in the recently passed Housing and Economic Recovery Act.

The effort has a fitting name, The Neighborhood Stabilization Program, and its aim is to let local and state governments use the available money under certain guidelines. They can tear down or restore abandoned homes and buy land temporarily to stabilize deteriorating areas and then promote redevelopment.

Possibly the more pro-active aspect of it is that they can also provide low- and moderate-income home buyers closing cost and down payment relief. If many of the foreclosed homes can be sold to owner-occupants, there would be less need for the local authorities to get involved in rehab and land purchase activity. That would be the easiest and fastest way to turn around areas with many foreclosed houses. The bulk of this grant money, therefore, ought to be directed to this particular segment.

HUD will use need-based criteria how to allocate the funds. Every state will receive something but areas hardest hit will receive the most. Foreclosure rates, mortgage defaults and subprime exposure understandably dominate the selection process. Las Vegas, North Las Vegas and Henderson, Southern Nevada in short, are then in a position to get a rather generous share for reasons well-known to anyone who follows the local real estate market. If the grants coming here are used wisely, they could also help steady the declining property values throughout the valley. Who wouldn't want that?

Earlier this year the high-rise Strip project ran into serious problems when the principal developer defaulted on the construction loan. Acting on the obvious decline of the real estate market in Las Vegas the lead lender, Deutsche Bank, asked the developer to put more capital into it but he couldn't get anything because the credit market by that time was already having its own difficulties. Since months-long efforts to sell the twin-tower undertaking rising next to the Bellagio were also unsuccessful, Deutsche Bank did the next best thing and took over the project for a cool $1 billion, actually a nice discount from the original cost of $3.9 billion.

The bank, though, isn't in the business of owning condominium-hotel developments and casinos, so it is likely to sell it when it's completed in late 2009. Currently construction is humming along on the site backed by an agreement reached months ago with the primary builder, Perini Construction, which has managed to adhere to the initial end date. Please click on the link to read the entire article.