The Obama administration announced on Friday plans to reform the housing finance market, including winding down government-controlled mortgage giants Fannie Mae and Freddie Mac and turning most of the market over to the private sector, as well as requiring larger down payments. The White House proposed three approaches to replacing Fannie Mae and Freddie Mac rather than offering up one final plan.

The administration’s proposal is expected to reshape the way Americans buy and own homes.
Among the plans outlined in the administration’s “white paper”:

▪ Shrinking the size of the portfolio of mortgages held by Fannie Mae and Freddie Mac by at least 10 percent a year.
▪ Creating an insurance fund for mortgages, supported by premiums paid by lenders.
▪ Winding down government subsidies of mortgages by raising the fees charged to cover the risk of default.
▪ Raising fees for borrowers and requiring larger down payments for home loans.

The administration also recommended measures to make government-backed mortgages more expensive in order to allow the private-sector to better compete in the mortgage market. For example, it called for reducing by this fall the size of mortgages Fannie and Freddie may purchase from $729,750 to $625,500.

Raising Rates?

Some critics of the proposal are concerned that the administration’s overall plan would raise mortgage rates.

Treasury Secretary Timothy Geithner said that mortgage costs likely will rise in the coming years, as government support is withdrawn and the private sector takes on a bigger role. Credit Suisse has estimated that rates on a 30-year fixed mortgage may rise as much as 2 percentage points if the government withdraws its backing of Fannie Mae and Freddie Mac.

Higher borrowing costs could be a thorn for a recovering housing market, since interest rates greatly affect how much buyers can afford, experts say.

“Reducing the government’s involvement in the mortgage finance market is necessary for a healthy market, but should not be done at the expense of the economy or home buyers,” NAR President Ron Phipps said in a public statement in response to the Obama administration’s plan. “Any proposal for increasing fees and borrowing costs beyond actuarially sound levels will only make it harder for working, middle-class individuals to achieve home ownership, and only the wealthy will be able to achieve the American dream.”

NAR’s economists estimate that a retreat of capital from the housing market will negatively impact the economy too. For every 1,000 home sales, 500 jobs are created for the country, NAR notes.

Geithner estimates that reducing the government’s role in the mortgage market may take five to seven years for the transition.

“Most people in Congress understand that this is a very political, contentious issue,” says David Berson, a former Fannie Mae chief economist. “It’s going to be a very volatile ride as we move toward what ultimately will be the future of Fannie and Freddie. It’s hard to know what that’s going to be.

Now is a good time to buy real estate, according to data from Moody’s Analytics. Home affordability has returned to pre-housing bubble levels or even fallen below the average in many U.S. markets.

In fact, housing affordability by the end of September had returned to or fallen below the average reached between 1989-2003 in 47 of the 74 housing markets that Moody Analytics tracked.

In September 2010, the ratio of home prices to annual household income had fallen to 1.6–below the historical average of 1.9 between 1989 and 2003. The ratio peaked in 2005 at 2.3.

“Based on incomes, this is as affordable as it gets,” says Mark Zandi, chief economist at Moody’s Analytics. “If you can get a loan, these are pretty good times to buy.”

Some of the most undervalued markets include Cleveland, Detroit, Las Vegas, Atlanta, and Phoenix.

But those cities also are facing high rates of foreclosures and more borrowers defaulting on their mortgages that could decrease values further in those cities before they start to improve, Zandi says.

In Phoenix, for example, “it’s become cheaper to buy than to rent,” Jon Mirmelli, a real estate investor in Scottsdale, Ariz., who rents out foreclosed homes, told The Wall Street Journal. “But the question is: can you qualify for a loan?”

First-time home buyers once set out to buy a “starter home,” which refers to an entry-level property that is affordable and often needs some updating. But new buyers are forgoing the “room for improvement” home, and are getting more choosy in their home shopping.

Eighty-seven percent of first-time home buyers said they want to purchase a home that is move-in ready, according to a survey from Coldwell Banker Real Estate, which surveyed 300 first-time home buyers in the last year. First-time home buyers made up half of the market in 2010, according to the National Association of REALTORS®.

“There’s a real ‘aha’ moment for sellers revealed by this survey that the condition and quality of their home matters a great deal to first-time home buyers,” says Diann Patton, a consumer real estate specialist with Coldwell Banker Real Estate LLC. “On top of that, our agents have reported that on average, first-time home buyers now look at more than 11 homes before making decisions, which is higher than in the past. They can be choosy about what appeals to them and are recognizing the benefits of the low prices and wide selection of homes in many areas.”

Location is a key deciding factor when looking for a home: 78 percent of new buyers said the home had to be in an area convenient to shops and services, according to the survey. What’s more, three-quarters of buyers said it was important to be near their workplace, and nearly two-thirds said it was important to be close to “highly rated” schools.

Many first-time home buyers said the current real estate market offered them more opportunity than they had expected. For example, half of new buyers said they found a home in a more desirable neighborhood than they expected; 61 percent were able to get the home at a better price; and 40 percent got more space than expected.

The Most Common Tax Mistakes
The biggest problems small business owners make on their taxes are often mistakes or oversights they made during the previous year, the Associated Press reports. Sloppy record-keeping is the main reason for mistakes, even when accounting software is used, experts say.

Small business owners also often short-change themselves by not taking all the deductions they are entitled to because they aren’t well versed in tax law basics.

Here are two tips from experts:

1. Improve your record-keeping. Jeffrey Berdahl, a certified public accountant with RLB Accountants in Allentown, Pa., says it’s important to have a record-keeping program. If you use computer software, become an expert at it or pay someone who’s more tech-savvy to input the numbers for you, he says.

2. Keep track of business vs. personal expenses. If you use your car or home for business and personal reasons, you need to keep track of what you spend for each. Berdahl says those who use their cars partly for the business, or who have a home office, should go over all the expenses from the previous year and be sure that they don’t miss any deductions.

For car expenses: Insurance, gas, repairs, and garage rental can all be deductible. Determine the percentage that the vehicle was used for business and then multiply that by the expenses for the deduction amount.

For a home office: Mortgage interest or rent, insurance, utilities, and maintenance costs can be deducted, using the home’s square footage as a guide for the deduction amount.

No Paws Left Behind (NPLB) announced today its 1000^th foreclosure animal rescue. To date 1000 abandoned animals from dogs, cats, llamas to pot-bellied pigs have been successfully rescued and placed in “No Kill” shelters where foster care is provided until adoptive families can give them a good home.

In light of the increasing foreclosure epidemic, many homeowners have been faced with the hardship of having to leave their homes due to the current depressed economy that has rocked the housing market. In addition to losing their homes, many owners lack the financial means to continue taking care of their companion pets and end up leaving them behind. Subsequently, many pets are found locked in basements, garages, or simply left in backyards without adequate sustenance.

Headquartered in Houston, No Paws Left Behind was formed by a nationally recognized business woman and community leader. Cheryl Lang, President and CEO of Integrated Mortgage Solutions, (“IMS”), a leading provider of REO property inspections and rehabilitation was moved to create NPLB, after coming face-to-face with countless abandoned animals at inspection sites.

“Sadly, the current housing crisis has severely affected countless homeowners creating a trickle down negative effect on helpless animals,” said Cheryl Lang. “During routine housing inspections, we frequently discover animals left behind in deplorable conditions with no food and at times inadequate shelter,” added Lang.

Across the nation, NPLB has located homes and shelters and/or well-being support for 1000 abandoned animals found on foreclosed properties. With community support from local shelters, rescue groups and tireless volunteers, NPLB provides food, shelter, and vaccinations to abandoned animals 365 days of the year. In addition, the organization provides immediate support to owners faced with the terrible decision of having to part with their animals – from locating a new home for the pet to providing monetary assistance for pet deposits.

“We receive over 20 calls a week regarding an abandoned pet being left behind,” said Lang. “It’s just heartbreaking. Our goal is to be the voice of these silent victims and bring greater awareness and solutions to the growing phenomena of foreclosure pets.”

As part of their Pet Awareness campaign, No Paws Left Behind has recently launched a hardship pet deposit assistance program that provides foreclosure homeowners with financial assistance, if they are unable to pay a pet deposit for a new home.

“We are thrilled and proud to have reached this momentous 1000^th pet rescue milestone,” said Lang. “We will continue to strive to help homeowners and their pets through this foreclosure epidemic, so that no one is left behind without a home or shelter.”

About No Paws Left Behind

No Paws Left Behind, Inc. is a focus driven not for profit organization, designed to bring awareness to all communities’ silent victims of foreclosure who have no voice or rights to implement change. As a united front, we will restore moral obligation toward all pets that have potential to be, or have been left behind to suffer needlessly. We further pledge to act as a support group for those who find foreclosure imminent and need help finding shelter for their beloved pets; be a resource for those who find or know of abandoned pets.

PR Newswire

Good afternoon.  Speaker Adams, President Pearce, Honorable Senators and Representatives of the Centennial Legislature, Chief Justice Berch and Justices of the Supreme Court, constitutional officers, tribal leaders, honored guests, and my fellow Arizonans:
I had intended to deliver a State of the State address to you today — remarks that outline an exciting and solid plan for job creation, education, and tax reform and I WILL deliver that plan to you.

But, not now. Not today. Tragedy and terror sometimes come from the shadows — and steal our joy and take away our peace. That happened on Saturday when a gunman took away people we love, innocent people, and outstanding public servants — like U.S. District Judge John M. Roll.

Judge Roll had just come from the light of a Catholic Mass — and confronted the darkness of a madman.  The gunman gravely wounded others — people we love and respect — like Gabby Giffords, my good friend.  This past weekend’s events have caused me — caused all of us — to reflect on many things, including how we respond to those terrible events.

First, our response to this tragedy must be led by prayer and comfort for the victims and their families. So, please — join me in a moment of silence as we pray for all those we’ve lost — for the injured — and for the suffering. Thank you. With our faith and our courage tightly in place, we will step forward from this Chamber, dedicated to the Lord’s work — continuing our service to the public.

One year ago, from this very place, I told you I would serve beside you — proud to serve the people of Arizona. I said then, that public service is acting NOT in self-interest — but on behalf of others. And, I asked people to join me in the field. Gabby Giffords DID join me in the field. And, we worked together, knowing that when our public service ended, we would be judged LESS by what we achieved than what we overcame.

In addition to Judge Roll — Arizona also lost — Dorothy Morris, Dorwan Stoddard, Phyllis Schneck, and Gabriel Zimmerman. Let me take a moment to recognize the acts of extraordinary Arizonans — who responded with professionalism — and saved lives — law enforcement, emergency responders, the Tucson medical community, and the staff at the University Medical Center. Daniel Hernandez, a University of Arizona junior showed no fear in the face of gunfire. His quick action in going to Gabby Giffords’ aid — likely saved her life.

Daniel is here today and I’m going to ask him to stand and receive the thanks of a grateful state. It was a sunny Saturday at the supermarket in Northwest Tucson. It was a picture of what our country is all about: Public servants doing their duty, citizens, old and young coming to hear — coming to participate — in the beauty of our government in action. We lost someone else on Saturday- nine-year-old, Christina Green.

She was just elected to her student council. She was hoping to be a positive part of the future of America.  And, she has become just that. She loved baseball — she was the only girl on her Little League baseball team; and she loved to wear red, white and blue. I should tell you, Christina was born on September 11th, 2001. She thought of her birthday as a day of hope — a time to find goodness in America. As her mother said, “Her light shines on all of us today.”

Saturday’s events were not just an attack on those individuals we loved and lost, but an assault on our Constitutional Republic — on our democracy — on all we treasure and hold dear — as citizens and public servants. Arizona is in pain, yes. Our grief is profound. We are yet in the first hours of our sorrow — but, we have not been brought down. We will never be brought down! In fact — we’ve been lifted up by America’s thoughts and prayers — and we’re deeply grateful for them.

Arizona, like all of America — has been through difficult times before. But, those times have united us, and made us stronger — more enduring. Let those of us who serve our state and country do so in a way that honors those we have lost.  Our meetings on sunny days will not end. Like the words from Isaiah, I believe Arizona will rise on wings like eagles — we will run, and not get weary — we will walk, and not grow weak  So — I ask for your help — and your continued prayers, as we step from here, and guide this Great State with courage and devotion.

May God bless all the victims and their families and those suffering from Saturday’s tragedy. May God bless those who serve us in the cause of freedom and justice. May He bless you and your families and our Great State of Arizona. And may God always bless and protect the United States of America. Thank you.

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