Most consumers make the mistake of focusing solely of the rate. I am hearing form financial planners and others that some lenders are taking 90-120 days to settle a loan and many times, the low rate promised never materializes.

Ask questions of your lender and proceed when you are confident that the loan will actually come to fruition. A zero rate loan is worthless if you never get it! More importantly, it is important to focus on some other areas when shopping for a mortgage and one in particular is how will you title the home?

As we start seeing some signs of positive economic news, many are still dealing with the ramifications of the recession. Divorce, credit issues, foreclosures, short sales and other factors have changed the financial snapshot of many. Now is the time t focus on how your property is held or will be held!

There are four basic ways to title a property ( some exceptions , such as California, which does a trust) but for simplistic purposes, I want to focus on the four generally accepted methods.

First, is Sole Owner-  an individual, whether single or divorced, but holds title by him/herself. If this person gets married or wishes to add a significant other to title, then they must look at the other options.

Tenants by the Entirety is a common method for married couples to own a home together. This is a common way to hold title and offers some benefits but may not address all of your estate planning needs.

Joint Tenants is another method that allows two or more people to own the property together, in indivisible interests, while reserving the rights of survivorship to one another.

The fourth way, Tenants in Common, is used to create divisible percentage ownership interests to each of the owners, but with no rights of survivorship reserved for one another. For example, an older couple both divorced and/or widowed now getting married and buying a home together would consider this tenancy.

If they each have children and grandchildren, they may wish that their share of the property is bequeathed to their heirs rather than to the surviving spouse. Obviously, neither of these options should be taken for granted and you should seek the advice of the counsel and your financial planner to assure that your goals are met.

Now, it is important to note that how you hold title can be changed at any time, so if you recently purchased or refinanced, you can change how you hold title afterwards. Make sure that you convey to your lender how you wish to hold title, so it is done correctly.

Finally, “ A quitclaim deed is the least protective deed for the buyer. It provides no warranties or covenants to the buyer” states Sara Moore, COO of Veracity Title in Annapolis, Maryland. . If the grantor has good title, the quitclaim deed is as effective as a general warranty deed, but with none of the guarantees. Quitclaim deeds are frequently used to cure defects in the title and  used to transfer property between family members. They are also a favorite tool of con artists!

A real estate buyer is best protected by a General Warranty Deed. The seller (grantor) conveys the property with certain covenants or warranties. The grantor is legally bound by these warranties, whether expressly written into the deed, or implied by certain statutory words.

The covenants or warranties in a general warranty deed do not cover just the period of ownership of this grantor. They extend back to the origin of the property. Each grantor of a general warranty deed in the title chain would be liable for title problems before and through their ownership. This is why title insurance is so important!

Your home is most likely your most valued asset. Please make certain that you ask the right questions from your lending, legal and financial professionals.

In addition, some other stats appear to be dismal but are also good. For example, the national homeownership rate is at a 14-year low coming in at 66%. A quick glance at that headline would cause most to feel that a 14-year drop is a bad thing.

To the contrary, it is positive. Just as stocks grew to unsubstantiated levels in the 90’s only to be deflated by the dot.com boom, housing too saw a run up in the early 2000’s that would eventually run out of steam.

A homeownership rate of 66% is not bad. Seventy percent is too much, as too many unqualified buyers enter the market ill prepared and ill informed, thus driving up prices. If you have ever watched the show Storage Wars, you will see how inexperienced spenders drive up the price and/or pay too much, and this happens in housing as well.

Now that we have found a floor at 66%, fewer programs and tighter regulations will prevent another artificial run up. Buyers are back in full force and this “return to normalcy” should start a manageable but slow and steady growth in most housing areas.

A study last week by HomeGain showed that 72% of homeowners surveyed were happy with owning a home. That too is a positive. If too many homeowners were dissatisfied, housing would have yet another problem with which to contend.

Almost 30% of those that were dissatisfied pointed to depreciation in value as the culprit. Moreover, 18-25 year olds were the most dissatisfied. That makes sense as they bought at the peak and have lost value or are unable to buy at this time.

In other news this week, the secretary that Warren Buffett made famous by stating that she paid more in taxes than he did, bought a second home in Surprise, Arizona. Warren- “The Sage of Omaha,”  known for his tenure of investing prowess, succinctly advised her that there would be no better time in our lifetime to buy and own a home. Warren may not return your call, but we will!

Rents are increasing rapidly while values and rates remain low. While not everyone should be a homeowner, if you are considering this move, remember to get your financial house in order before you start looking at financing a house.  Just like a recovery, slow and steady wins the race.

More details are needed, as are investors besides Fannie, Freddie and FHA . At present, we have a number of programs that have fallen far short of their stated goals, such as the FHA Short REFI, HARP1 and HARP 2, and others. Expect a flood of web ads, web sites, calls and letters touting the “new refinance program in Mr. Obama’s speech” but be wary, since no program exists. Identity thieves and disingenuous sales people will try to take advantage of the confusion.

Just when we thought that the mortgage interest deduction was safe from Congress, Maryland has decided to be the first state to attempt to remove it in phases. This is a slippery slope on many levels. First, will it gradually apply to every homeowner? Will other states follow? Will home prices stagnate in Maryland or drop further?

Maryland also has included removing the property tax deduction for homeowners. True, it still has to go to a vote on the floor, but the fact that it has gone this far is of great concern. I contacted Dr. Peter Morici, University of Maryland Professor and noted economist  as well as frequent guest on   CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and other national outlets, for his opinion.

Dr. Morici informed me that “Phasing out the home mortgage and tax deductions won’t be good for the housing market. At a time when Marylanders’ incomes are stagnating, and many can’t sell their homes, it’s another cynical tax increase on the middle class”.

Rates are low; inflation seems tame; homebuyers are back and consumer sentiment is rising as a result. Eliminating homeowner’s deductions coupled with new onerous rules just announced by FHA (more on that in a future column) would simply douse the struggling embers of a housing recovery, and as an extension, an economic recovery.

Instead of eliminating deductions and adding additional barriers to homeowners, wouldn’t it make more sense to stimulate housing so recordation taxes, property taxes and other associated housing revenue fill state coffers?

First, let me state that even with my experience in lending and real estate, I would not consider selling my home without a realtor. I certainly could do it myself, but I am confident that if I hire the right agent, that is the best decision for me.

Now, I am not against FSBOs or anyone trying this method, but it is imperative that the seller knows exactly what they are getting into. In today’s litigious world, you may put yourself into a bad situation if you miss a law or county specific code; misrepresent any defects; or potentially discriminate.

Some of the reasons given for not using an agent include the realtor fees, not meshing with the agent, and undervaluing /underestimating the job at hand. However, if you are diligent and informed, you may be successful in selling the home yourself.

Richard bought a home in Hereford, Maryland in 2006, subdivided the lot, and sold that part. He decided to list FSBO primarily because he “did not enough equity to pay the 6% the realtors wanted”. He hired an agent about a year and a half ago but after no activity, he decided to try on his own.

“I sold the lot FSBO but if the buyers were not patient and understanding, I would have lost that deal”, states Richard. “ I now appreciate the value of a realtor and like the buffer that they set so I am now offering 3% to any realtor that sells my home while still listing as FSBO.”

Mark, In York, Pennsylvania tried to sell FSBO and ended up having to bring in an attorney to untangle the mess created by both the buyer and seller. Language missing from a contract purchased online put them both at risk but they were able to rectify things, albeit, at a cost.

From the FSBO sellers that I spoke with, the number one complaint is ironic: The majority of their calls are from Realtors trying to pitch them on listing the home. The onslaught forces many sellers to not answer the phone numbers given and screen voice mails, potentially missing out on a hot buyer.

There are many examples of successful FSBO transactions. Just perform your due diligence before proceeding. Realtors may negotiate their fee and most will invest money in marketing your home. Moreover, successful agents already have a stable of buyers looking, which may equate to a quick sale time.

If you are selling as FSBO or sold as FSBO, I would like to hear your story, both good and bad. Your experiences could help another person avoid problems. For now, rates are near record lows and buyers are out there. Whether you choose an agent or decide to try it yourself, you need to have all of the facts. If you decide to sell the home yourself, contact us as we have a turnkey marketing program at no cost to help you sell the home and a list of experienced agents to interview if you decide on that route.

First, interview realtors and find one that matches your goals. Inquire about how they plan to market your home; value your home; and how much they plan to invest in marketing your home.

Simply placing your home on the multiple list is not enough. Many agents are creating QR codes for the listings and using social media and other web mediums to market the homes. The correct price is important but so is the marketing surrounding it.

“Winter is a great time to sell a home,” states Debbie Henninger of Keller Williams Baltimore. “In the winter months, buyers tend to buy looking at one to three homes as they are more motivated but in spring, it is more like one in twelve.”  Henninger also echoes that these are not normal times and marketing the property from both a price and aesthetic perspective is tantamount to success.

The holidays are over so take down the decorations both inside and out. Buyers do not want to see them and if you are slow in taking decorations down it can suggest that you are slow at addressing other items in the home, such as maintenance, etc.

If photos of your home for marketing show decorations, snow, bare trees, etc.  then find photos of when the trees where blooming and the grass was green. Show prospective buyers what it will be, rather than what it looks like now.

If you have a fireplace, use it for showings. Gas fireplaces create ambiance and wood burning ones give buyers a great olfactory greeting when they pull into your driveway and when they are looking inside. In addition, bake muffins before any showings as the smell will linger and create positive vibes.

Heather Barnhart, an agent with The Foreclosure Alternative Team in Hagerstown, Maryland suggests that you have your agent look at how many distressed sales are listed nearby. If your home is a typical sale, you need to market so people do not compare your home to a distressed home that is priced lower. “This can be tricky, especially with an inexperienced agent. I have seen some nice properties linger simply because these issues were not addressed between seller and the listing agent,” adds Barnhart.

By comparison, one seller listed their York County, Pennsylvania home in January thinking that it would take months for a buyer to materialize. They had  a full offer within four days and were not prepared to move. Fortunately, the buyer agreed to wait 60 days to settle and allow the seller to rent back for another two months, proving that now is a great time to buy or sell and more importantly, buyers and sellers are working in a collaborative manner rather than an adversarial one. Now that bodes well for housing!

It is still surprising to me how many industry professionals are misinformed or simply apathetic. I receive emails from mortgage veterans asking questions that a rookie should know the answer to and receive marketing solicitations that violate myriad laws. Last week, I was one of several guest speakers to a room full of realtors. Despite free lunch, coverage of important topics,and no admission fee, only 72% of those that registered actually attended.

I think that this clearly illustrates why it is imperative that you choose your realtor and lender wisely. Apathy from a financial professional should not be tolerated – you are the one making the payments , so your loan officer and realtor need to be current on rules, programs and in tune with your needs. I spoke to a homeowner trying to refinance but frustrated that her current lender and two others offered her the same FHA refinance but with no monthly savings due to the mortgage insurance premium.

I connected her with a 20 year veteran loan officer in our office, John Acton, that did an extensive interview and uncovered that the husband was honorably discharged from the military years ago but never used his VA eligibility for a loan. They went from zero savings with the other lenders to over $1000 a month savings as VA allows for debt consolidation and has no monthly mortgage insurance fee.

Another recent example is a well known realtor that simply relies on the fact that they have been an agent for almost four decades. Impressive but without staying current, his perspective is forty years behind. Without going into too much detail, his advice to borrowers is not only myopic, but in some cases, harmful. By comparison, I know other veteran realtors that have embraced technology ,continuing education ( not just the mandatory requirements,but everything relevant). I can not state this enough: interview and choose your loan officer and realtor thoroughly and wisely ! Realtors and loan officers work on commission. Make sure they are working for you, not the money!

Utility firms can be difficult but they do have some positives . Most offer little known programs to help homeowners save money. For instance, Baltimore Gas & Electric offers an energy audit for $40. If they uncover at least three qualifying items, they will fix for free and waive the $40! Items include replacing old light bulbs with new CFL bulbs; energy flow shower heads and faucet aerators; water heater insulation and more. For details, check out their site:

• http://www.bgesmartenergy.com/residential/quick-home-energy-check.

Met Ed offers a similar service but not quite as generous . Their fee is $50 and installation on any products is capped at that value:

• http://energysavepa-home.com/walkthrough/walk-through-audit

Ask your loan officer and realtor what other helpful tips may be available. The good news is that attrition has removed most of the apathetic individuals. The bad news is that is up to to find, interview and ultimately choose your professional wisely. All things considered, that really is not bad news!

1.  The Fed will keep rates low. Bernanke and Company will not do anything with The Federal Funds Rate for the majority of 2012, if at all. This means that loans based on The Prime Rate will remain as is. In addition, The Fed will continue to buy Mortgage Backed Securities thus allowing mortgage rates to remain low.

2. Foreclosures and “distressed sales” will remain a large percentage of home sales. More foreclosures will hit the market, probably end of first quarter. Short Sales and bank-owned homes will remain steady as the market continues to adjust and correct. While these distressed homes depress values, they also set floors and it appears that most areas have hit bottom and are rebounding.

3. Homebuyers are back! 2012 will see home buying increase. My guess is that the National Association of Realtors will adjust their predictions mid-year. Buyers recognize that bargains abound and record low rates have made home affordability at an all time best. I am already witnessing multiple offers and full priced offers in various markets indicating that both buyers and sellers have adapted to the market. While 2012 will not set any records, it will surprise many.

4. Underwriting will continue to remain conservative. The fate of Fannie and Freddie coupled with the concerns over FHA’s financial condition has lenders overly cautious. Increased repurchase requests coupled with a few big lenders exiting the lending arena will create an “err on the side of caution” mentality in underwriting. Keep copies of everything financial and be prepared to provide extra documentation when borrowing.

Lending is prevalent but many consumers seem shocked when asked for certain documentation, especially compared to lending a few years ago.

5. Mortgage deductions will be under attack. Congress will allow the Mortgage Insurance deduction to lapse. From a budgetary perspective, I can see why. From a housing perspective, another year would not hurt, especially since FHA increased their mortgage insurance premiums and USDA added them. Mortgage Interest deduction should be safe. At worst, it may be lowered to $500,000 but I think this deduction, considered sacrosanct by many, will be left alone in a political year.

If you are thinking of buying or refinancing, the timing and conditions are very good. While there are many unknowns, as well as many “knowns”, such as Europe; the debt ceiling; over-regulation; and more, housing seems determined to prove Darwin correct.

However, there are many things conspiring independently and in tandem that could affect housing. Here are the top 5 items to watch:

1. Short Sales and distressed sales comprise almost 50% of all sales in some areas. While this will help unclog the inventory, according to some appraisers, it may hurt valuations. When the majority of comparables are distressed, it becomes the rule not the exception.
2. Investors are buying almost ¼ of all homes sold. However, several states and cities have enacted laws forcing the lender to maintain the property if in default. Lenders may start pricing investor loans even higher and that could put a dent in that niche. In addition, The National Association of Realtors announced last week that they miscounted home sales since 2007. They will be revising the numbers and that could have a temporary psychological effect on sales.
3. Senator Casey of Pennsylvania introduced a bill that would increase the guarantee fees that Fannie and Freddie charge lenders. Most feel that this is simply a tax on housing. Others feel that it will create additional problems for FHA as more loans end up there to avoid the higher fees.  This will most likely pass as it is tied to the payroll tax cut extension.
4. Student loan debt is near an all time high. The average borrower owes $25,000 and that exceeds credit card debt. The Under 30 crowd is at a 10-year low for homeownership and the 30-34 age group is at a 17-year low. In fact, almost 6 million 25-34 year olds live with their parents. Weak jobs coupled with high debt makes it difficult to qualify for homeownership.
5. Mortgage Fraud is way up, despite increased regulations. California leads the nation but as fraud increases, so do the loan repurchases. This could lead to underwriting tightening further as lenders add to their cautionary mindsets.

Do not let this dissuade you from buying or selling. There are many positives occurring in lending. In life, it is always easy to see the positive but we tend to ignore the negative. Knowing some of the potential pitfalls ahead will only make you a more savvy buyer, seller or borrower. And no matter where you sit, that is a positive!

At present, most of the mortgage insurance firms have revealed their guidelines for the products and many lenders are offering some level of HARP 2. The problem is that the automated underwriting system utilized by Fannie and Freddie will not be ready for those loans above 125% of the value until late first quarter.

Some lenders have misinterpreted this to mean that they can not do any HARP programs until then, which is not true. A number of lenders are able to offer some of the programs now, so ask around.  In some cases, waiting a few weeks may be the safe bet.

Most experts feel that HARP 2 will help refinancing activity and as a result, many have increased their predictions for loan volume in 2012. One drawback not discussed is early pre- payments of loans as a result of HARP2.

As borrowers look to save money by refinancing, that could cause payoffs earlier than estimated. There is a slight chance that this could convince banks to be a bit conservative with rates.

However, it does appear that Mortgage Backed Securities, especially those with Ginnie Mae, are simply shrugging off any bond unfriendly news and holding steady. The spreads are always indicating that rates should remain relatively level for awhile.

If you are currently underwater on your loan, meaning that you owe more than the home’s value, ask your lender if they are offering HARP2. You do not need to give your credit info to find out. If they are not offering, ask when they expect to. If you are unhappy with the answer, call us. We never charge an application fee. Just be wary of internet-based lenders, as there is a higher probability of fraud online.

Now, his position appears valid on the surface. FHA is far below the Congressionally mandated cap rate of 2% and many are worried it will need a huge taxpayer bailout. These fears are certainly warranted but FHA has operated below the ratio in the past. Acting Commissioner Carol Galante recently stated that FHA will not need a government bailout and still has room to increase premiums to help the balance sheet.

Here are some rebuttals: First, even worst case scenario, a bailout would be far less than Fannie and Freddie receive annually. I’m not advocating that taxpayers bail out any more entities, but the extreme scenario is not a deal breaker. In fact, Galante  strongly feels that FHA will be solvent before it’s next fiscal year end.

Next, the 2% cap is set by Congress. You know, the same group that can not balance a budget so they appoint av”super committee” and they fail too. Finally, one has to consider the agenda of the COO of the private mortgage insurer . His product is only for Fannie and Freddie and they are on life support with most voting to pull the plug on both. If they go, so does his firm. Moreover, his “testimony” is tantamount to the COO of KFC testifying why burgers are bad for you. It is difficult to get past the ulterior motive.

Again, there is a bit of validity to this but at present, FHA’s increased premiums have prevented a large percentage of homebuyers from qualifying and homeowners from refinancing. As evidence, The National Association of Realtors is warning of alarmingly high cancelation rates with borrowers. Some are due to poor appraisals, expensive repairs , job loss and other reasons, but a significant percentage is simply that total house payments are too high despite record low rates. FHA has witnessed a 560% increase in business  in just a few years but many that have FHA loans now can not refinance to lower FHA rates since the increased premium negates any savings.

Some positive news in real estate is that Pending Home Sales are up significantly. Pending sales are prone to fallout, but this is still a positive sign. Chrissy Dell, a veteran Realtor with ReMax in Hanover, Pennsylvania feels that ” The market is very attractive now with prices and rates. Homes priced correctly are moving quickly and distressed properties are abundant, comprising nearly half of the inventory!”

In addition, investors comprise approximately one fourth of all purchases. That is a telling stat- if investors are that confident, first time buyers should feel confident too.