Tuesday, February 28, 2012

Will Mortgage Settlement Have a Large Impact on the Housing Market?

The Administration is touting its latest plan designed to help homeowners and to repair the struggling real estate market. They have high hopes for the $26 billion foreclosure settlement made with five big banks on February 9.
But will this latest effort really turn the housing market around or is it just another political ploy in an election year? It’s hard to tell just how effective this will turn out to be. Three weeks after the government came to an agreement with the banks, experts continue to disagree.
To get a better understanding let’s take a look back at the basics as covered in Gretchen Morgenson’s excellent article in the New York Times: “The Deal is Done But Hold the Applause.”
What does the deal provide?  Over the next three years five big banks will spend $17 billion to help approximately 2 million underwater homeowners by reducing the principal on their loans. In addition, qualifying borrowers will get refinancing to the tune of  $3 billion. The banks will also hand over $5 billion in cash: $3.5 billion to states and $1.5 billion to some homeowners who were improperly foreclosed on.
It sounds like an enormous amount of money, but not when compared to the size of the problem. According to Paul Diggle, property economist at Capital Economics in London, “Close to 11 million borrowers are underwater on their loans to the tune of $700 billion in total.” In addition the average amount underwater is $50,000. 
This plan would help approximately two million borrowers and would reduce their loan by $20,000.  As for the total amount - $17 billion in write-downs would be about 2.4 percent of the total negative equity weighing down borrowers across the nation now. 
Of the 4 million Americans who have been through foreclosure since early 2007 – this plan would give about $2000 to 750,000 people who have lost their homes.  Not exactly enough for the down payment on a new home.  It appears that this is a baby step in the right direction but much more is needed if we are to really help underwater homeowners and help the housing market rebound.  

Thursday, February 16, 2012

Steeplechase and Polo in Northern Virginia

For those not familiar with the area, one of the many joys of Northern Virginia is its horse country.
Out in The Plains,Virginia sits the Great Meadow Foundation: http://www.greatmeadow.org/Contact/tabid/79/Default.aspx, which owns a beautiful steeplechase track with rolling hills, a small pond, and several jumps for steeplechase racing.  At this location they hold two steeplechases called the Virginia Gold Cup in May and October.  The main event is in May and it is quite an affair.  Attendees dress in their best attire and watch the beautiful horses tear up the track and hurdle the jumps with grace and speed.  It is an extremely elegant event and a lot of fun.

If that wasn't enough for you, at the same spot, they hold night polo every Friday night throughout the summer.  You can bring your own picnic dinner and watch sheer artistry as high goal polo players show off their skills and their horsemanship.  You can even learn to play polo at affiliated clubs.

These events are definitely worth a visit and they are a part of the fabric of our community.

Wednesday, February 15, 2012

Northern Virginia - Golf Mecca

I was pleasantly surprised when I moved to Centreville to find a plethora of great golf courses within a 10 mile radius.  Check it out:

Westfields:  (http://www.westfieldsgolf.com/sites/courses/supersite.asp?id=988&page=56507)

For the elite golfer who is willing to pay for traps immacutely raked and greens as fast as a pool table.

Pleasant Valley:  (http://www.pleasantvalleygc.com/) Along with its twin club South Riding (http://www.southridinggc.com/) they strike a nice balance between high quality and affordability.  If you get their player's pass you can really get your money's worth especially if you play in the afternoon and get a twilight rate.  Wide open fairways are nice as well as some great elevated greens.

Twin Lakes (http://www.fairfaxcounty.gov/parks/golf/twinlakes/)  This is a great public course for us working stiffs who are used to putting our golf shoes on in the parking lot and dining on a hot dog as a fancy meal.  A lot of variation in the layouts but the Oaks Course is just as it sounds very wooded.  Bring plenty of extra balls if you play it :)

To top it all off you have the Virginia Golf Center and Academy (http://www.yelp.com/biz/virginia-golf-center-and-academy-clifton) which has a nice par 3 course to try and a great driving range.  They also have a lot of putting greens and a short game practice area.

With all of these resources you have no excuse not to practice your game!

Tuesday, February 14, 2012

Great Victory By George Mason Men's Basketball Over VCU!

George Mason hit a 3-pointer at the buzzer to beat arch rival VCU.  They were both tied in the Colonial Athletic Association before the game so the winner of the game will get a big boost in their effort to get a bid to the NCAA tournament.

Mason was down pretty much the whole game but the kept fighting back and hit an improbable shot at the end.  They actually hit three 3 pointers in the last 29 seconds!!! Here's the article describing the game:  http://www.gomason.com/ViewArticle.dbml?DB_OEM_ID=25200&ATCLID=205380173

Congrats Patriots!

Sunday, February 12, 2012

Which closing costs can be deducted in the same year as the closing?

As tax time is approaching, you may be wondering which closing costs you can deduct against your 2011 income if you bought a property in 2011.  It turns out that is a pretty complicated question.  Many of the closing costs that you would think you could expense immediately have to be added to the basis of the property and depreciated over 27.5 years unfortunately.

For a line-by-line breakdown of what is presently deductible from your HUD-1 costs check out this website: http://www.minassiancpa.com/articles/realestate/closingcosts.html

Good luck! 

Saturday, February 11, 2012

Great Eats in Northern Virginia

One of the many reasons to live in Northern Virginia is the abundance of unique eateries.  I search out off-the-beaten track restaurants that aren't fancy but have great food.

Northern Virginia has a competitive advantage in this area because it has such a large immigrant population bringing with them a wonderful supply of ethnic restaurants.  In addition, real estate isn't as expensive so cheaper restaurants can thrive.

These aren't your latest U Street $20 a plate restaurants.  Just plain goodness at a good value.

Jireh Bakery and Cafe in Centreville (http://www.facebook.com/JirehBakeryCafe?sk=wall)

This place right on route 29 is unassuming from the outside.  They've taken an old house and made it into a 2 floor coffehouse hangout.  They make fresh Korean breads and pastries as well as great tea and coffee.  Free Wifi and a great atmosphere make this a wonderful part of the community.

Kline's Freeze in Manassas (http://manassas.patch.com/listings/klines-freeze)

This place is old school.  A 1950's style ice cream and burger joint, which has that simple charm.  The best part is the soft serve ice cream which they can dip in all sorts of delicious sauces that harden on the ice cream. My favorite is the vanilla with chocolate sauce and rolled in walnuts.  All for a very reasonable price.  You won't be disappointed you stopped here.

Banh Mi DC Sandwich in Falls Church (http://fallschurch.patch.com/listings/banh-mi-dc-sandwich)

Move over Subway, this place has 24 different foot long Vietnamese sandwiches for between $3.50 and $4.00.  They are not only cheaply priced but they are awesome.  The bread is baked fresh and there are  a lot of tasty ingredients.  Many of the sandwiches have cilantro, grilled meat, peppers, light seasoning.  One of the best deals around.

Mark's Duck House in Falls Church (http://marksduckhouse.com/)

If the idea of duck roasting over a spit makes your mouth water, this is your place.  Almost exclusively frequented by Chinese speakers, this place is legit.  The duck is succulent and moist and sold at a very fair price.  Bring your appetite when you come because the portions are generous.

If you have any suggestions on other great eats in Northern Virginia definitely let me know.  I'll include them in my next blog on the topic.

Wednesday, February 1, 2012

New York Fed President's Housing Proposals

With the housing market still dragging the economy down, more and more voices are calling for the government to offer relief.  One of the latest and loudest is William Dudley, New York Fed President and Chairman of the Federal Open Market Committee, which sets interest rates. In a January 6 talk, Dudley described the housing market as a key factor behind the frustrating slow recovery of the US economy, and called for “further housing-related policy interventions that would help stabilize home prices, improve the housing outlook and generate an earlier recovery in housing activity.
In making the case for housing intervention he suggested measures which would “improve access to mortgage credit, reduce the obstacles to refinancing, lessen the flow of homes into foreclosure through bridge financing and accelerated principal reduction, and facilitate the absorption of REO back into use as owner or renter-housing.”
The last, REO-to-rental conversions, could offer great opportunities for real estate investors.
According to Dudley, an interagency group which includes the Federal Reserve is working on a program. Under consideration are several proposals:  investors could be encouraged to purchase REO to be made available as rental housing.  Fannie Mae and Freddie Mac could increase the number of loans offered to individual investors, provided the investor puts up an adequate amount of equity for each mortgage. And REO properties in a given locality could be bundled for sale.
“The government might consider a package of tax incentives for purchases of REO that are used as rental properties. Such incentives might include a reduction of the current 27-½ year depreciation period and/or a reduction of capital gains tax liability if the property is held for a minimum period, such as five years.”
In spite of all the calls for government help, experts disagree on just how much the government can help the real estate market. But that doesn’t mean that they’ll stop trying, in fact the President had some new ideas in his State of the Union speech. Next time we’ll examine the president’s proposal.