Designer Handbag Bingo ~ Benefits Charity

Keller Williams Real Estate Langhorne Presents

Ladies Night Out

Designer Handbag Bingo is the perfect night out with the girls!

Saturday, March 24th

6PM Bag Preview               7PM Bingo Begins

William Penn Fire Company

123 Main Street

Hulmeville, PA 19047

$30 per person

Cost includes 2 Bingo cards for 10 games and light refreshments.  Additional cards will be available for $2 each & special games for $5 each.  The winner of each game will        receive a new, authentic designer handbag from Coach, Dooney & Bourke, Vera Bradley and more!  Also, lightly used designer bags will be available for purchase.  Please come prepared – this is a cash only event.

Be a VIP ~ Reserve a table (seats 10) and receive one FREE special games card!  VIP  tables must be purchased in advance by Friday, February 24th.

BYOB ~ Light refreshments will be served, but feel free to bring snacks and drinks to share with your friends or table.  MUST BE 21 TO ATTEND.

For Tickets & VIP Tables Contact Carol:
Phone: 215-431-8705        Email: Carol@SwainSells.com

All profits benefitting Habitat for Humanity of Bucks County &

KW Culture, helping local individuals & organizations in need.

Positive Housing Market Trends

It appears that July 08 has offered us some positive housing market trends.  There has been an increase in resales and new construction in most parts of the country.

Don’t get too excited now.  The market has lowered home prices due to the overwhelming number of foreclosures and short sales.  With prices being so low, first time homebuyers have now entered the market. 

This seems to me to be great news.  Prices needed to level off.  Prices could not have continued to soar, no one would be able to afford them.

Now Maybe the Time to Remodel

I have heard on the news,got multiple home center advertisements, and have seen the ads. 

Now is the time to remodel!  Prices are down at the retail centers.   Many homeowners are reluctant to put money into their home for fear of house prices falling. 

However, that can be far from the truth.  If you are planning on staying in the home the improvement is well worth it.  Or if you are planning sooner it still could be worth it as well.  It all depends on the numbers.

The bottom line here is if it is time for you to remodel, now is the time to get a good deal.

JUST SOLD

Despite everything you here in the media and read newspaper, The Swain Group are selling homes!  Last week Carol Swain sold two properties.

We also have listed two properties:  42 Buttonwood in Levittown and 627B Rose Hollow in Yardley.

To see info on these properties visit http://www.swainsells.com.

So if you are thinking of selling your home, or looking to buy give us a call at (215) 757-7257.

Going “Green” Can Be Deceptively Easy

by PJ Wade

Now that “green” is in, taking an environmental stance seems easy. In the post-Gore crush of organizations jumping on the “green” bandwagon, Canadians should not neglect the thousands of individuals — alone and in groups — who dedicated years, decades and lifetimes to raising their voices to protect the environment while society was in a more destructive mode.

When “green” was just another term for money, being pro-environment could make you unpopular. Criticize industries and corporations for polluting and you may have been considered anti-jobs. Complaints about off-gases from building materials and concerns about environmental damage caused by harvesting lumber were swept aside by traditions in construction and architecture. Consumers played follow the leader and generally were not receptive to developers who tried to introduce new ideas.

The current shift to “green” is driven both by concern for the environment and by profit. The corporate and entrepreneurial worlds have embraced this marketing opportunity and “labeled green” products and services are popping up everywhere — sometimes with less net environmental benefit than advertising campaigns would have us believe.

As we search for improvements in the way we approach everything from laundry, lighting and lawns to fabrics and building materials, let’s take time to support the individuals and their non-profit organizations that have long supported our environment. Search out a group that concentrates on a cause you believe in or a place you want preserved and say ‘thank you.’ The best sign of appreciation is to pitch in since battles are still raging.

Ontario-based Earthroots, a twenty-one-year-old non-profit involved in grassroots activism and advocacy directed at preserving Canadian wilderness, wildlife and watersheds, is sustained by its 12,000 supporters across Canada. Among Earthroots’ successful initiatives and victories are continued protection for 44 per cent of the ancient red and white pine forests of the Temagami region, and for several million hectares of environmentally-sensitive Ontario land. Public education through the Wolves Ontario project launched in 2000 has led to hunting bans in Algonquin Park and restrictions on hunting across the province. Earthroots continues to battle logging in Algonquin Park if you are looking for a cause.

Environmental groups like Earthroots also work hard to educate the public. Among Earthroots’ activities is the Changing of the Seasons Ceremony in Temagami, hosted by an Ojibway elder to mark the fall equinox. In 2006, almost 100 people gathered for a weekend of wilderness camping to experience the old-growth forest first hand. Add your name to the Wilderness Defenders email list at http://www.earthroots.org if you’d like an invitation. Backcountry experience is not essential.

Beyond “Green”

Be prepared for fallout when the full impact of this new “green” wave strikes real estate head on.

Research new options and weigh the costs of conversion before you champion a new “green” strategy. Believe that everything labeled “green” is automatically good and you may be stuck with unnecessary costs. Unless repercussions of caring for our environment and wanting to minimize pollution are anticipated, property owners and tenants may be hit with surprises:

• Just as urea formaldehyde insulation (uffi) and aluminum wiring were once approved for use by the government, but are now targeted as liabilities by insurance companies, there will be innovations which may eventually affect insurability. The Internet offers great opportunities to investigate the global track record of products and approaches before you commit.
• Will non-green houses and condominium complexes incur mortgage or insurance penalties just as properties with knob-and-tube wiring or lead plumbing do today?
• Since interior air quality can be worse that exterior, health insurance companies could conceivably factor this into their evaluation of claims for respiratory illness or other conditions where long term exposure could be a significant factor.
• The terms “green” and “organic” are not as rigidly controlled as Canadians would like to believe. Nor does either label automatically indicate superior design or functionality. During this trial-and-error period, purchases of big-ticket items like heating systems should be approached with caution and careful investigation. Do you remember property owners who switched to “cheap” electric heating with government assurances only to tear out their hair and their electric furnaces when hydro costs went through the roof?
• Higher prices for new housing and for renovations may be the result of increasingly stringent government regulations. Although “green” solutions should not significantly increase costs, some how consumer costs do keep going up.

Can you think of another example of government assurance leading to consumer regrets and expense? Many communities are living with something or without something that seemed like a good idea at the time.

Embrace the environmental movement, but learn from those unsung heros from all walks of life who have watched waves of concern come and go. Many of the most successful environmentally-friendly solutions and choices are the simplest. Work with the environmental pioneers in your community to ensure this “green” wave is not a passing fad, but the beginning of a new way of thinking and living.

Fraud: $4 Billion and Rising

by Lew Sichelman 

The Federal Bureau of Investigation’s estimate that mortgage fraud costs the lending business $1.2 billion a year is off the mark by more than $3 billion, a fraud analyst said at the Midwinter Conference in Park City, Utah, last week.

But a former fraud analyst says the FBI’s calculation could be shy by even more than that. And others who work in the mortgage sector scam artists continue to find new ways to fleece lenders.

The FBI’s calculation is based on Suspicious Activity Reports, or SARs, which it receives from lenders and others who think they may have been cheated in one way or another. But Arthur Prieston, chairman of the Prieston Group, a California firm which offers an integrated suite of fraud protection, loss mitigation and insurance services, puts fraud losses at $4.4 billion annually.

Prieston bases that figure on claims data for clients represented by his firm’s legal services affiliate, the American Mortgage Law Group, which chases down fraudsters. And he says the loss severity is at least 50 percent greater for lenders which are not insured and don’t go after perpetrators.

At the same time, a former fraud detection specialist who asked to remain anonymous because he no longer works in the field said the annual take as a result of mortgage fraud is more like $6 billion and growing.

He said “fraud for commission” in which originators will “do anything” to earn a fee is just as prevalent as fraud for profit.

“It’s pervasive throughout the entire industry,” the source told me in an exclusive interview. “It’s growing because the accountability is not there. Risk management (for fraud) is the Rodney Dangerfield of the mortgage business.”

The source said fraud for profit also is a growing category, but he said when originators commit fraud “and get away with it, they’ll do it again.”

Meanwhile, Ronald Frazier, president of LSI, a large automated title and appraisal company based in Santa Ana, Calif., told me he’s “seeing a level of fraud in the title industry that I’ve never seen before.”

From a claims perspective, Frazier added, “the last 120 days have been like a mushroom cloud.”

The LSI president, whose company is a division of Fidelity National Information Services, laid the blame for the increased level of chicanery, in part, on lenders who have “beaten us down” on costs. And as a result, title firms “don’t do all they should do.”

Frazier also said “shotgunning,” a scam in which a single borrower makes multiple applications to several lenders at one time, also is on the upswing, especially in the home equity sector. These crooks are able to get away with the scam, in part, because they close on the loans almost simultaneously, so they are hard to detect, he said. But he also said some title companies aren’t searching the records as diligently as the should because they can’t afford to.

Prieston said he expects financially strapped home builders to be the next to try to pull the wool over lenders’ eyes. He believes those builders who are sitting with unsold inventory will turn to straw buyers so they can obtain primary mortgages and use the money to pay off costly construction loans.

Once the builder “sells” the finished houses, Prieston believes, “they’ll walk, they bail,” leaving lenders who gave loans to the pretend buyers holding the bag.

He also said that occupancy fraud, in which buyers say they will live in the house but never do, is still the largest category of fraud his company sees. “The likelihood of default rises by 300 percent if the borrower claims he will reside in the property but doesn’t,” he said.

Insane Real Estate Market is Long Gone

by Henry Savage

In 2004 and 2005 I wrote a few articles about the insane Washington, D.C. real estate market. There were multiple buyers for every house on the market. Prices were skyrocketing and buyers were stripping themselves of every protection by eliminating such common contract contingencies such as a home inspection, the ability to obtain a mortgage and an appraisal. Such practices were unheard of prior to about 2002.

The focus of my articles wasn’t merely a description of the crazy conditions, but a prediction — even a warning — to anyone jumping on the real estate bandwagon hoping to make a quick buck: The red hot market isn’t sustainable. Those folks who were buying speculative real estate with no money down and a short term holding period are playing a risky game.

These articles generated a lot of reaction from readers, most who agreed with my prediction that the market was headed for possible hard landing.

During the same period — mid-2005 — I received a phone call from a woman from New York City. She says she’s putting together a book on real estate advice for Donald Trump. She asks me if I’d like to write something down and send it to her. If The Donald likes it, it will go in the book.

Even though I’m thinking that this must be some sort of practical joke, I agreed to send her an email anyway. My advice to Mr. Trump was simple: Recognize that real estate, while a good investment over time, may require patience and staying power. Folks expecting to double their money in a year are in for a rude awakening if their investment was ill-timed. If property values dip or the rental market slows, the investor must have the ability to hold the investment long enough to overcome dips in the marketplace.

So I write a few paragraphs and hit the send button. I then forget about it.

Low and behold, last week I received a package in the mail containing Trump’s new book, “The Best Real Estate Advice I Ever Received — 100 Top Experts Share Their Strategies,” along with a letter from the publisher thanking me for my contribution. I flip through the book and there it is on page 213. I also note that Blanche Evans, editor of Realty Times, is a contributor.

Well, it turns out my advice to the Realty Times readers and to Mr. Trump himself wasn’t too bad. I contacted my friend and true real estate expert, Bill Barnes of Barnes Real Estate Company in Alexandria, Virginia to get his take on today’s Washington real estate market. He summarized the current market like this:

• The number of days on the market for a new listing is approaching 90 days, compared with less than a week a couple of years ago;
• Home prices are indeed declining because houses are being priced at the same levels when the market was at its peak. Since there are far fewer buyers, sellers are coming off those peak prices because many sellers do not, for a variety of reasons, have the ability to hold onto their home indefinitely, waiting to get top price.
• A “herd mentality” exists in the marketplace. When the market was hot, investors flocked to write a contract as soon as a property came on the market. Today, with the help of the media’s incessant negative reporting on the real estate market, the same herd is wary to write a contract, fearful that property values will fall. This creates fewer buyers as inventory grows.

The Washington area real estate market is bound to lose a bit more steam before it picks up again. But Washington has proved to be resilient, and someone who buys real estate has made a good investment if the intent of the purchase is a long term investment. But be well aware of the fact that I mentioned in a Realty Times column that was published on March 17, 2005: Cycles happen.

House Overwhelmingly Passes FHA Reform Legislation

by Kenneth R. Harney

Prospects for reviving the long-slumping FHA (Federal Housing Administration) mortgage program took a big jump last week as the House of Representatives overwhelmingly approved reform legislation.

By a 415-7 floor vote, the House sent the bipartisan “Expanding American Homeownership Act of 2006” (H.R.5121) to the Senate. The legislation would:

• Eliminate current rules banning FHA downpayments below 3 percent. FHA would be authorized to offer zero down or 1-2 percent down options for credit-worthy but cash-deficient homebuyers.
• Shift FHA to “risk-based pricing” — a loan underwriting approach widely used in the conventional marketplace. As envisioned by the bill, FHA would be able to charge high-risk borrowers significantly higher mortgage insurance premiums — as much as 3 percent upfront compared with the current standard of 1.5 percent — and charge low-risk borrowers lower premiums.
• Raise FHA’s mortgage limits to each local market area’s median home price, but not to exceed Fannie Mae’s and Freddie Mac’s loan limits, which are currently pegged at $417,000. In designed “low-cost” areas, the FHA maximum would rise to a new ceiling of 65 percent of the Fannie-Freddie limits, or currently about $271,000.
• Open the FHA program for the first time to effective participation by the largest group of home loan originators — mortgage brokers, who account for more than 60 percent of the marketplace. Under current rules, small-scale brokerage firms are frozen out of the FHA segment because of rules mandating annual submission of audited financial statements — a costly process for many firms. The new legislation would require that brokers post surety bonds to protect the FHA against fraud and financial failures.

FHA Commissioner Brian D. Montgomery said the legislation will transform his agency and make it more directly competitive with subprime lenders.

“We are now closer to a (new) landmark,” he said, “a modernized, flexible FHA that can respond to the needs of today’s low and moderate income home buyers who need a helping hand.”

Chartered by Congress in the midst of the Great Depression in 1934, FHA traditionally functioned as the go-to resource for mortgage financing for first-time buyers short of cash. It has also been a key homebuying portal for consumers with imperfect or minimal credit histories. As recently as the mid-1990s, FHA accounted for 10 to 12 percent of all mortgage originations, but that percentage has fallen sharply as subprime lenders using private mortgage insurance cherry-picked the agency’s customer base with aggressive marketing campaigns, often through brokers who were effectively excluded from FHA participation.

The legislation has potentially large significance for realty agents and brokers who specialize in serving first-time purchasers in general, or African-American, Hispanic and other minority groups. FHA’s combination of low interest rates and substantial consumer protections — no prepayment penalties, for example — often offers clients superior terms compared with those available from subprime lenders.

FHA has also adopted a series of administrative reforms designed to attract realty agents — especially its termination of its long-controversial rules requiring repairs of property defects before closings, at the seller’s expense.

The outlook for final action in the Senate is uncertain at the moment. A companion bill is pending before the Senate housing subcommittee, but has not been reported out. After its August recess, Congress will only have about a month before its final recess for the election cycle. The situation is complicated by the go-slow approach of housing subcommittee chairman Sen. Wayne Allard (R-Colorado), who is no fan of government involvement in the mortgage market and is a political ally of the private mortgage insurance industry.

FHA commissioner Montgomery, however, pledges an “all-out effort” to convince the Senate to pass the bill before its final recess. As a former White House aide — secretary of President Bush’s cabinet — Montgomery brings political skills and the muscle of the Administration to the task. HUD Secretary Alphonso Jackson, a personal friend and former Houston neighbor of the President’s, also has pledged to work to push the bill through the Senate, underlying the White House’s strong backing for FHA reform this year.

The Good, the Bad, and the Really Bad of Business Structures

by Diane Kennedy

When it comes to business structures there are three types: the good, the bad and the really bad. Now before you think this article has nothing to do with you, consider this.

If you receive a Form 1099-MISC, or called an independent contractor, you have a business. And when it comes to selecting the right business structure, it doesn’t matter how big your business is, it matters how much you have to lose if something goes wrong. The more wealth you have, or the more wealth you plan to have, the more important selecting the right structure becomes.

Before we go into more detail on those structures, let me start with a story that was told to me by an attorney friend. When he talks to people at his sell-out seminars, the one thing he always emphasizes is protecting your assets. Face it — why go to all the trouble of building a business and wealth, if you’re not going to work just as hard to keep it?

He talked about the bad business structure, the sole proprietorship. That’s the type of business structure you have if you haven’t filed as another type of structure for your business. It’s the default structure that means you’ll pay more in tax, have a 10 times greater risk of an IRS audit and have just put all of your personal assets at risk from some mistake that could happen with your business. My friend talked about the risk of a sole proprietorship and then made the statement that he didn’t think anyone should begin a business until they have one of the three good business structures already in place.

After the seminar, a lady came up to him and said that she had just started her business and although she now understood the importance of a business structure, just didn’t have the time or money to form something now. My friend strongly suggested she wait to do anything in her business until she did have the time and money to protect her other assets with a good business structure. She promised to call him in 3 months. So, he was happy when she called him in 2 months. That is, he was happy until he knew why she had called him. Something had gone wrong, and although her employee was the one who caused the damages to a customer’s property, he was in her employment at the time and that meant she was liable. What could she do now to protect her home, her savings account and her investments? “Nothing, absolutely nothing,” replied my friend.

The time to protect your assets is before the problem occurs. If you wait until after there’s a problem, there is nothing you can do.

Good business structures include: Limited liability company (LLC), S Corporation and C Corporation.

These structures will protect your personal assets from litigation that might come about from your business. Of course, the business may still be at risk if there is a suit. But, at least you won’t lose your house too. The S Corporation and C Corporation business structures also will affect how you pay taxes.

Generally, real estate agents do best with an S Corporation structure. That’s because it is the easiest to run. You’ll have to file a separate tax return at the end of the year, but the income all flows to your personal return so there is no tax due at the corporate level. The LLC elects how it wants to be taxed. If you don’t elect a method (generally as an S Corporation or a C Corporation), you will default to either the Sole Proprietorship structure for taxes if you’re the only owner or the partnership structure for taxes if you have a partner.

Now, let’s look at the really bad business structure — the general partnership. If you’re a general partnership, you are not only liable for all the crazy things that you might do, you’re also liable for all the crazy decisions your partner might make. You’ve cut your profits in half and doubled your risk. Most attorneys won’t put your business into a general partnership simply because the risk for their clients is too great. But, here’s the problem and it’s a doozy. If you go into business with your friends through an informal handshake deal or with a more formal joint venture, you’re a general partnership unless you form another type of business structure.

The right business structure can save you taxes and save your assets in case of a lawsuit. The extra cost associated with having a business structure is easily offset by the tax savings and peace of mind you’ll gain.

Keeping the Kids Out of the Contractor’s Way

by Al Heavens

We bought our first house in March 1982, and our first son was born just a few months later.

So when we had accumulated enough money to do some needed work on the house, Nick was about 10 months old. Although he already a well traveled youngster, he wasn't prepared for three weeks of home remodeling, with his mother out of town on business for two of them.

In college, we soccer players often told the better-financed football squad to "eat nails." I spent three weeks of renovation trying to keep Nick from doing the same thing.

Whether you hire out or do the work yourself, you need to determine early on how a renovation job will affect the kids.

There's much more to consider than just inconvenience, although a change in routine will likely play a major role in even small remodeling jobs.

When you deal with any topic, there's a big difference between what the professionals recommend and reality. We'd like to assume that everyone cares as much as we do about everything, but, to be honest, a lot of workers look at a job as a way to earn money, and completing it quickly as way to move on to the next job.

So when Everett Collier, the president of the National Association of the Remodeling Industry, urges that you "communicate with your remodeling contractor openly and let him or her know what to expect while working in your household," he is making assumptions about the people who work in your house.

He also makes assumptions about the children who live in your house.

"Inform [the contractor] about your children, their ages, their behavior patterns and how mischief-prone they may be so the contractor's crew can be safety-aware at all times," he says.

I'll readily acknowledge that it is tough to predict the behavior of anyone under 100, let alone those between a few months and 18 years.

Job-site cleanliness was an issue cited in a recent survey commissioned by Kimberly-Clark.

Sixty percent of contractors said they put down tarps or drop cloths to minimize the mess before starting a job. Ten percent wear protective clothing, such as gloves, coveralls or masks, to keep clean.

Fifty-six percent of home improvement customers said contractors generally cleaned up everything and left their homes immaculate, while 26 percent said their contractors usually left a mess.

By contrast, 90 percent of contractors said they clean up everything after finishing a job. Only 1 percent confessed to packing up their tools and leaving the cleanup to the customer.

The standard contract usually calls for a house to be "broom clean" before the contractor and his crew leave for the day, but I've only seen one person — a friend from Ireland who worked in her parents' bed and breakfast from age four — who truly could clean a space spotless with only a broom.

Brooms create dust, so you should specify use of a heavy-duty vacuum cleaner designed for job-site cleanup at the end of every day.

And before you let the children loose after the contractor leaves, make sure you check the work area itself for any stray debris.

Children should stay out of the work area anyway, until the contractor and crew have left for good.

Everett of NARI recommends talking with the contractor about where tools and materials will be stored, who will be responsible for cleaning the area, and what sections of wall or floor can be covered at the end of the day.

"Ask to be notified on days when the remodeling crew will be carrying in large pieces of equipment or building materials and plan an activity for your children that day," he says.

You need to talk with your children as well, and be sure both they and you can anticipate the number of workers likely to be in the house at a given time, and the general work hours.

Consider how close the work area is to your child's room or play area, and if necessary, designate a new, safe area for play and toy storage.

It's also important to set safety rules that they will need to follow while the work crews are present.

If possible, designate an entrance for workers' use only, and advise your children never to use that entrance. This will help keep children out of the contractor's way, and vice versa.

Be aware of environmental hazards. Lead paint is often found in homes built before 1978 and can be especially detrimental to young children. Find out if and when your remodeling contractor will be using hazardous chemicals and work with them to devise a proper ventilation plan.

And don't ask the contractor or his workers to baby-sit your children. That's your job, not theirs.