The Destruction of wealth of African Americans and Latinos

Credit Crises, Mortgage Crises, Bank Crises, Bail out, Wipe Out...Whatever you call what is happening the hurt really has a human face. The impact on the Hispanics/Latinos is enormous.
Specially, the crises is eliminating the wealth and savings of African Americans and Latinos to greater degree as stated: "The housing and subprime-mortgage crisis stands to cost minority homeowners 40 percent more of their wealth than white homeowners in similar circumstances, an advocacy group says. Some estimates put the loss for African-American homeowners who lose homes to foreclosure at $122 billion, while Latino homeowners stand to lose up to $129 billion, according to a study by the nonprofit group United for a Fair Economy.
A national conference on subprime lending, foreclosures and race is being held today and Friday, hosted by Ohio State University's Kirwan Institute for Race and Ethnicity.
National experts on race, law, finance and real estate will examine the subprime crisis' disproportionate effects on African-Americans and Latinos, and try to develop solutions for the growing problem, said Jason Reece, a senior researcher at the Kirwan Institute."
(Thursday, October 2, 2008 3:06 AM , By Tracy Turner
THE COLUMBUS DISPATCH , http://www.columbusdispatch.com/live/content/business/stories/2008/10/02/racial_foreclose.ART_ART_10-02-08_C8_VABG18N.html?sid=101)

Bank Refuses To Help...Seller forced into foreclosure.

This is a another real Customer case:
Facts: Seller bought condo in Daly City for $385,000 with 10% down in March 2006. Towards the end of 2006 several Condos in the same building foreclosure and where later sold for under $300,000. Ever since the Seller has tried to refinance to get of a 2 year fix-adjustable loan.
Each time the banks have declined her due to value going down. In Daly City (as of 5/08) there are bought 9 condos similar to hers for under $200,000.

Action: Since October 2007 I have been working with the her lenders and/or servicing company: America's Servicing Company(Fremont was the lender originally). I submitted all the paper work a short sale and on 3/17/08 I submitted a offer from a Agent representing a Buyer. Since then I have tried to contact the Lender and I was always told that it was been looked. However, the Seller called me yesterday 5/8/08: Her condo will be up for sale at the Redwood City Court House on 5/30/08.

Results: So I really think that Lenders are not motivated enough to act faster and with better intention to help distressed Sellers.

So now we have another statistic. And just this week I've have 3 other people consulting with me on what to do. I really don't think I can help them.

This business of short sales is a very stressful sale, and a lot of it comes from dealing with the Lenders.

The Real Real Estate Crises

As a real estate agent, I am suppose to sound optimistic about what is going on in the real estate industry. However, the reality is that I don't think things will get better until late 2010 or 2011. Also, I think that what is going on is more than just real estate problem. It is only the beginning. Our economy is going through structural changes.

Here are some things I think contribute to what is going on:
1. the oil consumption : we now have billions of new people who can buy cars, washers, dryers and therefore, need energy: India, China, Latin America, Africa....where having a clothes washer was a luxury it is pretty much becoming a common item, as a car, motor bike.

2. US and world real estate prices exploded. I think this is primarily due to an increase of credit (credit card, mortgages) being more easily available.

Now, I don't think it is because people are getting richer. Yes, people may getting paid more (eg. India, China, Mexico for example). I think it is because the big banks are making credit more available.
And, the forthcoming, credit crises as the mortgage crisis today.

That's globally. Locally,
In San Francisco, who really can afford to make a mortgage payment of $800,000 without a minimum of 2 salaries?
How many service jobs pay well enough to pay a $4,000 mortgage? Plus property taxes, etc.

Add a car payment of at least $400 per month.

Again, what's the problem credit. We are no longer willing to safe to buy something. We want it now using credit. I recently was talking to friend who has stopped making his mortgage payments, and bought 3 LCD TVS....He spent $7,500 on 3 othem and bought them on credit.

I asked why not just 1, or save up to buy them. His response that he wants TODAY, will enjoy them TODAY, and if he goes bankrupt tomorrow at least he enjoyed already.
wow.

como calcular su tasa de interes cuando no es fijo

Hay various tipos de prestamos hipotecarios....se pueden categorizar en 2 sectores:
prestamos figos y prestamos adjustables....

Son los prestamos adjustables la razon de muchos de los problemas de cual los proprietarios no puedan pagar su casa.

Como se calcula el interes de un prestamo adjustable? Tiene que leer la Nota o hablar con "customer service" y conseguir la informacion seguiente:

1. la fecha en cual se combierte en adjustable: el premier dia, en 6 meses en 2 anos?
2. El "margin"
3. el index y el nombre de index: existen muchos indicis: labor, 12th, etc.

el nuevo interest es Interest = Index + Margin

ejemplo:
Hoy tengo la tasa de 6.9, y se adjustable april 1, 2008, el margin es 4.1, y el indice es el Labor 6 Meses

su nueva tasa (usand el indice de 2/08) seria Interest = 3.1 + 4.1= 7.2%

Dumping the First Time Home Buyer at the first signs of trouble

Where have all the lenders and agents gone? 

Has the real estate and loan industry abandoned the Latino
First Time Home Buyer? It seems they have. It was only a few months ago that most major companies and reports where announcing their plans to serve the growing latino home buyer. But that was until this subprime mess exploded.

What about all those first time home buyers that bought with adjustable loans
with a 2 or 3 year period. A lot of these loans are adjusting now and causing
great suffering to these home owners. Many of these borrowers cannot afford the
payment increase and or can no longer refinance, or sell due to current market
conditions. So now what. I recently wrote Senator Feinstein asking her to get
the lenders to waive various onerous conditions especially the Pre Payment
Penalty. This penalty imprisons someone from refinancing due to the high cost of
this penalty.  If borrowers wait until the penalty expires it may be harder
to get a loan.

I recently heard from a real estate agent at PruLatino (Prudential's Hispanic
Full Service real estate office) in northern California. He was complaining
about how Prudential has abandoned their focus on the latino home buyer due to
current subprime problems.

As Realtor Magazine states: "Reaching out to Latino customers in word
and deed.  Several years ago, the California Association of Realtors
release research showing that 20 percent of California home sales involved
buyers or sellers with a Hispanic surname.  Those findings motivated Ed
Krafchow, president of residential brokerage giant Prudential California/Nevada/Texas Realty, to conduct similar research on his company ... In response, Krafchow initiated a Hispanic outreach effort and this year launched  a Spanglish language listings magazine, Palacio." (Realtor Magazine, August 2007)

However, it seems the magazine has not been released, and if my friend at
PruLatino is correct, it seems Prudential was "reaching out for the easy
MONEY only and not in word and deed."

So for all of us involved in the real estate business, let's not forget those
buyers and future buyers who fed us and our families while it was good.

Has the American Dream turned into a nightmare? ¿Se ha vuelto el Sueño Americano una pesadilla?

YES. And in my opinion this has to do primarily due to:
Greed! --buyer's, seller's, agent's, bank's. How can you buy something you cannot afford and with NO money down. I still remember some clients telling me "only in the U.S. can you buy something so expensive with no money down and still get money back." And they said with an incredible but satisfying smile.
Easy Credit! The industry (builders, banks, government) made credit so easy but with one fundamental basic mistake: How can you increase home ownership so fast so much with no increase in real income?

Are we making our living at the Cost of the working Poor?

A new study shows that subprime loans are affecting blacks and Latinos more than other groups.
And what is sad is that a lot of these groups could have qualified for non subprime loans.As a real estate and loan agent, I think that many of us perhaps don't intentionally want to hurt our clients, but we fail to do our work and chose the easy path of getting our
client subprime loans because (1) the banks tells that we should because they are easier to get,or (2) we intentionally do it to get a greater compensation.If we really do care about of clients then we should start questioning the loan programs the banks/lenders are asking to submit.
Are we making our living at the Cost of the working Poor?
For more info see
http://money.canoe.ca/News/Sectors/BanksFinance/2007/05/19/4193328-cp.html

WOMEN MORE LIKELY THAN MEN TO RECEIVE SUBPRIME HOME MORTGAGES

For more info see : http://www.consumerfed.org/pdfs/WomenPrimeTargetsPressRelease.pdf


WOMEN MORE LIKELY THAN MEN TO RECEIVE SUBPRIME HOME MORTGAGES
Women represent nearly 40 percent of subprime borrowers, making it more difficult for women-led households to build wealth through homeownership, according to a recent study by the Consumer Federation of America (CFA). Last year, 32 percent of women borrowers received mortgages with interest rates exceeding the average prime mortgage rate of 5.87 percent compared with 24.2 percent of men. The study, which examined 4.4 million mortgage originations throughout the country where borrowers were identified by their gender, also found that more than one in 10 women received high-cost subprime loans with interest rates above 9.66 percent.

The disparity between the rate of subprime lending for men and women grows as income levels increase, according to the study. Women earning double the median income are 46.4 percent more likely to obtain a subprime mortgage than men with similar incomes. "Evidence suggests that women have slightly higher credit scores on average than men and similar credit usage patterns, yet the fact that women are more likely to receive more expensive mortgages at all income levels undercuts the lending industries calm assurances that borrowers are priced based on their creditworthiness," said Allen Fishbein, CFA's director of housing and credit policy.