Real Estate

Realtors urge lawmakers to support legislation to keep banks out of real estate

New Hampshire Association of Realtors members Kathy Corey-Fox, Joseph Hunkins, Sandra Ziehm and their lobbyist, Kipp Cooper, met with New Hampshire congressional leaders on Capitol Hill recently to urge them to co-sponsor legislation that would prohibit large banking conglomerates from entering the real estate business.Joseph Hunkins, a Realtor with Hunkins Real Estate of Greenland, discussed the Community Choice in Real Estate Act with members of the New Hampshire delegation to the U.S. House of Representatives, Charles F. Bass and John E. Sununu. This bill is the top legislative priority for Realtors this year. Big banking conglomerates are seeking permission to sell and manage real estate through a proposed regulation before the Federal Reserve Board and the Treasury Department. However, the proposed rule is contrary to what Congress intended when it passed financial services modernization legislation called the Gramm-Leach-Bliley Act in 1999. The Community Choice in Real Estate Act clarifies congressional intent to preclude any such action by the Federal Reserve or Treasury. A bipartisan group of about 200 house members and 10 senators have signed onto the bill since it was introduced last December. National Association of Realtors announced its opposition to the proposed regulation in December 2000, following the decision by the Federal Reserve's Board of Governors to seek public comment on the proposal. Realtors have since generated over 200,000 protest letters to Congress, the Federal Reserve, Treasury and the White House. The association opposes allowing large banking conglomerates to enter real estate brokerage and property management because it will lead to higher costs to consumers, large scale consolidation in the real estate industry, and potential conflicts of interest should banks be able to steer home buyers to their own insurance and loan products. The National Association of Realtors is America's largest trade association, representing approximately 800,000 members involved in all aspects of the residential and commercial real estate industries.
  • Written by Tim Dunham
  • Category: Real Estate

Is there a killer in your basement?

By Loren Davis

What would you do if there was a possibility of a killer in your basement? It may sound far-fetched, but there could be a serious health hazard in your basement that you cant hear or see. Radon gas, colorless and odorless, inhabits many of our homes in New Hampshire and Maine. It is a result of the breakdown of radioactive rock down in the ground, and occurs naturally in many areas of the U.S. and Canada. Radon enters our homes through cracks and construction joints in the foundation and tends to collect in the lower levels of a building. The gas is also found in water and leaches out quickly from showerheads and faucets, adding to the overall radon air level of a house. The U.S. Environmental Protection Agency (EPA) considers radon in household air a thread to health because it multiplies the risk of contracting lung cancer. In fact, the Surgeon General has warned that radon is the second leading cause of lung cancer in the U.S. today. Only smoking causes more lung cancer deaths.How do you know if you have a killer in your basement or elsewhere in your home? There is a fairly simple test, which uses charcoal canisters about 4 inches in diameter to collect air samples from ones home. The most common test runs about 48 hours and costs from $30 to $50. These test canisters may be purchased through the mail, from a home inspection company, or a diagnostic lab such as A&L Laboratories in Conway. (Several testing companies are listed in the phone book.) According to the EPA, a test result of 4.0 pci/L (picocuries per liter of air) or higher, is considered unsafe. Tests should be done in the lowest level of the dwelling, which may be used by the residents. It should be noted that not all countries have as strict a radon air-quality standard as does the United States. There is some debate as to how low a level is dangerous. We dont necessarily see a large number of old-time residents dying from radon-induced lung cancer. However, homes in the past were not nearly as airtight as newer homes and families did not spend much time in the cellar, as they do today, in finished basements.If you are a real estate buyer, you should know as much as possible about the property you are purchasing, including the radon air quality. Have the air (and private water system) tested as a contingency of the sale. If you are a seller, why wait for radon to become a problem when selling your house? It is much better to know the level of radon ahead of time and even have radon mitigation equipment installed prior to the sale of your home. Otherwise, the air quality may become another point of contention to be negotiated before the sale can take place. The mitigation system is actually fairly simple. Holes are made through the foundation slab and connected to PVC pipe, which safely eliminates the radon into the outdoor atmosphere by way of a fan and vent tube. The process is guaranteed by re-testing after installation. The cost for most homes should be under $1,500.For more information, contact the EPA, U.S. Department of Health and Human Services, the U.S. Public Health Service, a testing company found in the local phone book, or a local real estate office, which should be able to provide a copy of A Citizens Guide to Radon and The Guide to Protecting Yourself and Your Family From Radon."Loren C. Davis is owner and founder of Buyer Representatives of Northern New England. He has been a member of the White Mountain Board of Realtors for nine years and has practiced Exclusive Buyer Agency for four. He is past president of the New Hampshire Association of Exclusive Buyer Agents and has earned the Accredited Buyer Representative (ABR), Graduate Realtors Institute (GRI), and the Graduate Buyer Representative (GBR) designations. Loren may be reached by phone at (603) 447-1329, or 1-800-741-5091. His web-site address is www.buyerrepnne.com.
  • Written by Tim Dunham
  • Category: Real Estate

Loans without qualifying

By William Kugel

This past week I received an inquiry from an out of area customer wanting a loan program requiring no qualifying. It may sound incredulous, but these inquiries are not entirely uncommon. Unfortunately, there are some misconceptions among consumers about loan programs of this type. Over the years, the mortgage industry has come forth with a number of mortgage loan programs that work around problems associated with documenting income. You may have heard them referred to as "No Qualifiers," "No Income Verification," "Stated Income," and "No Doc" loans. Are they all the same? Actually, they're not. But, in general, the public usually is unaware of the differences. In this article I'll give an overview of these types of loan programs, what they can and can't do, and some steps to follow when in pursuit of such loans.The term "No Qualifier" is definitely misleading. Lenders don't make loans to individuals with no qualifications whatsoever. Loan programs along these lines generally deal with only one qualification missing. In fact, most of these programs are targeted at borrowers who are presumed to have adequate income but they are unable (or sometimes just unwilling) to provide the documentation. In the inquiry I received this past week, the customers were a) moving across the country, with b) a business that was in existence less than two years, hoping to c) buy a lot and build with d) low cash reserves and e) marginal credit. In my experience when you attempt to overcome more than one deficiency at a time, the odds of success diminish accordingly. It has been several decades since the mortgage industry faced the dilemma of the self-employed borrower. The typical self-employed borrower, especially sole proprietors, usually knows the great financial truth that their business is also his or her best tax shelter. The net income of a self-employed borrower (or "bottom line" as it is often called) is the gross income less the cost of goods sold and all the expenses it took to operate the business. Sole proprietors, not so infrequently, are often married to the business and often use personal items for business purposes. Auto expenses are a perfect example. Telephones, home offices, computers, and a host of other items often find their way on to the Schedule C when reporting income and expenses of the business. The result: the net income ends up much smaller than the gross income. And, at tax time, the typical self-employed borrower revels in the fact that their tax liability has been greatly reduced.The dilemma for the self-employed borrower is that when you apply for a mortgage, the only acceptable source of proof of income is your tax returns. This is when the sword cuts the other way. The reality is that you usually can't have it both ways. You can't slash your income picture for the taxman without often destroying your ability to qualify for a mortgage. In my experience, most borrowers opt for the tax strategy because they face it every year. Applying for a mortgage happens far less often. Many self-employed borrowers applying for their first mortgage are often taken by surprise when they discover it is net income from your Schedule C that is used to calculate your income. Additionally, the standard documentation for this situation requires averaging the borrower's income over the two previous tax years and the portion of the present year when past the first quarter.This has been such a common situation that the mortgage industry has come to recognize it and offer a variety of loan programs that amount to work around solutions. The most common product available is not really a "no qualifier." It is properly termed "Stated Income." When the borrower applies, they are showing their self-employment (or independent contracting, commission, or miscellaneous income) on the application. In most cases showing that you've been at it at least two years is part of the requirements. The borrower is also stating the amount of their income; they just don't have to provide any documentation or proof to support the income stated. Keep in mind that this does exempt a borrower from any regulations relating to loan fraud.The reality for lenders is that these types of loans carry more risk than ones where the income is fully documented. As a result, the borrower can expect to pay more for these loans. It is not uncommon to see both an increase in the interest rate and some up front points added to the closing costs. The pricing of the various types of work around loans varies according to the risk. The stated income product has less risk and costs less than true "No Doc" and "No Income Qualifiers." I have seen "No Doc" loans that don't require the borrower to even list an employer (or self-employment). Another feature or type of loan that is offered requires no asset verification as well as no income verification. You will generally increase the cost of the loan with each feature you use. So try to minimize what you are unwilling to document. Also don't presume that a "No Doc" loan will have absolutely no documentation whatsoever. They generally only exempt you for the situation(s) you are trying to work around.Keep in mind that most of these loan programs seek to offset some of the additional risk by requiring better than average credit. A perfect credit history goes a long way to convincing an underwriter that while you can't document your income, you do have one and are able to pay your bills. If you have poor credit and you also expect to qualify without proving your income, one of three things will happen. You will either be denied; OR you will have to put a lot more money down; AND you will be charged a lot more for the loan.The best way to approach shopping for these loans (in my opinion) is to always start with the programs with the best rate and see if you can qualify. Leave the qualifying up to the lender. I know many borrowers who assumed they couldn't qualify when I have been able to approve their loans. For example, Automated Underwriting (AU), will occasionally approve a conventional mortgage (at the best rates) for a self-employed borrower with an exceptionally high credit score and a lot of assets. Since this is the best I can usually get for someone in this situation, I like to try for the AU approval first. Then, move on to the next best program and so on. Working this way assures the borrower the best possible outcome and it can also save a lot of shopping. If you start out poking around without knowing the true pecking order of these programs, you will likely not trust the rates quoted to you and you'll fumble around from one lender to another getting more confused all the time.William Kugel is author of the column MORTGAGE$ in publication for 11 years, a senior loan officer with GMAC Mortgage Corp., and a Mount Washington Valley resident. You may write him c/o of The Conway Daily Sun, visit the web site www.gmacm.net/william_kugel or send e-mail to This email address is being protected from spambots. You need JavaScript enabled to view it. Rights Reserved. Copyright 2002, W.H. Kugel.
  • Written by Tim Dunham
  • Category: Real Estate

Madison home full of surprises

By Bruce Stuart

Unusual is the right word. Today's home on Allard Hill Road in Madison is filled with surprises.Take the living room ceiling-high fieldstone fireplace and wall erected by mason Stan Szetela, which extends around into the kitchen. The eat-in kitchen, itself, boasts a commercial grade stove, large enough to prepare a feast for the family, friends and more.Next to the kitchen is a large separate dining room with an attractive bay window and handsome oak wainscoting. Close to the kitchen in the living room is a wet bar. There is a three-season sun room.But the biggest surprise of all in this 4,000-square-foot home are the views. Two 60-by-72-inch picture windows in the living room open up the out-of-doors. One looks east to Maine over the valley below toward Pleasant Mountain and Fryeburg. The other has a view of North Conway, the trails at Mount Cranmore, with Kearsarge Mountain in the background.The home has three bedrooms and three baths.A second surprise is the ground level of the home. Today, it houses a bedroom and bath and a labyrinth of rooms that are used for a variety of purposes including an office, a 19-by-29-foot shop, a professional darkroom and a large storage room. A buyer with imagination and the desire could take the 2,000 square feet of space and turn it into an in-law suite, a family recreation area with several additional bedrooms, or even a good-sized home business facility. The possibilities go on and on.Now, the final surprise. The original owner documented the construction of the home including house plans, detailed instructions on the utilities, a listing of every conceivable question a future owner might have, all in a 50-page book that will be turned over to a new owner at closing. What a blessing for those of us who have struggled to find a shut-off valve or a power switch in a newly purchased houseSusie McDougal at Wright Realty Inc., in Conway has the listing.
  • Written by Tim Dunham
  • Category: Real Estate