VA Loans on Veterans Day

VA loans are available to veterans, active duty personnel, certain reservists and national guard members, surviving spouses of persons who died on active duty or died as a result of service-connected disabilities, and certain spouses of active duty personnel who are missing in action, captured in line of duty by a hostile force or forcibly detained by a foreign government or power.

While VA loans are available through private lenders, the VA guaranties loan payments and thereby provides an incentive to lenders to make loans. The key advantages to a VA loan are as follows:

You can buy a home without a down payment - as long as the sales price doesn’t exceed the appraised value. (Of course, you have to qualify in terms of income and credit.)

You won’t need to buy private mortgage insurance.

VA rules limit the amount you can be charged for closing costs.

Closing costs may be paid by the seller. (You should keep this in mind when negotiating the sales price.)

The lender can’t charge you a penalty fee if you pay the loan off early.

VA may be able to provide you some assistance if you run into difficulty making payments.

To learn about eligibility FAQs, click here.

Lets pay our respect to our veterans on this Veterans Day!!!

Airbnb is Brilliant - NYC Housing

What a brilliant company Airbnb is. A major barrier to their success are local laws that prohibit short term rentals in many municipalities across the Country. They want the biggest markets, like NYC, but NYC prohibits rentals for less than 30 consecutive days based upon the State's Multiple Dwelling Law at section 4.

What a brilliant company Airbnb is. They see NYC's plight in the face of the destruction from Hurricane Sandy and they pounce. Not in a bad way, but instead as a savior of sorts. Yesterday, Mayor Bloomberg announced a partnership with Airbnb to help victims of the hurricane get necessary housing. Click here to read the article. You see, when two (2) political issues are face-to-face at odds, the public will choose the lesser of the two (2) evils. On the one hand, short-term rental housing has been associated with damaging the neighborhood environment, impairing the physical characteristics of a neighborhood and most importantly, creating safety hazards through unregulated units with transient guests. On the other hand, we have people without power, in flooded apartments that need a warm place to stay with the electricity turned on (yes Revolution, the power should be turned on). You guessed it, heat and power wins.

Yes, the partnership is not a home run for Airbnb; they have not repealed the short term rental statute that stands as their barrier to domination. This statute makes their customers' rentals of weekend apartments often illegal. Instead, they have capitalized on an opportunity to gain good will and brand awareness in their continual cause to have the law repealed. Great job Airbnb, you are brilliant.

Loan Modifications & the Federal Housing Finance Authority

A very interesting article in Business Insider for all those who have Fannie and Freddie (GSE) underwater loans. While its true that the current head of the FHFA has blocked any attempts to have Fannie and Freddie write off losses of underwater loans, the article speculates that "He's going to lose his job in the next six weeks" and this will quickly change.

An interesting aside is how this will create huge tax liabilities for homeowners in cancellation of debt income for those who have their underwater loans wrote off because the Mortgage Debt Tax Relief Act of 2007 is set to expire at the end of the year.

Maybe, it would be wise to extend the Act prior to concerning ourselves with whether its prudent to write off underwater loans.