HOLC
...beginning in the 1930s, the federal government launched a series of programs designed to increase employment in the construction industry and make homeownership widely available to the American public. The Home Owners' Loan Corporation (HOLC) was the first of these programs, and it served as a model for later efforts.... Unfortunately for blacks, the HOLC also initiated and institutionalized the practice of "redlining." This discriminatory practice grew out of a rating system HOLC developed to evaluate the risks associated with loans made to specific urban neighborhoods. Four categories of neighborhoods were established, and lowest was coded with the color red; it and the next-lowest category virtually never received HOLC loans. Black areas were invariably rated as fourth grade and redlined. [These practices] lent the power, prestige, and support of the federal government to the systematic practice of racial discrimination.
In the 1930s and 1940s banks used the HOLC maps to make their own loan decisions. Thus HOLC not only channeled federal funds away from black neighborhoods but was also responsible for a much larger and more significant disinvestment in black areas by private institutions.
By far the greatest effect of the HOLC rating system, however, came from its influence on the underwriting practices of the Federal Housing Administration (FHA) and the Veterans Administration (VA) during the 1940s and 1950s. These loan programs together completely reshaped the residential housing market of the United States and pumped millions of dollars into the housing industry during the postwar era. Loans made by the FHA and the VA were a major impetus behind the rapid suburbanization of the United States after 1945... the marriage of FHA financing and new construction techniques made it cheaper to buy new suburban homes than to rent comparable older dwellings in the central city.
As a result, the FHA and VA contributed significantly to the decline of the inner city by encouraging the selective our-migration of middle-class whites to the suburbs. "In evaluating neighborhoods, the agency [FHA] followed the HOLC's earlier lead in racial matters; it too manifested an obsessive concern with the presence of what the 1939 FHA Underwriting Manual called “inharmonious racial or nationality groups." According to the manual, "if a neighborhood is to retain stability, it is necessary that properties shall continue to be occupied by the same social and racial classes."
__________________________________________________________________________
"It is my belief that black citizens of this era were stuck between Jim Crow(Genocide) and the HOLC, which funneled wealth away from many minority communities in the form of home ownership."
-Eugene O. Smith, Jr.
Showing posts with label rent-to-own. Show all posts
Showing posts with label rent-to-own. Show all posts
Friday, October 17, 2008
Wednesday, July 30, 2008
HOPE FOR HOMEOWNER ACT OF 2008
Hello Everyone,If you have questions about the new bail out from the government, here are some questions and answers:
Questions and answers about the Hope for Homeowners Act of 2008, passed by Congress last weekend to try to steer as many as 400,000 struggling homeowners away from foreclosure:
Q: What exactly will the legislation do?
A: It will allow those who qualify to cancel their old mortgage loans and replace them with 30-year fixed-rate loans for up to 90 percent of the home's current value. The FHA will insure a total of $300 billion of the loans over a three-year period.But the decision on whether to write such a loan remains up to banks, which would have to be willing to take a loss on the existing loans in exchange for avoiding an often-costly foreclosure.
Q: Who is eligible?
A: Eligible borrowers must have spent more than 31 percent of their monthly incomes on their mortgages as of March 1, 2008. The troubled loan must have originated no later than Jan. 1, 2008, and be on the borrower's primary residence. And the borrower's income must be verified.
Q: When does the program start?
A: It takes effect Oct. 1 and runs through September 2011, although the FHA isn't likely to have it operating at full capacity until next year.
Q: Since lenders can pick and choose which loans to refinance, how can consumers determine if theirs will be selected?
A: Check with the bank or financial company servicing your mortgage, but it may be weeks before they make decisions concerning the new guidelines and assess individual loans.Even then, keep expectations limited."Servicers are going to be reluctant to take the government up on their offer," predicted Mark Zandi, chief economist at Moody's Economy.com. "The earliest they'll start taking them up on it is early next year. And even then it's likely to be modest."
Q: Is there anything a homeowner can do to improve chances of benefiting from the program, such as crunching numbers to make a case for the bank?
A: Not really. The best step is to keep up your payments as best you can.
Q: But doesn't this provide an incentive to NOT pay your mortgage, if you're barely keeping ahead of bills and are underwater on your house, so you can qualify?
A: No. If your situation deteriorates enough, the bank may reject any possible new loan."Turning yourself into a financial basket case is not going to work," said Dan Seiver, a finance professor at San Diego State University. "If you turn into a complete deadbeat, the servicer is going to just foreclose and dump it."
Q: So what should I be doing now besides trying to keep up with payments?
A: Talk to a local credit counselor and call the toll-free hot line of the Hope Now alliance — an industry group trying to coordinate a response to the mortgage crisis — at 1-888-995-HOPE. It is available 24 hours a day to provide mortgage counseling in multiple languages. Mary Thomason, director of resource development for The Impact Group of Atlanta, a housing counseling group, also suggests tracking expenses and income closely in order to be able to forecast your cash flow for the next six months and give yourself better control of your finances.
Q: If the banks and lenders refuse to write these loans, then what?
A: Public and political pressure may prompt them to participate. If not, and more people continue to lose their homes, Zandi says the next White House administration subject them to additional regulations or investigations if they remain unwilling to take on the risks.
Q: What happens if I'm able to sell my home after I refinance?
A: If you sell during the next five years, you must agree to share 50 percent of any profits from the resale with the government. What's more, homeowners can only retain equity gains based on a sliding scale. The homeowner would have zero equity from a sale in the first year, with the amount rising 10 percent in each succeeding year and capping at 50 percent from a sale in year five and thereafter. The equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of the current market value, which automatically gives the previously troubled homeowner 10 percent equity in the home.
Q: Where can consumers find more detailed information about the plan?
A: There is a six-page summary of the housing act at http://banking.senate.gov/public/_files/HousingandEconomicRecoveryActSummary.pdf and the FHA's Web site at http://www.fha.gov is a place to watch for updated information. The entire 694-page bill is at http://www.house.gov/apps/list/press/financialsvcs_dem/hr3221_bill_text.pdf
Questions and answers about the Hope for Homeowners Act of 2008, passed by Congress last weekend to try to steer as many as 400,000 struggling homeowners away from foreclosure:
Q: What exactly will the legislation do?
A: It will allow those who qualify to cancel their old mortgage loans and replace them with 30-year fixed-rate loans for up to 90 percent of the home's current value. The FHA will insure a total of $300 billion of the loans over a three-year period.But the decision on whether to write such a loan remains up to banks, which would have to be willing to take a loss on the existing loans in exchange for avoiding an often-costly foreclosure.
Q: Who is eligible?
A: Eligible borrowers must have spent more than 31 percent of their monthly incomes on their mortgages as of March 1, 2008. The troubled loan must have originated no later than Jan. 1, 2008, and be on the borrower's primary residence. And the borrower's income must be verified.
Q: When does the program start?
A: It takes effect Oct. 1 and runs through September 2011, although the FHA isn't likely to have it operating at full capacity until next year.
Q: Since lenders can pick and choose which loans to refinance, how can consumers determine if theirs will be selected?
A: Check with the bank or financial company servicing your mortgage, but it may be weeks before they make decisions concerning the new guidelines and assess individual loans.Even then, keep expectations limited."Servicers are going to be reluctant to take the government up on their offer," predicted Mark Zandi, chief economist at Moody's Economy.com. "The earliest they'll start taking them up on it is early next year. And even then it's likely to be modest."
Q: Is there anything a homeowner can do to improve chances of benefiting from the program, such as crunching numbers to make a case for the bank?
A: Not really. The best step is to keep up your payments as best you can.
Q: But doesn't this provide an incentive to NOT pay your mortgage, if you're barely keeping ahead of bills and are underwater on your house, so you can qualify?
A: No. If your situation deteriorates enough, the bank may reject any possible new loan."Turning yourself into a financial basket case is not going to work," said Dan Seiver, a finance professor at San Diego State University. "If you turn into a complete deadbeat, the servicer is going to just foreclose and dump it."
Q: So what should I be doing now besides trying to keep up with payments?
A: Talk to a local credit counselor and call the toll-free hot line of the Hope Now alliance — an industry group trying to coordinate a response to the mortgage crisis — at 1-888-995-HOPE. It is available 24 hours a day to provide mortgage counseling in multiple languages. Mary Thomason, director of resource development for The Impact Group of Atlanta, a housing counseling group, also suggests tracking expenses and income closely in order to be able to forecast your cash flow for the next six months and give yourself better control of your finances.
Q: If the banks and lenders refuse to write these loans, then what?
A: Public and political pressure may prompt them to participate. If not, and more people continue to lose their homes, Zandi says the next White House administration subject them to additional regulations or investigations if they remain unwilling to take on the risks.
Q: What happens if I'm able to sell my home after I refinance?
A: If you sell during the next five years, you must agree to share 50 percent of any profits from the resale with the government. What's more, homeowners can only retain equity gains based on a sliding scale. The homeowner would have zero equity from a sale in the first year, with the amount rising 10 percent in each succeeding year and capping at 50 percent from a sale in year five and thereafter. The equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of the current market value, which automatically gives the previously troubled homeowner 10 percent equity in the home.
Q: Where can consumers find more detailed information about the plan?
A: There is a six-page summary of the housing act at http://banking.senate.gov/public/_files/HousingandEconomicRecoveryActSummary.pdf and the FHA's Web site at http://www.fha.gov is a place to watch for updated information. The entire 694-page bill is at http://www.house.gov/apps/list/press/financialsvcs_dem/hr3221_bill_text.pdf
Wednesday, April 16, 2008
CHAPTER ONE OF ACCLAIMED BOOK BY REAL ESTATE INVESTOR JAMES BEST
Are You Ever Going to Be Able to Retire or
Are You Going to Mop Floors at McDonald’s?
Have you ever walked into a fast food restaurant and noticed a Senior Citizen mopping the floors or cleaning the tables? I have, and it really breaks my heart. Do you think that the Senior Citizens who are mopping the floors dreamed of the day when they could retire and then work at McDonald’s to earn some extra income? Can you picture them in their 20’s, 30’s, 40’s and 50’s just waiting for the day when they could start at McDonald’s?
I am presenting this on the funny side, but it is a serious point for you to consider. The Senior Citizens you see working are not working because they want to. (Well, some of them probably do want to.) My mother retired a few years ago and has a part-time job because she likes to meet new people and see old friends at work! The majority of Senior Citizens are working because they have to. The reason they have to work is because their monthly income isn’t enough to cover their monthly living expenses.
Do you want to mop floors and clean bathrooms when you hit your golden years? If not, then consider this:
If You Ever Want to Retire in Your Life,
You Better Start to Create Passive Monthly Income Today
What is guaranteed to you in today’s world? Is your job secure? Are you guaranteed to get Social Security or your pension at work? Will the stock market continue with hardly any growth? Study after study has shown that Social Security will run out of money. The reason is because the baby boomer population will go from working and paying to Social Security to retirement and collecting Social Security. The number of people still in the workforce paying into the plan will not be enough to cover all of the outgoing payments made to retirees.
Look at Enron! Thousands of employees’ retirement accounts disappeared over night. Don’t think that you will be safe. The biggest problem that I see most people make is to rely on one income. Relying on one of anything is very dangerous to you. If you are relying on your 401(k) and the stock market crashes, you are going to suffer. If you are relying on Social Security and it runs out of money, you are going to suffer. In fact, many people rely on just one income from their job. What happens when the company downsizes and your one income goes away? Never rely on one of anything. It is far too risky.
You really need to protect yourself from the danger of “one” by creating other multiple income streams. By having 20 income streams coming to you each month, you are not as dependent on any one of them. This book is about building passive monthly income streams that you can live on to ensure your financial security and independence.
When I say passive income, I mean money that you receive every month from your investments. Understand that it takes some work to set up passive income streams. However, once your income streams are set up, you simply have to manage them.
In this book, I will show you how to create on average $58,004 in profits from buying just one single-family home for investment.
Let me ask you a very serious question:
If all you did was invest in two single-family homes and never did any other investing for the rest of your life, would you be better off financially?
Well, I know the answer and you know the answer. It’s actually a silly question; however, the majority of people never ask themselves this question. If you kept your job and had two rental properties that would be three income streams you would have coming to you. As you will see shortly, it is actually many more income streams. Each income stream you create is added financial protection for you and your family.
What is the best investment your parents ever made? Many of you will say that your parents’ best investment would have to be their homes. The next logical question then becomes, what would your parents’ life look like, if they had bought two rental properties 30 years ago? What would the life of the Senior Citizen working at the fast food restaurant be like today had they invested in real estate earlier in their lives? Would they still be mopping the floors and cleaning ketchup off of the tables?
I don’t want to see you cleaning floors; instead, my goal with this book is to motivate you to just invest in a few single-family homes. That’s it. I know that if I can give you the encouragement and tools to get started, you can dramatically change your future. If you take the ideas in this book and continue to buy two homes a year for the next 10 years that would be fantastic! The focus is for you to get started today and build monthly passive income so that you can live life on your terms and not be dependent on any one income stream.
Think about this:
If you were to invest in just one single-family home today and keep it until your retirement, you would increase your net worth by $411,613. You would have a monthly income from this one home in excess of $1,330. (A $100,000 home appreciating at 5% a year for 30 years would
be worth $411,613.) And that’s a conservative example. It could be much more in a market experiencing soaring appreciation.
Just a few homes purchased now could make you a millionaire in retirement. By owning real estate as an investment, you are not relying on Social Security or your employer’s pension. If you are lucky enough to receive Social Security or a pension, super for you! Treat it as a bonus. However, by owning real estate, you are guaranteeing your future financial security and not just hoping for the best.
The amount of income you create from your real estate investing is completely up to you. In fact, how quickly you can achieve financial independence is entirely up to you too. One of my client members, Joe Mercadante, was able to achieve financial independence in seven months at the age of 34. You can create as much income, or as little as you want. The choice is 100% yours.
The reason I am able to say this so confidently is because I have some clients that only create $15,000 on one property and don’t do anything else. I have other clients that create $30,000 on one property and then repeat the process over and over again on other properties.
You see, building your wealth is simple, but it’s not easy. The thought of buying two homes and renting them out is simple. But actually doing it is not easy.
That’s where this book comes in. This book will help you make the simple, easy!
Copyright 2008
Are You Going to Mop Floors at McDonald’s?
Have you ever walked into a fast food restaurant and noticed a Senior Citizen mopping the floors or cleaning the tables? I have, and it really breaks my heart. Do you think that the Senior Citizens who are mopping the floors dreamed of the day when they could retire and then work at McDonald’s to earn some extra income? Can you picture them in their 20’s, 30’s, 40’s and 50’s just waiting for the day when they could start at McDonald’s?
I am presenting this on the funny side, but it is a serious point for you to consider. The Senior Citizens you see working are not working because they want to. (Well, some of them probably do want to.) My mother retired a few years ago and has a part-time job because she likes to meet new people and see old friends at work! The majority of Senior Citizens are working because they have to. The reason they have to work is because their monthly income isn’t enough to cover their monthly living expenses.
Do you want to mop floors and clean bathrooms when you hit your golden years? If not, then consider this:
If You Ever Want to Retire in Your Life,
You Better Start to Create Passive Monthly Income Today
What is guaranteed to you in today’s world? Is your job secure? Are you guaranteed to get Social Security or your pension at work? Will the stock market continue with hardly any growth? Study after study has shown that Social Security will run out of money. The reason is because the baby boomer population will go from working and paying to Social Security to retirement and collecting Social Security. The number of people still in the workforce paying into the plan will not be enough to cover all of the outgoing payments made to retirees.
Look at Enron! Thousands of employees’ retirement accounts disappeared over night. Don’t think that you will be safe. The biggest problem that I see most people make is to rely on one income. Relying on one of anything is very dangerous to you. If you are relying on your 401(k) and the stock market crashes, you are going to suffer. If you are relying on Social Security and it runs out of money, you are going to suffer. In fact, many people rely on just one income from their job. What happens when the company downsizes and your one income goes away? Never rely on one of anything. It is far too risky.
You really need to protect yourself from the danger of “one” by creating other multiple income streams. By having 20 income streams coming to you each month, you are not as dependent on any one of them. This book is about building passive monthly income streams that you can live on to ensure your financial security and independence.
When I say passive income, I mean money that you receive every month from your investments. Understand that it takes some work to set up passive income streams. However, once your income streams are set up, you simply have to manage them.
In this book, I will show you how to create on average $58,004 in profits from buying just one single-family home for investment.
Let me ask you a very serious question:
If all you did was invest in two single-family homes and never did any other investing for the rest of your life, would you be better off financially?
Well, I know the answer and you know the answer. It’s actually a silly question; however, the majority of people never ask themselves this question. If you kept your job and had two rental properties that would be three income streams you would have coming to you. As you will see shortly, it is actually many more income streams. Each income stream you create is added financial protection for you and your family.
What is the best investment your parents ever made? Many of you will say that your parents’ best investment would have to be their homes. The next logical question then becomes, what would your parents’ life look like, if they had bought two rental properties 30 years ago? What would the life of the Senior Citizen working at the fast food restaurant be like today had they invested in real estate earlier in their lives? Would they still be mopping the floors and cleaning ketchup off of the tables?
I don’t want to see you cleaning floors; instead, my goal with this book is to motivate you to just invest in a few single-family homes. That’s it. I know that if I can give you the encouragement and tools to get started, you can dramatically change your future. If you take the ideas in this book and continue to buy two homes a year for the next 10 years that would be fantastic! The focus is for you to get started today and build monthly passive income so that you can live life on your terms and not be dependent on any one income stream.
Think about this:
If you were to invest in just one single-family home today and keep it until your retirement, you would increase your net worth by $411,613. You would have a monthly income from this one home in excess of $1,330. (A $100,000 home appreciating at 5% a year for 30 years would
be worth $411,613.) And that’s a conservative example. It could be much more in a market experiencing soaring appreciation.
Just a few homes purchased now could make you a millionaire in retirement. By owning real estate as an investment, you are not relying on Social Security or your employer’s pension. If you are lucky enough to receive Social Security or a pension, super for you! Treat it as a bonus. However, by owning real estate, you are guaranteeing your future financial security and not just hoping for the best.
The amount of income you create from your real estate investing is completely up to you. In fact, how quickly you can achieve financial independence is entirely up to you too. One of my client members, Joe Mercadante, was able to achieve financial independence in seven months at the age of 34. You can create as much income, or as little as you want. The choice is 100% yours.
The reason I am able to say this so confidently is because I have some clients that only create $15,000 on one property and don’t do anything else. I have other clients that create $30,000 on one property and then repeat the process over and over again on other properties.
You see, building your wealth is simple, but it’s not easy. The thought of buying two homes and renting them out is simple. But actually doing it is not easy.
That’s where this book comes in. This book will help you make the simple, easy!
Copyright 2008
Tuesday, February 12, 2008
A VIEW ON REAL ESTATE INVESTING
John Hayes, president of HomeVestors of America, had an interesting
To learn more about prudent real estate investment
pratices visit the websites listed below:
www.quitworksomeday.com
www.learntobuyhomes.com
www.gigisteam.com
www.beatanagent.com
"letter to the editor" carried recently in USA Today. He was comparing the benefits of real estate investments with stock investments.
"The reason people invest in real estate is because they can take advantage of many benefits beyond asset appreciation," he said. "Real property investors benefit from rent income, depreciation tax benefits, tax-free access to accumulated equity, and the underlying stability of the value. Real estate doesn't lose 50 percent of its value in a few hours or days. Investors have the ability to substantially magnify returns by using leverage."
To learn more about prudent real estate investment
pratices visit the websites listed below:
www.quitworksomeday.com
www.learntobuyhomes.com
www.gigisteam.com
www.beatanagent.com
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