Credit unions buck negative trends

While banks far and wide are still shell-shocked about the frozen credit markets, there's one group out there that's still lending bucks a-plenty: credit unions.

Real Estate columnist Broderick Perkins recently wrote, "Credit unions didn't need a bail out during the Great Depression, they didn't need federal intervention during the Savings & Loan debacle and they don't need government assistance now."

Why is this? Because unlike banks that are exposed to market volatility, credit unions are client-owned nonprofits, whose returns come from the loans given out to its own members. Though during the boom times this may not look very sexy, downturns like the one we currently face make those fiscally conservative institutions look a lot better.

The first half of 2008 saw near gridlock in bank mortgage lending, but in that same period, the National Credit Union Administration (NCUA) reported a more than ten-percent increase in home loan origination. Because they're not driven by the same profit motive as for-profit banks, there's no point in engaging in such risky business as selling securities or getting involved in credit default swaps.

The downside for those who are used to easy lines of credit is that credit unions come by their conservative reputations honestly. Subprime loan candidates are likely out of luck, but if you've keep up on your payments and don't have too much outstanding revolving debt, a credit union may be just the solution for those who have the means to pay a loan, but can't seem to find a bank willing to take the chance.

For more information about credit unions, visit the NCUA's website at www.ncua.gov.

Mark Crabtree

Realtor/Investor/LEED AP

JT Henderson & Associates LLC

www.MarkCrabtree.com

(Direct: 616-485-9327)

(Corporate: 616-447-8977)

The $499 Deal - One Flat Fee – Full Real Estate Services in the following west Michigan communities:  Grand Rapids, MI, East Grand Rapids, MI, Rockford, MI, Walker, MI, Kentwood, MI, Caledonia, MI, Cutlerville, MI, Lowell, MI, Wyoming, MI, Ada, MI, Forest Hills, MI, Cascade, MI, Grandville, MI, Byron Center, MI, Belmont, MI, Dutton, MI.  I specialize in green & energy efficient homes, owner finance, rent to own, single family homes, multifamily homes, foreclosures, short sales, and handyman specials.

Investments in tougher times

A recent survey by Realty times of hundreds of the real estate industry's most powerful investors yielded some answers to the question about where the silver linings may be in real estate in the coming year. Here's what they said:

Pick up empty lots - Home builders have been strapped for cash recently, so to raise capital to finish projects they've started, many have been selling off vacant properties. The patient buyer, willing to hold for the longer term, may get a sweet deal on lots, especially in areas that historically have been high-growth areas. When the neighborhood rebounds, guess where they'll come looking for new property?

Invest in multi-unit properties - As people lose their homes or cringe at the idea of jumping into home ownership, rentals are stronger than they have been in a long time. Remember, just because single-family homes are down doesn't mean everything is following in its tracks.

Go Canadian - The Canadian financial system is more conservative by nature than the American financial system, so they are less prone to the volatility. Though you may not see the explosive growth you find in some American investments, Canadian investments are a generally more slow-and-steady bet.

Of course, there are no guarantees in any investments, but bucking common trends and reaching outside your traditional investment portfolio may serve you well as you continue to diversify for the future.

Mark Crabtree

Realtor/Investor

JT Henderson & Associates LLC

www.MarkCrabtree.com

(Direct: 616-485-9327)

(Corporate: 616-447-8977)

The $499 Deal - One Flat Fee – Full Real Estate Services in the following west Michigan communities:  Grand Rapids, MI, East Grand Rapids, MI, Rockford, MI, Walker, MI, Kentwood, MI, Caledonia, MI, Cutlerville, MI, Lowell, MI, Wyoming, MI, Ada, MI, Forest Hills, MI, Cascade, MI, Grandville, MI, Byron Center, MI, Belmont, MI, Dutton, MI.  I specialize in owner finance, rent to own, single family homes, multifamily homes, foreclosures, short sales, and handyman specials.

Public mortgage funds still flowing

Many private banks may be freezing out lots of average investors, but there is a place where loans are still flowing relatively freely: HUD.

The Federal Housing authority (FHA), a division of the department of Housing and Urban Development (HUD), has ramped up home loans to help fill the mortgage vacuum. In fact Kenneth Harney recently reported on the Realty Times Web site that FHA loans are up threefold, with more than 100,000 new loans being processed monthly.

Those with stable employment, at least three percent for a down payment and a reasonably good credit history can still qualify. And as traditional lending institutions continue to shudder at the perceived risk in the mortgage market, more people are turning to government-backed sources.

In addition to direct loans, HUD is sweetening the pot for those in the market for a foreclosed property.

While the bailout numbers for big banks overwhelmed most everything else in the recent rescue package, there was a (relatively) small program funded at the same time to clean up foreclosures for resale. In total, nearly four billion dollars is available to local governments through the Neighborhood Stabilization program to spruce up properties where home values have fallen significantly.

Contact local housing authorities to see if you qualify for this source of funding.

Mark Crabtree

Realtor/Investor

JT Henderson & Associates LLC

www.MarkCrabtree.com

(Direct: 616-485-9327)

(Corporate: 616-447-8977)

The $499 Deal - One Flat Fee – Full Real Estate Services in the following west Michigan communities:  Grand Rapids, MI, East Grand Rapids, MI, Rockford, MI, Walker, MI, Kentwood, MI, Caledonia, MI, Cutlerville, MI, Lowell, MI, Wyoming, MI, Ada, MI, Forest Hills, MI, Cascade, MI, Grandville, MI, Byron Center, MI, Belmont, MI, Dutton, MI.  I specialize in owner finance, rent to own, single family homes, multifamily homes, foreclosures, short sales, and handyman specials.

How the bailout is affecting Main Street

Congress' approval of a massive rescue package for the mortgage industry has made headlines across the world. But what does it mean for the average homeowner?

In the short term, the feds have released up to ten billion dollars for the current month alone to buy up so-called "toxic" mortgage securities from banks who are suffering from a lack of capital. As these bad debts are bought up, this adds desperately needed capital to the home lending market.

This doesn't mean, however, that it's a free-for-all when it comes to landing a home loan. Though lenders will get their hands on some cash, they're still going to be pretty jittery about taking excessive risks for some time. Also, there's some anticipation that the funds will soon be followed by some added regulation, which may narrow the qualifications for getting a loan.

There is good news, though. For those qualified buyers who have a reasonable down payment, they may have hope to get a "yes" from banks, whereas it was getting to the point that there were no funds for loans anywhere, regardless of ability to repay.

Also, the government intervention may signal a stemming of the tide of foreclosures that helped aggravate this crisis in the first place. With the government able to absorb more risk than a private bank, chances are that the feds will slow down or freeze foreclosures in which they are now involved, at least until terms can be renegotiated on some of the loans in an effort to keep roofs over peoples' heads.

Though we're hardly out of the woods, these first steps by the government signal a possible bottom in the market. Other indicators to watch in the near term are interest rates, new home sales, and hopefully over time, new housing construction.

Mark Crabtree

Realtor/Investor

JT Henderson & Associates LLC

www.MarkCrabtree.com

(Direct: 616-485-9327)

(Corporate: 616-447-8977)

The $499 Deal - One Flat Fee – Full Real Estate Services in the following west Michigan communities:  Grand Rapids, MI, East Grand Rapids, MI, Rockford, MI, Walker, MI, Kentwood, MI, Caledonia, MI, Cutlerville, MI, Lowell, MI, Wyoming, MI, Ada, MI, Forest Hills, MI, Cascade, MI, Grandville, MI, Byron Center, MI, Belmont, MI, Dutton, MI.  I specialize in owner finance, rent to own, single family homes, multifamily homes, foreclosures, short sales, and handyman specials.

Don't let appearances fool you

When selling a property, we all dream of the rich investor in the thousand-dollar suit rolling up in his - or her - Mercedes, cash in hand, to make us an offer on the spot.

Then there's reality.

Few of us ever have such an experience. Instead, we're left to wade through window-shoppers and under-qualified buyers, while we look for the one who can actually close the deal.

The problem is that we have no idea who that person might be.

It's tempting to size someone up as soon as they walk through the door, determining for ourselves whether or not they are worth our time. We may do so based on how they are dressed, what they drive or the type of words they choose.

Sure, we all have an idea of what the ideal millionaire investor looks like in our imaginations, but does that actually match up with the real world?

In their best-selling book, The Millionaire Next Door, Thomas Stanley and William Danko made some surprising discoveries about the "average" millionaire. It turns out that those with the most available cash are often more likely to sport overalls and a pickup truck, rather than the stereotypical Versace and Cartier brands.

Also, just because someone doesn't have the means to buy what we're selling doesn't mean they don't have friends who do. The plumber down the street might be more willing to tell his shop's owner about your property if you treat him well, and the majority of millionaires in America are small business owners.

In short, treating everyone like a potential gold mine takes a little more effort, but in competitive times when we have fewer buyers available than we'd prefer, every little edge makes a difference. 

Mark Crabtree

Realtor/Investor

JT Henderson & Associates LLC

www.MarkCrabtree.com

(Direct: 616-485-9327)

(Corporate: 616-447-8977)

The $499 Deal - One Flat Fee – Full Real Estate Services in the following west Michigan communities:  Grand Rapids, MI, East Grand Rapids, MI, Rockford, MI, Walker, MI, Kentwood, MI, Caledonia, MI, Cutlerville, MI, Lowell, MI, Wyoming, MI, Ada, MI, Forest Hills, MI, Cascade, MI, Grandville, MI, Byron Center, MI, Belmont, MI, Dutton, MI.  I specialize in owner finance, rent to own, single family homes, multifamily homes, foreclosures, short sales, and handyman specials.