Thursday, April 29, 2010

Home Is Where a Mother’s Heart Is

At a time when real estate professionals, economists, actuaries and accountants are busy interpreting data to determine housing trends in order to provide answers for homeowners and buyers, there are some folks whose focus is far from the maddening crowd. One such homeowner has captured this author’s heart and on this Mother’s Day, I share her with all readers.

“Irene” has been married to her devoted husband for several decades and their grown children live nearby on the North Shore. As is becoming more common among families, Irene, her husband, and married daughter’s family have decided to sell both of their homes and purchase a larger home together. Toward that end, I have come to know this lovely family.

When we all first met in our conference room, Irene, who is a little bit of a lady and cute as a button, sat quietly while conversation went on around her. She nodded and smiled several times as her family discussion led to searching for homes in several towns other than the one she had lived in for so many years. Every so often I saw her look down at her folded hands, then put a smile back on her face, look up and continue to nod.

After a few more moments, I asked Irene if she had any questions or towns she might like to add to the list of possibilities. She hesitated before saying “I really love my church. I will miss my church and my friends. I also love my pharmacy. They’ve been filling my prescriptions for years and years.” The moment of silence that followed was deafening and was broken by family who very lovingly assured Irene that they would drive her to her church or pharmacy whenever she needed no matter where they decided to move.

Irene had no desire whatsoever to leave her home that is clearly the center of her universe as much as she is the center of her family’s universe. As time goes by, change becomes more challenging for most of us and moving from one home to another can be very difficult. Irene exemplifies all those precious souls who sacrifice so much for the happiness of those they love. She knows that her children are very excited about the new adventure of exploring large homes with new sparkling kitchens. She is aware of how much work it is for her husband to maintain the upkeep of their present home and she knows that the change that is inevitable is in the best interest of those she loves. Irene wants her family to be happy.

When I visited Irene and “Bill’s” home, there were photos and mementos everywhere to attest to a lifetime of love within the home. While I began to measure the living room, I watched Irene as she ran her fingers over some of the photo frames on a side table. As Bill and I discussed preparing the home for sale, I noticed Irene staring out toward their lovely screen room off the kitchen. Once outside, Irene proudly pointed out the landscaping and BBQ area where “we have had so much fun.”

As the days went by, we began looking at properties and I watched “something” come over Irene. It is the same “something” that holds families together. It is the pure generosity of heart and selfless behavior of a wonderful Mother who will pack up many memories and discard many others for lack of space as the process of moving begins. Without meaning one single word, Irene announced to me that she was “really looking forward to this new adventure.”

True sacrifice is that which is made by one who does so while smiling wider than those for whom the sacrifice is being made so as not to diminish their joy. If you are reading this article, “Irene”, know that the whole world wishes you Happy Mother’s Day.

Thursday, April 15, 2010


Nicholas Cage just lost his Bel-Air mansion in foreclosure the beginning of April 2010 and he is only one example of the famous and wealthy homeowners falling victim to this new tidal wave of foreclosures that is looming over the prime market in the country. The famous actor listed his 11,817 square foot property for $35 million. When he had no offers it went to auction where it had no bids, so the bank took it back.
For the past few years, Americans have been hearing, seeing or living through the tidal wave of foreclosures that has washed out countless homeowners in the sub prime market.
By definition, “sub prime” lending means the practice of loaning money to borrowers who are a higher credit risk than normal. The criteria that are used to determine credit risk (prime vs. sub prime) are the following:
1. Credit scores of 660 or lower
2. Late payment to any creditor within the last 12 to 24 months
3. Collection accounts
4. Any repossession within the last 5 to 7 years
5. Bankruptcy filing within the last 7 years
Interest rates and fees for those borrowers who do not qualify for the prime market (excellent credit risk) will be higher because the risk that the “sub primers” will not repay their loans is higher.
Once the housing prices fell, the sub prime market homeowners began to buckle under the crushing devastation of adjustable interest rates on properties they could not refinance. By the thousands, home owners drowned in the tidal wave of sub prime foreclosures.
Those who are wealthier are generally the last to lose their homes even when they are in crisis because they have so much more credit power, savings and the ability to “move things around” to hold off inevitable foreclosure far longer than a sub primer. Many of the affluent homeowners have lost fortunes that were tied up in industries that have been hit particularly hard by the economy. As evidence that the super rich are about to join the foreclosure ranks with middle and lower class Americans, the number of multi million dollar mansions that were scheduled for foreclosure in February 2010 was 352 nationally. In all of 2009, the number was only 1,312.
One such 14 acre mansion in Westchester NY was listed for $13.9 million in November 2010 and when it did not sell, the bank moved to foreclose. The owner is Richard Fuscone, a high ranking Wall Street executive who filed for bankruptcy to delay the foreclosure on the 18,471 square foot mansion with 2 swimming pools, two elevators, six fireplaces, eleven bathrooms and a seven car garage.
Sources such as RealtyTrac and The Wall St Journal report that banks have foreclosed on homes with $5 million or more owed in Georgia, North Carolina and Colorado. States hit hardest in the country include Nevada, Arizona and Florida. (Nevada reported the highest foreclosure rate in the country). Other states that have reported highest foreclosure rates include Utah, Idaho and Illinois.
These facts and trends from around the country have relevance right here on the North Shore. The foreclosure wave which left so many of our neighbors floundering impacted the home prices around us. This next wave will do the same. There will be homes affected at all levels of value this time and the pricing of the home intended for sale must be very intelligently done to attract buyers who in turn must be able to obtain financing. Prices will not be increasing in the foreseeable future for reasons that are all too plain to see. The federal government had been buying up mortgage backed securities which kept the interest rates low. As of this past March 31st, however, they ran out of money to continue with that program.
No matter what is happening in any market, every property sells at the right price. Just when you think it may not be the right time to sell, think again about your specific set of circumstances and know that as a homeowner, you are sitting in your own “bank” and it is shrinking a couple of dollars a day. If your home no longer meets your needs, arm yourself with the truth about your options and learn how to move through this economy without making costly mistakes with this next tidal wave. How you ask? Call a knowledgeable Realtor before you end up swimming with the fish.