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Disaster Preparedness Key to Recovery

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | October 27th, 2017

Natural disasters rarely come with a warning. With the exception of hurricanes, most disasters sneak up on you. But there is plenty you can do to protect yourself and your family should a flood, fire, tornado or tropical storm head your way.

The key is preparedness. You probably won’t be able to prevent damage to your home or place of business. But if you are ready, you could recover far more quickly.

Here are a few tips. This list isn’t exhaustive, but follow these steps and you’ll be way ahead of the game:

-- Inventory. For insurance purposes, you will have to show what you lost. So take a fearless inventory. A list of every item in the house would be best, of course, with the date of purchase and the cost. But since that is all but impossible, use your smartphone or camera to photograph each room. Add a running commentary describing the major items.

-- Accounts. Make a list of all your bank, credit card, insurance and stock accounts, including account number, address, phone number and, if possible, the name of someone with whom you have interacted. Make sure you include the name of the company to which you send your house payments, the phone and account numbers and a contact person.

You will need this after the disaster passes to start rebuilding. Have it laminated so it can survive a flood if you have to escape through rising waters.

-- Documents. Maintain a duplicate set of key documents, including bank statements, tax returns, identifications and insurance policies, and keep them in a safe place. Store them in a waterproof container, away from the original set. To be extra safe, scan them into an electronic format such as a flash drive, or burn them onto a DVD or CD.

-- Devices. Keep a plastic bag of backup chargers, cables and headsets so you can grab it and run. Your phone or tablet may be the only way you will be able to communicate, so you’ll need to keep it charged.

-- Drugs. The older you are, the more medicines you likely take. So keep a stash, again in a sealable plastic bag, that you can grab at a moment’s notice. If not the actual meds, then at least keep a list of them, where they are being filled, doctor’s name, dosage and so on. Also keep a copy of your medical history, along with extra eyeglasses and hearing aid batteries.

-- Mortgage. If the event is designated a major disaster area by the president or your governor, there is plenty your loan servicer -- the company to which you send your payments -- can do to relieve your short-term burden. But you have to be proactive and call. They will try to contact you, but if you have been displaced, they won’t know where you are.

If your loan is secured by Fannie Mae, Freddie Mac or Ginnie Mae, your servicer can, on a case-by-case basis, extend forbearance and repayment plans for up to 12 months without prior approval. The same goes for people who reside outside the declared disaster area but work within it. Your servicers also can waive late fees and other penalties, and can suspend evictions and foreclosures for up to 90 days if you were already behind on your payments.

None of this will be reported to credit repositories, so your credit score won’t take a hit.

-- Other loans. After Harvey, federal and state banking regulators told bankers to work with borrowers in the disaster areas to adjust or alter loan terms. “Efforts to work with borrowers in communities under stress can be consistent with safe-and-sound banking practices,” said a memo from the Federal Reserve.

At the same time, the IRS amended its rules by allowing 401(k) plans and other employer-sponsored retirement plans to make loans and hardship distributions to Harvey victims without incurring any penalties. Similar relief was granted during previous disasters, including the Louisiana floods and Hurricane Matthew.

And in the wake of disasters, individual banks sometimes defer payments on consumer and business loans, waive ATM fees and offer discounted rates on home equity loans, lines of credit, renovation loans and construction loans. In the wake of Harvey, some banks and credit unions offered to help people get back on their feet and minimize their own potential losses by allowing borrowers to skip payments and extending the length of their loans.

One said it was open to restructuring entire loans. Another was deferring payments and adding them to the back end of the mortgage.

-- Scams. The unfortunate part of the human condition is that some people will always try to take advantage of others’ misfortune. According to the Federal Trade Commission, not long after Harvey cleared out of Texas, consumers started receiving fraudulent robocalls telling them their flood premiums were past due. Buyer beware of scam artists.

If you get such a call or letter, confirm that the company is legitimate. Telltale signs that it isn’t include grammatical mistakes, typos and names of affiliated business groups that you do not recognize or that cannot be identified.

Never be pressured to “act now,” and never give out your bank account or routing number until you have verified the outfit. And remember, mortgage help is free, so be particularly leery of anyone demanding payment or promising guaranteed results.

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Larger, Bolder Kitchens On the Way

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | October 20th, 2017

Buyers of new homes will soon be seeing larger model home kitchens with darker, bolder colors, especially when it comes to their appliances.

According to a study by Houzz, a leading platform for home renovation and design, the “great room” feel of the kitchen will soon be even greater. The study covered some 2,700 homeowners who are either planning a kitchen makeover, recently completed one, or are in the middle of one.

But those are remodels. This brings up a legitimate question: What does a remodeled kitchen have to do with a brand-new one? The answer: Builders pay attention to survey findings like these so they can stay up-to-date on kitchen trends and remain ahead of the curve.

One trend? Black stainless steel. According to trade publication Builder, black stainless is the hot new color, with more and more range and refrigerator manufacturers adding the finish to their lines. KitchenAid was the first to introduce the finish more than a year ago, and now Electrolux, Kenmore, LG and others are following.

Black stainless steel is said to be so versatile that it goes with almost any other finish, design style and color. Whether you opt for a modern farmhouse look, a contemporary commercial feel or something more traditional, the finish works.

“Black stainless steel appliances have a modern, neutral tone,” Miranda Valentino of Electrolux told the magazine. “This means they mix and match well with both bright, vibrant colors and dark, muted accents, and can easily blend into existing design styles.”

LG spokeswoman Taryn Brucia told Builder that the finish “elevates the traditional stainless steel look with a satin-smooth, warm and sophisticated finish for both a modern and timeless aesthetic that pairs beautifully with any kitchen style. Its sleek finish elevates the versatility and sophistication of kitchen appliances.”

Houzz found that millennials, in particular, gravitate toward black stainless steel, with 9 percent of respondents age 25-34 choosing the finish. That’s three percentage points higher than the 55-and-older group. And more and more builders are looking to break into that younger demographic.

Another trend new buyers are likely to see is more pantry space -- sometime much more. Elizabeth Hagie of the Maryland-based Builders Design calls them “Super Pantries,” and they can be customized to fit any buyer’s lifestyle and budget.

Much like the trend of larger showers a decade or so ago, reports Hagie, this trend is popular with builders because it permits them to showcase additional cabinet or shelving options. And buyers seem to be gravitating toward upgrading the pantry in order to keep a clean, welcoming look in the entire kitchen.

In some cases, the traditional pantry is simply larger, allowing the owner to store extra snacks and perhaps a beverage fridge. But in others, it can occupy an entire room, often hidden behind a kitchen wall, that permits the owner to hide the giant countertop mixer, coffeemaker and other small appliances.

Says Hagie: “As the kitchen continues to be the entertainment hub of the home, this customizable space is a trend that will only grow in the years to come.”

Looking into the future, the Consumer Technology Association estimates that by 2022, a typical new home could contain a startling 500 smart devices. The CTA’s chief economist, Shawn DuBravac, thinks the adoption of broadband and Wi-Fi technology is akin to the adoption of electricity and indoor plumbing years ago.

Companies are cooking up some wild devices, and the kitchen is the hotspot. At a Berlin trade show recently, Grundig unveiled a marble “hob.” Using projection technology, an ordinary induction hob is transformed into an intuitive work surface, allowing users to completely control appliances from a single surface point.

Samsung’s family hub refrigerator is a sophisticated multitasker. Its Wi-Fi-enabled touchscreen lets you manage and purchase groceries, pin photos on an HD screen on the exterior door, and post, share and update calendars. Three interior cameras snap photos every time the door is opened and closed so users can remotely see inside.

High-tech isn’t limited to large appliances, either. Take the Egg Minder, which wirelessly connects to your phone to tell you how many eggs you have on hand and when they start to go bad. Or the GeniCan, a trash can add-on with a sensor that reads the bar codes of items when you throw them away, then adds them to a grocery list.

Meanwhile, Paris-based designer Arik Levy has partnered with Spanish surface manufacturer Compac to create a marblelike kitchen that is stain- and scratch-resistant. Called Mineral Gravity, the conceptual kitchen is made from a synthetic material that resembles marble, but is much more durable.

“Everything’s better than natural stone,” Levy told Dezeen, a London-based design magazine. “This is unbreakable and unscratchable and nonporous. Marble will break and it will scratch. If you spill a glass of wine on marble, you can say goodbye to your table.”

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‘Duty to Serve’ Helps Borrowers

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | October 13th, 2017

Federal mortgage agencies Fannie Mae and Freddie Mac have long been tasked by Congress with serving areas that don’t get much attention from the private sector. And that could help you get a home loan.

Suppose you live in an underserved rural area -- Appalachia, say, or the Mississippi Delta -- or you are in the market for manufactured housing. Getting a home loan in both of those scenarios should be a little easier starting Jan. 1.

That’s the date the two giant funders of mortgage lenders have to start implementing their congressionally mandated Duty to Serve Underserved Markets plans, an idea that goes back to the start of the recovery from the mortgage market implosion of 2008.

Fannie’s and Freddie’s regulatory group, the Federal Housing Finance Agency (FHFA), started to implement “duty to serve” ideas in response to Congress’ 2008 Housing and Economic Recovery Act. But the agencies weren’t required to finalize their plans until this year, or to implement them until next year.

The new, formalized plans focus on three main areas: manufactured housing, rural housing and affordable housing preservation. Why do these companies have a “duty” to serve these areas?

“Numerous areas of the country will continue to experience housing challenges for years to come,” according to Danny Gardner, Freddie Mac’s vice president of single-family affordable housing.

Actually, Freddie and Fannie don’t work with consumers directly. You can’t apply to them for a mortgage. But they do fund the lenders that will make you a mortgage, and their reach is vast.

After a lender closes on a home loan with you, it sells it to Fannie and Freddie. Instead of waiting for you to pay it back a month at a time for 30 years, your lender gets its cash back the same day your loan is sold in what’s called a secondary market transaction. They can then use that money to make another mortgage to someone else.

In short, Freddie and Fannie are the straws that stir the mortgage cocktail. If they say they are willing to fund something -- or if Congress directs them to -- lenders will start to line up, hat in hand. And consumers are the ones who benefit. It’s said that over the years, Fannie/Freddie-funded mortgages have saved consumers an average of a quarter of one percent on their interest rates.

As part of Freddie Mac’s plan, Gardner claims his company “will seek to work to increase loan purchases in the underserved markets mentioned, develop new offerings, conduct market research, build technical skills for industry participants, and expand homebuyer education, community engagement and local outreach.”

If your loan falls in one or more of the duty to serve categories, lenders are going to be putting more spin on the ball very soon. And, like students bringing apples to teachers to gin up favorable impressions, the agencies can choose to go above and beyond.

“Certain impactful activities, including activities that promote residential economic diversity in an underserved market, are eligible for Duty to Serve extra credit,” says the FHFA.

Take manufactured housing. This is a murky area of the lending universe, because sometimes these loans are mortgages, and sometimes they are not. If the home is anchored to a permanent foundation and counted as “real” property (as in real estate), they may get mortgages that can benefit from favorable interest-rate pricing through Fannie and Freddie.

If the home can be moved, as with trailers, they are considered personal property and, in the past, have gotten “chattel” loans, which are often far more expensive than mortgages. Soon, those chattel loans will be eligible for sale to Fannie and Freddie, as will loans for manufactured housing communities. That could make those types of loans less expensive.

In the rural housing market, the duty to serve applies to middle Appalachia, the Lower Mississippi Delta, and a couple of other poorly served regions or groups or people, including agricultural workers, American Indian reservations and the “colonias” that dot the U.S.-Mexican border.

The third area, affordable housing preservation, applies to sustaining low- and moderate-income housing supplied by such federal programs as HUD Section 8 and the Low-Income Housing Tax Credit.

Though there are differences between Fannie Mae and Freddie Mac, Freddie’s plan gives you a good snapshot of the kinds of things both of them plan to do through the year 2020.

Gardner says Freddie will be “working with mortgage originators and other professionals in these communities to help more American families with their housing needs by developing and expanding solutions to some of society’s most persistent housing problems.”

Manufactured housing, for one thing. There is a lot of it. Gardner points out that in 2010, 17 million people lived in nearly 7 million manufactured units in America.

For “real” property, Freddie plans to “work with lenders to increase Freddie’s Mac’s purchases of loans in this important market.” And for “personal” property, Freddie plans to “initiate a chattel pilot offering” and “develop homebuyer education to support chattel financing.”

That’s important, because 80 percent of manufactured housing loans are chattel, so mortgages have not been a big part of that market.

Rural areas are a significant part of the country’s land base, Gardner says. And the problems there are many, not only with affordability but also with “persistent poverty, declining employment opportunities and limited access to financial services.” Freddie will seek to increase financing and homeowner education in these areas.

As for affordable housing sustainability, “Freddie Mac’s efforts to preserve affordable single-family options will focus on two fronts: energy-efficient home improvements and shared-equity programs.” Freddie plans to study both to bring some standardization to highly fragmented markets.

Ultimately, Freddie’s efforts will be to “bring liquidity, stability and affordability to these underserved but deserving markets.” So early next year, start asking your local realty agent and lender if you can get in on the action.

-- Freelance writer Mark Fogarty contributed to this report.

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