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To: Jim McMannis who wrote (42287)	12/6/2005 11:04:37 PM
From: mishedlo	Respond to of 116555

Homebuyer beware; mortgage lenders might be hiding something from you by Tara E. McLaughlin December 2, 2005 First-time home buyers beware. Obtaining a mortgage has been easier lately thanks to exotic loan products touting low monthly payments and teaser rates. But these seemingly affordable deals come with risks that some lenders might not be too keen to point out. Option adjustable-rate mortgages, interest-only mortgages, no-money-down and piggy-back loans have provided enticing financing for borrowers with little money of their own to invest in a home. One mortgage lender said inquiries he receives for these types of loans come mainly from first-time home buyers who may not be in a position to assume the risk. Current homeowners who are in these sometimes riskier products are opting into safer fixed rate or standard ARMs, said Leo Fronimos, mortgage specialist for Village Bank and Trust in Arlington Heights. He said nine of 10 calls he gets are for interest-only loans. "College grads making $20,000 to $30,000 are buying condos at $150,000," Fronimos said. "Interest-only loans give them payments of $750 where a regular payment would be $950." Fronimos said that homebuyers are seeking interest-only loans for all the wrong reasons. "They are overextending themselves, getting double the house they should be. I've got people whose mortgage rates have doubled and they can't afford it. They're selling everything they own, cars and antiques, just to pay the mortgage," he said. But with real estate prices so outpacing income increases, buyers may be tempted to go for unusual loan types to keep initial payments in an affordable range. The state's median home price in October was $209,900, up 14 percent from $184,000 a year earlier and 40 percent from the same month in 2001 of $149,200, according to the Illinois Association of Realtors. And incomes have not nearly kept up. In fact, according to a 2004 U.S. Census Bureau report, median household income dropped slightly in 2004 to $44,389, down 0.2 percent from a year ago. "There's a use for those products if you're financially astute or if you're wealthy," said Bill Fisher, lending officer with Midwest Bank and Trust, Elmwood Park. "What we have seen and read is that's not who is taking these loans. It's people who the bills are getting the best of them, so they're looking for the easy way out. When we advertise a 1 or 2 percent rate, they see the low interest and not the pitfalls." Option ARMs offer an extremely low teaser rate of 1 or 2 percent, but then change each month and may reach more than 5 percent or 6 percent and higher as short term rates to which the loans are indexed continue to rise. Along with the introductory rate, the customer can choose how much to send to the bank. A homeowner may vary payments, adhering one month to a 30-year payment schedule, then in another month to a 15 year schedule. He may pay interest only, which leaves the entire principal loan balance untouched or Make a minimum payment which is less than even the interest due. That would increase the loan amount and lead to what is called negative amortization. Piggy-back loans are so-called because they allow a borrower to buy a home with no money down. The first part of the loan is typically 80 percent of the home value. At the same time, a second mortgage, which typically carries a higher interest rate, is closed for the remaining 20 percent. In interest-only loans, payments are made only to interest and offer the borrower a lower payment. But no equity is built and the entire loan balance is due back to the bank once the home is sold or the term is up. To be sure, lenders argue there is a place for exotic loans. Interest only loans, "allow people more staying power. If they wants to sell their home and buy something else. Since it's taking longer to sell a home, they can afford to hold out for the right price because the monthly payment is smaller," said Jan Constantine a senior vice president at Lake Forest Bank and Trust, Lake Forest. "There would not be much of a principal pay down," said Constantine. So the only benefit above renting, "is the mortgage interest deduction." Fisher said homebuyers need to do their homework. "You have to be able to trust the person you're dealing with to tell you the truth including the pitfalls and if you can manage those," he said. "But Banks push rates and closing costs. Talk to two or three people and go with whoever your gut tells you to trust. Rates should all be fairly competitive." chicagodefender.com

To: Jim McMannis who wrote (42287)	12/6/2005 11:05:33 PM
From: mishedlo	Respond to of 116555

Fannie Mae misclassified $6.7 bln of loans in 2004 Thu Dec 1, 2005 6:13 AM ET NEW YORK, Dec 1 (Reuters) - Fannie Mae, the largest U.S. home funding company, misclassified about $6.67 billion in single-family loans as multifamily loans last year, the company said in its monthly summary report for October. Fannie Mae also said it misclassified about $3.68 billion of its single family loans as multi-family loans in the first two months of 2002. In both periods, the company's total mortgage purchases were unchanged. Fannie Mae is still recovering from a multibillion-dollar accounting scandal that could result in a profit restatement, as large as $11 billion based on accounting errors identified so far. today.reuters.com

To: Jim McMannis who wrote (42287)	12/6/2005 11:08:54 PM
From: mishedlo	Respond to of 116555

Remorseful or Not, Buyers Start to Return to Japanese Real Estate nytimes.com

To: Jim McMannis who wrote (42287)	12/7/2005 12:22:13 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Yahoo is now using something called "Web Beacons" to track Yahoo Group users around the net and see what you're doing and where you are going similar to cookies. Yahoo is recording every website and every group you visit. Take a look at their updated privacy statement: privacy.yahoo.com About half-way down the text part of the page, in the section on cookies, you will see a link that says web beacons. That will bring you to a paragraph entitled "Outside the Yahoo Network." In this section you'll see a little "click here to opt out" link that will let you "opt-out" of their new method of snooping. Once you have clicked that link, you are exempted. Notice the "Success" message on the top of the next page. Be careful because on that page there is a "Cancel Opt-out" button that, if clicked, will undo* the opt-out.