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Short Selling: An Option other than Foreclosure

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RIVERSIDE

 

By Dr. F. Beer, Mai Akasaka and Dong Woon Kim


The housing boom of the last decade has helped increase minority home ownership rates above 50 percent for the first time in 2004. Social scientists praise this success because home ownership encourages greater neighborhood stability and economic progress. President Bush cites rising minority ownership as an achievement under his "ownership society" programs.

Unfortunately, things have changed.  The market is crashing and minorities are losing their residents in huge amounts.  An article published in the New York Times reports that the rate of Black home ownership fell slightly in 2005.  It also reported that home foreclosures among minority homeowners could rise further in coming years due to higher rates.  The article said that the race of borrowers is not available on foreclosure documents, but studies that compare foreclosure rates to the racial makeup of the neighborhoods where the foreclosures are taking place suggest that the rate is rising higher for minority homeowners. Image

So who is to blame?  The sub-prime mortgage rates for one.  Sub-prime loans, are loans made to borrowers with credit histories that the industry considers less than prime.  These loans have interest rates that are, on average, three points higher than the prime rate and they carry higher fees and prepayment penalties that make them expensive to refinance.  Further, many of the sub prime borrowers took out adjustable rate mortgages where payments rose if interest rates rose.  Their plan was to refinance these loans using the expected increase in value of their house to help them qualify for a better loan.

Unfortunately, house values did not increase, but instead dropped!  In Riverside and San Bernardino Counties, the average price of homes has dropped by 18.6% and 16% respectively. 

Now that houses are no longer increasing in value, sub-prime borrowers cannot refinance.  This forces them to pay a much larger mortgage payment, which, they cannot afford.  Conclusion?  A sharp increase in foreclosure. 

If you have bought a house within the last 2 years, you know exactly what I mean. It is time to understand what your options are.   In this article we explore Short Selling.

A short sale is a nice option to get out from possible foreclosure and sell your house.   Here is how it works. 

Imagine that you have a house that has a $200,000 mortgage.  Unfortunately, your real estate agent states that the house is now worth $150,000.  If you find a buyer for your house, you are going to be required to come up with the additional $50K. Most people don't have as much extra cash.

When you do a short sell you need to contact the lender and get their approval to sell the house at whatever the market is at.  Sometimes lenders agree to this because they know their other option is foreclosure. When they have to sell a foreclosure they usually will only get 50 to 60% of the market value of the house.

Most people who have had a foreclosure have a difficult time buying a home within the first 3 years, unless they have a generous down payment.  Even then, their interest rate might be higher due to the fact that the new lender knows the person has lost a house to foreclosure in the past.  If you elect to "Short Sell" your home, make sure you work with an agent familiar with the procedure.  A professional realtor will assist you in avoiding a deficiency judgment for the amount of money that the bank lost.

Lenders may claim whatever debt they've forgiven as a loss on their taxes and issue a 1099 form.  In other words, the forgiven debt is taxed as earned income. You should definitely check with your accountant for this information.


Book Author to Offer Free Home Buying Seminar

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RIVERSIDE

 

Vanesssa Gordon, co-author of the home buyers' book "Secrets of How to Own the Home of Your Dreams With Little or No Money Down, Regardless of Credit" will conduct a free home buying seminar Feb. 16, 2008 at 2900 Adams Street Riverside.

"My book, co-written with veteran mortgage professional Doug Huggins of Atlanta, Ga., is a step-by-step guide for first time home buyers," Gordon said. "Many people think they can't afford a home, especially with recent market conditions, but we can show them how we can help them qualify for and purchase the home of their dreams."

 "There is no obligation to attend the seminar," Gordon noted. "We are simply offering advice and information about the home buying process to anyone who is interested."

"Of course, if they are ready to move forward, we can help them," said Earline Cooley, Gordon's partner.

The free seminar will begin at 10:am. To pre-register for the seminar, please call Ardena at 951-809-8092, or email vhgordon@sbcglobal.net before Feb.12.

Edison Offers Resolutions for an Energy Efficient 2008

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ROSEMEAD


 

Southern California Edison (SCE) wishes its customers a peaceful New Year with these 10 ideas to make their homes more energy efficient throughout the year.

"Conservation is always in season," said Gene Rodrigues, SCE's director of energy efficiency. "We're the nation's leading utility for energy efficiency because our customers do such a great job of conserving electricity with the many programs and services we offer. We hope that everyone, no matter where they live, can use these ideas for a greener New Year."


SCE's TOP 10 RESOLUTIONS FOR AN ENERGY-EFFICIENT 2008


1.            Light up your life: Pledge to switch out at least one regular incandescent bulb for a CFL at www.sce.com/cfl . CFLs now come in a variety of light qualities and shapes. Best of all, they use about a quarter of the energy and last up to 10 times longer than a regular incandescent bulb. Due to an arrangement with manufacturers, SCE has managed to place inexpensive CFL bulbs in more than 1500 stores-at reduced prices (often just 99 cents). Look for displays that have SCE's logo.

2.            Survey says: Take the Home Energy Survey online or in person at www.sce.com.  You'll get custom information on ways to make your home or business more efficient, plus a free compact fluorescent light (CFL), low-flow showerhead and two faucet aerators.

3.            Out with the old!: Let SCE haul away your old inefficient appliances and we'll pay you $35 for a refrigerator or $50 for a freezer. When you buy an ENERGY STAR-labeled replacement, we'll give you a rebate for that, too.

4.            Chill your bill: Get up to $200 credit on your summer electricity bills when you sign up for Summer Discount Plan at www.sce.com/summer .

5.            Beat the heat: Consider energy-efficient air-conditioning alternatives: cross ventilation, whole-house fans, ceiling fans, portable fans and evaporative "swamp" coolers.

6.            More cash in your stash: SCE offers many rebates at http://www.sce.com/RebatesandSavings/:

  • $50 rebate to buy an ENERGY STAR-labeled refrigerator
  • $50 rebate for an ENERGY STAR-labeled room or wall A/C
  • $100 for a whole-house fan (some large home-improvement centers and discount stores provide the rebate at the time of sale)
  • 10-20 cents a square foot incentive to use reflective roof materials when replacing an old roof. This can reduce roof temperatures by 60 percent.
  • $30-$200 rebate when replacing an old pool pump with a new, efficient one; variable-speed pumps are especially effective in reducing costs.

7.            Stay in tune: Much like an automobile, an air conditioning system needs to be regularly tuned up. Having an air conditioner tune-up can save up to 30 percent on home cooling costs. Tune-ups should be done by a qualified professional. An enhanced tune-up includes: condenser and evaporator coil cleaning; duct testing and sealing; and refrigerant charge adjustments. In fact, if just 10 percent of SCE's customers with central air conditioning got a tune-up, it could reduce carbon dioxide emissions by 297 million pounds - the equivalent of taking 26,650 cars off the road. Expect to pay between $75 and $150 for a tune-up and you can find a list of contractors at www.sce.com/summer , or by calling 1-800-369-3652.

8.            Leave a tip: Share energy-saving ideas with your neighbors at www.sce.com/leaveatip.  Or, take a tip about simple and creative ways to save energy throughout the year.

9.            Become a vampire slayer: "Energy vampires" refers to electronic equipment, appliances and devices that use energy 24 hours a day, even when you think they're turned off.  You can cut up to 6 percent from your bill by making sure that you plug your devices into a power strip or surge protector - and turn it off when you're not using the equipment. For equipment that will lose its programming if turned completely off, buy ENERGY STAR-labeled products because they uses less energy in "standby" mode.

10.          Follow the sun: You'll earn rebates when you provide your own clean, renewable energy from solar panels when you take advantage of the California Solar Initiative.  Learn more at www.sce.com/RebatesandSavings/CaliforniaSolarInitiative/

New SCE Renewable Energy Contracts Increase Nation's Largest Portfolio

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ROSEMEAD

 

Southern California Edison (SCE), the nation's leading purchaser of renewable energy, has signed two new contracts that could provide the utility's customers with more than 185 megawatts of environmentally friendly generation - enough power to about 120,000 homes at a point in time.

The 20-year agreements, subject to approval by the California Public Utilities Commission (CPUC), are for geothermal and wind generation.

"We hope to add even more prospective contracts to our renewable energy portfolio from our 2007 competitive solicitation," said Stuart Hemphill, SCE's director of Renewable and Alternative Power.  "Renewable energy is important to our power portfolio. We've worked hard to become the nation's leading utility in renewable power, and we'll keep striving to expand our portfolio."

The new contracts result from SCE's 2007 competitive renewable energy solicitation launched on March 12. SCE plans to submit the agreements to the CPUC in the near future for review and approval. SCE anticipates seeking offers for its 2008 solicitation during the first quarter of 2008. 

SCE's longstanding commitment to renewable energy

SCE leads the nation in renewable power delivery, procuring about 13 billion kilowatt-hours of renewable energy per year, more than any U.S. utility.

The utility currently serves between 16 percent and 17 percent of its customers' needs with renewable energy. SCE continues to work toward meeting the goals of California's renewable portfolio standard. By 2010, SCE hopes to have contracts in place so that when all of the energy purchased is provided, 20 percent or more of its customers' energy needs will be met with renewable energy.

SCE's renewable portfolio currently has the ability to deliver more than 2,700 megawatts of electricity. Recent contracts added to the portfolio will increase its capacity when energy purchased through those contracts becomes available. The current portfolio includes:

  • 1,021 megawatts from wind.
  • 892 megawatts from geothermal.
  • 354 megawatts from solar.
  • 221 megawatts from biomass.
  • 128 megawatts from SCE-owned small hydro (six of the 36 hydroelectric projects SCE currently operates have generated power for more than a century).
  • 95 megawatts from independently owned small hydro.

For more about SCE's renewable energy program, go to www.sce.com/renewables.

 

Company                           

                        

Location

Type

Minimum   Megawatts

Potential Megawatts


Daggett Ridge

Wind Farm

(an affiliate of AES Corp.)

Barstow, Calif.


Wind


79.5


85.5



Ormat Nevada, Inc.

Imperial County, Calif.

Geothermal

30.0

100.0



Total



109.5

185.5







               


Macy's Names Aubyn Elaine Thomas Senior Vice President, Marketing Services

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Aubyn Elaine Thomas
Macy's Inc. has appointed Aubyn Elaine Thomas as Senior Vice President of Marketing Services. In her new role, Thomas will be responsible for driving growth and service excellence for Macy's financial services businesses. This encompasses credit and loyalty marketing as well as multicultural marketing for one of the world's most recognized and respected brands. With a focus on customer intimacy, her leadership will create new sources of value for Macy's 40 million debit and credit card holders. Thomas will also provide direction for the loyalty and rewards platform, gift cards, enhancement services and financial analytic capabilities. Her multicultural marketing leadership will enhance the Macy's brand experience and continued offering of quality, fashion-forward assortments specifically relevant to diverse customers. Macy's will engage in key initiatives designed to build meaningful relationships and help all audiences enjoy their own unique sense of style and expression.

In her former assignment, Thomas was Vice President of the brand and acquisition marketing group at Harrah's Entertainment, Inc in Las Vegas. Her responsibilities included leading the growth and development of the industry's largest distributor of casino brands generating over $9 billion in sales annually. With over 40 resorts worldwide such as Caesars Palace, Harrah's, Bally's and Paris in Las Vegas, her team built the framework for Harrah's Entertainment, Inc. and developed advertising programs to build equity and distinction. She also served as a leading member of the corporate diversity strategy team for the office of the CEO.

Prior to her assignment at Harrah's Entertainment, Inc., Thomas served as the Senior Vice President of Brand Strategy and Enterprise Marketing for Bank of America in Charlotte. She led a team in corporate marketing to maintain enterprise focus on new and innovative programs.

Thomas's educational background includes a dual degree program in Engineering; a 5-year undergraduate curriculum. She holds two bachelors degrees: one in Mathematics from Spelman College, and one in Electrical Engineering from Georgia Institute of Technology. She also holds an MBA in marketing from Clark Atlanta University. She has made her home base in New York at Macy's Corporate Marketing headquarters.

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