Note: As a real estate professional who has earned the CDPE designation (Certified Distressed Property Expert), I work with many sellers who are in distress (trouble) over delinquent mortgage payments. Many times, if proper intervention is sought in time, a short sale may be the answer. In lieu of a short sale, some homeowners instead opt for a loan modification. As high as 80% of those who do obtain loan modifications become delinquent within the first year. Here is an article just published today which sheds a little more light on homeowners in distress who seek loan modifications. ~ Stephen Bennett

Mortgage rescue: Credit score killer
By Tami Luhby, senior writer December 28, 2009

NEW YORK (CNNMoney.com) — Most troubled homeowners view President Obama’s foreclosure rescue plan as a way out of their financial troubles.

But many don’t realize that entering a trial mortgage modification can actually hurt their credit.

CNMoney recently received a flood of e-mails from readers complaining about the impact of trial modifications on their credit reports.

To be sure, many people who apply for the president’s plan are already delinquent in their mortgage payments, which wrecks their credit backgrounds. And obtaining a trial modification should affect borrowers’ scores because it shows they cannot meet their original obligation, experts said.

But being in a months-long trial period may only add to the pain.

Jason Axelrod learned that the hard way.

Axelrod, a municipal employee who lives outside Chicago, entered a trial mortgage modification program this spring.

He had not fallen behind in his mortgage, but he was finding it harder to make ends meet after his overtime was cut and his property taxes skyrocketed. Told it would not hurt his coveted 750 score, Axelrod secured a $565 reduction in his monthly payments.

Eight months later, Axelrod is still stuck in the trial modification, trying to satisfy his loan servicer’s endless requests for documents.

And to his horror, his credit score has plummeted to 644.

“It’s completely destroyed my credit,” said Axelrod. “If I had known it would affect my score, I would have never entered the program.”

Representatives at JPMorgan Chase (JPM, Fortune 500), which services Axelrod’s loan, are instructed to tell applicants that entering a modification could impact their credit histories, a bank spokeswoman said.

Despite his weakened credit score, there is at least some good news for Axelrod: After being contacted by CNNMoney.com, JPMorgan Chase said his permanent modification had been approved. Read the rest of this entry »

I can’t believe Christmas is only three days away! The kids are excited beyond belief as they keep asking, “Daddy, can we please just open ONE present that’s under the tree?”

Our children are 11 and 9. Christmas has always been the same for the last 10 years. Irene and I set a budget, then I take the kids shopping. They are allowed to pick out what they like, within their budget, and then it gets wrapped and put under the tree until Christmas eve. They are so excited, for they got what they wanted - but just can’t wait to open it! The two little “angels” will have to wait two more days. I guarantee I’ll probably see their horns and tails pop through at some point during this time! :)

Today and tomorrow I’m finishing off my Christmas cards to dear family members, friends and clients. Then on Thursday, the BIG day begins. It’s my Christmas present to my wife: I’m completely cleaning the downstairs!! (Trust me, if you saw the downstairs, you would be rejoicing like she is!) I will take before and after photos, because I want to be amazed myself. Merry Christmas Irene!

We are also having our first New Year’s eve party in almost 15 years — and it was actually Irene’s idea! I am the one who LOVES a party - and she enjoys the privacy. But, she wanted it and it looks like it will be a big sha-bang. We’re expecting upwards of 50 people. We’ll have delicious food, delicious beverages, singing, dancing and karaoke with five microphones and a complete sound system!

I’ve got so much on my plate, I better get going. In the mean time, I want to share an AMAZING singer/group I found on You Tube. http://www.youtube.com/user/PomplamooseMusic You really have to click through the different music videos, but one of my favorites is: http://www.youtube.com/user/PomplamooseMusic#p/u/5/oIr8-f2OWhs I downloaded all of their music for free a LOVE it! Let me know what you think. Merry Christmas! ~ Stephen Bennett

So it’s 8 am on Saturday morning, and I’m sitting in front of my computer watching and reading every forecast I could get my hands on to. The snow has already started to fall. We are preparing for a MAJOR snowstorm and expecting up to 18″ of snow!! Anyone who knows me KNOWS I am in my glory! I have several errands that need to be done before the roads get bad. These include getting to the pet store for Duppy’s “crunchies” (he only eats a certain kind and PETCO sells them); cleaning out my side of the garage so the SUV can fit into it (a nightmare, really); finishing the rest of our mailing; getting over to my great Aunt’s in Bridgeport to see her before she leaves for Canada in the morning (she ain’t going NOWHERE in THIS storm!) and a few other things… PHEW! Let’s not forget I need my morning coffee!

Last night, I had THE best time out with two of “my girls” — Sarah and Melody. We have been friends for 20+ years and we really haven’t seen each other in almost 15. Irene (my wife) was supposed to join us, but fell sick with a bad cough. She decided to stay home. I told her I would have stayed home as well, but she insisted I go — such a sweetie. I did, and boy did we have F-U-N!!

I met the ladies out at the Thai House in Orange (a favorite, frequent spot of theirs I hear) - and I never had Thai food before. I told them though I would go anywhere — it wasn’t about the food for me, it was about seeing them again.

We were all a bit “conservative” in the beginning as it seems some feelings were hurt many, many years ago, and bitterness was still being held. By the end of the night, everything was dealt with, and we were all laughing, joking around and being loud — just like old times. Melody was folding napkins and putting them on her head in all different shapes (yes, this is a 53 year old woman) and of course, I joined in the fun! We laughed so hard, by the time we looked at the clock it was 9:30 pm, and 3 hours had passed by — and we were still sitting at the table! Now, THAT’S what friends are like!

My company Christmas party is on Monday at a very fancy, schmancy restaurant that I’ve been to before, and I’m looking forward to it. It has been so much fun and memorable over these past few weeks. Irene, the kids and I decided we were going to make this the best Christmas ever, and do something every single day to enjoy the Christmas season. Well, we sure have.

I pray every one of you has a wonderful, blessed and memorable Christmas, celebrating the birth of our Lord and Savior, Jesus Christ, and you have a healthy, happy and PROSPEROUS 2010! Merry Christmas!! ~ Stephen Bennett

By Hibah Yousuf, staff reporter December 16, 2009: 9:24 AM ET

NEW YORK (CNNMoney.com) — Home building rebounded from a six-month low in November, with improvement in new home construction in all sections of the nation, according to a government report issued Wednesday.

Construction of new homes rose to an annual rate of 574,000 during the month, 8.9% above the revised October rate of 527,000. The rate was still 12.4% below the 655,000 rate during November 2008.

A consensus estimate of economists surveyed by Briefing.com expected 574,000 housing starts during the month.

New construction jumped the most in the Northeast, with a 16.4% rise from the previous month. Housing starts rose 12.3% in the South, 3% in the Midwest and 1.9% in the West.

The number of building permits issued during November rose to a seasonally adjusted annual rate of 584,000. That was 6% above the revised October rate of 551,000, and 7.3% below the November 2008 estimate of 630,000.

One reason for the October downturn was concern that an $8,000 homebuyer’s tax credit — part of the Obama administration’s economic stimulus — was going to expire on Dec. 1.

At the start of November, the credit was extended through the end of June and expanded to apply to more buyers. But David Crowe, chief economist at National Association of Homebuilders, said the bill hasn’t had a chance to impact the housing market.

“This is a recovery from the prior month,” said. “But we’re still seeing a tapering off toward the end of the year. During the middle of this year, we saw a nice buildup through the late summer as a result of the homebuyer’s tax credit.”

Housing starts peaked this year in July with an annual rate of 593,000.

“We’re in a bit of a lull, but the new (extended) credit will have an impact as we move into 2010 and consumers plan for that credit availability, and builders begin to answer expected demand in the spring,” he said.

Crowe added that the tight credit market has also made it difficult for builders to borrow money to start building projects.

“Builders are ready to begin restocking their inventories to prepare for the selling season, but they can’t get production credit from the banks,” Crowe said. “Banks are effectively making carte blanche decisions without recognizing projects that are in decent markets with viable futures.”

Crowe said he hopes President Obama’s recent pressure on Wall Street banks to help taxpayers who funded their bailouts will improve lending practices.

Preventing Frozen Pipes

When water freezes, it expands. That’s why a can of soda explodes if it’s put into a freezer to chill quickly and forgotten. When water freezes in a pipe, it expands the same way. If it expands enough, the pipe bursts, water escapes and serious damage results.

Why Pipes Burst

Surprisingly, ice forming in a pipe does not typically cause a break where the ice blockage occurs. It’s not the radial expansion of ice against the wall of the pipe that causes the break. Rather, following a complete ice blockage in a pipe, continued freezing and expansion inside the pipe causes water pressure to increase downstream — between the ice blockage and a closed faucet at the end. It’s this increase in water pressure that leads to pipe failure. Usually the pipe bursts where little or no ice has formed. Upstream from the ice blockage the water can always retreat back towards its source, so there is no pressure build-up to cause a break. Water has to freeze for ice blockages to occur. Pipes that are adequately protected along their entire length by placement within the building’s insulation, insulation on the pipe itself, or heating, are safe.

Regional Differences

Generally, houses in northern climates are built with the water pipes located on the inside of the building insulation, which protects the pipes from subfreezing weather. However, extremely cold weather and holes in the building that allow a flow of cold air to come into contact with pipes can lead to freezing and bursting.

Water pipes in houses in southern climates often are more vulnerable to winter cold spells. The pipes are more likely to be located in unprotected areas outside of the building insulation, and homeowners tend to be less aware of freezing problems, which may occur only once or twice a season.

Pipes in attics, crawl spaces and outside walls are all vulnerable to freezing, especially if there are cracks or openings that allow cold, outside air to flow across the pipes. Research at the University of Illinois has shown that “wind chill,” the cooling effect of air and wind that causes the human body to lose heat, can play a major role in accelerating ice blockage, and thus bursting, in water pipes.

Holes in an outside wall where television, cable or telephone lines enter can provide access for cold air to reach pipes. The size of pipes and their composition (e.g., copper or PVC) have some bearing on how fast ice forms, but they are relatively minor factors in pipe bursting compared with the absence of heat, pipe insulation and exposure to a flow of subfreezing air.

When is it Cold Enough to Freeze?

When should homeowners be alert to the danger of freezing pipes? That depends, but in southern states and other areas where freezing weather is the exception rather than the rule (and where houses often do not provide adequate built-in protection), the “temperature alert threshold” is 20°F.

This threshold is based upon research conducted by the Building Research Council at the University of Illinois. Field tests of residential water systems subjected to winter temperatures demonstrated that, for un-insulated pipes installed in an unconditioned attic, the onset of freezing occurred when the outside temperature fell to 20°F or below.

This finding was supported by a survey of 71 plumbers practicing in southern states, in which the consensus was that burst-pipe problems began to appear when temperatures fell into the teens. However, freezing incidents can occur when the temperature remains above 20° F. Pipes exposed to cold air (especially flowing air, as on a windy day) because of cracks in an outside wall or lack of insulation are vulnerable to freezing at temperatures above the threshold. However, the 20°F “temperature alert threshold” should address the majority of potential burst-pipe incidents in southern states.

Mitigating the Problem

Water freezes when heat in the water is transferred to subfreezing air. The best way to keep water in pipes from freezing is to slow or stop this transfer of heat.

Ideally, it is best not to expose water pipes to subfreezing temperatures, by placing them only in heated spaces and keeping them out of attics, crawl spaces and vulnerable outside walls. In new construction, proper placement can be designed into the building.

In existing houses, a plumber may be able to re route at-risk pipes to protected areas, although this may not be a practical solution. If the latter is the case, vulnerable pipes that are accessible should be fitted with insulation sleeves or wrapping (which slows the heat transfer), the more insulation the better. It is important not to leave gaps that expose the pipe to cold air. Hardware stores and home centers carry the necessary materials, usually in foam rubber or fiberglass sleeves. Better yet, plumbing supply stores and insulation dealers carry pipe sleeves that feature extra-thick insulation, as much as 1” or 2” thick. The added protection is worth the extra cost.

Cracks and holes in outside walls and foundations near water pipes should be sealed with caulking to keep cold wind away from the pipes. Kitchen and bathroom cabinets can keep warm inside air from reaching pipes under sinks and in adjacent outside walls. It’s a good idea to keep cabinet doors open during cold spells to let the warm air circulate around the pipes. Electric heating tapes and cables are available to run along pipes to keep the water from freezing. These must be used with extreme caution; follow the manufacturer’s instructions carefully to avoid the risk of fire, and check to make sure the product conforms to UL 2049. Tapes and cables with a built-in thermostat will turn heat on when needed. Tapes without a thermostat have to be plugged in each time heat is needed, and may be forgotten.

Letting the Water Run

Letting a faucet drip during extreme cold weather can prevent a pipe from bursting. It’s not that a small flow of water prevents freezing; this helps, but water can freeze even with a slow flow.

Rather, opening a faucet will provide relief from the excessive pressure that builds between the faucet and the ice blockage when freezing occurs. If there is no excessive water pressure, there is no burst pipe, even if the water inside the pipe freezes.

A dripping faucet wastes some water, so only pipes vulnerable to freezing (ones that run through an unheated or unprotected space) should be left with the water flowing. The drip can be very slight. Even the slowest drip at normal pressure will provide pressure relief when needed. Where both hot and cold lines serve a spigot, make sure each one contributes to the drip, since both are subjected to freezing. If the dripping stops, leave the faucet(s) open, since a pipe may have frozen and will still need pressure relief.

If You Suspect a Frozen Pipe

If you open a faucet and no water comes out, don’t take any chances. Call a plumber. If a water pipe bursts, turn off the water at the main shut-off valve (usually at the water meter or where the main line enters the house); leave the faucet(s) open until repairs are completed. Don’t try to thaw a frozen pipe with an open flame; as this will damage the pipe and may even start a building fire. You might be able to thaw a pipe with a hand-held hair dryer. Slowly apply heat, starting close to the faucet end of the pipe, with the faucet open. Work toward the coldest section. Don’t use electrical appliances while standing in water; you could get electrocuted.

Going on a Trip

When away from the house for an extended period during the winter, be careful how much you lower the heat. A lower temperature may save on the heating bill, but there could be a disaster if a cold spell strikes and pipes that normally would be safe, freeze and burst.

A solution is to drain the water system. This is the best safeguard. With no water in the pipes, there is no freezing. This remedy should be considered even when the homeowner is not leaving but is concerned about a serious overnight freeze.

To drain the system, shut off the main valve and turn on every water fixture (both hot and cold lines) until water stops running. It’s not necessary to leave the fixtures open, since the system is filled mostly with air at that point and not subject to freezing. When returning to the house, turn on the main valve and let each fixture run until the pipes are full again.

Source: Institute for Business and Home Safety. IBHS is a national nonprofit initiative of the insurance industry to reduce deaths, injuries, property damage, economic losses and human suffering caused by natural disasters.

What should I do if my pipes freeze?

If you turn on a faucet and get no water, your pipes may be frozen. If your pipes freeze, there are some procedures that you can follow to thaw them. The sooner the problem is recognized, the better chance that damage will be minimized.

Some techniques for thawing frozen pipes include:

  • If possible, expose a boxed-in area to the inside heat. An example includes opening some ceiling tiles if your home has a drop ceiling.
  • Use a heat gun. However, be extremely careful as the heat from the heat gun will ignite any wood or paper it contacts.
  • DO NOT use torches to thaw pipes!
  • Rubbing the pipes with warm, damp rags may slowly thaw the line.
  • If you do not have water for an extended period of time, special attention should be given to hot water heaters and boilers.

What should I do if a pipe breaks?

Shut off your water immediately, using your home’s shutoff valve.

Where are my shutoff valves?

There are actually two major shutoff valves in line with your service. The first valve, called a curb stop, is generally located near the property line and is normally housed by a cylinder with a cap on it called the curb box. The other major valve is located in the home next to the water meter. Other valves may be near plumbing appliances such as sinks and toilets.

Keeping your main valve in good working condition will assure you that you will be able to turn your water off in the event of an emergency, in case one of your water pipes breaks, for example. Older style gate valves should be turned periodically due to possible corrosion build-up. Newer Teflon coated ball valves should stay in working order without any regular turning.

What if my main valve does not work in an emergency?

You should call your local Public Works Department so that someone can shut off your water.

Source: City of Keene, New Hampshire

WASHINGTON — The Obama administration, battling a foreclosure crisis that shows no signs of relenting, will step up pressure on mortgage companies to do more to help people remain in their homes, officials said Saturday.

The administration will announce its expanded program on Monday, Treasury spokeswoman Meg Reilly said.

“We are taking additional steps to enhance servicer transparency and accountability,” Reilly said. She said the goal was to increase the rate that troubled home loans were converted into new loans with lower monthly payments.

Industry officials said the new effort would include increased pressure on mortgage companies to accelerate loan modifications by highlighting firms that are lagging in that area.

The Treasury is also expected to announce that it will wait until the loan modifications are permanent before paying cash incentives to mortgage companies that lower loan payments.

Under the $75 billion Treasury program, companies that agree to lower payments for troubled borrowers collect $1,000 initially from the government for each loan, followed by $1,000 annually for up to three years.

The government support, which is provided from the $700 billion financial bailout program, is aimed at providing cash incentives for mortgage providers to accept smaller mortgage payments rather than foreclosing on homes.

The program has come under heavy criticism for failing to do enough to attack a tidal wave of foreclosures. Analysts said the foreclosure crisis is likely to persist well into next year as high unemployment pushes more people out of their homes. To read the full AP article on FOXNEWS.COM, click here

Thanksgiving Memories

I have to say Thanksgiving is probably my favorite holiday of all. Growing up, my mother would always do her shopping for Thanksgiving on the Tuesday and Wednesday before. Wednesday night, starting actually about 4 pm or so, my mother would have her glass of wine on the counter and begin all of her preparations. Sometimes, Grandma Bennett or Grandma Martin would sleep over and help out as well. I loved both of my grandmothers.

Thanksgiving Day, my mother was up early wearing her housecoat and slippers, and the coffee was brewing by 6:30 am. As all the kids got up, we had our bowls of cereal and then went in to the family room to watch the Thanksgiving Parade on the big TV. I remember several snowy Thanksgivings - or at least bitter cold - and my father would have us “fill the log rack” as he started the fire in the fireplace.

Around 1 pm, my mother would call my father to cut the turkey - he was an expert at cutting meat (he used to work as a butcher in his early twenties) - and we were all ready to sit down for our meal. I have so many memories of the most wonderful Thanksgiving Days.

Now that I’m grown and married with children of my own, we continue the “Bennett Family Tradition” of having Thanksgiving at our home. We’ve done so for the last 15+ years. Like my mother used to do, Irene does her shopping on Tuesday and Wednesday, and begins cooking Wednesday, late afternoon. Everyone in the house chips in and does their fare share.

This year, I had a project that needed to be completed prior to our Thanksgiving at the Bennett home: our new kitchen floor. The project took me almost four days, however, the last tile was laid shortly after 11 am on Thanksgiving Day. Guests began to arrive two hours later. (I’ll see if I can post a picture or two of the new floor. Check back please.)

Yesterday was everything that Thanksgiving always was to me — and more. I am so grateful for my beautiful and loving wife, my two precious children, my mother-in-law (yes!) and our little dog Duppy. Though it’s not always easy — life is very good.