I recently noticed that my monthly mortgage payment had increased by a modest amount. I received a notice that they were adding about $15 a month as a “reserve requirement” for my escrow fund. As you are aware if you’re a home owner, the bank collects extra money from you each month for an escrow fund, which it then uses to pay your real estate taxes. A nice service, because you then don’t have to come up with many hundreds of dollars every six months to pay your taxes.

However, as I found in a recent post in a financial planning newsletter (http://www.ricedelman.com/cs/education/qa_questionable_reserve_requirement), this extra reserve isn’t a requirement at all! They’re simply holding onto your money, in case there’s an “unexpected” expense. That’s nice for them, because they can then pocket the interest on your deposit. A quick phone call, and they offered to remove the extra $15 “requirement”–I didn’t even have to argue with them! They even told me they had an extra $150 in my escrow account, and would I like that returned to me? Well, duh!

So the next time you see an unexpected charge, pay attention. Even if they say it’s required. Ask questions. And if you’re tired of dealing with the big banks, you have options: check out http://moveyourmoney.info.

From  Associated Press: Apartment rents stable across U.S.

In the San Francisco Bay area, with one of the highest housing prices in the country, average rents for the third quarter were $1,637, or 1.2 percent higher than the $1,618 they cost per month in the second quarter.

In the Riverside-San Bernardino area of southern California, which has one of the highest foreclosure rates in the country, rents were $1,157 in the third quarter, slightly down from $1,162 in the second.

We’ve helped many clients buy real estate in the Washington, DC, area with in-law suites or English basements. They then apply the rent they make from that apartment to offsetting part of their mortgage payment.

Municipalities have different regulations regarding rental units though. But if you decide to take this investment-minded approach to buying a home, Brandon Green Companies is happy to provide you with guidance.

(Via The Housing Chronicles)

Credit for this blog is given to GCAAR.  www.gcaar.com

Fannie Mae will no longer require borrowers to put up an extra 5% down payment when purchasing homes in areas deemed “declining markets.” Fannie Mae had been hearing concerns from REALTORS® and others for months that the policy was bad for housing because it discouraged consumers from buying in markets hardest-hit by foreclosures. NAR met several times this spring with Fannie Mae officials and sent letters reflecting members’ unease with the policy. Under the policy change, borrowers can get loans up to 95% loan-to-value, even in markets in which prices have been falling. Prior to the change, borrowers could only get loans up to 90% to give lenders a 5-percentage-point cushion to protect against possible price declines in the future.

The new policy takes effect June 1, and Freddie Mac has said it will also scrap this policy