VA Loan / Veteran Mortgage News

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MAY 2006

Important VA Announcement:
Data About Millions of U.S. Veterans Stolen

The Department of Veterans Affairs (VA) has recently learned that an employee, a data analyst, took home electronic data from the VA, which he was not authorized to do. This behavior was in violation of our policies. This data contained identifying information including names, social security numbers, and dates of birth for up to 26.5 million veterans and some spouses, as well as some disability ratings. Importantly, the affected data did not include any of VA's electronic health records nor any financial information. The employee's home was burglarized and this data was stolen. The employee has been placed on administrative leave pending the outcome of an investigation.

Appropriate law enforcement agencies, including the FBI and the VA Inspector General's office, have launched full-scale investigations into this matter. Authorities believe it is unlikely the perpetrators targeted the items because of any knowledge of the data contents. It is possible that they remain unaware of the information which they posses or of how to make use of it. However, out of an abundance of caution, the VA is taking all possible steps to protect and inform our veterans.

The VA is working with members of Congress, the news media, veterans service organizations, and other government agencies to help ensure that those veterans and their families are aware of the situation and of the steps they may take to protect themselves from misuse of their personal information. The VA will send out individual notification letters to veterans to every extent possible. Veterans can also go to www.firstgov.gov as well as www.va.gov/opa to get more information on this matter. The firstgov web site is being set to handle increased web traffic.

Additionally, working with other government agencies, the VA has set up a manned call center that veterans may call to get information about this situation and learn more about consumer identity protections. That toll-free number is 1-800-FED INFO (333-4636). The call center will be open beginning today, and will operate from 8 am to 9 pm (EDT), Monday-Saturday as long as it is needed. The call center will be able to handle up to 20,000 calls per hour (260,000 calls per day).

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Strong Growth Helps Home Sales

America's economy advanced at a rapid 4.8 percent growth pace in the first three months of 2006. Most economists predict expansion will remain healthy for the rest of this year. Companies are adding workers, and an expected two million new jobs will go a long way towards helping households in 2006. Real estate sales will remain strong in this environment, although down a bit from recent record levels.

The Federal Reserve is expected to end its string of rate increases this year, as the real estate markets and economy as a whole slow to a sustainable pace. Yet home sales in many neighborhoods are thriving today, as some markets that saw small price increases in recent years now are starting to heat up.

Buyers are finding great value with fixed-rate mortgages and adjustables whose rates won't change for up to a decade. In 2006 rates on these loans have moved up much slower than rates on short-term adjustable mortgages have. Call us if you're thinking about purchasing a house now. There's no need to put off your plans to upgrade your lifestyle this year.

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Prepare for the Future

Some economic commentators are concerned that homeowners could find rising interest rates make it difficult to pay their mortgage in the future. But a recent study shows these problems won't occur for most borrowers. However, it is important to understand your home loan thoroughly. Owners with adjustable-rate mortgages should know when their payments will adjust, and how high they could go.

Borrowers who aren't currently paying off any principal also need to know when their mortgage will "reset," and they'll be required to make higher payments to reduce their loan balance. Interest-only and other payment options let borrowers pay less initially. Yet it's crucial to realize these are temporary discounts. Consumers should use such loans when they know their incomes will go up, or their expenses will drop in the future.

Matching a loan to your needs is possible only after reviewing your financial situation, and going over your loan options. Experts say three groups of borrowers are most likely to encounter problems handling their mortgage payments because of higher rates:

1. Borrowers whose loans provide very low initial interest rates could experience a big payment shock when their mortgage adjusts to reflect current rates. Some owners will find their payments more than doubling at that point.
   
   
2. Homeowners who already have a higher-rate mortgage because of previous credit problems may find their finances further squeezed as those rates adjust upwards. Check your credit score to see if it's possible to obtain a loan on better terms today.
   
   
3. Speculators who bought rental properties in hopes of selling them for a quick profit, but can't get the price they want. Investment real estate quickly becomes a financial drag if your incoming rent and tax benefits don't cover mortgage payments.
   
   

Fortunately, many owners who are at risk due to rising payments can refinance now into a home loan that better suits their long-term needs. Many homeowners can refinance without paying anything out of pocket, as well. Contact us soon for a no-obligation review of your current home loan. We'll explain how your payments could change in the future. We'll then find a financing solution that will be affordable now, and in years to come.

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Get Ready to Sell!

Home sales have dipped from their record-setting pace of the last five years. Although sales remain healthy, it's important now to make sure your property stands out from other residences on the market. Pricing your house right is the first step. Go over the recent sales prices of homes similar to yours before setting your price.

Also consider the asking prices of competing properties currently on the market. If you're looking for a timely sale, it helps to be priced attractively by comparison. Next, make sure your house looks great. You want potential buyers to get excited the moment they drive up to your home.

You can find many easy ways to spruce up your property. Start by thoroughly cleaning your carpets and windows, as well as your bathrooms and kitchen. Also make minor repairs at this time. Your plumbing should work well, and doors should open and close easily. Don't neglect the outside of your home. Prune back overgrown shrubbery and plant some flowers to make its appearance more inviting.

Make your rooms and closets seem larger by storing some clothes and furniture. Now may be a good time to have a yard sale or give away things you don't need. Consider enlivening a room or making your exterior look years younger by applying a fresh coat of paint. Also remember to open drapes and blinds to let in sunlight when prospects are viewing your home. Having a faulty furnace or leaky roof will encourage potential buyers to make an offer on a home that's ready to move into. If your house has a major problem that needs to be fixed before selling, we can help you obtain the funds to make those repairs.

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Secure Your Estate Families want to be certain their real estate assets pass to heirs as they envision that happening. Real properties make up the largest portion of most American's net worth, so it's crucial to get everything right. Yet even if you know what your wishes are, your estate-related documents may not accomplish those goals. Mistakes can occur when a couple holds title as "joint tenants."

That's the most common method for married couples who own real estate, since it insures that no legal proceedings are needed when one spouse passes away. At that point the surviving spouse owns the entire property. So even if the couple's will states that the house goes to their children from previous marriages, joint tenancy makes the surviving spouse the sole owner. His or her will then decides who will eventually receive the property.

Proper estate planning requires two steps: Deciding what your wishes are, and then making sure they are clearly spelled out in a way that's legally binding. Once you've determined what you want to accomplish with your estate it's crucial to work with a qualified estate attorney to insure your goals will be accomplished.

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