Buying homes for sale requires research, planning and financial management, so if you are planning to buy a home, this free downloadable PDF document from the Office of Idaho Attorney General Lawrence Wasden is a very helpful PDF that you need to read.

This free document was prepared by Attorney General Wasden for residents and prospective home buyers in Idaho, but a large portion of information in this document apply also to residents and home buyers in other states. So even if you do not live in Idaho, you can download this document, which has just been released this October, and benefit from it.

According to the PDF, before buying a home, you need to examine your credit scores, financial readiness and your loan pre-qualification.

Most lenders use the FICO credit score to evaluate your credit-worthiness. FICO refers to credit rating agency Fair Isaac Corporation. If your FICO credit score is higher than 700, you are considered financially healthy by lenders, but if your credit score is below 600, you are considered a high risk.

Attorney General Wasden advises buyers to delay their plan of buying homes for sale if their credit score is poor because lenders assign higher mortgage rates to high-risk debtors. Besides, banks no longer offer subprime or nontraditional loans.

To calculate if you can afford to buy a house, use mortgage calculators available at fhaoutreach.gov. You should not consider future salary increases because they may never come and you should have 20 percent of the home price ready for down payment. Additionally, you should not be allotting over 30 percent of your monthly income for your monthly home loan payment.

Remember also that closing on a home is very costly. Depending on your agreement with the seller, you may be required to pay various fees that include fees for loan application, appraisal, home inspection, credit report, document processing, prepaid interest, private mortgage insurance, insurance escrow, title closing, title insurance, recording, taxes, flood certification and home association. You can get more information about closing costs at federalreserve.gov.

Under the Real Estate Settlement Procedures Act, when you are buying a house, you are entitled to receive written disclosures from your lender or broker before and during closing and as you pay your mortgage loan through the years. These disclosures will inform you about closing costs, escrow accounts and other activities related to your loan account so you can guard yourself against people victimizing people buying homes for sale.

According to Robert Miller, deputy supervisor for Redford, around 2,000 homes will be foreclosed this year in the area. Just like other places in Michigan, Redford has been following the foreclosure trend in the state.

In the July to September quarter, more than 37,000 residential properties throughout the state were hit with foreclosure postings, with almost 15,000 already in the foreclosure books of lenders. With the continued increase in foreclosures in the state, Michigan was ranked eighth in the third quarter based on foreclosure rates.

To help contain foreclosure properties in Redford, Thomas Krause, head and founder of the Redford business association, and other members committed to help distressed families avoid foreclosures. They planned to work with Bruce Kaufman, a mortgage restructuring specialist who owns HHAF Systems LLC and who has been negotiating loan modification successfully with lenders.

Early this year, Redford officials tried to launch a foreclosure prevention program that involved HHAF Systems, but the program fell through. The program would have prevented distressed properties from getting into real estate foreclosure listings with only around $500 in fees per mortgage modification and with the fees getting paid by state or federal agencies.

Even if the initial effort to work with Kaufman collapsed, the township has been supporting the plans of RTBA and encouraging business leaders and other associations to help families in Redford save their homes from foreclosure.

To help start the modifications, the association will be conducting fund raising efforts. In November, RTBA will hold a fundraising event at the Timber Wolf Tavern.

Bill Kanbilian, founder of Little Bill?s Trophies, explained that RTBA decided to help solve the problem of foreclosure homes not only to help families, but also to help themselves. Business people know that if communities are overloaded with foreclosed properties and families abandon communities, they will be left with no customers to serve.

Additionally, values of properties will deteriorate, including the values of their office spaces and their business spaces.

Kaufman of HHAF said that he has reduced his mortgage modification fee to only $150, a sharp drop from the usual $500 charged by loan modification firms in the area.

Both Kaufman and Krause reiterated that launching the program to contain real estate foreclosure listings in Redford requires determination to face challenges, but they need to do it to save their township from deterioration.

According to bank analysts, the bank was crushed by its option adjustable rate mortgage loans, which comprised nearly one-third of its single family home loan portfolio.

In addition, the bank had provided $1.2 billion in loans to homebuilders primarily in California, where many homes turned into foreclosed houses for sale when borrowers failed to pay their home loans.

In the second quarter, Guaranty declared a loss of $174 million, according to a report from the Office of Thrift Supervision. The bank tried but failed to raise additional capital.

Shares of the bank have declined by over 95 percent since 2008. Among prominent stockholders are hotel businessman Robert Rowling and corporate investor Carl Icahn.

Guaranty would be the fourth Texas bank to fail after the collapse of the housing market. It would also be the second largest bank failure in Texas, based on FDIC reports. The largest in the state was the bank failure of $17.1-billion First Republic Bank of Dallas in July 1988.

According to some reports, Spain-based Banco Bilbao Vizcaya won the right to acquire the bank in a bidding.
Other banks reported to have filed their bids to buy Guaranty were the newly-chartered bank of Gerald Ford and his private equity partners, JPMorgan Chase and Toronto Dominion.

According to several analysts, Guaranty Bank’s failure is significant, but it is not as staggering as the failure of banks in the 1980s when the energy-industry-driven construction boom collapsed.

During the years from 1980 to 1994, 599 banks in Texas collapsed. In 1989, a total of 223 thrifts and other banks closed, equivalent to four bank failures every week.

Dick Evans, head of Cullen/Frost Bankers, said Texas now has fewer housing-related problems than other states because its housing sector, having learned from the crisis in the 1980s, did not allow home prices to shoot up. Cullen/Frost Bankers acquired some of the failed banks in the 1980s.

According to the Federal Housing Finance Agency, home prices across Texas declined by only 0.6 percent compared to 2008. Evans, however, said that while banks in Texas are holding up much better than those in other states battered by foreclosures, banks across the state expect slower growth.

The 24-story oceanfront hotel condominium, with 298 fully-furnished units, stands without a single tenant inside. The property is one of the 34 projects in South Florida financed by Chicago, Illinois-based lender Corus Bankshares Inc.

According to industry experts, deposits had been made on 70 percent of the condominium?s units. But the collapse of the real estate market caused some buyers to turn their backs on the deals or filed lawsuits on the property that is yet to open.

The condominium is part of the troubled loan portfolio of Corus Bank. As of May 31, Corus Bank?s troubled loan portfolio includes 14 outstanding loans on condominiums located in South Florida. Out of the 14 troubled loans, 12 were in default for more than 3 months already and in danger of becoming foreclosed condos.

The delinquent construction loans in South Florida, with a combined amount of $1 billion, form almost 50 percent of Corus? $2 billion bad mortgages across the country. Last month, Corus warned that these bad loans may lead to its eventual failure.

Corus is already behind the June 18 deadline that regulators imposed for it to raise about $390 million for capital. Industry experts said that it would not come as a surprise if the Federal Deposit Insurance Corp. (FDIC) would seize control of the bank as soon as it finds a buyer.

According to industry analysts, one of the challenges facing the FDIC is that Corus? operation is similar to a real estate investment firm instead of a traditional bank. Corus, which has a total asset of $7.07, operates only 14 branches in Chicago.

Bank United Chief Executive Officer John Kanas said that the FDIC will have difficulty finding a buyer for Corus, adding that the bank has no franchise value because of the limited branch network. Additionally, majority of the bank?s 170,000 deposit accounts, totaling $7.1 billion, have one of the highest interest rates in the country.

Industry experts said that if companies would buy Corus? deposits and real estate assets, they would continue to pay the above-average rates.

But several private-equity companies and real estate firms, including Related Group of Coral Gables, have expressed interest to buy Corus assets. The bank has foreclosed properties amounting to $499 million on its portfolio and potential troubled loans totaling to $1.3 billion.

It reported $768 million in net income, which arose from the decrease in reserves for future loan losses, accounting adjustments, lower funding costs and gains from the increase in long-term interest rates.

The report also stated that it was not asking for more financial assistance from the Treasury. Since November last year, Freddie Mac has received $50.7 billion from the federal government to be able to function. Over the previous 7 quarters, it has already posted $63.7 billion in total losses.

It has also been dependent on a preferred stock purchase contract worth $200 billion with the Treasury Department to be able to operate.

Freddie Mac interim CEO John Koskinen said the aid from the Treasury has been keeping Freddie Mac solvent and preventing it from being run by a receiver under federal regulations.

In contrast, Fannie Mae posted a loss of $14.8 billion in the second quarter, bringing its total losses over two years to $101.6 billion. It also made a request of $10.7 billion more in financial aid from the Treasury, bringing its total withdrawal from the Treasury since April to $44.9 billion.

Since December 2007, the quality of mortgage bonds and loans owned or guaranteed by Freddie Mac has deteriorated as more of its mortgages entered foreclosure. According to a nationide survey of foreclosures, more than 1.5 million residential properties received default or foreclosure notices in the first 6 months of the year, a 15-increase from filings in the first 6 months of 2008.

Freddie Mac also stated that its net worth in the second quarter was $8.2 billion, a substantial improvement from the negative $6 billion net worth in the first quarter. It posted $5.2 billion as provision for future loan losses and expenses, a decrease from the $9.1 billion provision in the first quarter.

In the second quarter of 2008, Freddie Mac posted a loss of $821 million.

Freddie Mac and Fannie Mae were created by the federal government primarily to make home loans affordable to homebuyers. They buy home loans from lenders and also sell and guarantee mortgage-backed securities.

Since April, they have been integral in the implementation of the Obama administration?s Making Home Affordable Program. Freddie Mac and Fannie Mae said they expect to suffer losses as they refinance or modify the home loans of up to 9 million distressed homeowners.

But positive signs have been occurring only in the low-cost and middle-priced sectors of the housing market. While inventories of lower-priced homes were being cut down, inventories of luxury homes have not been moving.

Real estate analysts in San Diego and Las Vegas said one of the major reasons for the slow movement of higher-priced homes is the refusal of sellers to cut down their selling prices. Realtors have warned sellers that agents are not going to accept their listings if they do not reduce their prices significantly because listing their unsalable high-end homes would add costs to their operations.

Pat Lashinsky, head of a real estate brokerage in California, said it is now taking up to 40 months to sell a luxury home.

According to data from the National Association of Realtors, the current inventory of houses priced higher than $750,000 will take nearly 17 months to sell, an increase from the 14.5 months needed last year. The pace is also almost double the 9.4 months worth of supply of all types of homes for sale.

The slow movement of high-end inventory has been pushing down prices in the higher-end of the market, according to real estate sellers. In Greenwich, Connecticut, the median sales price for high-end homes has gone down to $1.5 million, a substantial drop of 24 percent from the sales price as high-end sales in the area decreased by more than 50 percent.

Based on surveys, the three major reasons for the small number of buyers in the high-end sector are the lack of loans readily available for homes priced over $417,000, the ineligibility of buyers earning over $75,000 for the federal tax credit incentive for first time home buyers and the rising preference of Americans for smaller homes.

Housing analysts explained that while the federal tax credit significantly helped in cutting down inventories of lower-priced homes, there is no comparable program helping cut down inventories of higher-priced homes.

A NAR survey also found that 73 percent of homeowners in May moved down instead of moving up because of lack of credit. Demand for luxury homes has especially declined in Miami, Las Vegas and San Diego where there is an oversupply of homes priced above $1 million.

According to JPMorgan Chase analysts, the higher end of the residential market will recover much later than the other price segments of the housing market.

Now, the administration is starting formal talks to shape the future of the two GSEs. A meeting of the White House National Economic Council this week will tackle the issue.

Lawrence Summers, director of the council, had long planned to revamp Fannie and Freddie. When he was head of the Treasury in 1999, he warned Congress that Fannie Mae and Freddie Mac have grown so big that if they would collapse, the national economy could collapse with them.

One of the overhaul proposals being seriously considered is the plan to transfer all bad debts owned by the two GSEs to newly created government financial entities that would collect the unpaid loans.

Without bad debts, the two companies would be able to start with new and stronger structures that will support the residential mortgage market.

Fannie Mae was founded in 1938 to respond to problems in the housing sector during the Great Depression. In 1968, it was chartered by Congress as a GSE to buy and securitize mortgages to ensure that home loans are always available to home buyers.

Two years after, in 1970, Freddie Mac was founded to expand the secondary market for mortgage loans and to further increase the amount of money available for lending to potential home buyers.

When the housing market collapsed, the two GSEs had to be saved by the federal government to prevent a financial collapse that would down the national economy, as Summers had predicted in 1999. Since their bailout last September, the federal government has infused a total of $85 billion in funding into the two GSEs to keep them alive as they help stabilize the mortgage market.

Treasury Secretary Timothy Geithner said that the federal government has so far been successful in stabilizing the companies, but still has to study what their final function and structure would be.

Fannie Mae and Freddie Mac have run for years as hybrid entities, created by the government to support the housing market but owned by private-sector shareholders. Since their federal bailout last year, the two GSEs have been majority-owned by the federal government.

Currently, as their future roles are being shaped, the two GSEs are helping the government carry out the Making Home Affordable Program.

The mansions, which are located along Boston State Road in Hamburg, will be auctioned off separately on September 1 at the foreclosure alcove of the Erie County Courthouse.

Michael Wilson, a young Cleveland-based hedge fund manager and financier who manages New Frontier Trust, purchased the two mansions last October through a firm named Phantom One Holdings LLC. He paid $3.3 million for 6553 Boston State Road and $3 million for 6523 Boston State Road.

Real estate professionals who came to know of the purchases were stunned because the prices were the highest price levels ever paid for mansions in the Western New York area.

To pay for the mansions, Wilson and his firm Phantom One Holdings LLC gave Russo $2 million in cash and then signed to pay $4.3 million over a period of time to cover the balance.

Russo provided two home loans to Wilson, one for $1.8 million and the other for $2 million. Wilson was scheduled to pay $1 million on May 1 and make the other payments every 6 months.

But Wilson failed to make his first payment, so Russo and his firm Greenacres filed a foreclosure case last June 16 to get back the mansions.

There are also mechanics liens against the two mansions from Nest Interiors Commercial Residential LLC which provided interior design services for both houses. The filings indicated unpaid costs of materials and labor costs.

In one of the mansions, Nest Interiors Commercial provided materials and labor that cost $206,805.42. Work included furniture planning and buying, lighting selection, home theater design and installation, indoor pool slide design, pool bar design, pool grotto design and installation and project management.

In the other mansion, Nest Interiors provided services that cost $42,350.39. Work included planning and selection of furniture, design of a racquetball and squash court, the design of a loft, selection of materials and products for the entire mansion, design of a training room and a gym and project management.

Both interior design projects were completed on March 20, but Wilson was able to pay only $125,748.69 for the first job and $28,579.79 for the second job, making him indebted for more than $81,000 and $13,000 respectively.

The nonprofit organization will use the money to provide roof to struggling families. According to industry experts, more and more families are becoming homeless due to the worsening economic recession and foreclosure crisis.

Community Storehouse is one of the nonprofit organizations in North Texas that has been approved to identify individuals and families who will be eligible for assistance, including rent and utility payments.

Community Storehouse executive director Barbara Board said that problems such as utility bills, health emergencies and layoffs are a great burden to both middle class and working families.

The federal stimulus money that the nonprofit organization will receive is part of the Texas Department of Housing and Community Affairs funding assistance for North Texas under its Homelessness Prevention and Rapid Re-Housing Program. The funds will be made available in September.

Other recipients of the federal funds intended to be used to help struggling families, including those who lost their homes to foreclosures, to have a place to live in are Catholic Charities Diocese of Fort Worth and the Christian Community Action in Denton County.

Housing and Community Affairs community services section manager Stuart Campbell said that the state of Texas stands to receive a total of $41 million for its program. He added that several cities in Texas also received over $60 million that they will use to fight homelessness.

Families who qualify for the program will receive rent and utilities payment assistance for 90 days up to 18 months.

According to Campbell, recipients of the program will be linked with various social services and government agencies for case counseling assistance. It is a requirement that program beneficiaries should re-certify every three months.

To become eligible, families should have an income of not more than 50 percent of the area?s median income. The median income in Tarrant County is $66,000 so for a family to quality for the program, they must have an income of $33,000.

The Community Storehouse provides assistance to families living in the Northwest and Keller school districts that include neighborhoods with a high number of foreclosure properties. Foreclosure filings were made on 1,135 properties from January up to date.

According to financial advisers, home foreclosures are now affecting people from all walks of life. However, they noted that a great number of troubled borrowers are people who lost their jobs and as a result, also lost their capacity to pay their mortgage.

Albert Kyle, finance professor at the Robert H. Smith School of Business at the University of Maryland, said that many of these troubled homeowners would be able to make ends meet for some time, but they cannot do it forever. He added that homeowners who do not want to lose their homes to foreclosures may have used their life savings and credit cards to keep things floating.

Robert H. Campbell and Associates auction operations director Bob Campbell said that homeowners who do not violate the rules are the ones being hit by the foreclosure crisis now.

According to the County Circuit Court records, Anne Arundel County had 325 foreclosure properties as of July 19, representing a 19 percent increase from the 273 the previous month and twice as much as the 160 in 2007.

And many foreclosed houses are found in Annapolis, Brooklyn Park, Glen Burnie and Pasadena. Campbell said that many foreclosed homes are auctioned back to lenders rather than to people who may consider making them their primary residences.

Circuit Court Clerk Robert P. Duckworth said that the number of foreclose houses in the county could reach by as much as 3,000 by the end of 2009, compared with last year’s 1,692 and 1,921 foreclosures in 2007.

According to Duckworth the county’s economy is slowly bleeding, adding that the June unemployment rate was 6.9 percent, representing nearly 19,000 jobless people.

Industry experts are expecting that the number of foreclosure houses will start climbing in the middle of 2010. They said that the first onslaught of foreclosures due to the subprime mortgage collapse is peaking now, adding that the next tide will reach its peak in 2011.

The rise in the number of filings for foreclosures in Maryland occurred despite Governor Martin O’Malley’s efforts to prevent the spread of the crisis, such as extending the foreclosure process to 150 days and the Bridge to HOPE mortgage program.