Sunday, September 26, 2010

Featured Article - August 2010: How Wall Street Reform Benefits Foreclosure Buyers

By Peter G. Miller

With the passage of Wall Street reform now a done deal in Washington there are probably few people who did better than real estate investors. Stricter mortgage standards plus less federal emphasis on homeownership means there will be a new and growing demand for rental housing.

'In previous eras, we haven't seen people question whether homeownership was the right decision. It was just assumed that's where you want to go,' Raphael Bostic, a senior official with the Department of Housing and Urban Development, told the Washington Post. 'You're not going to hear us say that. What we've seen in the last four years, is that there really is an underside to homeownership.'

The change in government policies impacts the demand for investment real estate because a growing population combined with a smaller percentage of owner-occupants means more demand for rental property.

The Wall Street reform legislation homogenizes the mortgage marketplace and assures that there will be no shortage of conventional, VA and FHA loans. Lenders are entirely free to offer more exotic financial products, but only if they're willing to set aside reserves, eliminate prepayment penalties and face potent lawsuits from borrowers and mortgage investors enabled by the new standards.

For buyers and investors with proper paperwork and visible finances the new loan requirements will be a low hurdle, however, for many borrowers mortgage applications will suddenly become more difficult. Application reviews will stiffen and lender standards will rise, meaning that many loan applications will be declined. We're already seeing this with the new devotion to higher credit scores.

The tougher financing standards will create two results. First, there will simply be fewer buyers than might otherwise be the case. Second, there will be fewer buyers who can 'stretch' and afford a bigger mortgage for a given income. In the end these two factors will create less pressure to push up home prices.

Rentals & Foreclosures:
Since the end of World War II, we have had a steady need for additional rental units to accommodate a growing population. In 1950 we had a population of 153 million, a figure that will soon top 310 million. Now we have massive numbers of foreclosures adding to demand.

'For 2010, the midyear numbers put us on pace to exceed three million properties with foreclosure filings by the end of the year, and more than one million bank repossessions,' said James J. Saccacio, chief executive officer of RealtyTrac. 'The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continue to sit just below the surface, threatening the fragile stability of the housing market.'

Marketplace Changes:
Although there's plenty of property demand, that demand is not actionable. Individuals who might once have bought are effectively being shut out of the marketplace by such issues as tougher loan standards, unemployment, reduced wages, credit reports with major black marks and changing federal policies. And while such individuals may not have the financial muscle to buy a home, they often have sufficient income to afford a good rental.
Time & Place:
So is this the time to buy investment real estate, especially short sales and foreclosures? In many markets there's a fusion of discounted acquisition costs, historically-low interest levels, falling vacancy rates and rising rental rates. This doesn't mean specific real estate investments are attractive everywhere or for all buyers, but in areas where such trends exist and seem likely to continue this may well be an unusually good time to consider short sales and foreclosures, two ways to acquire discounted real estate.

Start searching for your next home today with RealtyTrac and save money. Join now!

Banks Delay Foreclosures and Pray Property Values Increase

Banks Delay Foreclosures and Pray Property Values Increase


Tuesday, September 14, 2010

How Does Satellite Radio Work?

Satellite radio is one of the largest innovations in broadcasting since the introduction of FM. A satellite radio signal can be broadcast for more than 35,000 kilometers or 22,000 miles with a clear and high quality sound.

The idea behind satellite radio first appeared in 1992 when the Federal Communications Commission granted a spectrum of the S band (the 2.3 GHz frequency) for Digital Audio Radio Service. This license to broadcast in that band was allocated to Sirius Satellite Radio and XM Satellite Radio in 1997. Today there are three companies that provide satellite radio in the world: Sirius and XM in Northern America and WorldSpace in Asia, Europe and Africa.

Each of these companies offers a different broadcasting system since the radio signal of each is proprietary. This means you will need to purchase different hardware depending on your subscription to one of these companies. However, there are three components common to all satellite radio services: the satellites, the ground repeaters, and the radio receivers. Different satellite radio companies broadcast the radio signal in different ways. For instance, XM satellite radio uses geostationary satellites which have orbits synchronized with the movement of Earth. These satellites are located above the equator.

In order to allow subscribers to receive crystal-clear signal despite obstacles such as buildings, hills or bridges, XM satellite radio service has installed a network of repeater antennas that receive the radio signal from the satellites and retransmit the signal to the subscriber’s receiver. Sirius, on the other hand, uses satellites that have unique elliptical orbits around Earth. These orbits allow satellites to get higher in the sky than geostationary satellites and this prevents loss of signal. This is why Sirius has fewer terrestrial repeaters than XM.

Satellite radio services have digital broadcast centers where a huge amount of music in digital format as well as CD format is stored. Radio programmers have the task of selecting which song has to be played at which time. There are also a lot of studios managed by digital radio companies where artists perform live. All songs and material are transmitted to the satellites in digital format so that the signal contains very high quality sound. The signal is encoded by the satellite and then retransmitted to the repeaters antennas which then transmit the signal to the radio receiver which in turn decodes it and plays the sound. The entire process is very quick and reliable.

In addition, satellite radio would not be possible without digital compression. Digital compression is a technique that uses sophisticated algorithms to compress as much material as possible on the available bandwidth. Once you subscribe to a satellite radio provider you will need the appropriate radio equipment. Traditional radios cannot decode the signal received from satellites so you will need the special equipment.

The popularity of satellite radio has exploded due to much technological advancement that enabled manufacturers to offer the receivers at very attractive prices. The fact that satellite radio is commercial free for many of its channels is also a major selling point.

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