Foreclosure Property

Investing in Pre-foreclosures and Foreclosed Property THE SOURCE FOR INFORMATION ON FORECLOSURE OUR MOST POPULAR PAGES Bank Foreclosures - REO Pre-Foreclosure Homes Foreclosure Help Foreclosures Discussion Real Estate Investing Sites FORECLOSURE ARTICLES Ready to Invest? Foreclosure Investing 101 Foreclosure Investing 111 Buying at Trustee's Sale Finding Foreclosures Determining Property Value Real Estate Foreclosures FORECLOSURE RESOURCES CA Foreclosure Time-Line Investment Tools Sources for Comps CA County Resources Real Estate Definitions INFORMATION & LINKS Foreclosure Industry Links Avoiding Foreclosure Scams Equity Buyout Scams Trustees and Posting Co.'s "How To" Information Curb Appeal Importance HOME MAIL Investing in Pre-foreclosures and Foreclosed Property Would you buy a house for $150,000 if you could buy the house next door in the same condition for $100,000? If you are a smart investor, I'm going to bet you wouldn't. If you are just beginning as an investor and need information, how are you going to get it and how much are you going to pay? THE SAME CONCEPT APPLIES! You can easily get a basic understanding of the stages of foreclosure, how to purchase property at each stage of the process and ways to obtain financing for your purchase for free or at a very nominal cost. Libraries, bookstores and many websites all offer free or low cost information. Obtain the basic information, read it once, then continue reading it until you KNOW all the material. Your success is not going to be handed to you, you have to become an authority on the investment approach you choose. The confidence and knowledge you will obtain are essential keys to success. No seminar or course costing hundreds or thousands of dollars will put the confidence and knowledge in your mind, YOU have to make the decision and effort to get it there. THERE ARE NO SHORTCUTS! Seminars Books and Courses Cash Investors Personal Counselors Recommendations Avoiding Scams Seminars An easy way to spend a lot of money. The personal motivation inspired by the speaker will always last long enough to provide you time to buy the books or courses. If you are truly motivated to become an investor, you don't need a seminar. On a positive note, if you are an active investor and have already bought a course to increase your knowledge, a seminar is one way to allow the author or presenter to expand on their printed material. TOP Books and Courses Available at Libraries, Bookstores and Websites. Balance the cost against the information presented. You can't really argue the benefits of a twenty dollar book against a seventy dollar book, both undoubtedly have good points and bad points. Try to find the most appropriate information for your situation at a reasonable price. Courses costing hundreds of dollars or more should not be purchased by a new investor. When you have the basics down solid and want additional information or specialized information, then consider additional courses. Remember, your success will not be determined by the size of your library, but by your motivation and knowledge. TOP Cash Investors Take our course, we'll back you up financially! Great sales pitch and I'm sure it would happen if the property could be purchased cheap enough, but anyone can find a cash investor. The hardest part is finding the property. You don't know any cash investors? Look in your local Yellow Pages under Real Estate Loans. Look for ads that say "All Credit" or "Any Credit", typically these are hard money lenders(cash lenders) who have investment money. Can't find any? Look in your local newspaper for real estate ads saying "We Buy Houses", these will often be cash investors. Still can't find any? Look in your local legal newspaper for Notices of Sale. A location will be listed where properties in foreclosure are going to be auctioned off. Go to the location at the time specified and talk to the investors who show up. These are investors used to dealing with properties in foreclosure, find out their requirements, get phone numbers and you are all set. TOP Personal Counselors Sign up with us and we'll provide one-on-one help for as long as you need it. Oh, I'm sure they have experienced investors just sitting around waiting for the phone to ring. There are newsgroups where you can have your questions answered, but your best source of help is going to be investment clubs. Clubs are comprised of local investors who will share information and resources with you. They will have a good grasp on area values and should be able to help you more than anyone else. Plus, if you haven't found a cash investor yet, this is a good place to find one or get referred to one. Look in the Yellow Pages under "Clubs","Associations","Real Estate" or various web sites have lists. TOP Recommendations Take a deep breath, relax and plan your success. You'll need information, resources and knowledge. Find a local investment club, ask where and when they meet, go to all the meetings, absorb everything you can and make contacts. Evaluate the books and information you have seen, pick a source and start reading. Follow the web site discussion groups, print articles that have resources or solid information and save them. Read all the articles you can find on different web pages, it will add to your knowledge. Consider completing a Real Estate Licensing Program Many established real estate companies provide subsidized Real Estate Licensing School. If you do not have a background in real estate, this is a fairly inexpensive way to get an education regarding the technical processes involved, what is necessary to sell a home plus all sorts of additional knowledge. Many companies charge a higher fee if you do not get your license and work for their company, so be sure to shop, an independent school might be cheaper. Look in the Yellow Pages under Real Estate Schools. Keep in mind that if you actually obtain your real estate license, you have different legal considerations than if you are unlicensed. Even if you don't actively sell property full-time, when licensed, you are considered a real estate professional. Go to Open Houses Every weekend houses are held open by Realtors. Go to all the open houses in your area every weekend. You'll learn what sells, what doesn't, what the price ranges are in different areas and start to build a knowledge base of property in your area. It takes gasoline and time, but it's the best way to get a feel for what values are in a given area. Build your Resource File Organize your information and file it. Individual properties will come and go, but six months from now, you don't want to find a property that suits a cash investor's requirements and discover that you cannot find the investor's phone number. Or you were supposed to check back with a property owner this week, but you can't find the paperwork and don't remember the address. The only way to keep track of everything is to have organized files that you use. Understand it doesn't happen overnight. Honestly, the first few times you try to put a transaction together, I would expect problems. It's part of the education process. As long as you don't make the same mistakes again, you'll only get better at what you do. Education is the first big hurdle, the second one is experience, and there's only one way to get that. To just do it. TOP When everything is looked at, MOTIVATION is the base for all of it. You have to be motivated to get the education, you have to be motivated to get the experience and you especially have to be motivated to keep on doing it through the times where nothing seems to be going right. ARE YOU MOTIVATED?

Real Estate Loan

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Daily Mortgage Rates Conforming Avg. 7d avg. 7d chg. 30 Year Fixed 5.71% 5.74% 0.03% 1/1 Adjustable 4.62% 4.47% -0.15% Jumbo Avg. 7d avg. 7d chg. 30 Year Fixed 5.98% 6.02% 0.04% 1/1 Adjustable 4.41% 3.89% -0.52% Mortgage Refinance Is your interest rate too high? Refinance could be an option. Are you in need of some extra cash? You probably want to reduce your interest rate... >> Debt Consolidation Everyone can get into financial trouble. Maybe you are behind on your bills and need help? Our debt consolidation lenders respond to your specific needs. They help you find a loan solution that fits your circumstances... >> Home Purchase Have you found your dream home? A home purchase includes finding the best possible home loan. Our brokers and lenders will guide you along the way... >> Home Equity Loans Do not look any further for your home equity loan or equity line of credit. 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Purchase Property

Shanghai Metropolis Property Consultants Co Ltd - Real Estate Listings Shanghai Metropolis Real Estate Brokerage Co., LTD. established 19 96 For Prompt c ustomer s ervice Please Contact: Tel : (86-21) 1391-651-2856 1390-188-9564, (86-21) 6210-9150 6210-9157 Fax:(86-21)6210-8716 e-mail : info@metropolis.sina.net SHANGHAI PURCHASE REAL ESTATE LISTINGS APARTMENTLISTINGS Real Estate & Relocation Services OFFICELISTINGS Rental Property Listings for Shanghai-Pu Dong Office, Apt & Villa Shanghai-Pu Dong Property Photo Gallery VILLALISTINGS Multiple Listing Property Viewings & Shanghai-Pu Dong City Tours Maps of Shanghai-Pu Dong Metropolis Real Estate Consultants has additionalShanghai Apartment, Villa and Office Purchase Properties not listed belowin its Shanghai Real Estate Price Guide. If you wish to receive a freemonthly updated copy : please e-mail back to Metropolis Real Estate Consultants. This articleappeared in Business Weekly Newspaper Feb 25-Mar 03, 2003 Shanghai s housing prices keep going up Stable growth stimulates strong housing demand Shanghai: Local property prices, boosted by the bullish market and strong demand, are likely to continue climbing this year. In general, Shanghais property market is stable healthy, there are no bubble in it, said Pan Jianxin, director general of Shanghais statistics bureau. Investments in Shanghai property market last year reached 72 billion yuan (US$8.7 billion), or about half of the citys total fixed investments. Output of the property industry rose 14.5 per cent year-on-year, higher than the 10.9 per cent growth in GDP (gross domestic product). The sector, one of the citys six industrial pillars, made up 6.9 per cent of Shanghais GDP, compared with 6.4 per cent in 2001. Property prices grew 10 per cent last year. Forty-five per cent of that growth came from developments priced 3,000-5,000 yuan (US$605-846) and 20 per cent from more expensive properties. That momentum is expected to continue this year as Shanghai s general economy maintains a 10-per-cent growth rate. The citys per capita GDP is expected to reach US$5,300. Shanghai Residential Development Bureau predicts the city will witness investments totoalliong58 billion yuan (US$ 7 billion) this year in the residential sector. That would be a 24.3 per cent increase over last years 56.3 billion yuan (US$6.81 billion). Construction of 18 million square meters of residential development will begin this year, and 18 million square meters of floor area well completed. Increased supply s not expect to affect prices, as many developers involved in renovation projects received their permits late last year and their projects will not be completed until the years second half. There is still room for rising price given current development costs and supply and demand, suggests officials with Shanghai Zhongyuan Real Estate. Improvements in housing quality including designs, new construction materials and techniques and government control over development of floor space will drive up prices. Consumers from outside Shanghai have helped push up prices. In 2002, they bought 53.6 per cent of the high-end residential apartments and 29 per cent of mid-range apartments. Many of them buy properties as investments. Most of the outside buyers were from Wenzhou, Zhejiang Province, Hong Kong, Macao and Taiwan. Prices for second-hand apartments have also rise rapidly in the past year, due largely to high prices for new apartments and the costly rent. As the central government has released a ban on leasing land to build villas in urban areas, prices for villas will grow steadily, analysts predict. Developers remain upbeat about Shanghais property market and, lured by high profit margins, they will continue trying the high-end market, analysts predict. Hong Kong developers have helped boost confidence in Shanghais property market. Major companies including Sun Huang Kai, Hang Lung, New World, Hutchison Whampoa and Shui On recently decided to increased their investments, worth about 25 billion yuan (US$3 billion) in the city, Shanghai Morning Post reported. The trend will continue as people seek great opportunities in Shanghai, which is preparing to host the 2010 World Expo, and which is focusing on renovating the banks of the Huangpu River, market insiders said. To fend off possible overheating of the market, Shanghais municipal government has announced several measures, said official with Jones Lang Lasalles, a property advisory company. The title deed tax for the purchase of general residential housing was raised in September to 1.5 per cent from 0.75 per cent. Income tax deduction for home purchases will end in May. People are likely to see mild rises in the prices, until possible 2010, said Zhang Hongming, a local property expert. HOME

Colorado Real Estate -

Durango Colorado Real Estate with Prudential Triple S Realty Prudential Triple S Realty Home Contact Us Site Map Southwest Colorado Properties Search Our Listings Search Other SW CO Properties Exclusive Developments Short-Term Rentals Long-Term Rentals HOA Documents About Our Company Why Prudential Triple S Realty? Meet our Agents Community Involvement Office Locations Careers The Prudential Brand Regional Informaton Why Southwest Colorado? Durango Cortez Resort Area Glacier Club Pagosa Springs Maps My Prudential Triple S Register / Login Favorite Properties Saved Searches Mortgage Calculators E-Newsletter Durango Colorado Real Estate - Prudential Triple S Realty Welcome to beautiful Southwest Colorado, one of the most healthy and diverse places to live and play in the Rocky Mountains. Picture 14,000-foot summits, high desert mesas and access to 2 million acres of wilderness. Cultural and educational opportunities in the area range from orchestral concerts at Fort Lewis College to sightseeing from aboard the historic Durango Silverton Narrow Gauge Railroad while traveling through the beautiful Animas River Valley to exploring the world-renowned Anasazi cliff dwellings in Montezuma County. Recreational activities include world-class golf, gold-medal trout fishing, hot springs, skiing, hiking and the best mountain biking on the continent. Small town hospitality, unique galleries, fantastic dining and big-city amenities make Southwest Colorado perfect for relocation or a second home purchase. Durango's oldest, most respected and advanced real estate firm, Prudential Triple S Realty , stands ready to serve you in every aspect of real estate with the most knowledgable professionals and state-of-the-art tools on the Western Slope and the Four Corners area. Durango 700 Main Avenue Durango, CO 81301 (970) 247-3840 (800) 477-8346 Resort Area / Glacier Club 40290 Hwy. 550 North Durango, CO 81301 (970) 382-9809 (N. County) (970) 382-7800 (Glacier Club) Pagosa Springs 262 Pagosa St. Pagosa Springs, CO 81147 (970) 264-1771 Cortez 1740 E. Main St. Cortez, CO 81321 (970) 565-8988 (800) 665-0460 ©2004, An independently owned and operated member of The Prudential Real Estate Affiliates, Inc. Site Development by Electric Sage Designs, LLC.

home equity lines of

Home Equity Lending Gaps in Texas The Texas Economy March 2003 "Texans need and deserve the right to take out home equity lines of credit.This simple change will pump $741 million back to Texas homeowners." -- Carole Keeton Strayhorn, Texas Comptroller Home Equity Lending Gaps in Texas The number of Texans with home equity loans has more than doubled since 1997 when changes in the Texas constitution made it easier for Texans to borrow against the equity they have in their homes. [1] Yet, Texans are still not taking as many home equity loans as residents in other states. In the traditional home equity lending market—the segment that involves a lump-sum payout of equity to be repaid over a set term—Texans seem to have caught up with the rest of the nation. Indeed, the estimated 6.4 percent of Texas home-owners with traditional home equity loans in 2001 is not only up considerably from 2.5 in 1997 but may well be higher than the average for the other 49 states of 5.7 percent (Figure 1). [2] This most likely reflects the fact that one portion of the home equity loan market—the home equity line of credit market—remains unavailable to Texans. An estimated $12.7 billion in higher-cost, non-tax-deductible loans that currently exist could be supplanted if home equity lines of credit were available and Texans used these financial options at the same rate as other consumers in the country. By taking advantage of a substantially untapped resource, Texas consumers could save $741 million annually using home equity lines of credit instead of other loans. These savings could be pumped into the Texas economy through lower interest rates and additional federal income tax deductions. The gains would be realized in the Texas economy if existing loans were merely paid off by homeowners through home equity lines of credit. This need not expand homeowners’ overall debt burden. Home Equity Lending in Texas For more than 160 years, access to the home equity that owners had built up in their residences was largely untapped. As a direct result of the Panic of 1837, Texas prohibited the forced sale of homesteads for all but a very limited number of reasons. When Texas became a state, these protections became part of the state constitution and effectively barred foreclosing on a person’s residence for reasons other than non-payment of taxes, the original mortgage or a home improvement loan. These same provisions also effectively barred tapping into home equity for purposes other than home improvement. But on November 4, 1997, Texas voters approved a constitutional amendment allowing more leeway in home equity lending and for reverse mortgages. [3] These loans became available to Texans in 1998, but some technical issues limited the availability of home equity loans for homesteads larger than one acre and from reverse mortgages. Subsequent amendments addressed these legal concerns. [4] Changes in the Texas Constitution expanded the conditions under which homeowners could obtain a traditional home equity loan. These closed-end loans extend for a specified length of time and generally require repayment of interest and principal in equal monthly installments. Interest rates on these loans are ordinarily fixed for the life of the loan. Growth in Home Equity Lending in Texas Since changing the Texas constitution to allow wider use of home equity loans, Texans have steadily increased their reliance on these loans. According to American Housing Survey (AHS) data on nine Texas metropolitan areas that cover 68 percent of Texas’ owner-occupied homes, only 2.5 percent of Texas homeowners had any form of home equity loan in 1997, substantially less than the 14.5 percent for all U.S. homeowners outside of Texas that same year. By 1999, the proportion of Texas homeowners with a home equity loan had risen to 4.5 percent. While this represents nearly a doubling of home equity loan usage in just two years, this was still slightly less than the estimated 5 percent rate for home equity loan usage in the nation and substantially less than the 12.9 percent estimated by the AHS that year for both home equity loans and lines of credit. By 2001, the proportion of Texas households with home equity loans had reached 6.4 percent. At this level, the usage in Texas actually exceeded the usage rate of fixed-term closed-end loans in the U.S., indicating that Texans may have reached the saturation point with traditional home equity loans. These loans typically are written for a set amount to be repaid in equal installments over a specified time, just like a traditional mortgage. Based on a survey conducted for the Comptroller of Public Accounts of home equity lenders in Texas, from 1998 to 2000, the amount of the average home equity loan was about $36,750. In 2001 and 2002, the average home equity loan jumped to more than $47,000. [5] Closing the Gap Although Texans’ reliance on home equity loans has grown substantially since the passage of the constitutional amendment, further gains may be unlikely. Other states’ average usage of 14 percent in 2001 included both traditional home equity loans and home equity lines of credit, financial instruments not now available to Texas homeowners. The possibility that the usage rate of traditional home equity loans in Texas exceeded the usage rate of similar loans in the nation probably indicates that without the home equity line of credit option, more homeowners are opting for the fixed term loans—their only other choice. During much of the 1990s, about 8 percent of U.S. homeowners had a home equity line of credit whereas about 5 percent of homeowners had a traditional loan. [6] In 2001, AHS data indicated an estimated 8.4 percent of homeowners had a home equity line of credit (HELOC) and 5.7 percent had traditional home equity loans. This newer form of home equity lending has become the preferred choice by homeowners in other states. A HELOC is a revolving account that permits borrowing from time to time, at the account holder’s discretion, up to a set credit limit. HELOCs also typically have more flexible repayment schedules than traditional home equity loans and have a variable interest rate. Most consumers think home equity lines of credit are more convenient than traditional home equity loans. While about 40 percent of consumers cited the tax advantages of both types of home equity credit as an important consideration, 43 percent of HELOC users cited convenience of use as an advantage, compared with only 1 percent of those using the traditional home equity loans. [7] Many of the major lenders in Texas make HELOC loans to homeowners in other states. Their experiences underscore how attractive this option is to consumers. Figure 2 presents the percentage of the amount of home equity loans and lines of credit written in Georgia, Florida and California by three major Texas lenders. [8] About 88 percent of the consumers in these states choose HELOCs compared with about 12 percent choosing traditional home equity loans. Potential Economic Impact of HELOCs in Texas One approach to examining what expanded home equity lending might mean in Texas is to estimate what consumers would save if they had access to HELOCs. Three issues are crucial when estimating this impact: what savings could be expected from lower interest costs; how much would HELOCs lower federal income tax bills; and how large total borrowing might become. Underlying this assessment is the assumption that if Texans had access to HELOCs the total home equity usage in Texas would approach the U.S. average. This implies that consumer use of both home equity lines of credit and traditional loans would reach about 14 percent, 7.6 percentage points up from the 2001 level, which was 6.4 and consisted of only traditional home equity loans. The true economic value of HELOCs to consumers lies in low interest rates and as a deduction from federal income taxes. For example, recent data from February 2003 show that the average interest rate on credit card debt is 13.8 percent, the rate for new auto loans is 5.8 percent and on home equity lines of credit, 4.4 percent. [9] This implies that on a $1,000 loan, annual credit card interest charges would be $138 whereas these charges would amount to only $44 for the home equity line of credit. On $1,000 in outstanding credit card debt, conversion of this debt to a HELOC would save $94 in interest payments annually. But even this neglects the fact that HELOC interest costs are deductible from federal income taxes, whereas credit card interest charges are not deductible. Although each individual’s exact marginal tax rate paid depends on adjusted gross income, the National Bureau of Economic Research estimates that, on average, in 1999 interest deductions reduced income taxes 24.5 cents per dollar of interest paid. [10] This implies that, on average, the $44 in HELOC interest payments would generate an estimated $10.78 in federal income tax savings so that the total consumer savings per $1,000 in credit card debt replaced by HELOC would be $104.78 annually. Savings from other loans would be less dramatic. Based on current rates, car loans would cost $58 in interest charges per $1,000 borrowed, or only $14 more than HELOC. But tacking on the deductibility of HELOC raises this savings to $24.78 annually per $1,000 borrowed. The loans likely to be displaced by HELOC would be a mixture of credit card loans and other consumer loans such as car loans. According to Federal Reserve loan data, consumer debt nationwide at the end of 2002 was divided into $738.9 billion in revolving loans, of which credit card debt is a large part, and $1,017.9 billion in non-revolving loans. [11] Assuming Texas consumers have a similar debt profile, about 42 percent of Texas consumer debt would be in revolving credit and 58 percent in non-revolving. Based on these shares, the average consumer would save an estimated $58.38 in interest and tax payments per $1,000 owed by switching from other consumer credit sources to HELOC. [12] How much Texans could save depends on the volume of consumer loans displaced. Using 2001 commercial bank data to update national figures indicates that the traditional home equity loan market in the U.S. reached $352.7 billion, up from $267 billion in 1997. Considering Texas’ share of home equity loans and the average per loan value, Texans account for an estimated 8.4 percent of the U.S. market for traditional home equity loans. Based on this percentage and assuming that Texans would use both traditional and HELOC loans at the national rate, Texas consumers would exchange $12.7 billion in existing loans for HELOC. In doing so, Texas homeowners would save $741 million in interest charges and federal income taxes annually. This would be a modest level of savings. The Federal Reserve Board estimates that households spend about 8 percent of their disposable personal income servicing the debt on revolving loans. [13] The $741 million annual savings from increased use of HELOCs would be about 1.7 percent of the annual amount Texans spend on debt service for revolving loans. [14] Home Equity Delinquencies If Texas consumers relied more on home equity lines of credit and followed national trends, loan delinquencies would likely fall. Based on American Bankers Association data (Table 1), Texas averages fewer loan delinquencies for closed-end home equity loans than consumers at the national level. Loan delinquencies did rise in Texas from 1999 to 2001, but dropped off in 2002. Table 1: Texas Home Equity Delinquency Rates Compared to All Other States Home Equity Delinquency Rates and All States First Mortgage Delinquency Rates* Closed-End** Home Equity Loans(1) Home Equity Lines of Credit(1) All States - First Mortgages(2) Texas All States All States Conventional FHA VA 2002 0.99% 1.30% 0.59% 3.06% 11.55% 7.87% 2001 1.17 1.28 0.73 2.96 10.78 7.67 2000 0.88 1.20 0.75 2.50 9.10 6.80 1999 0.77 1.26 0.62 2.60 8.60 6.80 * Delinquency Rates are based on the number of Loans Past Due 30 Days or More as a Percentage of Loans Outstanding. ** "Closed End" includes home equity and second mortgages (but not home improvement). SOURCES (1)Home equity delinquency rates obtained from "Consumer Credit Delinquency Bulletin" published quarterly by American Bankers Association. (2)First mortgage delinquency rates obtained from "U.S. Census Bureau, Statistical Abstract of the United States, 2001" and Mortgage Bankers Association of America "Quarterly Delinquency Surveys." But nationwide, loan delinquencies for lines of credit are slightly more than half the rates seen for closed end home equity loans. Based on this pattern, a shift towards using home equity lines of credit from traditional home equity loans should lower overall home equity delinquency rates. Compared with first mortgages, the delinquency rates for both home equity loans and lines of credit are substantially lower. Summary The use of home equity loans in Texas has risen dramatically following constitutional changes in Texas in 1997. Use of closed-end traditional home equity loans in Texas exceeds nationwide use. The fact that home equity lines of credit are not available in Texas contributes to a higher reliance on traditional home equity loans. But the strong consumer preference expressed for HELOCs in other states and consumer preference for their ease of use may indicate that continued expansion of lower interest, tax deductible home equity financing by consumers in Texas may slow without access to these loans. If Texans were to use home equity financing only up to the national average through HELOCs, lower interest payments and lower federal taxes would save Texas consumers $741 million. Making HELOCs available to Texas consumers would require passing another constitutional amendment and legislation proposing such amendments will likely be introduced during the current legislative session. If the nature of consumer safeguards and other requirements on lending institutions in Texas making HELOC loans were significantly more restrictive than national practices, interest rates on these loans in Texas could be higher than national rates, and the economic impacts less. Data Collection While banking and finance are two of the most heavily regulated industries, this level of scrutiny does not always result in the availability of detailed information. Since 1987, banks and finance companies have reported home equity lines of credit under receivables on quarterly Call Reports and since 1991 have also separately reported their holdings of traditional closed-end home equity loans. Mutual savings banks also report these data on Federal Reserve Board Call Reports. Other segments of the financial industry report this information to varying degrees. Savings and loan associations and federal saving banks report credit line receivables on Call Reports, but they do not separate home equity loans from first mortgages. Since June 1996, finance companies have reported commercial and residential mortgages separately but do not distinguish between loans under lines of credit and traditional loans. Credit union data is available on both types of home equity debt from the Credit Union National Association. At the national level, some data track the degree to which consumers utilize the various home equity loan alternatives. Every two years the Federal Reserve Board surveys consumers’ use of credit. This data, while instructive on overall trends and the use of home equity loans and lines of credit, does not contain information about practices in particular states. Moreover, much of the state-specific data collected from financial institutions is available primarily for the location of the financial institution involved, and not where the loan was made. Where this data are available, coverage by type of financing (home equity loan versus line of credit) is limited. The Texas-specific data in this analysis is derived largely from two sources. First, the U.S. Bureau of the Census surveys about 60,000 Americans every two years about housing conditions. This survey includes questions about the usage of home equity loans, but only the most recent survey, from 2001, elicits responses on traditional home equity loans separately from home equity lines of credit. Because this survey is national, there is only partial coverage of Texas. Specifically, publicly available data from the survey identifies only responses coming from nine metropolitan areas in Texas. Although the sample does contain responses from non-metropolitan areas, these are not identified by state. The Census survey covers about 68.2 percent of the Texas population. The second source of data is internal surveys of lending activity conducted by lending institutions doing business in Texas. These institutions cover more than 10 percent of the Texas market for commercial financial institutions and financial companies. These data are used to identify the potential to expand home equity lending in Texas if lines of credit became available. Endnotes [1] In 1997 and before, availability of home equity loans in Texas was limited to home improvement loans, loans to pay outstanding taxes and loans allowing one spouse to “buy out” another in the case of divorce. Such loans were typically known as a second lien against the property. Homeowners could not secure a loan backed by the equity in their home and use the proceeds of the loan for purposes other than those specified in law. Outside of Texas, using home equity loan proceeds for whatever purpose and even the more flexible home equity line of credit (a revolving line of credit secured by home equity) have been widely available for years. [2] The tentative nature of this statement stems from what seems to be respondent confusion to the American Housing Survey (AHS). In the 2001 AHS, 14 Texas households identified themselves as having a home equity line of credit in 2001. Since these lines of credit currently cannot be offered in Texas, the most likely explanation for this is that these respondents misunderstood the “line of credit” option in the survey as describing the “draw down” feature of a home improvement loan during construction when, in fact, these instances were almost certainly traditional “closed end” loans. Placing these responses in that category indicates that 6.4 percent of the homeowners in the survey in Texas had a closed-end home equity loan as compared to only 5.7 percent in states outside of Texas. [3] House Joint Resolution 31 (HJR 31) passed by the 1997 Legislature that, upon passage, became effective January 1, 1998. [4] On November 2, 1999, Texas voters approved constitutional amendments proposed by the 1999 Legislature to address these problems, Senate Joint Resolutions 12 and 22 (SJR 12 and 22). [5] Data submitted by lenders in early 2003. For number and amount of loans in Texas, the survey included five large Texas lenders. [6] Glenn B. Canner, Thomas A. Durkin and Charles A. Luckett, “Recent Developments in Home Equity Lending,” Federal Reserve Bulletin, April 1998, p. 243. [7] Canner, Durkin and Luckett, pp. 241- 251. [8] From data submitted by lenders. Together these three lenders serve more than 10 percent of the commercial banking market in Texas. [9] These rates and those of HELOCs are from http://www.bankrate.com/ on February 18, 2003. The credit card rate is for a standard card (not gold or platinum) at a fixed annual rate. The auto loan figure refers to a 48-month loan for a new car. The HELOC rate is for a $10,000 or minimum amount. [10] http://www.nber.org/~taxsim/mrates/mrates2.html , February 20, 2003. [11] Federal Reserve Board Statistical Release, G.19, Consumer Credit, February 7, 2003. http://www.federalreserve.gov/releases/g19/current/ . [12] This is a fairly conservative assessment on two points. First it assumes that consumers would replace current borrowing in proportion to the amount borrowed of each type without consideration of the interest rates charged for each type of borrowing. A more rational approach would be to replace all of the most costly borrowing first. Secondly, new car financing rates are among the lowest cost loans available and this probably underestimates the interest costs of non-revolving loans. [13] http://www.federalreserve.gov/releases/housedebt/default.htm , February 19,2003. [14] Disposable personal income in Texas is estimated to be $535.2 billion in 2001. Carole Keeton Strayhorn Texas Comptroller of Public Accounts Window on State Government Contact Us Privacy and Security Policy