Thursday, March 01, 2007

Following the Mortgage Dollar

Ever wondered what really happens to your house payment?

It seems logical that it would go to the lending company that made the loan to buy the home -- and it does, but it takes a longish trip along the way.

If your mortgage stayed in your lending company's portfolio, the lender would probably have to wait many years before the loan was paid up. And the relatively small monthly mortgage payments wouldn't provide enough money to enable the lender to continue making home loans.

But most mortgage loans don't stay with the lenders who made them. To obtain more money to lend, most lenders sell their mortgages on the secondary market -- a large network of investment companies and quasi-government agencies, including the industry giants Fannie Mae and Freddie Mac.

If your mortgage is sold to one of these organizations, you may never know it, because the mortgage's new owner will often use your original lender to service the account.

But you money doesn't stop its journey at that point either. The purchasing organization must also replenish their money supply, so they can keep on buying mortgages. They pool you loan with thousands of others and sell shares in the pool to individual investors and big financial institutions. Countless people obtain income by investing in these mortgages.

Because of this, when you buy a home, you're not only helping yourself, you're also helping our economy.




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Wednesday, February 28, 2007

Property Tax Reform: Is it Really Dead?

Perhaps we should autopsy property tax reform to see what killed it. By real reform I mean more than the stop-gap measure that is in the works. Yes, the special interest groups played a part in the downfall of this last attempt to curve the runaway costs of living in NJ. It was naïve to think that the Governor and legislature could pass a tax reform package that would really give New Jersey an overhaul especially this close to an election year. That legislators could or would police themselves and end practices that drain the state’s revenues, well we got a clue when they balked at changing rules that allow dual office holding, seems just plain wishful thinking. Instead in a slight of hand move unionized workers’ benefits and pension plans became the fall guys. Legislators can continue to hold down two positions in state government and in effect rob state revenues that double benefits without demanding any real work.


Is it any real surprise that the legislature will pass only about half of the 98 special committee’s recommendations? Not really. Blame the special interest groups for trying to prevent their membership from having to bear the brunt of the reform effort, blame the Governor for hearing the pleas of the people and calling a special session of the legislature, blame New Jersey residents for wanting lower taxes in the first place; but, whatever we do, don’t blame the legislators themselves who gave up the fight for real tax reform before the first bill was drafted.

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Tip of the Day: Paint

Stumbled across this article today and thought it would be fun. A friend to sellers, buyers and renters alike, paint can do many things to help create a mood. It is a low-cost way to freshen a room. It can help reduce the recurrence of mold and mildew and depending on the play of light in the room can appear to deepen or lighten itself. For about $20-$45 per gallon of paint you can revitalize a room or change it entirely using different application techniques. There is nothing else that can do so much in a room for such a price.

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Monday, February 26, 2007

Hamilton Transit Village Back On Again

Well, it looks like the transit village is on again in Hamilton -- almost anyway. Seems the squabbling town council and the mayor met again with transit company representatives and agreed to act in the public interest and get more public input and further studies into the proposal to create a mixed use site at and around the Hamilton Train Station. The Republican council and Democratic mayor agreed to put partisanship aside and act for the public good much like their neighbors in West Windsor, who are also getting a transit village. The complaint of disruption the proposed project would create around the station is moot because the traffic pattern around the station is already changing due to parking expansion. The station sits alone with many, long abandoned, commercial properties. The transit village would definitely vitalize that area. If done carefully the Hamilton Station area could well become a destination in New Jersey in its own right allowing visitors to check out Hamilton’s attractions or use Hamilton as a base to hop over to Philadelphia or New York for big city shopping or entertainment. Hopefully the servicing the people attitude will last long enough to allow this project to move ahead.

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