U.S. Steps Up Help For Homeowners

WASHINGTON -- The chief executives of Detroit's Big Three auto makers appealed in dire language for U.S. taxpayers to help their industry, but couldn't dispel doubts in Congress that have clouded prospects for a government-led rescue.

In appearances Tuesday before the Senate Banking Committee, the leaders of General Motors Corp., Ford Motor Co. and Chrysler LLC, together with the head of the United Auto Workers union, argued the shaky U.S. economy couldn't withstand a collapse of any of the companies.

The chief executives of GM and Chrysler said they could run out of funds without the government's support. GM CEO Rick Wagoner said the package is needed to "save the U.S. economy from a catastrophic collapse." Many markets however are doing well, these markets include; Raleigh Real Estate, Durham Homes, High Point Homes, Greensboro Homes, Home Inspection, Wilson Homes, Wilson NC Real Estate, Home Warranty, Raleigh Estate Homes, Triangle Homes, Chapel Hill Farms and Farms Chapel Hill.

That the companies were convening -- "hat in hand," as Sen. Christopher Dodd (D., Conn.) said -- before a congressional panel reinforced the depth of their difficulties and the possible diminishment of their political clout. Extending a helping hand to Detroit auto makers, long a central part of the nation's manufacturing base, doesn't appear to be a given.

One question is whether the auto makers can muddle through to January when a new Congress convenes with strengthened Democratic majorities and a Democrat in the White House. The complexity of a possible intervention -- and the political divisiveness it has wrought -- could be too great to overcome this week.

On Monday, Senate Democrats introduced legislation that would set aside $25 billion to help the industry, drawing from the $700 billion fund created to stabilize financial markets. The legislation would allow the auto companies and parts suppliers to receive "bridge home loans" of at least ten years with favorable interest rates. But there is resistance among many senior Republicans and the White House. If no decision is made this week, the issue will be kicked over to the new 111th Congress.

In the late afternoon session, Republicans largely condemned the industry's request. Even some Democrats committed to helping the auto makers showed little enthusiasm for the task at hand.

While noting he backs aid, Senate Banking Chairman Mr. Dodd denounced the companies for failing to move more aggressively to reverse their sharp declines in market share. "They're seeking treatment for wounds that, I believe, are largely self-inflicted," Mr. Dodd said, adding the industry has failed to adapt and "we're all paying the price for it."

As the hearing stretched past its third hour, the top executives disclosed how much they might each apply for if Congress approved the $25 billion loan package: $10 billion to $12 billion for GM; $7 billion to $8 billion for Ford; and $7 billion for Chrysler.

The companies said they would use the money to pay employees, cover current operating costs and develop new products.

Both GM and Ford are on a pace to use up $2 billion each a month, based on their third-quarter earnings. Not getting funding immediately threatens GM most directly because the firm is operating close to its minimal funding requirements. The supply chain is shared among the Big Three, so a bankruptcy filing of one could spell problems for the other two.

Some analysts suggest GM, Ford and Chrysler can cut costs enough to survive until January. But if the U.S. auto market continues to sink, the companies' cash drain could outpace their ability to cut costs.

GM has said that without government aid, the company would run out of operating funds as early as early 2009.

Chrysler joined GM for the first time in linking its survival to a federal bailout. "Without immediate bridge financing support, Chrysler's liquidity could fall below the level necessary to sustain operations in the ordinary course," Robert Nardelli, the company's chairman and CEO, said. He added that the company was currently spending about a $1 billion a month more than they were taking in, leaving the auto maker with slightly more than $6 billion cash on hand.

Only Ford says that while the loan package is necessary for the betterment of the U.S.-based auto companies, it could withstand the downturn without government assistance.

The auto makers and the union sketched their companies' far-reaching impact. They also argued that Chrysler, Ford and GM are on the right track to compete with foreign-based auto makers, but that turmoil in the broader economy foiled their good planning. The companies together employ 239,000 people in the U.S.

Under pressure from senators over the issue of executive compensation, Chrysler's Mr. Nardelli said he would be willing to accept a salary of $1 a year as part of a federal bailout. Lee Iacocca made the same commitment when he ran Chrysler and secured federal loan guarantees in 1979. The chief executives of GM and Ford declined to make the same commitment.

The Banking Committee testimony is part of a broader lobbying campaign that includes parts suppliers and dealers. The executives will appear before the House Financial Services Committee Wednesday. All told, the companies are seeking $25 billion to weather the weakening economy, which has dampened demand for autos and restricted consumer access to home loans.

In another indication of the industry's problems, the world's three dominant credit insurers now consider the U.S. auto industry among the riskiest sectors for default.

Few lawmakers in either party doubt the economic challenges facing the Big Three. At issue is how -- and whether -- Congress should get involved.

Sen. Jim Bunning (R., Ky.) said a rescue proposal by Senate Democrats would give the industry "virtually a blank check," and doesn't require the companies to improve productivity and lower labor costs. "Major changes are needed, if federal dollars are to be made available," he said.

Sen. Richard Shelby (R., Ala.) said he has doubts about whether the money will be enough to meet the industry's needs: "Is this the end, or just the beginning?"

Industry supporters, such as Sen. Carl Levin (D., Mich.) want action this week. "The stakes are great and time is short," said Sen. Levin, who is scrambling to find the 60 votes needed to overcome objections in the Senate. Sen. Levin drafted the legislation that would set aside $25 billion to help the industry using bridge home loans.

To qualify, companies would have to accept limits on executive compensation, allow the government to take stock in the firms, and submit a detailed plan showing how they intend to return to sound financial footing and improve their capacity to produce fuel-efficient vehicles.

It wasn't clear whether Congress would demand management changes as a condition to any bailout, although the topic was on the minds of some lawmakers. Sen. Bob Bennett (R., Utah) predicted the jobs of hourly workers and executives are on the line as the industry restructures itself. "Everybody's going to get hurt in the process," he said, adding that the idea "that we in the Congress can prevent that from happening is wishful thinking."

The proposed assistance would be on top of $25 billion in already-approved home loans intended to help the industry retool to meet higher fuel-efficiency standards. The White House is pushing a rival plan to speed release of the previously approved home loans, by removing certain restrictions.

In testimony before the House Financial Services Committee, Treasury Secretary Henry Paulson said Tuesday the collapse of one of the auto companies "would be something to be avoided." But he said giving the industry access to the $700 billion fund isn't the answer. "I don't see this as the purpose" of the bailout program, he said.

Some Democrats aren't showing enthusiasm. Sen. Dianne Feinstein (D., Calif.) said she has problems with helping the industry without first receiving "a new business plan" that shows how the companies will return to competitiveness.

Sen. Jon Tester (D., Mont.) said the idea of additional government intervention isn't popular with voters: "People in Montana are experiencing bailout fatigue."

'Underwater' Need Not Mean Foreclosure

What does being "underwater" in your house really mean? Probably not that you're drowning.

The number of underwater homeowners -- those who owe more on their mortgages than their home is now worth -- has been growing sharply since 2006 as real-estate prices have tumbled. By some estimates, between one in six and one in eight homeowners are in that position, most of them people who bought homes in the past few years or who put down small or no down payments.

This worries economists and policy makers, since owing more than your home is worth is the first step toward foreclosure. And it's a concern to the rest of us because foreclosures are roiling the financial markets and, closer to home, they drag down our neighborhoods. (Most people who still have equity, by contrast, would rather sell their houses at a loss than lose what's left of their investment.)

In response to concerns about rising foreclosure and delinquency rates, federal regulators are studying possible new programs aimed at needy homeowners. There are concerns that such programs could attract a flood of applications from those who don't truly need assistance or encourage lenders to push homeowners into foreclosure. At the same time, lenders such as J.P. Morgan Chase and Bank of America have committed to working on new loan terms for the most-distressed homeowners.

But experts who have studied previous sharp housing downturns in Texas, California, New York and Massachusetts say that being underwater, while unpleasant, doesn't lead huge numbers of homeowners to default on their mortgages and end up in foreclosure.

Christopher L. Foote, Kristopher Gerardi and Paul S. Willen of the Boston Federal Reserve Bank studied more than 100,000 homeowners who were underwater in Massachusetts in 1991 and found that just 6.4% of them lost their homes to foreclosure over the next three years, according to a paper published in the September Journal of Urban Economics. The vast majority of homeowners simply continued paying as usual because they focused on the affordability of their payments, not on what they owed, and they believed home values would eventually recover.

The economists found that homeowners typically lost their homes only after at least two things happened: Their home values dropped and they either couldn't afford the payments or stopped making payments after losing hope that prices would eventually recover.

Homeowners in California also were more likely than expected to keep paying during the deep 1990s slump, says Richard Green, director of the Lusk Center for Real Estate at the University of Southern California. More people turned in their keys in Ohio and Michigan during the difficult 1980s downturn because they lost faith in an economic turnaround.

Typically, homeowners fall behind after a job loss, divorce or serious illness. In the current downturn, foreclosures are higher than in previous cycles because more homeowners reached beyond their means to buy their homes and simply can't keep up the payments. As a result, the Boston economists project that up to 8% of underwater Massachusetts homeowners could lose their homes between now and 2010 -- a significant amount, but still not catastrophic.

So what does this all mean for you?

If you have a low-interest fixed-rate loan, you have a valuable asset that might be hard to replace in the current market, no matter what your home's value is. Keeping that mortgage current has some value, even if it means cutting other household expenses.

In addition, the penalties for defaulting are great. In most cases, walking away from a mortgage can knock a top credit score down to the cellar, says Ethan Dornhelm, a senior scientist at Fair Isaac Corp., which sells credit-scoring formulas to credit bureaus.

A person with a stellar credit score from the high 700s to the top score of 850 would see it drop more than 200 points. A person whose credit score is lower may see it fall by fewer points, but still end up with a score in the mid 500s. At that level, reasonably priced new debt, from credit cards to car loans, will be out of reach. In addition, a default could lead landlords and utilities to require more cash up front and even affect your job prospects.

If the borrower continues to pay other debts on time, the score will climb gradually, though it may take three to five years to return to "good" scores, from the mid-600s and up. Scores of 790 or more -- which are rewarded with the lowest interest rates -- won't be attainable for at least seven years, when the default blemish finally disappears, Mr. Dornhelm says.

Fannie Mae requires borrowers who have lost their homes to foreclosure to wait five years before it will accept a loan from them, though borrowers who had extenuating circumstances, such as an illness or job loss, may requalify within three years.

What's more, lenders in most states can go after homeowners for an unpaid balance on a mortgage. That's a real risk, especially if you have other assets.

The longer you stay in your house, the better the chances of making it through this down cycle. Though a return to peak prices may take five or 10 years, some housing markets may start to bounce back once credit becomes more available. Meanwhile, you'll be reducing your mortgage as you make your payments.

Lenders aren't going to renegotiate just because prices have fallen, but if you truly can't afford your payments, contact your mortgage servicer to see if you can rework your interest rate or work out new payment options. The federal Hope for Homeowners program, which began Oct. 1, is intended to provide some relief if lenders will agree to reduce the loan amount to 90% of the home's current value.

If you can't get help from your lender, try contacting a credit counselor certified by the Department of Housing and Urban Development. These counselors have direct access to lenders' loss-mitigation departments, which consumers don't, says Natalie Lohrenz, counseling administrator for Consumer Credit Counseling Service of Orange County, Calif. A list of HUD-certified counselors is available through Hope Now, a consortium of lenders and counselors. (Call 888-995-HOPE or go to www.hopenow.com.)

If you need to sell the property and can't afford to cover the shortfall, your lender may agree to a "short sale," in which you sell at a price below the mortgage amount. This is a much more complicated transaction to pull off than a regular home sale, though, and it may hurt your credit score if the lender reports that you failed to pay off the whole obligation.

Sales at Meritage Homes Decline by 28% in Texas

For months, Meritage Homes Corp. has counted on Texas to carry it through the housing slump. But in its third quarter, the home builder paid the price for that strategy: Sales plummeted 28% in the Lone Star State, contributing to the company's sixth consecutive quarterly loss. Sales aroung texas may be down, but the markets around Charlotte Condos, Winston Salem Homes For Sale and Wilson NC Real Estate are all fine.

The Scottsdale, Ariz.-based builder said its loss widened because of write-downs on its real estate because of the housing market's continued weakness. Also, sales in Texas were affected by Hurricane Ike, not so much by direct physical damage but by delaying construction, closings and sales as the credit crisis widened. Arizona was the only state where the company saw gains.

As it waits for the housing market to hit bottom, Meritage has become dependent on Texas, which didn't become frenzied during the housing boom and, until now, had benefited from surging oil prices.

In its second quarter, Meritage said orders fell 28% outside of Texas, but slipped just 4% in the state, where it operates in Dallas/Ft. Worth, Austin, San Antonio and Houston. That's why, as of Sept. 30, more than half of its roughly 21,000 lots were in Texas, compared with 29% in Arizona and 1% in Colorado, with 28% owned. Earlier this year, a home-building consultant labeled the state a "lifeline."

Not any more. "Unlike prior quarters, sales volumes in Texas were down in line with the company average and, in turn, didn't offset weakness in harder-hit housing markets," noted UBS' David Goldberg. "We expect this trend to continue over the near term, given the impact the slowdown in the economy is having on buyer sentiment."

JMP Securities noted Texas's margins could come under pressure in a weaker job market. "The relatively low wage level and FICO scores in the Texas market have also slowed that market, although we see only modest price corrections likely," noted analyst James Wilson.

Even so, company executives said no strategy shift is imminent.

As the credit crisis seems to have pushed the world into a recession, the already battered home-building industry is feeling a deeper pain. The industry's confidence is at a record low and, after some homes sold below replacement cost, new construction has largely been halted. Earlier this month, the Commerce Department said new construction dropped 6.3% in September to the slowest pace since January 1991.

Major builders -- including Pulte Homes, Ryland Group Inc. and NVR -- recently detailed grim quarters.

Meritage, which had delivered one of the industry's best year-to-date returns, reported a wider net loss of $144 million, or $4.69 a share, compared with a loss of $118.6 million, or $4.52 a share, a year earlier.

The latest results included $55 million of pretax real-estate-related charges and a $106 million deferred tax asset valuation allowance. Credit Suisse estimates $305 million in further charges.

Meritage's impairments were elevated in the third quarter, but well below last year's third and fourth quarters. Of the latest impairments, $29 million were in Arizona -- fueled by four underperforming projects in Phoenix -- followed by $11 million in California. Nevada and Florida each had $4 million, while Texas came in at $2 million. As inventory and land prices have plummeted, the top public builders have written off more than $25 billion since 2006, according to Standard & Poor's Equity Research.

"While Hurricane Ike hurt our Houston operations in early September, the financial crisis and slowing economy have damaged buyers confidence and resulted in further decline in home sales and asset values which prompted us to record further real estate impairment in our third quarter," said Steven J. Hilton, chairman and chief executive officer, during the earnings conference call.

The builder said closing revenue dropped 35% to $374.8 million. Net orders fell 29%, while closings dropped 25%. As jittery buyers abandon deals, cancellations came in at 40%, up from this year's two previous quarters. Its September net sales were about 30% lower than the July/August pace -- the cancellation rate jumped to 45% that month alone, executives said during the call.

Make your home look 10 years younger

These tips brought to you by ORA Warranty. ORA Warranty is a leading home warranty firm
dealing in the home warranty industry. These tips will help bring value to your home and increase the need for a home warranty.

Paint a room: Do any of your rooms look drab and worn, with walls and woodwork full of scuffed or fading paint? Or perhaps your wall color is dated and could benefit from a hip new palette. Maybe you have antiquated and stained wallpaper that needs to come down. Take a critical look at the color and condition of your walls, then consider jazzing them up a bit with new paint or wallpaper.

Replace pillows: Are the accent pillows on your sofas or beds starting to look a bit tattered? Are they out of style, reminiscent of a look long gone? If so, it's time to get new ones. Check out your favorite home-interior stores to see what's new.

Freshen wood furnishings: In the hustle and bustle of daily life, wood furnishings get dented and dinged. Now is the time to get a stain stick and touch up all your wood pieces, covering up those boo-boos that make them look older than their years.

Do some deep cleaning: There's nothing like a thorough deep cleaning to make your home look newer. Put on your grubby clothes, turn on some great tunes and get to work. Scrub your walls and woodwork, polish your silver, scour the grout in your kitchen and bathroom, and wash windows.

Weed out artificial plants: While I love faux greens, they are dust magnets. After a few years, they get filthy and faded. So do some interior weeding, tossing the fakes you've had on display for years. When you replace them, you're going to be so blown away by how much better today's faux greens are that you'll wish you'd rooted out the old plants earlier.

Edit accessories: Today's trend in interior design is for a lighter and leaner use of accents, using fewer pieces to make a bold statement. As you evaluate your displays, remove pieces you aren't crazy about and find new ways to showcase the select items you are crazy about.

Replace fixtures. Take a long, hard look at your light fixtures, faucets and the hardware on your cabinets. Do you still love them as much as you did when you moved in? If not, it's time to replace them with today's new styles

Open yourself to new window treatments: Window coverings take a beating from sun and dust. And when they get dated, they age the look of your entire home. Sometimes simply hanging new curtains will dramatically update the look of a room. I'm in the process of doing just that in my kitchen. The window valance above my sink has gone limp, so this fall I'm going to replace it. I'm having as much fun thinking through my window-treatment options as I will looking at my new coverings once they are up.

Other things to consider:

- Do you have a home warranty?

- Is the house on a septic system?

- Does the home feature a custom bathroom design?

- Does the master bathroom feature a custom shower enclosure?

- Are you working with a home buyers agent?

Nervous About Buying Home?

Home Buying Tips and Help for Home Buyers

The single most important step that any Raleigh home buyer can take is to contact get a home waranty from ORA Warranty. ORA Waranty is a leading Home Warranty Dealer and will work hard to ensure your home warranty is exactly what you are looking for.

They're a couple in their early 30s -- a computer technician married to a bank teller. They have stable jobs, a down payment in the bank and an intense desire to escape their Charlotte condo for a luxury home in Raleigh North Carolina.

In fact, the couple has picked out their ideal property -- a sprawling ranch-style house on a full acre. Plus they're convinced this is an opportune time to buy.

Still, the couple is racked with doubts and have yet to make a serious bid on the property. Are they crazy to consider buying in so tumultuous a real estate market? Their parents think so and call them often to urge that they hold off.

This couple's situation illustrates the pervasive confusion affecting prospective homebuyers at a time of economic uncertainty, says a real estate broker, who is also the author of "A Survival Guide to Buying a Home."

One manifestation of buyer ambivalence is a common phenomenon: the withdrawn bid.

"People search around and around for the perfect house at a bargain price. When they find it, they're super excited and run to their agent's office to write an offer. But an hour later they tell the agent to tear up their bid," the broker says.

Of course, buyer ambivalence is understandable -- given the economic situation in the country. Turbulence on Wall Street, along with high gas and food prices and job jitters are combining to cause insomnia for many once-confident members of the middle class.

"It's difficult to get a handle on home values now -- or to accurately project what real estate will be worth in the future," the real estate broker says. Even so, he insists that those who get a rock-bottom price on a home in a desirable community will one day be glad they acted now rather than waiting.

Here are pointers for those now contemplating a home purchase:

• Clarify your reasons for making a purchase.

Fear is a powerful force that can restrain people from going forward -- even when they believe it's in their interest to do so. But those convinced that now is a good time to realize a long-held housing dream shouldn't let ungrounded fears inhibit them, says another real estate broker and former president of the National Association of Exclusive Buyer Agents.

"The main thing is to go into a purchase with your eyes wide open, plus every piece of solid information you can obtain," the other broker says.

Keep in mind, though, that there could be reasons why it might be imprudent for you to buy now, including near-term employment prospects or perceived job security.

• Get a strong mortgage lender and RTP home buyers agent on your team to build confidenc e.

It's no secret that home lenders now want to be doubly sure any home loan they originate will be solid. This means you'll need to be unusually well-prepared to answer the lender's request for documents, the other broker says.

"All your paperwork must be in order. I recommend that even before you go look at homes, you sit down with a Ann Davis and get all of your paperwork in order."

Also, more lenders are now demanding proof that the funds you've amassed for your down payment have been in your savings or checking account for some time. That means you'll need to produce account statements showing the money is truly your own, which gives you a stronger stake in the home or real estate property you buy.

If you're self-employed, you can now expect your lender to do a rigorous review of documents related to your business.

But the time you spend documenting your eligibility for the home loan will be worth it if your lender gives you a "pre-approval" letter. This you can use as a bargaining chip when negotiating for the home or real estate property of your choice.

• Take your time choosing a home -- within reason.

Many neighborhoods now have an unusually large number of for sale signs. This huge array of choices gives homebuyers yet another reason to delay commitment to any one property.

"If this is the right time for your family to buy a house, don't let the negative atmosphere around real estate discourage you. Use the abundance of choices to help you get precisely what you want," the other broker says.

Here are some other things to consider when buying a home:

- Do you have a home warranty?

- Is the house on a septic system?

- Does the home feature a custom bathroom design?

- Does the master bathroom feature a custom shower enclosure?

Home and the Range

Engineers are experimenting with bold ideas and minor tweaks to squeeze out new efficiency gains in household appliances.

Some improvements may go unnoticed, like new materials and adjustments to motors. But engineers are also rethinking basic ways in which traditional white goods work -- exploring how one appliance can harness heat produced by another, for instance, or using ambient warm air inside a home.

Appliances already have made substantial gains in energy efficiency over the past two decades, driven by government standards. A new refrigerator uses about half as much electricity as one bought in 1990, for instance, while a clothes washer requires nearly 70% less electricity per load, according to the Association of Home Appliance Manufacturers, an industry trade group based in Washington, D.C.

Small efficiency gains spread across millions of homes hold huge promise for energy savings as a nation. The trick is to keep coming up with products that reduce energy needs while still satisfying consumer demands.

Household efficiency is the biggest potential we have to reduce energy use in the U.S., says Jeff Christian, a researcher at Oak Ridge National Laboratory in Oak Ridge, Tenn. But whether that potential is fulfilled, he says, is "in the hands of 120 million individual decision makers."

Here are some of the ideas being discussed, and products being worked on.

Microwave Dryer?

One idea that's been kicked around for years is a microwave dryer. Drying towels with the same technology used to reheat leftovers has its attractions. A microwave dryer would work much faster than a traditional dryer, using less electricity. But serious hurdles exist: Metal buttons and zippers could spark, just like a fork accidentally left in a microwave oven, says Tom Reddoch, director of energy utilization at the Electric Power Research Institute, a nonprofit based in Palo Alto, Calif.

For the near future, consumers are more likely to see tinkering with existing types of appliances than whole new categories. Lighter materials in a washing machine, for example, will reduce the power needs of its electric motor, while improved insulation will cut the power a refrigerator needs to keep food cool, says John Weinstock, vice president of marketing for digital appliances at LG Electronics USA, a unit of LG Electronics Inc. of South Korea.

General Electric Co. plans to introduce a water heater in 2010 that it says will use half as much electricity as a standard electric water heater -- now the second-largest consumer of power in a home, after heating and cooling. The new water heater incorporates heat-pump technology to absorb heat from the air and transfer it to the water, says Kevin Nolan, vice president of technology for GE Consumer & Industrial.

Transferring heat requires a lot less power than generating it, the power research institute's Mr. Reddoch says, so heat pumps are likely to find other uses as well. He imagines one day there will be a "modern clothesline" that would draw on warm air from outdoors to dry clothes in a highly efficient dryer.

Refrigerators have already slimmed down their electricity needs. But further changes are in store, such as having several small doors instead of one big one. Each time a fridge door is opened, a blast of warm air enters, and a lot of electricity is required to bring the temperature back down. Having several smaller doors can provide quicker access to items and allow less cool air to escape. In Japan, such models are already on the market, but industry insiders say U.S. consumers may resist such a big change if it doesn't clearly make their lives easier in some way.

U.S. consumers have been cool to a new kind of energy-saving stove now popular in Europe. Induction stovetops, which feature a smooth, glass cooking surface, are one-third more efficient than either open flames or electric ranges, industry experts say. While range stoves heat coils that in turn heat the food, an induction stovetop creates an electromagnetic field that creates an electric current heating the metal pan or pot on top of it. A cook can change the desired temperature instantly. The food cooks faster and with more precise control. Despite a slow start, Whirlpool Corp. says it is starting to see increases in U.S. sales of induction stoves.

Looking at how appliances can work together may achieve much bigger energy savings than tinkering with individual pieces. For instance, the heat in a clothes dryer is currently wasted when it goes out the exhaust vent. Whirlpool engineers are looking at using that heat to warm water for the washing machine, thus reducing the load on a home's water heater, says Henry Marcy, vice president of global technology for the Benton Harbor, Mich., company.

Whirlpool is also exploring the possibility of a household system that captures and reuses heat that otherwise is wasted. But the company says it isn't ready to commercialize such a system, because for it to work, homes may require significant changes.

Smart Power Strips

Some new products try to help consumers themselves be smarter about their power usage.

While many major appliances use less electricity than they did two decades ago, households are using more, due to the boom in electronic equipment -- especially home-entertainment gear and chargers for personal electronic devices. The costs add up with each charger left plugged in or DVR running 24 hours a day.

Motion-sensitive power strips may help. Watt Stopper Inc., a Santa Clara, Calif., unit of France's Legrand SA, makes a power strip that works in combination with a motion detector to shut off all the electronics plugged into it after determining no one has been in the room for a predetermined length of time.

Another idea is "smart" appliances. Most households now pay a flat rate for electricity. But power prices actually fluctuate throughout the day, depending on usage levels. According to the power research institute's Mr. Reddoch, there are devices that alert customers to price changes in real time, as well as appliances that can be set to respond on their own to price shifts.

Some of these changes are starting to trickle into the market, such as a light that changes colors depending on power prices. Also, GE plans to release appliances next year with displays that indicate real-time power prices. The Fairfield, Conn., company says the appliances will be programmable to run when the rates are least expensive.

This kind of smart technology has huge potential, says Mr. Reddoch, who adds: "We don't convey to our consumers what it really means to use electricity."

A Quest for an Energy-Efficient House

We Undertake Four Home 'Audits'; The Pros vs. DIY

Preventing energy waste has become a household preoccupation in the era of nearly $4-a-gallon gas and rising prices for everything from airline tickets to milk. Whether motivated by environmental impulses or a desire to reduce utility bills, many Americans are researching ways to create a more energy-efficient home.

Statistics from a range of sources provide plenty of motivation. The U.S. Department of Energy's office of Energy Efficiency and Renewable Energy (EERE) estimates that draft reduction within a home can lower energy costs anywhere from 5% to 30% annually. Meanwhile, according to Department of Energy data provided by the U.S. Green Building Council, homes account for 21% of U.S. carbon dioxide emissions. And claiming a green home remodel makes for great neighborhood bragging rights.

Eager to lessen our carbon footprint and plan a responsible remodel, we undertook four so-called "energy audits" on our 1966 Seattle home, which has a finished 1,100-square-foot main floor and a partially finished 1,100-square-foot basement. We wanted to learn both how to improve the finished portion of our home and how best to add insulation and factor energy efficiency into an eventual basement remodel.

Energy audits -- assessments of your home's energy efficiency -- run the gamut from free do-it-yourself audits offered online to paid inspections in which professionals with varying credentials spend up to three hours scrutinizing the home and determining what gestures will improve its energy efficiency and which fixes will reduce energy expenses. More sophisticated professional audits employ high-tech devices, including "blower door" fans, which lower indoor air pressure and enable technicians to measure draft levels, and infrared (thermographic) scanning, which can measure surface temperature variations and thus spot air leaks and poor insulation.

We started with two do-it-yourself energy audits offered free online, including the Home Energy Yardstick offered by Energy Star, the organization that promotes energy efficiency and endorses energy-efficient products, and Home Energy Saver, a free online audit from the Environmental Energy Technologies Division at Lawrence Berkeley National Laboratory, a Department of Energy lab operated by the University of California.

The free Home Energy Yardstick was disappointingly basic -- especially given how much data we had to provide from 12 months' worth of utility bills. However, it's not a bad starting point. The Yardstick calculated that we have a 1.7 efficiency score on a scale of 1 to 10 (oops). Tips for making changes were basic, such as using a programmable thermostat (already in use), energy-efficient bulbs (check), and Energy Star-endorsed appliances. Nice tips, but rather generic.

Next up, Home Energy Saver put us through more paces, asking us to answer 20 categories of questions ranging from insulation levels in attic walls to our furnace type. We had to guess at some answers, but, assuming we guessed right, the data provided were detailed: The program spat out nine pages worth of information on possible improvements, including the cost to implement each, and how much we would save in energy costs. For instance, insulating our basement to R-11 (insulation-speak for thickness levels -- the higher the better) would cost only $480 but could save us $115 per year in reduced bills. These were estimates, to be sure, but they helped us shape priorities.

The professional inspectors drilled deeper, looking more at the "building envelope" of our home and making more concrete recommendations. The Home Detective, a home-inspection company that also performs energy audits, sent an inspector who checked our exterior, climbed in our attic and perused our basement, but didn't bring out some of the higher-tech gear. The upshot? It suggested that we increase the "R" value of attic insulation to R-30 or more, insulate interior walls surrounding our non-insulated garage, and insulate the perimeter of the basement's ceiling -- an area known as the house's "rim joists." Minor fixes would include sealing ducts and any spot where pipes intersect with a floor or ceiling. The cost: $169.

Pinnacle Inspections used both a blower door test and infrared scanning to investigate how airtight our home is. The blower door test, which the technician ran twice to make sure results were solid, revealed that our home is relatively airtight for its age -- possibly due to our new windows. The technician seconded Home Detective's recommendation to insulate rim joists and walls adjacent to our garage, but also was able to use infrared scans to point out non-obvious sources of drafts on our main floor, all needing only minor fixes. These areas included the front door (which needs weather-stripping), switch plates (which need fireproof electrical insulation), window trim (which needs insulation), the attic trap door (which could use weather-stripping or other insulation), and a bathroom fan that is vented into the attic (and could be better insulated).

In the end, we felt that Pinnacle's high-tech energy audit was worth the $550 price tag, since it gave us short-term and low-cost repairs we could make now as well as guidance for future insulation projects. Now, we're ready to tackle that basement.

By: Jane Hodges
Wall Street Journal; September 18, 2008

How to Choose a Mortgage Lender

When choosing a mortgage lender, the first thing one usually thinks of is getting the lowest interest rate available. While interest rates are important, there are other notable considerations, such as choosing a lender you can trust and with whom you can work. Take time to research area lenders.

As you will see in this brief out­line, obtaining a mortgage can be a lengthy and complex process. Along the way, there are many opportuni­ties for problems and misunder­standings.
Select a lender in whom you can have confidence and trust - one you can depend on to help you make decisions for your long term benefit. Taking time to research the lenders in your area just may prove to be the most valuable investment you will make toward the purchase of a new home.

The Best Mortgage

All lenders offer a variety of home financing options. A good lender will work with you to find what best suits your individual circumstances.

Most loan rates will not differ widely. However, differences in loan structure can result in large savings of costs to you. Loans may differ in such items as: Term (length of the loan), prepayment options or penal­ties, processing fees, no credit fees, etc.

While most mortgages are offered for terms of 15 and 30 years, other terms may be available. Keep in mind that the shorter the term, the less you will pay for your house over the life of the loan. However, the shorter the term, the higher your monthly payment will be. Your lender can help you decide which loan arrangements are best for you.

Finding A Lender

• Build a list of lenders. Talk to people you know who have bought or refinanced a home recently.
• professionals. Or simply look in the yellow pages under "Mortgages."
• Talk to a loan officer. Call or visit the lenders on your list. Get a feel for what it will be like to work with them and how they approach your needs. If you're still uncertain, ask for references from recent home buyers like yourself. Ask about their experience with a particular lender.
• Compare rates for similar loans. Among the things you'll want to discuss with prospective lenders are the rates they offer on mortgages. But when comparing rates between lenders, be sure the rates are for comparable loans, and remember to include fees and other costs so you're really comparing apples to apples.

It is important to verify that you lender is a member of a state as­sociation for mortgage lenders. This is a trade association made up of members engaged, either directly or indirectly, in the mortgage lending business. Each member is bound by a strict code of ethics to encourage the highest standards of conduct in dealing with the public and other members. The purposes of the as­sociation can be summed up as follows:

• Encourage among its members sound and ethical business practices in making, marketing and servicing of real estate loans.
• Inform the members of changes in government laws affecting real estate.
• Provide education to the membership and the public on real estate matters.

In a continued effort to provide consumer education and assure compliance by all members to the canon of ethics, an ethics committee is in place to provide assistance to you. If you have a complaint or need general information, contact your state's mortgage lenders association.

Pre-Qualification

Before you start house hunting, it is wise to determine your price range. This can be done through the simple process ofpre-qualifi­cation. To become pre-qualified, a lender or real estate agent will use financial information you provide to estimate the maximum mortgage you should be able to obtain. The process doesn't guarantee that your mortgage application will be accept­ed, but it does help you narrow your search to homes you can afford.

Interest Rate Protection

When applying for a loan, you will be given an option to "lock in" a rate, thereby guaranteeing your interest rate during the processing and underwriting of your loan. It is wise to obtain a written, rather than verbal, interest rate agreement if you choose this option. The other option is to let the rate "float," allowing the final rate and fees to be set nearer the settlement date. This means your rate would be subject to market conditions at the time and date that your rate is locked in prior to the closing.

Loan Application Process

A loan officer will complete the application form and collect all information necessary to begin pro­cessing the loan. Discuss the loan program and terms best suited to your financial needs with the loan officer. Then a loan processor will verify your loan application infor­mation. The loan processor assembles your documentation for submission and final risk approval to the underwrit­er, who then forwards your package to a closer to prepare the closing documents. If denied, a letter outlin­ing the reasons for denial is issued to you.

Loan Closing

When the lender approves your loan, it is time to close. Closing the loan and transferring the title to the property are the legal procedures that are handled by a real estate attorney.

Properly Fixing a Roof Now Will Save Time and Money Later

Fall is upon us, and it won't be long before you look at your roof and see snow piling up. While that isn't an image many people enjoy, it reminds us that it is a good time to check your roof to make sure it is ready to handle the harsh winter weather.

While fall is often a time when homeowners focus on some indoor home improvements, one of the most important home improvements may be putting on a new roof (see if this is covered under your home warranty). Sure, a new roof doesn't have the "wow" factor that a new kitchen or finished basement has, but it is vital in eliminating the potential for serious water damage in your attic. If you have an older home, or even one built in the last 20 years, there is a good chance you need a new roof.

Of course, one of the most common questions I get from callers is, "How do I know if I need a new roof?" If you have any obvious leaks in your attic or ceiling, that's a sure sign that you need a new roof. Even if you don't have a problem with leaks, it doesn't mean your roof is fine. To determine if your roof is in need of repair or replacing, take a pair of binoculars and inspect your roof shingles. If they are cracked, discolored or curling, you should call a full-service roofing contractor to get it inspected.

Once you determine that you need a new roof, you should learn all you can about roofing and roofing products. For example, in the past, many homeowners that had one layer of shingles on their roof would elect to have the roof "re-covered." That's where the contractor would put a new layer of shingles over the old ones. While that is certainly cheaper than a complete "tear-off" of the old shingles, it is not the best solution to your roofing needs.

ORA Warranty is one company that doesn't recommend re-covering. According to experts, if you do a re-cover, it means you are assuming the wood underneath and the original shingles are in good shape. However, you can't really know that unless you tear off the old shingles and inspect the wood. If that wood is rotting or in need of repair, your roof could still leak even after a re-cover.

Home warranty and construction experts also say that re-covering a roof doesn't enable a roofer to address other important areas of the roof's integrity, such as flashing walls and areas around chimneys or stack-vent pipes.

When it comes to roofs, you get what you pay for. Therefore, saving some money by doing a re-cover could unfortunately lead to paying your deductible on an insurance claim when your ceilings are damaged by water leaks.

Cost of shingles

You also get what you pay for in terms of roofing products.

While most contractors may be similar in pricing for installation of a new roof, the bigger cost differences are in the type of shingle you choose. There are two categories where the cost for a shingle can vary dramatically. One is the style of the shingle, while the other is the shingle warranty.

In the past, most shingles were the flat, three-tab variety, and only came in a few basic colors, such as black, gray or brown. Fortunately, today's homeowners can choose from a variety of architecturally designed shingles in a several colors that complement the look and color scheme of your home.

So, today's shingles can actually bring better curb appeal.

Of course, these architectural shingles are more expensive than the flat, three-tab version, but there are various price points for you to choose from to help you stay within your budget.
Warranty

The other important price factor when considering roofing shingles is the warranty. Obviously, a shingle that is warranted for 50 years is going to cost more than one warranted for 25 years. But it also will be better then the 25-year warranted shingle, so it will last longer.

When it comes to warranties, you need to know what the warranty covers before you can decide whether it's worth the investment. The best warranty is one that has a "No Dollar Limit." Which means that no matter how bad the problem or the cost, the shingle manufacturer will take care of the problem.

If you are planning to get a new roof, it's important to familiarize yourself with the common terms used in the roofing industry to help you make an educated decision when choosing a contractor and roofing materials. See the accompanying story for some of the most common terms used in the roofing business.

Once you have settled on the type of roof shingles you want, make sure you have enough roof and soffit ventilation to improve the shingle's life. With the proper amount of insulation on your attic floor, your attic temperature is closer to the outdoor air temperature, which eliminates the potential to "cook" the underside of the shingles. Most roofing contractors will recommend and install the proper ventilation system for your roof.

Make Home Repairs Before Autumn Sets In

When you're working, wrangling the kids and generally living a full life, it's easy to let taking care of your home fall to the bottom of the priority list. But you need to stay on top of maintenance chores if you want to keep your home and all the good things in it functioning smoothly.

As fall approaches, it's time to start thinking about a top-to-bottom inspection to check for any damage and to prepare for the upcoming cold winter months.

Bite-sized projects

When it comes to staying one step ahead of maintenance headaches, we have to admit, our preference would be to bury our heads in the sand and hope that someone else takes care of any problems. Fortunately, we learned a trick that helps us overcome that mental block. If we break a big task down into smaller tasks, and then put one task on our to-do list each week, we will surprise ourselves by tackling something we didn't think was possible.

For example, Sarah recently moved into a new house and there were about 50 little maintenance issues, such as a knob that had fallen off the dresser drawer and a leaky faucet that was keeping her up at night, which she knew she had to deal with. So she broke it down. Week one, she created a checklist. Week two, she went to the hardware store for all the supplies she'd need to fix the broken things. Week three, she fixed the broken knob. And so on. When you're feeling overwhelmed, break the project down into smaller bite-sized steps, and you'll be off to the races in no time.

Getting help

If you keep putting off maintenance tasks because you're too busy, reach out to others who can help you. I am happy to admit that I am out of my depth in many areas of home maintenance. Why? Because that means my job as a homeowner is really about finding the right people to help me for the right price.

Here are three essential chores to tackle this week to get your home ready for the transition to fall.

No. 1. Change esssential batteries

Don't wait until your smoke and carbon-monoxide detectors chirp at you to be changed, since that usually happens when you're busy doing something else (like sleeping). Buy a few extra batteries when you're at the grocery store this week and swap out the old batteries for new ones in all of your detectors.

No. 2. Change the filters

As much as half of the energy used in your home goes to heating and cooling. A dirty filter will slow down air flow and make the system work harder to keep you warm or cool -- thus wasting energy. A clean filter will also prevent dust and dirt from building up in the system, leading to expensive maintenance and/or early system failure. If it's been more than three months, buy some new filters and put them in your heating and cooling systems this week.

No. 3. Sweep the chimney

Chimneys need periodic examination and thorough cleaning to maintain efficiency and to reduce the chance of a chimney fire. Book an appointment with a chimney sweep to have yours professionally cleaned and checked for loose or missing mortar.

By: Sarah Welch and Alicia Rockmore
Detroit News; September 20, 2008

Creating a Wonderful Master Bedroom And Bath

Enlisting the help of a professional could be a saving grace

To shorten their extremely long commute, many Americans are moving out of the suburbs and into the city. However, this also means trading in a brand-new, spacious dig for a 100-year-old row house that needed lots of work.

To save money, the many intrepid couples decided to don safety glasses and sledgehammers and do it themselves. But after a certain length of time goes by, couples have realized they have bitten off more than they can chew. Their houses are still in shambles, and they often run out of money, ideas and patience.

Many couples often grow weary, and consider abandoning their projects. However, if they can afford to hire a professional to finish their kitchen remodel, for instance, the couples' sanity can be saved. Couples also might want to consider simplifying their projects, like purchasing a bath enclosure rather than completely redoing a bathroom.

Here is a professional's account of a typical couple who has enlisted help:

The couple wanted their third-floor bedroom to be an open space with a bright, airy loft feeling. They had gutted it with that in mind, but the shell of a room lay unfinished in a heap of dust and debris. So the first order of the day was drywall -- a lot of drywall. I created walls and ceilings, and lay down a sub-floor covered with beautiful dark vinyl that has the look of wood.

Once the basics were in place, I chose a color palette for the space. When searching around for inspiration, I found a box labeled "Barb's favorite fabrics." In it, I discovered a gorgeous sage-and-gold cloth that gave me the jumping-off point I needed for the paint, fabrics and tiles.

I then got busy dividing the loft into two zones: a bedroom and a bathroom. I separated the two areas with a wall of closets that provide storage, privacy and soundproofing. In addition, I closed off the smaller entrance to the bathroom with a series of woven panels on a track system that will slide across the space when privacy is needed.

In the bedroom, I put in a king-sized bed with a chocolate-brown upholstered headboard.

For added warmth and ambience, I put in gorgeous linens and throw pillows in a variety of textures and colors. And, for a touch of romance, I installed a beautiful crystal chandelier above the bed.

In the bathroom, I created a little closed-off space for the toilet, but left the rest of the space open.

In this open area, I installed a gorgeous old-style tub with cast-iron feet (after I reinforced the floor to accommodate this 700-pound beauty); a glass-enclosed shower, complete with solid white quartz walls and a feature wall in a beautiful green rippled tile; and a stylish vanity with a quartz countertop, a stunning sink in a gold-and-green paisley pattern, a mirror and two sconces.

After adding a variety of accents and accessories, this third-floor bed and bath were complete. With some high-end fixtures and finishes, a mixture of textures and colors and creative planning, Barb and Evan got the loft space they desired.

Now, with their bedroom-renovation woes behind them, the couple can finally get a good night's sleep -- and start dreaming about finishing the other rooms in their house. How divine!

Luxurious Condo Life

Glenmore Garden Villas offers luxury living at affordable prices

In today's market, homebuyers have more options – especially when it comes to purchase price.

That's why several developers are building homes and luxury condos that are more affordable than many of the luxury-prices dwellings that came to market a couple of years ago. Yet at the same time, they're not skimping on luxury details.

Elaine Burgin, Marketing Vice President at Glenmore Garden Villas, says there has never been a better time to buy a new condominium, with extremely low mortgage interest rates and great values in the housing industry.

One example is Glenmore Garden Villas, located right off of I-485 on McKee Rd. in Charlotte, North Carolina. Glenmore Garden Villas is being developed as an attached-condo community with units starting from the low $400s.

“Our condos are close to I-485 for easy access to other popular areas of South Charlotte like Ballantyne, Southpark, Center City and the Charlotte Douglas Airport CLT for easy flight arrivals and departures with quick access to the CLT airport parking and terminal.,” says Burgin.

But even with such reasonable pricing, “These units definitely offer luxury-line amenities,” Burgin says. “For example, they all have high vaulted ceilings and cultured marble countertops in Master Bath and Guest Bath rooms. They also include hardwood floors, arched openings, top of the line appliances, and granite countertops in the kitchen.”

Buyers choose one of two floor plans, both equipped with a flex room and office. The Highland Villa is a 2,899 square feet condo, with three bedrooms, two and a half baths, and an open living/dining area. The Forest Gate Villa is also 2,899 square feet and has three bedrooms and two and a half baths, but the dining area is separated and slightly more secluded.

The Glenmore community has 16 acres on which it offers peaceful fountains, gardens, elegant pools, a cabana, and pergola covered lounging areas.

For more information regarding luxury condos, visit Glenmore Garden Villas' website.

Burning Issue

As wood stoves gain popularity, air-quality concerns rise

The soaring prices of heating oil and natural gas are prompting many Americans to warm their houses with a less expensive fuel -- wood.

Consider Julia and Jim Fusari of Freeport, Maine. Last year, they burned 500 gallons of oil to heat their 2,000-square-foot home. They hope to cut that figure in half by supplementing their oil furnace with a new stove that burns pellets of compressed wood waste. Relying solely on oil is "just too expensive," Ms. Fusari says. "We can't afford it.".

But increased reliance on wood stoves is worrying many environmental regulators and activists, who say the practice emits harmful pollutants. Around the country, local environmental regulators are limiting the use of stoves when pollution is especially bad, and in some cases they're offering incentives to get people to buy the cleanest models possible.

"People conceive of burning wood as being natural. Tobacco is natural, too -- until it burns," says Julie Mellum, president of Take Back the Air, an organization concerned with neighborhood air pollution, and Midwest director of Clean Air Revival, a group concerned with the medical hazards of wood-smoke exposure. "When many people are burning wood, the effect is all the more hazardous."

Burning Money

Many homeowners feel they have little choice but to switch to wood stoves. Residential heating oil, an energy source for 8.1 million U.S. households, will average $4.13 per gallon this winter, according to a projection from the Energy Information Administration, a federal agency that tracks energy statistics. The average household can expect to pay $2,524 for heating oil this season, up more than 30% from last year. And natural-gas bills will increase 19% to $1,017, the agency predicts.

The threat of high heating costs is pushing up stove sales across the country. Second-quarter shipments to dealers of pellet-burning stoves and stove-like inserts that fit inside fireplaces rose 212% over the same period last year, reports the Hearth, Patio and Barbecue Association, a trade group in Arlington, Va. Shipments of wood-burning stoves and inserts were up 54%.

Burning wood offers consumers sharply lower fuel bills. In some cases, adding a wood stove can reduce oil consumption by half or more, and the cost of fuel can be as low as about $1,380 per season for a pellet stove in a midsize house. The problem? Wood burning produces toxins such as dioxin, arsenic and formaldehyde, and emits fine particles into the air -- known as particulate matter -- that can become embedded in the lungs.

Heat Source

Particulates can aggravate respiratory conditions and lead to cardiac problems and lung disease, according to Janice E. Nolen, a policy advocate for the American Lung Association in Washington, D.C.

In 1988, an Environmental Protection Agency regulation required new stoves to keep particulate emissions below certain levels. Some states and municipalities require that all stoves sold and installed carry an "EPA certified" designation.

But some clean-air advocates say the EPA's certification standards aren't stringent enough to curb runaway pollution. Even wood stoves that are certified as "clean burning" by the EPA still emit 107 times more fine particulates than an oil-fired furnace.

Earlier this year, the Western States Air Resources Council in Seattle and Northeast States for Coordinated Air Use Management in Boston, both of which are groups of air-quality agencies, urged the EPA to tighten its certification standards with stricter particulate requirements. The EPA says it's reviewing the information it needs to revise the standards.

State by State

In the meantime, local regulators are cracking down. In July, the Bay Area Air Quality Management District in San Francisco approved its first mandatory controls on indoor residential wood burning. The air district can prohibit burning on nights when particulate matter exceeds 35 micrograms per cubic meter -- something that occurred seven times during the 2007-08 winter season. Violators could incur fines of up to $1,000.

Similar measures are in effect elsewhere in California, including Sacramento and the San Joaquin Valley, as well as in other states. The Puget Sound Clean Air Agency in Seattle bans indoor burning of any type of wood or pellet stove -- unless it's the only adequate heat source -- when pollution reaches its highest levels. (That's on top of Washington State's stringent emissions standards for wood stoves, which are tougher than the EPA's.) In Colorado, residents can use only stoves certified by the EPA or state when pollution is high in the wintertime.

Other states are trying to get residents to replace older stoves with cleaner-burning models or other heating sources. The state of Washington this summer awarded $1.5 million in grants to local clean-air agencies for one such effort. Last year, a Puget Sound Clean Air Agency program offered consumers in three communities incentives ranging from $200 to $750 to make the switch. A total of 238 households participated, and more than 100 switched to cleaner-burning wood or pellet stoves.

A similar program in Libby, Mont., saw 1,130 stoves replaced between 2005 and 2007. The result: a 28% reduction in fine particulates during winter months, according to the Hearth, Patio and Barbecue Association. But Montana air officials say the state needs three years of data in order to be more certain of the program's effects.

Some states with a wealth of forestry resources are trying to balance their convenient fuel source with cleaner air. In Maine, for instance, Gov. John Baldacci has established a Wood to Energy Task Force to explore a transition to cleaner-burning stoves and pellet fuels.
What to Look For

So, what's the best move for consumers interested in heating cleanly with wood? First, do your homework. Standards vary among states and local jurisdictions, so make sure you know what's legal for your area. And look carefully at performance levels, which can vary even among certified stoves.

Hearth Condition

* The Popular Alternative: As oil and gas prices soar, people are flocking to stoves to help heat their homes.
* The Drawback: Burning wood releases harmful pollutants -- leading lots of states to crack down on wood-burning stoves.
* The Smart Solution: Before you buy, do your homework on local rules and figure out what size stove you need. Also, look into ways to keep the heat in your house, such as an efficient shower enclosure, to prevent drafts.

"Look at the emissions numbers and try to purchase the cleanest-burning unit you can," says Lisa Rector, a senior policy analyst with the Northeast States air-quality group.

EPA-certified stoves carry a label that that shows how a particular stove performs on a scale of acceptable emissions and its wood-burning efficiency. The lowest particulate emissions among stoves are generally between 1.8 and 3.0 grams per hour; the EPA limit for wood stoves with the most popular type of combustion system is 7.5 grams per hour.

Also bear in mind that some wood stoves and fireplaces are exempt from the EPA standards, which apply mainly to appliances not intended for residential heating, such as cook stoves, decorative fireplaces and outdoor wood-fired boilers. But it's illegal to install noncertified stoves in places with strict standards, such as Washington State.

Adding to the confusion, many pellet stoves don't require EPA certification at all if they already meet certain standards required for certified wood stoves. They are also relatively clean because the pellets burn more efficiently than regular wood, producing more heat and less pollution (generally about 1.2 grams of particulate emissions per hour). Stoves that burn coal, corn and other organic waste are also unregulated.

It's also important to work with a reputable dealer who can help you choose a properly sized stove. If it's too big, for example, it will overheat the room unless you reduce the air flow -- which causes a low, smoldering fire and excessive smoke. What's more, wood selection can play an important role in pollution reduction. Burning dry, seasoned wood reduces smoke output.

Ultimately, says Ms. Rector of the clean-air group, the burden falls on consumers to do research prior to purchasing a stove. "You can burn wood," she says. "But you have to find out how to do it right."

By: Suzanne Barlyn
Wall Street Journal; September 15, 2008

Home-inspection Checklist Helps Prevent Problems

When people buy a home, it is advisable to have it inspected by a professional home inspector to ensure there are no major issues with the home before buying it, and to help determine which items might need repair or regular maintenance.

But once people have lived in their homes for a few years, they usually don't bother about putting many of the same items on a home-inspection checklist to ensure there are no developing problems.

It's smart to use regular-home inspections to ensure your home is properly maintained. Certainly having a professional home inspector perform an annual inspection of your home is a great idea, but you can do your own inspections and save a lot of money.

While I wouldn't advise you to crawl into your attic or up on your roof if you don't feel comfortable doing that, there are plenty of other items you can check and repair if needed.

The weather at this time of year is ideal for doing an exterior inspection of your home. When that's done, check the interior as well so you can fix things before additional problems occur.

When doing your home inspection, focus on these key areas that many professional home inspectors find most often are in need of maintenance:

• Gutters and downspouts. Make sure gutters are clear of debris and aligned properly so they can do what they were made to do -- keep rain water from seeping into your basement and causing potential flooding or structural problems. While you are inspecting your gutters, look for leaks in the seams that can be repaired with silicon caulk. If you pull on the gutters and they give way, your fascia boards may be rotting and need replacing.

• Improper grading around the home. Besides leaky gutters, one of the other common reasons people have basement leaks is because the grading is sloping toward the home, rather than away from it. If you have an area of your yard that slopes toward your home, re-grade it with topsoil.

• Shingles and chimney flashing. Loose or missing shingles are a sure sign your roof may be wearing or is damaged. The safest way to do a sight inspection of your roof is to use a pair of binoculars. Look for worn, curling, or discolored shingles, and check the valleys (where rooflines come together).

Cracks in the valleys can lead to leaks in the attic. They need to be sealed immediately. Then, check the flashings around your chimney to see if they need to be caulked or repaired. This will also help prevent water from leaking into your home.

• Exterior caulking and weather stripping. Lack of proper caulking or weather stripping around door and window exteriors can cause air to seep into and out of the home, which increases heating and cooling bills. Replace hardened or cracked caulk and window putty. Make sure all openings where pipes and wires enter the home are sealed and the caulk is still flexible.

• Gas leaks at valves on appliances. Gas valves on appliances, such as dryers, stoves, or hot-water tanks, can begin to leak over time. There have been many incidents where a gas leak in a home resulted in an explosion.

By doing the simple smell test, you can ensure this catastrophe won't happen to you. If you smell gas, call the gas company immediately.

• Dryer vent systems. Every year, thousands of families experience home fires that are caused by cheap or clogged dryer vents. Unfortunately, many homeowners use vinyl tubing rather than hard metal for the dryer vent, or they don't clean the vents regularly. Both can lead to dryer fires.

If your clothes dyer has a vinyl or foil dryer vent, replace it with a solid-metal vent. And make sure you clean your dryer vent at least twice a year.

• Inoperative smoke detectors. Most people have smoke detectors in their home, but don't clean them or change the battery regularly. I recommend cleaning smoke detectors and replacing the batteries twice a year -- on Memorial Day and on Labor Day. Remember, a smoke detector's life span is 10 years.

Building your own home inspection routine into your annual maintenance schedule is a cost-effective way to protect one of the biggest investments of your life.

Also consider getting a professional home inspector to perform an in-depth inspection every five to ten years to help you determine if you have been missing items that need repair and get a home warranty to cover regular maintenance costs.

It is always more economical to repair or upgrade according to your schedule rather than having to repair or replace on an emergency basis. The more carefully you inspect your home, the less you'll have to worry about in the future.

By: Glenn Haege
Detroit News; August 30, 2008

Dream Homes At Prices You Can Afford

Is buying a new home a good idea in today's economy? As a long-term investment, homeownership is still one of the best investments for individual households.

Housing, like all markets, has its ups and downs. Homeownership has a track record that is virtually unmatched by any other purchase in terms of its real benefits.

If you have good credit, a job, and a steady income, you'll find there's still plenty of mortgage credit to be had at good rates. For well-qualified buyers, rates are running at near historic lows.

Based on the housing stimulus program recently signed into law, you might even qualify for a first-time homebuyer tax credit, if you purchase a new home now.

Homeownership's Real Value

Dollar for dollar, homeownership is a solid stepping-stone to a future of financial security and the single largest creator of wealth for many Americans.

Over time, real estate has consistently appreciated, even through periodic adjustments in response to economic conditions. In the state of North Carolina, home appreciation has stayed at a solid 8% annually, with Raleigh real estate at a 6.4% annual home appreciation rate, compared to the national home appreciation rate or 5% annually.

The returns of such high appreciation rates are much more than an equal investment into the stock market. For instance, at the national appreciation rate of 5%, if you put 10% down on a $200,000 house, for an investment of $20,000. At a 5% annual appreciation rate, that $200,000 home would increase in value by $10,000 during the first year. Earning a $10,000 on an investment of $20,000 is an extraordinary 50% annual return. As you can imagine, an even better investment return occurs with an 8% home appreciation rate.

In contrast, putting that $20,000 down payment into the stock market and getting a 5% gain would only yield a $1,000 profit.

Should I Wait to Buy Until Home Prices Go Even Lower?

If you wait for what you think is the absolute best deal, you could end up waiting for years and missing out on your dream home. All the market fundamentals show that now is a good time to buy – prices are down, interest rate are near historic low levels, and there are lots of homes to choose from.

There are many things to consider when “shopping around” for a new home, and waiting for something that might now happen will only prolong that process. In addition to taking advantage of currently offered incentives, one of the most important things you can do when looking to buy a new home is to hire a home inspector to make sure the home is safe. A home inspector focuses on the condition and structure of the house and points out observed safety concerns. However, a home inspector will not do and destructive testing and will not inspect what they cannot see, leaving your new home in stable condition.

Therefore, if you buy now, you'll not only be in the driver's seat during the buying and home inspection process, you'll also reap the gains of price appreciation. Remember, those who purchased homes in the early 1990s during the last big economic and housing downturn came out as big winners.

The Advantage of New Construction

Today's new homes are better than ever. When you buy a new home, you get quality, new construction, the latest technological advances, and low-maintenance, money-saving, energy-efficient appliances. Many new-construction homes are built to Green Building standards. Homes are designed to fit your lifestyle, featuring larger kitchens for family gatherings, bigger closets, ample storage space, and more bathrooms.

In addition to cutting edge construction, it is easier than ever to get a home warranty. A home warranty will provide a new homeowner with coverage that will help curb the costs for common frequent household breakdowns. A home warranty will help keep the house looking and functioning like new, and is also a good selling point down the road.

So it's a good time to buy – if you're a first time buyer and qualify for the tax credit, it's an even better time to buy – and there are quality, new-construction homes and condos in every price range throughout North Carolina waiting for you. Don't wait and risk missing out on your dream home.

Teardowns Have Foes, But They Can Revitalize The Block

The first part of Mark and Constance Eddy's home-ownership story is classic: In 1998, the newlyweds bought a starter home in a post-World War II subdivision in Prairie Village, Kan.
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The 900-square-foot, two-bedroom, one-bath house was dated, with 1950s metal cabinets and gold-flecked Formica counters in the kitchen, but cozy.

"It was all we needed," Mark Eddy said.

What really sold the couple on the home was the street. Prairie Lane is a winding street of tiny houses nestled close together under a canopy of large trees. The neighborhood is next to the Prairie Village Shops, which contains an urban mix of businesses -- gas station, hardware store, drugstore and diner, as well as upscale restaurants and boutiques.

"People live in their front yards. There's a mix of ages -- some neighbors are like grandparents to the children on the street. It really has a sense of community," Eddy said.

Seven years later, the couple had two small children and a third on the way. It was time to trade up. So the Eddys sold the house on Prairie Lane and bought a 1,900-square-foot ranch on a big lot in Leawood, Kan. They were living the American dream.

But in a 21st-Century twist to the tale, the Eddys were unhappy in the "better" neighborhood. The street was usually deserted and quiet, except for the distant hum of traffic on Interstate 435.

"We immediately missed the neighbors, and we missed walking to the shops," Mark Eddy said. Two years later, when the house next door to their first home came up for sale, the Eddys decided to buy it, tear it down and build a new house on Prairie Lane big enough for their family to grow into.

At 3,400 square feet, the Eddys' new home towers over its neighbors on Prairie Lane. The home is in compliance with city requirements for setback from the street, setbacks from the sides of the property, height and footprint on the lot. But shortly after groundbreaking, the Prairie Village Homes Association took the Eddys to court, claiming the proposed house design was in violation of deed restrictions that limited to homes to "1 1/2 " stories. The judge eventually ruled in favor of the Eddys.

Mark Eddy, co-owner of Gahagan-Eddy Building Co., says he talked with many neighbors on the street and showed them his house plans to try to gain their approval before moving ahead with the home teardown. A majority of homeowners on his street signed a petition in favor of allowing the house.

Bill Chinnery on the homes association board of directors says he thinks the chocolate-brown exterior paint and two tall trees on the lot help the house blend into the neighborhood in summer. But in winter he thinks the house sticks out too much.

"I like the house, but it's too big for the neighborhood," Chinnery said.

Jessamine Guislain, who has lived on the street since 1965, disagrees.

"It's a beautiful house, and I enjoy looking at it," Guislain said. "I'm happy to see a family who loved Prairie Lane able to move back to it."

Guislain said allowing home teardowns and home renovations on the street helps keep the community intact. "In my own experience with a house next door to me, every family who lived there, once they had their second child, moved."

Eddy says most of his neighbors have been supportive, but he acknowledges others think the house is too big. "I respectfully disagree. If a house is beautiful, I don't care if it's twice the size of the one next to it. It should only be a problem if it's ugly."

Prairie Village recently adopted an ordinance to notify homes associations of permit requests within their neighborhoods, says assistant city administrator Dennis Enslinger.

"Everybody has their own expectation of what the neighborhood is and what it should become, and the city is trying to balance those interests for everybody involved. But it is an ever-changing balance," Enslinger said.

Cydney Millstein, owner of Architectural & Historical Research LLC in Kansas City, says preserving historic neighborhoods is important, but it doesn't mean everything has to stay the same.

"If new designs are done tastefully with a tip of the hat to what was going on historically, that's OK. If it's bringing life back to a neighborhood that became kind of stale after a while, this is a good way to inject vitality back into the neighborhood."

By: Cindy Hoedel; McClatchy Newspapers
Detroit Free Press; August 17, 2008

Home-Equity Debt Lurks

A recent improvement in beleaguered home-equity loans has been a rare sign of encouragement for banks. But bullish investors need to remove their rose-colored glasses.

Banks have about $700 billion of home-equity loans -- in which a bank lends money to a homeowner against the equity in his house. That includes both fixed-rate loans and floating-rate debt drawn from credit lines. Lenders usually can't collect on a defaulted home-equity loan by seizing a house unless the borrower has no mortgage, since mortgage lenders have first claim.

The so-called piggyback loans are the riskiest of this home-equity debt. Most were taken out during the raging real-estate market. These loans came on top of a first mortgage, aren't backed by insurance and enabled some borrowers to buy homes without making a down payment. These loans represent more than 8% of the value of outstanding home-equity loans, according to SMR Research.

Banks have been reducing unused credit lines, especially in areas with housing problems. James Dimon, chief of J.P. Morgan Chase, which has been hurt by losses in its home-equity portfolio, recently said delinquencies could be stabilizing. "It's a little ray of sunshine that is OK to grab onto for now," he said.

Many who were caught flat-footed when these loans turned sour now assume that home-equity loan risk already is factored into bank stock prices, which have tumbled. But investors may be too upbeat once again. For one thing, the recent news isn't exactly uplifting: 2.22% of all home-equity loans were charged off by banks in the second quarter, an all-time high. That is up from 1.69% in the first quarter and 0.9% in the fourth quarter of last year. Tax refunds and government-issued stimulus checks likely are at least partly responsible for why things aren't worse.

The losses likely will remain elevated for the foreseeable future. It isn't easy to see why home-equity losses would improve until there is a true bottom for housing. Analysts at Goldman Sachs predict home-equity losses won't peak until the first quarter of next year.

For investors, it would be best to avoid lenders with heavy exposure to home-equity loans written by outside mortgage brokers and other third parties that often employ lax underwriting standards. Instead, stick with banks that made their own loans during the real-estate surge.

Using this stance, investors should use caution when it comes to First Horizon National. According to a Goldman analysis, 15% of First Horizon's home-equity loans, or 5% of all its loans, were made by outside parties. Outsider-written loans represented 22% of Fifth Third Bancorp's portfolio, or 3% of its total loans. And 14% of Wells Fargo's home loans, or 3% of total loans, were written by third parties.

These three banks also have a relatively high number of home-equity loans that are at least 90% of the value of the underlying houses, which is worrisome. Some investors also are concerned about E*Trade, which also was a big buyer of home-equity loans.

On the flip side, Comerica, Regions Financial and BB&T Corp. hold almost no loans made by outsiders, which is a good sign.

By: Gregory Zuckerman
Wall Street Journal; August 1, 2008

Private Lenders Provide Option for Borrowers

As lending standards have become tougher, a rising number of people and businesses are turning to an unlikely source for money: private lenders.

In recent years, the practice of borrowing money from private parties was rare, except among those who were unable to qualify for traditional loans. Banks were flush with cash and eager to lend, meaning even people with a tarnished credit history often could find quick sources of cash.

Now, even those with good credit are bypassing banks to borrow money -- despite interest rates that can reach 20% or more, and down payments of 35% or more.

These private funds -- which aren't from banks or credit unions -- are being used for everything from second homes to apartment construction. Many borrowers have excellent credit, but they are trying to avoid the added time, scrutiny and uncertainty of a conventional bank loan. Such transactions are "not as publicly available as one might expect," says Ron Phipps, a real-estate broker in Warwick, R.I., "but there is definitely money available."

Arrangements for such loans are equally low-key. While hedge funds and high-net-worth investors are providing cash, it isn't unusual for a private lawyer to get five friends to each throw in $100,000 for a home loan. Wealthy investors, hedge funds and private-equity firms are lending money in pursuit of consistently higher returns. The bear market for stocks may make alternative investments such as this type of lending more attractive.

Typically, borrowers hear about private loans from lawyers, mortgage brokers and real-estate agents. Borrowing and lending opportunities are even sometimes posted on Web sites or in newspapers.

For investors, well-structured deals could reap significant returns, because private lenders typically charge much higher closing costs and interest rates than traditional lenders. They also require a much higher loan-to-equity ratio. So if the borrower falls behind, the lender potentially could resell the property at a profit.

"For the investors, there's an opportunity," says Scott Haislet, owner of LEC Mortgage in Lafayette, Calif. "But you better know who is in charge and who's making the decisions about the property."

Borrowers "need to make sure they understand the way the loan works," says Allen Fishbein, director of housing for the Consumer Federation of America. Mr. Fishbein recommends that borrowers "seek out independent professional advice before committing themselves."

The tight credit market makes the loans especially appealing to borrowers, who a few years ago might not have considered the option. "In times like these, when money is tight, private money flourishes," Mr. Haislet says. Stricter lending standards make it more difficult for borrowers with good credit scores to get large loans or so-called bridge loans, which someone might use during a construction project. If you are considering a home-equity loan for a construction project, also consider a home warranty. A home warranty service contract will cover the repair or replacement of many common home repairs and replacements.

Even borrowers with excellent credit scores can wait weeks for a loan to be approved. Occasionally, those deals evaporate, leaving builders and home buyers scrambling for cash. That is where private lenders step in. It isn't unusual for these lenders to charge several points and interest rates of 12% or significantly higher. They also typically require borrowers to provide 35% or more of the down payment, so there is ample collateral if anything goes wrong.

Mr. Haislet, who arranges some private loans, warns that "they're not for everyone. If borrowers can find a better alternative, they should take it, but sometimes there are no other alternatives."

Mr. Haislet says most of the private loans are for less than five years -- and sometimes only six months, for those doing home-renovation projects who could otherwise not borrow the money.

He says his borrowers typically pay 9% to 11%, compared with many current bank rates of less than 7%. The loan-to-value ratios also are much larger.

By: Jilian Mincer
Wall Street Journal; July 31, 2008