Law School Discussion

Home Ownership and Wealth Building

2Lacoste

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Re: Home Ownership and Wealth Building
« Reply #460 on: July 05, 2006, 11:52:10 AM »
Most firms "require" you to split the first half of your summer with them.  So what you usually have to do is pick your favorite, then force the other firm to let you split the second half with them.


Is it possible to split, say, DC firm -- NC public interest type?



yes thats easy, but you won't make any money for the NC portion.

Money is no object.  You know, I got all that Truman money to cover all 3 years of tuition and then some!   ;) :D


EDIT:  The other thing is that Charlotte firms are mostly finance and banking-type firms.  Not my cup of tea.  At all.

Re: Home Ownership and Wealth Building
« Reply #461 on: July 27, 2006, 02:50:45 PM »
Tag for my reads.

One Step Ahead

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Re: Home Ownership and Wealth Building
« Reply #462 on: March 16, 2007, 05:18:04 PM »
Scary Math: More Homes, Fewer Buyers
The problem with subprime lenders means there will be more homes in an over-supplied market and not as many people who can step in to make purchases.
By Les Christie, CNN
March 16, 2007
Subprime lenders are already getting crushed, but the impact rising mortgage delinquencies will have on home prices overall is still an open question.

At a minimum, it means financing is drying up for those with less-than-perfect credit and that spells fewer home buyers.

And foreclosed properties will add supply to a housing market that already has too much.

"It's going to be a really big deal," says Dean Baker, co-director of the Center for Economic and Policy Research.

"[National] inventory is 20 percent higher than last year, vacancy rates have soared and prices are down about 3 percent," he says. "Now, with the tightening of credit, I don't see how prices don't fall another 5, 6 or 7 percent."

The tightening of credit could take as many as one million buyers out of the market, says Baker, citing Bear Stearns research. "Even if you cut that in half, say to 400,000 or 500,000, that's huge."

Mark Zandi, chief economist for Moody's Economy.com, is also concerned. "I think the subprime problems will take housing activity to a whole other level," he says.

Zandi is projecting a doubling of subprime defaults this year to 800,000. "Those homes will go on the market at a discount and will weigh on the market," he says. He also believes that 500,000 fewer Americans will be able to obtain financing because of the tighter standards.

All that has led Zandi to alter his projection of a 3 percent decline in housing prices this year to a mid-single digit decline. The hardest hit areas, which he thinks will be Arizona, Nevada, parts of California and Florida, will absorb high single digit or even double-digit punches.

Not everyone paints as bleak a picture. "We don't know how many subprime mortgage holders will actually default," says Christopher Mayer, an economist at Columbia University. "Banks are working with borrowers [so they can keep their homes]. Plus, there's plenty of liquidity around for people looking for mortgage loans."

That's not to say he sees everything as hunkey-dorey. Mayer thinks values in speculative markets had gotten way ahead of fundamentals and that weak local economies in the Midwest will depress values there.

The extent of the subprime delinquency problem is disputed. According to a report from the Center for Responsible Lending (CRL), about 1 in 5 of the subprime loans written in the past two years will go into default, costing 1.1 million their homes and unleashing a flood of foreclosed homes on the market.

But Doug Duncan, chief economist of the Mortgage Bankers Association, thinks CRL is overly pessimistic, noting that defaults for subprime mortgages have never exceeded 10 percent in any given year.

And he argues that most of the loans written before mid-2005 are unlikely to fail because they are already out of the danger zone - they've either reset with their borrowers continuing to pay them off or the increased housing values that accompanied the boom have boosted home equity enough so that owners have comfortable cushions.

More significant than defaults may be the impact of credit tightening.

"Banks have become much more cautious. Lenders are tightening, not just subprimes, but Alt-As (not quite prime) loans and primes as well," says Ellen Bitton, founder of the Park Avenue Mortgage Group.

Lawrence Yun, an economist with the National Association of Realtors, which tends to have an optimistic view of home markets, is projecting the number of potential homebuyers unable to obtain financing because of the subprime crisis will average about 20,000 a quarter.

Defaults, he believes, will come to perhaps one-half of one percent of mortgage holders, perhaps 200,000 homeowners. NAR's position is that the impact on prices will be only slight.

"Unlike the last housing crisis in the early 1990s, the economy is very sound; people are getting jobs, not losing jobs," says Yun.

Baker, perhaps the most pessimistic of the prognosticators (he is someone who sold his Washington, D.C. home a couple of years ago in anticipation of it falling in value), saves most of his concern for the markets that had the most speculation - Las Vegas, Arizona and parts of Florida. Meanwhile New York, Boston, and coastal California, and even D.C. should hold up OK, he says.

http://promo.realestate.yahoo.com/More_Homes_Fewer_Buyers.html

A.

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Re: Home Ownership and Wealth Building
« Reply #463 on: March 18, 2007, 01:43:03 PM »
Wink at OSA:

Easing That Mid-April Angst
Get the Ball Rolling Early With These Tax Tips

By Kathleen Day
Washington Post Staff Writer
Sunday, March 18, 2007; F01

The deadline for filing taxes is 30 days away, a countdown that's costing many veteran and novice taxpayers a good night's sleep.

"I know the deadline, but I don't know what I'm required to submit," said Jennifer Ash, 22, who graduated from George Mason University in May and will pay taxes for the first time on a full-time job. "All the forms are in different places. I'm afraid of leaving something out. I don't want the IRS coming back years later saying I owe them thousands of dollars."

Ash at least has collected her paperwork in one place -- W-2 forms stating her wages for the year, college-loan payment stubs and totals paid in interest, receipts for charitable giving and for the Treo smartphone she uses mostly for work. Being organized is more essential than ever: The Internal Revenue Service has cracked down on receipts, requiring one for even tiny claims.

"If I had to give one piece of advice to anyone, keep receipts and keep them for three good years past when you file your return," said Stef Tucker, an attorney with Venable.

But being organized won't necessarily make the rules easier to fathom -- if you can find out about them in the first place. Many taxpayers simply won't take advantage of breaks, experts say.

As of mid-February, 10 million taxpayers, or about 30 percent of those who had filed, did not request a one-time refund of a telephone excise tax that ranges from $30 to $60 and that nearly everyone can claim.

And while most folks know the peril of filing late if they owe the government money -- penalties, interest charges, scary letters and potential visits from IRS agents -- many may not know that filing too early can also have drawbacks. The 1099 form summarizing dividends and interest payments that banks, brokerages and other financial firms send clients in January often is revised in February or March, requiring taxpayers to amend returns.

Not until Feb. 3 could IRS computers handle 2006 returns claiming breaks Congress extended at the last minute last year, including deductions for state and local sales taxes, higher-education tuition and fees, and teacher expenses. Electronic forms filed before Feb. 3 that claimed any of these breaks must be resubmitted, while paper versions were set aside to process after that date.

As always, taxpayers need to remember the distinction between tax deductions or exemptions, which reduce the amount of income that is taxable, and tax credits, which reduce the actual amount of tax owed.

Low-income wage earners who claim the earned-income credit may also qualify for the saver's credit, which Congress recently made permanent. It permits a family earning $50,000 or less that puts money in a work retirement plan to cut a tax bill or boost a refund by up to $1,000.

Wealthier taxpayers must calculate taxes first under regular rules, then under the alternative minimum tax, and pay whichever is higher. The AMT was created in 1969 to target 155 wealthy tax-dodgers, but because it's not indexed for inflation, it could affect an estimated 4.2 million families when they calculate their taxes next month. Taxpayers in high-tax jurisdictions such as Maryland and the District are especially vulnerable. (Unless Congress changes the law, 19 million more households, many earning as little as $50,000 a year, could end up paying the tax next year, as would nearly half of all taxpayers by 2017.)

All taxpayers should take advantage of retirement credits -- you have until the April filing deadline, for example, to invest in an individual retirement account for 2006. A recent survey of nearly 1,300 adults by CCH, a tax-consulting firm, found that 18-to-24-year-olds are the least likely to participate in tax-advantaged retirement plans, such as 401(k)s. A new law lets companies automatically enroll new workers in such plans, but the survey found that young adults say their employers don't explain these programs well or help workers take full advantage of them.

New graduates need to know the rules governing work-related tax deductions. First, itemizations must exceed the standard deduction, which this year is $5,150 for a single adult, said David Sharkey, a certified public accountant with Ryan, Sharkey & Crutchfield in Herndon.

Mortgage interest, taxes on a home or car or boat, charitable contributions and unreimbursed employee expenses are all potential claims to itemize.

So can Ash claim part of her Treo? Tucker says taxpayers can itemize a claim only if they can show how much the equipment was used for work. Phone bills could prove what percentage of the time a cellphone is used for work, for example.

But the rules are tricky. Tax lawyers say individuals who go it alone should use a good computer program. Intuit's TurboTax and H&R Block's TaxCut are popular.

Taxpayers with adjusted gross income of $52,000 or less -- attention recent college graduates -- can have their taxes prepared free through the IRS "Free File" program on the agency's Web site, http://www.irs.gov.

Since its 2003 debut, Free File has been used to file 15.4 million returns, but that's a fraction of the returns that could have been filed through it. The IRS says 70 percent of tax filers, or 95 million people, could qualify for the program this year and hopes a larger percentage will use it.

Paralegal Chad Harple, a history and international studies major who graduated from Yale University in May, says he's going to use Free File. But his friend and fellow Yale graduate, Julia Pudlin, is going with an option many first-time filers find even easier: parents.

"I'm embarrassed to say that's the case," Pudlin said. "I sent my stuff to my dad. It was just too daunting, and my dad is tax lawyer."

http://www.washingtonpost.com/wp-dyn/content/article/2007/03/17/AR2007031700106.html

One Step Ahead

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Re: Home Ownership and Wealth Building
« Reply #464 on: March 26, 2007, 09:40:34 AM »
Sales of new homes fall sharply By MARTIN CRUTSINGER, AP Economics Writer
2 hours, 22 minutes ago
 


WASHINGTON - Sales of new homes fell sharply for a second consecutive month in February, a weaker-than-expected performance that dimmed hopes for a rebound in the troubled housing market.

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The        Commerce Department reported Monday that sales of new single-family homes fell by 3.9 percent last month to a seasonally adjusted annual rate of 848,000, the slowest sales pace in nearly seven years. All regions of the country except the West experienced weakness last month.

The February decline followed an even larger 15.8 percent drop in sales in January, which had been the largest one-month plunge in 13 years. The back-to-back declines provided evidence that the housing market is continuing to struggle with lagging demand and a glut of unsold homes.

The weakness in sales pushed the median price of a new home down to $250,000 in February, a drop of 0.3 percent from a year ago. It marked the second straight month that the median price fell compared with the same period a year ago. The median is the point where half the homes sold for more and half for less.

By region of the country, sales were up 24.6 percent in the West, a rebound after a 25.8 percent plunge in January.

However, every other region showed weakness last month, led by a 26.8 percent drop in sales in the Northeast and a 20 percent decline in the Midwest, two areas which experienced a series of winter storm. Sales also fell in the South, dropping by 7 percent.

The performance of new home sales was in contrast to a report last week that sales of existing homes rose in February by the largest amount in nearly three years.

Analysts had expected new home sales to increase in February as well, based on a view that January's steep plunge had overstated the weakness in housing.

The back-to-back declines in the new home market served to support the forecasts of private analysts who believe the slowdown in housing has more months to run its course.

The housing bust is coming after a housing boom in which sales of both new and existing homes set records for five straight years.

Some analysts see the current slowdown as a correction from a period of speculative frenzy in which investors were buying second homes in hopes of reselling them quickly to make profits on the double-digit gains in prices in the hottest sales areas in the country such as California and Florida.

The sales decline that has occurred over the past year has left a glut of unsold homes on the market, forcing builders to slash prices and offer a number of incentives to attract buyers.

For February, the number of unsold homes rose by 1.5 percent to 546,000. That meant it would take 8.1 months to sell all of those homes at the February sales pace, up from 7.3 months in January.

The problems in housing are being increased by spreading financial difficulties with mortgage lenders who specialized in the subprime market, where borrowers with weaker credit histories could qualify for mortgages.

The plunge in housing has trimmed overall economic growth and is occurring as part of an effort by the        Federal Reserve to raise interest rates as a way of slowing economic activity and keeping inflation under control

A.

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Re: Home Ownership and Wealth Building
« Reply #465 on: April 12, 2007, 08:29:22 AM »
A Word of Advice During a Housing Slump: Rent
By DAVID LEONHARDT

A promotional spot for the National Association of Realtors came on the radio the other day. The spot, introduced as something called “Newsmakers,” was supposed to sound like a news report, with the association’s president offering real estate advice.

“This is the best time to buy,” Pat Vredevoogd Combs, the president, said cheerfully. “There’s a lot of inventory in the marketplace. Interest rates are low. It’s a wonderful tax deduction.”

By the Realtors’ way of thinking, it’s always a good time to buy. Homeownership, they argue, is a way to achieve the American dream, save on taxes and earn a solid investment return all at the same time.

That’s how it has worked out for much of the last 15 years. But in a stark reversal, it’s now clear that people who chose renting over buying in the last two years made the right move. In much of the country, including large parts of the Northeast, California, Florida and the Southwest, recent home buyers have faced higher monthly costs than renters and have lost money on their investment in the meantime. It’s almost as if they have thrown money away, an insult once reserved for renters.

Most striking, perhaps, is the fact that prices may not yet have fallen far enough for buying to look better than renting today, except for people who plan to stay in a home for many years.

With the spring moving season under way, The New York Times has done an analysis of buying vs. renting in every major metropolitan area. The analysis includes data on housing costs and looks at different possibilities for the path of home prices in coming years.

It found that even though rents have recently jumped, the costs that come with buying a home — mortgage payments, property taxes, fees to real estate agents — remain a lot higher than the costs of renting. So buyers in many places are basically betting that home prices will rise smartly in the near future.

Over the next five years, which is about the average amount of time recent buyers have remained in their homes, prices in the Los Angeles area would have to rise more than 5 percent a year for a typical buyer there to do better than a renter. The same is true in Phoenix, Las Vegas, the New York region, Northern California and South Florida. In the Boston and Washington areas, the break-even point is about 4 percent.

“House prices have to fall more before housing becomes a clear buy again,” says Mark Zandi, chief economist of Moody’s Economy.com, a research company that helped conduct the analysis. “These markets aren’t as overvalued as they were a year ago or two years ago, but they’re still unfriendly. And that’s one of the reasons the market is still soft — people realize it’s not a bargain.”

There is obviously no way to know what home prices will do in the next few years. But there are two big reasons to doubt the real estate boosters who insist that it’s once again a great time to buy.

The first is history. After the last big run-up in house prices, in the 1980s, a long slump followed. In the New York area, prices peaked in early 1989 and then fell 9 percent over the next three years, according to government data. (Adjusted for inflation, the drop was much bigger.) Not until 1998 did prices pass their earlier peak.

Keep in mind that the 2000-5 boom was even bigger than the ’80s boom and that house prices on the coasts, according to the official numbers at least, have fallen only slightly so far. So it is hard to imagine that prices will rise 5 percent a year, or another 28 percent in all, over the next five years.

The second reason for skepticism is that buying has never been quite as beneficial as Realtors — and mortgage brokers, home builders and everybody else who makes money off home purchases — have made it out to be. Buyers have to pay property taxes on top of their mortgage, while renters have the taxes included in their monthly rent bill. Buyers also face thousands of dollars in closing costs (and, in Manhattan, co-op charges). Renters, meanwhile, can invest what they would have spent on closing costs and a down payment in the stock market, which hasn’t exactly delivered a bad return over the last 20 years.

And that famous mortgage-interest tax deduction? Yes, it reduces the borrowing costs that come with a mortgage, but it doesn’t eliminate them. Renters don’t face any such borrowing costs.

Almost two years ago, I interviewed a thoughtful 37-year-old man named Tchaka Owen, who happens to be a real estate agent. (Whatever the sins of the Realtors’ association, there are a lot of smart, helpful agents out there. Just remember that they have a financial interest in getting you to buy a house.)

Mr. Owen and his girlfriend, Polly Thompson, had recently moved from the Washington suburbs to the Miami area and decided to rent a two-bedroom apartment with spectacular bay views. “You can get so much more for your money, renting instead of buying,” he said at the time.

Sure enough, house prices soon began to fall in South Florida, and Mr. Owen and Ms. Thompson started to think about buying a place. A three-bedroom Mediterranean-style house that they liked was originally listed for $620,000 last year, but the price was later cut to $543,000. They bought it in June for $516,000. Since then, the market has fallen further, but Mr. Owen said he didn’t mind, because they plan to stay in the house at least a decade. “We love it,” he told me.

Clearly, there are benefits to owning a house beyond the financial, like the comfort of knowing you can stay as long as you want or can fix the roof without permission. But real estate has been sold as more than a good way to spend money. It has been sold as a can’t-miss investment. Back in 2005, near the peak of the market, the chief economist of the Realtors’ association, David Lereah, published a book called “Are You Missing the Real Estate Boom?” The can’t-miss argument was wrong then, and it may still be wrong today.

After hearing that radio spot, I called Ms. Combs and asked her whether she thought there was any chance that she and her fellow Realtors had gone a bit too far in promoting the boom. “I absolutely disagree,” she said, still cheerful. “We help people look at the marketplace.”

So I asked what advice she gave her own clients in Grand Rapids, Mich., where she is an agent. “We often tell people that they need to stay in a house five to six years for it to make sense,” she said.

That’s a nuance that didn’t make it into her “Newsmakers” interview. In Grand Rapids, where the median home costs $130,000, it is probably good advice. In a lot of other places, it may still be too optimistic.

http://www.nytimes.com/2007/04/11/realestate/11leonhardt.html?em&ex=1176523200&en=c27e7d0948aecb80&ei=5087%0A

Re: Home Ownership and Wealth Building
« Reply #466 on: April 18, 2007, 11:55:30 AM »
Well my concern is I will be leaving graduate school with over 200,000 grand in debt (I plan on going to Columbia, which cost over 60,000 a year) now assuming I take a corporate route (Which I really don't want to do...) I probaly can pay off the debt in two years...but it is going to take time out of my life which I can be contributing to something larger.  My question is since I plan on creating lots of wealth (not sure how but I'm going to) what advice would you guys have..(from what I hear stay away from credit cards, buy land, and don't buy anything that drops in value...such as D&G glasses or multiple cars).   In terms of law I want to be a trial lawyer. Criminal Defense and Personal Injury are my main intrest but I'm sure starting my own buisness will be my path to wealth not lawyering (although Johnny was able to average a million a year..I'm sure I can do the same..)   :) let me know mates...

Justice

P.S.  I think it is possible to make a lot of money in my lifetime I am still young (23 now will probaly be 28-30 by the time I'm done with law school and have passed the bar) and I'm single with no kids  ;)

Astro

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Re: Home Ownership and Wealth Building
« Reply #467 on: April 18, 2007, 04:39:33 PM »
BAFF


(re-BAFF, actually)

cui bono?

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Re: Home Ownership and Wealth Building
« Reply #468 on: April 19, 2007, 01:51:05 PM »
BAFF


(re-BAFF, actually)


LOL, hiya troll, how u been?   :)

Astro

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Re: Home Ownership and Wealth Building
« Reply #469 on: April 19, 2007, 03:41:06 PM »
BAFF


(re-BAFF, actually)


LOL, hiya troll, how u been?   :)


Which troll do you think I am?