Earthquake Preparedness (Part 1)

Earthquake Map

With the recent events in Japan and our location near a major fault, I felt it was important to relay some information that would help in preparing for an earthquake should it hit LA.

WATER:
Store water in plastic containers such as soft drink bottles or keep extra cases of water bottles on hand. Avoid using containers that will decomplse or break such as milk cartons or glass bottles. A normally active person needs to drink at least two quarts of water each day. In hot environments or where there is intense physical exertion, a person can double that. Children, nursing mothers and those who are ill will need more.

Something that might not be obvious is the use of your water heater as a water source. With the increased popularity of tankless water heaters, it should be noted that a traditional water heater with a stored value of water can be used in an emergency which is not the case for a tankless. you should store one gallon of water per person per day. And do not forget your pets. It is recommended that you keep at least a three days supply of water per person.

Do not forget to change the water at least every 6 months. Household liquid bleach can kill the microorganisms that contaminate your water. Use only regular household liquid bleach that contains 5.25% sodium hypochlorite. Do not use scented bleches, colorsafe bleaches or bleaches with added cleaners. You can add 16 drops of bleach per gallon of water, stir and let stand for at least 30 minutes. If the water does not have a slight bleach odor, repeat the process and let stand another 15 minutes.

FIRST AID:
Keep the following supplies in a ready to go kit.
* Sterile adhesive bandages, 2 inch sterile gauze pads, 4 inch sterile pads, Triangular bandages
* Assorted safety pins
* Cleansing agent / Soap
* Latex gloves
* Sunscreen
* Non-prescription drugs (Pain relievers, Anti-diarrhea medicines, Antacid, Syrup of Ipecac, Laxatives, Activated charcoal etc.)
* Scissors, Tweezers, Needle, Moistened towelettes, Antiseptic, Thermometer, Tongue blades
* Tube of Petroleum Jelly or other lubricant

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Jeremy Grantham on the Economy and CASH

This is a fantastic interview that appeared on CNBC with Jeremy Grantham. It is a 30 minute video where he answers questions about where he believes our economy is going, why and how to invest around current trends. Paste this link for the CNBC page and interview: http://tiny.cc/6kw9i

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Buyer’s Dilemma

Buyer’s in today’s market are faced with a dilemma, should they buy or should they wait? With historic lows in the mortgage market and prices that as reported hit bottom around July of ’09 buyer’s are in a position to capitalize on the financial meltdown of our economy. Let’s face it everyone wants a deal and as someone once said “hog’s get fat, pig’s get slaughtered”…is it time to take the plunge and capitalize on the market or sit idle on the sideline? Many buyer’s still believe that prices will fall further even with market data that supports the opposite (obviously depending on the localized market). Buyer’s point to the outstanding inventory of foreclosures that have yet to hit the market, and in all honesty I don’t think that anybody really knows the true numbers or the impact of those homes when (and I do say when not if) they hit the market. If they are slowly released and allowed to be purchased the impact may be slight. If they are released in mass, the market may take another hit. The fact is that banks are in business to make money, and since for all intents and purposes, the foreclosed on home is an asset of the bank, why would they further depreciate their asset by releasing in mass their inventory and driving down prices.

It still comes down to the question of should a buyer buy? I believe the answer is yes. If they find the right house for themselves then take the leap of faith. My family has been in LA since the 1940’s and with each and every market downturn, there has been a rebound with prices rising to levels above what they were before.

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Rates Back to 1951 Levels

Mortgage Graph

Historical Mortgage Graph

Mortgage rates are at new lows for a third consecutive week as investor demand for mortgage-backed securities that fund most home loans continues to be more than adequate to satisfy demand for mortgages.

Rates for 30-year fixed-rate mortgages averaged 4.19 percent with an average 0.8 point for the week ending Oct. 14, down from 4.27 percent last week and 4.92 percent a year ago, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey.

That’s a new low in Freddie Mac’s records, which date back to 1971. Rates haven’t been lower since April 1951, according to another set of data based on FHA rates that goes back to 1948.

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4 Things Buyers Should Know About The Foreclosure Freeze

Foreclosure Sign

Foreclosure Sign

1. What is robo-signing is, and what all the fuss is about? The phrase robo-signing refers to what we’re now realizing has been a very common practice in the banks’ foreclosure document processing divisions, where one person was essentially given the job of signing as many 10,000 foreclosure documents per month, by hand. These individuals were supposed to be reviewing the files, making sure grounds for foreclosure actually existed, signing the docs in front of notaries. But because of the volume of documents, what they actually did was just sign thousands of documents at a time, without even reading them, and ship them off somewhere else to be notarized.

If you do the math on an 8 hour workday, you’ll see that that only gives the staffer 1.5 minute to review each file and documents to make sure the foreclosure is warranted. That’s not humanly possible, which is how these staffers got the nickname “robo-signers”

Government regulators are very concerned that the banks may have been taking people’s homes without following the proper legal procedures. As a result, 40 states’ attorneys general are teaming up to launch a multi-state investigation, and the federal Comptroller of the Currency and federal attorney general may also get involved in investigating this issue.

2. Will the freeze will make the banks cancel buyer contracts on REO properties? Currently, the freeze impacts bank-owned properties that are owned and/or serviced by Ally Financial/GMAC Mortgage, JP Morgan Chase, and some properties that were owned by Bank of America. Generally, contracts to buy these homes are being put on hold and extended for 30 days. As well, the banks are often reaching out directly to buyers and offering them the option to cancel their contracts and recoup their deposit money.

3. Is it safe to buy a foreclosed home? There’s lots of talk right now about the “clouds” that this scandal will create on the titles to homes that were foreclosed by the banks’ foreclosure mills. And that makes sense: if the home wasn’t properly foreclosed on in the first place, then the legitimacy of the bank’s resale can be called into question. Normally, I’d say: Don’t worry about it, buyer – that’s why you’ll get title insurance! But last week, 3 of America’s largest title company insurers declared that they will not offer title insurance on a number of the homes that may have been involved in this scandal.

In the vast majority of cases – when the foreclosure was justified and a bona fide purchaser, someone who was not involved in the bank’s wrongdoing, has purchased the home, courts will not reverse these foreclosures or their sale to buyers. But if you’re in the market for a foreclosure, get clear on which bank owns the place as soon as you can, and run the property past your title insurer before you get too far into the transaction to make sure they can write a policy of title insurance on the property before you spend too much money on inspections and appraisals.

4. How the foreclosure freeze will impact American home values, say after you buy. In the short term, these freezes might cause prices to stabilize, as we expect to see the supply of foreclosures for sale start to shrink. However, if these freezes stretch out for a long period of time, they could simply be delaying many inevitable foreclosures, which could delay the recovery of the housing market and home prices, over time. I wouldn’t expect to see the freezes cause prices to drop much beyond where they are now, but if they stretch out, they could keep appreciation flat for a longer period of time.

P.S: Don’t underestimate the deals you can get on non-foreclosed properties. You can often get just as good of a price on a better property with more flexibility on the seller’s part in terms of repairs and other negotiation points if you buy a home from an individual seller, as opposed to a bank-owned property.

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