Real Estate

Friday, December 14, 2007

H&R Block posts wider loss due to mortgage unit charges

NEW YORK - H&R Block Inc., the biggest US tax preparer, fell 3.3 percent in New York trading after it reported a wider-than-expected loss on write-downs tied to closing its money-losing mortgage business.
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The loss for the quarter ended Oct. 31 was $502.3 million, or $1.55 a share, compared with a loss of $156.5 million, or 49 cents, a year earlier, the Kansas City, Mo.-based company said yesterday in a regulatory filing. H&R Block dropped 65 cents to $19.30 in New York Stock Exchange composite trading.

Richard Breeden, the hedge-fund manager and former head of the Securities and Exchange Commission, replaced Mark Ernst as chairman last month after H&R Block's Option One Mortgage Corp. lost more than $1 billion over five quarters. The yearlong effort to sell the unit ended Dec. 4 when a proposed sale to Cerberus Capital Management collapsed and 620 jobs were cut.

"What's always a weak quarter was even weaker because of continuing mortgage charges," said Charles Bobrinskoy of Chicago-based Ariel Capital Management, the fourth-biggest H&R Block stockholder with 18 million shares. "Breeden has said they should never have been in the lending business. He has a nice grace period because we were all so unhappy with previous management."

About $366 million of the loss was from discontinued operations, mostly tied to Option One, H&R Block said. The company failed to report fiscal second-quarter results as scheduled Monday and will file full results by Friday.

"We continue to move resolutely to end our participation in the subprime mortgage business," Breeden said yesterday in a statement. "While we incurred a painful loss in exiting these positions, we determined to take our lumps and move forward."

H&R Block has fallen 16 percent this year as the worst US housing recession in 16 years caused higher loan losses and reduced new business for Option One. The company is trying to sell Option One's billing and collections unit, the only part that won't be closed by January.

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source: boston.com

How to find good home-improvement contractors

Q: I have read many times that when hiring professionals to work on one's home that three bids, with references, are preferred. Unfortunately, I have a problem with that method.
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While it sounds prudent, I live in a place (Vallejo, Calif.) where I can't get a single pro to come out to my house, let alone three of them. I have been stood up many times and have been disappointed with the few that have come out. It seems that people wish to work on new home developments.

Most of my neighbors are do-it-yourselfers, but I am not so confident, nor do I have the time. Any suggestions on finding qualified people in an apparently undesirable location? I feel helpless and ripped off.

A: We must confess that we're among those who suggest that, when hiring a professional contractor to work on your home, it is prudent to get at least three bids, get references and review some of the work they've done before hiring.

Also, depending on the size of the job, make sure the contractor you hire is licensed, insured and bonded. Anyone contracting for a home-improvement project in California of more than $500 must be licensed. For more information about licensing requirements and other subjects regarding contractors, visit the California Contractors State License Board Web site.

We also regularly hear the lament that homeowners who are ready to part with some of their hard-earned dollars to hire out work just can't find anyone who's interested.

Over the past few years, the problem has gotten worse. We don't think it's necessarily related to location. Vallejo is not an "undesirable" town. In our minds, the cause of the dearth in tradespeople is twofold: the real estate boom and the lack of skilled workers -- especially those willing to take on home-improvement projects. It's simple supply and demand. Too many jobs are chasing too few workers. The good contractors can afford to cherry-pick, and you don't want the bad ones.

It's not just a local problem either. Last summer, Kevin had the opportunity to chat with Tom Silva, the general contractor on the PBS television programs "This Old House" and "Ask This Old House." In addition to appearing on television, Silva is a partner in the family construction business in Boston. In the course of conversation, Silva remarked that there seem to be fewer and fewer young people entering the trades and that he was having a tough time finding skilled workers.

It affects us, too. Construction work can be physically taxing, and now that we're on the downhill side of 50, we're in the market for professional help more than we were in the old days. Our bodies just don't work the way they used to. On a recent Sunday, Bill was painting casework and baseboard at his condo in Walnut Creek, Calif., but this week a contractor will come in to lay down a new hardwood floor.

We have the advantage of being able to "talk the talk," and we do have some contacts from yesteryear, so it's a bit easier for us. It's still a challenge, though.

The best source of contractors is referrals. Family and trusted friends are the best source of referrals. Ask them for references. Next, we'd inquire of local real estate agents. Any agent who does a fair amount of business is likely to have a stable of professionals to perform work on properties they list to get them ready for sale. Also ask at church, at work or at a civic organization for suggestions about contractors.

Finally, take a look at a Web site called Angie's List. The site offers referrals and reviews of home-service contractors by the homeowners who have hired them. We've never had occasion to use this service, but it has gotten good publicity and is probably worth checking out. ***

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source: boston.com

Holiday safety tips for hosting older guests

Tis the season for all kinds of company.
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If you are among the 76 million baby boomers in the United States who soon will be expecting that special visitor in the big red suit, it might be wise to take the time not only to "kid proof" but also to "parent proof" your home for the holidays.

Hosting parents or older guests, especially those scheduled to stay overnight for the first time, requires particular preparation. Homey seasonal touches can make friends and family feel welcome, yet safety is often an underestimated issue.

The Home Safety Council, a North Wilkesboro, N.C.-based organization focused on home safety and education, recommends injury-proofing your home to reduce slips, falls and other common holiday-related injuries that occur to seniors.

"Slips and falls remain the number one cause of unintentional injury and deaths in the home for Americans age 65 and older," said David Oliver, former president and executive director of the Home Safety Council.

"Let's face it . . . toys, decorations and winter weather combine to create an extremely high-risk period for seniors who are already prone to slips and falls. It's important to take the time to rid homes of potential hazards so your parents spend the holidays in your living room, not in the emergency room."

Kathee (CQ) Henning, Home Safety Council board member, said she takes inventory before her folks, Clyde and Molly, arrive for a visit. Clyde is legally blind and Molly has arthritis.

"I'm one of those kids who fell and cracked their head on a coffee table with corners," Kathee said. "Before my folks arrive, I try to put a table like that away and replace it with one with rounded corners. Seniors can bump into things very easily and I think it's important to try to minimize the chances of injury."

According to the Home Safety Council, nearly 11,000 Americans are injured in the home every holiday season. Here are some tips to help create a safer home for older guests:

* Ensure ample lighting in all hallways and stairways, both inside and out.
* Check all handrails and tighten loose railings.
* Inspect stairs for worn or loose carpeting and make any necessary repairs.
* Secure rugs to the floor with double-sided tape or rug gripper pads to avoid slips and trips.
* Arrange furniture so that it is out of high-traffic areas.
* Keep stairs free of obstacles, such as toys, plants or decorations.
* Install grab bars and safety rails in the bathroom. Temporary products exist that can be installed when guests arrive and removed after their departure.
* Apply non-skid strips or bathmats to bathtub surfacing.
* Never use towel racks or wall-mounted soap dishes as grab bars - they can easily come loose and cause a fall.
* Clear all snow and ice by salting and sanding walkways leading into the house.

"This is also the time of the year when extension cords and extra electrical devices crowd living spaces," Oliver said. "Make sure that cords are not placed in walkways where they become a tripping hazard.

"And, an extra nightlight to a bathroom or hallway is another simple tip to help guests find their way in the middle of the night."

Chances of falling are also increased by illness, fatigue, haste, use of alcohol and even prescription drugs. The best method of prevention is observation, so keep a watchful eye on senior guests and assist them as necessary.

Henning suggested increasing the wattage of fluorescent kitchen lights and also advised caution when selecting large, natural Christmas trees.

"Some seniors have problems with asthma and natural trees can sometimes spark a reaction," Henning said. "Some older persons don't notice how trees can get so dry so quickly, and thus become a fire hazard."

Henning's home now features electrical figurines instead of holiday candles, lighter weight pots and pans (to better facilitate her parents' cooking), special potholders and liquid soap in pump containers for all washbasins and tubs.

Looking for a special touch? Lindsay Steenblock, owner-operator of Laguna Beach, Calif.-based County Clare Interiors, is a big believer in displaying family pictures when family members come to stay. Parents especially enjoy and appreciate pictures of special moments with the hosting children or grandchildren.

"Old pictures can be copied, cut and placed on cardboard to make terrific tree ornaments," Steenblock said. "If specific members of the family are visiting, pull out old pictures of them and place them on the mantle. Everybody will notice."

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source: boston.com

Pros and cons of down payment assistance options

You know it's in your best interest to put down 20 percent on the home you want to buy. If you can scrape together that kind of down payment, you'll wind up with a loan on the best terms, without paying private mortgage insurance (PMI) or the FHA equivalent of PMI, also known as MI, or a higher monthly interest rate.
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But even as housing prices moderate somewhat in various areas, coming up with that kind of cash is tough. Most first-time buyers don't have 20 percent to put down on a home. They're looking to put down just 3 to 10 percent in cash.

While getting a 100 percent loan (no down payment necessary) is still possible, it's tough to find a good lender who will do it at a reasonable cost. So, scraping together as much of a down payment as possible is important.

In addition to saving every cent you can for 3 to 4 years, there are a few possible sources for down payment assistance. I've outlined the positives and negatives associated with each option:

Borrowing from a 401(k). If you work for a company that offers a 401(k) plan, it's in your best interest to fund it to the maximum allowed for your income. Not only will you be able to tap into the power of compounding (and have your money work harder for you), but you'll be able to more quickly build a sizeable nest egg for your retirement. When it comes to borrowing from a 401(k) plan, not every company allows it. Check with your plan administrator to see if your company will allow you to borrow, if there are limitations on what you can do with the cash, and what the interest rate will be on the money you borrow. You should also be aware that you'll typically need to repay this cash within 5 years. But if you should leave the company, or be fired, you'll need to repay the cash within 60 days, or it will be considered a withdrawal (and you'll owe federal income taxes on that money along with a 10 percent penalty, if you're under the age of 59 1/2).

Withdrawing up to $10,000 from an IRA. If you have an individual retirement account (IRA), the IRS allows you to withdraw up to $10,000 for the purchase of a first home. (For those of you who have purchased a home before but haven't owned a home in the last 3 years, you're considered to be a "first-time buyer" for this specific purpose and can make a withdrawal). When you withdraw cash at any time from a tax-deductible, tax-deferred IRA, you'll owe federal income taxes on the amount you're withdrawing at your current marginal tax rate. However, if you're withdrawing for the purchase of a first house, you will not owe the 10 percent under-age penalty if you're less than 59 1/2 years old.

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source: boston.com

Keeping it green

A record 6,100-plus acres of land in Massachusetts - nearly equal to the area of Wellesley - have been preserved from development this year through conservation restrictions, thanks to a sweetened federal tax break that expires in 18 days.

* globe graphic Protected land

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A total of 182 Bay State property owners - including homeowners, farmers, and businesses - have executed legal agreements with local governments and land trusts giving up their right to develop land totaling more than 6,116 acres, Ian A. Bowles, the state Energy and Environmental Affairs secretary, said yesterday.

That is nearly double the amount of land protected in 2005 or 2006, and the highest total since the state began the program in 1967, Bowles said. Newly protected parcels include 30 acres around the Stony Brook alewife run in Brewster, a 28-acre area covering 8,000 feet of Buzzards Bay shoreline in Bourne, 300 acres on Nantucket, 600 acres surrounding one of the last undeveloped ponds in the Berkshires, and even a 1-acre lot with grape arbors on Roxbury's Fort Hill. Donors still own the land but give up the right to develop it, reducing the market value and tax obligation.

Bowles and environmental groups said the main factor was a tax break for land donors that Congress and President Bush substantially enhanced in August 2006, but which expires Dec. 31. Under the old rules, donors could use the value of the development rights they forfeited to offset 30 percent of their adjusted gross income each year for five years. The temporary enhancement allows land donors to offset up to 50 percent of their taxable income for 15 years, or 100 percent for some full-time farmers and foresters. This means that a landowner making $100,000 a year could receive a total offset of $750,000, compared with $150,000 under the previous provision.

"This tax incentive has worked," said Mark H. Robinson, executive director of the Compact of Cape Cod Conservation Trusts, a Barnstable association of 24 town land trusts and watershed-protection associations. "It's stimulated a lot of people who've been fence-sitters."

William E. Rose, 73, of Phillipston, which is in northern Worcester County, said the enhanced tax break was a key reason for the timing of his decision in June to place a conservation restriction on 103 acres next to his family's Red Apple Farm. Rose's grandfather bought it in 1929, and now his son Albert offers pick-your-own apples, pears, peaches, berries, pumpkins, a small petting zoo, and wagon rides.

"It was nice to take advantage of the extra 20 percent, and I wanted to protect the land from development," Rose said. "I'm sure my grandfather and father would love it. It will never have houses."

Dr. Eric White, 66, a Williamstown surgeon whose family lived for five generations in Winchendon, last May put a conservation restriction on 90 acres of farmland his late stepmother owned and leased to the adjacent Murdock Dairy Farm. White said he was committed to preserving a bucolic vista his ancestors had maintained since 1891. "The family legacy is important," White said.

Congress is weighing an extension of the conservation tax break as part of a wide-ranging farm bill, but Robinson said activists don't know whether it will pass.

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source: boston.com

Real Estate

Friday, December 14, 2007

H&R Block posts wider loss due to mortgage unit charges

How to find good home-improvement contractors

Holiday safety tips for hosting older guests

Pros and cons of down payment assistance options

Keeping it green

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