Look, up in the air, it’s a bird, it’s a plane, no it’s Richard Branson, piloting his new start-up, Virgin Money USA.

In his new venture, daredevil adventurer, businessman, and philanthropist Branson has taken the plunge into the U.S. real estate market. For anyone who has followed Branson’s storied career, it should come as no surprise that he would jump into a housing market that is still falling. They laughed when he launched Virgin Airlines as a low cost no frill carrier serving the UK to US market. Other brash entries into other markets have been similarly ridiculed at the outset. The unlikely success of his many risky ventures has defied many of the naysayers. His new business model is designed to take advantage of the current downturn in the U.S. housing market and the resulting mortgage and credit crisis that is making buying properties more difficult.

Is this guy delusional, or, as he has often been in the past, a visionary? See for yourself in this article from Realty Times that details Virgin Money, USA and what it offers to both buyers and sellers of U.S. properties.

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Lunenburg, Nova Scotia is located on a peninsula at the western side of Mahone Bay, in the South Shore area of Nova Scotia. Historically, Lunenburg was an important seaport and shipbuilding center. Its first settlers, in 1753, were primarily German and Swiss protestants who came over from Europe. Because of its important Maritime history, and because it is the best surviving example of a planned British colonial settlement in North America, it was designated a UNESCO (United Nations Education, Scientific and Cultural Organization) World Heritage Site in 1995.

The schooner Bluenose was built in Lunenburg. It was a fishing vessel as well as a racing schooner, and was undefeated in the International Fishermen’s Series races. After it’s racing career it became a touring vessel that visited the Chicago World’s Fair in 1933, and England in 1935 among other destinations. It won the last International Fishermen’s Series in 1938. After that it was used as a freighter to take goods to the Caribbean, and in 1946, it went aground on reef near Haiti. In 1963, Oland and Sons built a replica of the Bluenose, the Bluenose II, as a promotion for their new Schooner Beer. The schooner was later sold to the government of Nova Scotia for $1 and now serves as a seafaring goodwill ambassador and tourist attraction in Lunenburg.

Despite Lunenburg’s relatively small population (2800 residents), it does have a number of excellent attractions and cultural activities. There are 19 art galleries in Lunenburg, and over 160 restaurants. Lunenburg is also home to The Fisheries Museum of the Atlantic, and has a number of summer festivals including the Lunenburg Craft Festival, the Lunenburg Waterfront Seafood Festival and the Lunenburg Folk Harbour Festival (a musical gathering depicting traditional Maritime folk). There are beaches, scenic drives, golfing, hiking, biking, kayaking and plenty of other recreational activities in and around Lunenburg, which means there’s plenty to do when visiting your second home there.
Real estate prices are very reasonable in Lunenburg, with river and lakefront homes starting at around $150,000CDN and oceanfront homes starting a little over $500,000CDN. Areas surrounding Lunenburg are less expensive, with oceanfront homes starting at under $200,000CDN and river and lake front homes starting at under $100,000CDN (although most are priced between $100,000 and $300,000CDN).

For more information about Lunenburg, you can visit their municipal website, or Explore Lunenburg for tourism information.

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In its zeal to protect creditors, the prior Congress passed bankruptcy reform, making it more difficult for consumers to walk away from consumer debt. The old bankruptcy law, which had been in effect since 1978, had been seen by many to be housing friendly. It was a relatively inexpensive means of debt liquidation that offered a greater likelihood that consumers filing for bankruptcy could keep their homes. The new bankruptcy rules limit Chapter 7 filings that allowed cancellation of certain unsecured debts, (such as credit cards), to low-income consumers. All others are now forced to file under Chapter 13, which requires repayment over time of most, if not all of their debt, secured and unsecured. The unintended consequence of this change to the bankruptcy code has been that many consumers, when forced to repay all of their debt, are finding it difficult or impossible to keep up their mortgage payments. In essence, lawmakers have created a situation where, in an effort to protect financial institutions, they passed a law that has contributed to a deepening of the current home mortgage crisis.

Via Business Week

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It sounds kind of wacky, I know. But really, folks, the Kroger chain of grocery stores, the largest in the U.S., are now entering the home mortgage business. The chain, which includes some well-known retailers such as Kroger, Fry’s, Albertson’s, Fred Meyer, Ralph’s and many more. Is expanding into providing a number of financial services. This may seem an odd mix, but Kroger thinks it is a good match with their business expansion plans. After all, until recently, Wal Mart had been pursuing setting up its own banking division. This application was withdrawn after howls form the banking industry.

While the current credit crunch might slow Kroger’s expansion into the home mortgage market, it’s likely they will still pursue this plan.

Click here for coverage of the Kroger move provided by KABC News, Los Angeles.

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The U.S. mortgage market is going though a period of dislocation related to the increasing level of loan defaults, particularly on so-called sub-prime loans. While it started in the sub-prime market, the difficulties there have begun to bleed over into the regular mortgage market. As a result, formerly solid lenders, such as Countrywide (the nation’s largest residential lender) have begun to experience credit crunches of their own. Countrywide has resorted to issuing high-rate CD’s to raise capital to allow them to continue to write new mortgages. And this is on top of the firm having to tap into a nearly $12 billion dollar credit line last week

What impact will this tightening of credit markets have on borrowing for vacation properties? It’s likely that those lenders with funding problems in the primary residential market will lower the amount they are willing to loan of second homes.

If you are planning to buy a second home soon, be aware that loans for action homes may be harder to come by and the ready availability of home equity on your primary residence to finance such a purchase may also be tightening.

You will find further details on this subject at AllBusiness.com.

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