Foreclosure Crisis Unveiled: Subprime isn’t the real story

by Chris McLaughlin on July 3, 2009

Foreclosure Crisis Unveiled: Subprime isn’t the real story

Real Estate News & Commentary by Chris McLaughlin, July 3, 2009

http://www.shortsalesriches.com

* Follow me on Twitter: http://www.twitter.com/mclaughlinhris

“You Thought Short Sales Were Hard to Close?

Sorry -  You Thought Wrong…”

This automation miracle finds listings, negotiates

low-ball price with the bank, and sells them to investors

without you doing anything more than signing the papers.

You don’t even pay for marketing!

Find out more for fr-ee right here Sunday night:

https://www2.gotomeeting.com/register/192261314

New insight into the foreclosure crisis

ForeclosureAccording to Stan Liebowitz, professor of economics at the University of Texas, popular explanations such as sub-prime lending and rise in unemployment and interest rates do not adequately explain the high rise in foreclosures since 2007. Liebowitz’s study of foreclosure data, pertaining to the period after the third quarter of 2006 when foreclosures started rising significantly, shows that 51% of all foreclosed homes had prime loans, not subprime. In addition, the foreclosure rate for prime loans grew by 488% compared to a growth rate of 200% for subprime foreclosures.  In today’s Wall Street Journal, Liebowitz says negative equity — the balance of the mortgage being greater than the value of the house — is the single most important factor driving foreclosures. While one may argue that negative equity does not mean a loss of homeowners’ ability to pay their mortgage, it does point to the possibility that homeowners may be more willing to walk away from their mortgages. Liebowitz argues that methods behind the government’s $2 trillion package for stabilizing house prices are poorly targeted. Liebowitz highlights the importance of underwriting standards, including a requirement of high down payments in mortgages. High down payments would have limited the growth of the housing bubble and the impact of negative equity would have been much smaller when home prices fell. If homeowners have positive equity, they would have lesser incentive to default on mortgages and the lenders’ salvage value, in the event of a default, would be much higher. Liebowitz exhorts politicians to “face up to the actual causes of the mortgage crisis, not fictitious causes that fit political agendas and election strategies.”

Mortgage rates fall; will they stay low?

mortgageratesdownAccording to Freddie Mac, rates for 30-year fixed home loan dropped this week to an average of 5.32% from an average of 5.42% last week. The rate was 6.35% this time last year. Rates on 30-year mortgage rose from a low of 4.78% earlier this year to 5.6% in June on account of rising yields on government securities. Analysts were worried about the rising mortgage rates hampering the recovery of the housing market. Yields on government securities have dropped in the recent past, leading to a drop in mortgage rates. “Lower mortgage rates are helping to support the housing market,” said Frank Nothaft, Freddie Mac’s chief economist. The average rate on a 15-year fixed-rate mortgage dropped to 4.77%, down from 4.87% last week, while rates on five-year, adjustable-rate mortgages averaged 4.88%, down from 4.99% last week. These rates do not include add-on fees.

Lies, damned lies, and statistics

liesData drives everything in our economy. The government makes important decisions on the basis of data. But what if the data is incorrect? Robert Kleinhenz, Deputy Chief Economist for the California Association of Realtors (CAR), has said in an interview that the California home sales data for the current year had mistakes. Home sales data pertaining to San Diego county was incorrect on account of a computer error. The CAR had previously reported a 63% increase in April’s San Diego home sales from a year earlier and an 89% increase in May from a year earlier. Thomas Lawler, an independent economist, said last week the numbers reported by the CAR vastly exceeded those reported by other agencies. The CAR has now revised the gain in April to 20% and the gain in May to 6.5%. The mistake is confined to just San Diego data and the state-level data will not be impacted significantly by the downward revision. “It’s going to reduce the statewide number by a couple percentage points, but it’s not going to make a huge difference in the statewide,” said. Kleinhenz.

Seven more banks fail, taking the total to 52 this year

Six banks in Illinois and one in Texas, with total assets of $1.49 billion and deposits of $1.34 billion, were closed by regulators this week. Buyers have been identified for all the closed institutions. The failures will cost the insurance fund of the Federal Deposit Insurance Corporation (FDIC) a sum of $314.3 million. “The six failed Illinois banks are all controlled by one family and followed a similar business model that created concentrated exposure in each institution,” the FDIC said. All the failed banks had significant exposure to the real-estate sector. “The common denominator for most of the bank failures so far has been troubled construction loans,” said Matthew Anderson of Foresight Analytics. “There’s no easy way out with defaulted construction loans in today’s environment.” The number of failed banks this year has risen to 52, the most in a year since 1992. With the economy not showing any signs of sustained recovery, the FDIC’s insurance fund is likely to take more hits in the months to come.

Private equity players unhappy with takeover rules proposed by the FDIC

The Federal Deposit Insurance Corporation (FDIC) has proposed rules which would require firms buying out banks to put in more capital at risk. According to the FDIC’s “source of strength” rule, a bank’s owner should be a source of strength “for their subsidiary depository institutions.” The rule will force private equity firms interested in acquiring or investing in the assets and liabilities of failed banks to stay invested in the bank for at least three years and be capitalized at a Tier 1 leverage ratio of 15%. The FDIC believes that the new rule will prevent the acquired banks from being “flipped” for a short-term gain. The new rules are subject to a 30-day comment period. Not everyone inside the FDIC is convinced about the usefulness of the proposed rules. John Bowman, a member of the FDIC’s board, said the new rule could “choke off capital.” Douglas Lowenstein, president of the Private Equity Council, an industry group, said: “The FDIC’s proposed guidance would deter future private investments in banks that need fresh capital.”

Now on to our real estate investor education section…

The Fear Factor – Fight, Flight or…. Faint?

You have heard it a million times before; buy low and sell high. It sounds simple enough so why do so few people fail to heed this common sense approach to investing? Plain and simple – it’s the fear factor. Successful short sale investors have learned how to proactively invest with their intellect rather than react from an emotional response. Fortunately, once you realize how fear is responsible for the majority of short sale investing mistakes it’s easy to take action and get your investments back on track.

How do you respond to fear and uncertainty?

Fight. Some people are naturally motivated through fear. It provides just the right level of encouragement to get them moving and keep them alert to the potential opportunity afforded by short sales. No matter how bad the market has treated them they realize the need to not go down without a fight and fight they do. These are the people that take inventory, weigh the risk and reward then get busy informing themselves and working the program to begin rebuilding wealth.

Flight. These people are energized all right but they are unable to properly channel that energy into productive results. This is one of the worst situations to be in because it consumes all your time, energy and extra income while leaving you very little to show for it. Sadly, the majority of most self-proclaimed “investors” fall into this category – they believe the activity level makes them an investor…it doesn’t. The proof is in the PROFIT. Don’t trade a lot of activity for actual results – instead, go with a proven system that generates real returns.

Remember, your time and energy as well as hard earned dollars should show a very real profit. It’s okay to begin slow and learn as you go – but learn how to measure the results.

Faint. The fight or flight response is well known in nature but there is one other response less commonly mentioned…the tendency to faint. Have you ever met a person confronted with a perceived threat or something like blood that simply melts away rather than run or turn and confront the problem? Some investors are the same; they become immobilized by fear. Doubt, confusion and outright anxiety over-ride their normal senses. Without a clear plan of action they fall prey to unethical schemes or simply give-up on their hopes and dreams for the future…their own and often that of their family.

Recognize your tendency then take steps to restore your financial future with the help of a short sales system that has been proven to work. Get involved with others able to provide the information and tips you need to succeed until you have a proven track record of success under your belt. It’s one of the best reasons short sales remain such a popular investment vehicle; you can start at whatever level your tolerance for risk, level of energy and assets allow. There is literally something for everyone.

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

PS:

“Strange New Automation Strategy Closes Short Sales

Fast and Easy!”

Think of it! Our new automatic system for finding and

closing short sales is letting people cut their

work-week in half… and triple their income!

If you’re ready to say good-bye to endless hours of

labor, and far too few dollars in return, find out

more for fr-ee – no cost, no obligation. Just click

the link below..

https://www2.gotomeeting.com/register/192261314

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes.  Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Follow me on Twitter: http://twitter.com/mclaughlinchris
* Add me on Facebook: http://www.facebook.com/mclaughlinchris

{ 0 comments }

Pending home sales rise for the fourth straight month

by Chris McLaughlin on July 2, 2009

Real Estate News & Commentary by Chris McLaughlin, July 2, 2009

http://www.shortsalesriches.com

* Follow me on Twitter: http://www.twitter.com/mclaughlinhris

“You Thought Short Sales Were Hard to Close?

Sorry -  You Thought Wrong…”

This automation miracle finds listings, negotiates

low-ball price with the bank, and sells them to investors

without you doing anything more than signing the papers.

You don’t even pay for marketing!

Find out more for fr-ee right here tonight:

https://www2.gotomeeting.com/register/942725962

Pending home sales rise for the fourth straight month

pendinghomessalesAccording to the National Association of Realtors, its Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, rose 0.1% to 90.7 from a reading of 90.6 in April, and is 6.7% higher than May 2008 when it was 85.0. This incidentally is the fourth straight monthly gain; the last time there were 4 consecutive monthly gains was in October 2004. Lawrence Yun, NAR chief economist, cautions that there could be delays in closure of home contracts. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” said Yun. “The pronounced increase in April and the fact that May sustained this rise does indicate that actual existing home sales are poised to rise in the coming month or two,” said Joshua Shapiro, chief U.S. economist for MFR. On a regional basis, the pending home sales index rose 3.1% to 80.9 in the Northeast, increased 2.2% to 96.9 in the West, dropped 1.3% to 89.2 in the Midwest, and dropped 1.7% to 92.6 in the South.

Government widens the scope of mortgage refinancing program

Housing and Urban Development Secretary Shaun Donovan has announced that the scope of the Home Affordable Program will be widened to include refinancing of mortgages with loan-to-value ratio of 125% from the current 105%. As home values keep falling, more homeowners are slipping into delinquency. The government’s move clearly acknowledges the worsening situation in the housing sector. “The president’s Making Home Affordable plan is already helping far more than any previous foreclosure initiative and with today’s announcement we will extend its reach still further,” said Donovan. The program is limited to loans by Fannie Mae and Freddie Mac. Rick Sharga, a senior vice president of RealtyTrac, said: “The bulk of loans that are significantly upside-down probably aren’t the Fannie and Freddie products, they’re probably the other loans.” Analysts believe the impact of the move will be limited. Paul Miller, an analyst with FBR Capital Markets, said: “I don’t think it’s going to have much of an impact because you still don’t have enough qualified borrowers.”

Unemployment rises in June

unemploymentrisesThe jobless rate jumped from 9.4% in May to 9.5% in June; the highest since August 1983. The Labor Department said employers cut 467,000 jobs in June. The total number of jobless people was 14.7 million in June. On a sectoral basis, professional and business services cut 118,000 jobs in June; manufacturers cut 136,000, and construction companies eliminated 79,000 jobs. Retailers eliminated 21,000 jobs, financial sector cut 27,000, and the government cut 52,000 jobs in June. Education and health services were among the few sectors which added jobs. Economists expect the unemployment rate to rise further, particularly in sectors such as automobiles. “Payrolls will be going down the rest of the year and the unemployment rate will be rising,” said John Silvia, chief economist at Wachovia. “The challenge for the Obama administration is that we’ll have positive economic growth but still no job growth. It’s going to be tough on them.”

Beazer Homes admits to mortgage and accounting fraud

According to court documents, Beazer Homes, a homebuilder, has admitted to wrongdoings in its mortgage origination and accounting practices and agreed to a $50 million settlement. The company will pay $10 million immediately to home-buyers who were impacted by the company’s practices. Over a period of time, the company will pay up to $50 million to a national restitution fund. The Securities and Exchange Commission (SEC) has accused Michael Rand, the former chief accounting officer of the company, of recording improper reserves in order to “smooth” the company’s earnings between 2000 and 2005. In 2006, Rand started decreasing the reserves in order to report a better than actual performance. The SEC says that meeting analyst expectations was critical to keeping the stock price high and maximizing the annual bonus of senior company executives. “We deeply regret these matters and have used what we learned to strengthen our control and compliance culture,” said Ian McCarthy, Beazer’s president and chief executive.

GM plans “garage” sale

gmsinkingGeneral Motors (GM) proposes to sell its “worst” assets by way of auction in the bankruptcy court. The assets for sale include polluted factory sites, parking lots in Michigan, and a nine-hole golf course in New Jersey. GM has been criticized for its polluting factories. In a court filing, the state of New York has listed 11 GM sites that are contaminated or have “ongoing environmental compliance obligations.” New York Attorney General Andrew Cuomo has said that the carmaker should meet all its environmental obligations during its asset sale. A golf course is anything but strategic to a carmaker. “The new GM hardly needs to be in the golf course business,” said Tom Wilkinson, GM’s director of news relations. “The old GM will be selling a lot of potentially valuable but peripheral property the company accumulated over 100 years, kind of like a big garage sale. You will see some really good real estate deals come out of this for investors and communities.”

Now on to our real estate investor education section…

Rich or Wealthy – What’s Your Motivation?

“Being rich is having money; being wealthy is having time.”

Margaret Bonnano

There is a lot of hidden insight into the quote above; being rich is about having money whereas true wealth affords the luxury of time. Because time is the only true commodity on earth – it is also the most elusive. It is also one of the reasons short sales will remain one of the most popular ways to build both riches and wealth remaining to the average individual.

While most people think the only thing they really need is a bit more money, research shows few are able to enjoy it or obtain the quality of life anticipated. In most instances the progressive nature of income taxes combined with the heavy time requirement of high income jobs steals the wealth right out from under all your hard work. On the other hand, short sales afford the opportunity to structure your time and taxes into the most favorable – and affordable – methods possible to generate real wealth including the time you desire to actually live your life.

So, are you brave enough to tally up the total riches and wealth generated by your life-energy? After all, you only have one life to live so you should make it count. To date, what has it done for you in terms of money and time? Find out by taking this quick assessment:

  1. Calculate your lifetime income. Create a list estimating how much you have made over your entire work-life to date.
  2. Make a list of all major items you own free and clear. It could be real estate, cars, boats, television or anything you consider valuable.
  3. Make another list of all your most precious moments in life.
  4. Make a final list of all the moments you missed out on in life or all the things you wanted to do, learn or experience but haven’t been able to do so yet.
  5. Be Honest…how much do you have to show for all your years of hard work as of this very day? Many people work 20, 30 or even 50 years and literally have nothing to show for it. No security from having a house paid in full during old age, no car they love to take out for a spin just for the fun of it, no boat or other items to occupy their golden years…nothing.

If you aren’t satisfied with the results of your hard work to date, it’s time to do something new before even more time is stolen away from you. Time is the one thing you can never get back; time to spend with your family and friends, time to enjoy the simple pleasures in life that make living worthwhile. Time to become the person you always wanted to be and learn or experience what life has to offer. At the very least, you should have a decent list of items like homes, cars or fun toys to show for all your years of effort….if not an actual list of memories and experiences that make life complete.

If not – find out how short sale investments are allowing people just like you to obtain both riches and true wealth.

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

PS:

“Strange New Automation Strategy Closes Short Sales

Fast and Easy!”

Think of it! Our new automatic system for finding and

closing short sales is letting people cut their

work-week in half… and triple their income!

If you’re ready to say good-bye to endless hours of

labor, and far too few dollars in return, find out

more for fr-ee – no cost, no obligation. Just click

the link below..

https://www2.gotomeeting.com/register/942725962

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes.  Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Follow me on Twitter: http://twitter.com/mclaughlinchris
* Add me on Facebook: http://www.facebook.com/mclaughlinchris

{ 0 comments }

REITs have a fantastic second quarter

by Chris McLaughlin on July 1, 2009

Real Estate News & Commentary by Chris McLaughlin, July 1, 2009

http://www.shortsalesriches.com

* Follow me on Twitter: http://www.twitter.com/mclaughlinhris

“You Thought Short Sales Were Hard to Close?

Sorry -  You Thought Wrong…”

This automation miracle finds listings, negotiates

low-ball price with the bank, and sells them to investors

without you doing anything more than signing the papers.

You don’t even pay for marketing!

Find out more for fr-ee right here Thursday night:

https://www2.gotomeeting.com/register/942725962

REITs have a fantastic second quarter

Real estate investment trusts (REITs), which were written off by analysts not so long ago, had a blockbuster second quarter this year. The Dow Jones Equity All REIT Total Return Index, which tracks 114 publicly traded REIT stocks, rose 28.9% in the April-June quarter, the biggest quarterly gain since the index debuted in 1989. Just 5 REITs posted losses while 7 firms posted returns in excess of 100%. The spectacular performance signals a change in investor sentiment. “The fear of REITs going to zero is clearly far less today,” said Alexander Goldfarb, an associate director at Sandler O’Neill + Partners LP. Since March this year, REITs have raised over $13 billion from investors. Jon Bortz, chief executive of LaSalle Hotel Properties, said, “We’d been through a pretty challenging period over the last 12 months. The recovery had to do with belief that the world was not going to come to an end.” REITs have restructured their capital structure by reducing debt in their balance sheet. Some analysts believe REITs have to reduce their debt further if they have to be viable in the long-term. Sectorally, hotel REITs rose 73.8% in the second quarter, regional mall REITs rose 59.3%, retail REITs rose 43.2%, and manufactured homes rose 4.9%.

Construction defects hit the housing sector

constructionA large number of homeowners across the country are confronting defects in their homes largely on account of construction faults. As the housing sector expanded aggressively in the last couple of decades, the industry has been besieged with a shortage of skilled manpower and quality construction materials. In addition, tardiness of municipalities in inspecting and certifying homes contributed to the problem. Criterium Engineers, a building-inspection firm, has estimated that 17% of newly built houses in 2006 had at least two significant defects, up from 15% in 2003. Paul Amirata, vice president of claims at Axa Insurance, says construction-defect claims being filed are “pretty severe in terms of the total damage alleged.” The drop in real-estate values has exacerbated the problem. Those with faulty houses find that repairs often cost more than the value of the home. In addition, many do not have the equity to leverage in order to pay for repairs. In case of house defects what is the remedy for homeowners? The National Association of Home builders believes litigation is an inefficient way of resolving issue related to construction defects and says homebuyers should consider using “alternative dispute resolution including mandatory, binding arbitration in consumer contracts.”

Home loan modifications rise in the first quarter

homeloanmodsAccording to a report released by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, the number of loan modifications rose in the first quarter of this year. The report also said there was an increase in mortgage delinquencies and foreclosures in the first quarter. John Dugan, Comptroller of the Currency, said: “While I’m very concerned about the rise in delinquent mortgages and foreclosure actions, the shift in emphasis by servicers to more sustainable, payment-reducing modifications is a positive step that should show significant benefits in the coming months.” Servicers carried out 185,156 loan modifications in the first quarter; this is a rise of 55% from the previous quarter. Seriously delinquent mortgages – loans that are 60 days or more past due – rose 9% from the previous quarter. Delinquencies in prime loans increased by over 20% from the previous quarter and foreclosures stood at 2.5% of all serviced loans. Despite the bad news, analysts believe the loan modification program introduced by the Obama administration is gaining traction and will benefit a large number of homeowners in the coming months.

Consumer confidence drops in June

consumerconfidencedropsThe Conference Board (TCB), an industry group, said consumer confidence dropped in June after rising in May. TCB’s index of consumer attitudes declined to 49.3 in June from a reading of 54.8 in May. The Present Situation Index, which measures overall consumer sentiments toward the present economic situation, dropped from 29.7 in May to 25.8 in June. Millan Mulraine, economics strategist with TD Securities, said: “On balance, this was a disappointing report as it has clearly bucked the trend of improving consumer sentiments in the past few months. Moreover, with the details of the report uniformly weak, we are left with the impression that this was an outright slump in consumer confidence.” Among the consumers who participated in the survey conducted to gather information on consumer sentiment in the current quarter, 4.6% said they had plans to buy an automobile within 6 months; in contrast to 5.7% in the previous quarter. Those with plans of buying a home dropped from 2.8% to 2.7% while those planning to buy a major appliance dropped to 26.5% from 29.2%. Inflation rate expectations for 12 months rose to 5.9% from 5.6% in May. “Consumers are making a more somber and accurate assessment of the economy and their own financial position,” said Mark Vitner, senior economist at Wachovia. “Consumers may be thinking less bad is not good enough.”

Wall Street firms looking to sublet office space

During boom time, financial firms took office space as though there was no tomorrow. In the current slowdown many firms are giving up or looking at subletting excess space.  According to real-estate brokerage Jones Lang LaSalle, 8.9 million square feet of high-quality, class “A” office space is available in midtown Manhattan for sublet. John Goodkind, a broker with Newmark Knight Frank, says about 10% of the high-end commercial space, amounting to 380,000 square feet, have been given up by financial firms in Greenwich. Analysts say it is a classic buy-high, sell-low situation.

officesubletNew York private-equity firm Quadrangle Group has offered a three-year sublease for 10,000 square feet at $85 a square foot, a discount of 32% to the 2006 rate. Taconic Capital Advisors has offered 50,000 square feet near Central Park at $80 a square foot, denoting a 22% discount to the rate being paid by Taconic. Hedge funds and other firms, when they sublet space, are likely to lose millions of dollars over the life of the building lease. Buyers looking for space are getting great bargains. Brian Rance, U.S. managing partner of law firm Freshfields Bruckhaus Deringer, says, “It’s a complete buyer’s market.”

Now on to our real estate investor education section…

Sellers – Learn how to Sell Your Home Fast

Whether you are a short sale investor, broker or homeowner these tips for making your home sell fast are sure to streamline the process. Professionals in the field can create a checklist for potential sellers or homeowners can use the following steps to take matter into their own hands and attract legitimate short sale offers with quick closing times.

Begin preparing the paperwork as soon as possible. Your agent or short sale investor is often able to help. Typically you will need the following items:

Hardship letter

Tax Returns

Bank Records

HOA, Property Taxes and other pertinent outlays associated with the property.

Copy of Mortgage, liens or other monies owned on the property.

Put out the word. Let everyone know you need to sell the home – fast. Use works like ‘motivated seller’ or “distressed homeowner” to indicate a willingness to work with buyers able to provide a fast closing.

Contact the lender to let them know your situation.

Perform maintenance and upkeep as you are able. If finances are an issue, try to make the property appear as attractive and well maintained as possible.

Create a list of what you need the most from this deal. For example, if you need a fast closing avoid bankruptcy then say-so when speaking with the agent or potential short sale buyers. If you need a new place to live or rent after closing then mention that as well. Often these items can become part of the negotiation process to help make the deal work.

Identify personal property prior to accepting a final offer. If you intend to take the appliances be sure to specify this in advance. Likewise, it’s important to bring all items that will remain with the home (good and bad) as well as be removed from the home prior to entertaining offers.

Make a folder of all contact information and paperwork. Keep it accessible when speaking with real estate agents or potential buyers. Remember, everything must be in writing and never sign something you don’t fully understand.

Avoid entertaining multiple offers all at once. While this might seem like a good way to increase the odds of a successful sale, it often creates unnecessary delays that could result in your losing the home or growing farther into debt. Instead, ask to see proof of financing or other indication of a quick closing.

Keep it realistic. Even the most reputable short sale offer is likely to be somewhat slow given the large number of sales currently going through the system. A lot of sellers are searching for solid short sale offers so increase your odds by responding quickly to all inquiries and remaining patient throughout the process.

Start Early. The sooner you start the better the odds of selling your property before it becomes critical or urgent.

See you at the top!


Chris McLaughlin

http://www.shortsalesriches.com

PS:

“Strange New Automation Strategy Closes Short Sales

Fast and Easy!”

Think of it! Our new automatic system for finding and

closing short sales is letting people cut their

work-week in half… and triple their income!

If you’re ready to say good-bye to endless hours of

labor, and far too few dollars in return, find out

more for fr-ee – no cost, no obligation. Just click

the link below..

https://www2.gotomeeting.com/register/942725962

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com


Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes.  Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Follow me on Twitter: http://twitter.com/mclaughlinchris
* Add me on Facebook: http://www.facebook.com/mclaughlinchris

{ 0 comments }

Home prices fall in major U.S cities

by Chris McLaughlin on July 1, 2009

Real Estate News & Commentary by Chris McLaughlin, June 30, 2009
http://www.shortsalesriches.com

* Add me on Facebook: http://www.facebook.com/mclaughlinchris

“Lazy Person’s Way to Pre-Foreclousre Riches”

Since putting this system to work instead of me, I’m

slaving away at the beach with sun screen on my arms,

and my cell phone at my ear for a full, uh, 20 hours

a week.

Life’s not so tough when others willingly do your work.

And the earnings?  Out of this world!  See how I do it

anywhere I want from my iPhone… and it won’t cost you

a cent tonight at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/309228778

Home prices fall in major U.S cities

pricereductionThe Standard & Poor’s/Case-Shiller index, which measures the movement of home prices in 20 major U.S. cities, dropped 18.1% in April from a year earlier. This follows an 18.7% drop in March. The price drop was largely on account of increasing foreclosures. “The market will likely remain out of balance for some time given the flood of foreclosures,” said Michelle Meyer, an economist at Barclays Capital. “Home prices are likely to continue to fall, albeit at a slowing pace, even after the economy technically emerges from the recession.” The decline in home prices is stabilizing the housing market. According to the National Association of Realtors, home resales rose 2.4% in May to an annual pace of 4.77 million units. Lennar Corp., the third-largest U.S. homebuilder, reported last week that home deliveries in the second quarter rose 47% while new orders rose 67%, from the first quarter of this year. Stuart Miller, Chief Executive Officer of Lennar, said: “While we are sensing pent-up demand in the market, rising unemployment, increased foreclosures and tighter credit standards continue to present challenges for the industry.”

Loan modifications program yet to take off

The Obama administration introduced the $75 billion loan modifications program 4 months ago to refinance and modify millions of mortgages, by offering government subsidies and incentives for servicers, lenders, and borrowers. The plan offers $1,000 to mortgage companies for each loan they modify, followed by $1,000 per year for the next 3 years. The program has been ineffective so far with millions of homeowners continuing to slip into delinquency and foreclosure. Analysts attribute the slow progress of the program to operational constraints faced by mortgage companies. Michael Barr, the assistant Treasury secretary for financial institutions, said mortgage companies need to do better to promote the program. “They need to do a much better job on the basic management and operational side of their firms. What we’ve been pushing the servicers to do is improve their infrastructure to make sure their call centers are doing a better job. The level of training is not there yet,” said Barr. Mortgage companies acknowledge they need to do more. Tom Kelly, a spokesman for JPMorgan Chase, which now owns Washington Mutual, said the bank has added 950 loan counselors since the beginning of the year, bringing the total to 3,500, in order to expedite the process. “But we’ve got a lot more to do,” said Kelly.

State can probe racial discrimination in mortgage lending.

racialdiscriminationIn an important judgment, the U.S. Supreme Court has ruled that New York’s attorney general can investigate whether banks discriminated against minorities while offering mortgage loans. In 2005, Eliot Spitzer, then the New York state attorney general, said data showed that loans to minorities carried higher interest than loans to non-minorities, and wished to start a probe. The Office of the Comptroller of the Currency (OCC), a federal agency that oversees banks, opposed the probe because it believed the probe fell outside state jurisdiction. The Supreme Court ruled in favor of the New York state attorney general. Andrew Cuomo, the current New York attorney general, said: “This is a huge win for consumers across the nation.” According to Cuomo, the ruling will help state attorneys to protect consumers from the “illegal and improper practices by our country’s biggest and most powerful banks.” James Cox, a securities law professor at Duke University, said the ruling gives state attorneys a “bully pulpit” and “even without subpoena power they can still hold press conferences and take steps to swing public opinion.” Michael Calhoun, president of the Center for Responsible Lending, said the ruling “is a victory for taxpayers, who have suffered enormously as a result of abusive business practices in all types of lending.”

GM seeks approval for the “new GM” plan

Just 30 days after filing for bankruptcy under Chapter 11, General Motors (GM) has sought court approval for selling its prized assets such as Chevrolet and Cadillac under Section 363 of the bankruptcy code to a “New GM.” GM’s old assets would remain behind for liquidation. The proposal is likely to face opposition from GM’s bondholders. Analysts believe that GM’s case is likely to be strengthened by the permission of U.S. Supreme Court for the sale of Chrysler to Italy’s Fiat. Stephen Lubben, a bankruptcy professor at Seton Hall Law School, said: “I think it is going even perhaps more smoothly than Chrysler, which is kind of interesting considering how much bigger GM is than Chrysler.” GM has emphasized in its court filings that its proposal will avoid a “systemic failure” in the U.S. auto industry and provide “a genuine opportunity for the business to survive and thrive in an economically viable entity.”

The “not in my backyard” syndrome

notinmybackyardThe Obama administration’s financial reform plan, unveiled on June 17, is facing opposition from almost all constituents – banks, hedge funds, and industry associations such as the U.S. Chamber of Commerce. The “not in my backyard” (NIMBY) reaction is predictable as industry constituents begin to realize how the new regulations will impact their business. Scott Talbott, a lobbyist for the Financial Services Roundtable, which represents large financial companies, said: “I think the NIMBYism started once we had something to shoot at—before that, it wasn’t really real. Then once we have the legislative language, the real fights will begin.” While banks and other players say they have valid concerns on the impact of the new regulations, consumer advocates and groups supporting government proposals have criticized financial industry participants. “It’s a strategy to try to split people on Capitol Hill and try to confuse people,” says Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group, a consumer advocacy organization. “It’s an attempt to blame it on the other guy—they’re hoping to water down reform, deflect criticism of their industry.”

Now on to our real estate investor education section…

To Diversity or Not…That is the Question

Common wisdom holds that diversification is the key to safety and the secret to building long term wealth but does this golden nugget of investment knowledge really hold true? By now every investor with a pulse should be ready to carefully evaluate every piece of investment advice before putting their hard earned dollars to work; scandals, worthless securities and severe economic strain have turned retirement accounts into little more than emergency funds while millions of Americans are completely rethinking the concept of retirement in light of meager savings.

So, should you heavily invest in short sales while the price is right or are you spreading yourself too thin and putting yourself at risk? If you are one of the plethora of people that would never dare consider the option of not diversifying – keep reading before making up your mind. In his latest book “A Gift to My Children” by legendary investor Jim Rodgers, Rodgers clearly comes out against diversification. A quick look through history shows many of the wealthy failed to follow that worn-out advice and became outright rich because of it; Henry Ford, Bill Gates, Rockefeller and others were heavily invested in what they knew best.

The Down Side of Diversification

Diversification is nearly always portrayed as a way to reduce risk but it simultaneously reduces profit. For example, if an investor has $100,000 to spend and they spread it across ten different stocks, the chances of all ten going up (after correcting for inflation) are minimal. It happens but typically they rise and fall at different rates over different periods of time. Some will go out of business entirely while others will reach stratospheric rates of return. Typically the winners and losers “average out” to create a long term rate of return of roughly 8 percent. Unfortunately, as millions of Americans have found, when the market is down it can take considerable time to reverse losses. Add in holding fees, transaction costs, the rate of inflation and taxes…well, you get the idea.

On the other hand, if the same investor had put the entire $100,000 into a “sure-fire” stock they would have one of three outcomes: win, loose, hold steady. Yes, it is a risk but it’s also the way to obtain big life-changing rewards. Unfortunately, stocks are not easily controlled and do not conform to the hard work or direct intervention of the average investor.

However, real estate does. It still retains excellent tax advantages, provides a direct input by investors that are able to impact the value of the property through a multitude of individual decisions such as how to use the property (rental, flip, option etc) or even how to stage and repair. Before you allow others to tell you short sales are risky or that putting all your eggs into one basket is a recipe for financial failure; take time to examine the current condition of that person’s portfolio versus a short sale investors. Despite the downturn in the economy, chances are the short sale investor is outpacing the traditional stock and bond diversification investor by significant margins.

Remember, it is still possible to diversify while building a short sale investment profile simply by expanding the type of properties purchased and geographic location. Stop accepting common wisdom as the plain truth – instead, start putting it to the test. Chances are you will agree short sales have the most to offer by a long shot.

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

PS:

“Strange New Automation Strategy Closes Short Sales

Fast and Easy!”

Think of it! Our new automatic system for finding and

closing short sales is letting people cut their

work-week in half… and triple their income!

If you’re ready to say good-bye to endless hours of

labor, and far too few dollars in return, find out

more for fr-ee – no cost, no obligation. Just click

the link below..

https://www2.gotomeeting.com/register/309228778

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes.  Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Add me on Twitter: http://twitter.com/mclaughlinchris
* Add me on Facebook: http://www.facebook.com/mclaughlinchris

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KB Home new-home orders rise; cancellation rate improves

by Chris McLaughlin on June 29, 2009

Real Estate News & Commentary by Chris McLaughlin, June 29, 2009
http://www.shortsalesriches.com

* Add me on Facebook: http://www.facebook.com/mclaughlinchris

“Lazy Person’s Way to Pre-Foreclosure Riches”

Since putting this system to work instead of me, I’m

slaving away at the beach with sun screen on my arms,

and my cell phone at my ear for a full, uh, 20 hours

a week.

Life’s not so tough when others willingly do your work.

And the earnings?  Out of this world!  See how I do it

anywhere I want from my iPhone… and it won’t cost you

a cent:

https://www2.gotomeeting.com/register/309228778

KB Home new-home orders rise; cancellation rate improves

kbhomesKB Home, a large homebuilder, has reported a lower loss for the quarter ended May 31 as compared to the earlier quarter. Analysts say this could be yet another sign of housing sector recovery. The company said new home orders, which totaled 2,910 units in the quarter, were up from the beginning of the year. In addition, the company’s cancellation rate improved. Net loss for the quarter was $78.4 million, or $1.03 a share, compared with a loss of $255.9 million, or $3.30, a year earlier, KB Home said in a statement. Michael Rehaut, an analyst at JP Morgan, said the result was worse than expected, and was “in sharp contrast” to the prior quarter’s order growth. Builders such as KB Home are competing with foreclosed homes up for sale. According to RealtyTrac, foreclosure filings, including default and auction notices as well as property seizures, rose 18% in May from a year earlier. Jeffrey Mezger, chief executive of KB Home, was cautiously optimistic. “Although key economic indicators remain mixed, we are beginning to see signs that some negative housing market trends may be moderating at both the local and national levels,” said Mezger.

McMansions lose their sheen

nfxWarlick0219aHomebuyers are losing interest in McMansions – oversized homes with 3,000 to 5,000 square feet of living space – amid the recession, and are moving towards smaller sized homes. Smaller homes are cheaper to buy, furnish, and maintain, say homebuyers; particularly those buying a home for the first time. “Entry-level buyers are coming out of rentals and coming out of apartments, and they are not looking for 3,000 or 4,000 (square) feet,” said Steve Hilton, chief executive of Meritage Homes. Homebuilders, in order to cater to the change in customer preference, are going along with the trend. The median new-home size, which grew from less than 1,000 square feet in the 1950s to over 2400 square feet in 2004, has been falling in the last couple of years. In 2008, the median home size was 2,200 square feet. The current recession is bringing it down further. According to a survey conducted by the American Institute of Architects (AIA), Americans are increasingly looking at smaller homes and lower ceilings, in part because of energy costs. “Home sizes have been trending down recently,” said AIA chief economist Kermit Baker. “The era of the ‘McMansion’ could well be over.”

Big banks renew interest in “jumbo” mortgage lending

Jumbo mortgages, which are loans for purchase of expensive, high-end homes, are not bought or guaranteed by Fannie Mae and Freddie Mac, the government-controlled mortgage companies. Jumbo loans, including refinancing as well as debt for home buyers, dropped to $98 billion in 2008 from $348 billion in 2007, according to Inside Mortgage Finance, an industry publication. Jumbo loans amounted to $11 billion in the fourth quarter of last year; the lowest quarterly amount since 1990. Now it looks as though things are looking up. Banks such as JPMorgan and Citigroup have started showing interest in jumbo loans once again. JPMorgan, which had halted purchasing jumbo loans in March this year, resumed buying new jumbo loans made by other lenders this month. Citigroup too is offering jumbo loans through independent mortgage brokers. “I’m actually starting to see a lot of community banks asking for jumbo loans,” said Grant Stern, owner of Morningside Mortgage.

Consumer confidence rises to its highest level in over a year

consumerconfidence2The Reuters/University of Michigan Surveys of Consumers are monthly surveys which provide a gauge of consumer anticipation of changes in the economic environment. According to the latest survey results, the Index of Consumer Sentiment (ICS) rose from a reading of 68.7 in May to a 70.8 in June; this equals the reading in February 2008. The Index of Consumer Expectations, which is a sub-index of ICS, moved lower to 69.2 in June from 69.4 in May. “Over the past four months, sentiment has improved moderately, suggesting that consumers’ attitudes about the economy are improving,” said Steven Wood, chief economist at Insight Economics. “However, they remain very cautious. Nevertheless, these data do suggest consumers are no longer shell shocked.” ICS has gained 15.5 points since a low of 55.3 last November. “Such a sizable gain has usually indicated that an end to the economic downturn is on the horizon, as consumers begin to increase their spending on houses, vehicles, and large household durables,” the Reuters/University of Michigan Surveys of Consumers said in a statement.

Swiss banks losing interest in American customers

According to new regulations, Swiss banks must register with the Securities and Exchange Commission (SEC) in order to provide banking services to Americans. The largest of Swiss banks, UBS and Credit Suisse Group, have asked their American customers to move their money to the banks’ newly created units in the U.S. or close their accounts. Many small Swiss banks are closing accounts held by Americans. “My bank doesn’t want to do that, so we wouldn’t accept an investment account for a U.S. person,” said Pierre Mirabaud, chairman of Mirabaud & Cie., a Swiss bank, while commenting on the requirement to register with the SEC.

Analysts believe over 5 million Americans living abroad are likely to be impacted by the new requirement. Registration with the SEC means clients don’t enjoy the protection of Swiss banking secrecy laws, which disallow money managers to disclose the names of clients without their consent. The Internal Revenue Service, in its efforts to recoup an estimated $50 billion in unpaid taxes, is seeking information on offshore bank accounts. Charles Adams, managing partner at the law firm Hogan & Hartson LLP in Geneva, said: “American citizens are starting to feel like they’re Typhoid Mary. The Swiss simply don’t want American customers because it requires so much infrastructure and hassle that they don’t make any money.”

Now on to our real estate investor education section…

How to Get the SBA to Finance Your Short Sales Empire

In yet another display of support for the short sales concept, the Small Business Administration recently announced breakthrough changes to the 504 Loan Program in conjunction with the American Recovery and Reinvestment Act of 2009. Small business owners (defined as those that do less than $5 million in business each year) will be eligible to refinance existing loans that were used to buy real estate or other assets. Even better, the 504 program also provides funding to allow small business owners to purchase real estate as well as fixed assets…including short sale real estate.

This is no small boon for those short sale investors searching for a way to obtain financing in a tough market or wishing to expand their short sale empire through the acquisition of additional types of properties. Keep in mind, small business loans may be interested in acquiring many different types of properties including residential real estate, commercial real estate, retail, storage or many other forms of distressed property.

The enhancement of the 504 Loan program to include refinancing and funding for new acquisitions is especially timely for those short sale investors who have taken steps to incorporate their business or who would like to purchase short sale properties as part of their existing small business. Forming a subsidiary or acting like a holding company is one way to allow your small business to cash in on short sale profits and broaden your bottom line holdings with the bank.

In addition to expanding the scope of new and existing financing options, the program has also increased the guarantee level to 90 percent while correspondingly reducing fees and transactions costs. ARC loans have also been made available to companies facing immediate financial hardship.

Eligibility Requirements:

“Expansion” includes any project that involves the acquisition, construction or improvement of land, building or equipment for use by the small business. The following are some of the conditions under which borrowers will be eligible for refinancing:

• The debt being refinanced was incurred to acquire land, to construct a building or to purchase equipment.  The assets acquired must be eligible for financing under the 504 program.

• The existing debt is collateralized by fixed assets.

• The existing debt was incurred for the benefit of the small business.

• The new financing provides a substantial benefit to the borrower when prepayment penalties, financing fees, and other financing costs are taken into account.

• The borrower has been current on all payments of existing debt for one year prior to the date of refinancing.

——-

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

PS:

“Strange New Automation Strategy Closes Short Sales

Fast and Easy!”

Think of it! Our new automatic system for finding and

closing short sales is letting people cut their

work-week in half… and triple their income!

If you’re ready to say good-bye to endless hours of

labor, and far too few dollars in return, find out

more for fr-ee – no cost, no obligation. Just click

the link below..

https://www2.gotomeeting.com/register/309228778

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes.  Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Add me on Twitter: http://twitter.com/mclaughlinchris
* Add me on Facebook: http://www.facebook.com/mclaughlinchris

{ 0 comments }