Real Estate News & Commentary by Chris McLaughlin, March 17, 2009 – Happy St. Patrick’s Day!
http://www.shortsalesriches.com/welcome.html
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New Housing Starts Up
Apartment construction was primarily responsible for the surprising 22% gain in new housing construction in February, according to the US Commerce Department. For the month there were 583,000 units built. The increase was broad based, affecting all regions of the country except the West, and defied economists’ predictions of a slowdown to around 450,000 units. Housing construction is still down to nearly half what it was a year ago.
Banks in for a rough time in 2009
Meredith Whitney, a former analyst at Oppenheimer who recently opened her own firm, told CNBC today that banks are in for a rough year in 2009. She predicts “breakups and M&As on a grand scale” as the industry faces additional write downs and called loans due to growing unemployment. Whitney says the government should focus less on its ever-changing rescue plans and instead start helping smaller institutions ramp up their community lending to local businesses and homeowners.
AIG Update
Uncle Sam has stepped in four times to help AIG through $170 billion in bailout packages, and the fury over $165 million in employee bonuses shows no signs of abating. Obama said Monday that he has asked Treasury Secretary Tim Geithner to use the government’s role as a majority owner of AIG and “every legal avenue” to stop the bonuses, and New York Attorney General Andrew Cuomo plans to subpoena AIG for details of the employee bonuses. However, because the bonuses are contractual, it’s unlikely they can be stopped unless the government is willing to risk future lawsuits. Given the political hot potato this has become, I think we can expect few lawsuits ahead.
A Sign of the times: Auto delinquencies
Auto delinquencies may shoot to their highest point in a decade by the end of the year. The percentage of auto loans past due 60 days or more rose 8.9 percent in the fourth quarter of 2008, compared with the prior-year period, according to credit reporting agency TransUnion. Since the recession began in December 2007, auto loan delinquencies have jumped 25 percent, compared with a 10 percent increase in the 2001 recession. Some analysts predict a rise to 15 or 16% before peaking.
Companies reducing salaries/bonuses
A growing number of companies are freezing salaries, reducing bonus pools and making other major changes to their executive pay programs, Watson Wyatt reported Tuesday. The number of companies that have frozen salaries jumped to 55 percent, from 21 percent when the companies were first polled in December 2008. Of 145 companies surveyed during the first week of March, roughly half plan to decrease this year’s bonus pool by an average of 40 percent. However, The Wall Street Journal reported Tuesday that some Wall Street firms are adjusting their pay programs to get around new federal limits on compensation.
Now on to our real estate investing education section …
Stimulus Information & Resources
You have probably heard the current Economic Stimulus plan will not help speculators – while that is mostly true the refinance portion of the program may actually allow some home buyers and short sale investors to obtain a better rate. Here to help locate elusive information on the refinance program for yourself or potential clients that might be sitting on the sidelines waiting for a big bail-out check from Uncle Sam, or for those of you who would just like to learn how your hard earned tax dollars will be spent to bail-out your arrogant neighbor here is the best list of stimulus related resources around:
General Stimulus Information For Clients or Consumers
The government has established a consumer friendly website with the latest news, budget information and guidelines about the stimulus plan and other funding activities located at www.Recovery.gov or visit the U. S. Treasury website at http://www.financialstability.gov/ . Clients and current homeowners that aren’t sure whether or not they will qualify for help may also want to visit http://www.mymoney.gov/ for free calculators and other information provided by the U.S. Financial Literacy and Education Commission in conjunction with www.ControlYourCredit.gov.
Local Credit Counseling Services. Locate a HUD approved counselor online by visiting http://www.hud.gov/offices/hsg/sfh/hcc/fc/ .
Housing Related Stimulus Information
The U.S. Department of Housing and Urban Development or HUD website has created a website related to the American Recovery and Reinvestment Act of 2009 at http://www.hud.gov/recovery. Learn about tax credits, funding allocations for each state and access links to apply for more information in your area.
Taxes, Banking and Finance Related Stimulus Information
The U.S. Department of the Treasury website is located at http://www.treas.gov/recovery/. You can even sign up to purchase foreclosed or seized property online.
Take a look at your current mortgage. If it is owned or guaranteed by either Fannie Mae or Freddie Mac then you may be eligible for a faster refinancing program. If you aren’t sure whether or not your mortgage is underwritten by either of these programs call your mortgage lender or servicing company or visit www.fanniemae.com or https://ww3.freddiemac.com/corporate/ or call 1-800-7FANNIE or Freddie at 1-800-FREDDIE to find out who owns your mortgage. Those with an existing mortgage underwritten by Freddie or Fannie who wish to refinance might be eligible for streamline processing even for some rentals or second homes. If you aren’t sure where to begin, use the FHA Lender Finder located at http://www.fhaoutreach.gov/lender/lender.do.
Veterans – Veterans in need of loan assistance should contact the Department of Veterans Affairs or visit http://www.homeloans.va.gov/ondemand_vets_stream_video.htm to learn about programs that will help veterans avoid foreclosure including refinancing homes with low interest rate loans, special mortgage programs to purchase or upgrade to energy efficient homes and foreclosure prevention programs just for veterans.
Small Business Loans & Grants. Learn about government stimulus programs that provide free money in the form of grants by searching the Catalog of Federal Domestic Assistance CFDA website at www.cfda.gov or the federal government grants website at www.grants.gov. Both are sponsored by the United States government and provide a comprehensive list of available funds, eligibility requirements and how to apply.
HOPE for Homeowners was the original troubled homeowners program that has now been expanded to include additional assistance in the form of counseling and referrals to mortgage companies and other services designed to provide the resources to prevent foreclosure. Homeowner’s HOPE ™ Hotline at 888-995-HOPE (4673) or visit www.hopenow.com.
See you at the top!
Chris McLaughlin
http://www.shortsalesriches.com/welcome.html
P.S.
Don’t miss out webinar this coming Tuesday night at 8:30 PM ET, 5:30 PM PST:
https://www2.gotomeeting.com/register/661793179
Copyright Loss Mitigation Institute 2009.
All Rights Reserved.
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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 flipping of distressed homes. Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner and Supervising Broker 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
* On twitter: http://twitter.com/mclaughlinchris
* On facebook: http://www.facebook.com/addfriend.php?id=709199143
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