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Let Us Never Forget Those Who Lost Their Lives on September 11^th.

May God Continue to Bless America…

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MBA against court ordered mortgage modification

At a House Financial Services subcommittee hearing Wednesday, Barney Frank, D-Mass., supported cramdown legislation, which would allow bankruptcy judges to alter mortgages on primary residences, potentially lowering — or “cramming down” — a portion of the balance.  According to words flowing from the mysterious brain of Mr. Frank, judges rather than jobs are the key to reducing the flow of foreclosures.  David Kittle, Chairman of the Mortgage Bankers Association (MBA), issued a statement in strong opposition to the possibility.  “Allowing judges to retroactively modify borrowers’ mortgage balances will destabilize a mortgage market that desperately needs stability right now…We ought to let [the Obama administration's Home Affordable Modification Program (HAMP)], still in its early stages, continue to take hold, rather than rushing to try to pass a measure that will do more harm than good.  We hope that proponents of cram down will recognize the successes that the industry is making through HAMP and other means to help keep borrowers in their homes.  Loan modifications cannot happen overnight.  But as today’s report from Treasury shows, servicers are making significant progress.”

Mortgage rates down

Both Freddie Mac’s weekly survey and a separate survey of major US banks and thrifts, conducted by Bankrate.com found that mortgage rates dipped slightly this week.  Freddie Mac reported that the average rate for a 30-year fixed-rate mortgage (FRM) was 5.07% with an average 0.7 points for the week ending Sept. 10, down one basis point (bp) from the previous week’s average of 5.08%.  Last year, Freddie Mac reported the average rate was 5.93%.  Freddie Mac also found that the average rate for a 15-year FRM was 4.50% with an average 0.7 point, down four bp from a week ago when it was 4.54%.Bankrate.com reported the average interest rate for a 30-year FRM also dropped 1bp, to 5.4% with an average 0.34 point.  One year ago, Bankrate.com reported the average rate was 6.15%.  Bankrate.com said the average interest rate for a 15-year FRM was 4.75%, an increase of 1bp from last week.  Interest rates on adjustable-rate mortgages (ARMs) also decreased this week.  Freddie Mac said the average rate for a five-year Treasury-indexed hybrid ARM was 4.51% with an average 0.5 point, down from 4.59% last week.  The one-year ARM rate was 4.64% with an average 0.6 point, down from 4.62% last week.  Bankrate.com said the rate for a five-year ARM was 4.89%, down 5bps from last week.

Home prices cut

Trulia.com said in its monthly price report that more than one in four U.S. homes for sale on Sept. 1 had their prices cut at least once since landing on the market, up slightly from a month earlier:  26 percent of homes had their prices reduced, up from 25 percent on Aug.1.  Two factors driving the decrease were the pending expiration of the government’s $8,000 tax credit for first-time home buyers — part of the stimulus bill — and the closing of the summer months peak sales period.  The average discount was 10 percent from the original price, unchanged from August.  On average, sellers dropped their price by $39,378.  Nationwide, $28.5 billion has been dropped from the price of homes for sale on September 1, up by more than $1.1 billion from June to September.

Gap between asking and selling closes

According to a Zillow real estate market report, the gap between asking price and selling price is closing.  Buyers paid 3.3% or nearly $7,039, less than the last listing price on homes for sale in July; down from 3.5%, or $7,630, in June; and 4.6%, or $10,260, in January.  Zillow reported 22.8% of all homes listed for sale on its Web listing service had at least one price reduction as of September 1 and the median reduction was 6.5% off the original listing price.  Negotiating power varied from region to region: Florida homebuyers had the most negotiating power in July, and California buyers, where some actually paid above asking price, the least.

Insider selling up…way up

The stock market has mounted an historic rally since it hit a low in March.  The S&P 500 is up 55% as U.S. job losses have slowed and credit markets have stabilized.  But against that improving backdrop, in August corporate officers and directors were selling $31 worth of stock sales for every $1 of buys.  While a wave of insider selling doesn’t necessarily foretell a stock market downturn, it suggests that those with the first read on business trends don’t believe current stock prices are justified by economic fundamentals.  “It’s not a very complicated story,” said Charles Biderman, who runs market research firm Trim Tabs.  “Insiders know better than you and me.  If prices are too high, they sell.”  Ben Silverman, director of research at the InsiderScore.com web site that tracks trading action, said insiders are selling at their most aggressive clip since just before the onset of the subprime malaise two years ago.  Silverman said the “orgy of selling” is noteworthy because corporate insiders were aggressive buyers of the market’s spring dip.  The S&P 500 dropped as low as 666 in early March before the recent rally took it back above 1,000.

Now on to our real estate education section…

The Most Important Financial Survival Strategies You Need to Implement Today

Need an easy to understand, affordable and hassle free way to keep your books in the black? Keep reading to discover the most important financial survival strategies you need to begin putting into practice today.

1. Step back and plan for the short term and the long term. Like the  old adage – failure to plan is akin to planning to fail. During tough economic times it isn’t merely enough to have a ten year goal in place, you must have objectionable and actionable short and long term goals. Failure to see the big picture leaves you wandering aimlessly while failure to account for short term details increases the risk of ruin due to insufficient cash-flow, liquidity or other problems.
2. Don’t ignore bad news. Yes, there are more than enough nay-sayers that will tell you the sky is falling rather than teaching you how to profit from one of the greatest transfers of wealth to take place in a generation. On the other hand, don’t automatically write-off all bad news…it often contains the information you need to know in order to make informed decisions about your future…or to take advantage of the financial wreckage coming down the pipelines.
3. Control your cash flow. One reason the current financial crisis has hit so hard is an over-reliance upon credit to meet short term obligations. Both consumers and small business owners are at the “mercy” of banks, credit cards and other lenders who can (and will) change credit terms and adjust lines of credit on a moment’s notice.
4. Minimize liability. Aside from cash flow issues, one of the other major risk factors impacting most investors is liability risk. One slip and fall accident by an uninsured worker on a short sale property could negate a lot of earnings. Likewise, while cash is king it also requires a much greater personal level of responsibility for the average investor. Stay smart and learn how to minimize liability both in terms of financial risk and more routine forms of liability by properly insuring and structuring holdings.
5. Focus on profits. Novice short sale investors with more time than money may need to begin small but should move up to more profitable investment as soon as feasible. Always focus on profits and eliminate the bottom 10 percent of all performers in your portfolio. Follow this one simple strategy to increase profits each and every year.
6. Identify your customers. Short sales are a strange business..do you really know who your clients or customers are? Is it the seller? Lender? New buyer? Know your customers and don’t waste money on ineffective marketing. Make everything count.
7. Don’t work too much. We’ve said it before and will say it again; earned income is expensive. Many people work themselves into an early grave only to watch more and more of their earnings go to paying ever rising taxes, health insurance premiums and medical bills. Outsource what you are able and switch the source of income to take advantage of favorable taxes.
8. Work with – not against – your competitors. In reality, there isn’t any such thing as a real competitor, only someone more suitable versus someone less suitable. When you find a deal that doesn’t really work for you…pass it along to someone better able to make it work and ask for them to do the same for you. Create a win-win for all involved in order to secure better profits with less work.

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

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