Forward this e-mail to your friends!
Then they can subscribe directly at the following link:
http://www.smartrealestatenews.com/
*** Follow Chris on Twitter–> http://www.twitter.com/mclaughlinchris
*** Join Chris’ Facebook Fan Page–> http://www.mclaughlinchris.com
**********************************************************
NO FLIP RICHES UNVEILING AND FR*EE ONLINE DVD
Here’s what we’ll reveal in this free online DVD and one-hour class:
• Details on each of these 9 threats – even if you don’t have a clue now
• How to get around them, and get up and running in less than a day
• How to target markets with NONE of these problems, with eager sellers and starving buyers eager to hand you cash… you’ll be a hero just for giving them what they need.
• When and how to fill your short sale funnel with high-margin deals… and rake in HUGE profits regularly
• Create multiple income opportunities — because after your first flip, done this new way, you simply wash, rinse, and repeat your way to a fortune!
• Best part — with this new strategy, it’s like it’s 2008 all over again… where you can generate an autopilot, dependable, predictable, and steadily soaring income that’ll create enough wealth to retire for good!
It’s time to get excited…
Make sure you wait for the gotowebinar page to redirect you to obtain the free DVD:
http://www.noflipwebinar.com
****************************************************
Shadow Inventory will prolong slump: Economists
Economists, during an annual meeting of the National Association of Real Estate Editors, shared that continuing foreclosures and an “overhang” in housing inventory will likely prolong the housing slump for several more years. Home values in many markets are still in decline, said Stan Humphries, chief economist for online real estate search and information company Zillow. And housing demand may not see a normal balance with new household formation and housing starts until 2013, said Doug Duncan, chief economist for secondary mortgage giant Fannie Mae.
The “overhang or shadow supply” of housing inventory has a lot to do with the drawn-out recovery for the housing market, he noted. Zillow also forecasts a bottom in home prices during the third quarter. The “tremendous amount of shadow inventory,” which Humphries defined as properties that are in foreclosure and not yet on the market or are seriously delinquent and not yet in foreclosure, is definitely a contributor to the stalled real estate recovery, he said. Negative equity, combined with high unemployment is the other key factor. The federal tax credit programs offered to first-time and existing homebuyers do not appear to have had a major impact in driving sales, he also said Humphries. Also, the tax credits appeared to just be “stealing demand” ahead in time, and July and August are the months to watch out for.
Goldman Sachs Stung by Backlash in China
Goldman, arguably the most successful foreign investment bank in China, has been lambasted in articles in state-controlled media. “Many people believe Goldman Sachs, which goes around the Chinese market slurping gold and sucking silver, may have, using all kinds of deals, created even bigger losses for Chinese companies and investors than it did with its fraudulent actions in the U.S.,” read the opening lines of an article in the China Youth Daily, a state-owned daily newspaper, last week. The article was widely distributed through commercial news portals and the websites of government mouthpiece Xinhua News and the People’s Daily, the Communist Party publication.
Reports in 21st Century Business Herald, one of the largest financial newspapers in the country, and New Century Weekly, a liberal magazine were highly critical of Goldman for designing and selling oil hedging contracts to state-owned Chinese companies that then lost billions of dollars when oil prices plunged, contrary to Goldman analysts’ predictions, in 2008 and 2009. Probably the most telling assertion in all of the articles is the complaint that Goldman has been too successful in China, that it has made too much money from underwriting initial public offerings, arranging deals and making its own private equity investments. Goldman saw a 2007 investment in a small pharmaceuticals export company of less than $5 million rise to nearly $1 billion at the company’s IPO, a gain of 20,000 percent. The bank has a lead role in the IPO of Agricultural Bank of China. Chinese business reporters are rarely allowed to criticize powerful state enterprises, but foreign companies are often regarded as fair game.
Weekend News
The Group of 20 nations (G-20) did not agree on a global tax on banks that would have placed the cost of worldwide bailouts on the financial industry, according to a report from Bloomberg. Instead, the G-20 settled for a set of common guidelines. This means countries such as Canada, China and Brazil that did not suffer as severe a financial downturn as others can spare their banks from taxation. Proponents of the global tax wanted to keep financial institutions from seeking refuge in other countries from that do impose such taxes. As US lawmakers continue their push toward financial reform this week, former Federal Reserve economist Robert Bliss, now a professor at Wake Forest University Schools of Business, said such sweeping change could have serious and unintended consequences.
The House and Senate will try to reach a compromise between financial reform bills passed by the House in December 2009 and the Senate a few weeks ago. Lawmakers have set a goal of reaching a compromise before the July 4 recess. The joint committee will try to reach agreement on issues such as the regulation of the derivatives market and the creation of a new consumer protection agency. Regulators closed three banks on Friday viz., TierOne Bank in Lincoln, Neb, First National Bank in Rosedale, Miss and Arcola Homestead Savings Bank in Arcola, Ill. The closures are expected to cost the Federal Deposit Insurance Corp. (FDIC) Deposit Insurance Fund (DIF) $313.6m total. There have been 80 bank failures so far in 2010, compared to 37 over the same amount of time in 2009.
Diana Olick – Luxury Homes Losing Value
“Thanks to a slightly bizarre story about a New Jersey couple putting their almost-finished home on the market for $68 million, I decided to take a look at the luxury home market. It’s hard to get data exclusive to this segment of the market, since the $1 million+ homes make up just 1 percent of all existing home sales. The National Association of Realtors breaks out sales by price and does show that sales of $1 million+ homes are up 54.4% in April from a year ago. The Institute for Luxury Home Marketing, which operates out of Dallas, runs run data weekly on high-end homes in 31 local metro markets. They do that by ranking zip codes by median price and then taking the data from the top ten zip codes with median prices above $500,000. That’s how they arrive at their composites.
Of course the first thing I look for is prices. It seems that while the middle and lower end of the market was seeing real price recovery this Spring, the high end, which was pretty flat all fall, started to really tank from March through May. Not surprisingly, the inventory of high end homes surged in January, just before that price drop and is continuing to climb. I suppose some sellers were feeling better about the economy and the market and thought this was the time to get back in. Unfortunately they were sorely mistaken. The percentage of sellers who dropped their asking price at least once over the past 90 day period went from 33 percent in mid February to 38 percent at the end of May. Obviously the high end of the market was not at all moved by the home buyer tax credit, since $6500 to a move-up buyer isn’t going to mean much on a multi-million dollar home. First-time buyers in high end? Maybe Justin Bieber. I wish the folks in New Jersey good luck.”
DSNews.com – Veterans Affairs Department Revises Loan Modification Guidelines
The U.S. Department of Veterans Affairs (VA) has issued new guidelines for modifying VA-guaranteed home loans. The new procedures are effective immediately, and give servicers the authority to restructure distressed loans in accordance with the administration’s Home Affordable Modification Program (HAMP) if other loss mitigation options have been exhausted. “The intent of these instructions is to ensure that veteran borrowers receive the opportunity to be considered for affordable loan modifications when other home retention loss mitigation options are not feasible,” the VA’s notice to servicers reads.
According to the new guidelines, before considering HAMP-style modifications, servicers must first evaluate defaulted mortgages for traditional loss mitigation actions, such as repayment plans, special forbearances, and proprietary loan modifications. If the payments are affordable, then the traditional loss mitigation option will be used. If none of the traditional home retention options provide an affordable payment, the servicer must then evaluate the loan for a HAMP-style modification prior to deciding that the default is insoluble. The VA HAMP-style modification authority can be utilized only if the following three requirements are met: 1) borrower does not qualify for traditional home retention loss mitigation, 2) the property is the borrower’s primary residence, and 3) the VA HAMP modification is agreed upon prior to the HAMP expiration date of December 31, 2012.
Now on to our real estate education section…
Waiting on Wall Street? Lessons Learned from Argentina in 2001
Still waiting on Wall Street in order to fund your retirement, pay for college costs or simply set aside emergency cash? Better start thinking about “Plan B” because even if Wall Street finally makes a much awaited “come-back” in nominal terms, the reality is you could still be behind the curve in actual spending power….plus be forced to pay an even greater percentage of taxes!
Fortunately, Americans have a relatively recent example to serve as a reference when trying to plan for the future; the December 2001 collapse in Argentina. For those who didn’t make an “A” in high school geography, Argentina was once considered the “London” of South America. A prosperous nation that exported enough food to feed Europe, the average standard of living compared favorably to most industrialized nations. A combination of corrupt politicians, overt federal spending and high unemployment rates (sound familiar?) plunged the nation into a hyperinflationary monetary collapse literally overnight. As the stock market crashed and banks declared a holiday, average citizens were unable to withdraw more than a few hundred dollars per month from their bank accounts. Riots broke out as what little available money and supplies quickly dwindled away as inflation ran rampant.
Today, nearly a decade later, Argentina is considered a stable nation but still suffers from the impact of the 2001 collapse in ways that most American’s can’t envision. Why is this important to real estate and short sale investors? According to experts and average citizens of Argentina alike…real estate remained one of the safest investments throughout the entire crisis. Those that bought real estate were able to protect and profit even during the worst of the economic collapse; most of the remaining middle class dropped into the poverty level.
For those that believe Wall Street investments will make a comeback despite rising inflation and excessive money printing, consider what happened in Argentina:
1. Rising food bills. On average a 300 to 400 percent increase.
2. Rising utility bills. Electricity and other utility bills increased as much as 800 percent in some areas.
3. Rising rental rates. Property owners were able to keep pace with increased costs both during and after the crisis.
4. Dropping wages. Unemployment reached over 20% and those that did have jobs were paid less.
Now ask yourself…will Wall Street returns increase 300, 500 or even 800 percent just to keep up with the rising cost of food or utilities? Remember, you would need to add on an additional 15 to 35 percent on top of that to keep pace with taxation. The federal government loves inflation; not only does it allow the government to reduce their debt but it also increases taxation in nominal terms. Ten years later Argentina still hasn’t recovered; taxes are higher, wages are lower in real purchasing power and the stock market remains stunted…but those who owned real estate have managed better than most. Take a lesson from Argentina….buy real assets to hedge against inflation.
See you at the top!
Chris McLaughlin
**************
Copyright Loss Mitigation Institute LLC 2009.
All Rights Reserved.
http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches
http://www.smartrealestatenews.com (subscribe to this newsletter)
*************************************************
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 over
400 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
* Join my Facebook Fan Page: http://www.mclaughlinchris.com
–
{ 0 comments… add one now }
Leave a Comment