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One of the biggest problems derailing most short-sale investing careers is having to negotiate short sales with banks.

by admin on August 4, 2010

Smart Real Estate News & Commentary by Chris McLaughlin August 4, 2010

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One of the biggest problems derailing most short-sale investing careers is having to negotiate short sales with banks.

Well, guess what? You don’t have to anymore. You’ll discover why in this free planning session Wednesday at 8:30 PM ET, 5:30 PST:

Click Now -> https://www2.gotomeeting.com/register/331982995

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Mortgage Applications Increase

The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 30, 2010 increased 1.3% on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 1.4% compared with the previous week.  The Refinance Index increased 1.3% from the previous week. The seasonally adjusted Purchase Index increased 1.5% from one week earlier. This third straight weekly increase in the Purchase Index was driven by government purchase applications which increased 3.4% from last week, while conventional purchase applications were essentially flat.  The unadjusted Purchase Index increased 1.5% compared with the previous week, was up 7.1% relative to four weeks ago, but was 33.7% lower than the same week one year ago.  The four week moving average for the seasonally adjusted Market Index is up 0.3%.  The four week moving average is up 0.9% for the seasonally adjusted Purchase Index, while this average is up 0.2% for the Refinance Index.  The refinance share of mortgage activity remained flat at 78.0% of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.4% from 5.7% of total applications from the previous week.

More Private sector jobs

We won’t have the official figures for two more days, but two employment reports released early today gave a mixed picture.  According to a report by payroll processing firm Automatic Data Processing (ADP), private-sector employers added 42,000 jobs to their payrolls in June, following an upwardly revised 19,000 increase in June.  Economists polled by Briefing.com had expected the report to show the private sector added 25,000 jobs in July.  According to outplacement firm Challenger, Gray & Christmas Inc., employers announced plans to eliminate 41,676 jobs last month -  up 6% from June, when job cuts rose to 39,358.  Economists forecast that employers cut payrolls by 87,000 jobs in July after cutting 125,000 jobs in June. 

Since hitting a four-year low in April, job cuts have risen nearly 9% over the past three months, but downsizing remains well below 2009 levels and cuts in July were down 57% from a year ago.  So far this year, employers have announced 339,353 job cuts, down 64% from the same period last year.  For the fourth month this year, employers in the government and non-profit sector shed the most jobs, announcing plans to eliminate 7,193 employees in July, up 36% from the 5,306 job cuts in June.  Government and nonprofit employers have announced plans to eliminate 105,969 jobs so far this year. That’s nearly triple the number of planned cuts in the pharmaceutical industry, which has announced 30% fewer layoffs this year but remains the sector with the second highest number of cuts.

Pending sales down

According to the National Association of Realtors (NAR), the Pending Home Sales Index (PHSI)declined 2.6% to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6% below June 2009 when it was 93.0. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.  Lawrence Yun, NAR chief economist and perpetual optimist, said lower home sales are expected in the short term. “There could be a couple of additional months of slow home-sales activity before picking up later in the year, provided the job market continues to improve,” he said.

“Over the short term, inventory will look high relative to home sales. However, since home prices have come down to fundamentally justifiable levels, there isn’t likely to be any meaningful change to national home values. Some local markets continue to show strengthening prices.”  The PHSI in the Northeast dropped 12.2% to 58.8 in June and is 25.4% lower than June 2009. In the Midwest the index fell 9.5% to 64.1 and is 27.8% lower than a year ago. Pending home sales in the South rose 3.7% to an index of 85.8, but are 13.3% below June 2009. In the West the index slipped 0.2% to 85.1 but is 14.2% below a year ago.

Uncertainty and inaction hurt economy

A panel of economists told the Senate Budget Committee yesterday had gloomy outlooks for growth in 2011, offering annual GDP forecasts ranging from 3% to 4%. and arguing that Congress needs concrete plans for tax cuts, stimulus and deficit control because the economic uncertainty this administration and congress have created will mean slow growth.   Joel Naroff, president and founder of Naroff Economic Advisors, predicted even slower growth of 2% to 2.5% — if Washington fails to make major “changes in fiscal or monetary policy.”  “Market participants are used to thinking that political gridlock is good because it keeps politicians from interfering with the marketplace,” said Richard Berner, a top economist at Morgan Stanley. “Well, today gridlock is more likely to be bad for markets as our long-term economic problems require solutions with political action.”  The problem is that it’s possible Congress won’t tackle big decisions — such as extending the Bush-era tax cuts — until after the November elections.  Berner suggested that uncertainty over tax policy — as well as uncertainty on how health care and Wall Street reforms will play out — played a role in the sluggish consumer confidence levels of the past few months.  “That is not the only reason, but I think it’s an ingredient,” Berner said.

More foreclosure bailout

As many as 50,000 homeowners in 5 states with high unemployment may receive help from a special $600 million federal fund intended to head off some foreclosures.  State housing agencies in Ohio, North Carolina, South Carolina, Oregon and Rhode Island can use money from a so-called “Hardest Hit Fund” for foreclosure mitigation that was announced in March, says Herb Allison, Treasury Assistant Secretary for Financial Stability.  The five states have counties where the unemployment rate exceeded 12 percent in 2009.  Allison said the program is targeted at those who need it most and is not designed to prevent all foreclosures.  Obama announced a $1.5 billion “Hardest Hit Fund” in February for California, Nevada, Arizona, Florida and Michigan, where home price declines were most pronounced. 

Under pressure from lawmakers, the administration expanded the program in March to the five states now eligible for an additional $600 million.  The $2.1 billion fund shifted money from the existing $50 billion program: Home Affordable Modification Program (HAMP).  Some of the programs that states proposed will help unemployed or under-employed people keep up with their mortgage payments.  Others will try to assist homeowners who are facing negative equity by reducing the principal of loans that they owe or will be used to finance short sales of homes to avoid foreclosure.  Ohio, for example, would allow unemployed workers to get mortgage payment assistance for longer than the three months allowed under the nationwide program.  Ohio will get up to $172 million for these purposes while North Carolina gets up to $159 million and South Carolina up to $138 million.  Oregon has been approved for up to $88 million of funding and Rhode Island up to $43 million.

30 year rates set record low

According to Zillow Mortgage Marketplace’s weekly update, the 30-year fixed-mortgage rate (FRM) dropped week-to-week nationally averaging 4.28% — down 0.1% and a new record low.  Regionally 30-year rates are varying, but the majority of states saw a drop.  California’s current rate is 4.33%, down from 4.34% last week, as is Colorado’s at 4.26%, down from 4.28%. 

Rates substantially decreased in New York to 4.23% (from 4.46%), Massachusetts to 4.28% (from 4.61%), Florida to 4.18% (from 4.33%) and Washington to 4.36% (from 4.56%) from last week.. Texas is down to 4.27% from 4.36%  and Illinois state average is down to 4.33% from 4.31%.  Zillow reported the rate for 15-year fixed home loans at a national average 3.85%, while the rate for a 5-1 adjustable-rate mortgage (ARM) is at 3.27%.  Zillow’s rates are based on real-time mortgage quotes from lenders registered with, but not exclusively bound to the company. The national average comes from thousands of daily quotes given to anonymous borrowers through their website.  State averages are also available.

Now for our real estate education section…

How is Your Marketing Know-How?

Be honest. How is your marketing know how? Not sure how you really measure up? Take this quick quiz to determine if you use guerrilla marketing to the max or just monkey around. Answer true or false to each of the following questions:

1. I routinely use a publicity campaign to build my professional identity, increase visibility and create name recognition.

2. I’m not comfortable “tooting my own horn” or I commonly encounter more aggressive people that seem to steal my thunder.

3. I am the product. My expertise, experience and/or education set me apart from the crowd.

4. I’m not comfortable asking clients for testimonials, letters of praise or endorsements.

5. I am nothing if not persistent. I’m able to overcome lack of interest, rejection, competition and even rudeness in order to achieve my goal(s).

6. I tend to focus on today rather than the long-term outlook. For example, I focus on the effectiveness of advertisements rather than campaigns or measure results in terms of days or weeks rather than months or years.

7. I position myself well in advance. For example, by collaborating with upcoming events, publications calendars and offering my services or expertise before it is requested.

8. I try never to extend myself.

9.  I look for opportunities everywhere.

10. I focus my attention on the buying audience and forget the media.

What’s Your Score?

Give yourself 1 point for every “true” answer to each odd numbered item above. Give yourself 1 point for every “false” answer to each even numbered item above. Subtract 1 point for every “false” answer to every odd numbered item. Subtract 1 point for every “true” answer to every odd number.

0-3 points: You are in dire need of marketing help. Run – don’t walk – to find immediate help.

4-6 points: Chances are you spend a lot of time with minimal results…ie, you monkey around but not very effectively. Either get serious or outsource it.

7-9 points: You have a solid foundation and could quickly become a master with a bit of tweaking.

10 points: You understand the essentials of guerilla marketing. Keep up the good work!

See you at the top!

Chris McLaughlin
**************

Copyright Loss Mitigation Institute LLC 2010.

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)

*************************************************
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

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Smart Real Estate News & Commentary by Chris McLaughlin, May 17, 2010

by admin on May 17, 2010

Forward this e-mail to your friends! 

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http://www.smartrealestatenews.com/ 

*** Follow Chris on Twitter–> http://www.twitter.com/mclaughlinchris

 *** Join Chris’ Facebook Fan Page–> http://www.mclaughlinchris.com

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Housing market diagnosis: Bi-polar

Bi-polar is what comes to mind when diagnosing the post-homebuyer tax credit market. On one hand, sales and prices are rising, indicating recovery. On the other hand, so are interest rates and repossessions, which most certainly do not. And then there are the millions of foreclosures that need to be sold but haven’t yet been listed — so-called shadow inventory — that could derail a real recovery if they hit the market in floods. The result means, negative short-term but turning positive by the end of 2010.  “In the short run, I see a mini-collapse,” said Richard DeKaser, an independent housing market analyst and founder of Woodley Park Research who correctly predicted a downturn back in 2005 when he was chief economist for National City Corp. 

There are some strong negatives dragging on the market. 1. Intermittently increasing interest rates 2. Bank repossessions surpass a million homes in 2010. 3. More than a quarter of borrowers are “underwater,” meaning they owe more than their homes are worth. 4. “Strategic defaults” close to 31% of all foreclosures in March — where underwater home owners walkway even when they can still afford to pay. And the scary truth: Right now, there could be more than 4.5 million homes that are ready to be sold but not on the market, also called “shadow inventory,” according to a recent report by Barclays Capital. This so-called shadow inventory is a recent phenomenon. In the past, inventory was either tight or it wasn’t. But now, with home prices so low and so many foreclosures on the market, both homeowners and banks have been waiting to put properties on the market.  But as more sellers put their homes up for sale, supplies increase, which will depress prices again. Rinse and repeat ad infinitum. That vicious cycle could cause prices to bounce up and down for years, low or no appreciation and more homeowners in negative equity.

Obama aide: U.S. economy still needs further boost

The U.S. economy has begun to climb out of the worst downturn since the 1930 Great Depression but still needs additional steps by the federal government to stem a crisis in the job market, a senior economic adviser to President Barack Obama said on Sunday. “What we need now is not the withdrawal of support, but further targeted actions that will help the private sector come back more strongly,” Christina Romer, chairwoman of the White House Council of Economic Advisers, said in prepared remarks for a commencement ceremony at the College of William and Mary in Williamsburg, Virginia.

Romer urged Congress to pass a series of measures Obama has proposed to jump-start growth, including the establishment of a lending fund to spur credit to small businesses and providing cash-strapped cities and states with aid to help them avoid layoffs of teachers and other local employees. With the U.S. unemployment rate just under 10 percent, the Obama administration is juggling the need to spur economic growth with pressure to rein in ballooning U.S. budget deficits. The latest government report on the job market showed that the jobless rate ticked up two tenths of a percentage point to 9.9 percent as discouraged workers began looking for work again. Romer, an expert on the Great Depression, used much of her speech to compare the current economic crisis to the long downturn of the 1930s.  Republicans have sharply criticized the stimulus package, calling it an example of overreach by the government and contending that it failed to do enough to spur jobs growth. 

Diana Olick – Home Mortgage Interest Deduction In Play

“The Administration isn’t officially considering it, maybe not “actively” considering it, not even taking a side on it per se. According to “staff” it was just a “musing.” At a small conclave of reporters, no cameras allowed, the Secretary of Housing and Urban Development was reportedly asked about the mortgage interest deduction, the importance of home ownership and the seeming shift of focus from owning to renting. That last bit is huge in itself, as pretty much every President dating back to Herbert Hoover and the Home-Loan Discount Banks pushed people to own own own.  Some argue that it was this push to the “ownership society” by President’s Clinton and Bush that caused at least some of the housing crisis, and at the very least pushed Fannie Mae and Freddie Mac to push the envelope of responsible lending.  Secretary Donovan reportedly offered that modifying the deduction could result in deficit reduction and, as the Wall Street Journal notes, “rebalancing federal housing policy.” 

The mortgage interest deduction, which appears on about 41 million U.S. tax returns, is a huge political hot button, and the more questions the Secretary got, the quicker he tried to get out of the conversation. No, there is “no official position” on the deduction. But the question didn’t come from the ether. A couple of economists from Harvard and Wharton suggested last week that the housing bubble was not caused entirely by faulty mortgage lending, but perhaps more by housing policy going back decades. Their conclusion was to focus on modifying the mortgage deduction.  According to the Congressional Joint Committee on Taxation, between 2009 and 2013, the federal government will lose roughly $600 billion from the home mortgage interest deduction.”

Threat of Shadow Inventory Diminishing: Barclays

Analysts at Barclays Capital say the industry’s ominous shadow inventory is close to topping out.  New research published by the firm says the supply of homes nearing REO status, defined as 90 or more days delinquent or in the process of foreclosure, will peak this summer and then begin falling gradually as the market becomes stable enough to absorb 130,000 distressed properties a month. “While we expect REO levels to remain elevated, the trickle of homes from foreclosure into REO implies moderate levels of inventory reaching market,” Barclays said in its report. 

The company estimates the current REO supply to be 478,000 and expects it to rise to 536,000 by late 2011. Barclays’ delinquency pipeline snapshot shows that as of February, there were 2.4 million mortgages at least 90 days past due and 2.1 million more already winding through the foreclosure process, which combined makes up a shadow inventory of 4.5 million. It’s a daunting tally and could grow larger as foreclosure alternatives are exhausted, but Barclays’ model forecasts 4.7 million distressed sales over the next three years, with 1.6 million coming in 2010, 1.6 million in 2011, and 1.5 million in 2012. The research firm notes, however, that an orderly liquidation of shadow inventory will require both “more robust household formation and job growth.”  Barclays forecast that the industry is only a few months away from reaching peak levels of shadow inventory.

Commercial Market Still Struggling

While the commercial real estate market may not have fully recovered, National Association of Realtors® Chief Economist Lawrence Yun identified some developing, positive trends in the market that could eventually lead to recovery at the “Economics Issues and Commercial Business Trends Forum.”  Yun said jobs only began increasing a couple of months ago and are still below peak. The commercial market has seen a few improving trends in recent months. The market is experiencing an increase in transactions due to more distressed properties available, and prices are beginning to stabilize. Yun believes within the next year more lending will slowly become accessible to commercial property owners.

Two commercial sectors showing the most promise are manufacturing and multifamily. Manufacturing activity and employment have risen recently and because household formation is also rising, the multifamily sector will likely fare the best during this economy. Despite some of these promising trends, the commercial market is still experiencing high vacancy rates and rent concessions. “All real estate is local, but I expect to see vacancy rates bottoming out and rent rising by next year,” said Yun.  He also warned against some of the possible risks commercial practitioners may experience in the future such as high interest rates and inflation, as well as increased taxes for commercial real estate investors. During the session, Yun was joined by two leading economic experts, Diane Swonk, Mesirow Financial; and Brendan Reilly, Commercial Mortgage Securities Association. The panelists agreed that an improving economy and job creation continue to be the two main factors when it comes to restoring the commercial real estate market.

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Now on to our real estate investing education section …

Huh? HUD Reform Could Create Chaos

It probably comes as no surprise that the lending industry has…and will continue…to undergo dramatic changes in response to the financial strain and economic meltdown however, one recent proposal is putting a lot of lenders up in arms. Specifically the “Strengthening Risk Management through Responsible FHA Approved Lenders” report published on April 20,2010 which essentially lays out the new plans designed to help FHA lenders and brokers comply with upcoming regulatory changes.

While that all sounds straightforward enough, the devil is in the details. According to industry experts, after December 31,2010, the FHA broker approval process will be eliminated from HUD responsibility and oversight. Savvy brokers might wonder who will now be in charge of the approximately 8,000 current FHA brokers that will be left without direct supervision under HUD. According to the same report, beginning in 2011, FHA approved lenders will be responsible for approving brokers…and held accountable for the brokers FHA originations.

Hmmm…let’s take a moment to break this down into plain language terms.

By eliminating roughly 8,000 brokers from HUD’s direct responsibility without reducing HUD’s audit staff, the remaining 3,000 FHA lenders are likely to be exposed to greater scrutiny and oversight. If that wasn’t enough, here are few more highlights coming soon to an office near you.

May 20,2010 – Yes, this week marks the first step in the reform process. Beginning 05/20/10, lenders will be directly responsible for the approval and oversight of new brokers (12/31/10 for current FHA approved brokers). There does seem to be a decided lack of clarity. Confused yet?

You aren’t alone. To date, HUD has not provided lenders any specific guidance on how to oversee a brokers activity.

December 31,2010 – This is the final date where Quality Control audits will be required for broker approval. After that date, the broker will require FHA lender approval to participate. Lenders are expected to pass the QC requirements to the broker in an effort to reduce regulatory requirements.

To learn more or to view the document for yourself visit:

http://edocket.access.gpo.gov/2010/pdf/2010-8837.pdf 

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 }

Smart Real Estate News & Commentary by Chris McLaughlin, May 2, 2010

by admin on May 3, 2010

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 

***********************************************************

HAFA encourages short sales to avoid foreclosure

Short sales give distressed homeowners an exit that doesn’t lead through credit-damaging foreclosure and saves bank’s money compared with taking and selling houses with failed mortgages. That should make them a preferred option. But short sales take longer, often two months longer, and can be nearly impossible if other lenders have liens on the house. So at the urging of the National Association of Realtors, the U.S. Treasury Department came up with a new program to encourage short sales. Home Affordable Foreclosures Alternatives, or HAFA, went into effect April 5, although banks and real estate agents will need time to take full advantage of its provisions. HAFA encourages short sales chiefly by, (a) holding parties to deadlines for various parts of the process (b) providing financial incentives, including $3,000 to help the homeowner relocate; $1,500 for servicers to cover their extra costs; and as much as $2,000 for mortgage security investors who allow as much as $6,000 of sale proceeds to go to other lien holders (c) allowing the current mortgage holders to get pre-approved short-sale terms before listing the property for sale (d) requiring that homeowners be fully released from future liability for the first mortgage debt. 

Under HAFA, banks must decide within 10 business days whether to approve or deny a requested short sale under the program. Banks already have an inventory of 1.1 million foreclosed houses, recent estimates by LPS Applied Analytics of Jacksonville, Fla., show. Many more will be heading for a short sale or foreclosure. The Mortgage Bankers Association said more than 9 percent of homeowners were behind at least one payment on their mortgages in the fourth quarter. LPS figures 4.8 million are delinquent or already in the start of the foreclosure process. The HAFA program can’t reach many of those houses. Lenders participating in the federal government’s effort to encourage mortgage relief for distressed homeowners — Home Affordable Modification Program — are required to participate in HAFA as well.

Strength in Recovery? Not Yet

U.S. companies are plowing money back into their businesses at a rate that demonstrates growing confidence in the economy’s recovery, but still leaves questions about its strength. The Commerce Department reported Friday that private investment in equipment and software, everything from machine tools to word-processing programs, rose at a robust annualized rate of 13.4% in the first quarter of 2010, adjusted for inflation. Business investment overall, including money spent on warehouses and office buildings, grew at an inflation-adjusted annualized rate of 4.1%, dragged down by the persistent slump in commercial real estate. The increased spending on equipment and software encouraged hopes that businesses will help lead the economic recovery, generating enough investment and jobs to sustain a recent resurgence in consumer spending.

So far, though, it is falling well short of the pace needed to drive the kind of sharp, “V-shaped” recovery that has followed deep recessions in the past. Together with rising exports, the business investment “is enough to generate a sustainable recovery, but not enough to generate a V,” said Nigel Gault, chief U.S. economist at consultancy IHS Global Insight. In the first four quarters after the harsh recession of 1981-82, inflation-adjusted investment in equipment and software rocketed back at an average annualized rate of 21%, helping to drive nearly 8% growth in the broader economy. Most business surveys show optimism rising and many companies planning to boost capital expenditures further in coming months. But disparities remain. Business investment still has a long way to go to reach normal levels. In the first quarter of 2010, net private investment—including capital spending on everything from houses to assembly lines, minus depreciation—stood at 1.6% of economic output, well below the 20-year average of 5.4%. Meanwhile, the smaller firms that tend to account for an outsize share of job growth are facing serious obstacles, as banks shy away from providing credit.

Diana Olick – Bye Bye Home Buyer Tax Credit

“It was the last day of the home buyer tax credit…for the second time.  Of course given all the hype on the home builder web sites, you’d think this was the last day of the housing market as we know it.  And was it working? Well, hard to say.  One guy we spoke to in suburban Maryland just couldn’t get the seller to budge quickly enough. Another in New York City was rushing to get a developer to sign by midnight but there seemed to be some issues. I emailed a Realtor I know out in Burbank, CA, David Fogg, and he responded:  “The real story is the intense difficulty qualified people are having in obtaining financing, as well as the appraisal regulations which are hurting many home sales.” So does the housing market implode at midnight?  I seriously doubt it, seeing as the tax credit extension already hasn’t had nearly the effect the first credit did last fall.  In the run-up to the previous deadline, we saw annualized sales volume rise to nearly 6.5 million units. Volumes then tanked to 5m units by January and were only up to 5.3m by March. I doubt we’re going to get back to 6.5m by April. All this says is that demand was pulled forward, and there just aren’t that many buyers left who are buying solely because of the credit.

Most experts I talk to, including the Realtors’ own economist, believe we may see another dip in sales and prices before we are really on the road to recovery. Remember, Spring is historically the busiest market, and we’d probably have seen some bump, tax credit or not. And it’s not like the government is gone from housing entirely, given that the $75 billion mortgage bailout is stemming some of the foreclosure crisis, and Fannie Mae is still offering 3.5% back when you buy one of their foreclosed properties.  Housing today is dependent on financing and confidence, and both of those are hanging by a thread. Frankly I’m glad to see the tax credit go, because maybe now we can see the housing market’s true colors, without excuses.”

DSNews.com – Fannie Mae takes a second look at REO Property Sales

Fannie Mae is tightening up its initiative to facilitate the sale of REOs to owner-occupants and entities using public funds, such as local housing and community development agencies. Fannie Mae says these buyers bring permanency and stability to tenuous markets where swollen inventories of foreclosures have taken their toll, and the GSE is making some changes to ensure owner-occupants and public entities have “first look” at its REO homes.

Fannie Mae initially rolled out its First Look initiative last fall. Under the program, the GSE only considers offers from those seeking to purchase a home as their primary residence and public entities during the first 15 days that a property is listed.  Julia Dugger, Fannie Mae’s senior manager of marketing communications, explained that the execution of the First Look program has been “tricky,” primarily because individual homebuyers and public entities usually can’t view multiple listing services (MLS), and consequently don’t know when the property they’re interested in was actually listed or when the 15-day First Look window ends. To address this snag, Fannie Mae is making some changes to the program. Going forward, First Look will be tracked based on days listed on the GSE’s REO marketing site HomePath.com. Public entities, too, are taking advantage of the no-investor marketplace provided by First Look, particularly those agencies that have been awarded federal funding through HUD’s Neighborhood Stabilization Program (NSP) to purchase, rehabilitate, and resell foreclosed and abandoned properties. Beginning today, Fannie Mae is extending the First Look marketing period for its REO homes in Nevada from 15 days to 30 days. Dugger says the GSE may explore lengthening the timeframe in other areas as well.

Goldman CEO acknowledges company ‘role’ in finance crisis

Goldman Sachs’ CEO Lloyd Blankfein said in an interview to CNN, broadcast Sunday that his company bears some blame for the real estate bubble that led to the global financial meltdown. “We made a contribution to the bubble,” adding that executives at the company now “beat ourselves up” for the error, although he said there was a lot of blame to go around. “How did we make a contribution? We’re a lender. We lent money to companies, we lent, we financed real estate ventures that had too much leverage, we made a contribution to leverage,” Blankfein said. “State and local governments took on debts and deficits, the federal government took on big deficits. All made a contribution to the over-leverage — and consumers over-leveraged themselves,” he said. But did we play a role in that? Absolutely we did,” he said.

He added: “Did we think we were doing that at the time? No. In hindsight? Yes. Goldman has been roundly berated for having emerged a highly profitable winner in the wake of the financial crisis, while many of its investors took major losses. Blankfein’s concession came just days after a contentious congressional hearing last week at which he and other current and former Goldman employees denied any wrongdoing after a Senate probe alleged fraud that the firm bet heavily against the housing market in 2007 without telling investors who were buying its mortgage-backed securities. Goldman faces a vexing dilemma, legal experts say, as the Justice Department conducts a criminal investigation into whether the financial services giant duped buyers of its securities. Goldman could lose its vaunted reputation for integrity if it admits to wrongdoing as part of a deal to avoid criminal prosecution. The value of Goldman’s stock has fallen $21 billion — a fifth of its market value — since the Securities and Exchanges Commission (SEC) alleged that the firm created and sold a mortgage-backed security in 2007 without telling investors that it had been partly shaped by a hedge fund manager who bet that it would fail. Friday, Goldman’s stock fell 9% to $145.20.

Now on to our real estate investing education section …

Bank Foreclosures vs Tax Foreclosures – Which is Better?

Tax foreclosures were once all the rage but with media attention on short sales and REO properties, they have recently fallen out of favor. Of course, among savvy real estate buyers and investors, nothing is “off the table” so it’s only fair to spend a bit of time examining the pros and cons associated with each.

Tax Foreclosures are Not Tax Deed Sales

It’s important to differentiate between tax foreclosures, tax deed sales and other forms of government sponsored property sales. Tax foreclosures are typically the result of unpaid tax or other liens placed on the property (for example, unpaid income taxes). Tax deed sales are often the result of a homeowner failing to pay the local property taxes on a given parcel; after a period of time the taxes are paid by someone else (often an investor) with a guaranteed rate of return ranging from 5 to as high as 18 percent upon redemption.  At some point and time in the future, if the original owner does not redeem the property and repay the prior property taxes plus interest, the property may eventually go up for auction.

Pros & Cons

Although tax foreclosure sales may sound simple enough, in reality they are often plagued by problems. For example, unlike short sales or REO properties, the buyer often assumes all prior liability for past due taxes when purchasing the property. Additional liens (including other forms of taxes, HOA fees, etc…) may add thousands to the purchase price of the property. Because the tax lien takes precedent over all other liens, a substantial sum may be required to obtain clear title and clear liens against the property. Remember, there is often a mortgage in addition to the back taxes owed.

Tax foreclosures can also be highly competitive; auctions often take place quarterly or once per month with extensive advertising used to attract maximum bidding. Pre-approval is necessary since closing typically takes place within 10 to 30 days after the auction. Bidders may conform to the dictates of the taxing authority rather than negotiate a closing based upon their own individual situation. Of course, the use of leverage, timing and other financial issues may significantly impact the individual rate of return for any type of real estate investment. Be sure to take all considerations into account before moving forward with a tax foreclosure sale.

Although both REO and tax foreclosed homes are typically sold in “as is” condition, the bank representative and others typically attempt to provide a thorough review of the property. Tax foreclosures should be extensively scrutinized prior to the sale in order to gain as much information as possible; it’s not unheard of for investors to believe they got a “great deal” and were the lowest bidder only to find out there were zoning irregularities, EPA restrictions or other major issues associated with the property.

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

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Smart Real Estate News & Commentary by Chris McLaughlin, April 26, 2010

by admin on April 26, 2010

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

***********************************************************
Short Sale Fraud Legal Update: Ron Ballard, Jeff Watson, & Chris McLaughlin

If you are involved in reselling short sales, this is the best hour and a half you can spend to protect  yourself:

http://www.shortsalesriches.com/3lawyerupdate
 ***********************************************************
More about new home sales 

Sales of new single-family houses in March 2010 were at a seasonally adjusted annual rate of 411,000, 23.8 percent above the March 2009 estimate of 332,000, according to estimates released jointly Friday, April 23, 2010 by the U.S. Census Bureau and the Department of Housing and Urban Development.  March new sales are 26.9 percent above the revised February rate of 324,000.  The $8,000 first-time home buyer tax credit expires Friday, April 30, 2010. There is also a $6,500 credit for repeat buyers.  “Undoubtedly, the tax credit is working,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “Builders are seeing a growing optimism among consumers.”  “The near record-breaking 27 percent increase over February was the result of home buyers taking advantage of the tax credit as well as a carryover of demand that was held back by unusually bad weather in February,” said NAHB Chief Economist David Crowe.  “The increased sales are very welcome news and sales will continue to improve, although we expect them to plateau in late spring and early summer when the credit expires. Following that, the housing momentum will be carried forward by low interest rates, pent up household formations, excellent affordability conditions and a budding employment growth,” Crowe added. 

Regionally, sales increased 35.7 percent in the Northeast, 4.3 percent in the Midwest, 43.5 percent in the South and 5.7 percent in the West.  The nationwide inventory of new homes on the market dropped a negligible 0.8 percent in March, to 227,000 units as builders continued to maintain small inventories. With the increased sales pace and low inventory level, the month’s supply of new homes for sale dropped from 8.6 in February to 6.7 in March.  The median sales price of new houses sold in March 2010 was $214,000; the average sales price was $258,600.

The real news about new home sales

Diana Olick has a contrarian, and perhaps more realistic take on the situation:  “It’s big, no question. A 27 percent monthly bump up in sales of newly constructed homes.  To me this is real proof of the tax credit boost, because this data series is based on contracts signed, unlike the Existing Home Sales series we got yesterday from the Realtors, which is based on closings (so contracts signed in Jan/Feb).  The tax credit expires one week from today, so the March and April numbers should reflect that. That said, I thought it would be useful for you to hear what some of the analysts are saying: 

Dan Oppenheim/Credit Suisse: ‘The improving trend in sales is consistent with our expectations for rising activity through April based on the pull-forward in demand ahead of the tax credit expiration. However, the tax credit does not appear to create incremental buyers, but just shifts the timing of purchases so that the stronger March and April are, the worse May and June will be.  We expect the focus to soon shift to the severity of the payback, which is likely to undermine builders’ quest for profitability especially when combined with rising materials costs.

-  Michael Rehaut/J.P. Morgan: ‘We expect the builders to continue to show positive order growth during the spring selling season, as well as order growth in the second half of the year, as community counts stabilize and the builders gain share against a more stable housing backdrop. As a result, we reiterate our positive sector stance based on our outlook for the builders to continue to demonstrate positive order growth, improving margins and less charges, which we believe should serve as positive catalysts for the group.’

-  Mark Hanson/Housing/Mortgage Analyst: ‘I am fairly confident that new home sales (counts) are really close to bottoming in here. Note, that is the very first time I have ever said this about NHS. In fact, in Feb sales actually rose month over month on a not-seasonally adjusted basis by 2k units…24k vs 22k in Jan. And unlike existing sales, weather could have held sales down a bit in Feb. I absolutely do not see some sort of building streak on the horizon given foreclosures are back near record highs for the past two months in a row and it looks like in March actual foreclosures will set an all-time record above 90k.  But I do think that building has reached such depressed levels that the ‘crash’ has ceased in here and Feb’s 22k NSA sales—down from Feb’s bubble year’s average of 90k and last Feb’s 29k —will be as bad as it gets for a while.’

America underwater?

Bill Gross, a founder of the investment giant Pimco, is a bottom-line kind of guy; he doesn’t seem to care if the debt is the fault of Republicans or Democrats, the Bush tax cuts or the Obama stimulus. He’s simply worried that Washington’s habit of spending today the money it hopes to collect tomorrow is getting worse and worse. According to Gross, it even has elements of a Ponzi scheme.  In fact, he’s so concerned about America’s national debt that he has started unloading some of his holdings of U.S. government bonds in favor of bonds from such countries as Germany, Canada and France.  “In order to pay the interest and the bill when it comes due, we’ll simply have to issue more IOUs. That, to me, is Ponzi-like,” Gross said. “It’s a game that can never be finished.”  The national debt — which totaled $8,370,635,856,604.98 as of a few days ago, not even counting the trillions owed by the government to Social Security and other pilfered trust funds — is rapidly becoming a dominant political issue in Washington and across the country, and not just among the “tea party” crowd.

President Obama is feeling the pressure, and on Tuesday he will open the first session of a high-level bipartisan commission that will look for ways to reduce deficits and put the country on a sustainable fiscal path.   It’s a tough task. The short term looks awful, and the long term looks hideous. Under any likely scenario, the federal debt will continue to balloon in the years to come. The Congressional Budget Office expects it to reach $20 trillion over the next decade — and that assumes no new recessions, no new wars and no new financial crises. In the doomsday scenario, foreign investors get spooked and demand higher interest rates to continue bankrolling American profligacy. As rates shoot up, the United States has to borrow more and more simply to pay the interest on its debt, and soon the economy is in a downward spiral.  Of course, at least in theory, this problem can be fixed. Unlike a real Ponzi scheme, which collapses when no new suckers offer money that can be used to pay off earlier investors, the government can restore fiscal sanity whenever our leaders decide to do so.  But that premise is what has people like Gross worried. In addition to running a budget deficit, Washington has had a massive deficit of political will.

Stimulus didn’t help

In the latest quarterly survey by the National Association for Business Economics (NABE), the index that measures employment, a majority of respondents felt the fiscal stimulus had no impact.  NABE conducted the study by polling 68 of its members who work in economic roles at private-sector firms. About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act, which the White House’s Council of Economic Advisers says is on track to create or save 3.5 million jobs by the end of the year.  That sentiment is shared for the recently passed $17.7 billion jobs bill that calls for tax breaks for businesses that hire and additional infrastructure spending. More than two-thirds of those polled believe the measure won’t affect payrolls, while 30% expect it to boost hiring “moderately.”   But the economists see conditions improving. More than half of respondents — 57% — say industrial demand is rising, while just 6% see it declining. A growing number also said their firms are increasing spending and profit margins are widening.  Nearly a quarter of those surveyed forecast that gross domestic product, the broadest measure of economic activity, will grow more than 3% in 2010, and 70% of NABE’s respondents expect it to grow more than 2%.  Still, the survey suggested that tight lending conditions remain a concern. Almost half of those polled said the credit crunch hurts their business.

Fannie and Freddie get tough on scams

A new coalition, led by Fannie Mae and Freddie Mac, will launch a national campaign to prevent loan modification scams.  The Loan Modification Scam Prevention Network also includes the Lawyer’s Committee for Civil Rights Under Law and NeighborWorks America, which is a network of community development and affordable housing organizations. The network will work to educate borrowers, take in complaint reports and coordinate with local, state and federal enforcement agencies.  A story in the November 2009 issue of HousingWire cited complaints of modification scams in California increasing from 163 in 2008 to 2,000 in 2009. Some companies allegedly charged as much as $3,000 for a guaranteed loan modification and did nothing. 

The network website names individuals and companies identified by enforcement agencies to have allegedly committed a loan modification scam.  “This effort links homeowners to free, legitimate counseling and helps to put scammers out of business. The goal of this campaign is to educate homeowners and empower those who have fallen victim to scammers to report and prevent future fraud,” said Jeff Hayward, senior vice president at Fannie.  Other partners in the network include the Treasury Department, the Department of Housing and Urban Development, the Department of Justice, Federal Bureau of Investigations, the Federal Deposit Insurance Corp. and the Federal Trade Commission.

Now on to our real estate investing education section …

Get Going on Google – Online Lesson #1

With over 63% of the search engine market, Google is the clear winner in the race to grab consumer attention so making sure your real estate related website is highly ranked is essential. Pay-per-click is fast and easy but rarely as cost effective as organic marketing measures. Naturally ranked websites are also perceived as more reputable among users…in fact, research indicates over 65% of people never click on paid results!

This week we will find out what it takes to get going on Google. Whether you putting up your very first real estate related website or are a veteran, find out exactly what is required to reach the coveted front page (top ten) search results. Remember, less than 15% of searchers go beyond the first two pages of search results so it’s imperative to be in the top twenty for your market.

1. Discover your current rankings via each data center. Google has several different data centers located around the world…whenever a user initiates a search, they could be directed to any one of these different data centers. More importantly for the purpose of online marketing, each data center has a slightly different result. Google also provides two test domains for new algorithms. It’s useful to see how your rankings measure up by visiting:

www.seochat.com/seo-tolls/multiple-datacenter-keyword-position/

2. Turn on the tool bar. Google provides a plethora of tools designed to assist in marketing efforts but you must actually turn them on to get the full value. Essential features include the following:

  • Page Rank Display
  • Highlight Search Terms
  • Backward Link Checker: See who links to your website, assess the quality of links, see who your competition is and secure new links for your website.
  • Cached Pages Checker: See what your webpage(s) looks like on the Google database and when it was last indexed.

3. Sign-up for Google Analytics. Think of this like one-stop shopping for all your Google related infomatics. To get started, simply log into your Google account, click “Analytics” on the service menu then “sign-up”. Enter the information requested. Viola’…your very own mini-marketing department that will track important information about who is visiting, site visits, new and returning visitors, content summary and much more.

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

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Real Estate News & Commentary by Chris McLaughlin, October 23, 2009

by admin on October 23, 2009

http://www.shortsalesriches.com

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

******************

Fix A Flip … A Revolutionary Way to Close More Deals!

We’ve been flooded with phone calls and e-mails begging
us to reopen Fix A Flip … so today you get another
chance!  If you’ve been frustrated by not being able to close
your flip transactions due to 30 to 90 day seasoning
requirements, this program is for you!

Join us for a webinar Tuesday at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/570893394

*****************

The next collapse

If there’s another real estate collapse on the way, it’s in commercial real estate, and the FDIC closing Chicago’s Corus Bank last month may have signaled the beginning of it.  Corus, whose balance sheet full of bad construction loans, was just one of many banks that have this type of debt on their books, and refinancing the $2 trillion in commercial mortgages is going to be tough as property values decline.  In this new age of cautious lending, few banks are willing to refinance loans.  Michael Haas, a real estate attorney at Jones Day, says, “There is a hesitancy to extend credit when there is a real possibility that the real estate may be worth less than it was a few years ago.” In a situation similar to the subprime crisis, we may be looking for a wave of foreclosures and loan defaults that could, in turn, trigger a collapse in the market of the structured bonds backed by commercial real estate and construction debt.

MBA objects to new legislation 

The Mortgage Bankers Association (MBA), like most of us who believe government has no place in the nation’s business, objected to legislation passed by the House Financial Services Committee that would create a consumer financial protection agency.  The bill continues the patchwork approach of state and local laws that present challenges for lenders in multiple states, and ultimately lead to increased costs for consumers.  MBA’s Chairman, Robert E. Story, Jr. says:  “MBA has also expressed concern about the creation of a new government bureaucracy that could result in financial institutions facing conflicting regulatory guidance from two regulators – the CFPA and their existing prudential regulators.   A better approach would be to create a national regulator for mortgage banks that would regulate for both consumer protection and safety and soundness.  Existing federal regulators could then be empowered to enforce consumer protections on the financial institutions they oversee.  Moving forward, MBA will continue to work to make these and other improvements to the bill in the hope of finding common ground on a consumer protection bill that we can support.”

2010 is shaping up for a weak recovery 

The Federal Reserve is in no rush to pull back its extensive economic life support measures.  Chicago Federal Reserve President Charles Evans said: “We have to think about our exit policy and are looking at it very carefully, but at the moment, that’s not our first order concern, at the moment, its policy accommodation.  I think that the recovery is going to be very unsatisfactory in 2010.”  Evans, who will vote on the Fed’s policy-setting panel in 2010, said he expects unemployment to rise above ten percent.  The Fed has cut rates to near zero and pledged to hold rates there for an extended period.  Its next policy-setting meeting is Nov. 3-4 and it is not expected to signal any movement toward an exit then.  High unemployment and low inflation rates both indicate that policy accommodation is in order, and with economic growth, household spending will be restrained and businesses will face weaker demand for their goods and services, Evans said. “It is not going to feel like a recovery for some time.”

Freddie Mac – increased delinquencies

Freddie Mac announced today that its mortgage investment portfolio grew by an annualized 7.3 percent rate in September, while delinquencies on loans it guarantees accelerated.  The portfolio increased to $784.2 billion, for an annualized 3.4 percent decrease year to date, and delinquencies, which increase stress on the company’s capital, jumped to 3.33 percent of its book of business in September from 3.13 percent in August and 1.22 percent in September 2008. The multifamily delinquency rate accelerated slightly in September to 0.11 percent from 0.10 percent in August. A year earlier it was 0.01 percent.

IRS gives Homebuyer Tax Credit to aliens and minors 

Ok, we knew it would happen, right?  We all love the tax credit – if only the government didn’t have to be the one administering it.  The Treasury Inspector General for Tax Administration (TIGTA) believes the Internal Revenue Service (IRS) may have paid out millions of dollars in first-time homebuyer tax credits to individuals not eligible to receive the $8,000 credit.  Nearly $4 million of incorrectly paid credits were due to both alleged fraud and filing errors on claims by 580 taxpayers less than 18 years old. The youngest of these was 4 years old, TIGTA head J. Russell George said in prepared testimony to the House Ways and Means Oversight subcommittee.  TIGTA also found 3,200 taxpayers with Individual Taxpayer Identification Numbers (ITIN) claiming the credits. ITINs are used to track income tax for resident aliens, in lieu of a social security number, and it’s possible that as much as $20.8 million in tax credits was paid to resident aliens ineligible for the credit.  As of August 22, 2009, more than 1.4 million taxpayers claimed the tax credit for homes purchased in 2008 and 2009, representing total foregone tax revenue of about $10 billion, according to estimates presented by Government Accountability Office (GAO) director of strategic issues James White.

Now on to our real estate investing educational arena …

Who’s Your Seller?

By far, one of the surest signs of a novice short sale investor is the tendency to think of the homeowner as the actual seller. While s/he certainly has a legal right to the property and therefore a “say-so” in whether or not to accept an initial offer for a short sale, when it comes down to the hard and fast fundamentals of the deal, more often than not the actual lender is closer to what most people would consider the actual “seller”.

If this seems counter-intuitive, chances are you are not alone. Many homeowners actually believe they are the “sellers” as well; in fact, it’s not uncommon to hear things like “Send me an offer and I’ll consider it” or “How much will you pay me for the property?”. Of course, that is understandable since most homeowners never really realized they didn’t truly own the property to begin with…the bank did (and still does). However, what is forgivable among distressed homeowners seeking financial relief is unforgivable among short sale investors; you simply must know and understand your seller in order to work a successful transaction.

Take time to consider a few facts; first, the lender is the only party able to make the final determination on whether or not to accept the short sale offer, subject of course to the homeowners’ approval. They can determine what constitutes an acceptable net and even change their mind when it suites them to do so – make it your business to understand what the seller needs and wants to make the deal work …the real decision maker, not the homeowner.  For example:

  1. Have you used the correct state commission form containing all required disclosures for both buying and selling?
  2. If you are using your own purchase and sale contracts/option etc, have you verified each includes all necessary verbiage and disclosures?
  3. Do you have appropriate contracts in place with agents specifying the working relationship?
  4. Do you have appropriate disclosures, verbiage and properly positioned details of each transaction when buying/selling a property?
  5. Does the BPO accurately reflect the property?
  6. Have you verified all the “math” so the Net is properly attributed? Don’t make it harder than it needs to be for the seller to approve your deal!
  7. Do you understand all legal requirements related to “double closings”? If not…learn them. This is a major cause of confusion and loss of confidence when purchasing short sale investments!

Serious about short sales? Get to know your seller then adopt a tried and true system that works rather than spending all your time talking about investing.  Interested in learning more? Attend a free webinar to learn more about short sales in less time than you ever thought possible.

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 

*************************************************
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
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com

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