foreclosure

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Home sales drop 7.2% 

According to the National Association of Realtors (NAR), existing-home sales fell in January but are above year-ago levels.  Economists polled by Thomson Reuters had forecast that completed sales last month rose almost 1% to a seasonally adjusted annual rate of 5.5 million, up from 5.45 million in December.  Existing-home sales – including single-family, townhomes, condominiums and co-ops – dropped 7.2% to a seasonally adjusted annual rate1 of 5.05 million units in January from a revised 5.44 million in December, but remain 11.5% above the 4.53 million-unit level in January 2009.  Total housing inventory at the end of January fell 0.5% to 3.27 million existing homes available for sale, which represents a 7.8-month supply at the current sales pace, up from a 7.2-month supply in December. Raw unsold inventory is 9.6% below a year ago, and is at the lowest level since March 2006.  The national median existing-home price for all housing types was $164,700 in January, unchanged from a year earlier. Distressed homes, which accounted for 38% of sales last month, continue to downwardly distort the median price because they typically are discounted in comparison with traditional homes in the same area.  A parallel NAR practitioner survey4 shows first-time buyers purchased 40% of homes in January, down from 43% in December. Investors accounted for 17% of transactions in January, up from 15% in December; the remaining sales were to repeat buyers. The survey also shows that buyer traffic increased 9.4% in January.

Economy grows 5.9%

The Commerce Department reported today that the nation’s gross domestic product (GDP), the broadest measure of the nation’s economic activity, grew at an annual rate of 5.9% in the last three months of 2009.  Economists surveyed by Briefing.com had forecast that the revision would show the same 5.7% growth that was originally reported a month ago.  The solid growth follows a 2.2% annualized increase in the third quarter. Most economists now agree that the recession probably ended at some point last summer.  Still, the recovery is widely perceived as fragile. Economists point out that much of the growth at the end of the year came because businesses were no longer slashing inventories. Federal Reserve Chairman Ben Bernanke testified to Congress this week that the central bank will need to keep interest rates low in order to support the economy.  The recovery is even less apparent to the typical American. Job losses have continued in all but one month and most economists believe unemployment will stay close to 10% for much of the year.  Credit remains tight for small businesses and consumers and the recovery in housing prices is uneven at best. The most recent survey of 5,000 American consumers by the Conference Board found the greatest level of worry about the current state of the economy in 27 years.

Housing recovery off the rails?

As the Federal Reserve nears the end of a critical, year-long program to support the mortgage market, the recent slump in housing is making some analysts uneasy about a recovery that many thought sustainable just a couple months ago.  “Housing is at a pivotal, ambiguous point,” says Ted Gayer, co-director of Economic Studies at the Brookings Institution.  Recent reports from home sales to mortgage activity has been starkly negative. And, even if some of it can be written off to seasonal patterns, namely weather, the weakness is not what people expected.  New homes sales fell to a record low in January, extending a two-month slide; both pending and existing home sales were down in the most recent month; homebuilder sentiment in January fell back to where it was last June, and mortgage applications have fallen three of the past four weeks.  No one expected a wonderful housing recovery with unemployment stubbornly high, the consumer balance sheet still in repair mode, and credit conditions stingy, but right now there’s palpable worry about momentum–especially given a string of solid months in mid- to late-2009.  Global Insight, for one, says it will probably lower its projections for housing starts and new home sales. The homebuyer tax credit, which now applies to repeat buyers and not just first-time ones, “isn’t panning out, its’ not registering, “say Newport. “Demand for new housing is a lot weaker than we thought it would be.”  Some 4.5 million homes are expected to fall to foreclosure this year, following 2.8 million in 2009. In contrast, existing homes sales for the two-year period will average about 5.5 million.

Green jobs mythology

“Green jobs” have become a central underpinning of the Obama administration’s rationale to promote clean energy. But how valid is the assumption that a “clean-energy” economy will generate enough jobs to mitigate today’s high level of unemployment?  The Washington Post took a look at the question.  Consider just one clean-energy sector, the smart grid, for its job-creation potential. The Obama administration allocated a little more than $4 billion in funding from the American Recovery and Reinvestment Act to the smart grid, most for installing smart meters — digital versions of the spinning electric meters that are omnipresent nationwide. Virtually eliminating human intervention by eliminating the need for meter-reading and transmitting data directly to utilities, smart meters promise more accurate measurement of electricity usage as well as increasingly efficient management of energy production resources.  It typically takes a team of two certified electricians half an hour to replace the old, spinning meter.

In one day, two people can install about 15 new meters, or about 5,000 in a year. Were a million smart meters to be installed in a year, 400 installation jobs would be created. It follows that the planned U.S. deployment of 20 million smart meters over five years, or 4 million per year, should create 1,600 installation jobs. Unless more meters are added to the annual deployment schedule, this workforce of 1,600 should cover installation needs for the next five years.  Now let’s consider job losses. It takes one worker today roughly 15 minutes to read a single meter. So in a day, a meter reader can scan about 30 meters, or about 700 meters a month. Meters are typically read once a month, making it the base period to calculate meter-reading jobs. Reading a million meters every month engages about 1,400 personnel. In five years, 20 million manually read meters are expected to disappear, taking with them some 28,000 meter-reading jobs.  That’s not an increase in jobs.  It’s a loss.  And this metric is one that follows “greening” everywhere – the sad fact is that to streamline to “greener” technologies eliminates jobs.  It’s all fine and well to treat mother nature better, but patently dishonest to pretend it’s a jobs strategy.

DSNews.com — House prices fall

According to the Federal Housing Finance Agency’s (FHFA) seasonally-adjusted purchase-only house price index (HPI), house prices declined modestly in the fourth quarter of 2009.  On a seasonally adjusted basis, the fourth quarter HPI was just 0.1% lower than it was in the third quarter of 2009. However, the quarter-to-quarter decline in prices was much more significant when measured without seasonal adjustment. According to FHFA, the unadjusted national decline was 1.5%.  FHFA’s seasonally-adjusted monthly index for December was down 1.6% from its November value, and over the year, seasonally-adjusted prices fell 1.2%. Although house prices in the fourth quarter of last year dropped notably from the fourth quarter of 2008, prices of other goods and services during this same period rose 1.9%. Accordingly, the inflation-adjusted price of homes fell approximately 3.1% over the latest year.  The all-transactions HPI, which includes data from mortgages used for both home purchases and refinancings, also fell in the fourth quarter of last year. Compared to the previous quarter, the index declined 0.7%, and over the four-quarter period it plummeted 4.7%. FHFA said the difference between appreciation rates in the two indexes is entirely explained by the inclusion of refinancings in the all-transactions index.

Now on to our real estate investing educational section…

Friday File – 15 Minute Real Estate Resolution

This week we spent some time discussion the use of social media marketing for real estate including several specific tips to enhance your LinkedIn profile page. This week’s 15 minute real estate resolution takes it to the next level by suggesting you take the time to adopt an actual strategy for using LinkedIn. Before implementing these advanced level tips be sure you have a firm handle on the basic LinkedIn process.

1. Set-up a “Company Buzz” application. Simple select any keyword desired (ie, short sale real estate) and the Company Buzz application will show you what is being said about the topic on Twitter. It’s easy to get started; simply log in to LinkedIn, click on the “applications” menu to the left then click on “Company Buzz” on the application page. Install the application, allow it to display on your LinkedIn profile page and then type in your Twitter ID or topic keywords etc… All the tweets will then automatically show on your LinkedIn page.

2.  Ask & Answer. Questions are a great way to engage others or show what you know. Ask and answer at least one question this week just to get a taste for the application. It’s quick and convenient enough that you might find yourself using it more frequently than anticipated.

3. LinkedIn Lions. There is a lot of debate whether or not someone should join a LIONS group or not. These meta networkers can certainly raise your ratings but LinkedIn has also suggested a rather negative position in relation to these groups. On the other hand, open networking has been shown to work especially when used properly and not abused. For more information on the general LinkedIn LIONS visit http://finance.groups.yahoo.com/group/linkedinlions/ or perform a search for real estate specific LIONS groups in your area. Remember, LInkedIn has now limited the total number of connections to only 30,000 so use discretion.

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
–

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 Automation … The Paperless, Easy Solution.  Join us

tomorrow (Tuesday) at 3 PM ET, NOON PST as we unveil a new

way to manage what used to be chaos:

 https://www2.gotomeeting.com/register/231942947

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

Home prices fall

Home prices fell, but just 2.5% during the last three month of 2009 compared with the fourth quarter of 2008, according to the S&P/Case-Shiller Home Price Index. That was a big improvement over the past three years.  “As measured by prices, the housing market is definitely in better shape than it was this time last year, as the pace of deterioration has stabilized for now, said David Blitzer, chairman of the Index Committee at Standard & Poor’s. “However, the rate of improvement seen during the summer of 2009 has not been sustained.”  The index did rise 1.6% on a seasonally adjusted basis during the fourth quarter compared to the previous three months, for the third consecutive quarter of increase.  S&P reports the national statistics quarterly and an index of 20 cities monthly. The 20-city index inched down in December, falling 0.2% compared with November. Only four cities showed improvement.  One of those was Las Vegas, where prices rose 0.2% — the first monthly gain for that city in three years.  The future of home prices remains difficult to forecast, though, as the market at some point will have to weather the withdrawal of government measures to boost home buying, Yale economist Robert J. Shiller told CNBC.  “This isn’t a forecast, but it’s a worry that home prices might drop substantially from here forward once this support is taken away,” Shiller said in a live interview after the report was released. “Mortgage rates will go up, the economy might double-dip, the expectations for housing which helped drive the market might change suddenly once people see this support being withdrawn.”

Jobs bill passes

The Senate voted Monday to push forward a $15 billion jobs creation bill that would give businesses a tax break for hiring the unemployed. The 4-prong bill will:  Exempt employers from Social Security payroll taxes on new hires who were unemployed; Fund highway and transit programs through 2010; Extend a tax break for business that spend money on capital investments like equipment purchases; and Expand the use of the Build America Bonds program, which helps states and municipalities fund capital construction projects.  The final legislation is a scaled-down version of an $85 billion bipartisan draft bill that was crafted by Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa.  However, the bill does not extend the deadline to apply for unemployment benefits and the COBRA health insurance subsidy. Some 1.2 million people will run out of benefits after Feb. 28 if the deadline is not extended. Lawmakers are looking to pass a separate, 15-day extension to give them time to enact a longer fix.  And unlike the House’s bill, the Senate measure does not provide additional assistance for states. Many governors, who are holding their annual meeting in Washington, want the Obama administration to send more federal dollars their way so they can cope with yawning budget gaps.  Labor leaders and left-leaning think tanks all say the Senate must do more to spur job creation – as if the Senate can fabricate jobs out of thin air somehow.

Commercial real estate prices up

US commercial real estate prices, as measured by Moody’s Investors’ Service/Real Estate Analytics, Commercial Property Price Indices (CPPI) increased for the second month in a row in December, rising 4.1%, as the commercial real estate (CRE) market continues to face several challenges, such as the rising tide of defaults and subsequent foreclosures.  Moody’s said the index’s improvement was the largest month-over-month increase in the nine-year history of the CPPI and followed a small, 1% gain in November. The volume of transactions also rose in December, typical for the end of the year, Moody’s added. In December, 716 transactions totaling $9bn were recorded in the month. At the end of December, CRE prices are down 29.2% from a year ago and 39.8% from two years ago. They are 40.8% below their peak values.  But, Moody’s said, it’s uncertain whether the recent price increases represent CRE passing the bottom of the market or are only the “volatility of a market in transition.”

Underemployment at 20%

According to a Gallup poll released today, nearly 20% of the U.S. workforce lacked adequate employment in January.  Gallup estimated that about 30 million Americans are underemployed, meaning either jobless or able to find only part-time work.  This is a big deal, because underemployed people spent 36% less on household purchases than their fully employed neighbors in January, while six out of 10 were not hopeful about their chances of finding adequate work in the coming month.  Gallup surveyed more than 20,000 U.S. adults from Jan. 2 to 31. The results have a 1% point margin of error.  Gallup found that underemployed Americans were more likely to have a favorable view of Obama, with 55% approving of his performance as president against 49% of the wider public.  Hopefully this doesn’t give President Obama ideas for a campaign strategy – to put people out of work to increase his popularity.  The poll’s estimate of U.S. underemployment is higher than official statistics, and tends to paint a darker picture of the economy than official statistics. The Labor Department, for its part, disagrees with Gallup and claims only 16.5% of American workers were without employment or worked part-time for economic reasons in.  A Labor Department official said the government rate may be lower because it factors out temporary seasonal changes in employment to better reflect the underlying economy.

DSNews – Subprime securities fall in value

Heightened concerns about the valuation of subprime assets backing U.S. residential mortgage-backed securities (RMBS) has manifested in an across-the-board drop for all vintages, Fitch Solutions reported last week.  The ratings agency’s U.S. Subprime RMBS Price Index fell by just under 6 percent month on month to 7.17 as of February 1, down from 7.62 as of January 1.  All vintages dropped in value, highlighting concerns about the valuation of all RMBS subprime assets. Driving the declines was the 2007 vintage, which dropped by 17.7 percent, followed by the 2005 vintage falling by 9.5 percent month on month. Recent loan level analysis conducted by Fitch Solutions on the indices’ constituents found that the 2007 vintage showed a significant jump in 90-day plus delinquencies rising from 13.7 percent to 14.2 percent.  “The rise in delinquencies is signaling a potential increase in 2007 loan defaults,” explained Thomas Aubrey, managing director at Fitch Solutions.  Further evidence of a potential rise in defaults is in the six-month constant default rate (CDR) for both 2007 and 2005 vintages, both of which fell only marginally, the company said. Fitch explained that this is in stark contrast to much larger declines in the default rates of 2004 and 2006 vintages.

Now on to our real estate investing educational section…

Fiscal Survival of the Fittest

Survival of the fittest applies to economics as well as biology – in fact, some would argue the concept is better applied to the financial arena than any other area of study. Unfortunately, it’s a fact few Americans want to face head on…it goes against the steady diet of “American ingenuity” and the (false) belief that any child born in the good old USA can grow up to be anything they want. While there are exceptions to every rule, survival of the fittest is an economic trend currently undergoing the equivalent of an ice-age extinction as one era gives rise to an entirely new one. Research by consulting firm McKinsey found a few unsettling statistics that demonstrate the depth of the problem:

Over 70 percent of currently employed Americans work in jobs for which there is low or declining demand. This includes both blue collar and white collar. Competition for jobs that cannot be shipped overseas (healthcare for example) has created high competition which is driving down wages and promoting part-time, per diem and other “job sharing” situations.

Mainstream stores are doing double-takes as consumers shift spending habits. Not only are brick and mortar stores under heavy competition from online retailers like Amazon but the bleak economy is finally taking a toll. Violating one of the core marketing principles ‘never undercut your own product’, heavy weight’s ranging from Proctor & Gamble to Macy’s are rolling out discount versions of their more expensive popular items. Cost of Tide got you down? Don’t worry, you can now buy Tide Basic…a discount version. Research shows 1/2 of Americans have already reduced spending and 1/3 plan to do so permanently with 18 percent of consumer switching from name brands to generics in the past two years alone.

So, how are Americans spending their money both today and into the near future?

1. Nearly 34 percent of the average household income goes toward housing. Expect this trend to continue as people downsize into affordable housing options.

2. Just over 19 percent goes toward entertainment and/or miscellaneous items…however, as a discretionary item this is subject to volatility.

3. Roughly 17 percent goes toward transportation – a number experts expect to hold steady as people opt for more affordable options.

4. Just under 13 percent goes toward food; a necessity to be sure but one that is subject to “replacement” purchases as people opt for hamburger instead of steak during tough times.

5. Approximately 11 percent on retirement and personal insurance.

6. Nearly 6 percent on healthcare.

Even a precursory look at where Americans spend their money tells the average investor where to spend theirs…housing, entertainment, transportation, food, financial products and healthcare. Those are the big six that run the American economy. Now stop and consider which are available to the average “little guy” investor…stocks and bonds for healthcare, insurance and finance have been decimated in recent years. The auto industry? Please! Now that’s it’s been nationalized you can count on the same efficiency that brought you the driver license office to run the auto industry. Food is notoriously volatile and forget direct intervention unless you have an unusual level of gardening know how. No, the answer remains the same today as it did 100 years ago…real estate. It’s not easily outsourced, it’s not subject to the market manipulations of stocks and bonds nor is it entirely dependent upon your ability to work yourself into an early grave. It simply requires a willingness to adapt to the new economic environment like all other species that learn to thrive or barely survive.

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
–

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

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

Announcing the Limited Re-Opening of FixAFlip!  Learn how to

flip Bank of America and Wells Fargo short sales … and learn how

to sell to FHA buyers!  And if you thought you could flip to FHA

buyers the same day … you thought wrong.  Learn why tonight … our

answer might surprise you!

 Join us for a FINAL ENCORE this Saturday at 3 PM ET, NOON PST:

 https://www2.gotomeeting.com/register/325729331

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Fed raises discount rate

The Federal Reserve said yesterday it is raising the rate it charges banks that borrow from the central bank when they run short of funds by a quarter percentage point, or 25 basis points, to 0.75%. The central bank said in a statement it made the move in response to improving financial market conditions.  Don’t everyone panic here, because the move is largely symbolic – banks do little borrowing at the discount window and the discount rate has no effect on the more widely watched federal funds rate, which measures the rate banks charge each other for overnight loans. That rate is expected to remain between 0% and 0.25% for the foreseeable future, given the slack in the labor market and the still fragile state of the economy.  But raising the discount rate allows Federal Reserve chairman Ben Bernanke to take another small step toward normal monetary policy, after the past two last years of  financial firefight.  The Fed also shortened the term of some discount window loans and raised the minimum bid in the term auction facilities it uses to supply overnight funds to banks. The central bank said Thursday’s increase should “encourage depository institutions to rely on private funding markets for short-term credit and to use the Federal Reserve’s primary credit facility only as a backup source of funds” and added that it will “assess over time whether further increases in the spread are appropriate.”  It added: “The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy.”

Another program, another $1.5 billion

President Obama is expected to announce today another $1.5 billion program to help borrowers in the five states hit hardest by the housing crisis.  California, Arizona, Nevada, Florida and Michigan will all share more money to fund programs to prevent foreclosure for people who are unemployed or who owe more than their homes are worth.  The funds will be allocated based on a formula that takes into account home price declines and unemployment. The agencies’ programs must be approved by the Treasury Department.  The move is the administration’s latest attempt to fix its signature foreclosure-prevention effort, the Home Affordable Modification Program, which has been widely panned for not doing enough. A senior Obama official cautioned that the new program is just another tool in the White House arsenal, not a full solution to the housing woes facing the unemployed and underwater.  “As important as $1.5 billion will be to these five states, it’s not going to solve what is a catastrophically large problem,” said the official, speaking to reporters on a conference call. “It’s going to help as many of the other programs do.”  The senior administration official was vague about how the money would help the target audiences, saying mainly that these groups are intimately involved in their local housing markets.  In other words, when in doubt, throw more money at it.

DSNews.com – homeowners pessimistic on home value

According to a new report from real estate data provider Zillow, American homeowners’ confidence in their own homes’ values has fallen to the lowest level on record.  Just one in five homeowners believe their property value increased during 2009, but Zillow says in fact, 28 percent of homes appreciated during the year. It’s the first time in the history of the Seattle-based company’s survey that such a large percentage of homeowners have underestimated their home’s value.  The Zillow Home Value Misperception Index was -2 in the fourth quarter. A Misperception Index of zero would mean homeowners perceptions’ were in line with actual values. The closest it’s ever come to that until now, was in the second quarter of 2008, when the index was at 32.  Zillow says a negative Misperception Index indicates that homeowners are “overly cynical” about their own homes’ values when compared with reality. This is the first time the national index was negative.  However, Dr. Stan Humphries, Zillow chief economist, noted that almost three times as many people currently believe their home’s value will increase over the next six months as believe it will decrease in value – a level of optimism he says is likely to outpace actual performance in the near-term.  Humphries says given recent news about the stabilization of home values in some markets, it’s easy to understand why some homeowners are optimistic. “However, home values in many markets are still under substantial downward pressure from high levels of foreclosures and we don’t believe we’ll see a definitive bottom nationally until the second quarter of this year.

Inflation up over year, down over month

According to the Labor Department, the Consumer Price Index rose 2.6% during the past 12 months.  The core CPI, which is more closely watched by economists because it strips out volatile food and energy prices, rose 1.6% over the past year.  For the month of January, overall prices rose 0.2%. Economists surveyed by Briefing.com and Reuters had forecast a 0.3% rise.  However, prices excluding food and energy fell for the first time since 1982, supporting the Federal Reserve’s contention it would keep its benchmark interest rate low for an “extended period.”  Consumer energy costs soared 2.8 percent last month after rising 0.8 percent in December. Food prices climbed 0.2 percent following a 0.1 percent gain in December.  Stripping out volatile energy and food prices, the closely watched core measure of consumer inflation fell 0.1 percent in January, the first decline since December 1982. Core prices rose 0.1 percent the prior month.  Analysts had expected core prices to rise 0.1 percent. Core prices were pulled down by declining costs for new vehicles, shelter and airline fares. High vacancy rates are keeping rentals depressed.  Compared to January last year, the core inflation rate rose 1.6 percent after increasing 1.8 percent in December.  Quarterly forecasts released by the Fed on Wednesday showed policymakers expect inflation to remain muted through 2012.

Foreclosure and modification scams on the rise

The Financial Crimes Enforcement Network (FinCEN), an overseeer of financial activities for the US Treasury, says it received hundreds of suspicious activity reports (SARs) regarding foreclosure and modification scams.  In the third quarter of 2009, depository institution filers submitted 15,697 mortgage loan fraud SARs, a 7.5% increase over the same period in 2008.  The primary suspicious activity surrounding loan modifications deal with occupancy misrepresentation, social security number discrepancies, and altered or forged documentation, the government agency said.  “Subjects of these reports primarily have been borrowers, though filers also reported industry insiders as subjects, including loan officers, underwriters, and purported loan modification agents,” said a FinCEN statement today updating progress made since April’s red flag advisory. “SARs involving loan modifications described potential fraud in either the application for the loan modification, or in the older loan which came under review subsequent to the modification application.”  California and Florida originated the most overall mortgage loan SARs, at 6,444 and 5,077 respectively. New York is a distant third at 1,614.

Now on to our real estate investing educational section…

Double Your Income in Real Estate

Sick and tired of “feel good” motivational books that promise the world but deliver little in terms of your net worth? Good. Perhaps you are ready to make real profits rather than listening to empty promises. Real estate has historically been one of the leading roads to wealth for average American’s seeking a better life but it also has more than its share of casualties lost along the way. Survey’s show the average real estate professional makes less than $50,000 a year…many as little as $15,000 annually….a comparable rate to just one or two quick short sales done right.

Is it really possible to double your income in real estate? Absolutely. The key to any type of sales related area is word of mouth marketing. Duh right…of course! But we aren’t talking about just any word of mouth marketing…no, we are talking about WORD OF MOUTH on steroids; developing the type of “A” list others would only dream about. Creating such demand for your services that the “B” list becomes a secondary source of referral income simply because you are too busy to handle it.

Before we get into the nuts and bolts of what it takes to double your income in real estate, let’s first define what this isn’t…

1. This isn’t a spiel about how “service is its own reward”. Let’s face it, if service were its own reward you could spend more time at the local volunteer center any day of the week. Hard work deserves a real reward – the type you can take to the bank.

2. This isn’t a long term process that promises to pay off in ten, twenty or thirty years. Chances are you have been taught time and time again that there are “no shortcuts in selling”. Bunk! Of course there are shortcuts in selling and they are used all the time by those that thrive rather than barely survive! The rest of the crew is kept in line by scavenging the bottom for the few that fall through the cracks. Move up the food chain and learn to play the game like the big boys.

3.  This isn’t about toxic attitudes or how to “win friends and influence people”; the system works just as well whether you are an untamed punk or stodgy old fart.

4. This isn’t about the history of real estate – knowing that never made anyone richer but it’s bored a lot of people along the way.

What this is about is generating an “A” list that would be the envy of every real estate agent in the nation. The type of list other spend an entire career to generate. Plain and simple it’s all about your sphere of influence – it’s a numbers game in the most literal manner. Numbers don’t lie but they are tough for the average agent to muster. Y’know the rules; begin with friends and family then hit up church groups and social clubs…then wait for others to hopefully mention your name when the time comes for someone to buy or sell. That’s not a strategy – it’s an antiquated popularity contest. Fortunately the rules have been re-written thanks to technology and social networking that expands your reach far beyond anything possible during the days of “business cards”. True exponential growth isn’t just possible but actually probably when used properly. Find out more with a quick visit to www.ordersmr.com to find out how to double, triple or even quadruple your real estate income.

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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Announcing the Limited Re-Opening of FixAFlip!  Learn how to

flip Bank of America and Wells Fargo short sales … and learn how

to sell to FHA buyers!  And if you thought you could flip to FHA

buyers the same day … you thought wrong.  Learn why tonight … our

answer might surprise you!

 Join us tonight at 9 PM ET, 6 PM PST:

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75% of all U.S. homes are affordable

According a quarterly report from the National Association of Home Builders and Wells Fargo, the typical American family, who makes the nation’s median income of $64,000 a year, could afford to buy 70.8% of all homes sold in the United States during the last three months of 2009.   That’s off just a tad from the record 72.5% reached during the first three months of 2009, but up substantially from the second quarter of 2008 when only 55% of homes sold were affordable.  “Favorable mortgage rates and sliding house prices that have now started to stabilize nationally have both contributed to a record year for housing affordability in 2009,” said NAHB chairman Bob Jones, a home builder from Bloomfield Hills, Mich.  The NAHB judges a home to be affordable if a family making the metro area’s median income could devote no more than 28% of their take-home pay toward housing costs. 

There was a huge variation in affordability around the nation. All five of the most affordable major housing markets were in the Rust Belt, led by Indianapolis, which has been the nation’s most affordable major metro area for more than four years. More than 95% of all home sold there were classed as within the budget.  Detroit was the second most affordable major market with 93.4%, followed by three Ohio cities, Dayton (93.2%), Youngstown (93%) and Akron (92.2%).   New York was the least affordable market; less than 20% of homes met the criteria. San Francisco (22.3%), Honolulu (33.8%), Santa Ana, Calif.,. (34.5%) and Los Angeles (36.8%) filled out the bottom five.  The most unaffordable small market was San Luis Obispo in California, where only 32% of homes sold were attainable for median-income families.

Jobless claims up again

The Labor Department says there were 473,000 initial jobless claims filed in the week ended Feb. 13, up 31,000 from the previous week’s upwardly revised 442,000.  A consensus estimate of economists surveyed by Briefing.com expected claims to slide to 438,000.  Analysts polled by Reuters had expected claims to drop to 430,000. The prior week was initially reported as 440,000.  The number of people filing continuing claims in the week ended Feb. 6 was unchanged from the previous week’s revised 4,563,000 claims.  The four-week moving average of new claims, which irons out week-to-week volatility, fell 1,500 to 467,500, the Labor Department said. The number of people still receiving for benefits after an initial week of aid was unchanged at 4.56 million in the week ended Feb. 6.  This measure has held below the 5 million mark for eight straight weeks and analysts believe it is starting to reflect an improvement in the labor market rather than people merely dropping off rolls because they have exhausted their benefits.  The economy has lost 8.4 million jobs since the start of the downturn in December 2007. However, the pace of layoffs has dropped sharply from early last year.

HAMP helping some

 The U.S. Treasury said its foreclosure-prevention program (Home Affordable Modification Program, known as HAMP) has cut mortgage payments for about 947,000 households, at least temporarily.  The total was up about 11% from a month earlier. The administration estimates that 1.7 million households—about 3% of those with mortgages—are eligible for the program.  The Treasury said 60,000 trial modifications have been canceled. Many more are likely to fall out of the program this month because extensions of the time available to verify incomes have run out.  For those who fail to qualify, lenders may proceed with foreclosure or seek other solutions, including short sales, in which homes are sold for less than the loan balance due.  The program’s dropout rate is likely to be high, partly because lenders allowed many people into trials without first making sure they qualified. Wells Fargo & Co. said 92,000 of the borrowers it services had made three trial payments by Jan. 31. It expects about half of them to get permanent modifications. Others failed to provide all or some of the required documents or were found to be ineligible after the paperwork was reviewed.  Among loans with permanent modifications, the median monthly savings is about $522, the Treasury said. It said borrowers in trial and permanent modifications have saved more than $2.2 billion so far.

Manufacturing up

According to the Institute of Supply Management’s survey of manufacturing executives, the global economic recovery and a lower value of the dollar have lifted US exports of goods 24% since April. January was the first month in three years that there was a gain in manufacturing jobs nationwide.  “Manufacturing is clearly leading the way out of the recession,” said Mark Zandi, chief economist for Moody’s Economy.com. Zandi said there even should be some new manufacturing jobs created in the next few years, and that “modest gains are a big swing from massive job losses.”  Further signs of strength came Wednesday when the Federal Reserve’s report on industrial production showed growth for the seventh straight month.  While the index is still 10% below where it was at the start of the Great Recession in December 2007, it has jumped 4% in the nine months since the low point it hit in April.  An expected pickup in consumer and business spending in the U.S. later this year could be particularly good news for manufacturers. 

Experts point to the pent-up demand for new cars and new homes as a good sign.  “The levels of vehicle sales and housing construction are much below where general demographic trends suggest they should be,” said Zandi.  Automakers are among the leading purchasers of goods as varied as semiconductors, carpeting, glass, metals and paint, in addition to traditional auto parts. New home sales lead to the purchases of furniture and appliances far more than sales of existing homes.  Dave Huether, chief economist for the National Association of Manufacturers, agrees with Zandi that U.S. manufacturers have a relatively bright outlook.  He said the sector is far better positioned today than it was at the end of the previous recession in late 2001, due partly to the lower value of the dollar, which remains relatively weak against other currencies despite a rally this year.  Huether believes that manufacturers could start to hire significant numbers of workers later this year, and that job growth will continue all the way through 2012. He is predicting a million new manufacturing jobs in the next few years. There hasn’t been an annual net gain in jobs since 1997.

DSNews.com – “perfect storm” in foreclosures

Foreclosure experts at Heavy Hammer Inc. and its foreclosure listing site USHUD.com see a confluence of factors exacerbating an already devastated housing market in 2010, driven primarily by financial industry practices and changing government policies. They predict that the consequence will be a doubling of foreclosure rates this year.  USHUD.com CEO Michael Urbanski says the first and most obvious factor is the unemployment rate, which continues to languish in the 10 percent range nationally, and often much higher regionally. He explained that similar unemployment rates have historically affected 20 to 30 percent of homeowners’ ability to make their scheduled mortgage payments.  The second factor, according to Urbanski, is the significant constriction of lending due to tightening mortgage requirements.  Citing a National Association of Realtors (NAR) study that finds the average U.S. home depreciated 12 percent from 2008 to 2009, Urbanski says selling will become an impossible proposition for a growing number of underwater homeowners.  “Watch the horizon,” said Urbanski. “Left unchecked, the perfect storm may be only one more bad policy away.”

Now on to our real estate investing educational section…

How to Build Prestige Into Any Property

Learning how to differentiate a property isn’t difficult nor does it require any special training or the use of costly home stagers; simply make the property a “best of breed” for its individual class specifications by implementing any or all of the following:

Views, vista and local amenities: Whether the property is beachfront or bus-route friendly, use it as an asset. For example, investing a few hundred dollars into a super large picture window may bring in thousands extra in resale. Don’t be penny-wise and pound foolish – invest in the view!

Energy efficiency: Yes, it might be getting old but wise real estate investors will not just learn to live with it but embrace energy efficiency in a big way. It’s a tremendous benefit to those properties that can boast of super saver appliances, low cost LED lighting and inexpensive maintenance.

Natural Light & Ceiling Height: If you got it – flaunt it!

Deck, Patio, Balcony, Outbuildings and Workshops of any type: People can’t get enough of these. Even if it needs work, be sure to list it.

Closet & Storage Space: The average American owns more junk than any generation in history. Maximum closet and storage space every way possible; attic, basement, outbuildings, hanging loft or any other place people can stash their stuff.

Kitchen Functionality: Emphasize ease and convenience for lifestyle; for example, entertaining for larger or professional homes or simple access and storage for down-to-earth properties adjacent to laundry/mud rooms.

Fireplace, ponds and fruit trees: Nearly everyone has a touch of nostalgia so use it to your advantage by painting a picture of the lifestyle they will enjoy with the property. Evening by the pond, picking wholesome fruit with the kids or just sitting beside the fireplace on a cool evening. Sell the emotional impact of the property.

Security: Safety and security are primary considerations for nearly any home-buyer so play it up. If the home is located in a gated community be sure to say so. On the other hand, for properties lacking natural surveillance take time to install dead-bolts, an inexpensive security system or perimeter fencing to enhance the feeling of safety.

Upgrade the Obvious: Sounds simple enough but just a quick drive through any neighborhood will show how infrequently this good advice is put into place. Upgrade obvious features to form a good first impression…common examples include a sturdy and elegant door knob in the entry, attractive lighting throughout the home and other tiny touches of elegance.

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
–