foreclosures

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Woops!  We had a major gotowebinar meltdown Tuesday … and

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Home prices falling

According to Fiserv, a division of Moody’s Economy.com, the average home price in the United States will fall by about 6% by September 2011.  Most of the projected home price decline will occur during the usually slow summer months of 2010. After that, prices should begin to stabilize, according to Fiserv, and stay almost flat through fall of 2011. The main reason for continued decline, according to Mark Zandi, economist and co-founder of Economy.com, is foreclosures — the same thing that’s plagued markets for the past three years.  He figures there are at least 4.5 million mortgage loans either in foreclosure or clearly headed in that direction. When that additional inventory hits the market, it will provide numerous choices for buyers and encourage sellers to drop their listing prices.  The end of two federal programs, which have been propping up markets, will also tamp down prices. The Fed’s program to buy mortgage securities lapses on March 31, when it cedes the playing field to private investors, who will almost surely demand higher rates, and a month after that, the homebuyer tax credit will start to expire.  Of course, home prices are ultimately decided by employment. “If [the job market] improvement is stronger than expected, prices will get better. If it’s weaker than expected, prices will be worse,” Zandi said.

Jobless claims up

The Labor Department said in its weekly report that there were 496,000 initial job claims filed in the week ended Feb. 20, up 22,000 from a revised 474,000 the previous week,. The prior week, there were 442,000 claims filed.  A consensus estimate of economists surveyed by Briefing.com expected new claims to fall to 460,000. The government said 4,617,000 people filed continuing claims in the week ended Feb. 13, the most recent data available. That’s up 6,000 from the preceding week’s revised 4,596,500 claims for a jump of more than 12% over the past two weeks. A Labor Department official said the unexpectedly large rise could partly reflect a backlog of claims that were unable to be processed in four Mid-Atlantic and New England states because of heavy snowfall. Still, the increase is likely to amplify concerns that the job market is weakening, potentially slowing the economic recovery.  Dan Greenhaus, chief economic strategist at Miller Tabak, said the claims data has been unusually distorted in recent weeks. As a result, “we are concerned about the upward pressure on initial claims but not overly concerned.”  The four-week average, which smoothes volatility, rose by 6,000 to 473,750.  The four-week average has risen by about 30,000 in the past month, raising concerns that job cuts are continuing. Initial claims had fallen sharply over the summer and fall but the improvement has stalled since the year began.

New home sales down

The Census Bureau says the seasonally adjusted annual rate of new home sales fell 11.2% to 309,000 last month, compared with a revised rate of 348,000 in December.  It was the lowest rate since the government began keeping records in 1963 and comes after declines in November and December.  The drop surprised many industry analysts. A consensus of economists surveyed by Briefing.com had expected January sales to rise to an annual rate of 354,000. “Some people were expecting a surge in demand because of the tax credit,” said Patrick Newport, an economist at IHS Global Insight. “But that surge isn’t materializing.”  New home sales fell in all U.S. regions except the Mid-west, where sales edged up 2.1%. The Northeast was the hardest-hit last month, with sales plunging more than 35%.  “Distressed inventory continues to hit the market at cut-rate prices, drawing potential buyers away from new product,” said Mike Larson, real estate analyst at Weiss Research. “And let’s face it, the job market is nothing to write home about, either.”  There were an estimated 234,000 new homes for sale at the end of December, according to the report. At the current sales rate, it would take 9.1 months to sell through that inventory. That’s up from December, when there were 8.1 months of inventory on the market. Prior to December, inventory levels had been steadily declining since May 2009. IHS Global Insight’s Newport said he also expects sales to pop this spring. However, he may reduce his full year forecast for new home sales in light of Wednesday’s report. “Builders are putting up homes,” he said. “But what these numbers are telling us is that those homes aren’t selling.”

Manufactured Goods Jump 3%

The Commerce Department reported Thursday that orders for durable manufactured goods jumped 3 percent in January, the biggest increase since a 5.8 percent increase last July. However, excluding transportation, durable goods orders fell by 0.6 percent, a weaker showing than economists had expected.  The strength came mostly from a surge in demand for commercial aircraft, while demand for autos, machinery and a host of other products fell last month, indicating manufacturing is still facing hurdles that could slow the economic recovery.  The drop in orders excluding transportation followed solid gains of 2 percent in both December and November.  Analysts were not too concerned by the drop in demand outside of aircraft, noting that the government revised higher the increase in orders excluding transportation in December to show a gain of 2 percent, stronger than the initial estimate of a 1.4 percent rise.  Paul Ashworth, an economist at Capital Economics, said the January durable goods report provided further evidence that “the manufacturing sector is enjoying a healthy rebound, driven by restocking and a sharp turnaround in world trade.”  The 0.6 percent drop in orders outside of transportation reflected a big 9.7 percent plunge in demand for machinery, which offset a 1.9 percent increase in orders for primary metals such as steel.  Orders for non-defense capital goods, excluding aircraft, fell by 2.9 percent in January following solid gains in the two previous months. This category is considered a proxy for business plans to invest in new equipment to expand and modernize.

MBA proposes forbearance program

The Mortgage Bankers Association (MBA) says it has developed a concept for a new forbearance program that would allow qualified borrowers who had lost their jobs to remain in their homes while they seek new employment.  According to the proposed program, loan servicers would reduce the borrower’s mortgage payment to an affordable amount for up to nine months while the homeowner looked for employment.  “The vast majority of new distressed borrowers we are seeing involve the loss of income,” said John A. Courson, MBA’s President and CEO.  “This program is designed to buy those borrowers time to find a new job, after which they could hopefully qualify for a loan modification.” Loan servicers who participate in this program would reduce monthly payments to an affordable level based on household income, and borrowers would be initially evaluated for the forbearance program using a model that assumes the borrower will be reemployed within nine months of losing his or her job at 75 percent of the borrower’s previous salary.  The borrower would be reevaluated as to employment and income status every three months for a total forbearance of nine months.   Once reemployed, the borrower would be evaluated for a modification under the Obama Administration’s Home Affordable Modification Program (HAMP). “Recent statistics show that the average unemployed U.S. worker stays unemployed for between six and seven months,” added Courson.  “That is a long time for a borrower with a dramatic drop in income to stay current on their mortgage.  Further, borrowers with such a precipitous drop in income can’t qualify for most loan modification programs, so we are looking for ways to allow those borrowers to keep their homes while they look for another job.”

Now on to our real estate investing educational section…

LinkedIn LifeHacks for Realtors & Investors

By now nearly every real estate agent, broker or investor in the nation has a LinkedIn account…but are you making the most of it? According to LinkedIn, the majority of people create a profile, invite a few friends and family then let it go dormant. Learn how to supercharge your LinkedIn profile and let it begin really working for you with these quick tips:

1. Pick a professional name. Select the title or name you want to use for all of your business dealings to put on your LinkedIn profile. Be sure to make sure your name shows up on the Google search results whenever you perform a search for that name. Because LinkedIn is a large website that is constantly indexed by Google, your LinkedIn profile should show on the first page.

2. Pimp our your profile. LinkedIn comes with a standard “my blog” and “my website” links on the profile page…rather than use these rather lame and generic equivalents, put them both to maximum productivity by customizing each. Simple log into LinkedIn, click on the “edit” button then “other”. The system will now allow you to customize the phrase so people can more easily find your business. For example, replace with your name and city or type of real estate you specialize in for enhanced search engine visibility and marketing.

3. Add the options. Link to your Facebook account (remember, use a strategic name!) and import your Wordpress blog into your LinkedIn profile page. Not only does it keep the content fresh and focused in one easy to access location but it reduces the amount of time you spend updating information. Another important option to consider is LInkedIn’s Direct Ads campaign where you can target professionals for as little as $50 per month. It works a lot like Google’s adwords but for LinkedIn. Find out more at https://www.linkedin.com/directads/start.

4. Include your email contact list. Sounds like a no-brainer but a surprising number of people fail to follow through with this one simple step! If you are like most real estate agents, chances are you have hundreds or even thousands of email contacts in your address book. Put them to good use!

5. Join a group. There are many LinkedIn groups ranging from specialized interest areas, geographic location or simply to share and expand networking connections. While some shudder at the thought of joining a link-building group, keep in mind these are all willing participants who act like virtual networking promoters on steroids. Six degrees of separation demonstrates the best connections are often those most distant from our typical circle of influence so take time to develop both close and far connections.

If this sounds like a lot of work, don’t despair. Find out how to put Social Media to work for your professional goals without the hassle or headache.  Join us tonight at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/819732522

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

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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:

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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:

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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
–

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

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TONIGHT Learn How To Generate Massive Leads … with Facebook, Twitter, YouTube, LinkedIN, and

Social Media!  Come watch what everyone is excited about … the Proven Social Media Lead Machine!

When: Wednesday, February 17, 2009 at 9 PM ET, 6 PM PST

Where: https://www2.gotomeeting.com/register/698867362 

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

Delinquencies up

According to credit reporting agency TransUnion, 6.89% of mortgage payments were 60 or more days past due in Q409 – up from 4.58% in the final three months of 2008. The previous record delinquency rate was 6.25% in the third quarter of 2009.  FJ Guarrera, vice president of TransUnion’s financial services business unit, says the fourth-quarter uptick was due in part to normal seasonal spending shifts. Consumers are more likely to have trouble paying bills during the last few months of the year as they run low on cash because of holiday spending.  But he says that even accounting for normal season patterns, there is some reason to be concerned about the pace of increase moving higher. “To see continuing growth in the first quarter would certainly raise an eyebrow.” 

TransUnion tracks mortgages that are two months past due as an indicator of potential foreclosure, because of the difficulty involved in coming up with three payments to bring an account current. The agency said the delinquency rate stayed highest in Nevada, at 16.2%, and Florida, at 14.9%. Arizona and California, the other two states hit hardest by the housing crisis, were third and fourth, at 11.3% and 11% respectively.  The highest growth rates compared with the third quarter were in the District of Columbia, Louisiana and Delaware.  Guarrera noted that many homeowners still have adjustable rate mortgages written in late 2006 or early 2007 due to reset to higher rates in coming months, and that could drive foreclosures even higher, especially in areas where home prices have fallen to the point where values are lower than mortgages. “We’re not out of the woods yet,” he said.

Government jobs ballooning

Amity Shlaes at Bloomberg.com points out the growth of government.  In the 1990s, former President Bill Clinton and House Speaker Newt Gingrich managed to reduce the federal workforce to less than 2 million, excluding the postal service.  But from January 2000 to January 2010 — first under President George W. Bush after Sept. 11, then under Barack Obama — the number of non-postal employees in the federal government grew 15 percent, to 2.18 million from 1.89 million. The rise came in Homeland Security positions, Veterans Administration jobs, Justice Department posts, and so on.  This increase would mean less if the private sector had grown as well. But over the same period, private-sector employment decreased by 3 percent, to about 107 million from about 110 million. In short, the relative picture changed. 

Jobs with Uncle Sam aren’t just more numerous than they used to be. They’re better. Wages and benefits for federal civilian workers were more than double the average total compensation in the private sector: $119,982 versus $59,909. In the treacherous period between December 2007 and mid-2009, the number of federal employees earning more than $100,000 doubled, rising to 66,500 or so.  The new relative appeal of a government job sends a message that private-sector work, especially self-employment or a job at a start-up, may not be worthwhile. Recent wipeouts of big businesses and the recessionary struggles of smaller ones only reinforce that message. So do politicians’ occasional disparagement of “risk.”  Shlaes concludes:  Today, the U.S. economy has more competition than it did in the 1950s.  So the kind of policy change that would affect the jobscape, such as eliminating the capital-gains tax and simplifying the income tax, is necessary.  But you won’t hear about those radical measures in the Reid-McConnell jobs debate of February 2010. That’s a shame, because right now there are young people deciding whether they will be employers or mere employees.

DSNews.com – 33 months of coming foreclosures

The Standard & Poor’s (S&P) report we mentioned yesterday in connection with short sales also said the hidden supply of REOs and pending foreclosures will likely take 33 months – or nearly three years – to clear if liquidation rates hold steady.  Even more unsettling is that S&P called its estimate “conservative” because the company’s analysis was based on the number of properties the company believes to be lurking in the shadows right now – repossessed homes that banks have not put on the market and already delinquent mortgages that will likely turn into foreclosures. S&P’s assessment does not take into account any loans that have yet to show serious signs of distress. The ratings agency did not give a specific number of loans in its calculated shadow supply, but said the original balance of currently seriously delinquent and REO loans stands at $426.3 billion. An earlier study by Amherst Securities estimates the dark cloud to hold about 7 million loans, while First American CoreLogic puts it at 1.7 million.  Analysts at Standard & Poor’s said in the report, “It is our opinion that recent positive housing reports should not be construed as a sign that the distress in the residential housing market is abating, but rather should be attributed to the temporarily limited supply of homes on the market.”

New home construction up

The Commerce Department announced today that construction of new homes climbed to an annual rate of 591,000 during the month, up 2.8% from December’s revised rate of 575,000.  Economists surveyed by Briefing.com expected January housing starts to rise to an annual rate of 580,000. The number of building permits issued during January fell 4.9% to a seasonally adjusted annual rate of 621,000. Economists had predicted building permits would fall to 620,000.  “It’s a positive surprise on all fronts and shows that overall demand has moved higher. That’s an important element to watch as we move through a cycle going from incentive-based to more organic growth,” said Craig Peckham, equity trading strategist at Jefferies & Co. in New York. 

Groundbreaking for single-family homes rose 1.5 percent last month to an annual rate of 484,000 units after declining 3 percent in December. Starts for the volatile multifamily segment increased 9.2 percent to a 107,000 unit annual pace after rising 12.6 percent in December.  New building permits, which give a sense of future home construction, fell 4.9 percent to 621,000 units last month after rising to a 14-month high of 653,000 units in December, the Commerce Department said. That’s compared to analysts’ forecasts for 620,000 units.  The inventory of total houses under construction fell 2.3 percent to a record low 503,000 units last month, while the total number of units authorized but not yet started eased 0.9 percent to 94,300 units.

MBA – loan applications down

The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of mortgage loan application volume, decreased 2.1 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 0.5 percent compared with the previous week.  The Refinance Index decreased 1.2 percent from the previous week and the seasonally adjusted Purchase Index decreased 4.0 percent from one week earlier.  The unadjusted Purchase Index increased 1.0 percent compared with the previous week and was 18.4 percent lower than the same week one year ago.  The four week moving average for the seasonally adjusted Market Index is up 1.1 percent.  The four week moving average is down 1.2 percent for the seasonally adjusted Purchase Index, while this average is up 1.8 percent for the Refinance Index.  The refinance share of mortgage activity decreased to 69.3 percent of total applications from 69.7 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 4.4 percent from 4.5 percent of total applications from the previous week. The survey covers over 50 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990 = 100.

Now on to our real estate investing educational section…

Are YOU a Broker and Not Even Know It?

When it comes to taxes, the Internal Revenue Service defines a Broker differently than most state or business regulations; in fact, you do not even need a Broker’s license for the IRS to classify you as a broker for tax purposes. Take the following quick quiz to find out if you are a broker and not even know it according to the IRS:

1. Do you routinely sell, exchange, purchase, rent or lease real property?

2. Do you offer to sell, exchange, purchase, rent or lease property for others on a regular basis?

3. Do you negotiate the terms of real estate contracts for yourself or others on a regular basis?

4. Do you list real estate for sale, lease or exchange on a repeat or regular basis?

5. Do you procure prospective buyers and/or sellers on a consistent basis?

If you answered “yes” to the above questions then you might be considered a real estate broker for tax purposes. To determine if you qualify as a “real estate professional” you must satisfy three independent tests including:

1. The 51% Test. Do you spend more than half your working time each year toward your real estate business or activities?

2. 751 Hour Test. In addition to spending 51% or more of your work time in real estate related activities, do you spend at least 751 hours annually in the same pursuit?

3. Material Participation Test. Do you activity participate in the activities related to your real estate profits and losses?

If you answered “yes” to all three of the above questions, you may qualify as a real estate professional by IRS standards and are therefore eligible to take the real estate professional exemption which provides more than $25,000 offset for losses. All real estate related losses or deductions can be claimed including an offset against other earnings, exclusive of income limits, making this an extremely valuable tax strategy for high income earners.

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
–