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WSJ – government will stay in the housing market for a long time

A weak start to the spring housing season, which could be underscored later this week by reports on sales of new and previously owned homes, is raising the prospect that the U.S. government will dominate the mortgage market for a long time.  The fragile housing market is complicating Washington’s stated goal of dialing back its support after it has reduced stakes in the financial-services and auto industries. The slide in home prices in turn is weighing on the economic recovery, and it threatens to hamper a bipartisan push to unwind the emergency support policymakers enacted three years ago.  Falling prices are eroding consumer confidence and hindering job mobility by leaving millions of borrowers trapped in homes worth less than what they owe. A glut of bank-owned foreclosures has slowed residential construction, damping a major source of job growth. In some markets, the share of buyers paying in cash for homes has hit its highest levels in years, a red flag that prices could fall below “fair value” due to a lack of credit.  Fannie Mae and Freddie Mac, government-sponsored entities intended to foster mortgage lending, face a hard balancing act. They are trying to restore sound lending standards without choking off access to mortgages.

Together with the Federal Housing Administration and federal agencies, Fannie and Freddie are behind nine in 10 new mortgages. The firms don’t make loans; instead, they buy them from lenders, repackage them for sale to investors as securities, and offer guarantees to make investors whole if borrowers default.  Congress has boosted the size of loans that the firms can buy, making it easier for borrowers in more expensive coastal housing markets to qualify for loans. But those steps have crowded out the private sector, leaving investors with fewer loans to buy and either hold or pool into securities that don’t have government guarantees.  The Obama administration and Republican lawmakers have embraced efforts to encourage private investors into the mortgage market by curbing the government’s role. Officials want to increase the fees that Fannie and Freddie charge lenders and reduce the maximum loan sizes eligible for government backing. The limits are set to decline modestly at the end of September to roughly $625,500 from the current $729,750 maximum in high-cost areas such as New York and Los Angeles.

But market advantages for government entities are only part of the problem. Stable housing prices, more than anything else, would make it easier for private lending to return.  Moreover, the economics of securitization don’t work right now. Interest rates are low and investors are demanding high returns, which mean that mortgage-bond deals have made little if any profit for the firms that arrange them. Tight underwriting standards for “jumbo” mortgages—ones too large for government backing—have prompted banks to keep those relatively safe and profitable loans on their books.  “There’s a misunderstanding in the market, an irrational belief that says private capital will emerge” if government-supported mortgage lending looks too expensive, says David Stevens, chief executive of the Mortgage Bankers Association who headed the FHA for two years until March.  Trying to “crowd-in” private money could be dicey if there aren’t broader structural changes to rebuild confidence, so investors don’t have to price in a hefty “uncertainty premium.”  To be sure, some academics say Fannie and Freddie should more aggressively reduce their role in supporting housing markets and test whether private investors will pick up the slack without substantially shocking housing markets.  Historically, most mortgages that weren’t held on bank balance sheets were issued as securities and backed by Fannie, Freddie, or the FHA. During the past decade, investment and mortgage banks jumped in and began issuing their own mortgage-backed securities. These private-label bonds, issued by the likes of Bear Stearns and Countrywide Financial, comprised riskier loans.

Because the banking sector isn’t large enough to hold more mortgages without expanding its deposit base, securitization markets are an integral part of any lending expansion. The private-label market seized up four years ago as investors faced big losses on investments that turned out to be far riskier than advertised. Just two new privately issued mortgage-bond deals have come to market since, one in April 2010 and another in February, and both consisted of mortgages to extremely qualified borrowers.  Investors are looking for standardized contracts that govern private-label deals, better loan disclosures and easily enforceable provisions to kick back loans that don’t meet agreed upon standards. They also want to eliminate conflicts of interest in the collection of loan payments, known as mortgage servicing.  Lawsuits between bond insurers, investors and issuers over the soundness of the underlying mortgages, and disputes over whether ownership of mortgages was properly assigned, further underscore the market breakdown. “There’s pretty much nobody that’s not being sued,” said Ryan Stark, a director at Deutsche Bank Securities, at an industry seminar last month.Regulators have addressed some of those problems with a flurry of rules, but some of them could also complicate a revival.

Policymakers are right to worry over indefinite government stewardship of the mortgage market, which makes laying the foundation for a functioning market all the more pressing. If it’s lacking, housing won’t exit a destructive cycle: one where prices fall because credit isn’t flowing, and where credit doesn’t flow because housing is weak.

Gasoline down, but not going much lower

Gasoline prices have dropped to $3.64 a gallon nationally from a peak of $3.98 in mid-May, according to AAA. Diesel prices at the pump have fallen more slowly but are beginning to catch up and are now averaging $3.97 a gallon.  “We may get down to that $3 to $3.25 neighborhood for some states that have lower taxes and cheaper supply,” said Tom Kloza, chief oil analyst at OPIS. But the coasts, specifically the Northeast, will not see as much relief because of its dependence on higher grade imported oil. The loss of Libya’s light sweet crude output continues to crimp those supplies.  “The price of the sweetest, lightest, least troublesome crude is to a great extent determining the price of gasoline on the coast. I do think you’re going to see prices drop more in the nation’s interiors. Chicago, Detroit, Minneapolis, Ohio. They saw some of the most spectacular increases. They’re going to drop more. For the coasts, and the country as a whole, we’re not really going to drop that much unless we see Brent prices come off,” Kloza said.

Andy Lipow, president of Lipow Oil Associates, said gasoline could fall as much as another $0.10 a gallon nationally by July 4, but after that, the situation is uncertain. “We could see further declines, but I think that’s heavily dependent on how the situation in Greece pans out and affects the value of the euro to the dollar,” he said.  He and Kloza said if Greece were to default, Brent would immediately drop because of the potential ripples across Europe’s economy. “If you’re hoping for $2.50 to $2.75 gas prices, you probably don’t realize it, but you’re hoping for a recession,” said Kloza.  An improving economy could also keep prices high. Kloza said his concern is that oil and gasoline could be pricier next winter and spring, if the global economy improves and supplies tighten.

Olick – investors using cash, credit shrinking

“Nothing like getting to work on a Monday morning and finding no fewer than four dismal reports on the housing market in my ‘Inbox.’  It’s not like anyone thought housing recovered over the weekend (that was pretty clear from the precious few ‘Open House’ signs in my neighborhood at least), but the outlook is deteriorating, and we’re just a day away from getting what is expected to be a weak report on existing home sales for May.  Let’s start with home prices from Fannie Mae’s Economics and Mortgage market Analysis Group, which predicts additional home price declines through the third quarter before flattening out at the end of 2011. ‘Ultimately, the labor market holds the key to a housing recovery, but job growth is needed in order to activate housing demand,’ said Fannie Mae Chief Economist Doug Duncan. ‘Hiring delays will continue to push out timing for the housing rebound.’  Okay, not exactly a shock, but never a good thing to hear analysts say, ‘growth is stalling.’

Now to a new point about investors, from the May Housing Market report from Campbell/Inside Mortgage Finance, which tracks several indices:  ‘The closely-watched survey’s traffic index for first-time homebuyers fell from 51.7 in April to 45.3 in May, while the traffic index for current homeowners fell from 56.1 to 44.8. Meanwhile, the traffic index for investors fell from 55.3 to 54.6. Any index value less than 50 indicates a decrease in traffic from the previous month.  The HousingPulse Survey’s Distressed Property Index, a key measure of the health of the U.S. housing market, fell slightly to 46.7% in April, although sales of distressed properties continued to account for nearly half of the market.  The monthly HousingPulse Survey also showed the proportion of first-time homebuyers in the housing market rose to 37.3% in May, from 35.7% in April. First-time homebuyers have difficulty getting mortgage financing and current homeowners are often locked into properties with negative home equity. That leaves investors to take up the slack,’ says research director for Campbell, Thomas Popik.

The trouble is that investors can’t get financing easily and are largely forced to use cash. In fact 74% bought with cash in May. The survey found a drop in investor activity in May from 23% to just over 21% of purchases. Most investors are using personal funds, like retirement funds, home equity lines of credit and savings accounts, which in itself is concerning; hedge funds and other larger investors make up a much smaller share of buyers, mainly in coastal regions.  All this weakness in housing continues to push more potential buyers to rent.  ‘As we have previously predicted, the U.S. apartment market has been recovering at an astounding pace,’ said Dr. Peter Muoio, senior principal of Maximus Advisors. ‘The sector will continue to benefit from the growing preference for renting over homeownership as well as rapid growth of the young adult population. We predict that vacancies will continue to decline while effective rents grow robustly during the next two years due to limited development of new multifamily properties during the recession.’

And there’s your bright side, if you happen to be an investor in the multi-family sector. I do think that the rental phenomenon will be temporary, but by temporary I mean a decade, not a year. Housing affordability is already enticing enough to bring the buyers back. We are still waiting for the mortgage market to sort itself out.”

Debt situation is like the sub-prime crisis

Monetary policy has been “the great enabler” that central banks used to keep interest rates at “absurdly low levels for years now” and this has encouraged politicians to believe that sovereign debt is “a lot cheaper than it really is,” says David Stockman, former director of the Office of Management and Budget.  “Politicians have not been willing to take the tough steps to impose the pain, the austerity and the tough trade offs that are required to control this,” Stockman said.  But things are changing as the Chinese aren’t buying as much sovereign debt because they have to take care of “their own inflation spiral,” and the Federal Reserve will have to end its second round of money printing soon, he added.  “The current situation is like the sub-prime mortgages crisis of a few years ago,” Stockman said.

Monetary stimulus, or quantitative easing, is officially due to end at the end of the month and talk of more stimulus has been rife, though to date Ben Bernanke, Federal Reserve chairman has kept silent on the issue, despite the debt ceiling deadline of August 2 nearing for Congress to agree on raising it further.

“The day of reckoning is rolling in, it may not be today or this week or this month but we’re very much towards the end of what can be sustained,” Stockman warned.  “In other words the balance sheets of the big countries have been used up. We’ve used ours, we don’t have any balance sheet room left. The ability of the central banks to monetize this debt which they have is coming to an end,” he added.

Prices up and down in midsize markets

Mid-sized cities, much like their larger counterparts, are experiencing a similar phenomenon where home prices are constantly fluctuating up and down.  It’s called a catfish recovery, Altos Research said yesterday. And in a catfish recovery, home prices bob up and down, making it hard to predict when a real recovery or downturn will officially take hold.  In Altos’ 20-city composite report on mid-sized cities, the research agency found home prices increased in 19 of 21 mid-cities surveyed last month. The mid-cities median price rose 1.11% in May, hitting $254,046, compared to $251,247 in April.  The mid-sized cities experiencing the largest increases were Orlando, Fla., Boise, Idaho, and Boulder, Colo., all of which saw price gains above 5.5%.  Altos concluded in its latest report that “headlines are still talking about a double-dip in housing and the mid-cities numbers provide further evidence of strength in prices across the board. The S&P/Case-Shiller numbers will report the same price strength in the late summer and early fall.”  The only mid-sized markets to report declines in the past three months were Honolulu, with price declines in the 2.64% range; Reno, Nev., which experienced a 0.33% decline; and Charleston, S.C. with a 0.24% drop.

See you at the top!
Chris McLaughlin

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

Copyright Loss Mitigation Institute LLC 2010.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com

http://www.youtube.com/shortsalesriches

http://www.smartrealestatenews.com

(subscribe to this newsletter)

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

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than

100 short sale & REO closings each month

* Long-time authority on real estate investing
and rapid reselling of distressed homes.  Owns
portfolio of nearly 150 high-value, high-profit
properties

* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices
closed 2,786 sides for a closed sales volume of
$392,912,927!

* 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/

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

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Home values fall

Real estate data firm Zillow said its home value index fell 3% in the first three months of the year from the previous quarter, and was down 8.2% year-over-year.  The number of homeowners under water amounted to 28.4% of single-family homeowners, representing a peak since Zillow began calculating the data in 2009.  That was up from 27% in the fourth quarter of last year.  Foreclosures also rose, following the moratoriums that had been in place in late 2010. In March, one out of every 1,000 homes was in foreclosure.  Given all those factors, it is unlikely home values will reach a bottom this year, Zillow said, and the firm pushed its forecast out to 2012.

Republicans want consumer bureau curbed

Last Thursday 44 of the 47 Republicans in the Senate sent a letter to President Obama, arguing that the new agency is far too powerful, and lacks structural checks and balances that would make it more accountable.  Republicans want changes at the very top of the agency. The director — a position that sits vacant — would be replaced with a board.  Without mentioning her by name, the letter is a thinly veiled reminder to the White House that an attempt to nominate Democrats’ favorite candidate, Elizabeth Warren, would lead to a contentious fight on the Hill.  Officially a White House adviser who also works with the Treasury Department, Warren is a lightening rod figure in the fight over the future of the agency.  The House Financial Services Committee is also considering bills to prevent the bureau from flexing new powers. 

Freddie Mac sells record number of REO

Freddie Mac sold roughly 31,000 previously foreclosed and repossessed homes in the first quarter, a new record for the company as both government-sponsored enterprises shed inventory from the end of last year.  Combined, both Fannie Mae and Freddie hold 218,000 REO properties as of the end of the first quarter, down from roughly 234,000 at the end of 2010, according to their filings.  In the first quarter of 2011, Freddie holds roughly 65,000, compared to its larger sibling Fannie, which holds 153,000 REO in its inventory.  While both GSEs made progress in cutting down this portion of the nation’s inventory of foreclosed homes, which continues to drag down home prices, inventory has elevated since one year ago.  Both Fannie and Freddie held 163,000 properties in the first quarter of 2010, almost what Fannie holds currently by itself.  Repossessions at Freddie increased by nearly 1,000 in the first quarter, and the holding period for these homes averaged 191 days before being resold. This varies significantly from state to state, especially as servicers restart foreclosure processes in different areas of the country. Servicers paused the process late last year to correct procedural problems.  “We expect the pace of our REO acquisitions to increase in the remainder of 2011, in part due to the resumption of foreclosure activity by servicers, as well as the transition of many seriously delinquent loans to REO,” Freddie said in its financial supplement.

Gas prices to drop

After rocketing up 91 cents since January, including 44 straight days of increases, the national average this past week stopped just shy of $4 a gallon and has retreated to under $3.98. A steady decline is expected to follow.  Typically, gas prices peak each spring, then fall into a summertime swoon that can last several weeks. This year’s decline should be gradual but steady, said Fred Rozell, the retail pricing director at the Oil Price Information Service.  Some drivers might not notice much of a price drop at first, Rozell cautioned. When average gas prices fluctuate nationally, some areas are affected more than others. In cities with many service stations, for instance, prices can be slower to fall. It’s even possible prices will rise at some stations in coming days even if they decline nationally.  And after the galloping surge in prices this year, many gas station owners are reluctant to lower prices until they see their competition doing the same, Rozell said.  A drop in prices would take some pressure off struggling consumers as well as businesses. As prices soared this year, surveys showed that motorists started to drive less. MasterCard SpendingPulse said this past week that it had recorded its sixth straight week of declining gasoline consumption.  That’s a cautionary sign for the economy, because most drivers conserve fuel only after curbing spending on other discretionary items like furniture, computers and vacations.

DSNews.com – Las Vegas investor sales up

Las Vegas region home sales held at a five-year high in March amid strong activity from investors and cash buyers focusing on foreclosures. Due to the large number of discounted, foreclosure properties on the resale market, the median sales price fell in the area.  According to figures from DataQuick, the median price paid for all new and resale houses and condos sold in the Las Vegas metro area in March was $117,000, down 1.7% from February and down 10% from a year ago.  It was the sixth consecutive month in which the median fell year-over-year. The March median was the lowest since January 1996.  DataQuick attributes the median’s 15-year low to price depreciation, robust sales of low-cost foreclosures, strong sales to investors who target low-cost properties, low new-home sales, and higher-than-usual condo resales.  Distressed sales, the combination of sales of foreclosed homes and short sales, represented about 69% of March resale transactions, the company reports.  Foreclosure resales rose to 57.3% of the Vegas resale market in March, up from 56.7% in February and 55.5% a year earlier.  Short sales made up an estimated 11.7% of Las Vegas-area March resales, down from 14.3% in February and 13.7% a year earlier.  Based on trustee deeds filed at the county recorder’s office, DataQuick says the number of homes foreclosed on in the Las Vegas region in March rose from both a month and a year earlier.  Lenders foreclosed on 3,331 single-family homes and condo units that month, up 41.6% from February and up 52.1% from March 2010.

Fannie Mae declares 1Q  loss

Fannie Mae reported net loss of $8.7 billion in the first quarter, including a $2.2 billion dividend payment to the Treasury Department. The loss narrowed from $13 billion one year ago.  Fannie said still falling home prices drove losses during the quarter. The government-sponsored enterprise estimated home prices fell 1.8% during the quarter, even though some regions experienced gains.  The mortgage giant’s regulator the Federal Housing Finance Agency (FHFA) requested $8.5 billion from the Treasury to eliminate Fannie’s net worth deficit. Fannie now owes the Treasury $99.7 billion and so far paid $12.4 billion in dividends.  Fannie said if the market shifts away from refinancing as is likely to occur as mortgage rates rise, market share will dip further.  While business could be declining, legacy issues are too. The serious delinquency rate on Fannie Mae loans dropped to 4.27% in the first quarter from 5.47% one year ago and 4.48% in the previous period. The company said modifications and other workouts, combined with foreclosures when other alternatives are exhausted, outnumbered new delinquent loans hitting its books.

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

http://www.smartrealestatenews.com (subscribe to this newsletter)

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

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month

   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 150 high-value, high-profit
      properties

    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     420 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!

   * In 2010, Chris’ 4 Central Florida real estate offices

      closed 2,786 sides for a closed sales volume of

      $392,912,927!  

    * 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

Real Estate News & Commentary by Chris McLaughlin, July 13, 2009

http://www.shortsalesriches.com

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

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Commercial construction activity to drop in 2009 and 2010

Economic downturn will lead to a drop in construction activity this year and next, according to the American Institute of Architects (AIA). In its report, AIA says spending on construction of offices, retail centers, and hotels will fall 16% in 2009 and 12% in 2010. “We’ve had a really rocky six months in the economy and in the construction sector,” said Kermit Baker, AIA’s chief economist. “People are seeing a real tough environment out there and not a lot of incentive to invest in projects.” Economists do not see any of the indicators being conducive to growth in commercial construction. Jobless rate is nearing 10% while consumer sentiment is showing no signs of improvement. Economic recovery is critical to commercial construction since non-residential construction lags behind the economy. “Why do you build new office buildings? You need to see job numbers pick up,” Baker said. “Why do you build new retail centers? You need to see consumer spending pick up.” According to AIA, hotel construction is likely to drop 26% in 2009 and 17% in 2010, while industrial spending will drop 0.8% in 2009 and 28% in 2010.

“The credit pendulum is stuck at stupid”

While analysts say buyers are getting great deals in the housing market, home buyers are not finding it easy to get a loan. Blame it on tightening of credit norms; even people with good credit score are denied loan. In addition, new norms such as borrowers having to produce at least 2 years of sufficient tax returns are posing problems for first-time buyers who have just begun their career. Bankers and brokers believe many borrowers who are being refused home loans now would have most definitely been accommodated in the past when lending norms were lot more lenient. “The credit pendulum is stuck at ‘stupid,’” said Lou Barnes, an owner of Boulder West Financial Services, a mortgage bank. “I am turning down loans every day that my grandfather in his Ponca City, Okla., savings and loan in 1935 would have been happy to make. And he was tough.” Fannie Mae recently changed its policies to count only 70% of the value of stocks and bonds towards valuing borrowers’ assets while considering their loan application. Earlier, 100% of the value was considered. Stuart Fraass of Guaranteed Rate, says, “If you’re self-employed, you have virtually no chance of getting a mortgage now.” While no one wants to return to lax lending standards of 2006 which led to the housing bubble, analysts believe excessive tightening of credit norms could hurt a housing market recovery. Banks, having been bitten, are shy now; at least for the time being.

No takers for luxury homes

Remember Veblen goods, those that defy law of demand? Veblen goods are high-status goods, the demand for which rises when price increases. Buyers’ perception of exclusivity may go up when the price rises, thereby making the good even more preferable. Luxury homes, which seemed to defy the law of demand in the past, have been impacted in the current economy. “In the high end we always kind of thought we were immune to this stuff,” says Christy Smith, president of Casas del Oso Luxury Homes. According to Smith, his company sold luxury homes even before they were completed, in this past. Things are changing now. “After 9/11 we didn’t miss a beat,” says Smith. “But this time with all the stuff on Wall Street there’s a lot of hesitancy.”

A study of decline in the housing market reveals that high-end homes have fallen more in value than lower-priced homes. Ken Shuman, spokesman for Trulia, says sellers reduced prices of $2 million and above homes by 14.3% in June as against a 9.75% drop for homes that are less than $2 million. In addition, large mortgage loans are more difficult and expensive to get than smaller loans. “There is no second market for jumbo mortgages right now,” says Peter Grabel, a mortgage banker with Luxury Mortgage. Analysts don’t see the high-end housing market recovering in the near-future. “I think it’s going to be a long time,” says Jim Randel, a Connecticut real estate attorney and author of “The Skinny on the Housing Crisis.” Randel said: “I don’t know if that means five years, ten years or what.”

States introduce program to help homeowners

According to a report prepared by the State Foreclosure Prevention Working Group of the Conference of State Bank Supervisors last spring, about 80% of the struggling homeowners had not taken advantage of the mortgage-modification program. State governments, realizing the need to do their bit, have introduced programs to help homeowners. New Jersey and Connecticut have programs which require lenders to meet with borrowers and court-appointed mediators during the process of foreclosure. The idea is to see if the number of foreclosures can be brought down. Roberta Palmer, who oversees Connecticut’s Foreclosure Mediation Program, says, “When people are in crisis, the more you ask them to do, the less likely it is they’ll participate.”

According to Palmer the program has so far attracted 2,500 borrowers to mediation and nearly 60% have reached settlements that permit them to remain in their homes. In New Jersey, 614 borrowers qualified for mediation by end May, and of those, 223 have reached settlements allowing them to keep their homes, according to Eric Max, the director of the Office of Dispute Settlement at New Jersey’s Department of the Public Advocate. New York has introduced a pilot project with $20 million of city funds, to convert empty or stalled condominium developments into affordable housing. “It’s not going to solve all of these problems by any means but it allows us to throw out a net and see what we pull in,” said Marc Jahr, president of New York City’s Housing Development Corporation. “We see an opportunity here to really capture affordability at a relatively inexpensive price to the public and to do it in a timely manner.”

President Obama says stimulus plan is working

President Barack Obama in a statement last week said the stimulus plan is working as intended. “It has already extended unemployment insurance and health insurance to those who have lost their jobs in this recession,” said Obama. Critics of the stimulus plan say the $787 billion initiative has not done enough to stimulate the economy. House Minority Whip Eric Cantor of Virginia said the economic recovery plan was “full of pork- barrel spending, government waste and massive borrowing cleverly called ‘stimulus.’” Cantor said: “The plain truth is that President Obama’s economic decisions have not produced jobs, have not produced prosperity, and have not worked.” The rising jobless rate is having an impact on Obama’s rating. A survey by Quinnipiac University conducted in June shows 49% of Ohio voters approved of Obama’s job performance, down from 62% in the May survey. The disapproval figure for Obama was 44%, up from 31% in May. Obama said the measure “was not designed to work in four months — it was designed to work over two years.”

Now on to our real estate investor education section…

Five Habits of Highly Effective Short Sale Entrepreneurs

What differentiates those that achieve success in short sales from the rest? Often less than you might imagine. With a bit of practice, patience and planning anyone can go from novice investor to self-made success with these five habits of highly effective short sale entrepreneurs.

1. Courage. Sounds easy enough but like the cowardly lion in the Wizard of Oz, acting upon that which we already own isn’t always easy. Courage is expressed in many different ways but unlike other activities, investing in real estate can’t be invented – there are no guarantees and very few ways to “spin” losses. In some ways investing in real estate is a lot like a sales job that is paid on compensation – it’s a direct measure of your own personal productivity and effectiveness.  Now, here is a little known fact discovered by researcher Thomas Stanley in his ground-breaking work regarding the affluent…the number one reason top sales professionals are more successful than others is their ability to ask one simple question; “Will you do business with me?”. It’s the key to self-made success and requires little more than the courage to ask.
2. Knowledge. The second most important habit of effective short sale entrepreneurs is a constant thirst for knowledge. They routinely stay up to date on the world around them as well as invest in their own success by working with mentors, reading and taking the time to know more than others. Plain and simple, learn everything there is to know about your market, your type of investment property, your financial options and other relevant information. Hire experts for those areas outside of your expertise.
3. Think Big. Effective short sale entrepreneurs might start small but they think big. They are not satisfied with the status quo nor do they falter when confronted with resistance or obstacles; instead, they merely recognize these as the natural growing pains associated with expansion. Likewise, the most successful entrepreneurs surround themselves with people more successful than themselves rather than vice versa. Forget the ego trip that comes from being the wealthiest, smartest or most savvy investor in the room…instead, opt for the opportunity, knowledge and networking potential that comes from being the least successful in the room.
4. Credible. Without a doubt, the most successful short sale entrepreneurs take great pains to differentiate themselves through a stellar reputation, high level of integrity and credibility. Rather than empty promises, effective entrepreneurs rely upon testimonials, proven results and a track record of success.
5. Consistent. “When the going gets tough the tough get going” is a sentiment that accurately reflects those that earn success versus those that eventually falter or fade away. Short sales are not easy profits – contrary to what some might think. While it is true you can earn a sizable income and provide ample time for other interests in life, mastering short sales from the ground up without the benefit of training, resources or mentors can literally take years. Success comes to those that are prepared for the long haul and differentiates the men from the boys (so to speak). While it might be possible to “get lucky” now and then, most short sale investors fail to achieve meaningful results – the life changing results that make a true impact for years to come- because they didn’t invest in their own training, networking or knowledge. Instead, they took the ‘Easy come –easy go” route.

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com
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 nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* Follow me on Twitter: http://twitter.com/mclaughlinchris
* Add me on Facebook: http://www.facebook.com/mclaughlinchris