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Smart Real Estate News & Commentary by Chris McLaughlin July 19, 2010

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Fix A Flip Re Opens … If you want your deals funded beyond 1 day,

this is the webinar you need to be on this coming Tuesday at 8:30 PM ET, 5:30 PM PST:

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HUD wants a FICO of 500

The Department of Housing and Urban Development (HUD) said that it intends to require borrowers to have scores of at least 500 to qualify for FHA-insured loans. The agency has not required a minimum score before.  “It really is just conforming FHA standards to what FHA lenders have already been doing,” said Michael Fratantoni, vice president of research and economics for the Mortgage Bankers Association.  As a result, the practical impact of this move will be extremely limited; during the second quarter of 2010, no FHA-insured loans were issued to borrowers with sub-500 scores. And, in fact, less than 1% of borrowers were below 580; most loans went to borrowers with scores above 620. 

The initiative is part of an ongoing effort to reduce default risk to the FHA loan portfolio and to boost the reserves that back those loans, according to HUD Commissioner David Stevens.  “These are the latest in a series of changes to allow the FHA to manage its risk better while continuing to support the nation’s housing recovery,” he said. “By protecting FHA’s capital reserves, we can continue providing affordable, responsible mortgage products and will remain the nation’s largest source of home purchase financing for underserved communities.”  During May, 8.97% of all FHA loans were seriously delinquent (seasonably adjusted). That was up from 7.93% during May 2009. But defaults have turned downward since January, when they peaked at 9.16%.  The defaults have drained FHA reserve, which is funded by insurance payments, to below the 2% minimum mandated by Congress. Taxpayer money could be in jeopardy if the insurance funds are depleted any further.

Hiring up slightly

According to a survey by National Association for Business Economics (NABE), employers grew payrolls for a second consecutive quarter this year. The percentage of firms increasing staff levels grew to 31% in the quarter, versus only 6% in the same period a year ago, while at the same time, the percentage of employers cutting jobs continued to move lower.  Looking ahead, the survey showed that 39% of companies expect to add employees over the next six months, the highest level of planned hiring since January 2008.  “The labor market continued to improve, with increases in current hiring and a rise in the percentage of firms planning to add workers over the next six months,” William Strauss, an economist at the Federal Reserve Bank of Chicago, said in a statement.

The U.S. unemployment rate stands at 9.5% as of June. The jobless rate has averaged 9.7% over the first half of the year, and many economists expect it to remain elevated into 2011.  The survey, based on responses from 84 NABE economists who work for private-sector firms and industry trade associations, also indicated that the pace of the economic recovery slowed in the second-quarter.  Industry demand grew at a slower pace in the quarter, the survey said. Corporate profits grew as price and cost pressures remained tame. About one out of four firms increased capital spending versus the previous quarter, and a growing number expect to continue investing over the next 12 months, according to NABE.  While economic activity is expected to remain positive this year, more economists lowered their expectations for 2010 gross domestic product. Only 20% of prognosticators expect GDP will grow more than 3% this year.

Asking prices up slightly

After increasing for the first time in nine months in May, asking prices for active home listings were virtually unchanged in the June reading of the Altos Research 10-city composite price index. In addition, inventory of existing homes for sale increased both in June and for Q210.  The June median listing sales price for single-family existing homes was $477,937 in June, down $146, about 0.03%, below the May 2010 median of $478,083 for homes in Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco, and Washington DC.  Altos Research said 13 of 26 markets it tracks reported increases in asking sales prices for homes during the month of June.

For Q210, asking prices were up in 14 markets. San Francisco led both categories with a 2% in June and an increase of 4.4% quarter-over-quarter.  Following San Francisco in asking price increases was San Jose (1.5% in June, 2.5% in Q210), Austin (1%, 1.7%), Dallas (0.9%, 2.2%) and Cleveland (0.8%, 1.5%).  The market with the biggest decrease was Phoenix, down 2.4% from June and 3.9% in Q210, followed by changes in Miami (-2.3%, -4%), Washington DC (-0.8%, 0.4%), Las Vegas (-0.6%, -0.9%) and Boston (-0.5%, 0.1%).  Listing inventory totaled 304,831 properties in the 10-city composite, up 2.8% and 5.4% for the quarter. Chicago was the only market where listing inventory decreased in June, but the area was still up 0.7% for the quarter. While Detroit posted a 1.6% increase in listing inventory during June, it was the only market with a decrease in listing inventory for the quarter, down 2.1%. San Francisco lead all markets in inventory volume, up 7.6% in June and 13.5% for the quarter.

Antidote to an anti-business agenda?

Because of the perception that Obama is anti-business and his policies are causing small and large businesses to hunker down and wait out the witch hunt, House GOP Leader John Boehner said he supports a ban on all new federal regulations, after meeting Friday with business lobbyists who complained about uncertain economic conditions.  “I think having a moratorium on new federal regulations is a great idea. It sends a wonderful signal to the private sector they may have some breathing room,” Boehner said.  He said any ban would include an exemption for “emergency regulations” for some agencies, and suggested it could last a year.  Boehner and Illinois Republicans Peter Roskam and Aaron Schock convened a group of nearly 20 Washington-based business leaders on Friday who represent various sectors — including homebuilders, retailers and manufacturers — as part of their “America Speaking Out” initiative to gather ideas for the GOP legislative agenda.  Roskam said those in the meeting reported that a significant obstacle to the economic recovery is “the down-talking of the private sector, the rhetoric.” 

“The anti-business rhetoric that they see coming out of Washington is more than just symbolic.” Roskam added. “It’s creating a great deal of uncertainty.”  The people in the meeting repeatedly criticized the approach to the economy taken by the Obama administration and congressional Democratic leaders, criticizing excessive federal spending and burdensome government regulations.  Jay Timmons from the National Association of Manufacturers maintained the United States is “becoming one of the most risky places in the world in which to do business.” But Timmons did make a pitch for both parties to come together, saying, “It takes a bipartisan effort to get this economy moving again.”  Naturally, Ryan Rudominer, spokesman for the Democratic Congressional Campaign Committee, seized on the GOP meeting Friday to argue it would result in “a Republican agenda written for lobbyists by lobbyists.”  Apparently it’s better to have a Democratic business agenda written by social activists?

BoA encourages short sales

Bank of America (BoA) reported $35.7 billion in nonperforming loans, leases and foreclosed properties in Q210 – which is 15% above levels measured in the same quarter of last year.  These loans and properties increased more than $5 billion in total aggregate balance since Q209. The total did drop by more than $200 million worth of these loans and properties from the $35.9 billion reported in Q110.  They represented 3.74% of all outstanding loans, leases and foreclosed properties at the end of Q210.  Since 2008, BofA and the acquired Countrywide completed nearly 650,000 loan modifications. During Q210 alone, BofA completed 80,000 modifications, including 38,000 trial modifications that were converted into permanent workouts under the Home Affordable Modification Program (HAMP).  If a modification does fail, BoA is putting an emphasis on selling the home through a short sale ahead of foreclosure. At REO Expo 2010, Matt Vernon, the short sale and REO executive at BoA said that the bank added 1,000 employees to the short sale staff and will “do everything possible to liquidate property prior to foreclosure.”

Now for our real estate education section…

The 15 Minute Resolution…How to Generate Free Leads with Craigslist

This week’s 15 minute resolution is a simple but super effective way to put the power of CraigsList to work generating free leads. No spam, no expensive software and best of all…hardly no time is involved!

Everyone in real estate has probably tried to use Craigslist to buy or sell real estate; it’s powerful, free and frequently used by people throughout the entire nation. Unfortunately, it’s also slow, behind the times and a major drain on time for those that try to sort through pages and pages of dull links and competitors advertisements.

Now it’s possible to change all that with just 15 minutes of time and these quick steps:

1. Visit Google keywords or any of your favorite keyword finder to create a list of real estate/short sale related keywords. Great examples might include “motivated seller”, “commercial property”, “investment income” or any other relevant words that signify the type of property you are seeking.

2. Visit www.Craigslist.com and select the state and city of your choice. Copy the url exactly as it appears in the url address bar.

3. Visit the Google Advanced Search page at http://www.google.com/advanced_search?hl=en

- In the second line of the advanced search (where is says “this exact wording or phrase”) type in the keywords previously outlined one at a time.

- Scroll down the advanced search page to the bottom where it says “Search within a site or domain” and put the Craigslist.com url exactly as it appears in the address bar.

- Indicate the number of listings, whether you would like to receive results via email (or forward to your phone) and other parameters such as price. Viola’…that’s it! Now you are ready to start receiving instant leads via Craigslist for free. Not only will this save time and money when working with Craigslist but it’s a simple way to begin building a contact list in your local area or across the nation.

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

*************************************************
About the author:

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

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Join my Facebook Fan Page: http://www.mclaughlinchris.com
-

Smart Real Estate News & Commentary by Chris McLaughlin July 15, 2010

Forward this e-mail to your friends! 

Then they can subscribe directly at the following link: 

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Fix A Flip Re Opens … If you want your deals funded beyond 1 day,

this is the webinar you need to be on this coming Thursday at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/618365627

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

Diana Olick – Home prices being slashed, more coming?

“As of July 1st, 24 percent of sellers on the market had cut their asking prices at least once, according to Trulia.com.  That’s up 9 percent from the previous month and represents about $27 billion worth of vanished national home equity (or home equity hopes).  “The market is going to maintain a relatively flat trajectory, if not more like a saw tooth trajectory, for the near future, and meaningful recovery may not happen until some time in 2011, 2012,” says Trulia’s Heather Fernandez.  We knew the price stabilization was largely due to increased buying activity on the low end from the home buyer tax credit. The issue now, front and center, is foreclosures. We’ve already seen a few reports, and I expect we’ll see more, that show new foreclosures “stabilizing,” while bank repossessions are increasing. 

Let’s face it, banks don’t want to be homeowners, and they certainly don’t want to shell out even more of their dwindling cash on lawn services and handymen. Whatever incentives there are out there to turn these properties over to homeowners who can actually afford them are certainly welcome.  The trouble is that there appears to be a dangerous disconnect in the housing market right now: Housing stats are at an all-time low and yet the home vacancy rate is rising. The only way that can happen is if the number of households is shrinking more than we know. Add bank repossessed homes to that mix, and I’m guessing home prices will dip more than some are expecting.”

Foreclosures fall as bank repossessions quicken

According to RealtyTrac, the number of foreclosure filings of all types — including notices of delinquency, auction notices and repossessions — fell during the first six months of 2010.  There were 1,654,634 properties with foreclosure filings during that time, a 5% decline compared with the previous six months. That equates to 1 out of every 78 homes.  However, the pace of bank repossessions quickened, creating nearly 270,000 homes lost to foreclosure during April, May and June, a 5% increase over the three winter months.  James Saccacio, CEO of RealtyTrac, called the report a “tale of two trends.”  He pointed out that the filings data showed improvement because fewer properties were entering the foreclosure process. Part of that is because lenders are now more committed to modifying defaulting mortgages or allowing homeowners to sell their homes for less than they owe.  

However, there is still much inventory to move through the system and experts aren’t sure how big it will be.  “While the foreclosure problem is being managed on the surface,” Saccacio said, “a massive number of distressed properties and underwater loans continue to sit just below the surface, threatening the fragile stability of the housing market.”  One in 17 Nevada households, or 64,429, received a filing. That’s the highest rate of any state.  The number of California homes with filings came to more than 340,000, the highest total of any state.  Florida had more than 277,000 filings, or 1 for every 32 households; Arizona had more than 91,000, or 1 in 30 homes.  Lenders repossessed 45,000 Calif. homes during the three months ended June 30, more than in any other state. Nevada, with a much smaller population, had nearly 11,000 repossessions, about twice the rate of the Golden State.

Business vs Obama

A letter posted to the US Chamber of Commerce’s site slammed President Obama’s economic policies yesterday, saying administration officials “took their eyes off the ball” and “neglected” to focus on job creation.  The letter further pointed out that the administration “vilified industries while embarking on an ill-advised course of government expansion, major tax increases, massive deficits and job-destroying regulations.”  The letter also included “some different approaches to unlock frozen capital and jolt our economy back to life.”  The six suggestions are: create a growth and jobs tax policy; restore fiscal health; expand trade and export-driven jobs; rebuild and expand infrastructure; ease regulatory burdens; and eliminate uncertainty for business owners.  In a speech at a jobs summit of 500 business leaders, Chamber president Tom Donohue focused on what he considers a glut of recent legislation, including financial reform and health reform.  “We must address the cumulative job-killing impact of over-regulation,” Donohue said, stressing the uncertainty he considers rampant in U.S. businesses.  Donohue also said lawmakers were “spending at astronomical levels — we’re setting ourselves up to be the next Greece.”

Lost decade coming?

Disappointing job reports, weakness in housing and consumer spending, and problems in world financial markets have raised concerns about the U.S. economy stalling out later this year. Now some economists are starting to talk about an even worse fate: a prolonged period of very weak growth, a so-called “lost decade.”  “The probability of a lost decade is significantly greater than a double dip,” said Sung Won Sohn, economics professor at Cal State University Channel Islands. 

“We don’t have too many engines of growth functioning right now — housing, consumer spending, exports are all sputtering. I have a hard time seeing where we can get 3% economic growth back.”  A lost decade, or something like it, could feel like a never-ending recession to many Americans, as the economy does not grow fast enough to recoup lost jobs, and investments like homes and stocks continue to lose value.  The most famous lost decade occurred in Japan in the 1990s. From 1992 through 1999, the Japanese economy grew by less than 1% a year. It has yet to fully recover from the economic weakness and falling prices it suffered during that period.

1 in 200 mortgages may be fraudulent?

According to projections in the July 2010 edition of the CoreLogic, one in 200 conforming loan applications could still contain misrepresentations in the file that could lead to default.  Overall mortgage fraud peaked in Q306, CoreLogic said. But when subprime mortgages were removed from the equation, the peaked shifted to Q309. CoreLogic said its data shows mortgage fraud in prime lending was still on the rise through the peak in Q307, even when many of the largest subprime lenders were going out of business. Since that time, non-subprime mortgage fraud is down 25% at the end of 2009.

The timeline below tracks non-subprime mortgage fraud, along with various milestones in the industry.  “Lenders’ aggressive stance against fraud is having an impact. Our 2010 Fraud Index indicates that mortgage fraud risk is on the decline. But with an estimated $14bn in fraud losses experienced in 2009 alone, fraud is still a major issue for the mortgage industry,” said Tim Grace, CoreLogic senior vice president of Fraud Analytics, said in a press statement.  “While the industry has done good work there is evidence that fraud patterns are changing and becoming increasingly better hidden,” Grace added. “By sharing fraud patterns with each other through CoreLogic fraud consortium members’ meetings and by statistical pattern recognition fraud scoring, lenders can help stay on top of these new trends and keep risk down.”  CoreLogic said its research finds a correlation between fraud risk and subsequent default rates. Of the 12 states with the highest instances of mortgage fraud in 2007, nine were among the top 12 states with the highest mortgage default rates in 2009. Florida, South Carolina, North Carolina, California and Georgia are the highest-ranking states for mortgage fraud, CoreLogic said.

Jobless claims and wholesale prices drop

The Labor Department said Thursday that new claims dropped by 29,000 to 429,000, the lowest level since August 2008. But much of that was the result of seasonal factors. General Motors and other manufacturers skipped their usual summer shutdowns.  It was the second straight week that initial claims dropped sharply and the third drop in the last four weeks. Claims fell by 17,000 in the previous week. 

Separately, the Labor Department said that wholesale prices fell for a third consecutive month, pulled down by another drop in energy costs and the biggest plunge in food costs in eight years. But excluding those two volatile commodities, inflation was relatively flat.  Normally, such a sharp drop in jobless claims would be seen as a positive sign that the job market is improving. But economists will need to see the downward trend continue for several more weeks before drawing conclusions.  Another concern is that the latest drop may be the result of temporary seasonal factors. A Labor Department analyst said manufacturing companies reported fewer temporary layoffs than usual this time of year.

Now for our real estate education section…

Becoming an Angel Investor

Do you have what it takes to become an angel investor? Perhaps it’s time to take your own portfolio to the next level by multiplying the returns of both time and money while helping others realize their own dreams. Find out if you have what it takes to become an angel investor with this quick quiz:

1. I have a desire to give back to others. Research found that 15% of angel investors had a strong desire to simply give back to others; altruism is its own reward for those that have gained so much in life. The satisfaction of seeing others realize their dreams and make a difference in their lives…and the lives of their family…is integral to a significant number of angel investors.

2. I have the desire to remain involved in an industry I love…but at a different level. Retirement is a terrific way to enjoy life once you have made your mark on the world but that doesn’t mean you don’t miss the energy and vitality of wheeling and dealing. Angel investors often find the mentoring (and money) provides the perfect balance between involvement and independence.

3. I have the desire to network in a new industry. High net work individuals may benefit from becoming an angel investor by the ability to network in a new industry while still generating impressive returns for their own portfolio. Real estate is an exceptional area to try out since it appeals to such a wide spectrum of other professionals.

4. I have a desire to maximize profits while minimizing involvement. For those that are not satisfied by average returns (and who is these days?), becoming an angel investor is the perfect way to obtain the profits you seek without the excessive time and energy required to do it yourself.

5. I have the desire to make a difference in society. Many angel investors provide funding to entrepreneurs or investors that adhere to a specific societal function, outlook or other value near and dear to the heart of the angel investor. Whether it’s affordable housing for the elderly, eco-friendly sustainable living for the urbanite or something else in between, make the world a better place by supporting those on the cutting edge.

6. I am able to deal with risk and loss. Sometimes you win, sometimes you lose and sometimes you just break even…successful angel investors understand their personal level of risk and are able to emotionally and financially handle it.

7. I have a financial fitness plan in place and can stick to it. Finally, and perhaps most importantly, a successful angel investor has a personal plan in place for their own portfolio and the determination to stick with it. Don’t be swayed by every investment, instead, wait for those that meet your criteria. According to research, the most successful angel investors obtain more than just a return on their money…they enjoy and take personal satisfaction from the entire process.

See you at the top! 

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

*************************************************
About the author:

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

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Join my Facebook Fan Page: http://www.mclaughlinchris.com
-

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

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

IT’s BACK: NO FLIP RICHES REOPENS THIS SATURDAY!

When you know how to defeat the top 9 issues that are stopping profitable short sale investing today, you’ll rapidly rise to the top of the real estate elite! (Imagine — you the guru!)

Here’s what we’ll reveal in this free online DVD and one-hour class:

*Details on each of these 9 threats – even if you don’t have a clue now How to get around them, and get up and running in less than a day

*How to target markets with NONE of these problems, with eager sellers and starving buyers eager to hand you cash… you’ll be a hero just for giving them what they need.

*When and how to fill your short sale funnel with high-margin deals… and rake in HUGE profits regularly

*Create multiple income opportunities — because after your first flip, done this new way, you simply wash, rinse, and repeat your way to a fortune!  

* Best part — with this new strategy, it’s like it’s 2008 all over again… where you can generate an autopilot, dependable, predictable, and steadily soaring income that’ll create enough wealth to retire for good!

It’s time to get excited…

Make sure you wait for the gotowebinar page to redirect

you to obtain the free DVD and tune in to the encore

Saturday at 3:00 PM ET, NOON PST: 

https://www2.gotomeeting.com/register/159690035

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Pending home sales ‘fell off a cliff’

It was expected, but not this bad.  Experts did suggest that home sales would drop once the homebuyer tax credit lapsed at the end of April, but no one expected it to be close to a shocking decrease.  According to the National Association of Realtors (NAR), pending home sales fell a whopping 30% in May. Their index, which measures signed sales contracts but not closed sales, plunged to 77.6 from 110.9 in April. It’s even off 15.9% from a year ago when the nation was barely emerging from the recession. “The pending home sales report is a disaster,” said Mike Larson, a real estate analyst for Weiss Research. “Sales fell off a cliff after the tax credit expired. It’s the biggest monthly decline ever and the index is at its lowest level since NAR began tracking it in 2001.”

Lawrence Yun, NAR’s chief economist downplayed the damage a bit. According to him, customers rushed into deals to claim the credit, borrowing from May sales. Once the economic recovery comes into full swing, housing markets will heat up. Those conditions include much lower home prices and extremely favorable mortgage interest rates. The question is when — or if — the job market will ever bounce back. “We’re not creating jobs,” said Larson. “The housing problems now are being driven by broad economic problems.

US employment figures continue to threaten 

Agreed, getting the economy back on track does mean a lot more than stimulus packages. Is the President listening? The patchy US economic recovery faces a crucial litmus test Friday when fresh unemployment figures are released. Most analysts say the ranks of jobless Americans are likely to have swollen to more than 15 million, pushing the unemployment rate from 9.7 percent to 9.8 percent. With the Congressional elections due in November, that does not sound good for the President. Unemployment is a crucial issue with voters and for the markets, as well.  With fears of a double dip recession in recent weeks looming, the Dow Jones Industrial Average lost more than ten percent of its value, over fears about the fate of the US economy. 

Goldman predicts that payrolls shrunk by 100,000 last month, the first negative figure this year. Faced with an uncertain outlook and poor access to credit, US firms have been reluctant to rehire workers, as the private sector created just 41,000 jobs in May.  Congress is currently locked in a bitter debate over extending unemployment insurance for over one million workers and is likely to balk at a wider spending package.  Heidi Shierholz of the Economic Policy Institute, a Washington-based think tank, said “The private sector is not yet poised to takeover and sustain a robust recovery.” Last week, the Labor Department reported that new jobless claims rose to 472,000, an increase of 13,000 from the week before. But Washington is now more focused on elections in which the national debt is also likely to feature prominently, and that may mean that some 1.7 million unemployed and their troubles will have to be ignored.

Home Buyers Get Tax Credit Closing and Flood Insurance Extensions

The National Association of Realtors® worked closely with congressional leaders on both sides of the aisle toward the timely passage of two bills to extend the home buyer tax credit closing deadline and reauthorize the National Flood Insurance Program. Both bills had cleared the House earlier and were passed by the Senate last night, heading for the President’s signature. The tax credit closing deadline and the NFIP reauthorization were extended to September 30. Extending the tax credit closing and flood insurance deadlines will help provide additional stability to real estate markets across the nation, NAR said. The passage of H.R. 5623, the Homebuyer Assistance and Improvement Act, applies the homebuyer tax credit closing deadline extension only to homebuyers who have ratified contracts in place as of April 30, 2010, but could not close before June 30. There will be no gap between June 30 and the date the president signs the bill into law. Senate passage of the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), reauthorizes extension the NFIP until September 30, allowing currently stalled transactions to move forward. The bill is retroactive and covers the lapsed period from June 1, 2010, to the date of enactment of the extension. Any new policy applications or renewals that were signed and submitted during the lapsed period will be effective from the date of application. In the case of waiting periods, the waiting period will start from the date of application.

Diana Olick – Housing’s Powerful Lobby Surges Ahead

“Last week, at the monthly lockup for the existing home sales report, the Realtors’ chief economist, Lawrence Yun, told reporters that if the closing date wasn’t extended, 180,000 home buyers who signed contracts by April 30th, would lose the tax credit due to delays in closing. He blamed these delays on the tough mortgage market, new appraisal rules and the still-complicated short sale process (when a home is sold for less than the value of the loan). So Congress tried to attach a three month extension on the closing date to other legislation last week, but those bills never passed. But the powerful troika of Realtors, builders and mortgage bankers pushed full speed ahead, rallying the troops. So, lo and behold, before midnight last night, a stand-alone measure made its way through the Senate, as the House had passed it the day before.

The Realtors alone are one of the most powerful lobbying forces in Washington, number one in spending in the real estate industry and 13th out of all industry lobbyists. Add the National Association of Home Builders and the Mortgage Bankers Association, and you get a force that spent $5 million in just the first quarter of this year and is on pace to break last years $27 million tab. Many Realtors also moonlight as state legislators, city council members, mayors and school board presidents; if you think members of Congress don’t understand that, think again. Housing represents a lot of jobs, plain and simple, and now is a critical time for the industry. The home buyer tax credit and its extension and its closing extension were all the result of this powerful lobby. Now, as Congress looks forward to tackling mortgage behemoths Fannie Mae and Freddie Mac, you can bet these three associations will be buying their lobbyists new shoes for walking the hill. Government may be trying to extricate itself from the business of housing subsidies, but the industry has no such plan. Get ready for a surge in K Street spending, as housing builds itself back from the ground up.”

Swinging Short Sale Discounts

Short sale discounts from regular retail home prices are varying widely from market to market in the US, according to RealtyTrac, an online foreclosure marketplace. This week, RealtyTrac released a report that foreclosure sales took up 31% of all home sales in the US through Q110. According to the report, there were 88,000 pre-foreclosure sales, often short sales, in Q110, for an average discount from retail home prices of 14.7%. By comparison, REO discounts in the US averaged 34%. But while some are seeing large short sale deals above the 14.7%, others are not.  Bill Gassett, a broker with RE/MAX Executive Realty in Hopkinton, Mass., said he’s seeing slightly different numbers, suggesting that short sale discounts vary differently even within states. “There are amazing discounts right now for buyers in the Bluffton/Hilton Head Island market if they are willing to pursue a short sale,” said Tisha Chafer, a real estate agent with Century 21 Southern Lifestyle Properties in Bluffton, S.C. Bluffton is on the very southern-most tip of South Carolina. “If you are patient and can handle dealing with the time it takes for the bank to process the file then you will be rewarded at the end with a property that you were able to purchase at a great price,” she added.

Walter Mueller, a broker at Exit Realty Charleston Group said the listing price is set differently depending on which lender a broker is working for. Some want the listing price set at market value. Others want it listed at the amount of the mortgage balance, while others still have no preference. But Mueller said buyers are becoming more aware of the opportunities short sales and REO provide.

Fannie’s Appraisal Policies Updated

Fannie Mae updated its selling guide to provide additional appraisal-related guidance. The new policy addresses issues identified with appraisals after reviewing many mortgage loan files. Fannie will now require interior photographs of specific rooms and areas of the house in the appraisal report. The GSE provided guidance on when an appraisal is considered deficient and when a lender can make changes to the opinion of market value based on underwriter judgment, automated valuation models or other methodology. The policy changes take effect for all mortgage loan applications dated on or after Sept. 1, 2010. Additionally, the GSE provided guidance on appraisers’ use of foreclosures, short sales and builder sales as comparable. Fannie clarified that appraisers must be selected based on knowledge of specific geographical markets, access to appropriate data and sufficient experience. Specifically, Fannie said, a qualified employee of the lender may contact the appraiser to provide additional information or explanation about the basis for a valuation.

Now for our real estate education section…

Friday File – 15 Minute Resolution

Are you making the best use of available technology for your commercial real estate endeavors? For this week’s 15 minute resolution, several tools of the trade will be presented including a few novel ways to make the most of each. Pick your favorites and take 15 minutes to sign-up…in no time at all you can be reaping the rewards of your extra effort.

CoStar: Although a subscription is required, this is considered one of the most largest independent commercial real estate sites available. A “must have” for those seeking to break into the retail, office, manufacturing or other commercial real estate venture.

www.costar.com

LoopNet: An easy to use site dedicated to commercial properties, LoopNet has recently upgraded many of their tools including robust property research records, making it a strong competitor to CoStar.

www.loopnet.com

Also check out the LoopNet Commercial Real Estate Search iTunes application; it’s simple to use and allows you to do it all from the convenience of your phone.

http://itunes.apple.com/us/app/loopnet-commercial-real-estate/id349561448?mt=8 

Finally, check out the CRE Online list of real estate investment clubs in your area. Not only is it a great way to network and learn from others but it’s also potentially profitable should you qualify to join.

http://www.creonline.com/clubs.htm

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

*************************************************
About the author:

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

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Join my Facebook Fan Page: http://www.mclaughlinchris.com
–

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IT’s BACK: NO FLIP RICHES REOPENS THIS SATURDAY!

When you know how to defeat the top 9 issues that are stopping profitable short sale investing today, you’ll rapidly rise to the top of the real estate elite! (Imagine — you the guru!)

Here’s what we’ll reveal in this free online DVD and one-hour class:

*Details on each of these 9 threats – even if you don’t have a clue now How to get around them, and get up and running in less than a day

*How to target markets with NONE of these problems, with eager sellers and starving buyers eager to hand you cash… you’ll be a hero just for giving them what they need.

*When and how to fill your short sale funnel with high-margin deals… and rake in HUGE profits regularly

*Create multiple income opportunities — because after your first flip, done this new way, you simply wash, rinse, and repeat your way to a fortune!  

* Best part — with this new strategy, it’s like it’s 2008 all over again… where you can generate an autopilot, dependable, predictable, and steadily soaring income that’ll create enough wealth to retire for good!

It’s time to get excited…

Make sure you wait for the gotowebinar page to redirect you to obtain the free DVD and tune in to the encore Saturday at 3:00 PM ET, NOON PST:

https://www2.gotomeeting.com/register/159690035

**********************************************************
US Congress Backs Home Tax Credit Extension

The U.S. Congress on Wednesday approved a bill extending the closing deadline for homebuyers trying to take advantage of a popular tax credit. Homebuyers with contracts signed by April 30 who failed to go to closing by the June 30 headline will now have until September 30 to complete their purchases. The $8,000 tax credit for first time homebuyers and $6,500 credit for others purchasing a new primary residence was a highly popular temporary measure by the administration to jump start home sales during the economic recession. Real estate agents said thousands of homebuyers would miss the June 30 deadline because banks and settlement offices were struggling to deal with the volume of people rushing to close on their deals.  Senate Republican Leader Mitch McConnell offered a two month extension that was paid for by using unspent money from last year’s economic stimulus program and Democrats objected.

Wall Street reform Bill Approved – Pitfalls galore

The House of Representatives passed the Wall Street Reform Bill, in what is touted as the most sweeping change of the administration.  The Wall Street Reform Bill is showcased as one that will make the U.S.’ financial system more transparent, and put an end to the idea that any financial firm is too big to fail, and therefore entitled to taxpayer bailouts. Sharing his views, the House Republican Conference Chairman, Mike Pence, alleged that under the guise of financial reform, Democrats are pushing yet another Bill that will kill jobs, raise taxes and make bailouts permanent.

“This legislation will kill jobs by restricting access to credit. It will kill jobs by raising taxes on those that would provide loans and opportunities to small business owners and family farmers. And it makes the bad ideas of the Wall Street bailout permanent,” he said. “I vigorously opposed the Wall Street bailout because I thought it departed from that fundamental principle of personal responsibility and limited government. And I rise today to vigorously oppose this legislation that takes the bad ideas of the Wall Street bailout and makes them permanent,” Mr. Pence said. What this means is that When a financial firm is failing, Treasury Secretary and the FDIC will actually have the authority to take taxpayer dollars and decide which creditors to pay back, and how and when they get paid, giving the government bureaucrats more power to pick winners and losers.

Fannie Mae Mortgage Portfolio to Fund More ‘Dead Assets’

The Fannie Mae mortgage portfolio passed $813bn in May, climbing $24bn from April, according to its monthly summary. It is interesting to watch, how much debt Fannie will issue to fund more “dead assets.” Fannie could issue more debt paid back to investors at scheduled times and at the investors discretion, also known callable debt. The growth shown in May was financed mostly by this short-term borrowing, according to Vogel. “Fanie will have clear sailing for is next benchmark on Wednesday, July 7 with no Treasury supply and limited corporate competition in front of earnings announcements,” Vogel wrote.

He added another $5bn in issuance “is certainly possible.” Fannie issued $36.2bn mortgage-backed securities (MBS) in May, a 3.7% drop from the $37.8bn mark in April and a 71.9% decrease from the $129bn issued in May 2009. MBS issuances reached its peak in the last year in June 2009, when Fannie issued more than $130bn in MBS.  In May, Fannie purchased another $49bn of loans out of MBS trusts as part of its effort to buy-out seriously delinquent pipelines. That’s up from $46bn in April.

Commercial/Multifamily Real Estate show signs of stability, in First Quarter 2010

The Mortgage Bankers Association (MBA) today released its Commercial Real Estate/Multifamily Finance Quarterly Data Book for the first quarter of 2010. The analysis shows that commercial real estate fundamentals are beginning to show signs of stabilization, though property and mortgage performance remains weak. As economic growth continues, the impact on commercial real estate markets should broaden and reach rents, vacancies and delinquencies.  The Data Book compiles the most up-to-date information on topics of interest to commercial / multifamily real estate finance industry participants and observers including rends in property sales, originations, delinquencies and mortgage debt outstanding.

The Housing Market, still lost in the Woods

As the administration’s mortgage and housing officials sing their own praises, the Treasury and the Department of Housing and Urban Development released a new monthly “housing scorecard” in an attempt to show that the administration is making progress in its efforts to heal the market. With rehashed statistics and numbers from various sources, many of them can be interpreted as “stable,” far from the truth.  But what some observers miss is that “stabilization” is temporary and is brought about by tax credits, very low interest rates and other forms of government intervention.  “Obviously, we are not out of the woods. Our housing market remains fragile, and we still may see further declines,” said HUD Secretary Shaun Donovan told reporters. 

We already have seen evidence of very steep declines in newly contracted home sales since April 30, the deadline for home buyers to qualify for tax credits of up to $8,000. But that drop won’t show up in Tuesday’s report from the National Association of Realtors on May home sales because that will reflect sales that were completed in May, not new contracts signed. The Treasury also released its monthly update on the administration’s $50 billion drive to prevent foreclosures, known as the Home Affordable Modification Program, or HAMP. By the end of May, 429,696 trials had been canceled, up from 277,640 a month before. Nearly 468,000 households are still in trials, and 190,000 of them have been in limbo for at least six months, as loan servicers, slowly work through their huge backlogs of unresolved cases. Another big problem remains: Even after HAMP modifications, many borrowers still face crushing overall debt burdens, when credit cards, car loans, student loans and other obligations are considered.

Now for our real estate education section…

Facts, Figures & Other Tidbits That Make a Real Difference

Admit it. Most people don’t have a head for facts, figures and statistics. Except for a few special people that seem to thrive on data and obscure calculations, just the mere mention of facts and figures tends to cause people to start shifting in their seat and looking for the nearest exit. This is NOT one of those situations. Today we are going to cover a few facts and figures that make a very real difference in your real estate and investing career. Things you can put to work and take straight to the bank. Try these out and see for yourself.

1. Establish a ratio. Not just any ratio…a ratio that has been proven effective. Burn this number into your brain and use it as a foundation for growth and maintenance. Research conducted by top agents and businessmen indicated a 34:1 ratio to successfully close one deal. Notice, these are successful agents so novice investors may need to use a higher ratio when first starting however, nothing says that each contact must be time consuming or made in person. Learn how to use social media to dramatically reduce the time, effort and expense to meet this criteria. Bottom line: make contact with an average of 34 buyers/sellers for every deal you close….but worker smarter not harder by using social media.

2. Increase your odds. One of the biggest mistakes most people make when investing in real estate is to think the little things don’t matter. They do. Take the above ratio as an example. It’s tempting to believe that making contact with only 25 people instead of 34 is sufficient. Don’t believe it. Do the math and you will soon realize the impact on your business at the end of the year is likely to be a full 30 percent less than the person who maintained the 34:1 ratio instead! Take away…to grow your business you must not just meet the standard ratio but rather exceed it. Instead of retaining the 34:1 ratio you might need to adopt a 45:1 ratio but remember, by using social media it is possible to work smarter rather than harder while growing your business and profits.

3. Focus on one skill and delegate the rest. Veteran real estate professionals have learned the fine art of delegation but there is one skill that you should NEVER delegate…do you know what it is? Not only is it one of the most crucial skills to business success but it’s where the money is. In fact, it’s probably not an overstatement to say this is the single most important part of your business…yet the majority of real estate professionals are unable to identify this skill when asked. Even worse, many actually delegate this to others…a practice akin to handing over their business.

Have you guessed yet? Plan and simple…lead generation. Consider this, real estate entails several core competencies including lead generation, presentations to buyers/sellers, marketing, negotiation, contracts, coordination of closing etc…nearly all of these are technical considerations that can be clearly defined and cost estimated to a narrow margin because they are predictable in terms of time and cost. Lead generation is different. Research has shown that top agents are able to convert nearly 80 percent of leads into successful transactions…novice agents and outside vendors average as little as 10 to 20 percent. Why pay more for less? Remember, the secret to success is to be in front of a qualified prospect when they are ready to buy – not when you are ready to sell. Learn how to use social media marketing to meet your objectives and find ready buyers by joining one of our free webinars.

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

*************************************************
About the author:

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

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Join my Facebook Fan Page: http://www.mclaughlinchris.com
–