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HAMP a failure, defaults on the rise

admin — Mon, 23 Aug 2010 15:18:10 +0000

Smart Real Estate News & Commentary by Chris McLaughlin August 23, 2010

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HAMP a failure, defaults on the rise

According to a federal report released Friday, only 36,695 homeowners received long-term mortgage modifications in July under the Obama administration’s Home Affordable Modification Program, known as HAMP. This brings the total to 434,717 borrowers who have successfully made it out of the trial phase. A month ago, 51,205 delinquent borrowers were given long-term assistance, but the number of people falling out of the program is on the rise. Some 12,912 homeowners had their permanent modifications canceled in July, 272 of whom paid off their loans. “While there has been some stabilization in the housing market, it remains clear that we have more work ahead,” said Raphael Bostic, assistant housing secretary.

“We know that we must continue to provide support to underwater borrowers, unemployed homeowners, and to the nation’s hardest hit neighborhoods.” Foreclosure prevention programs have taken on renewed importance with the housing market on shaky ground again. A spike in foreclosures, combined with weak housing sales, could send home prices plummeting again. In July, foreclosures were up 3.6% from the month before but down 9.7% from the year earlier period, according to RealtyTrac. The latest report comes two weeks after the government had to revise its June redefault figures sharply higher, after analysts called the initial numbers misleading. The revision showed that nearly 20% of homeowners were at least two months delinquent nine months after receiving a permanent modification. The initial figure showed that 7.7% had fallen behind. The government did not provide redefault statistics for July in the current report. Officials said the data would be released quarterly. Analysts at Barclay’s Capital said last month said 60% of homeowners may ultimately redefault.

New rules for credit cards

New rules designed to protect credit card users from “unreasonable late payment and other penalty fees” came into force yesterday. According to the Federal Reserve, which approved the regulations, the rules block credit card companies from charging more than $25 for late payments except in extreme circumstances, prevent them from charging customers for not using their cards, and requires them to reconsider rate increases imposed since January 1, 2009. “The industry has moved swiftly to implement all of these changes and the final piece of the puzzle is now in place,” said Kenneth Clayton of the American Bankers Association. Some banking groups have concerns. Financial Services Roundtable’s senior lobbyist Scott Talbott warned that the Fed’s cap on penalty fees will limit the industry’s ability to offset the risk that credit cardholders don’t pay their bills. “The restrictions in the rules the Fed issued will decrease the ability of the credit card industry to price for risk and the net effect will be a decrease in [credit] availability,” Talbott said.

Olick – Government spin

“I don’t envy the folks over at Treasury and HUD who, month after month, are forced to report lackluster statistics on the Administration’s mortgage bailout and find something positive to say about them. Unfortunately they painted themselves into a corner by inventing a “Housing Scorecard” this summer, which only forces them to report more troubling numbers. Dr. Raphael Bostic, an assistant secretary at HUD, cited three reasons that we should feel good about housing. 1. “More stability in terms of prices than we’ve seen before the Administration initiatives were started” and “improving expectations offering some hope that we are moving to a more positive environment.” 2. Historically low interest rates that “will be an important incentive and tool for people to access housing and home ownership in a very affordable way.” 3. A lot of things the Administration has done outside of the mortgage bailout “have touched a significantly larger number of people than the number of people who have gone into foreclosure.” Numbers 2 and 3 are fair enough, but I, and another reporter on the call who got to ask the question first, took issue with Number 1. Yes, home prices are not in freefall, as they were before the current administration took office, but I’m not sure where they’re seeing “improving expectations.”

All I’m seeing are reports of double dips in home sales and prices, and increasing concern that the struggling job market will push more borrowers into foreclosure. When asked about that, Dr. Bostic replied only to the first part, about prices being better now than two or three years ago. He declined to answer the question: Where exactly are you seeing data that things are improving now? Administration officials seem to want to point to all the other programs and incentives out there that have and are stabilizing the housing market. It’s not just HAMP (Home Affordable Modification Program), they argue, but the FHA, the Hope Now industry program, the home buyer tax credits, and the government-induced low interest rates that are saving housing, they claim. Still, the reason everyone focuses on HAMP and criticizes its results is that HAMP is the direct bailout that we the taxpayers are paying for…”

AIG repays $4 billion

American International Group’s (AIG) aircraft leasing unit, ILFC, repaid nearly $4 billion of U.S. loans after raising new debt from investors. The repayment reduced the principal balance under a Federal Reserve Bank of New York loan to just over $15 billion, its lowest level since the March 2009 restructuring of government aid. A previous low of $17 billion was reached in December after AIG gave the Fed preferred interest in two special purpose vehicles created to hold its foreign life insurance business, the source said, declining to be named as the development is not yet public. International Lease Finance Corp raised $4.4 billion with new debt sales earlier in August. Chief Executive Robert Benmosche told Reuters in an interview the funds would be used to pay down the Fed’s loans that AIG had taken to prop up the unit

41% price drop in commercial real estate

National property prices on commercial real estate dropped 9.1% in June from last year, according to Moody’s commercial property price index. The rate declined 0.9% over the first half of 2010, and while prices remain 4.2% above the current recession low of October, they are down 41.4% from the peak in October 2007. Moody’s bases the index on the dollar volume of repeat sales transactions in commercial real estate. Analysts reported $2.1bn of these transactions in June, up from $1.5bn in May and $800m in April.

Moody’s managing director Nick Levidy said the increase in sales could mean prices have fallen far enough to meet new demand. “The increase in dollar volume in each of the past two months, taken together with this month’s 43% increase in the number of repeat sale transactions, may be an early indication that buyers and sellers are starting to agree on market-clearing prices,” Levidy said. “If this is in fact occurring, we would expect transaction volumes to rise steadily and price volatility to ebb in the months to come.” Analytics firm Realpoint found delinquency rates on these loans that have been securitized, CMBS, reached 7.79% in July, more than two times the 3.15% reported a year ago. It’s also more than 27 times the recorded low point, a 0.28% delinquency rate in June 2007. The delinquent unpaid balance for CMBS loans reached $60.8bn in July. While it did increase $387.9m from the previous month, it’s nearly 90% below the previous six-monthly average of $3.14bn in increases. Commercial loans that were either 90-plus days delinquent, in foreclosure, or REO grew in the aggregate for the 31st consecutive month, reaching $49bn in July. That figure is nearly triple the year ago and up 9% from the previous month. Realpoint said the delinquency rate could reach between 9% and 10% by the end of the year with the potential to reach 11% under more heavily stressed scenarios.

Now for our real estate education section…

What a Difference a Decade Makes: Marketing Today & Yesterday

Ever experience one of those moments when you suddenly realize an entire year has passed by without your notice? Perhaps a favorite song comes on the radio or an important date seems to catch you by surprise; sooner or later it happens to everyone.

The same phenomena occurs in the business world…especially marketing. What worked a few years ago isn’t just old news, it’s a downright waste of time and money. Unfortunately, it’s easy to be taken by surprise even when working with a marketing company or professionals that really should “know better”. Here to demonstrate the point is a quick comparison between what worked just a few years ago versus what works now.

Year 2000: Email blasts. Remember how easy (and expensive) it was to buy a target email list and send out a mass email or newsletter to prospective new clients? That has all changed. According to Marketing Sherpa, the average open rate for an email blast is less than 40%. Users routinely use filtering software to weed out unknown email and the National Canned Spam Act limits the use of email only to those clients you already have a relationship with.

2010 Update: Twitter/Facebook. Build a relationship and allow it to go viral. Not only is it less expensive than an email blast but it’s also a lot less work. No need to constantly clean and update the list nor hassle with other database management issues.

Year 2000: Telemarketing. Ten years ago it was still common practice to hire an independent firm or marketing pro to call on people directly. Caller ID combined with cell phones and a sizable increase in the number of people registered for the “Do Not Call Registry” have made this all but obsolete.

2010 Update: UTube and other viral video’s. Not only do they provide more comprehensive information to the prospective client but they are available 24/7 and cost a fraction of the amount required by telemarketing.

Direct mail: There was a reason credit card companies constantly sent unsolicited approvals through the mail…it worked! Direct mail was one of the mainstay marketing techniques used by mega corporations and small business owners alike; simply purchase a list and send out postcards or letters then wait for the response. Of course, it was also expensive. Design and printing, stamps and postage, the cost of the list all adds up.

2010 Update: Direct mail is still in use but tends to be much more targeted due to the high cost. Instead, email newsletters, blogs and social media websites are filling in the gaps and gaining more impressive results by creating a constant level of contact and interaction with clients.

Newspaper classified ads: Remember those? Most newspapers throughout the country have either shut down or are barely surviving…meanwhile, advertisements cost more yet reach fewer people than ever.

2010 Update: Online classified advertisements have almost entirely transformed real estate and secondary sales. Not only are they more timely and cost effective but viewers are able to gain valuable information that requires less of your valuable time.

Bottom Line: Today’s media savvy consumers are adept at blocking out unwanted interruptions and outbound marketing efforts. Learn how to reduce the time and cost…while increasing response rates…through the use of social media marketing. Tune in for one of our free webinars to learn more.

See you at the top!

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

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

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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
–

admin — Fri, 20 Aug 2010 21:28:24 +0000

Smart Real Estate News & Commentary by Chris McLaughlin August 20, 2010

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Standard & Poor’s expects delinquencies to remain high

S&P expects declining mortgage applications, high unemployment, the number of distressed sales, and a backlog of foreclosed properties not yet for sale to keep home prices down. Agency loans backed by bond resolutions rated by S&P and at least 60 days delinquent or in foreclosure rose to 6.05% in the first quarter from 4.48% a year ago, but fell from 6.57% for the fourth quarter of 2009, according to analysts. Without a decrease in unemployment – S&P chief economist David Wyss projects the figure hovering around 10% for the rest of this year – and tangible economic improvement, the ratings service expects agency delinquencies rates to remain high. Wyss also sees difficulties with loan restructuring and delays in the foreclosure process keeping foreclosure inventory high for the next 18 months. And “additional foreclosures could put more pressure on home prices, possibly affecting loans” in agency portfolios, which could increase delinquency rates, according to the credit rating agency. Still, analysts “don’t expect fluctuations in delinquency rates alone to cause ratings action at this time.”

State taxes

A Tax Foundation report says that Tennessee has the highest combined state and average local sales tax rate of any U.S. state, at 9.44%, while two Alabama cities are tied for the highest combined state, county and city sales taxes. Birmingham and Montgomery both levy an average of 10% on purchases. Chicago used to hold the title of highest metro area sales tax, but lost it after Cook County lowered its rate by 0.5% in July, leaving it with the sixth highest rate at 9.75%. Among the nation’s other metro areas with at least 200,000 inhabitants, there are five California cities with sales tax rates above 9%: Long Beach, Los Angeles, Oakland, Fremont and San Francisco. Glendale, Ariz., and Seattle also ranked high on the list. the state with the second highest combined sales tax rate after Tennessee is California, at 9.08%, while Arizona came in third, at 9.01%. Other states with particularly high rates are Louisiana, Washington, New York, Oklahoma, Illinois, Arkansas and Alabama. There are 34 states that allow local governments to charge a local option sales tax on top of the state sales tax, while 16 states have no local sales tax. There are five states that have no statewide tax at all: Alaska, Delaware, Montana, New Hampshire and Oregon. Sales taxes are levied by state, county and city governments. As a result, rates vary widely across the nation, making it difficult to measure and compare sales tax trends, said Kail Padgitt, a Tax Foundation economist.

Olick – not just the tax credit

“There’s no question that the home buyer tax credit, which expired at the end of April, pulled home buying demand forward and thus created an inevitable drop-off afterward. It would be wrong, however, to blame the current lull in home buying/selling entirely on the tax credit hangover. You need only look at a report today from California-based MDA Data Quick, headlined, ‘Bay Area July Home Sales Down Sharply.’ Sales in San Francisco in July fell to the lowest level in 15 years, down 19 percent from June and down nearly 23 percent from July of 2009. It was also one of the largest monthly drops recorded. ‘There’s been a pause in the market. Some potential buyers – including those who held off until the tax credits expired – will take their time to assess market conditions, searching for signs of renewed price cuts,’ says DataQuick President John Walsh in the release.

“Depending on the economy and other factors, that might be what some of them find, especially in areas with a growing number of homes for sale – particularly distressed properties.” There’s even more to it than that, specifically a startling lack of confidence. Yesterday the chief economist for the National Association of Realtors, less than a week before the release of its monthly existing home sales report, warned that this lack of confidence, grounded or not, could pose a bigger risk to recovery than expected. ‘As long as people hold back, whether realistically or irrationally, or rationally,’ Lawrence Yun says, ‘then naturally there will be too much supply in relation to the demand, and that could lead to some over-correction in home prices in some markets.’ And we didn’t even bring up foreclosures in the conversation. Add this to a new report from Zillow.com that one third of all homeowners in the U.S. still think the housing market has yet to hit bottom and nearly the same amount think the worst is yet to come. And another report from Trulia.com (and mind you these are real estate sale Websites) that finds fewer renters than ever now intend to buy and fewer Americans than ever think owning a home is part of the American dream, and dare I say, ‘Case closed.’”

Faith in government low

Steen Jakobsen, Chief Investment Officer at Litmus Capital Partners, says a big risk for markets is the fact that faith in the US government’s ability to fight the economic markets, as well as in central banks’ monetary policy tools, is eroding. “The fact of the matter is that people have a huge disbelief in government,” he said. “The real crisis 2.0 is not about the new normal or whatever term is being used, the new crisis is a crisis of faith in the US system. We’re far away from that point now but that is a clear risk,” Jakobsen said.

Because people are losing faith in the governments’ ability to bring the economy back on track, the impact of various policies is smaller, while keeping interest rates at record lows has altered investors’ perception about what this actually means for the market, Jakobsen warned. Investors no longer perceive low rates as good for stock markets because they create liquidity, but as a sign that a slowdown in economic growth is coming, he said. Jakobsen predicts zero or even negative growth for the US economy for the third and fourth quarters.

DSNews.com – Modifications pick up, but not from HAMP

The industry has completed about 975,000 permanent loan modifications so far in 2010, according to estimates released this week by the Hope Now Alliance. Of those, just over 331,000 have been processed under the umbrella of the federal government’s Home Affordable Modification Program (HAMP), while nearly 644,000 have been restructured using servicers’ own proprietary mod programs. The latest data from the Treasury provides details on what happens to borrowers that are not accepted into HAMP.

Based on information from the eight largest HAMP participants, 45% of those that don’t make it into a preliminary HAMP trial receive an alternative modification from the servicer; 2.4% lose their home through a pre-foreclosure short sale; just over 10% are pushed through to foreclosure; and nearly 3% file for bankruptcy. According to Hope Now’s report, servicers have initiated more than 1.2 million foreclosures so far this year, and completed foreclosure sales on 583,000 homes. The Alliance’s data, though, shows that servicers slowed the pace of foreclosures in June. Foreclosure starts dropped 7% compared to the previous month, and foreclosure sales were down 9%.

Economy to get worse?

We’ve all anticipated a gradual gain in US employment, but what seems to be happening is a surprising deterioration, and that has economists worried about the increasing threat to the economic recovery. Yesterday’s jobs report was just the latest confirmation that things are getting worse instead of better. The monthly Labor Department report for July showed 71,000 private jobs were created even as total non-farm payrolls fell 131,000, and that trend is confounding economists, who say the net job creation in the private sector ought to start having some effect on the weekly number. “There’s got to be an awful lot of job-churning going on if we can have positive private sector employment growth for seven months out of the year and this (weekly claims) thing is drifting up,” says Kurt Karl, chief US economist at Swiss Re in New York. “Businesses have got to be laying off a lot of people and hiring a lot of people, and the net is slightly positive.”

Besides the sharp drop in government payrolls and the dynamics of the benefits program, small business remains a major concern, since recent surveys have shown waning confidence among small business leaders. The multiplicity of factors lining up against the labor market is sure to stoke up talk about a double-dip in the economy, or at the very least little chance of meaningful gains for quite some time. “It’s not good, it just isn’t, particularly when you piece it together with all of the other data we’re getting,” says Paul Ashworth, senior economist at Capital Economics in Toronto. “This isn’t just rising claims and nothing else is going on. We’re seeing activity rates going down, we’re seeing confidence weaken—a lot of not very encouraging signs.”

Now for our real estate education section…

Friday File – 15 Minute Resolution

Ever dream of buying a beautiful investment property in a far-away place like Brazil or perhaps something a little closer to home like the lovely island of Jamaica is more to your liking…Well, whatever your taste, chances are your good old Uncle Sam has already bought some land in the same area and with the economy being what it is, he’s ready to wheel and deal.

This week’s 15 minute resolution is a quick way to find – and potentially fund – the investment property of a lifetime. Luxurious locations and even some attractive funding make these worth the time to take a second look.

Bureau of Overseas Building Operations – Now this is a resource you hardly ever run across! This little known gem lists property owned (and listed for sale) by the federal government in exotic locations around the world. Pick up a beautiful 7,000 square foot home in La Paz Bolivia, a downtown condo in Santiago Chile or even an unbelievably beautiful executive residence on four acres in Kingston Jamaica. Other areas of interest include Haiti, Pretoria South Africa, and even Prague…just this week alone! Sign-up to receive instant notification of newly listed properties at http://www.state.gov/obo/c20736.htm.

How about tax-free living on an enchanted Island? If the idea of zero federal incomes taxes without the need for a Visa sounds interesting, be sure to check out all the great properties for sale in by the federal government in Puerto Rico. As a commonwealth, Puerto Rico is part of the United States but doesn’t pay federal income taxes. Great year-round weather, easy access to the mainland and more tropic fruit than you can consume in a lifetime make this an increasingly popular destination. Best of all, buyers are still able to use HUD/FHA and even VA vendee loan programs to purchase an island property with little money down!

Search all the properties at once by visiting http://www.homesales.gov/homesales/mainAction.do?pageAction=GetCounties&state=PR&stateName=Puerto%20Rico

See you at the top!

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

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.

22 cities in danger of double dip

admin — Wed, 18 Aug 2010 20:43:27 +0000

Smart Real Estate News & Commentary by Chris McLaughlin August 18, 2010

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22 cities in danger of double dip

A new report from Moody’s Economy.com singled out 22 cities that are at risk of slipping back into a recession in as early as three months. To come to this conclusion, the economists considered dwindling progress in employment, housing starts, home prices and industrial production. The at-risk cities are spread across the country, ranging from Missoula Montana to Mobile Alabama, though more than half of the cities are in the South, and five are concentrated in the Midwest. “With chances of a national double-dip recession now estimated at about one in four, several metro areas will probably experience their own downturns in the first half of 2011,” said economist Andrew Gledhill, author of the report. Private sector hiring has been tapering off in recent months compared to the start of the year, triggering Moody’s to boost its forecast for a national double-dip from a 20% chance to 25% chance. In the 22 identified metro areas, Gledhill said private sector hiring is particularly sluggish, increasing the chances of a slowdown. Without a substantial pick-up in hiring, Gledhill said the number of cities in danger of a double-dip recession could grow, possibly reaching the triple-digits. “There was a time when all 384 metro areas were in a recession. We probably won’t get to that point again, but given the growing risk of another national recession, we’re on the lookout for more metro areas that will be weakening substantially on several levels over the next six months to a year,” Gledhill said. He added that a handful of metro areas, particularly those that are industrial economies, are also suffering from a recent falloff in manufacturing.

MBA – Refinance Activity Increases

The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of mortgage loan application volume, increased 13.0% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 12.4% compared with the previous week. The Refinance Index increased 17.1% from the previous week and was the highest Refinance Index observed in the survey since the week ending May 15, 2009. The seasonally adjusted Purchase Index decreased 3.4% from one week earlier. The unadjusted Purchase Index decreased 4.6% compared with the previous week and was 38.6% lower than the same week one year ago. The four week moving average for the seasonally adjusted Market Index is up 2.6%. The four week moving average is up 0.1% for the seasonally adjusted Purchase Index, while this average is up 3.2% for the Refinance Index. The refinance share of mortgage activity increased to 81.4% of total applications from 78.1% the previous week, which is the highest refinance share observed since January 2009. The adjustable-rate mortgage (ARM) share of activity decreased to 5.7% from 5.9% of total applications from the previous week.

Obama’s tax hike

With Obama’s tax plan in place, people making more than $195,550 in taxable income ($200,000 in adjusted gross income) and joint filers with taxable income over $237,300 ($250,000 in adjusted gross income) would be pushed up from the current 33% and 35% tax brackets into 36% and 39.6% brackets next year. “It comes down to the greater your earnings, the greater the tax hit,” said Robert Kerr, senior director of government relations at the National Association of Enrolled Agents. “But it’s all relative. For someone used to spending that money — whether on a big family or expensive habits — it’s impossible to say how much they would be impacted.” Say you’re a single filer with a taxable income of $250,000. This year, you owed $67,617 in income tax under the 33% bracket. Under the new system, you would pay $67,912 in taxes next year, a slight increase of $295. But those people making more than $300,000 are going to owe additional amounts in the thousands. For instance, if you make $382,650 you’ll owe an extra $4,095 in income tax. Single filers with $500,000 in taxable income would owe Uncle Sam an additional $9,492 from this year’s tax bill. Meanwhile, joint filers with taxable income of $700,000 would owe $232,396 in 2011, an extra $17,088 from $215,308 in 2010. Those Americans lucky enough to be earning millions each year, whether filing as individuals or jointly, could end up seeing increases in the six-figures. A single filer with a million dollars in taxable income would owe $32,493 more than in 2010, While joint filers with the same income would owe $30,888 more than they paid in 2010. For single filers making $5 million in taxable income, get ready to hand over $1,944,137 for the 2011 tax year, an increase of $216,493 from $1,727,644 in 2010. And a joint filer with an income of $5 million is likely to see his tax bill go up more than $200,000 next year.

HSBC to sell mortgage unit?

HSBC Bank USA is considering the possible sale of its US-based mortgage unit, HSBC Mortgage Corp., and notified employees Monday of the possible options being considered although no firm timetable for a potential decision was provided. The bank, the U.S. subsidiary of London-based HSBC Holdings Plc, bases much of its US operations in New York state. Options for the mortgage subsidiary include “a sale, merger or other business combination,” according to a statement from the bank, which also said the mortgage company may look to sell substantially all of its assets. It’s also possible that no changes at all will be made, the bank said. Bank spokesperson Neil Brazil stressed to the press that HSBC is not looking to exit US mortgage originations, but is instead assessing how it conducts its mortgage business in the United States. HSBC’s mortgage operations currently employ roughly 1,500 in the US, according to the company, and the company was the 21st largest mortgage originator in the US during 2009. But Europe’s largest bank has been moving to reduce its exposure to unsecured lending and exiting unprofitable businesses for the past two years, transferring its North American consumer finance operations into a run-off portfolio following heavy losses from subprime lending. Beyond considering options for its US-based mortgage business, the bank is in the process of divesting from other assets and recently announced that a deal to sell the remainder of its vehicle finance loan portfolio, which totaled $4.3 billion at the end of June, would close in Q310.

Record low rates again

According to the Zillow Mortgage Marketplace weekly update, The national, 30-year fixed-mortgage rate (FRM) slightly decreased from a week earlier, reverting back to the record low average of 4.28% set two weeks ago. , 30-year rates vary regionally, of course, but the majority of states witnessed a deflation. Most large states saw a decline in rates: California’s current rate of 4.33% is down from 4.34% last week; New Jersey’s at 4.26% is down from 4.28%; Pennsylvania’s at 4.32% is down from 4.33%; Illinois’ at 4.3% is down from 4.34%, and Florida’s at 4.21% is down from 4.24%. Rates substantially decreased in New York to 4.25% from 4.41% and Texas to 4.19% from 4.29%. Rates increased in Massachusetts to 4.22% from 4.28%. Zillow reported the national average rate for 15-year fixed home loans remained flat at 3.86%, while the rate for a 5-1 adjustable-rate mortgage (ARM) is 3.23%. Zillow’s rates are based on real-time mortgage quotes from lenders registered with, but not exclusively bound to the company. The national average comes from thousands of daily quotes given to anonymous borrowers through their website. State averages are also available.

Now for our real estate education section…

Low-Down on Government Loans

Sometimes it seems the more things change the more they stay the same especially when it comes to the mortgage industry. However, this time it really is a bit different especially given the major upheaval in the mortgage market. With the majority of mortgage loans now guaranteed by the U.S. government, it is a good idea to review what is available and to whom. Here is the low down on government loans as of August of 2010.

Basic FHA Loan (Home Mortgage Insurance – HUD/FHA) – This program has grown into a heavy hitter within the industry despite the fact that it doesn’t lend money directly to buyers (in most cases) but rather insures or underwrites the loans.

Condominium Unit Purchase (Mortgage Insurance – HUD/FHA) – Similar to the Basic FHA loan above, this is designed with condo owners in mind.

Manufactured Home Loan Insurance (HUD/FHA) – Like the basic FHA and condo loans above, this program is designed for borrowers interested in the purchase of a mobile or manufactured home.

Hope for Homeowners – The media made a lot out of this little program which turned out to be a much smaller than originally anticipated. Designed to help people avoid foreclosure, the program provides new, 30 year fixed interest rate mortgages for those that cannot afford their current payments. Stringent requirements have limited the number of eligible participants.

Rural Housing: Farm Labor Housing Loans and Grants – Once a major program within the federal government, the reduction in family farms has made this an all but forgotten program but one worth looking into for anyone interested in purchasing a family farm. Loans (and a limited number of grants) are available for land, housing, machinery and other assets required to buy, build and operate a farm.

VA – Home Loans – Interest Rate Reduction Refinancing Loan – Once considered the domain of veterans, this guarantee service also provides funding for the family of service members as well as veterans and others. Additionally the VA provides vendee loans for anyone interested in purchasing a VA foreclosure.

Section 203k Rehabilitation Mortgage Insurance – Interested in a major fixer-upper? Section 203k may be the right mortgage for you; once the main mortgage is obtained, this program provides the funding needed to make necessary repairs and upgrades to the property. Section 203h is a closely related program that provides funding for repairs and rebuilding due to natural disasters or other emergencies.

Home and Property Disaster Loans – The Small Business Administration may not be the first agency that comes to mind when you need a mortgage after a disaster but don’t be so quick to mark this one off the list; the SBA is able to assist small business owners, homeowners and even some renters after an area has been declared a disaster.

See you at the top!

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

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)

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About the author:

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

Existing homes sales fall

admin — Fri, 23 Jul 2010 20:08:49 +0000

Smart Real Estate News & Commentary by Chris McLaughlin July 23, 2010

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Existing homes sales fall

According to the National Association of Realtors (NAR), existing homes sales fell 5.1% to a seasonally adjusted annual rate of 5.37 million units in June from 5.66 million in May, but are 9.8% higher than the 4.89 million-unit pace in June 2009. Lawrence Yun, NAR chief economist, said the market shows uncharacteristic yet understandable swings as buyers responded to the tax credits. “June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months,” he said. “Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.” AR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz., said softer home sales expected this summer don’t tell the whole story. “Despite these market swings, total annual home sales are rising above 2009 and we’re looking for overall gains again this year as well as in 2011,” she said. “Conditions have become more balanced in much of the country, which is good for both buyers and sellers. However, consumers find it even more challenging to navigate the transaction process, especially for distressed properties, which only underscores the value Realtors® bring to buyers and sellers in this market.”

Most Americans think things will get worse

A nationwide survey from Citigroup shows that nearly two-thirds of Americans believe that the economy has yet to hit bottom, meaning a double-dip recession is expected. The quarterly report, conducted by Hart Research Associates, revealed that 62 percent of people asked were still not counting on a rebound, which is 3-point decline from the March reading and almost as bad as last September’s result of 63 percent. The survey also showed that Americans’ expectations for when the economy will stabilize for their households have been pushed further into the future. Nearly two thirds think that their households will not see a stable financial situation for at least two or three years, it said. On the positive side, Americans’ views on current economic conditions and the outlook for their own personal financial situations are improving or holding steady, the survey said. Twenty-four percent said that the local economy where they live is good or excellent, which is up from 19 percent in March, the report said. “The big question is, could the gloomy news become a self-fulfilling prophesy, prompting consumers to restrain their spending, thus hurting the economic recovery?” he added.

Inventories up, sales down

A NAR practitioner survey shows that first-time buyers purchased 43% of homes in June, down from 46% in May. Investors accounted for 13% of sales in June, little changed from 14% in May; the remaining purchases were by repeat buyers. All-cash sales were at 24% in June compared with 25% in May. Total housing inventory at the end of June rose 2.5% to 3.99 million existing homes available for sale, which represents an 8.9-month supplyat the current sales pace, up from an 8.3-month supply in May. Single-family home sales fell 5.6% to a seasonally adjusted annual rate of 4.70 million in June from a level of 4.98 million in May, but are 8.5% above the 4.33 million pace in June 2009. The median existing single-family home price was $184,200 in June, up 1.3% from a year ago. Single-family median existing-home prices were higher in 10 out of 19 metropolitan statistical areas reported in June in comparison with June 2009. In addition, existing single-family home sales rose in 12 of the 19 areas from a year ago while two were unchanged. Existing condominium and co-op sales slipped 1.5% to a seasonally adjusted annual rate of 670,000 in June from 680,000 in May, but are 20.5% higher than the 556,000-unit pace in June 2009. The median existing condo price was $180,100 in June.

Bush did it … another perspective

In office 18 months, Obama is still running against the policies of George W. Bush and cites “nearly a decade of not paying for key policies and programs” such as the wars in Iraq and Afghanistan, big tax cuts and a costly Medicare prescription drug program. Bush came to office with a $236 billion budget surplus in 2001, says Obama. “The day I took office, eight years later, America faced a record $1.3 trillion deficit.” But blaming the country’s economic woes on Bush tax cuts and spending is a stretch. It ignores the fact that as recently as 2007, the budget deficit was just $162 billion — long after Bush’s tax cuts of 2001 and 2003 kicked in and spending on the two wars and on the Medicare program was in place. Furthermore, the projected surplus reflected a continuation of the bubble economy of the late 1990s, when the stock market was soaring, high-tech businesses were on a roll and corporate profits were surging. Those surpluses would have evaporated no matter who became president in 2001. The rise in the annual deficit from $162 billion in 2007 to over $1 trillion now is largely due to collapsing tax revenues from the recession that began in December 2007, and stimulus and bailout spending by both Bush and Obama, said Brian Riedl, a budget analyst at the Heritage Foundation. The Bush tax cuts and other policies are “a convenient scapegoat for past and future budget woes,” he said, but can’t be blamed for today’s trillion-dollar deficits — or future ones. “Over the next 10 years, virtually 100 percent of the rising deficits” will be driven by “entitlement” programs such as Social Security, Medicare and Medicaid and interest payments on the $13.2 trillion national debt, Riedl said.

Olick – don’t be fooled

“Don’t be fooled by the little uptick in home prices in today’s Existing Home Sales report from the National Association of Realtors. Even the always glass-is-half-full chief economist Lawrence Yun made clear several times in the briefing before the report’s release, that he expects home prices to come under significant pressure over the coming months, as inventories rise. The report today showed inventories up 2.5 percent to 3.99 million units. At the current sales pace, that represents an 8.9 month supply. The current sales pace ticked down 5 percent in June, even though those numbers are still under the sway of the home buyer tax credit (remember, EHS represent closings in June, so contracts likely signed in April before the credit expired). But more importantly, the Pending Home Sales Index, which represents contracts signed, fell off a cliff in May, down 30 percent, indicating that closings will be way off as well. Bottom line, experts who follow housing are having a hell of a time predicting just where home prices are headed nationally.”

“A new monthly report, Macro Markets Home Price Expectations, a venture by price guru Robert Shiller, found that the results for 2010 vary widely, anywhere from plus 4.9 percent to minus 12 percent. “In July 60 percent of the panelists projected negative home price growth for 2010,” writes Shiller in the report. The longer-term results, however, were less optimistic. “Although still positive, the average outlook for five-year cumulative home price appreciation fell in July for the second consecutive month, and is now in single-digit territory,” writes Terry Loebs, MacroMarkets Managing Director. “This new consensus suggests a less robust housing recovery scenario – one that, all other things equal, would result in U.S. household wealth by year-end 2014 being about $500 billion less than the level implied by the average of panelist responses just two months ago.”

Now for our real estate education section…

Friday File – 15 Minute Short Sales Resolution…is Your LinkedIn Profile a Liability?

For this week’s 15 minute short sale resolution, it’s time to take a critical look at your LinkedIn profile…specifically, your professional headline.

Face it, if you are like most people, yours probably leaves a lot to be desired. In fact, it might just be a liability if you tend to use it like most people. Find out how you measure up and how to transform your LinkedIn profile from a lackluster liability to a lightning fast lead with this quick quiz:

Question: Do you have a professional headline?

Response: If not, it’s time to get one…NOW!

Actionable Item: Assuming you have a LinkedIn professional headline, continue to the following questions…

1. Did you include a title in your professional headline?

and/or

2. Did you include the name of your company?

Response: Your headline probably needs work!

Gotcha right? Yes, traditional wisdom holds that you should include your name or the name of your company in the headline but is this always true? Let’s examine the wisdom of this little gem for someone named “Joe Smith”. Great name, easy to remember…even easier to forget. Oh yeah, and shared by a zillion others of the same name.

Likewise, title is meaningless. Are you a big title in a little company or a little title in a big company. Perhaps you have some really odd title that tells the reader next to nothing. See the point? Plain and simple, titles and names don’t always mean a lot. So, what should you do to make a great professional title?

3. Explain what you do and why the reader will care. Use a bit of flair and keep it short and simple. Use the WIIFM approach to explain “What’s in it for me?” to the reader. Not sure how to write a great professional headline? Check out our free webinar or other social media marketing for real estate and short sales to learn more.

See you at the top!

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

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)

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About the author:

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

HUD wants a FICO of 500

admin — Mon, 19 Jul 2010 20:18:31 +0000

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

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

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.

Diana Olick – Home prices being slashed, more coming?

admin — Fri, 16 Jul 2010 16:48:42 +0000

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

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

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.

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

admin — Fri, 02 Jul 2010 13:59:12 +0000

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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

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

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 1, 2010

admin — Thu, 01 Jul 2010 17:25:37 +0000

Forward this e-mail to your friends!

Then they can subscribe directly at the following link:

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*** 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!

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

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.

Smart Real Estate News & Commentary by Chris McLaughlin June 28, 2010

admin — Mon, 28 Jun 2010 18:21:50 +0000

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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Weekend News From Here, There and Housing Wire

The House Financial Services Committee issued a statement Sunday urging “bold action” on the Dodd-Frank bill, the reconciled financial reform bill agreed to by a Congressional committee last week and named after Sen Christopher Dodd (D-CT) and Rep Barney Frank (D-MA). The final bill now travels to separate House and Senate votes and then, upon passage by Congress, to a Presidential signature into law. Part of financial reform will involve ultimately winding down government support of Freddie Mac and Fannie Mae, which are still in conservatorship. Speculation remains as to how the mortgage finance industry will look post-conservatorship.

The Royal Bank of Scotland, in commentary Friday, noted that conservatorship will likely end as financial reform is extended to government-sponsored entities (GSEs) Fannie and Freddie. Regulators shut down three depository banks – The Peninsula Bank, First National Bank of Savannah, Georgia, The High Desert State Bank – on Friday, bringing the running 2010 total to 86 banks shuttered so far. By the same time last year, 45 banks had failed. Friday’s failures, located in Florida, Georgia and New Mexico, are estimated to cost the Federal Deposit Insurance Corp. (FDIC) a combined $284.6m. Federal disasters were declared on June 24 for some municipalities in Puerto Rico where flooding occurred in late May, and for selected counties in West Virginia where mudslides and landslides began on June 12.

Central banks warn of new crisis

The Bank for International Settlements warned governments that if budget deficit issues are not addressed decisively, the very same measures meant to tackle global recession could end up becoming the next crisis. The BIS, which acts as a bank to central banks and a discussion platform for policymakers, said reforms of the financial system remained key to prevent further crises. In its annual report published today, the BIS said, that the global economy as well as financial markets were on the mend, though the recovery remained fragile in the advanced economies and in the euro zone the debt crisis put the recovery at risk. Global leaders meeting in Toronto agreed to take different paths for shrinking budget deficits and making banking systems safer though Washington has warned against cutting too fast. “We cannot wait for the resumption of strong growth to begin the process of policy correction. Delaying fiscal policy adjustment would only risk renewed financial volatility, market disruptions and funding stress,” BIS general manager Jaime Caruana told the bank’s annual general meeting.

The BIS said if the extraordinary measures were kept in place for too long, policymakers ran the risk of creating “zombie” banks or companies, dependent on direct support. The banking system was still far from sound, as recent profits from fixed income and currency trading and the low interest rate environment were hard to repeat and not all crisis-related losses may have been booked. “But the longer that policy rates in the major advanced economies remain low, the larger will be the distortions they create, both domestically and internationally,” the BIS said. The Greek debt crisis had highlighted that many governments had to consolidate their finances immediately as highly indebted countries would not be able to rescue banks as a buyer of last resort in another crisis.

Diana Olick – Home Tax Credit Closing Extension Dead

“The proposal was simple and necessary: Extend the closing date for the home buyer tax credit from June 30th to September 30th — not the tax credit itself, which required buyers to sign a contract by April 30th, just the closing date. Anybody who has ventured into the real estate market in the past year knows that tighter lending standards, new appraisal rules and general banking backlogs are making a two month contract-to-closing period very difficult. This week the chief economist for the National Association of Realtors said 25 to 30 percent of the buyers who signed in April will not get to closing by June 30th; that translates into roughly 180,000 home purchases. The credit is $8000 for first time buyers and $6500 for repeat buyers.

This is not to say that all those buyers will pull out of the deals, but they will lose the incentive that may have gotten them to the table in the first place. June 30th is still the current deadline, and that means an awful lot of buyers will not get what the government promised, and many will likely pull out of deals. Here you have a federal tax break, designed to stimulate a housing market in total freefall, but it somehow fails to recognize just how bad the current market conditions are. The housing industry spent millions and millions of dollars lobbying Congress for said stimulus and its extension. So how is it that nobody mentioned that in today’s market it can often take longer than 8 weeks to close on a house?”

G-8 Warns Recovery Remains Fragile

The Group of 8 industrialized countries agreed the global recovery remains “fragile” but made few suggestions about how they would strengthen it. The joint communique at the end of a two-day G-8 summit in Huntsville, Ont., said progress is being made to restore the health of the global economy and financial system. But it acknowledged continued strains. “This economic crisis exposed and exacerbated vulnerabilities already embedded in integrated global economies,” the statement said.

The G-8 includes the U.S., Russia, Canada, Britain, Germany, France, Italy and Japan. The G-20 includes all the G-8 plus big developing countries including China, India and Brazil. G-8 leaders used much of their public statements to address what they would try to do in the G-20, where the main drama is the pace at which stimulus spending will be withdrawn. While the other countries talk of reducing debt-to-gross domestic product ratios by 2016, the U.S. talks more vaguely about cutting deficits and debts in the “medium term,” meaning three to five years from now. Over the years, the G-8 has focused increasingly on development issues, partly to damp criticism that industrialized nations were giving short shrift to the rest of the world. G-8 initiatives have given a political boost to debt relief in poor nations and increases in foreign aid, though never enough of a boost to satisfy critics on the left.

Now for our real estate education section…

Freddie and Fannie Delisted! What Does it Mean for Real Estate?

You might have missed this little item in the nightly news report; government home mortgage giants Freddie Mac and Fannie Mae are delisting from the New York Stock Exchange. Despite $145 billion in taxpayer funds spent to shore up the pair, shares have dropped so significantly they no longer qualify for inclusion on the exchange but will continue to be traded via the infamous bulletin board instead. In order to participate in the traditional exchange, shares must trade above $1…Fannie has been below that level for well over a month making delisting a legal necessity. Freddie has continued to struggle at just over the $1 level but will also be delisted given the eventual prospects. Given the difficulty of becoming profitable…much less an actual attempt to repay the government aid, it’s unlikely any serious effort to revive the failing entities will be forthcoming.

Since January of 2010, Freddie and Fannie (with some help from the Veterans Administration) have underwritten nearly all new home mortgages for the year; throw in the assumption of non-performing assets and bail-outs and the combined total for the defunct duo now accounts for nearly half of all the mortgages in the entire nation. With bank lending standards showing little sign of relief, experts are wondering what the delisting of Fannie and Freddie may mean for the future of a struggling real estate industry.

Aside from the loss of shareholder value…which is expected to be significant as neither entity has retained any level of significant value…the immediate impact is expected to be minimal. “Business as usual” is the anticipated motto for the time being. However, experts predict the long term consequences could dramatically alter the landscape of mortgage lending for years to come. There is significant support for privatizing the role of Freddie and Fannie while liquidating assets to recoup some of the anticipated $1 Trillion in losses currently shouldered by the tax payers.

But what would that really entail? According to AEI think tank guru Peter Wallison, a combination of liquidation followed by privatization is the preferred method of reform and would allow both to compete in the marketplace for securitization and the goal of providing affordable housing. Bernake is also an advocate of the privatization plan but suggests the prior operational model was unsustainable prior to the collapse but suggest the new footing would establish a firm foundation going forward. Critics argue this is a rehashing of the same trends that put us here in the first place and seek nationalization instead. Time will tell but as of this writing, it appears there is strong support for a push toward privatizing. Stay tuned for more information or sign-up for a free newsletter and Twitter updates to stay informed on the latest news you need to know in real estate.

See you at the top!

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

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 June 21, 2010

admin — Mon, 21 Jun 2010 15:37:40 +0000

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New Monthly National Housing Scorecard Announced

The Department of Housing and Urban Development (HUD) and the Treasury Department will announce the creation of a new monthly national housing scorecard. The initiative will combine housing market indicators along with the progress of the administration’s homeowner assistance programs, including efforts by the Federal Housing Administration and the Making Home Affordable programs. Last week, senators passed an amendment to the American Jobs and Closing Tax Loopholes Act of 2010 that would extend the June 30 deadline to close on a house sale to Sept. 30 for first-time and existing homebuyers to be eligible for the homebuyer tax credit. The legislation also includes spending on extended unemployment benefits and spending on educational initiatives. New commercial mortgage-backed security (CMBS) issuance was one of the most popular topics discussed during last week’s Commercial Real Estate (CRE) Finance Council’s June convention, according to analysis published by Barclays Capital (BarCap). A number of speakers agreed that the new origination and securitization volume year-to-date is lighter than what was initially expected, BarCap said, adding on the origination side, loan supply remains low, as borrowers’ demand for conduit-style loans is not as high as initially expected and as the availability of properties not encumbered by debt and suitable for conduit securitization remains somewhat limited.

Another concern at the conference was the future of warehousing, as the accumulation of loans for further securitization is still challenging for the conduit platforms, the report continued. On the residential side of the market, it appears residential rental yields are returning to “normal” levels, according to weekly commentary published by JPMorgan. Rental yields bottomed in 2007, but are now back to pre-housing bubble levels, JP Morgan analysts wrote. The impact of this is that as foreclosures force more homeowners to become renters — JPMorgan puts that number at more than 2m during the next three years — the market needs real estate investors. For the second week in a row, the Federal Deposit Insurance Corp. (FDIC) reported only one bank failure over the weekend. The Nevada Financial Institutions Division closed Reno-based Nevada Security Bank.

Is the recovery stalling out?

Economists are more nervous about the chances of another recession. And the Federal Reserve seems to have, “some ammunition left, but it’s not going to pack a lot of punch,” according to Mark Zandi, chief economist with Moody’s Economy.com. As financial problems in Europe led to a sell-off in U.S. stocks in the past six weeks, weaker-than-expected readings on job growth and retail sales have added to concerns that the recovery is stalling out. “Whenever the next recession comes, it is very important that policymakers have had the opportunity to reload their gun to fight the downturn,” said Lakshman Achuthan, managing director of Economic Cycle Research Institute. “Today it’s not clear that there’s a lot more policymakers can do.”

The typical first step to spur a faltering economy is for the Fed to cut the cost of borrowing money in order to encourage spending. But the federal funds rate, its key interest rate used as a benchmark for a wide range of consumer and business borrowing, is already near 0%. Fed policymakers are widely expected to leave rates near zero at the conclusion of their two-day meeting on Wednesday. Longer-term rates set by the market, such as Treasury yields and mortgage rates, are also nearing historic lows. So the Fed can’t make money much cheaper. Achuthan said he is worried that neither the Fed nor Congress have the resources and political will necessary to stimulate the economy if that’s needed. And despite the growing worries about the economy, Fed officials have to be careful not to raise too many alarms. Too much attention to problems that have arisen since the Fed’s last meeting on May 9 could be more dangerous than ignoring the growing threats, according to experts.

Diana Olick – New Hurdle to Housing: No Flood Insurance

Who knew you needed flood insurance in Bergen County, NJ – located on a 100 year flood plain – to get a mortgage? Andrea Mantia, a producer on CNBC’s Street Signs, called to tell me she is supposed to close on a home, but her lender is denying the mortgage without flood insurance. She can’t get flood insurance, because “apparently, all insurers get flood coverage via the government/FEMA. Now that Congress has let it lapse, NO insurers are offering new policies,” she says. “It’s putting a lot of closings in doubt.” 1400 homes per day in the United States require flood insurance and cannot go to closing without it. That according to the Texas Association of Realtors.

The National Flood Insurance Program hasn’t issued a new policy since May 31st, when the most recent extension ran out. Mantia tells me it gets updated every five years, but since it ran out in 2009, Congress has just been issuing temporary extensions. The latest extension is mired in the jobs bill, which is itself still mired in the Senate. “State Farm has had it with the government,” she says. “They just announced it will not write any new flood policies, even if Congress gets their act together.” I found this part of a post put up yesterday by Relocation.com: It’s unlikely that State Farm would begin to write flood insurance policies again, even if the NFIP were extended for a longer amount of time. Phil Supple, a spokesperson for the insurance company, told Insurance Journal that “the flood program distracts and pull[s] resources away from other needs of the company.” State Farm announced on June 3rd that it would stop administering the government policies entirely this fall, but now it can’t anyway because there’s no money. I wonder about all those folks trying to close on homes that they bought with the home buyer tax credit. They have to close by June 30th. The summer market wasn’t going so well as it is. Just more grief for buyers, sellers, and this very tenuous housing recovery.

Minorities hit hard by foreclosure crisis

About 2.5 million homeowners have lost their homes to foreclosure in the housing crisis so far, and black and Latino borrowers have been disproportionately affected, according to a new report released by a nonprofit research group. The study by the Center for Responsible Lending was based on an analysis of government and industry data on millions of loans issued between 2005 and 2008 – the height of the housing boom. It found that whites made up the majority of foreclosures completed between 2007 and 2009, about 56 percent, but that minority communities were affected more.

The disparity holds even when comparing “high-income” borrowers, the report found. High-income black borrowers were 80 percent more likely to lose their homes to foreclosure than their white counterparts, while high-income Latino borrowers were 90 percent more likely. Traditionally, minority communities have fewer financial resources to fall back on during a crisis, making foreclosure a more likely outcome, housing experts have said. The report comes as government foreclosure prevention efforts falter and banks have begun to make their way through a backlog of seriously delinquent homeowners and repossess homes at a higher rate. Economists expect distressed properties to be a drag on the housing market for years, particularly if high unemployment levels persist.

DSNews.com – Lenders Reclaim $10 Billion of Commercial Property: Report

Distressed commercial real estate is being reclaimed by lenders at a rapid pace, but relatively few assets are being marketed and re-sold. According to the research firm Real Capital Analytics, lenders acquired some $10 billion of commercial property during the first five months of this year – via foreclosure or negotiated settlement. But they disposed of just $2.6 billion of commercial REO during the same period. The company’s analysts estimate that commercial REO inventory resulting from this cycle now exceeds $28 billion. Real Capital said in its report, “There is a large amount of capital that is eager to acquire these assets from the lenders, at appropriately discounted prices, but lenders do not have pressure to sell their REO immediately, and most are content to wait for conditions to improve further before selling.”

While a good number of equity funds are seeing problems with their earlier investments and losing assets to foreclosure, Real Capital says a new vintage of equity funds have raised significant capital for opportunistic acquisitions. But one of the uncertainties in the market is how patient that capital will be if distressed opportunities remain scarce, the company says.

Now on to our real estate education section…

Mortgage Interest Tax Deduction On the Cutting Block…Again

Much to the relief of many homeowners, Congress rejected the White House proposal to reduce the home mortgage deduction when it came up for vote last year. Unfortunately, the need to raise taxes in any way possible has put this popular program on this year’s budget agenda.

With nearly $210 Billion at stake, the rhetoric from Washington has a decidedly negative overtone, recently referring to them as “tax entitlements” in an effort to compare these age old strategies to a form of welfare for the rich. Unfortunately, these are not tax breaks enjoyed merely by the rich but rather long held forms of financial planning often worked into the budgets of average middle class American households.

Democrats on the financial commission are currently reevaluating a plethora of permanent tax breaks including the mortgage deduction and corporate deferral, arguing they should be part of the financial reform package and treated just like other entitlement programs such as Medicare, Social Security, Medicaid and discretionary spending packages.

Current proposals for the tax deduction include a tiered approach which would first reduce deduction rates for itemized expenses on those that earn more than $250,000 annually and eliminate or severely reduce mortgage interest tax deductions in general. Critics of the popular mortgage interest tax deductions claim this will further hurt an already weak real estate market by eliminating one of the remaining incentives for people that wish to own a home rather than rent.

Others go so far as to say this will force borderline homeowners to default on their current mortgages…especially those that are struggling to maintain their homes during the current downturn in the economy. Still others believe it is just “bad form” to change the rules of the game after others have locked in long term expenses…and anticipated tax deductions.

Advocates of the bill claim it favors the wealthy and that low to middle income Americans’ rarely benefit from the tax deduction anyway while still others claim it is a tax on the poor that benefit the rich. One thing is certain; Washington is searching everywhere for much needed ways to raise cash…quickly.

When formerly “untouchable” tax deductions are suddenly on the table for two years in a row, it’s time to sit up and take notice. Not only is the home mortgage deduction up for grabs but according to industry insiders, “everything must be on the table” including Social Security and Medicare. The anticipated outrage from SS and Medicare/Medicaid recipients is likely to create such backlash that the mortgage interest issue is likely to get lost in the shuffle…or worse, used as a bargaining chip for those attempting to calm the clamoring masses. Will any of these measures be enough? According to experts…probably not.

See you at the top!

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

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Finally, a blog for Real Estate professionals
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About the author:

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

Short Sales Riches Blog » housing

HAMP a failure, defaults on the rise

Smart Real Estate News & Commentary by Chris McLaughlin August 23, 2010

Get the capital you need to do more deals than ever before!

HAMP a failure, defaults on the rise

New rules for credit cards

Olick – Government spin

AIG repays $4 billion

41% price drop in commercial real estate

Now for our real estate education section…

What a Difference a Decade Makes: Marketing Today & Yesterday

Smart Real Estate News & Commentary by Chris McLaughlin August 20, 2010

FR*EE Report on Bulk REOs … check it out here:

Standard & Poor’s expects delinquencies to remain high

State taxes

Olick – not just the tax credit

Faith in government low

DSNews.com – Modifications pick up, but not from HAMP

Economy to get worse?

Now for our real estate education section…

Friday File – 15 Minute Resolution

22 cities in danger of double dip

Smart Real Estate News & Commentary by Chris McLaughlin August 18, 2010

22 cities in danger of double dip

MBA – Refinance Activity Increases

Obama’s tax hike

HSBC to sell mortgage unit?

Record low rates again

Now for our real estate education section…

Existing homes sales fall

Smart Real Estate News & Commentary by Chris McLaughlin July 23, 2010

********************************************************** Existing homes sales fall

Most Americans think things will get worse

Inventories up, sales down

Bush did it … another perspective

Olick – don’t be fooled

Now for our real estate education section…

HUD wants a FICO of 500

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

********************************************************** HUD wants a FICO of 500

Hiring up slightly

Asking prices up slightly

Antidote to an anti-business agenda?

BoA encourages short sales

Now for our real estate education section…

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

Diana Olick – Home prices being slashed, more coming?

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

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

Diana Olick – Home prices being slashed, more coming?

Foreclosures fall as bank repossessions quicken

Business vs Obama

Lost decade coming?

1 in 200 mortgages may be fraudulent?

Jobless claims and wholesale prices drop

Now for our real estate education section…

Becoming an Angel Investor

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

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

********************************************************** Pending home sales ‘fell off a cliff’

US employment figures continue to threaten

Home Buyers Get Tax Credit Closing and Flood Insurance Extensions

Diana Olick – Housing’s Powerful Lobby Surges Ahead

Swinging Short Sale Discounts

Fannie’s Appraisal Policies Updated

Now for our real estate education section…

Friday File – 15 Minute Resolution

www.costar.com

www.loopnet.com

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

Smart Real Estate News & Commentary by Chris McLaughlin July 1, 2010

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

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

Wall Street reform Bill Approved – Pitfalls galore

Fannie Mae Mortgage Portfolio to Fund More ‘Dead Assets’

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

The Housing Market, still lost in the Woods

Now for our real estate education section…

Facts, Figures & Other Tidbits That Make a Real Difference

Smart Real Estate News & Commentary by Chris McLaughlin June 28, 2010

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Existing homes sales fall

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HUD wants a FICO of 500

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Pending home sales ‘fell off a cliff’

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US Congress Backs Home Tax Credit Extension

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New Monthly National Housing Scorecard Announced