housing

Forward this e-mail to your friends! 

Then they can subscribe directly at the following link: 

http://www.smartrealestatenews.com/ 

*** Follow Chris on Twitter–> http://www.twitter.com/mclaughlinchris

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

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

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

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

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

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

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

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

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

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

It’s time to get excited…

Make sure you wait for the gotowebinar page to redirect

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

Saturday at 3:00 PM ET, NOON PST: 

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

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

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

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

US employment figures continue to threaten 

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

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

Home Buyers Get Tax Credit Closing and Flood Insurance Extensions

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

Diana Olick – Housing’s Powerful Lobby Surges Ahead

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

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

Swinging Short Sale Discounts

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

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

Fannie’s Appraisal Policies Updated

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

Now for our real estate education section…

Friday File – 15 Minute Resolution

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

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

www.costar.com

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

www.loopnet.com

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

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

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

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

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

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

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

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

Forward this e-mail to your friends! 

 Then they can subscribe directly at the following link: 

http://www.smartrealestatenews.com/

*** Follow Chris on Twitter–> http://www.twitter.com/mclaughlinchris

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

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

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

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

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

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

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

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

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

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

It’s time to get excited…

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

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

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

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

Wall Street reform Bill Approved – Pitfalls galore

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

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

Fannie Mae Mortgage Portfolio to Fund More ‘Dead Assets’

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

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

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

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

The Housing Market, still lost in the Woods

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

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

Now for our real estate education section…

Facts, Figures & Other Tidbits That Make a Real Difference

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

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

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

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

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

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

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

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

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

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

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

X-Bank Foreclosure Attorney And Millionaire Real Estate

Investor “Attorney X”… Who has over 15 years of proven

Success under his belt… Is going to Reveal Insider Investor

Secrets The Banks Don’t Want You To Know…

On this Free Content Packed Webinar You’ll Learn…

- How To Acquire As Many Properties As You Want, Without

Ever Needing To Apply For A Loan Or Use Any Of Your

Own Money… (This is an absolutely REVOLUTIONARY strategy)

- How “Attorney X’s” student “Will”, picked up 71 properties

in less than 6 weeks using this EXACT strategy… (Unbelievable!)

- How another one of “Attorney X’s” students got a 65%

PRINCIPAL REDUCTION on her property… (Amazing!)

…And so much more, simply enter your info below and

reserve your spot now for FREE this Tuesday at 3 PM ET, NOON PST:

https://www2.gotomeeting.com/register/710760107

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

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

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

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

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

Forward this e-mail to your friends! 

Then they can subscribe directly at the following link: 

http://www.smartrealestatenews.com/ 

*** Follow Chris on Twitter–> http://www.twitter.com/mclaughlinchris

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

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

Tax Lien Certificates: The Guaranteed Solution for Financial Freedom

Here’s Just Some of What You’ll Learn:

• How to Safely Earn 18% – 36% Interest per Year Complete Guaranteed by the Government.

• How to Safely Invest in Tax Lien Certificates anywhere in America from the Comfort of Your Own Home.

• How to Secure a Consistently Monthly Cash Flow of an Extra $1,200.00 — $7,800.00 per Month or More!

• How to Get Started with Any Dollar Amount – Highly Profitable Investments for as Little as $20 or as Much as $100,000++.

• How to Get Started Completely in Your Spare Time in as Little as 4 – 10 Hours per Week Even if You’re a Beginner.

Join us TODAY at 3:00 PM ET, NOON PST:

https://www2.gotomeeting.com/register/790330787

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

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

About the author:

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

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