Short Sales Riches Blog » mortgage fraud

Caution is the watchword for potential home buyers

Chris McLaughlin — Thu, 09 Jul 2009 14:36:06 +0000

Caution is the watchword for potential home buyers

Real Estate News & Commentary by Chris McLaughlin, July 9, 2009

http://www.shortsalesriches.com

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

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Caution is the watchword for potential home buyers

According to a survey conducted by Realtor.com, home buyers in the U.S. are hesitant to jump into the housing market, given the current economic downturn. Nearly 53% of the survey participants said they have postponed their home plan on account of their negative outlook. Uncertainty on the job front was the main factor for not buying a house for nearly a third of the survey participants. Nearly 16% said they worry about selling their current home, while 8% said they fear home prices will keep falling. Home buyers recognize that the housing market currently offers great deals; however, financial worries far outweigh attractiveness of the deals available. Nearly 20% said they were interested in foreclosed homes with an attractive price, while nearly 15% said they want to receive incentives such as the $8,000 tax credit for first-time buyers. Errol Samuelson, president of Realtor.com, said buyers feel that purchasing a foreclosed home is more “complex” than other transactions. Among the survey participants, only 28% said President Barack Obama’s plan to tackle the foreclosure crisis is working, compared with 41% who said it isn’t and 27% who didn’t know.

12 plead guilty in $100 million mortgage fraud

New York City prosecutors have charged 25 people, including lawyers, bankers, mortgage brokers and appraisers, and a mortgage company, with committing mortgage fraud. Robert Morgenthau, Manhattan District Attorney, said AFG Financial Group Inc. (AFG) and its accomplices inflated property values, created phony loan packages, forged W-2 forms, and bank documents to get loans from banks for unsuspecting buyers. Buyers did not know that the transactions were a sham. AFG, through its attorneys, would ask that the mortgage money be deposited in escrow accounts. Instead of paying the seller, AFG would take the money for itself. “These attorneys often did not meet or communicate with their so-called clients until the day of the closings … and were paid off by AFG for their efforts,” Morgenthau said. Buyers were left with bad credit while the lender foreclosed the seller’s property and took ownership. Banks which were cheated include New Century Mortgage Corp., which lost $32.2 million; Countrywide Home Loans, which lost $7.9 million; and Washington Mutual, which lost $8.6 million. “This is one of the reasons for the mortgage crisis,” said Morgenthau. Among those charged, 12 have pleaded guilty. All those convicted face up to 25 years in prison.

Analyst says AIG’s equity value could be zero

Joshua Shanker, an analyst at Citigroup, says American International Group (AIG) will have no value left after repaying bailout funds. “Our valuation includes a 70% chance that the equity at AIG is zero,” said Shanker. AIG has received over $182 billion as bailout funds from the government so far. Edward Liddy, the outgoing chief executive officer of AIG, said last month at the firm’s annual meeting that the company has an “excellent chance” of repaying the government. Liddy had earlier informed the Congress that the company can pay back bailout funds within 5 years. AIG said last week that its recent losses in derivates could have a “material adverse effect” on its results. “The company has not been forthcoming about the sequence of events that would result in a loss,” Shanker said. “Even a proportionally small loss could be significant.” The outgoing CEO has been under pressure to sell some of AIG’s assets to repay government funds. “The CEO’s motivation and ability to lead may be compromised by his preparations to transition the company’s top seat to another,” Shanker said.

Monthly retail sales data denotes weakness in consumer spending

Retailers, across segments, posted weak monthly sales in June on account of continuing unemployment and rising gasoline prices. Merchants such as Limited Brands Inc., teen merchant Wet Seal Inc. and The Children’s Place Retail Stores Inc. reported poor sales figures. Low-priced retailers too were not spared. Costco reported a sales decline of 6% compared to a year ago. “Consumers are under severe pressure on the job front, so discretionary spending is just not happening, “said Ken Perkins, president of Retail Metrics, a consultancy. “This is not setting up well for the back-to-school season.” Customers continued to trade down to essential goods. Costco said food was among the categories which exhibited strong sales. Recession has taken its toll on consumer spending. “Obviously, the consumer has been under severe pressure here throughout this recession,” said Perkins. “There just were no catalysts for consumers to spend in June.” Weather also played spoilsport. Consumers buy items such as light clothing and beachwear in June which marks the onset of summer weather. However, this year, June had a cool weather with record rainfall in cities like New York, Boston and Chicago. As a consequence, consumer interest for summertime merchandise dropped significantly.

UBS caught in diplomatic row

The U.S. government believes that the Swiss bank UBS has about $15 billion in secret accounts meant to evade taxes in the U.S. UBS says it cannot reveal the identity of its account holders on account of Swiss banking laws. Switzerland has made it clear that it would prevent UBS from revealing the identity of account holders. “Switzerland will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS,” the Swiss government said in a response to U.S. authorities. Analysts believe that this issue souring diplomatic relations between the U.S. and Switzerland. Alan Gold, a district judge in the U.S., has asked the U.S. Justice Department if the government will shut UBS in the United States if the bank does not provide information on its account holders. The Justice Department will have to be careful in answering the judge’s question. “They’re going to have to be very delicate and thoughtful in terms of how they respond to this,” said Peter Hardy, a partner at the Post & Schell, a law firm.

Now on to our real estate investor education section…

Top Reasons Short Sale Investors Get Side-Tracked

Sooner or later you are likely to encounter a potential short sale investor filled with anticipation, eager to get started and checkbook in hand…who dwindles away with little to nothing to show. Find out the top reasons short sale investors get side-tracked and what actions are required to get back into the race.

False Start. The excitement of doing something new overrides their discipline and true desire for success. Plain and simple, they don’t have realistic expectations or the knowledge to get the job done right. Start slow and invest in success by acquiring proper training, surrounding yourself with the right professionals and expect to confront a few bumps now and then.
Justification. These would be investors tend to be cautious and perform well once they convince others it is the right track. Unfortunately, it can be tough to justify your position to everyone around you. If you need to prove your position before moving forward, either take the time to crunch the numbers in more detail or do a reality check on your readiness to invest. Having someone agree with you might feel good but does little for your bank account at the end of the day. Learn how to rely upon yourself rather than the opinions of others.
Guilt. Paying for Past Mistakes can be a long and difficult journey especially if you are involved with someone that simply wants to “punish” you. Recognize that investment involves elements or risk and reward then move forward. Make what amends you can then walk away from the issue once and for all. Remember, investing is about the future –not the past.
Recruiting. Investing isn’t like joining a golf club; there are very real reasons why it can be good to go it alone. This doesn’t mean you can obtain expert advice and surround yourself with professionals – that is always a good idea – but it does mean you are able to move forward without having half your friends and associates involved. Set the pace and believe us, they will show up once the profits begin rolling in!
Going it Alone. Likewise, trying to do everything your self is another major reason many short sale investors get side-tracked. It’s simple too much to handle alone. In fact, even if you are able to do so for a short period of time, it’s not always the best use of time. Establish a process that makes the most of your valuable time with the greatest possible reward then hire out or subcontract the rest.
Avoidance. Those that attempt to avoid all risk will rarely experience anything but the most limited gain – if not actually increase their total risk. It’s one thing to inform, educate and prepare yourself but quite impossible to avoid risk altogether. The reality is this is fear of the unknown which you are weighing more heavily than fear of that which is familiar…sadly, that isn’t always the least risky. Something familiar might initially seem harmless but in reality can be deadly. The same goes for finances – inflation can erode away even the safest investment making it the most risky route by far

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

PS:

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Fast and Easy!”

Think of it! Our new automatic system for finding and

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

About the author:

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

* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes. Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

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

Pending home sales rise for the fourth straight month

Chris McLaughlin — Thu, 02 Jul 2009 20:25:54 +0000

Real Estate News & Commentary by Chris McLaughlin, July 2, 2009

http://www.shortsalesriches.com

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

“You Thought Short Sales Were Hard to Close?

Sorry - You Thought Wrong…”

This automation miracle finds listings, negotiates

low-ball price with the bank, and sells them to investors

without you doing anything more than signing the papers.

You don’t even pay for marketing!

Find out more for fr-ee right here tonight:

https://www2.gotomeeting.com/register/942725962

Pending home sales rise for the fourth straight month

According to the National Association of Realtors, its Pending Home Sales Index, a forward-looking indicator based on contracts signed in May, rose 0.1% to 90.7 from a reading of 90.6 in April, and is 6.7% higher than May 2008 when it was 85.0. This incidentally is the fourth straight monthly gain; the last time there were 4 consecutive monthly gains was in October 2004. Lawrence Yun, NAR chief economist, cautions that there could be delays in closure of home contracts. “Closed existing-home sales have improved but are coming in lower than expected because some contracts are delayed or falling through from the application of new appraisal rules for many transactions,” said Yun. “The pronounced increase in April and the fact that May sustained this rise does indicate that actual existing home sales are poised to rise in the coming month or two,” said Joshua Shapiro, chief U.S. economist for MFR. On a regional basis, the pending home sales index rose 3.1% to 80.9 in the Northeast, increased 2.2% to 96.9 in the West, dropped 1.3% to 89.2 in the Midwest, and dropped 1.7% to 92.6 in the South.

Government widens the scope of mortgage refinancing program

Housing and Urban Development Secretary Shaun Donovan has announced that the scope of the Home Affordable Program will be widened to include refinancing of mortgages with loan-to-value ratio of 125% from the current 105%. As home values keep falling, more homeowners are slipping into delinquency. The government’s move clearly acknowledges the worsening situation in the housing sector. “The president’s Making Home Affordable plan is already helping far more than any previous foreclosure initiative and with today’s announcement we will extend its reach still further,” said Donovan. The program is limited to loans by Fannie Mae and Freddie Mac. Rick Sharga, a senior vice president of RealtyTrac, said: “The bulk of loans that are significantly upside-down probably aren’t the Fannie and Freddie products, they’re probably the other loans.” Analysts believe the impact of the move will be limited. Paul Miller, an analyst with FBR Capital Markets, said: “I don’t think it’s going to have much of an impact because you still don’t have enough qualified borrowers.”

Unemployment rises in June

The jobless rate jumped from 9.4% in May to 9.5% in June; the highest since August 1983. The Labor Department said employers cut 467,000 jobs in June. The total number of jobless people was 14.7 million in June. On a sectoral basis, professional and business services cut 118,000 jobs in June; manufacturers cut 136,000, and construction companies eliminated 79,000 jobs. Retailers eliminated 21,000 jobs, financial sector cut 27,000, and the government cut 52,000 jobs in June. Education and health services were among the few sectors which added jobs. Economists expect the unemployment rate to rise further, particularly in sectors such as automobiles. “Payrolls will be going down the rest of the year and the unemployment rate will be rising,” said John Silvia, chief economist at Wachovia. “The challenge for the Obama administration is that we’ll have positive economic growth but still no job growth. It’s going to be tough on them.”

Beazer Homes admits to mortgage and accounting fraud

According to court documents, Beazer Homes, a homebuilder, has admitted to wrongdoings in its mortgage origination and accounting practices and agreed to a $50 million settlement. The company will pay $10 million immediately to home-buyers who were impacted by the company’s practices. Over a period of time, the company will pay up to $50 million to a national restitution fund. The Securities and Exchange Commission (SEC) has accused Michael Rand, the former chief accounting officer of the company, of recording improper reserves in order to “smooth” the company’s earnings between 2000 and 2005. In 2006, Rand started decreasing the reserves in order to report a better than actual performance. The SEC says that meeting analyst expectations was critical to keeping the stock price high and maximizing the annual bonus of senior company executives. “We deeply regret these matters and have used what we learned to strengthen our control and compliance culture,” said Ian McCarthy, Beazer’s president and chief executive.

GM plans “garage” sale

General Motors (GM) proposes to sell its “worst” assets by way of auction in the bankruptcy court. The assets for sale include polluted factory sites, parking lots in Michigan, and a nine-hole golf course in New Jersey. GM has been criticized for its polluting factories. In a court filing, the state of New York has listed 11 GM sites that are contaminated or have “ongoing environmental compliance obligations.” New York Attorney General Andrew Cuomo has said that the carmaker should meet all its environmental obligations during its asset sale. A golf course is anything but strategic to a carmaker. “The new GM hardly needs to be in the golf course business,” said Tom Wilkinson, GM’s director of news relations. “The old GM will be selling a lot of potentially valuable but peripheral property the company accumulated over 100 years, kind of like a big garage sale. You will see some really good real estate deals come out of this for investors and communities.”

Now on to our real estate investor education section…

Rich or Wealthy – What’s Your Motivation?

“Being rich is having money; being wealthy is having time.”

Margaret Bonnano

There is a lot of hidden insight into the quote above; being rich is about having money whereas true wealth affords the luxury of time. Because time is the only true commodity on earth – it is also the most elusive. It is also one of the reasons short sales will remain one of the most popular ways to build both riches and wealth remaining to the average individual.

While most people think the only thing they really need is a bit more money, research shows few are able to enjoy it or obtain the quality of life anticipated. In most instances the progressive nature of income taxes combined with the heavy time requirement of high income jobs steals the wealth right out from under all your hard work. On the other hand, short sales afford the opportunity to structure your time and taxes into the most favorable – and affordable – methods possible to generate real wealth including the time you desire to actually live your life.

So, are you brave enough to tally up the total riches and wealth generated by your life-energy? After all, you only have one life to live so you should make it count. To date, what has it done for you in terms of money and time? Find out by taking this quick assessment:

Calculate your lifetime income. Create a list estimating how much you have made over your entire work-life to date.
Make a list of all major items you own free and clear. It could be real estate, cars, boats, television or anything you consider valuable.
Make another list of all your most precious moments in life.
Make a final list of all the moments you missed out on in life or all the things you wanted to do, learn or experience but haven’t been able to do so yet.
Be Honest…how much do you have to show for all your years of hard work as of this very day? Many people work 20, 30 or even 50 years and literally have nothing to show for it. No security from having a house paid in full during old age, no car they love to take out for a spin just for the fun of it, no boat or other items to occupy their golden years…nothing.

If you aren’t satisfied with the results of your hard work to date, it’s time to do something new before even more time is stolen away from you. Time is the one thing you can never get back; time to spend with your family and friends, time to enjoy the simple pleasures in life that make living worthwhile. Time to become the person you always wanted to be and learn or experience what life has to offer. At the very least, you should have a decent list of items like homes, cars or fun toys to show for all your years of effort….if not an actual list of memories and experiences that make life complete.

If not – find out how short sale investments are allowing people just like you to obtain both riches and true wealth.

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

PS:

“Strange New Automation Strategy Closes Short Sales

Fast and Easy!”

Think of it! Our new automatic system for finding and

closing short sales is letting people cut their

work-week in half… and triple their income!

If you’re ready to say good-bye to endless hours of

labor, and far too few dollars in return, find out

more for fr-ee – no cost, no obligation. Just click

the link below..

https://www2.gotomeeting.com/register/942725962

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

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

About the author:

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

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the