nathan jurewicz

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

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

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

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

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

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

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

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

Smart Real Estate News & Commentary by Chris McLaughlin July 13, 2010

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

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

Going … Going … GONE! 

The LA Investor Summit is SOLD OUT! 

If you would like to put your name on our waiting list please do so ASAP: 

http://www.LAInvestorEvent.com

**********************************************************
Wells Fargo leaves a gap in financing

The closure of much of the Wells Fargo Financial consumer finance operations, which we reported on a few days ago, will result in a gap of funding that may never be fully replaced, according to a weekly credit outlook today by Moody’s Investors Service.  “The contraction of the traditional consumer finance industry leaves a hole that will not be filled by regulated banks with tighter underwriting standards,” said Curt Beaudouin, a senior analyst at the firm in commentary. “A withdrawal of this form consumer lending is credit negative and suggests the prospect of slower economic growth and a stubbornly gradual decline in unemployment.”  The housing and subprime mortgage crises also eliminated residential mortgages — particularly cash-out refinancing — and the ample supply of wholesale funding. Wells’ closure of the Wells Fargo Financial branch network is just the latest move in an industry-wide contraction of consumer finance.

And the gap it leaves, particularly in non-prime mortgage lending, may never be filled.  Beaudouin did, however, note several means of meeting the consumer lending demand left by Wells’ restructuring.  Traditional banking operations — like Wells’ newly expanded community banking network — will likely look to fill the gap.  Retailers will similarly look to fill the gap by offering “creative financing” and other promotions like discounts on retail chain credit cards.  Finally, the void left by the decline of traditional consumer lenders potentially leaves room for new non-bank participants, although Beaudouin noted funding will continue to constrain operations.

Small business loans drying up

According to bank financial reports submitted to the Federal Financial Institutions Examination Council, loans to small businesses dropped from more than $710 billion in the second quarter of 2008 to less than $670 billion in the first quarter of 2010.  Ben Bernanke, chairman of the Federal Reserve, says there are several factors behind the contraction in small businesses lending.  He cited weaker demand from Main Street businesses worried about taking on more debt during tough times, “deterioration in the financial condition of small businesses during the economic downturn,” and a lack of supply of available credit. 

Throughout dozens of similar forums, a couple of issues came up repeatedly. In particular, banks noted they are stuck between a rock and a hard place. On the one hand, banks are being told to increase their small businesses lending, while on the other hand bank regulators are telling banks to tighten lending standards.  For small business owners, the collapse in the real estate market has also created another roadblock to obtaining a loan, since many depend on the value of their real estate as collateral for loans. Additionally, many manufacturers also rely on the value of their equipment as collateral for loans — and those values have fallen off sometimes more than real estate.

More mortgage bureaucracy in LA

The city of Los Angeles passed a city ordinance last week allowing for fines up to $100,000 to lenders and servicers of properties under foreclosure for failing to adequately preserve properties.  RealtyTrac, an online marketplace of foreclosure properties, reports new foreclosure filings in Los Angeles grew by nearly 3,000 properties in May. The state of California is listed as the highest ranked state for foreclosures, on the firm’s website.  However, data compiled by RealtyTrac finds that of the 72,030 properties in default, 15,946 are in real-estate owned status – meaning ownership is now transferred back to the lender. The average sales price for a LA home in foreclosure is $400,000. “The LA ordinance is an example where lenders, servicers now have one more piece of paper to push around in what is becoming a compliance nightmare,” says Dustin Hobbs, spokesman for the California Mortgage Bankers Association.

“The city is essentially asking firms to take responsibly for homes that they technically don’t own yet.”  The passage of a California state law last year, Senate Bill 1137, slows down the foreclosure process by adding an additional 30 day window to satisfy “due diligence requirements” and “in order to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure.”  One servicer said Monday that the additional time means the risk of damage to the property will increase as borrowers grow more disenchanted with the status of the property.

Businesses hire workers because of tax breaks?

According to the Treasury Department, businesses have added 4.5 million workers under a new program that provides tax breaks for hiring unemployed workers.  The bill, which was passed in March, exempts businesses that hire people who have been unemployed for at least 60 days from paying the 6.2% social Security payroll tax through December. Employers get an additional $1,000 credit if new workers stay on the job a full year. 

The administration released the report, which looked at the period from February through mid-May, in hopes, it says, of raising awareness about the credit – and of course not because it sounds good before November’s congressional election.  Unsurprisingly, the report does not estimate how many of those jobs would have been added without the tax break, since businesses run by anyone who has mastered 2nd grade math are not going to hire people just to get a fraction of their wages back through a tax break.  Alan Krueger, the Treasury Department’s chief economist, says, “”I would be cautious about attributing [additional hiring] to the HIRE Act.”  Indeed.

DSNews.com – Mortgage firms close

During the first half of 2010, the number of mortgage-related firms to close or fail jumped by more than a quarter from the same time last year, according to industry data released week. The increase was driven by financial institution failures as the number of non-bank lenders to close has dwindled.  Based on information tracked by the online industry resource Mortgage.com, the period between January 1 and June 30 of this year saw 109 mortgage-related failures and closings. The figure represents a 27% increase from the 86 closings reported during the first half of 2009.  

Bank and credit union failures have both doubled when compared to the first six months of last year, with the number of banks to go under tallying 86 over the last two quarters and credit union collapses at 11. Non-bank closings, on the other hand, fell by more than two-thirds during the same period to 12.  An analysis by MortgageDaily.com of bank failures and regulatory orders suggests this year’s bank failures will end up between 175 and 200. FDIC Chairman Sheila Barr has indicated that bank closings will likely pick up pace and peak during the latter half of this year.

NFIB – Business optimism down

The National Federal of Independent Businesses’ (NFIB) says that the small business optimism index fell by 3.2 points in June, dipping to 89, after posting several months of gains.  The report is based on 805 responses to a random survey of NFIB members.  “70% of the decline this month resulted from a deterioration in the outlook for business conditions and real sales gains,” the NFIB survey concluded.  The survey showed that only 10% of firms plan new hiring, down 4 points from May, and about 8% of firms plan to reduce their workforce, up one point from the previous month. Small businesses account for a major share of jobs in the U.S. economy.  The number of business owners planning to make capital expenditures over the next few months fell a point to 19%, 3 points above the 35-year record low, the NFIB said.  “This indicates that the ‘inventory’ stimulus in this cycle is likely fading,” the report concluded.

Now for our real estate education section… 

When to Seek Outside Investors

Novice short sale investors typically rely upon traditional mortgage products to fund their short sales; combined with personal loans, hard money lending and savings this strategy is more than sufficient to build a strong portfolio. However, there comes a time when outside investors may be the wisest choice. Learn when to seek outside investors and when to go it alone with these quick tips:

1. Seek outside investors when your growth strategy requires capital beyond your ability to self-fund. Sounds simple enough but a surprising number of short sale investors continue to struggle with traditional mortgage loans and slow self-funding mechanisms rather than turn to outside investors. This is primarily due to the following fallacies:

The belief that finding investors is hard work and will take longer than planned.   The reality is a large number of people are searching for ways to obtain better than average returns without the headache and hassle of timing the market or dealing directly with real estate. Show them the money and you will be surprised at the number of investors able and willing to fund your next purchase.

The belief that you will be at the beck and call of the investor. While it’s only natural that an investor take an active interest in how their funds are performing, the reality is they do not want to be bothered with the minutia and mundane tasks involved in the investment. Most investors simply want a return with the least amount of time and effort required. The last thing they want to do is micro-manage every detail of your daily life.

2.  Seek outside investors when the level of input equals or exceeds the anticipated output. What this means is that the deal needs to be big enough to attract the interest of an investor that is seeking higher than average rates of return.

3. Seek outside investors when the investors experience or contacts can accelerate your growth. This is the essence of “smart money” and a critical component to growing from a small-time investor to a major player. In fact, this is such an essential criteria that many novice investors deliberately seek out deals just to attract the interest of highly qualified investors with good contacts or experience. Remember, “dumb money” only brings money to the table whereas “smart money” bring experience, contacts and otherwise fills a much needed void in your long term investment strategy.

Think of short sale investing like any other small business start-up; who you bring to the management team and/or board of directors is just as important (perhaps even more important) than the actual product or service. With the right people, nearly any endeavor can become a raging success. To learn more about finding and working with outside investors as well as other information you can use to grow your real estate portfolio, attend 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
-

Smart Real Estate News & Commentary by Chris McLaughlin July 12, 2010

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

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

Going … Going … GONE!  The LA Investor Summit is SOLD OUT! 

If you would like to put your name on our waiting list please do so ASAP: 

http://www.LAInvestorEvent.com

**********************************************************
Foreclosures to persist

According to authors at the Federal Reserve Bank of Cleveland, the nation’s high foreclosure rate is likely to persist.  The Fed article looks at the changes in foreclosure and unemployment rates across states, noting the differences in the timing of the movements.  The conjecture that the high foreclosure rate will persist is based in part on the observation that states that experienced boom-bust housing cycles in the past (Texas, Oklahoma, Massachusetts and California) had elevated foreclosure starts for years after the peak in foreclosure starts and inventory.  These previous boom-bust cycles “were small in comparison to the current cycle,” the article said.  While the recession has left deep scars in the housing and labor markets — with the unemployment rate doubling and the foreclosure start rate roughly tripling — the timing of the movements differs over the cycle, according to the abstract, written by Timothy Dunne, a vice president at the Federal Reserve Bank of Cleveland, and Kyle Fee, a research assistant.

Credit scores down

According to FICO Inc., 25.5 percent of consumers — nearly 43.4 million people — now have a credit score of 599 or below, marking them as poor risks for lenders. With scores like that it’s unlikely they’ll be able to get credit cards, auto loans or mortgages under the tighter lending standards banks now use.  FICO’s latest analysis is based on consumer credit reports as of April. Its findings represent an increase of about 2.4 million people in the lowest credit score categories in the past two years. Before the Great Recession, scores on FICO’s 300-to-850 scale weren’t as volatile, said Andrew Jennings, chief research officer for FICO in Minneapolis.

Historically, just 15 percent of the 170 million consumers with active credit accounts, or 25.5 million people, fell below 599, according to data posted on Myfico.com.  On the positive side, the number of consumers who have a top score of 800 or above has increased in recent years. At least in part, this reflects that more individuals have cut spending and paid down debt in response to the recession. Their ranks now stand at 17.9 percent, which is notably above the historical average of 13 percent, though down from 18.7 percent in April 2008 before the market meltdown.  There’s also been a notable shift in the important range of people with moderate credit, those with scores between 650 and 699. The new data shows that this group comprised 11.9 percent of scores. This is down only marginally from 12 percent in 2008, but reflects a drop of roughly 5.3 million people from its historical average of 15 percent.

Olick – NYT caught with its pants down

The other way we posted an article claiming the rich were the worst defaulters.  Diana Olick says it ain’t so:  “The data show that while one in 12 mortgages under a million dollars are delinquent, “more than one in seven homeowners with loans in excess of a million dollars are seriously delinquent.”  Shall I wax on about how the rich care less about their credit ratings than the not-so-rich, or how many of these luxury homes are second homes that the owners don’t really need, or how rich folks don’t give a hoot about their communities and see these homes purely for their investment value?  

Nah, I’d rather do a little math. Here’s my problem with the thesis of this article: A little less than 14 percent of the loans outstanding in the U.S. are “jumbo,” meaning over $417,000, according to government statistics (FHFA). The number of loans that are over $1m are even less than that.  So when we’re talking about rates of default, you have to factor in the share of the market that you’re looking at and the bottom line numbers.  Yes, the rate is higher, but it’s a far smaller share of borrowers, and that makes the numbers far more volatile.   Just 1.7 percent of all home sales in May were of homes over one million dollars.  That just gives you an idea of how small that marketplace is.  Yes, we can always find the odd celebrity that squandered away all their millions and defaulted on the loan, but I would take a big step back before I come to the conclusion that the ‘rich: are more likely to default on a loan than the “unrich.’”

CMBS Delinquency Rate Exceeds 8%

The US commercial mortgage-backed security (CMBS) delinquency rate ticked up 17 basis points to 8.14% in June, according to Fitch Ratings.  It marked the smallest increase in 11 months, and the fifth straight month of loan resolutions in excess of $1bn. Fitch noted $1.5bn of loans leaving the index helped to offset the $2bn of new delinquencies, bringing the total net increase in delinquencies to $512m of loans.  Newly delinquent loans in June bore smaller average balances of $10.1m than the index’s overall $13.1m average. No loans with a balance in excess of $100m became newly delinquent in June.  “While delinquencies slowed for the month, this trend is not expected to continue,” said Managing Director Mary MacNeill. “The number of distressed properties continues to grow, and if borrowers are unable to access capital for leasing costs or are unable to restructure their loans to a leverage level commensurate with sustainable property values, they may stop subsidizing debt service payments.”  Loans continue to transfer to special servicing at an elevated rate, with a net increase of $4.2bn in performing specially serviced loans in June. In total, $23bn of loans in special servicing remain less than 60 days delinquent but face an increased risk of default.  The multifamily delinquency rate rose to 13.82%, from 13.65% in May, while the office delinquency rate grew to 4.84% from 4.59%. The retail delinquency rate grew 16 basis points to 6.19% from 6.03% in May, while the industrial delinquency rate grew 41 basis points to 5.48%, from 5.07% in May. The rate of delinquency in hotel loans grew a single basis point to 18.62%.

Now for our real estate education section…

Stats, Facts & Other Social Media Solutions

Are you putting the power of social media marketing to work for your real estate business? If not now-when? If you have been sitting on the sidelines waiting for the perfect time to take the plunge, here are a few stats and facts that should provide all the inspiration required:

Inclusive…

77% of Internet users rely upon blogs for information…roughly 80% of real estate buyers and sellers make first contact with an agent via by reading their blogs first.

The average social media user has 195 friends they routinely communicate with an average of 1 to 2 x per week.

Mobile Facebook users are twice as active as non-mobile users. Only one of every four Twitter users interact via the web interface.

Exclusive…

Over 60% of Twitter users are outside of the USA.

Over half of YouTube users are under 20 years of age.

Take Away’s…

1. Make mobile a priority when using social media websites. Mobile users on both Facebook and Twitter are more active, linked to more people and increasingly interact exclusively via applications outside of the web interface.

2. International real estate sales and market must use Twitter.

3. UTube is especially geared toward a younger audience.

4. Blogs are a ‘must have’ for building relationships.

5. Put an “I” in social media marketing. Effective marketing is an extension of your professional “voice” but that doesn’t meant it must take a lot of time and effort. Learn how to put the power of social media marketing to work for your real estate endeavors by joining one of our webinars or other informational sessions.

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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

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

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

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

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

Smart Real Estate News & Commentary by Chris McLaughlin July 7, 2010

 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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IT’s BACK: NO FLIP RICHES REOPENS TONIGHT!

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 Wednesday at 8:30 PM ET, 5:30 PM PST:

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

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Home delinquency rate increases

According to a report by Lender Processing Services, Inc. (LPS), there’s a 2.3% month-over-month increase in the nation’s home loan delinquency rate to 9.2% in May 2010, and early-stage delinquencies are increasing as normal seasonal improvements taper off. This report includes data as of May 31, 2010.  According to the Mortgage Monitor report, the percentage of mortgage loans in default beyond 90 days increased slightly, while both delinquency and foreclosure rates continue to remain relatively stable at historically high levels. There are currently more than 7.3 million loans currently in some stage of delinquency or REO.  The report also shows that the average number of days for a loan to move from 30-days delinquent to foreclosure sale continues to increase, and is now at an all-time high of 449 days, resulting in an increase in “shadow” foreclosure inventory. 

After a two-month decline, deterioration ratios increased, with 2.5 loans rolling to a “worse” status for every one that has improved. The number of delinquent loans that “cured” to a current status declined for every stage of delinquency, except in the “greater than six months delinquent” category.  This improvement was likely the result of trial modifications made through the Home Affordable Modification Program (HAMP) that transitioned into permanent status.  LPS manages the nation’s leading repository of loan-level residential mortgage data and performance information from nearly 40 million loans across the spectrum of credit products.  Diana Olick says, “Oh good, so the HAMP program is helping “cure” those 6 month+ delinquencies. No, they’re just delaying them yet again, since we know that the re-default rate on HAMP is only rising. Forget cure and think remission.”

MBA – Refinances increase

The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 2, 2010 increased 6.7% on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 6.5% compared with the previous week.  The Refinance Index increased 9.2% from the previous week and is the highest Refinance Index observed in the survey since the week ending May 15, 2009. The seasonally adjusted Purchase Index decreased 2.0% from one week earlier. The Purchase Index has decreased eight of the last nine weeks.  The unadjusted Purchase Index decreased 2.3% compared with the previous week and was 34.7% lower than the same week one year ago.  “Mortgage rates remained near record lows last week, as incoming data on the job and housing markets were weaker than anticipated.  As more homeowners locked in to these low rates, the level of refinance applications increased to a new 13-month high,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. 

“For the month of June, purchase applications declined almost 15% relative to the prior month, and were down more than 30% compared to April, the last month in which buyers were eligible for the tax credit.”  The four week moving average for the seasonally adjusted Market Index is up 6.4%.  The four week moving average is up 0.1% for the seasonally adjusted Purchase Index, while this average is up 8.3% for the Refinance Index.  The refinance share of mortgage activity increased to 78.7% of total applications from 76.8% the previous week, which is the highest refinance share observed in the survey since April 2009. The adjustable-rate mortgage (ARM) share of activity increased to 5.4% from 4.7% of total applications from the previous week.

Credit card delinquencies down

The American Bankers Association (ABA) says the number of consumers behind on their credit card payments fell to an eight-year low in the first quarter of 2010, and delinquencies across a wide-range of consumer debt categories have also fallen.  High unemployment and plummeting home values during the financial meltdown appear to have spurred consumers to shore up their finances and banks to limit their lending, resulting in fewer Americans being late with payments, the industry group said. 

About 3.88% of bank credit card accounts were past due by 30 days or more in the first quarter of the year — the first time since 2002 that the rate has fallen below 4%, the ABA said Wednesday.  And ABA’s composite ratio, which tracks delinquencies across eight key categories, fell to 2.98% from 3.19% the previous quarter — a sign of modest improvement in the U.S. economy, the group said.  “Consumers are doing a much better job managing their finances, building their savings and spending and borrowing less,” ABA Chief Economist James Chessen said.  The Commerce Department’s most recent reports on personal spending and income also showed that consumers stashed a higher portion of their earnings into savings in May than they did a month earlier.

Shopping center vacancies rise

According to research firm Reis Inc, the vacancy rate in U.S. strip centers during the second quarter rose 0.10 percentage point from the first quarter to 10.9%, slightly below the 11% in 1991 during the prior real estate bust, according to the Reis quarterly report, released on Wednesday.  Retailers gave up 1.85 million square feet of occupied space in the second quarter at neighborhood shopping centers, while developers opened less than 400,000 square feet of new strip mall space.  That compares with an average of about 7 million to 8 million square feet of shopping centers built each year from about 2001, according to Reis. 

Asking rents fell 0.3% from the first quarter to $19.07 per square foot, the lowest since the end of 2006.  Factoring in months of free rent and other perks landlords offered to attract and retain tenants, effective rent fell 0.5% to $16.58 per square foot, the lowest in nearly five years.  Reis said that roughly half of its clients plan to take advantage of the cheap rents in their expansion plans.  At large U.S. malls, the vacancy rate rose 0.10 percentage point from the first quarter to 9%, the highest since the first quarter 2000, when Reis began tracking regional malls. Asking rent fell 0.2% to $38.72 per square foot, marking the seventh straight quarter of decline. Asking rent was the lowest in more than four years.

Now for our real estate education section…

Stats, Facts & Other Social Media Solutions

Are you putting the power of social media marketing to work for your real estate business? If not now-when? If you have been sitting on the sidelines waiting for the perfect time to take the plunge, here are a few stats and facts that should provide all the inspiration required:

Inclusive…

• 77% of Internet users rely upon blogs for information…roughly 80% of real estate buyers and sellers make first contact with an agent via by reading their blogs first.
• The average social media user has 195 friends they routinely communicate with an average of 1 to 2 x per week.
• Mobile Facebook users are twice as active as non-mobile users. Only one of every four Twitter users interact via the web interface.

Exclusive…

• Over 60% of Twitter users are outside of the USA.
• Over half of YouTube users are under 20 years of age.

Take Away’s…

1. Make mobile a priority when using social media websites. Mobile users on both Facebook and Twitter are more active, linked to more people and increasingly interact exclusively via applications outside of the web interface.

2. International real estate sales and market must use Twitter.

3. UTube is especially geared toward a younger audience.

4. Blogs are a ‘must have’ for building relationships.

5. Put an “I” in social media marketing. Effective marketing is an extension of your professional “voice” but that doesn’t meant it must take a lot of time and effort. Learn how to put the power of social media marketing to work for your real estate endeavors by joining one of our webinars or other informational sessions.

See you at the top!

Chris McLaughlin
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Copyright Loss Mitigation Institute LLC 2010.

All Rights Reserved.

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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
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