nathan jurewicz

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

Forward this e-mail to your friends! 

Then they can subscribe directly at the following link: 

http://www.smartrealestatenews.com/

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

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

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

Fix A Flip Re-Opens … all new content, all new case studies.  This is

one webinar that you don’t want to miss!

When: Thursday, August 19th at 8:30 PM ET, 5:30 PM PST

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

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

Homeowners pessimistic

According to the Zillow Second Quarter Homeowner Confidence Survey, U.S. homeowners were less confident about the value of their homes in the second quarter, with one-third believing home prices had not yet reached a bottom.  Homeowners were more pessimistic about the short-term future of home values in their local market than they had been in the previous three quarters, with 33% believing home values in their local housing market had not yet reached a bottom, while 38% believed they had already reached a bottom.  Nationally, 28% of homeowners said home values in their local real estate market would decrease in the next six months, up from 20% in the first quarter.  Additionally, less than one-third, or 30%, believed home values in their local market would increase, down from 42% in the first quarter. 

Zillow said less than a quarter, or 24%, of homeowners said their home had increased in value in the past year, compared with 27% in the first quarter. In reality, 34% of homes increased in value in the second quarter, according to the Zillow Q2 Real Estate Market Reports.  27% of homeowners believed their own homes’ values would increase in the next 12 months, 35% believed they will stay the same, 12% expected a decrease and 26% did not know.  Of those who expected their homes’ values to increase, the median expectation was a rise of 6%, although that varied by geography.   Despite the increasing pessimism, a large number of homeowners were anxiously awaiting the opportunity to sell. Indeed, 5% of U.S. homeowners said they were very likely to put their home on the market in the next six months if they saw signs of a real estate market turnaround.  Zillow said this translated into 3.8 million homes with the potential to come into the market. By comparison, 5.2 million existing homes were sold in all of 2009.  “As these homeowners hear news of stabilization in home values, they put their homes on the market, driving up inventory and keeping a cap on home value appreciation,” Humphries said.

Jobless claims jump

The Labor Department says that initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 500,000 in the week ended Aug. 14, the highest since mid-November.  Analysts polled by Reuters had forecast claims slipping to 476,000 from the previously reported 484,000 the prior week, which was revised up to 488,000 in Thursday’s report.  The four-week average of new jobless claims, considered a better measure of underlying labor market trends as it irons out week-to-week volatility, rose 8,000 to 482,500, the highest since early December.  The number of people still receiving benefits after an initial week of aid fell 13,000 to 4.48 million in the week ended August 7 from an upwardly revised 4.49 million the prior week. Analysts polled by Reuters had forecast so-called continuing claims rising to 4.50 million from a previously reported 4.45 million.  The insured unemployment rate, which measures the%age of the insured labor force that is jobless, was unchanged at 3.5% during that period.  The number of people on emergency benefits increased 260,105 to 4.75 million in the week ended July 31.

Olick – Refi boom could break smaller banks

” To summarize, refinance applications are way up, up 17%, while purchase applications are on life support, down 3.4% from the previous week and down nearly 39% from a year ago. Refis now make up a full 81.4% of all mortgage applications, up from 78.1% the previous week, and at their highest level since January of 2009.  With home prices way down and mortgage interest rates hovering near record lows, you would think more buyers would get off the fence and sign a contract, but continued weak consumer sentiment is hold them back. You would also think that the bright side to all this is that all this refinancing is putting more money in the average, struggling American’s pocket. 

But then I read this note from FBR’s Bob Ramsey, who believes the rate on the 30-year fixed could go as low as 4%, with the following implications:  ‘If rates continue to fall, a refi boom could swamp banks and thrifts with cash flows with no obvious place to invest. With newly issued agency MBS yielding approximately 3.5%, banks and thrifts face considerable reinvestment risk.’  Thrifts, he says, are better positioned to handle the risk than regional banks, because, ‘better efficiency provides a significant buffer to weaker revenues.’  The less efficient regionals, he says, are most at risk and adds:  ‘Further, if rates remain low for an extended period, we would expect an increase in bank M&A activity as challenging prospects convince some to sell, and others choose to consolidate and grow earnings by cutting duplicative costs.’  I had thought that most borrowers who could had already refinanced by now, but he says that, for some unknown reason, is not the case.  “We believe approximately half of conforming borrowers have both the economic incentive and equity to refinance.”  It seems that in today’s housing finance market, for every upside, there is a downside.

GM tries to break away from the government

General Motors Co. filed registration papers Wednesday for an initial public stock offering, laying the groundwork for the car maker to begin cutting its ties to the U.S. government, its majority owner.  GM outlines a business plan that intends to leverage its massive global scale, strength in fast-growing emerging markets such as China and a balance sheet cleaned up by Chapter 11. At the same time, the company warns it faces many risks, such as continuing losses in Europe and a significant underfunding of its pension obligations.  GM’s plan to return to the public markets includes preferred stock, which the company will sell to raise funds, along with common shares, which will be sold exclusively by some of GM’s current shareholders, including the U.S. government. The company said no dividend is currently planned to be paid on the common shares. 

The IPO will allow the U.S. Treasury to begin selling the 61% stake it holds in GM after last year’s $50 billion U.S. government bailout of the company.  Another holder of GM shares, the United Auto Workers, also is expected to sell some of its stock during the IPO, according to people familiar with the situation.  The IPO, expected later this year, is anticipated to raise $10 billion to $15 billion but possibly more. An expected price range for the shares will be determined closer to the sale.  For the government to recoup its full investment GM must achieve a stock-market value of $70 billion—10 times GM’s market capitalization before the company headed into bankruptcy-court protection in June 2009, and at least $30 billion more than the market value of Ford Motor Co.

Now for our real estate education section…

Best Real Estate Resources You Never Knew Existed

By now everyone has heard of Zillow but when it comes to serious real estate related research, here’s how to find the best of  the best…the type of data the experts use to create those ground-breaking reports and hard hitting case studies. Whether you are working on your next commercial enterprise or simply want to stay abreast of the latest and greatest real estate related information, tap into sure-fire resources to access the best data available.

1. Put a Ph.D to work. Search thousands of doctoral dissertations to see who is working on relevant housing and commercial development related projects. Sponsored by the Office  of University Partnership and the US Dept of Housing and Urban Development, this is a goldmine of research:

http://www.oup.org/ddrg/ddrg_profilesearch.asp

2. Free Information resources. Need a few good resources but don’t have the time or money to hire a writer? Use these free foreclosure related resources to educate consumers and help them make informed decisions about the best course of action when it comes to keeping, selling or buying a home. Produced by the Making Home Affordable Program in conjunction with HUD, they are designed for maximum readability in both spanish and english.

http://portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure

3. Social Media & Uncle Sam – Your good old Uncle Sam has finally taken the plunge and is now available via Facebook and Twitter. Find out about the most recent research, grant and tax credit opportunities, new programs and much more with instant updates via your favorite social media site.

http://www.facebook.com/pages/Washington-DC/HUD-USER/183685747712?v=wall

http://twitter.com/HUDUSERNEWS

4. Taxing Tips – It’s a topic we would all rather avoid but make it as painless as possible by tuning in for great tips right from the source. IRS.gov has it’s very own real estate tax center…a topic of profound importance to every real estate investor.

http://www.irs.gov/businesses/small/industries/article/0,,id=185194,00.html

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 August 18, 2010

Forward this e-mail to your friends! 

Then they can subscribe directly at the following link: 

http://www.smartrealestatenews.com/ 

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

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

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

Fix A Flip Re-Opens … all new content, all new case studies.  This is

one webinar that you don’t want to miss!

When: Thursday, August 19th at 8:30 PM ET, 5:30 PM PST

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

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

22 cities in danger of double dip

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

MBA – Refinance Activity Increases

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

Obama’s tax hike

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

HSBC to sell mortgage unit?

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

Record low rates again

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

Now for our real estate education section…

Low-Down on Government Loans

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

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

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

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

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

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

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

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

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

See you at the top!

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

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 August 17, 2010

Forward this e-mail to your friends! 

Then they can subscribe directly at the following link: 

http://www.smartrealestatenews.com/

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

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

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

Fix A Flip Re-Opens … all new content, all new case studies.  This is

one webinar that you don’t want to miss!

When: Thursday, August 19th at 8:30 PM ET, 5:30 PM PST

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

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

More mortgages behind on payments, but increase rate has slowed

Credit reporting agency TransUnion said today that in the three months ended June 30, the number of mortgage holders 60 days or more behind on their payments was 6.67%, Tuesday. That’s a big jump from 5.81% in the second quarter of last year, and well above the historical norm of 1.5% to 2%.  One positive sign is that the statistic reveals a slower rate of increase from the pace seen a year ago.  What’s more, it marks a marginal improvement from the rate of 6.77% recorded during the first three months of the year. It’s also below the 6.89% record reached in the fourth quarter of 2009. “We’re seeing signs of recovering in terms of delinquency,” said FJ Guarrera, vice president in TransUnion’s financial services unit. 

The data comes days after foreclosure listing firm RealtyTrac Inc. said the number of U.S. homes lost to foreclosure in July surged 6% from last year. That jump indicates that more banks stepped up repossessions to clear out their backlog of bad loans.  “A lot of foreclosures continue to work their way through the system,” Guarrera said. Although the delinquency data does look back a few months, it shows a slight improvement that could indicate foreclosures will start to slow, he said.  Witness to that there were 12 states that showed increased delinquency rates in the second quarter, whereas a year ago the figure worsened in nearly every state, Guarrera said.  Driving up the national rate are the four states hardest hit by the foreclosure crisis: Nevada, Florida, Arizona and California. In each of these, the rate is above 10%, with Nevada leading at 15.86%, compared to 13.8% a year ago. In Florida, the delinquency rate rose to 15%, from 12.3% last year.  The rates in Georgia, New Jersey, Maryland and Illinois are also above the national average.  North and South Dakota remain at the low end for the nation, at 1.61% and 2.23%, respectively.  Some states, however, have more trouble ahead, including Arizona, California, Florida, Georgia, and Nevada: The rate is expected to start falling by the end of this year, but remain above 10% through 2012.

New home construction rises as demand weakens

The Commerce Department says housing starts rose 1.7% from June to a seasonally adjusted annual rate of 546,000 last month.  Economists were expecting housing starts to rise to 555,000, according to a consensus estimate from Briefing.com.  On a year-over-year basis, starts fell 7% from July 2009.  Applications for building permits, a gauge of future construction activity, fell over the month. Single-family starts in July fell 4.2 percent in July, the lowest level in more than one year. 

Permits for new construction, a leading indicator of future building activity, fell 3.1% to 565,000 from 583,000 one month earlier — reaching the lowest level since May 2009. Economists had expected permits to post a figure of 580,000 for July.  “Starts are still well below the 630,000 plus level we were seeing right before the homebuyer tax credit expired at the end of April,” said Paul Ashworth, senior economist at Capital Economics.  “The bad news is that activity in the housing market is likely to remain depressed for several years,” he said in an email. “The ‘good’ news, however, is that housing is so depressed it is hard to see activity falling much further from such a severely depressed level.”  Meshing with the new home sales data, the National Association of Home Builders on Monday said that its index of home builder sentiment fell to a 17-month low amid growing concerns about the nation’s economy.

Big banks loaning to small business again

According to the Federal Reserve’s quarterly survey of senior bank loan officers, demand for business and consumer loans was unchanged, but large banks — those with assets greater than $20 billion — are easing their lending conditions.  But the July survey showed the first sign that credit was loosening for small businesses, a sector especially hard-hit during the recession.  Over the last quarter, small companies — those with sales of less than $50 million a year — found loan standards relaxing for the first time since 2006. 

Lending generally eased for consumers, but credit card loans were the exception, the Fed report said.  Changes in standards for credit card loans varied widely. Big banks — and a few other card issuers — generally eased up, while others said they tightened conditions.  In addition, a small fraction of banks said they had reduced the size of credit lines for existing customers. Still, the report said, “that fraction has decreased noticeably over the past few surveys.”

Olick – Reform Fannie and Freddie now?

“Financial industry leaders, academics, economists and dozens of TV cameras will meet in a room at the Treasury Department for the first public forum on reforming the two mortgage giants which have been bleeding cash while still controlling 70 percent of today’s mortgage market.  No question these two entities, Fannie Mae and Freddie Mac, which have cost the taxpayers at the very least $148 billion on paper, not to mention irreparable, continuing and costly damage to consumer confidence in housing, must not exist in their current state for the long term.  I just wonder if now, or even January, 2011, when the Treasury Secretary has promised to deliver a reform proposal to Congress, is the right time to take this on? The housing market is still in deep hangover from the home buyer tax credit, job losses and lack of improvement in the job market are pushing foreclosures back up, and consumer confidence is so low right now that even in economically healthy local markets, potential home buyers are sitting tight on the fence.  Granted, much of Tuesday’s motivation is political.

The administration, heading into the fall elections, has to look like it’s on top of the one big remaining issue in the financial collapse.  But politics have a funny way of wreaking havoc on the markets, and I don’t just mean the stock market, I mean the housing market as well. What we need now, above any more money thrown at housing, is a return of consumer confidence.  Americans need to believe in housing and in the ability of our economy to support housing. Taking down the only secure bastions of liquidity in today’s mortgage market, immensely flawed as they are, or at least having big public forums that generate headlines that make Wall Street traders think these two behemoths are coming down imminently, is, I believe, dangerous. Yes, government needs a plan for Fannie and Freddie, and no they should not exist as they are in the future. But is now really the time?

Producer prices rise

The Labor Department said the seasonally adjusted index for prices paid at the farm and factory gate rose 0.2 percent, in line with Wall Street analyst expectations, after dipping 0.5 percent in June.  In the 12 months to July, producer prices increased 4.2 percent after rising 2.8 percent in May. The year-on-year increase was also in line with forecasts.  Separately, the Federal Reserve reports that output at the nation’s factories, mines and utilities increased 1.0 percent last month.

But it says June’s results were revised to a loss of 0.1 percent, reflecting the economy’s sluggishness.  Factory output grew by a robust 1.1 percent in July, helped by auto plants that kept operating when they normally shutter for summer renovations. Factories are the largest single component of industrial production.  The strong manufacturing growth should ease fears that the economy could begin to shrink again. The nation emerged a year ago from its deepest recession since the Great Depression.

Now for our real estate education section…

How to Access & Use the LIHTC

Never heard of the LITHTC? Don’t worry…even many seasoned real estate professional rank as mere novice users when it comes to the Low Income Housing Tax Credit data. However, not only is this a robust resource but also a potentially valuable one for those investors or professionals interested in applying for low income tax credits.

How to Access the LIHTC Database

To access the Low Income Housing Tax Credit database or learn more about the various programs, visit http://litch.huduser.org

Users can select from a variety of variables including a specific city, range, dates or other pertinent search queries.

Research

The LITHTC database contains over 31,250 different projects with over 1,840,000 units. Available research information includes project location, census tract, longitude/latitude, geo codes, county, state, zip, contact information for each project sponsor, total number of units and form of credit eligibility, unit distribution by rooms, type of construction, for profit or non-profit status, tax exemption plus much more.

Who may be interested in this? Obviously researchers interested in social service needs as well as small business owners, developers and even investors searching for historic norms that compare to their own area.

Other Cool Features

Take a few minutes to look around while on the site because there is a lot of terrific information available. For those interested in building or rehabilitating real estate in accordance to low income tax credits, find out if your building is eligible or to apply visit http://www.hud.gov/offices/cpd/affordablehousing/training/web/lihtc/basics/

To learn more about income and rent limits in your area, visit:

http://www.danter.com/TAXCREDIT/getrents.HTML

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 August 16, 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

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

Grab your spot to hear The Negotiation Nanny solve all the steps for your LOAN MODIFICATIONS, short sales, deed in lieus,

forensic audits, forbearance and Lease Back Programs…

forever.  You never talk to banks again!

https://www2.gotomeeting.com/register/165671459

TODAY at 3 PM ET, NOON PST

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

Lowes shows profit 

Lowe’s, the home improvement retailer, reported a profit of $832 million, or 58 cents per share, for the quarter ended July 30. That was below the 59 cents per share analysts were forecasting, but was up 9.6% from $759 million, or 51 cents a share, a year earlier, thanks to cost-cutting measures.  Sales for the quarter rose 3.7% to $14.4 billion from $13.8 billion a year earlier. Analysts were expecting revenue to jump 5% to $14.5 billion.  Lowe’s also gave a more cautious outlook for the year. 

“Longer term, we believe improvements in labor and housing markets will be necessary to support more consistent improvement in demand for home improvement products,” said Robert A. Niblock, Lowe’s chairman and chief executive.  Lowe’s is anticipating earnings per share of up to $1.45 for the fiscal year ending in January, down from $1.47 it previously projected.  Total sales are expected to increase about 4%, a drop from the 5% to 7% increase the company said it was expecting at the end of the first quarter.  Lowe’s stock was up 48 cents to $20.17 in premarket trading.

10 year yield down

Demand for safe-haven Treasurys dragged the yield on the benchmark 10-year note to 2.68% Friday from 2.75% late Thursday. Bond prices and yields move in opposite directions. “The belief that we’re in this stagnating growth phase, which is based on the idea that higher taxes and more uncertainty are going to limit growth, makes the Treasury market a lot more attractive,” said Larkin.  The fact that the yield on the 10-year note is hovering under 3% is a very bad sign for the economic outlook, and if investors don’t become more confident, the yield could sink even lower, he said.  “When yields get this low, it means trouble, and alarm bells should be going off in investors’ minds,” said Larkin. “A lot of people are betting that the economy’s not going to get enough steam, which is leading to frustration, confusion and impatience.” 

Struggling stocks, lackluster economic data and fears of a slowing economic recovery all boosted the appeal of Treasuries on Friday.  A report from the Commerce Department said July retail sales edged up 0.4%, missing economists’ forecasts of a 0.5% gain.  The University of Michigan Consumer Sentiment Index for early August rose to 69.6 from 67.8 the previous month, also just missing expectations.  The Labor Department said its July Consumer Price Index, a key measure of inflation, edged up 0.3% in July, slightly more than the 0.2% rise economists expected.

No wind down of Fannie and Freddie

It’s probably not a big surprise that this administration isn’t about to abolish an institution that it already has its fingers in.  According to officials, any credible proposal to overhaul the government-sponsored enterprises, as Fannie and Freddie are called, would need to include a “thoughtful approach” to prevent house prices from dipping lower.  In all fairness, without government backing, some large investors have said they would stop buying mortgage bonds, a development that would be catastrophic both for the housing market and the broader economy, but pressure is building on the Obama administration, which has promised to submit a proposal to Congress by January, to find a solution.  Since being taken over by the government in 2008, Fannie and Freddie have absorbed nearly $150 billion in aid, making them by far the costliest part of a bail-out that rescued carmakers and financial institutions.  Conservatives argue that the private markets, not the government, should provide financing for home loans.

But liberals say the government should have some role. They point out that the private markets seized up during the credit crisis.  “It’s clear there is no good short-term solution,” said Rajiv Setia, of Barclays Capital.   Last month Mr Geithner promised that an overhaul of Fannie and Freddie would bring “fundamental change” and that they would not survive “in anything like their current form”.  But he added: “I think there’s going to be a good case for taking a look at preserving or putting in place a carefully designed guarantee so, again, homeowners have the ability to borrow to finance a home, even in a very difficult recession.”  That sounds like nothing much will happen if the administration is left to tackle this alone.

New York Manufacturing grows

The New York Fed’s “Empire State” general business conditions index increased to 7.10 in August from 5.08 in July.  The August reading was below market expectations. Economists polled by Reuters had expected a figure of 8.00 for August.  Employment gauges showed improvement. The index for the number of employees rose to 14.29 in August from 7.94 in July. The average employee workweek index jumped to 7.14 from -9.52.  The new orders index, however, fell below zero for the first time since June 2009. 

The index of business conditions six months ahead fell to 35.71 in August, the lowest since July 2009, from 41.27 in July.  Despite a small rise this month, the index remains well below its recent high near 32 reached in April. It’s consistent with other recent data showing the U.S. economy has slowed considerably in the past few months, though most economists say a double-dip recession remains unlikely.  The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

HAHB index higher?

The National Association of Home Builders’ housing market index for August is expected to tick up to 15, according to the consensus forecast of economists surveyed by Thomson Reuters.  That would be a modest improvement from July, when the monthly reading sank to 14 — the lowest since March 2009. Readings below 50 indicate negative sentiment about the market.  The index is set for release at 10 a.m. EDT on Monday.  The lackluster economy has made potential buyers skittish about shopping for homes. 

Sales of new homes jumped in June, but it was still the second-weakest month on record. May’s sales were the worst on records dating back to 1963.  The industry received a boost in the first half of the year when the government offered tax credits to homebuyers. But since they expired in April, the number of people looking to buy has dropped. That has happened even though buyers are able to take advantage of the lowest mortgage rates in decades.

House prices slow in June

National home prices rose in June from the same time in 2009, marking the fifth consecutive month of year-over-year increases, according to the latest report from real estate services and data provider CoreLogic.  National prices, including distressed sales, rose by 1.4% in June from a year earlier. The yearly appreciation slowed from the 3.7% increase in May from one year earlier. The May increase was revised up from the initial 2.9% estimate. 

“Home price volatility and collateral risk remain very high,” said CoreLogic chief economist Mark Fleming. “The stabilization phase and policy intervention since the spring of 2009 has run its course. Prices are expected to further moderately decline as the economy remains weak through the fall.”  CoreLogic called the 2.3 percentage point deceleration from May “very large by historical standards,” with deceleration most pronounced in more expensive and distressed housing markets.  Excluding distressed sales, prices rose 0.2% in June from one year earlier.

Now for our real estate education section…

What’s Better – ADR’s or Real Estate?

What’s better…American Deposit Receipts (ADR’s for short) or real estate? In recent months there has been a great deal of interest in ADR’s as a convenient way for American investors to own shares of foreign corporations without the risk associated with overseas investing. Add in the prospect of dividend paying ADR’s and you have a recipe for success…or do you? Today we will investigate the pros and cons of investing in ADR’s to determine how it measures up against real estate.

ADR’s Defined

American Deposit Receipts are a special type of stock that allows investors the opportunity to mirror the value of foreign corporation shares while retaining the convenience of purchasing just like stocks while using US dollars and without the need to use a foreign trading desk.

The benefits of an ADR are impressive; the ability to easily purchase a stake in a foreign owned corporation, dividend paying yields and many of the same protections investors have come to rely upon when investing domestically.

ADR’s Profit Potential & Pitfalls

 Not only do ADR’s benefit from the currency exchange, rapidly rising economy in emerging markets and general growth trends but some ADR’s also pay dividends which can create an even more enticing profit potential.

Unfortunately, all that glitters isn’t gold especially when it comes to ADR’s. ADR’s are handled very differently when it comes to the underlying deposits on hand at the bank so it is essential to fully understand who is holding what and the reporting requirements before investing. It’s also important to note that the exchange rate may work in reverse, effectively reducing profits and yield due to exchange imbalance.

Compare & Contrast

By now it should be obvious that ADR’s certainly represent an interesting investment prospect; rising dividends, potential for capital appreciation and exchange rate returns… but how do they compare to real estate? After all, the most important aspect isn’t what the media thinks but how much profit an investment can generate for your personal portfolio.

To find out the facts, we took the time to research some of the most attractive dividend paying ADR’s currently available and found the majority provide dividends of less than 5% (most in the 1% to 3% range) yet trade at premium levels when compared to the cost of purchasing a similar product in the original nation of origin. Use of leverage may be restricted, lack of familiarity with ADR’s often results in a less robust trading floor due to decreased volume and perhaps most important of all…the real rates of returns often fall short of those enjoyed by average real estate investors just like yourself.

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
–