short sale investing

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Integrate the 4 Hour Workweek into Your Real Estate Business:

How to make a 6-figure income working less than 60-minutes a day

How NOT to do the things you don’t like in your business (like making phone calls to sellers, buyers, Realtors, etc.)

How to do ONLY the things you like and are good at so you become more profitable

How to find $2 per hour virtual assistants who do a bang-up job than most $20 per hour “professionals”

Join us tomorrow (Thursday) at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/569093555

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Commercial and multifamily mortgage delinquency among the lowest

According to a survey conducted by the Mortgage Bankers Association’s (MBA), delinquency of commercial and multifamily mortgages, of over 30 days, was lower than the average of all loans held by banks end 2009. Commercial mortgages had a delinquency rate of 5.06% while multifamily mortgage delinquency stood at 5.64%, the overall average delinquent rate was 7.3%. Single-family mortgages had 12.49% delinquency rate. The rate of charge offs – provision made in balance sheets when loans are written off – was 0.8% of the balance of commercial mortgages and 1.1% of multifamily mortgages. These rates compare with 1.7% of residential mortgages, 2.4% of home equity loans, 3% of non-credit-card consumer loans, 5.4% of construction loans and 9.1% of credit card loans. “Commercial and multifamily mortgages provide security to their lenders in that a) even when under stress the commercial property continues to provide some level of income to help pay its debt service, except in the most extreme situations, and b) for every loan there is a real, tangible asset pledged as collateral should the loan become delinquent,” said the MBA. “For these reasons, commercial and multifamily mortgages have historically not experienced the same rate of losses as most other types of loans.”

Apollo to buy Citi’s real estate unit

Citigroup, which has received substantial bailout money from the government, is under pressure to sell its non-core assets to strengthen its balance sheet. As part of asset restructuring, Citi has sold off many proprietary trading businesses, including the Philbro energy trading unit, and plans to focus on trading services for clients. Last week Citigroup Chief Executive Vikram Pandit informed a congressional panel that Citi was focused on “back-to-basics” banking. Citigroup is in talks with Apollo Management to hive off its real estate investment unit. The deal includes 65 investments in 26 countries. “Apollo is getting a lot of good assets with a lot of good sponsors because I think Citi was good at it,” said Gary Mozer, principal at George Smith Partners, a real estate investment banking firm. “They were just a victim of the times.” Citi’s real estate unit has more than 90 professionals and manages about $12.5 billion in gross real estate assets. Apollo’s real estate assets will more than triple once the deal is consummated. Apollo has signed a letter of intent and plans to retain Citi’s staff. The deal is likely to take 3 months to close.

A $6 billion program for energy efficiency in homes

President Obama is hopeful that the so-called Homestar program – which will offer rebates to homeowners of energy efficient homes – will create energy savings for U.S. consumers and offer environmental benefits. Under the program, rebates would be offered on energy efficient home HVAC equipment and water heaters, as well as insulation and windows and doors. “I’m convinced that the country that leads in clean energy is also going to be the country that leads in the global economy,” Obama said recently. The National Association of Home Builders (NAHB) believes that every $1 billion in remodeling and home improvement activity generates 11,000 jobs, $527 million in wages and salaries, and $300 million in business income. “This has the potential to be a real shot in the arm for the home building industry,” said NAHB Chairman Bob Jones. “It will help put America back to work and it will help families save on monthly energy bills.” Homeowners can choose to get the Silver Star rating which will consist of rebates of 50% of the cost for upgrades for a total of up to $1,000 or $1,500 or Gold star rating which will get them a $3,000 rebate plus additional amounts for any energy savings above 20%. “The majority of money is targeted to silver-star rebates,” said Steve Cowell, CEO of Conservation Services Group.

Job openings rise 7.6%

The Labor Department has said the number of job openings in January rose 7.6%, to 2.7 million, compared to December; this is the highest total since February 2009. Analysts say as many as 300,000 jobs may be added in March, a four-year high, giving rise to a hope of sustained employment gains and economic recovery. Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities, says a 450,000 payroll gain in March “can’t be ruled out,” and job gains are “going to convince people of the sustainability and durability of the recovery.” Some economists have cautioned that the job gains may not happen at a rapid pace. “It’s getting better, though not as quickly as you’d like,” said Dan Greenhaus, chief economic strategist at Miller Tabak. Indeed.com, which tracks job openings in 12 industries, said last week that 10 of the 12 industries posted more job openings in February than they did a year ago. “We have seen a sharp turnaround in the job market in the last few months,” said Paul Forster, CEO of Indeed.com. Among the 12 industries, hospitality and retail industries – which are critical to economic recovery – saw the biggest gains in job openings last month. When the recession began 1.7 people were competing for each opening. There are now 5.5 unemployed people, on average, competing for each job opening, against just over 6 people per opening in December 2009.

Investments in “high-yield” municipal bonds rise

According to Standard & Poor, a rating agency, high-yield municipal bonds which are some 10 levels below investment grade debt – those that assure timely interest payment and principal repayment – have yielded 31% in the last 12 months compared to 11% from investment-grade municipal securities. Lured by the high yields, investors poured over $7.8 billion into high-yield municipal bonds in 2009. Analysts say yields are high because of high risk premium (read, high likelihood of default) associated with such securities and investors should be wary of the bubble that is building up. “People are starving for yield because rates are at zero,” said Paul Tramontano, co-chief executive officer of Constellation Wealth Advisors. “They’re taking more risk than they think.” High-yield municipal funds had $49.3 billion in assets as of January, the most since November 2007, according to Morningstar. While states and local governments – borrowers that issue municipal bonds — can raise taxes and cut services to meet interest obligations, investors should do their own research before buying a high-yield bond, said Lynette Hotchkiss of the Municipal Securities Rulemaking Board. “Make sure you understand the credit of the issuer, the source of repayment for the bond and the priority of repayment,” Hotchkiss said. “Where I get worried is when Mom and Pop get interested in chasing yield,” Hotchkiss said. “It’s very intoxicating.”

Now on to our real estate investing educational section…

Who Walks? A Look at Strategic Default by Loan Type

Most people immediately think of sub-prime loans when the issue of strategic default is brought up but as every short sale investor knows, high risk borrowers are not the only people walking away from under-water mortgages. In fact, financial experts are noticing never before seen trends among even the wealthiest borrowers. Find out the facts about who walks by comparing strategic defaults by loan types:

Fixed Rate vs Option ARM’s

According to J.P. Morgan, 27 percent of borrowers owe more on their mortgage than the property is worth but only about 20 percent of them will do so over the next five years if inflation stays at or above 3 percent per year. If inflation is able to hold steady, the number of underwater borrowers will shrink from 27 percent to only 10 percent in that same five year period of time. For those that remain underwater, the difference or “incentive” is roughly $40,500 for fixed interest rate borrowers and $105,500 for Option ARM borrowers.

It will come as no surprise that Option ARM borrowers walk at nearly twice the rate of fixed interest rate borrowers….the banks know this and so should short sale investors. All things equal, a seller with an option ARM is a much higher default risk and typically owes significantly more on the property than a homeowner with a fixed rate mortgage. Which do you think the lender will be more likely to want off their portfolio as soon as possible?

Second LIens & Non Agency Loans

In an unusual turn of events, BofA recently decided to share some telling data on securitized non-agency loan performance including these startling statistics:

• Nearly 60% of prime borrowers have a second lien
• Over 50% of Alt-A borrowers have a second lien
• Over 46% of Option ARM borrowers have a second lien
• Nearly 25% of subprime borrowers have a second lien

When the primary mortgage plus any secondary loans were compared to the current value of the property, it was found that only 45% of prime borrowers retained any equity in their homes, just under 39% of Alt-A borrowers and only 19% of Option ARM borrowers. Surprisingly, almost 42% of subprime borrowers still had equity apparently due to their inability to obtain large amounts of credit to begin with. Savvy short sale investors should recognize the strategic default potential of high income, favorable credit homeowners in addition to the typical high risk or subprime market.

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

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

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

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

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

About the author:

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

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

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

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

“Lazy Person’s Way to Pre-Foreclosure Riches”

Since putting this system to work instead of me, I’m

slaving away at the beach with sun screen on my arms,

and my cell phone at my ear for a full, uh, 20 hours

a week.

Life’s not so tough when others willingly do your work.

And the earnings?  Out of this world!  See how I do it

anywhere I want from my iPhone… and it won’t cost you

a cent Tuesday at 3 PM ET, NOON PST:

https://www2.gotomeeting.com/register/241411282

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

Now on to our real estate investing educational section…

Home supply rises 4.2%

According to data compiled by ZipRealty, inventory of homes — single-family homes, condominiums and town houses listed on local multiple-listing services — in 27 major metropolitan areas rose 4.2% in February from a month earlier. The inventory in February dropped 19% year-over-year. The figures compiled by ZipRealty may not present the exact level of supply since half of foreclosed homes are not included on multiple-listing services at any given time on account of such homes awaiting repairs or being subject to litigation. Ivy Zelman, chief executive of Zelman & Associates, a research firm, says the average increase in home inventory in February has been 3.4%, over the past 27 years. Analysts say the housing inventory could be much higher than what is reported, and a large supply of unsold homes could hit market recovery. David Moon, president of Moon Capital Management, says the housing inventory data does not account for “properties on which the loans are seriously delinquent and those that already are in the foreclosure process but not for sale. Banks often have houses in their real estate owned portfolios that aren’t yet on the market.” 

Will foreign investment help commercial real estate?

“A wave of commercial real estate loan failures could threaten America’s already-weakened financial system … and… trigger economic damage that could touch the lives of nearly every American,” according to a recent Congressional Oversight Panel report. As troubled loans running into billions of dollars come due in the next few years, the industry is facing the prospect of a huge wave of defaults. A recently proposed legislation seeks to attract foreign investment to the commercial real estate sector to provide the much needed liquidity for the sector. In January, Joseph Crowley, a Democratic congressman, introduced the Real Estate Revitalization Act of 2010 which seeks to eliminate certain taxes that were part of the Foreign Investment Real Estate Property Tax of 1980 (FIRPTA). FIRPTA requires foreign investors to pay as high as a 55% tax on capital gains from the sale of U.S. real estate or shares in real estate investment trusts. Supporters of the bill say that by repealing the tax, the country would attract significant foreign investment. “We’re talking about bringing in foreign investment to be on equal footing if they invest in real estate versus non real estate,” says Jeffrey DeBoer, chief executive of the Real Estate Roundtable, a real estate think tank. Many property owners are now facing debt calls on account of property prices having fallen about 40% from their peak, and the commercial mortgage-backed securities market has dried up. Real estate loans to the extent of $1.4 trillion will come due between 2010 and 2014, and about 50% of those loans are currently “underwater.” If the bill is passed, Real Estate Investment Trusts could benefit significantly.

Bair says consumers did not understand subprime mortgages

Sheila Bair, the chairman of the Federal Deposit Insurance Corp. (FDIC) has said there is “ample evidence that consumers did not understand the consequences of the subprime and nontraditional mortgages that were sold to them.” In a speech to the National Association of Business Economics, Bair has called for greater consumer protection in financial services and said the information flow among the different market participants should significantly improve. “Economists understand a great deal about the effects of asymmetric information, and how it can prevent markets from existing in the first place or from operating efficiently,” Bair said. “In this light, I think there is a strong case to be made that basic consumer protections help markets function better by reducing information gaps between lenders and borrowers.” Commenting on failures of large financial firms, Bair said the typical resolution should not be a bailout using public money, but should be a mechanism which would ensure that shareholders and creditors take the losses.

 Small business optimism slips

According to a survey conducted by the National Federation of Independent Business (NFIB), its index measuring sentiment among small business owners dropped 1.3 points to a reading of 88.0 in February, from January. Incidentally, a value of 90 in the index indicates an expectation of positive growth. The index has remained at 90 for 17 straight months, and below 90 in all but 4 months since January 2008. The survey said small business owners cited weak sales as their biggest concern. The poor outlook on demand is driving small business owners to liquidate inventories and go slow on ordering new stocks. “Something is preventing owners from ‘pulling the trigger,’ said William Dunkelberg, chief economist for NFIB.”Very few owners felt that growth opportunities were solid enough to warrant expansion.” Only about 9% of the respondents said they were hampered by lack of credit. “Credit access is not a major factor holding up economic growth, at least the kind of growth we want,” said Dunkelberg.

Hiring outlook worsens

According to a quarterly survey by Manpower, a consultancy, employers in the U.S. are less willing to hire workers in the coming 3 months than they were 3 months ago. Some 17 million Americans are currently unemployed and the survey results do not indicate any optimism on employment. The survey is based on interviews with 18,000 managers responsible for hiring workers and measures the difference between those who say they will add to their workforce and those who plan cuts. About 73% reported no change in their hiring outlook, matching last quarter’s record. “There is some demand, so (employers) won’t let people go, but not enough confidence to do hiring,” Manpower Chief Executive Jeff Joerres said. According to Joerres, the U.S. economy is caught in a vicious cycle – companies will not add capacity and hire workers until demand improves, while consumers will not buy until unemployment falls and incomes improve. Joerres argued for continued government stimulus until the economic situation improves. “A snail’s pace recovery is (equivalent to) falling back,” Joerres said. “A very slow recovery is dangerous.”

 See you at the top!

 Chris McLaughlin
**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

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

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

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

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

About the author:

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

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

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

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

The FINAL Short Sale Sensei webinar:

She was one of them.  She attended their office parties.

She’s sat down to dinner beside them.  Socialized and went

to sporting events with them.

 

If there’s a tactic or strategy the bank’s kept hidden from

investors, she knows it.  She’s the Short Sale Sensei. 

 

And she’s ready to spill the beans in a FINAL ENCORE this coming

Saturday, at 3 PM ET, NOON PST, on a fr-ee webinar, right here:

https://www1.gotomeeting.com/register/261917249

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

Pending home sales drop 7.6%

According to the National Association of Realtors (NAR), its Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, dropped 7.6% to 90.4 from a reading of 97.8 in December, and is 12.3% higher than January 2009 when it was 80.5. NAR said the harsh winter hampered home sales. “January pending sales, though still higher than one year ago, remain much lower than expected given that a large number of potential buyers are eligible for the expanded home buyer tax credit,” said NAR chief economist Lawrence Yun. “Moreover, the abnormally severe and prolonged winter weather, which affected large regions of the US, hampered shopping activity in February.” Analysts say extension of tax credit is doing little to boost pending home sales, and given that the Federal Reserve will end purchase of mortgage backed securities this month, the housing recovery is going to take time. “When you take away all the support from the housing market, the underlying demand for housing is a lot weaker than we thought,” said Mark Vitner, an economist at Wells Fargo Securities. “We clearly pushed some demand forward, and there wasn’t that much demand to pull forward anyway. The housing recovery is going to be very, very slow.” On a regional basis, the pending home sales index dropped 8.7% to 71.3 in the Northeast, dropped 13.2% to 102.9 in the West, dropped 8.9% to 81.2 in the Midwest, and dropped 2.1% to 98.1 in the South.

Construction of multifamily units to rise in 2010

Green Street Advisors, a research firm, says real estate investment trusts are likely to begin construction of multifamily units worth about $1 billion in 2010; this is a significant increase over the $100 million of development starts in 2009. This comes as a bit of surprise since apartment vacancy is at a record high and the unemployment rate is not expected to come down any time soon. Analysts point out that construction cycles of multifamily units run into a few years and companies have to start today and be ready when the market turns around. Companies are betting that limited supply of new units coupled with an improving economy will help the sector in another couple of years. After 2012 until 2015, “apartment REITs may generate the best property net operating income growth that they’ve seen in a very long time, maybe ever,” said Haendel St. Juste, a REIT analyst with Keefe, Bruyette & Woods. While the sector has significant risks, analysts believe things are getting better. “There’s an element of risk,” said Andrew McCulloch, an analyst with Green Street. “But if you were to go back a year, the outlook is much more clear today. Their confidence level in that eventual recovery is much higher.”

Analysts predict better times for commercial mortgage

The commercial mortgage market, which hit the lowest level last year since 2003, is likely to do better in 2010. Analytics firm Trepp, which monitors collateral performance on related commercial mortgage backed securities (CMBS), says the amount of commercial loans at least 30-days delinquent rose to 6.72% in February; this is the smallest increase in six months. In addition, the value of commercial real estate loans that collateralize CMBS increased to 76.7% of the original loan price through January 2010, up from 75.9% in December, according to Debtx, a research firm. Cushman & Wakefield, a commercial real estate (CRE) services provider, has predicted a 30% increase in global CRE investments in 2010. Analysts believe mortgages are the best option now for both high yields and safety, and will attract the attention of investors in 2010. David Hutchings, head of research at Cushman & Wakefield says investors aren’t shying away from the risk in CMBS. “While challenges clearly remain and a double-dip cannot be ruled out, a higher risk appetite among financiers and investors will continue to fire the market,” Hutchings said.

Factory orders rise 1.7%

According to the Commerce Department, new orders for goods manufactured in U.S. factories rose 1.7% in January; this is the ninth rise in the last 10 months. Orders for nondurable goods, including food, paper products, petroleum and coal products, rose by 0.9% in January while orders for durable goods such as computers, cars and machinery, rose by 2.6% in January. Manufacturers have been battered by the financial crisis and the recession hit demand for durable goods in the last couple of years. Orders for heavy machinery fell 9.2% in January after posting a 7.3% increase in December. “The culprit here is turbines,” said Michael Feroli, an economist at JPMorgan Chase. “You smooth it out and things weren’t as robust as they seemed in December, but maybe not as dire as they seemed in January.” The decline in orders for heavy machinery has not dampened economists’ outlook. The declines in orders of heavy equipment “don’t change our opinion that capital spending is recovering,” said Aaron Smith, an economist at Moody’s Economy.com. “There’s always a tendency for the turbines and generator category to be weak in the first month of the quarter and stronger in the last month and that trend is particularly strong for the first part of the year.”

Payrolls fall less than expected in February

The jobless rate remained unchanged at 9.7% in February compared to January. The Labor Department said employers cut 36,000 jobs in February; analysts had expected at least 50,000 jobs to be cut in February. On a sectoral basis, professional and business services added 24,000 jobs in February; manufacturers added 1,000, construction companies eliminated 64,000 jobs, financial sector cut 10,000, and the government cut 18,000 jobs. The Labor Department said it is difficult to measure the impact of winter storms on employment. “Nor do we know how new hiring or separations were affected by the weather. For those reasons, we cannot say how much February’s payroll employment was affected by the severe weather,” said Bureau of Labor Statistics Commissioner Keith Hall. Economists say the less than expected job cuts are an indicator that unemployment is easing. “We are almost there, the point where we are consistently adding jobs,” said Ken Mayland, president of ClearView Economics. “The economy is making incremental but broad-based gains towards improvement.” Since the start of recession, 8.36 million jobs have been lost and unemployment remains the single biggest challenge for President Obama.

Now on to our real estate investing educational section…

Friday File – 15 Minute Resolution

Today’s 15 minute resolution is to learn the basics about using Twitter.  Think you don’t need to set up a Twitter account? Better think again. Despite the somewhat frivolous sounding name, Tweeting is becoming big business as heavy-weight real estate investors like Guy Kawasaki and even the Donald (as in Trump) sign-on.

A few of the most frequently cited reasons for joining Twitter include:

1. Sell products or services…sounds like a good reason for real estate investors to join right there!

2. Stay in immediate contact with a large number of people…ditto!

3. Monitor your reputation in real time. Find out what people are saying and take steps to enhance your professional reputation along the way.

4. SEARCH – Learn to use this powerful tool as soon as possible. Visit http://search.twitter.com/ 

5. ADVANCED TWITTER SEARCH – Serious tools for serious investors. Localize your search by area, specific people, places or other criteria…real time information.

6. Obtain data on your own Tweets with the use of social media analytics like www.objectivemarketer.com.

So, now that you know just a few of the reasons why Twitter is so important, it’s time to put your 15 minute resolution into effect. This week take time to create a Twitter account if you don’t have one (it’s simple…just visit www.twitter.com) or pimp out your Twitter page if you are still making do with a plain vanilla template.

1. Visit www.twitterbackgroundsgallery.com to find an easy to use Twitter template or create your own. Be sure to make your contact information highly visible but keep it simple, clean and concise.

2. Use the url field! Seriously folks, a blue background is bad enough but make the most of all the marketing potential by populating the existing fields.

3. Have it done for you. Not a designer by nature? No need to worry…it’s easy to have a complete Twitter account fully set-up and waiting for you.

See you at the top!

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

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

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

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

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

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

About the author:

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

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

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

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

We’re not allowed to release her name. Because she used to

work for the enemy.  And she knows all their dirty little

tricks.  Just call her the Short Sale Sensei…

 

This gal used to be well respected by banks.  She processed

nearly 10,000 short sales for lenders too big to name here.

 

She was one of them.  She attended their office parties.

She’s sat down to dinner beside them.  Socialized and went

to sporting events with them.

 

If there’s a tactic or strategy the bank’s kept hidden from

investors, she knows it.

 

And she’s ready to spill the beans in an ENCORE TODAY,

Thursday, at 3 PM ET, NOON PST, on a fr-ee webinar, right here:

 

https://www1.gotomeeting.com/register/815788648

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

Mortgage applications rise as interest rates fall

According to the Mortgage Bankers Association (MBA), its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, rose 14.6% for the week ended February 26, from the earlier week. The Refinance Index rose 17.2% from the previous week while the seasonally adjusted Purchase Index increased 9.0% from one week earlier. The increase was due to a drop in loan rates — the rate on 30-year fixed-rate mortgages dropped to 4.95%. “Mortgage applications rebounded last week, particularly refis, as rates dropped back below 5 percent,” said Michael Fratantoni, vice president of research and economics at MBA. “Purchase activity remains subdued, with application volumes remaining within the narrow range seen in the last few months.” Analysts say the surge in mortgage applications is not an indication of long-term recovery, given the current levels of foreclosure and unemployment. “We are seeing positive signs of some form of life, but it is not significant and the recuperation period is going to be significant because these are dramatic declines” in housing, said Vickie Lester, president of mortgage servicing at RoundPoint Financial Group.

Home prices rise 5%

Clear Capital, a provider of real estate data, says home prices climbed 5% nationally in February from a year ago. The prices grew 2.3% in January on an annual basis. Among metropolitan areas, Providence, Rhode Island saw the highest rise of 6.1% from the earlier quarter. California had 5 of the 15 highest performing markets. The rise in prices is likely to be sustained as the tax credit deadline approaches in April. “If the increase in demand that preceded the end of the last tax credit is any indication, home prices may dip only slightly into negative territory before getting an added boost before the April tax credit deadline,” said Alex Villacorta, senior statistician at Clear Capital. The firm has expressed optimism despite the likely impact of REOs – properties that go back to the mortgage company after an unsuccessful foreclosure auction – on home prices in the coming months. “Although many markets have seen a slow down in price gains, I’m encouraged that prices have remained positive through the first two months of the year despite all the negative economic news and threat of more REOs hitting the markets,” Villacorta said.

Hovnanian returns to profitability

Hovnanian Enterprises, a real estate development company, posted a profit of $236.2 million for the quarter ended January 31, compared with a year-earlier loss of $178.4 million. The result includes a $5 million write-down on land and other items, compared with $132 million in write-downs a year earlier. This is the first quarterly profit since 2006. Hovnanian operates in 18 states, including California, Arizona and Florida, the worst-hit states. The company’s net contracts, excluding unconsolidated joint ventures, decreased 5% while the average price grew 14%.

The company’s contract backlog as of January 31 was 1,593 homes, down 4%, with a value of $505.4 million. The cancellation rate dropped to 21% from 31%; this was the company’s lowest cancellation rate since the second quarter of 2005. Ara Hovnanian, Chief Executive of Hovnanian, sounded cautiously optimistic about the company’s prospects for the near-term. “We are pleased to see the market for new land deals begin to thaw out a bit and we continue to diligently pursue new land opportunities where we can make normalized returns based on today’s home prices and sales absorption levels,” said Hovnanian. “I’m not trying to brush off concerns in the marketplace. There are risks, and the risks are real.”

Service sector’s best performance since December 2007

The Institute for Supply Management (ISM) said its index tracking the service sector rose to 53.0 in February from a reading of 50.5 in January. This is above the estimate of 51.0 made by economists. A reading above 50 indicates economic expansion while a reading below 50 denotes contraction. The February reading is the highest since December 2007. The services sector accounts for about 70% of America’s economic activity. “We’re starting to see a broadening of the economic recovery,” said Richard DeKaser, chief economist at Woodley Park Research. The data “are encouraging, to say the least.” Dean Maki, chief U.S. economist at Barclays Capital, said: “Spending by consumers and businesses is growing again, though not at the pace prior to the financial crisis. Generating service-sector employment is quite critical to the broader economy.” Unemployment is the biggest concern. Given the current unemployment level, it may take years and not months for the sector to recover in a sustained manner. “Business feels better, there is no question about it,” said Macy’s Chairman and Chief Executive Officer Terry J. Lundgren. “We still have high unemployment, and I still see tight credit on consumers.” Nine industries, including information technology, arts, transportation and retailing, saw growth in February while 8 industries saw a fall in output.

Planned layoffs drop in February

According to a report released by Challenger, Gray & Christmas, a consultancy, planned job cuts announced by U.S. employers dropped 41% to 42,090 in February, from the 71,482 layoffs recorded in the previous month; this presents a 77% drop from 186,350, a year earlier. The report states that job-cut total in February is the smallest since July 2006. Analysts believe it will take some time before hiring starts to grow. John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said: “Employers have shifted away from downsizing and are poised to start adding workers. It may be a couple of more months before hiring begins to surge.” Pharmaceutical companies, with 17,687 announced cuts, and government and non-profit agencies, with 4,628, led all industries in reductions in February. The economy is limping back from its worst downturn since the 1930s, but economists are concerned about the unemployment rate which is expected to average close to 10% this year.

Now on to our real estate investing educational section…

Whole Life Financing For Dummies

Have you been sitting on the sidelines waiting to accumulate cash to start investing in short sales? There are faster, easier and more efficient ways to raise needed funds but one that is gaining a great deal of support is the use of whole life insurance as a finance vehicle for short sale investing.

Whole life insurance is often considered a “bad buy” among traditional investment guru’s including notables such as Dave Ramsey and Suzy Ormon…indeed, for the average American struggling just to get by, any form of life insurance is often viewed as a luxury rather than necessity. However, those with the foresight plus a little time on their hands to crunch the numbers soon realize a whole life policy isn’t always a bad investment…in fact, held long-term it can be the most economically viable option. Beyond the basic death benefit, there are other very real rewards to be gained from a whole life policy including the use of low-cost financing.

Basically it works like this; once a participating whole life policy is purchased and capitalized or funded, the dividends eventually cover the cost of the policy itself. Additional paid in full riders can greatly increase the initial funding of the account to grow the cash balance to a desirable level. At this point, the policy can be borrowed against for any desired purpose…including the purchase of real estate. A contract is established that delineates the “interest rate” to be charged on the loan and the time period in which it is to be repaid.  Meanwhile, the policy continues to receive dividends based upon the complete cash value of the policy essentially creating an exceptionally low cost source of funds. In fact, the policy owner benefits in several ways since the payments (with interest) are paid directly back into the whole life account. Interest can be used as a write-off for the real estate expenses while simultaneously, excess payment amounts paid back into the whole life policy are used to purchase additional paid-in-full premiums thereby increasing the death benefit and available source of future cash value in the account.

Not only does the account continue to grow, pay dividends and collect the full payments back into the account but insurance is considered a protected asset in many states and taxes are deferred until the withdrawals exceed the amount paid into the policy. Because dividends are considered a ‘return of premium’ rather than distribution of profits, they are not subject to typical taxes.

If you own a whole life insurance policy, take time to carefully consider the feasibility of using a policy or cash value loan to dramatically enhance your individual real estate portfolio. By establishing favorable repayment terms and recapturing the interest rates into your own account, it’s possible to act like your own banker while building a strong real estate investment portfolio.

See you at the top!

Chris McLaughlin
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Copyright Loss Mitigation Institute LLC 2009.

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
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