Short Sales Riches Blog » short sale http://shortsalesriches.com/blog Finally you easily generate huge real estate profits without even having to leave your home! Fri, 03 Feb 2012 16:18:33 +0000 en hourly 1 http://wordpress.org/?v=3.0.1 Foreclosures down in Colorado http://shortsalesriches.com/blog/foreclosures-down-in-colorado http://shortsalesriches.com/blog/foreclosures-down-in-colorado#comments Tue, 13 Dec 2011 19:48:18 +0000 admin http://shortsalesriches.com/blog/?p=2287 Smart Real Estate News & Commentary by Chris McLaughlin December 6, 2011

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Foreclosures down in Colorado

According to a report re-leased Tuesday by the Colorado Division of Housing, foreclosure auction sales in Colorado’s metropolitan counties were up 7.9 percent in November compared to November of last year.  Foreclosure sales in Larimer County rose 47 percent in November compared to a year ago but filings dropped 37 percent.  Overall, sales and filings dropped in Larimer County in the first 11 months of the year compared to the same time frame in 2010.  However, comparing the first 11 months of this year to the same period last year, foreclosure filings were down 28.6 percent through November while foreclosure auction sales were down 20.7 percent.  New foreclosure filings fell year over year during November with total filings dropping 21.7 percent from 2,932 filings in November 2010 to 2,296 filings in November of this year. Foreclosure auction sales increased during the same period from 1,195 to 1,290.  From October 2011 to November 2011, foreclosure filings fell 2.3 percent, and foreclosure sales at auction rose 37.5 percent.

Foreclosure auction sales through November fell year over year from 2010’s 11n-month total of 18,728 to 14,854 during the same period this year. Foreclosure filings were also down through November, falling to 23,556 filings year-to-date this year from last year’s 11-month total of 32,982.  Year-to-date through November, the counties with the largest decreases in foreclosure filings, year-over-year, were Mesa County and Denver County, where filings decreased by 35.2 percent and 32.2 percent, respectively. Pueblo County reported the smallest decline in filings with a decrease of 12.5 percent from the first 11 months of 2010 to the same period this year. All counties surveyed reported year-over-year decreases in foreclosure filings.  For the first 11 months of this year, all counties also showed decreases in foreclosure auction sales when compared to the same period last year.

The counties with the largest decreases in foreclosure auction sales, year-over-year, were Broomfield County and Adams County, where auction sales decreased by 40.3 percent and 27.0 percent, respectively. Pueblo County reported the smallest decline in auction sales with a decrease of 9.1 percent from the first eleven months of 2010 to the same period this year.  The county with the highest rate of foreclosure sales during November was Adams County with a rate of 681 households per foreclosure sale. Mesa County came in second with 792 households per foreclosure sale. The lowest rate was found in Boulder County where there were 3,402 households per foreclosure sale.

Mr. Geithner goes to Germany

U.S. Treasury Secretary Timothy Geithner arrived in Germany on Tuesday for a three-day blitz of euro zone officials to urge them to take decisive action to backstop their currency union and resolve a crushing debt crisis.  Geithner will press French President Nicolas Sarkozy, the new leaders of Spain and Italy and Germany’s finance minister to agree at a crucial European Union summit on Friday to take steps that will give markets confidence that no euro zone countries will default, and that the region’s banks will stay solvent.  Geithner has made several trips to Europe in recent months as U.S. concerns over the crisis grow and, judging by comments from both him and President Barack Obama, the Treasury Secretary may add to a growing chorus calling for the European Central Bank to take more decisive action to resolve the crisis.

The need for action was underscored by Standard & Poor’s warning on Monday that 15 of the 17 euro zone countries now face an unprecedented mass downgrade if they fail to reach a satisfactory agreement at the Brussels summit—all the way up to AAA-rated Germany and France.  The Federal Reserve joined with the European Central Bank and others in action to ease dollar funding strains a week ago and Obama and Geithner have both pointed to the option of the ECB backstopping European governments and the banking system. That idea is viewed by many economists as the key to any comprehensive solution to the crisis, but resisted by Germany.

Olick – why are cancellations even higher?

“For the past several months, Realtors across the nation have been reporting an ever-increasing number of cancelled existing home sale contracts. The latest Realtors Confidence Index now puts the cancellation rate at 20 percent, way up from the historical norm of around four to six percent.  ‘On-time settlements were reported as declining from 65 percent to 47 percent,’ according to the Realtors. It’s not why you think, or at least not why I thought. Inability to get a mortgage was reported by just 9 percent of respondents to the Realtor survey. Bigger issues were failed inspections, buyers with cold feet and adverse economic conditions. I’m sure appraisals figured in there as well.  It begs the question then, if these are just delays or true cancellations?

Anecdotally, I was doing a report on a residential street in Northwest DC last week, an area that is still holding its own and didn’t lose much in the housing crash. I was standing in front of a ‘For Sale’ sign, when the Realtor from the sign came out of the house. She wanted to know what we were saying about the neighborhood, concerned of course that there were any signs of cracking. I assured her there were not, but asked about the house she was selling.  The Realtor told me it was actually under contract, after about 35 days on the market. I asked why there was no ‘under contract’ sign, which used to be so commonplace before the ‘sold’ sign goes up. She said they hadn’t had the inspection yet, although the house looked, at least from the outside, to be in very good condition. When I asked if she worried about that, her answer was, ‘You never know these days.’ Apparently the jitters are widespread, even in one of the nation’s most secure housing markets.

With so much of the current housing market comprised of distressed property sales, and with the Realtors unable to capture so much of that share in their data, uncertainty is certainly understandable if not mandated. I read a report today citing Barclay’s analyst Stephen Kim of Barclays Capital, who is upgrading builders and raising price targets on the premise that we will see a housing ‘rebound’ in 2012.  ‘In the absence of a government homebuyer incentive, prices for non-distressed home sales have stabilized for almost a year. In our opinion, this is the most important trend in the housing industry right now,’ notes Kim. ‘We are amazed at how little attention it has been getting from the media and the Street. This stability on the part of non-distressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.’

I’m not sure where he’s getting that stabilization. CoreLogic reported home prices in September, excluding distressed sales, fell 1.1 percent in September. Their chief economist Mark Fleming cites a supply and demand imbalance and adds, ‘Distressed sales remain a significant share of homes that do sell and are driving home prices overall.’  We obviously have to be very careful reading today’s housing market tea leaves. There are so many different indicators and so many different entities reporting these indicators, that it’s often hard to find out what’s really going on. That’s why I always go back to the Realtors on the front lines. They are telling us that this market, distressed or not, is skittish and undependable. A 20 percent cancellation rate for existing sales is shocking and does not suggest a rebound on the horizon. At best, I’m looking for simple stabilization.”

Euro down against dollar

The euro edged lower on Tuesday, as traders reacted to news that Standard & Poor’s (S&P) put 15 euro-zone countries on a negative “credit watch” late in the prior session.  The euro traded at $1.3369 compared with $1.3386 in North American trade late Monday.  The dollar index, which measures the U.S. unit against a basket of major rivals, traded at 78.702 compared with 78.654 late Monday.  The move by S&P killed a risk rally that had been fueled in part by a pledge by German Chancellor Angela Merkel and French President Nicolas Sarkozy to quickly seek a new treaty that would automatically impose sanctions on violators of the euro zone’s fiscal rules.  The warning applied to triple-A Germany and France and all other euro members other than Cyprus, which was already on negative watch, and Greece, whose CC rating already implies a high probability of default.

Toll Brothers Q4 profits down 70%

Luxury homebuilder Toll Brothers said Tuesday its fourth-quarter profit fell about 70% to $15 million, or 9 cents per share, compared to $50.5 million, or 30 cents per share, a year earlier.  The homebuilder said its profit drop is attributed to inventory and joint venture write-downs, as well as debt retirement charges. In addition, the firm enjoyed a significant tax benefit in the fourth-quarter of 2010, which buoyed last year’s 4Q income.  The company said without the charges, fourth-quarter pretax income would have hit $33.9 million, up from $18.1 million last year. On the other hand, the firm’s overall fourth-quarter revenue grew to $427.8 million from $402.6 million last year.  For its entire 2011 fiscal year, which ended Oct. 31, the company earned $39.8 million, or 24 cents per share, compared with a loss of $3.4 million, or 2 cents a share, for fiscal year 2010.  The Horsham, Pa.-based homebuilder experienced another positive in the fourth quarter with home building deliveries hitting $427.8 million and growing to 757 units, compared to $402.6 million and 700 units, a year earlier.  The average fourth-quarter contract price for a Toll Brothers home hit $606,000, up from $565,000 last year, suggesting values are going up in the high-priced home segment.  In the fourth quarter, the firm signed contracts worth $390 million, up 24% from last year.

It’s Obama’s tone, not taxes, says tycoon

Leon Cooperman, a 68-year-old Wall Street veteran, says he is for higher taxes on the wealthy. He would happily give up his Social Security checks. He voted for Al Gore in 2000. He says the special treatment of investment gains, or so-called carried interest, for private equity and hedge fund managers is “ridiculous.” He says he even sympathizes, at least to some extent, with the Occupy Wall Street protesters.  And yet, Mr. Cooperman, a man with a rags-to-riches background who worked at Goldman Sachs for more than 25 years in the 1970s and 1980s before starting his own hedge fund, Omega Advisors, which has minted him an estimated $1.8 billion fortune, is waging a campaign against President Obama.

Last week, in a widely circulated “open letter” to President Obama that whizzed around e-mail inboxes of Wall Street and corporate America, Mr. Cooperman argued that “the divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them.”  He went on to say, “To frame the debate as one of rich-and-entitled versus poor-and-dispossessed is to both miss the point and further inflame an already incendiary environment.”  The letter comes as President Obama is planning to give a speech on Tuesday in Osawatomie, Kan., about the economy and the middle class, following in the path of President Theodore Roosevelt, who campaigned a century ago in that very city against the wealthy and big business.  Mr. Cooperman’s complaint has less to do with the substance of taxing the wealthy than it does the president’s choice of words in promoting it, an emphasis that he says is “villainizing the American Dream.”  While many executives have complained about what they perceive as the president’s antibusiness bent, Mr. Cooperman’s letter has gained credibility and attention in political and business circles because of his own seemingly liberal stances on taxes and the like.  He said, in an interview, that he had been deluged with hundreds of e-mails and phone calls about the letter, “99.9 percent of it positive.”

Mr. Cooperman, who recently signed the Giving Pledge, Bill Gates’s and Warren Buffett’s effort to press the world’s billionaires to give away at least half of their wealth, said he felt he came into his money honestly and said proudly, “I spend more than 25 times on charity what I spend on myself.” Asked whether he had received any response from the president for his letter, he replied with a chuckle, “I’m not optimistic I’ll hear from him.”

New Jersey foreclosures wait for deliberations

Hundreds of New Jersey foreclosure cases are waiting in the wings for the state’s Supreme Court to issue what will be a landmark decision in the Garden State.  Legal scholars suggest lenders are waiting to see what the court will do with the U.S. Bank National Association. Guillaume case before moving forward with thousands of pending foreclosures.  The issue in the case causing lenders to pause is the question of whether a foreclosure notice is made invalid because the lender filed a notice of intent to foreclose with the servicer listed on the notice instead of the lender.  In the original complaint, the Guillaume’s argue the lender, U.S. Bank NA, violated the Fair Foreclosure Act by not including the lender’s information in a spot that ended up containing contact information for the servicer.  Linda Fisher, a professor at Seton Hall Law School who has been following the case, said the foreclosure process is “kicked off by filing the notice of intent to foreclose.” Fisher filed an friend-of-the-court brief with the New Jersey Supreme Court in support of the Gillaumes’ claim.  Fisher says the intent to foreclose form has 24 data points, including the name of the lender and contact information for the lender.

The Guillaumes, who challenged the foreclosure on several fronts, initially claimed the lender “violated the FFA because although the notice of intent to foreclose listed plaintiff as the holder of the note, it did not list plaintiff’s address, but rather, listed the address and telephone number” of the servicer.  An appellate court ruled for the lender and against the plaintiffs saying “directing the Guillaumes to contact ASC (or the servicer) fulfilled the purpose of the notice provision under the FFA — making the debtor aware of the situation, and how and who to contact to either cure the default or raise potential disputes.”  But the case now awaits the New Jersey Supreme Court decision, causing some lenders to pause before launching foreclosures.

Fisher said the initial notice of intent to foreclose claimed the servicer was the lender and the holder of the obligation. Later in the case, the issue became the fact that the lender’s name was listed but with the servicer’s address.  “The banks are contending it is OK to enter only the name of the servicer,” Fisher said. “The Guillaumes are saying the servicer is not a substitute for the lender because the statute is quite clear, and it specifically mentions inclusion of the name of the lender.”  Banks are likely delaying some of their foreclosure actions in the state because they want to know how the Supreme Court will rule on this limited issue, Fisher contends. A rule against the lender’s argument could mean banks will have to review their intent to foreclose notices.  Fisher said if it turns out that Guillaume forces the 24 data points to be filled out perfectly, banks will have to retrace their filing steps to ensure they don’t end up facing sanctions.

LPS – house price declines across the board

Lender Processing Services, Inc. (LPS) today announced that its LPS Applied Analytics division updated its home price index (LPS HPI) with residential sales concluded during September 2011. The LPS HPI summarizes home price trends nationwide by tracking sales each month in more than 13,500 ZIP codes. Within each ZIP code, the LPS HPI tracks five price levels from low to high.  “Home prices in September were consistent with the seasonal pattern that has been occurring since 2009,” explained Kyle Lundstedt, managing director for LPS Applied Analytics. “Each year, prices have risen in the spring, but revert in autumn to a downward trend that has not only erased the gains, but has led to an average 3.7 percent annual drop in prices to date. The partial data available for October suggests a further approximate decline of 1.1 percent. Partial data from last month proved to be a good indicator for September’s performance: it showed a preliminary 1.1 percent estimated decline, compared to the 1.2 percent as shown by the full-month’s data.”

The LPS HPI national average home price for transactions during September was $202,000 – a decline of 1.2 percent for the month. As in previous years, this decline follows a 0.9 percent decline during August.  The September national average price is down 1.8 percent from the average price at the beginning of the year.  LPS HPI average national home prices continue the downward trend begun after the market peak in June 2006, when the total value of U.S. housing inventory covered by the LPS HPI stood at $10.6 trillion. The value has declined 30.2 percent since that peak to $7.56 trillion.  During the period of most rapid price declines, from June 2007 through December 2008, the LPS HPI national average home price dropped $56,000 from $282,000, which corresponds to an average annual decline of 13.8 percent.

Since December 2008, prices have fallen more slowly, interrupted by brief seasonal intervals of rising prices. During this period of more slowly declining prices, the national average price has fallen approximately $24,000 from $226,000. This corresponds to an average annual decline of 3.7 percent. The national average home price has declined 4.4 percent over the most recent year to September 2011.  Price changes were consistent across the country during September, declining in all ZIP codes in the LPS HPI. Higher-priced homes had somewhat smaller declines: -1.2% percent for the top 20 percent of homes (prices above $317,000), compared to -1.4 percent for the bottom 20 percent (below $102,000).

See you at the top!

Chris McLaughlin

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

Copyright Loss Mitigation Institute LLC 2011.

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 150 high-value, high-profit

properties

* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting over

420 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices

closed 2,786 sides for a closed sales volume of

$392,912,927!

* 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

]]> http://shortsalesriches.com/blog/foreclosures-down-in-colorado/feed 0 New foreclosure plan http://shortsalesriches.com/blog/new-foreclosure-plan http://shortsalesriches.com/blog/new-foreclosure-plan#comments Fri, 28 Oct 2011 04:57:29 +0000 admin http://shortsalesriches.com/blog/?p=2245 http://www.mclaughlinchris.com *** Follow Chris on Twitter–> http://www.twitter.com/mclaughlinchris ************************************************************ New foreclosure plan Big investors are showing interest in an evolving Obama administration [...]]]> Smart Real Estate News & Commentary by Chris McLaughlin October 27, 2011

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New foreclosure plan

Big investors are showing interest in an evolving Obama administration plan to sell off foreclosed homes, although the government will have to make the offer sweet enough to coax private funds. The White House is assessing how best to encourage private companies and investors to snap up foreclosed properties held by the government and convert them into rentals. Officials want private partners to take over as much as $30 billion in single-family properties that are currently on the books of government-run Fannie Mae, Freddie Mac and the Federal Housing Administration. Several money managers with large fixed income funds are interested, according to sources, and a request for ideas on how to construct a program received nearly 4,000 responses. The foreclosure conversion program would come as the next step to complement other government supports for housing, including an expanded refinance program announced on Monday.

The main question for prospective investors, which include broker-dealers and firms already overseeing similar rental programs, is the type of financing the government will make available—an issue officials are still struggling with. “In order to get a better bid, there has to be some incentive involved to get qualified investors involved,” said Ron D’Vari, co-founder and chief executive of NewOak Capital. “The reality is not a lack of interest, but so far it looks like a lack of financing.” Incentives could include low interest rates, tax benefits or some type of rental assistance, said D’Vari, a portfolio adviser who has been involved in mini-bulk auctions of real estate-owned properties, or REOs, in California. REO properties are those acquired by a lender, whether a bank or the government, after an unsuccessful auction attempt. Fannie Mae, Freddie Mac and the FHA own about 250,000 properties, close to a third of the country’s REO pool.

One key challenge would be finding big enough blocks of properties in specific geographic areas that could be sold at one time. Analysts say this is what it would take to make the program attractive to large institutional investors. The transaction and liability costs property managers will face as they try to bring deserted units back up to code also pose a hurdle. The government also needs to determine how it will protect taxpayers, and it might explore ways to pair up with investors and allow Fannie Mae, Freddie Mac and FHA to keep some type of an ownership stake in the rental properties. A public-private partnership, somewhat along the lines of a program the Treasury tried to use to soak up toxic bank assets during the financial crisis, would allow the government to gain from the sales. Fannie Mae, Freddie Mac and the FHA have already undertaken some small efforts to reduce the backlog of foreclosed homes. They have donated a few vacant properties for demolition and have held some small auctions. Having already received $141 billion in taxpayer support since being seized by the government in 2008, Fannie Mae and Freddie are under enormous pressure to make sure they maximize the returns from the properties they hold. “This has got to be thought out. Fannie and Freddie would need to assess if they are getting the return they need from a rental,” said Ken H. Johnson, a real estate professor at Florida International University. Johnson said one way to get over the hurdle would be for the two agencies to be given an explicit mission of market stabilization.

2.5% growth, jobless claims hold steady

US economic growth increased at its fastest in a year in the third quarter as consumers and businesses set aside fears about the recovery and stepped up spending, creating momentum that could carry into the final three months of the year. At the same time, slightly fewer people sought unemployment benefits last week, though level remains elevated above 400,000. Though part of the increase came from the reversal of temporary factors that had restrained growth, the expansion was a welcome relief for an economy that looked on the brink of recession just weeks ago. U.S. gross domestic product expanded at a 2.5% annual rate in the third quarter, the Commerce Department said in its first estimate on Thursday. That was a big acceleration from the 1.3% pace in the April-June quarter and matched economists’ expectations. Consumer spending in the last quarter was the strongest since the fourth quarter of 2010, while business investment spending was the fastest in more than a year. Even though consumer spending was stronger, businesses were slow in stocking up their warehouses. The peppier spending and a slower pace of inventory accumulation by businesses will lay a base for a solid fourth quarter, but a slowdown in Europe and the exhaustion of pent-up U.S. demand could leave a weak spot early in 2012. And the recovery’s pace is still too weak to lower a jobless rate that has been stuck above 9% for five straight months.

Olick – new sales increase, prices tank

“Sales of newly built homes in September came in well over expectations, and stocks of the big builders took a little tick up on the news. They then dropped off pretty precipitously, as analysts weighed in on what is behind that nice headline number. First of all, these particular monthly numbers are based on signed contracts to buy a home, not closings, which provide the numbers for existing home sales. This data set is extremely volatile due to how small the survey pool is. And then of course you have these huge seasonal adjustments, which are important given housing’s distinct seasonality, but they can really skew the reality. So, the headline number is that sales (signed contracts) rose 5.7% from a seasonally adjusted annualized rate of 296,000 in August to 313,000 in September. Take out the seasonal adjustment, and don’t annualize (the expectation of how many homes will sell this year based on the monthly rate) and according to the report, builders sold 25,000 homes in August and 25,000 homes in September. No change. The good news is that builders usually sell fewer homes in September than August, and they sold the same, hence the seasonal bump up, the bad news is that 25,000 is a pitifully low number of sales, actually tying a record low.

We can haggle over sales numbers ’til the cows come home (if their home isn’t in foreclosure), but we really need to focus on the pricing numbers. The price of a newly built home fell 10.4% in September year over year to $204,400.00, which is about $200 higher than the low of 2003. Builders are being forced to compete with existing home sale prices, one third of which are distressed properties (foreclosures and short sales). The median existing home sale price in September was $165,400, so that’s still a pretty big premium. Unfortunately, given the high cost of materials these days and difficulty in obtaining construction loans, builders take every dollar drop pretty hard. ‘The pricing issue would generally hit everyone and would result in lower margins (and some additional impairments),’ notes Dan Oppenheim at Credit Suisse. Of course the pricing numbers also have noise in them. ‘Those particular price figures are not adjusted for the mix of new homes being built, so the rate of decline probably also reflects the switch to building smaller homes rather than the so-called ‘McMansions’ that were popular during the boom years,’ writes Paul Ashworth at Capital Economics, who says a turnaround in the new home market may still be a couple of years away.”

Will the super-committee slow spending this Christmas?
The Super Committee has been negotiating behind closed doors since September, and they have until Nov. 23 — that’s the day before Thanksgiving — to reach an agreement on at least $1.2 trillion in deficit reduction measures. Some retail experts fear that further political gridlock in Washington will make American consumers even more hesitant to spend during the busiest shopping period of the year. When the Super Committee was forged out of the debate on whether to raise the debt ceiling, consumers reigned in spending. One of the problems plaguing retailers is a lack of exciting new products to inspire consumers to shop, says Marshal Cohen, chief industry analyst at NPD Group. “There is almost nothing new…to get the consumer excited beyond just the traditional holiday categories,” Cohen says. Against this backdrop, the political discussions could create a big distraction for consumers. And that’s something retailers don’t want when most analysts, including Cohen, expect marginal growth at best this holiday season. It also may be yet another reason for consumers to be downbeat. Numerous consumer surveys have shown that consumers are worried about the economy and about their rising household expenses. One of the latest, a survey conducted by Deloitte, showed that two-thirds of consumers expect the economy to stay the same or weaken next year. As a result many consumers reported that they would be trimming their gift list and 42% said they planned to spend less this year.

Underwater mortgages in Las Vegas fall further

The September median home price in Las Vegas fell 11.5% from one year ago and remains 63% below the peak, according to analytics firm DataQuick. A home that sold for $312,000 during the peak of the housing bubble in November 2006 is now worth $115,000. September was the 12th straight month the median home price fell from the year before. The decline has fallen to levels not seen since the mid-1990s, DataQuick said. “This can be attributed to several factors: home price depreciation; robust sales of low-cost foreclosures; robust sales to investors, who mainly target low-cost properties; extraordinarily low new-home sales (new homes tend to sell for more than resale homes); and higher-than-usual condo resales (condos tend to be the least expensive homes),” DataQuick said.

President Obama gave a speech Monday in Vegas, promoting changes to help more underwater borrowers refinance announced the same day. The Federal Housing Finance Agency will waive some representation and warranty risk, appraisal requirements, and negative equity caps for the Home Affordable Refinance Program. How effective the program is remains in question for the nearly 4 million Fannie Mae and Freddie Mac borrowers underwater. In Vegas, 80% of the local homeowners owe more on their mortgage than the home is worth, according to RealtyTrac. Principal reduction remains the largest tool yet to be taken up by the largest banks or by any government agency on a large scale to combat the negative equity problem in the U.S.

Department of Housing and Urban Development Secretary Shaun Donovan said principal reduction will be a major function of the still pending attorneys general settlement with the largest mortgage servicers. Many Republican AGs and lawmakers say such lengths would only promote strategic default, not entice more people to stay current on their mortgage. Meanwhile, the number of default notices in Vegas increased 190% from July to August, according to DataQuick. More than 4,700 default notices were filed, led by Bank of America, the same findings states along the West Coast found. “It is unclear whether the higher levels of NODs seen in August and September are the beginning of a longer-term upward trend in default filings, which could mean far more distressed properties on the market and more downward pressure on home prices,” DataQuick said.

See you at the top!
Chris McLaughlin

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

Copyright Loss Mitigation Institute LLC 2011.
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 150 high-value, high-profit
properties

* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices
closed 2,786 sides for a closed sales volume of
$392,912,927!

* 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

]]> http://shortsalesriches.com/blog/new-foreclosure-plan/feed 0 Short sales gaining popularity http://shortsalesriches.com/blog/short-sales-gaining-popularity http://shortsalesriches.com/blog/short-sales-gaining-popularity#comments Wed, 19 Oct 2011 16:28:32 +0000 admin http://shortsalesriches.com/blog/?p=2232 Smart Real Estate News & Commentary by Chris McLaughlin October 19, 2011

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Short sales gaining popularity

US home prices may get a boost from an unlikely source: a pickup in sales of properties in default before they reach the stage where they are repossessed by the bank and sold.  There has been a “dramatic shift” in banks’ willingness to sell a property for less than the mortgage balance to avoid foreclosing, said Ron Peltier, chairman and chief executive officer of HomeServices of America Inc.  The short sales typically change hands at a discount of about 20% to homes not in financial distress, compared with a 40% price cut for bank-owned homes, according to RealtyTrac Inc. Short sales jumped 19% in the second quarter from the prior three months while foreclosure sales were flat, the data seller said.  “Banks have become much more supportive of short sales,” said Peltier, whose Minneapolis-based company is a unit of Warren Buffett’s Berkshire Hathaway Inc. “That’s better for the lenders, who have smaller losses on a short sale, and it’s going to be better for homeowners, who won’t have as much psychological distress as a foreclosure.”

Distressed sales brokered by HomeServices used to be 60% foreclosures and 40% short sales, Peltier said in an interview. Now, that ratio has flipped, according to the CEO.  “There’s a huge backlog of homes in default that the banks want to get rid of,” said Thomas Popik, research director for Campbell Surveys in Washington. “They don’t want to be homeowners.”  Banks are being more agreeable to short sales as foreclosures slow following a yearlong probe of so-called robo- signing, or pushing through unverified default documents. Foreclosure filings have fallen for 12 straight months through September as banks work through a backlog of paperwork, according to RealtyTrac.  Almost a third of all home transactions in August were foreclosures or short sales, according to the National Association of Realtors.

Goldman Sachs posts loss

Goldman Sachs posted a loss that was even worse than expected of 84 cents a share on a 33% drop in investment banking revenue from a year ago.  Wall Street had expected the company to post only the second quarterly loss since Goldman went public in 1999, but estimates were for just 16 cents a share in the red.  Shares, though, rebounded from earlier losses after company officials insisted the firm was well-positioned after the economy recovers and financial markets stabilized. Goldman stock rose 1% in premarket trading.  Goldman posted $3.59 billion in revenue, a decrease from $8.90 billion a year ago when it posted a profit of $2.98 a share.  Analysts had expected revenue of $4.29 billion.  Investment banking revenues came in at $781 billion, a one-third fall from the third quarter in 2010 and a 46% drop from the previous quarter. Financial advisory revenues were $523 million, up a bit from the same quarter last year.  Goldman’s loss-driver was its Investing & Lending division, which holds stocks, bonds, loans and private equity assets as long-term investments.  The division reported negative revenue of $2.48 billion as the value of those assets dropped sharply. Goldman’s stock investment in Industrial and Commercial Bank of China alone generated more than $1 billion of paper losses.  Goldman was also hurt by big declines in bond trading and investment banking revenue.  Its fixed income, currency and commodities client trading business reported $1.73 billion in revenue, a 36% decline from a year earlier.

Federal officials and banks try to hammer out a mortgage deal

Officials and big banks are working on a plan that would make refinancing available to some borrowers whose houses are worth less than their loans, so long as they are current on mortgage payments, the Wall Street Journal reported.  Such borrowers typically are not able to refinance because they lack equity in their homes. The plan would apply only to mortgages owned by the banks, the Journal said, citing people familiar with the matter.  Federal officials have been trying to broker a settlement with the five largest mortgage servicers — Ally Financial, Bank of America, Citigroup, J.P. Morgan Chase and Wells Fargo — the Journal said.  It is not clear how many borrowers would qualify for help, the paper added.  Officials are pushing for a plan in a bid to break a legal impasse with big banks over alleged foreclosure abuses and ease problems in the housing market, the paper said.  Discussions are still fluid and any final outcome is uncertain. Talks between government officials and the banks are expected to continue this week.

Oil down

Oil fell for a second day in New York after China said its economy grew at the slowest pace in two years and US crude stockpiles were forecast to increase.  Futures dropped as much as 0.5%, extending yesterday’s 0.5% decline, after China’s statistics bureau said the economy grew at 9.1% in the third quarter, less than predicted. An Energy Department report tomorrow may show US crude inventories climbed for a second week, according to a Bloomberg News survey. Technical indicators indicate prices may have advanced too fast to be sustainable.  “The number from China is getting a bit worse than before,” said Ken Hasegawa, an energy trading manager at broker Newedge Group in Tokyo, who forecasts prices will decline $5 a barrel. “If the recovery of the economies in Europe and the US is getting worse, then the economies of China and Asia will show some damage.”  Crude for November delivery fell as much as 40 cents to $85.98 a barrel in electronic trading on the New York Mercantile Exchange. It was at $86.10 at 2:45 p.m. Singapore time. Yesterday, the contract lost 42 cents to $86.38, the lowest settlement since Oct. 13. Prices are down 5.8% this year.  Brent oil for December settlement on the London-based ICE Futures Europe exchange dropped as much as 45 cents, or 0.4%, to $109.71 a barrel. The European benchmark contract was at a premium of $24 to US futures. The difference narrowed 16% yesterday, the most since June 16.

Rentals surge

Despite the most affordable buying market in decades, households across the country are slowly choosing rentals versus homeownership, signaling a positive economic trajectory for the multifamily sector, according to Freddie Mac’s October 2011 economic outlook report released Monday.  In the year ending June 2011, the Census Bureau reported a net increase of 1.4 million households that moved into rental housing, a 4% rise in the number of tenant households.  The US homeownership rate fell about 1.5% over the past year, according to Freddie Mac’s report.  Hessam Nadij, managing director of research and advisory services for Marcus & Millichap, said in the August issue of HousingWire magazine that “apartments, which are considered part of the commercial real estate sector, are well ahead of retail, office properties and industrial properties in the recovery because of the release of pent up demand.”  Much of the rental demand is from household heads under 30 years old who have decided to postpone homeownership in favor of renting during uncertain economic times, according to the report. Owner rates for those under 25 years old fell 4.4% to 21.9% while rates for those 25 to 29 years old fell 7% to 34.7%.

Bank of America Merrill Lynch estimated a net decline of 1.2 million homeowners since 2007, alongside a net increase of 3.4 million renters. Americans expect home prices to continue to fall, according to a recent Fannie Mae National Housing Survey. Another Fannie survey released in August also predicted a rise in renters.  Financing for rental housing is becoming more readily available. Frank E. Nothaft, Freddie Mac vice president and chief economist, attributed the rise in lending to low mortgage rates, improving apartment-sector economics and the return of traditional lenders that had curtailed activity during the recession. Nothaft said this year’s multifamily loan origination volume is “stronger” than last year’s.  Texas is the hottest market for apartments this year. A majority of the growth is coming from the Dallas-Fort Worth metro area, according to, a unit of RealPage, Inc. The North Texas region started more than 7,300 new units, according to the firm’s mid-year data.

See you at the top!

Chris McLaughlin

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

Copyright Loss Mitigation Institute LLC 2011.

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 150 high-value, high-profit

properties

* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting over

420 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices

closed 2,786 sides for a closed sales volume of

$392,912,927!

* 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

]]> http://shortsalesriches.com/blog/short-sales-gaining-popularity/feed 0 Banks stand to lose billions http://shortsalesriches.com/blog/banks-stand-to-lose-billions http://shortsalesriches.com/blog/banks-stand-to-lose-billions#comments Wed, 05 Oct 2011 01:10:13 +0000 admin http://shortsalesriches.com/blog/?p=2218 Smart Real Estate News & Commentary by Chris McLaughlin October 4, 2011

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Banks stand to lose billions

The nation’s big banks could see billions in increased costs if the Federal Housing Administration (FHA) refuses insurance claims on soured mortgages, FBR Capital Markets said this week.  Analysts at the investment management unit of FBR Inc. said the federal agency could deny claims from lenders due to issues with the underwriting or securitization process of the loans.  In a note to clients, Paul Miller of FBR Capital said refusals on claims could lead to $13.5 billion in losses if servicer claims are denied and $11.5 billion if lenders’ claims are not accepted. Such a move would impact all of the largest banks, including Wells Fargo, Bank of America, and JPMorgan Chase, FBR Capital said.  FHA functions as a type of insurance provider for certain mortgages. When a home goes into foreclosure, a lender submits a claim to get reimbursement for the value of the loan.  “In the past, claim denials were unusual and policies were paid out almost automatically,” Miller said. “Today, due to the state of the FHA’s financial position and the possibility of further home price declines, the agency is motivated to take a closer look at the life of a loan before paying out claims to conserve cash.”

FBR Capital said such a scenario would be the equivalent of another shoe dropping on the housing economy, but for now it’s a headline risk as opposed to an immediate capital concern. And Miller said several questions remain about whether the FHA will cover claims in its financial state.  FBR said the risk lies with the servicers, and if the FHA is looking to refuse a claim, “the servicing process is an easy target.”  “Given the spike in FHA loans and market participants in recent years, we believe that, should the agency want to deny claims over procedural issues, it has ample opportunity,” Miller said.  “The servicing of FHA loans comes with highly technical regulatory mandated procedures, which include offering loan modifications and contacting the borrower within 45 days of delinquency. As a result, the agency’s narrowly proscribed requirements make it more likely for the servicers, not the originators, to be tripped up,” according to Miller.

More easing will hurt

Two top Federal Reserve officials known for their hawkish views on inflation reiterated on Monday their opposition to further Fed monetary policy easing, saying it would do more harm than good.  But the two, Richmond Fed President Jeffrey Lacker and Dallas Fed President Fisher, sketched somewhat different reasons for their views on the eve of Fed Chairman Ben Bernanke’s appearance before Congress on Tuesday.  Lacker said he was primarily concerned with the threat of inflation; Fisher said he was mainly worried that the policy would not work as advertised.  Fisher said that US. politicians need to lay a sounder base for economic growth, or the Fed’s easy monetary policy will simply be “pushing on a string.”  Fisher told CNBC television he expected the US. economy would grow at an annual rate of under 2% over the remainder of the year, but he warned: “We could slip.”

Fisher and Lacker both said that uncertainty was restraining businesses, and that many of the economic problems were beyond the central bank’s writ.  “We have a limited amount of ammunition,” Fisher told CNBC, adding that there were plenty of studies that suggested the Fed’s “Operation Twist” would not have that great an impact spurring stronger economic growth.  “I personally did not feel that the benefits … outweighed the costs,” he said. “I think we have done enough at this juncture.”  Fisher, who has long argued that an uncertain regulatory and budget environment was damping business spirits, said he felt it would do little good to ease monetary policy because the level of interest rates was not the problem facing the economy.  Lacker concurred.  “There are impediments to growth that somewhat lower, longer-term interest rates will not be the antidote for,” he told students.

DSNews.com – foreclosures jump 20%

Data released by Lender Processing Services (LPS) yesterday shows that foreclosure starts were up in August by 19.7% when compared to the previous month.   However, LPS noted in its report that the 247,957 foreclosures initiated in August represents a 12.2% decline from a year earlier.  At the same time, of the approximately 4 million loans that are either 90 or more days delinquent or in foreclosure, the number in the 90-plus day delinquency bucket – 2,148,179 – has contracted to levels not seen since 2008, according to LPS’ study.  That’s not the only indicator of improvement LPS documented for problem loans. The company’s latest report also showed that, of loans that were current six  months prior, 1.4% had become seriously delinquent by August.  LPS says that percentage is less than half the rate seen in 2009, when the loan deterioration rate peaked at 2.9%.

At the same time, “first-time” delinquencies – new problem loans that had never been delinquent before – accounted for approximately a quarter of all new delinquencies, another sign of an improving trend for problem loans, according to LPS.  The company points out, however, that 23% of the nearly 46 million loans that were current as of the end of August were still at risk as a result of negative equity – a leading indicator of a borrower’s propensity to default.  LPS’ analysis of mortgage performance data at August month-end showed an all-time high in the number of loans shifting from foreclosure back into delinquent status, suggesting that process reviews and potential loss mitigation activity are continuing.  As a result, the company says foreclosure timelines continue to increase, with the average loan in foreclosure having been delinquent for a record 611 days.  Average delinquencies in non-judicial states continue to be about six months shorter at the time of foreclosure sale when compared to their judicial counterparts, where LPS says backlogs continue to be extremely high.

Bear market pessimism

Some of the market’s top thinkers are releasing a chorus of dour predictions that, while allowing for the chance of a mild rally as 2011 closes, otherwise believe there is little reason for hope.  Bob Janjuah, the notably bearish fixed income analyst for Nomura Securities, believes that a market low is coming in October that could be followed by a late-year rise. But 2012 holds little but a bear-market roar that could take the Standard & Poor’s 500 all the way down to the 700 range—a numbing 38% drop from current levels.  “The basic problems remain weak trend growth in the (developed market) world, which we think will continue for another three to five years, the policy errors (in our view) of the current set of policymakers, and the existing set of inadequate ‘old world’ policy institutions,” Janjuah wrote in an analysis for clients.

Those types of comments are being echoed across the financial markets spectrum but perhaps most notably in recent days by the Economic Cycle Research Institute.  The ECRI is widely considered an impartial—and highly accurate—referee when it comes to discerning trends. At a similar point last year, when many also were anticipating another recession, the ECRI rebuffed those predictions.  For the months ahead, though, the ECRI’s leading index is unwavering in its call for another recession, just two years after the last one officially ended. ECRI’s head economist, Lakshman Achuthan, detailed the reasons for the coming recession:  “It’s important to understand that the recession doesn’t mean a bad economy—we’ve had that for years now. It means an economy that keeps worsening because it’s locked into a vicious cycle,” ECRI said in research posted a few days ago. “Here’s what ECRI’s recession call really says: If you think this is a bad economy, you haven’t seen anything yet.”  Strategists such as David Rosenberg at Gluskin Sheff in Toronto have been pounding the table for months about another recession. He said Monday that only a decline in the savings rate has prevented one from happening already.  “We have to admit that we feel somewhat vindicated, having made this call nearly four months ago to howls of derision,” Rosenberg said in his daily note Monday. “What we saw then and still see now is a full-fledged deleveraging cycle that has gone global.”  For those who have intensified their negative outlooks, the conversion has much to do with a repeated inability of policymakers and politicians to come up with solutions to the European debt crisis as well as the jobs stagnation and other problems in the US.

Fannie knew about robo-signing in 2003

Mortgage giant Fannie Mae knew about allegations of improper foreclosure practices by law firms in 2003 but did not act to stop them, a government watchdog says.  Similar allegations are the subject of a probe by state attorneys general into how lenders and law firms ignored proper procedures to handle a crush of foreclosure paperwork.  An unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003, the inspector general for the agency that regulates Fannie says in a report being released Tuesday.  Fannie Mae responded by hiring a law firm to investigate the claims in 2005. The law firm reported in 2006 that it had found foreclosure attorneys in Florida “routinely filing false pleadings and affidavits.”  Fannie officials said they told a government official about the law firm’s findings in 2006. That unnamed official, who now works for Fannie’s regulator, the Federal Housing Finance Agency, said he couldn’t recall the conversation, the report says.

Fannie began using a network of attorneys in 1997 to help handle foreclosures, evictions and bankruptcies. In 2008, the network grew to 140 law firms. And the number of foreclosures in Fannie’s portfolio reached historic highs. Foreclosures more than doubled from 2007 to 2008. They grew 50% in 2009.  In June 2010, FHFA officials went to Florida to study the foreclosure crisis. They found that the mortgage industry was overwhelmed by foreclosures; that the average foreclosure processing time had grown from 150 days to more than 400 days; that lenders were beset by flawed documentation; and that law firms weren’t devoting enough time to cases.  The worst practices, known collectively as “robo-signing,” led some lenders to suspend foreclosures last fall. And it led to an ongoing investigation by all 50 state attorneys general.  Several states, including California, Delaware and New York, oppose a proposed settlement with the lenders. They complain that the lenders would receive unfair immunity from civil litigation under the deal.  Fannie and its sister company, Freddie Mac, own or guarantee about half of US. mortgages. That equals nearly 31 million loans worth more than $5 trillion. And they account for nearly all new mortgages.  The Bush administration seized control of the mortgage giants in September 2008, hoping to stabilize the housing industry.  The inspector general’s report says FHFA plans to change its oversight policies by the end of 2012. The report is among several government inquiries into the aftermath of the housing crisis.  A broader report into missteps by Fannie and Freddie is expected this fall.

See you at the top!

Chris McLaughlin

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

Copyright Loss Mitigation Institute LLC 2011.

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 150 high-value, high-profit

properties

* Owner of one of Florida’s largest Real Estate firms,

running 4 different offices, supporting over

420 agents, uniquely positioning him to help

thousands of investors make money in the

biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices

closed 2,786 sides for a closed sales volume of

$392,912,927!

* 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

]]> http://shortsalesriches.com/blog/banks-stand-to-lose-billions/feed 0 Olick – new wave of foreclosures coming http://shortsalesriches.com/blog/olick-new-wave-of-foreclosures-coming http://shortsalesriches.com/blog/olick-new-wave-of-foreclosures-coming#comments Wed, 14 Sep 2011 14:56:54 +0000 admin http://shortsalesriches.com/blog/?p=2196 Smart Real Estate News & Commentary by Chris McLaughlin September 14, 2011

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Olick – new wave of foreclosures coming

“Bank of America is ramping up its foreclosure processing, sending out far more notices of default to borrowers in August than in previous months, well over 200% more month-to-month. A notice of default is the first stage of the foreclosure process in non-judicial foreclosures states, that is, where foreclosures do not go before a judge. The notice of default is usually sent when a borrower is 90 days or more overdue in payments, but that timeline has been extended significantly during this housing crisis, due to the so-called ‘robo-signing’ processing scandal and the sheer volume of troubled loans.

Mortgage and housing analyst and strategist Mark Hanson alerted me to unusually high legal default filing activity, and his research points to Bank of America as the primary driver. I contacted a Bank of America spokesman, who responded: ‘It appears the numbers you noted to me this afternoon generally track with our own numbers for key categories. It should be noted it’s driven more in key states like California and Nevada than overall, and certainly the progress we’re seeing is limited to non-judicial states. Judicial states continue to move very slowly, with key states like New Jersey only beginning to start processing foreclosures again this month.’

The foreclosure numbers are down very slightly year-over-year, but only because August 2010 was one of the highest foreclosure months on record, and of course was just before the ‘robo-signing’ scandal was uncovered. Delays in processing have artificially lowered the foreclosure numbers over the past year, so this new surge is likely addressing loans that have been long delinquent, but unaddressed. In other words, the foreclosure pipeline is filling again. RealtyTrac, a widely followed foreclosure sale and data site, is also confirming a surge in overall notices of default in its August numbers, to be released later this week. They do not cite Bank of America specifically, which bought Countrywide Financial, taking on millions of troubled loans. ‘We’ve been seeing REO [bank-owned property] sales, and processing of loans through foreclosure. This increase may simply be the lenders and servicers starting the next cycle. August traditionally is a high month for foreclosure actions, so part of the increase might be seasonal,’ says RealtyTrac’s Rick Sharga. ‘Could be any number of reasons – but with 3.5 million delinquent loans, this had to happen sooner or later.’

The question of course is, is this a one month catch-up purge or will it continue at high levels for a while? And if the latter, will other banks follow suit quickly? Because if other banks see Bank of America pushing more loans to foreclosure, which will inevitably means more properties heading out for sale, they may want to get in before that glut of properties pushes prices down even further. ‘This proves once again that ‘credit’ as measured by legal defaults and foreclosures is not necessarily about borrowers missing payments, rather about what the servicers chose to do about it,’ notes Hanson.”

CBO cuts economic outlook

The Congressional Budget Office (CBO) —the non-partisan budget and economic analyst for Congress—said economic growth would slow from previous estimates and a nagging, 9.1% jobless rate would basically remain stuck there through next year’s presidential and congressional elections. CBO Director Douglas Elmendorf said his agency now sees economic growth of around 1.5% this year and 2.5% in 2012. That’s down from CBO’s August estimate of 2.3% and 2.7%, respectively. New data since CBO pieced together its August outlook contributed to the downward estimates, Elmendorf said. The unemployment rate, now at 9.1%, will remain “close to 9% through the end of 2012,” Elmendorf said. Last month, CBO estimated joblessness at 8.9% this year, falling to 8.5% in 2012.

MBA – mortgage applications up

Mortgage applications increased 6.3% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending September 9, 2011. This week’s results include an adjustment to account for the Labor Day holiday. The Market Composite Index, a measure of mortgage loan application volume, increased 6.3% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 15.4% compared with the previous week. The seasonally adjusted Purchase Index increased 7.0% from one week earlier. The unadjusted Purchase Index decreased 16.2% compared with the previous week and was 7.2% lower than the same week one year ago.

The Refinance Index increased 6.0% from the previous week, stopping a run of three consecutive weekly decreases. The Refinance Index is not seasonally adjusted but is adjusted for the holiday. On an unadjusted basis, the Refinance Index decreased 15.2% and is 23.5% lower than the same week a year ago. The four week moving average for the seasonally adjusted Market Index is down 2.9%. The four week moving average is up 0.5% for the seasonally adjusted Purchase Index, while this average is down 3.9% for the Refinance Index. The refinance share of mortgage activity increased to 77.3% of total applications from 77.1% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.9% from 7.1% of total applications from the previous week.

Wholesale prices flat, inflation eases

Excluding the volatile food and energy categories, core wholesale prices edged up 0.1%, the smallest increase in three months. The figures indicate that inflation pressures are easing. The Producer Price Index, which measures price changes before they reach the consumer, was unchanged in August, the Labor Department said Wednesday, after a 0.2% rise in July. In the past 12 months, the index has increased 6.5%, mostly due to higher gas and food costs. That’s the smallest 12-month rise since March, though much bigger than the annual changes late last year. Core prices rose 2.5% in the past 12 months, the same pace as July.

Food prices rose 1.1% in August, the largest increase since February. Egg prices jumped nearly 11%, the most since April, while processed chicken prices increased 3.7%, the most in five years. That likely reflects the higher cost of corn and other grains that are used for animal feed. Processed fruits and vegetables rose 2%, the most since February 1990. The core index was pushed up by a jump in tire prices, which rose 1.4%, the most in four months. Wholesale gasoline prices, meanwhile, fell 1% in August, and home heating oil dropped 1.2%. Sharp increases in the prices of oil, food and other commodities pushed up most measures of inflation earlier this year. But now that many commodities are becoming less expensive, inflation pressures are fading.

What might work in Obama’s jobs plan

House Majority Leader Eric Cantor critiqued the Obama jobs plan on Tuesday, pointing out areas lawmakers can agree on as well as areas that House Republicans will oppose — including stimulus spending and tax hikes on the rich. “We need to work very hard to try to peel off things that we can actually agree on,” Cantor said at a summit hosted by the American Action Forum, a right-leaning think tank created by deficit hawk Doug Holtz-Eakin, a former Congressional Budget Office director. Cantor provided new insight on Republican reaction to the $447 billion Obama jobs package that the White House officially sent Congress on Monday. “Let’s get some wins on the board together. And then we’ll have to disagree to disagree on some of the things that will have to be decided in public debates in the next election.”

One of those areas Republicans want to leave to voters: Tax hikes for the rich. President Obama’s largest proposed pay-for — which the White House estimates would raise roughly $400 billion over 10 years — limits itemized deductions and certain other exemptions for individuals with adjusted gross incomes of $200,000 or more ($250,000 and up for married couples). Cantor said that’s not going to happen. “Republicans are not going to accept tax increases if the goal is to grow the economy,” he said. The No. 2 House Republican also elaborated a nuanced opposition to some details of the Obama jobs package that Republicans agree on in principle, like infrastructure spending.

The White House and some Republicans have talked about creating an infrastructure bank that would pair public and private dollars to finance projects that revamp roads and bridges. But Cantor blasted that proposal on Tuesday. “I, for one, think that infrastructure bank is akin to creating a Fannie and Freddie for roads and bridges,” Cantor said comparing the idea to the struggling government-owned mortgage finance companies. “It’s something we don’t need to do.” He said he’d rather see expedited permitting for such projects, which is included in the Obama package.

With 14 million workers jobless, Cantor acknowledged the enormity of the problem. But he doesn’t believe in a no-strings-attached extension of unemployment benefits. Without going into details, Cantor said he’d favor an extension only if it were tied to “job opportunities.” “Unemployment benefits should not turn into a permanent solution,” Cantor said. “We should somehow connect unemployment benefits with work or a job opportunity.”

In his Tuesday speech, Cantor also pointed out areas of bipartisan agreement, like giving more generous tax breaks to small businesses and pulling back burdensome regulations. President Obama has said he will push hard for his new jobs proposal to be passed in its entirety — not piecemeal. However, the president won’t veto pieces of the jobs package, if Congress passes them that way, a top Administration official on Tuesday.

Orlando prices jump 15%

As foreclosures and short sales made up a shrinking share of local home sales, home prices in Orlando jumped 15% in August from a year earlier. The Orlando metro area’s median price for August was $115,000, up 21.2% from January and 15.1% from August 2010, according to a report from the Orlando Regional Realtor Association. “A steady rise in the percentage of ‘normal’ sales — those that are neither bank-owned nor short sales — continues to boost the overall price,” said the report. Those “normal” transactions made up 41% of sales in August, down a percentage point from July. That was the first decline in such sales after they rose for six consecutive months.

Even with prices on the upswing, though, sellers continue to overprice their homes, the report shows. The average home sold for 95% of its listing price in August, after spending an average of 101 days on the market before coming under contract. Affordability numbers suggest the Orlando market still has a large amount of unmet demand. The area’s affordability index rose to 248 in August, showing median income earners make more than twice as much as they need to in order to qualify for a median-priced home. “Affordability conditions this year have been enormously favorable, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers and ignoring a large share of otherwise creditworthy buyers,” said association Chairman Mike McGraw of McGraw Realty Services, Inc. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that in Orlando and even on a national scale could stimulate additional economic activity and create jobs.”

The number of Orlando home sales completed in August fell 8.7% to 2,342 from a year earlier, as bank-owned sales fell 51%. Short sales and “normal” sales each rose 32%. Meanwhile, led by a decline in the number of condominiums for sale, Orlando’s for-sale housing inventory fell 39% to 10,055. That put inventory at a 4.29 month supply. Average interest rates paid by buyers fell to 4.26%, the lowest level since the realtor association began tracking it in 1995.

See you at the top!
Chris McLaughlin

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

Copyright Loss Mitigation Institute LLC 2011.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com

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http://www.smartrealestatenews.com

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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 150 high-value, high-profit
properties

* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices
closed 2,786 sides for a closed sales volume of
$392,912,927!

* 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

]]> http://shortsalesriches.com/blog/olick-new-wave-of-foreclosures-coming/feed 0 Home prices up, but… http://shortsalesriches.com/blog/home-prices-up-but%e2%80%a6 http://shortsalesriches.com/blog/home-prices-up-but%e2%80%a6#comments Tue, 30 Aug 2011 19:03:12 +0000 admin http://shortsalesriches.com/blog/?p=2173 Smart Real Estate News & Commentary by Chris McLaughlin August 30, 2011

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Home prices up, but…

The Standard & Poor’s/Case-Shiller home-price index shows prices  increased in June from May in 19 of the 20 cities tracked.  A separate figure shows prices rose 3.6% in the April-June quarter from the previous quarter. Those numbers aren’t adjusted for seasonal factors.  Over the past 12 months, home prices have declined in all 20 cities after adjusting for seasonal factors.  Chicago, Minneapolis Washington and Boston posted the biggest monthly increases. Metro areas hit hardest by the housing crisis, including Las Vegas and Phoenix, reported small seasonal increases.

Despite the uptick, the numbers contain “really no hope of any kind of surge,” David Blitzer, S&P Index Chairman David Blitzer said.  “None of the fundamentals look that good,” he said. “People still have difficulty getting mortgage loans, they still have difficulty in refinancing. The banks got a lot tougher and haven’t gotten any easier no matter how you measure.”  Blitzer said the housing market is taking on a more regional perspective, with the Sun Belt continuing to languish and other areas of the country stabilizing.  “You have to look much more into details,” he said. “You’ll some good times here and there but it’s a thin river of hope overall.”

Fed for more “easing?”

According to Chicago Fed President Charles Evans, the Federal Reserve may get even more aggressive in its easing policies than it has been so far unless the economy shows significant improvement.  In his view, QE needs to stay in place until unemployment plunges to 7% or if inflation gets past 3%. Core inflation, which strips out food and transportation, is about 1.8%, though the number is 3.6% including the more volatile measures.  “Strong accommodation needs to be in place for a substantial period of time,” he said. “If we could sort of make everybody understand that this is going to be in place for a longer period of time, we could knock out some of that restraint that comes about when people talk about premature tightening.”  Since the financial crisis hit in 2008, the Fed has expanded its balance sheet past the $2.5 trillion mark and kept its funds rate near zero in an effort to stimulate the economy.  It has not worked – the housing market is worse than Great Depression levels, recent manufacturing readings have been around contraction levels and weekly jobless claims have stayed above 400,000.

NAR – pending sales slip

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, slipped 1.3% to 89.7 in July from 90.9 in June but is 14.4% above the 78.4 index in July 2010. The data reflects contracts but not closings.  The PHSI in the Northeast declined 2.0% to 67.5 in July but is 9.7% above July 2010. In the Midwest the index slipped 0.8% to 79.1 in July but is 18.8% above a year ago. Pending home sales in the South fell 4.8% to an index of 94.4 but are 9.5% higher than July 2010. In the West the index rose 3.6% to 110.8 in July and is 20.6% above a year ago.  Lawrence Yun, NAR chief economist, said sales activity is underperforming.  He followed that observation with his typical hopefulness:  “The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy.  [But we] also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process.”

Irene hits sales

Hurricane Irene hit the US East Coast at the most inopportune time for many businesses, keeping millions of shoppers away from stores and auto dealerships during what should have been a busy weekend.  As much as a fifth of US auto sales are often generated in states affected by Irene, said Paul Taylor, chief economist with the National Automotive Dealers Association. And in those states, August sales will likely be down about 10%.  A bigger problem related to Irene may hurt September sales as well, Taylor said.  “The real issue is going to be flooding,” he said.  The average forecast of 44 economists surveyed by Reuters was 12.1 million vehicles were sold on an annualized basis, up from 11.5 million a year ago, but off slightly from 12.2 million in July.  Honda appears to be struggling the most. Edmunds.com and TrueCar.com expect Honda’s sales for August to drop at least 22% to 25% from last August, and for Toyota’s sales to fall at least 11% to 14%.

Retailers that sell back-to-school items likely felt Irene’s pinch as the storm essentially shut down malls on a weekend when parents normally shop for clothes and notebooks, not bottled water and flashlights.  “This is a major weekend of sales that were planned, but that won’t happen, in one of the most densely populated regions,” said Joel Bines, a managing director of consulting firm AlixPartners.  The damage could take 1%age point off August same-store sales, said Bines, adding that leftover merchandise will likely be discounted, damaging gross margins.  A large portion of back-to-school sales, retailers’ second-most important season after the winter holidays, could be lost for good, especially if it takes time for the transportation infrastructure to get back in place.  “There are millions of dollars in economic activity and productivity that were lost and simply will not and can not be recouped,” said weather tracking firm Planalytics.

Olick – a curious letter

“A borrower in Michigan recently received a letter from his mortgage servicer, CitiMortgage. It offers to discuss foreclosure alternatives, including potential eligibility for the government’s mortgage bailout program. It is clear, succinct, and gives several phone numbers and contact information. The letter includes the borrower’s name, address, and mortgage loan number. It seems quite reasonable…except that the borrower tells me he isn’t and hasn’t been late on any payments.  ‘I called them and they stated they sent this letter out to all mortgage clients,’ the borrower tells me in an email. ‘I am one of these clients and have had no issues with my mortgage, and they get my direct payment on time every month.’  He says that when he called Citi, the operator said it was a, ‘blanket letter and basically junk mail.’  I called Citi to verify the letter, which arrived in an envelope with a Citi logo.

Obviously lenders/servicers have been sending letters to troubled borrowers, offering assistance to avoid foreclosure, but a blanket letter to all borrowers seems a bit much. There have also been a lot of scammers using fake bank logos.  A Citi spokesman says, ‘I don’t believe it went out to all customers. We are not getting reports from our call centers that they are getting any significant number of calls on this. It is likely a coding error that affected some accounts.’  If the letter had gone out to all Citi customers, most of those customers would have called in, fearing there was a mistake and that their properties were being foreclosed improperly. That didn’t happen, so perhaps this one borrower did just get it in error. What’s so interesting/telling, though, is that the operator at Citi who answered the borrower’s call referred to the letter as ‘junk mail,’ as if it makes sense that a mortgage servicer would send out a blanket foreclosure help letter to every one of its customers. Perception versus reality, I suppose.”

See you at the top!
Chris McLaughlin

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

Copyright Loss Mitigation Institute LLC 2011.
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 150 high-value, high-profit
properties

* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices
closed 2,786 sides for a closed sales volume of
$392,912,927!

* 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

]]> http://shortsalesriches.com/blog/home-prices-up-but%e2%80%a6/feed 0 Nuwire – Banks now prefer short sales to foreclosures http://shortsalesriches.com/blog/nuwire-banks-now-prefer-short-sales-to-foreclosures http://shortsalesriches.com/blog/nuwire-banks-now-prefer-short-sales-to-foreclosures#comments Thu, 11 Aug 2011 04:51:02 +0000 admin http://shortsalesriches.com/blog/?p=2149 Smart Real Estate News & Commentary by Chris McLaughlin August 11, 2011

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Nuwire – Banks now prefer short sales to foreclosures

Banks dealing with lengthy, complicated and frequently messy foreclosures are starting to see “short sales” as a quicker and cheaper way of getting bad loans off their books.  The nation’s biggest mortgage servicers- Bank of America, JPMorgan Chase and Wells Fargo - are beginning to step up their efforts to ease the short sale process for borrowers who are unsuccessful in getting loan modifications and face the threat of foreclosure.  Servicers are attempting to reach out to borrowers and are paying out more incentives to those suffering financial hardship to help proceed with a short sale. They are also cutting down the time taken to approve short sales, although realtors still complain that the process takes too long.  JPMorgan has processed 120,000 short sales through its proprietary program since June 2009 and now averages 5,000 short sales a month. The bank says its average response time to approve a short sales transaction is 30 days.  “We think the short sale is a good solution for many struggling homeowners and we let them know that it’s an option,” said Christine Holevas, spokesperson for JPMorgan in an email. “Our outreach efforts have increased in the past year or so. Foreclosure can be an expensive and lengthy process for all parties. It’s a good deal for the homeowner and a good deal for us (a cheaper way to get a bad loan off the books.)”

The average time for the foreclosure process- from the time of notice to the completed foreclosure- is now 318 days in the U.S., according to RealtyTrac.  The foreclosure process in the state of New York, which follows a judicial process, took 966 days on average for properties foreclosed in the second quarter. New Jersey and Florida followed with an average processing time of 944 days and 676 days respectively.  The longer it takes for a foreclosure to be approved, the longer bad loans stay on banks’ books.  Foreclosures are also more expensive than short sales, because of the legal expenses involved as well as the expenses for maintenance and upkeep while the property is in foreclosure.  Wells Fargo, for instance, incurred expenses on repossessed homes to the tune of $305 million in the second quarter and $408 million in the first quarter, according to data from SNL. Data for the other big banks wasn’t available.  According to real estate analytics firm CoreLogic, the number of short sales in the market have tripled in the last two years and transactions are anticipated to grow by 25% in 2011. The markets with the largest short sale volume are California, Arizona, Colorado and Florida.

Mortgage rates and the downgrade

At least one fear was not realized amid Monday’s meltdown: the concern that mortgage rates would immediately shoot higher in response to Standard & Poor’s downgrade of Fannie Mae and Freddie Mac, the government-sponsored entities that are the 800-pound gorillas of the mortgage market. In fact, the initial response to Fannie and Freddie getting cut to AA+ from AAA was precisely the opposite. Mortgage rates were poised to continue declining.  HSH Associates, which surveys lenders, quoted the average 30-year fixed rate mortgage at 4.44% Monday. “We expect to see rates go into the 4.30′s by noon tomorrow,” said Keith Gumbinger, of HSH Associates.  Mortgage rates are set off of the interest rates on U.S. Treasury notes and bonds. Even though Standard & Poor’s pulled its AAA rating of the United States Friday night, investors still rushed into U.S. Treasury securities Monday as a safe haven, believing more in the “full faith and credit of the United States” than in the opinion of Standard & Poor’s credit analysts. As investors snapped up Treasury notes and bonds they pushed down interest rates on those securities, which move inversely to prices.

Interest rates low till 2013

The Federal Reserve painted a much gloomier picture of the economy yesterday, and indicated it would keep cash cheap and easy for at least two more years.  The Fed indicated it plans to keep “exceptionally low” interest rates in place until at least mid-2013 as a way to continue to prop up the recovery.  The new two-year time horizon was an unusual move because the Fed doesn’t typically signal its policies that far in advance, and because it was interpreted as an admission that the economy will remain weak until then.   three of the Fed’s 10 voting members formally dissented against using the new language. Multiple dissenting votes are rare among the Fed’s policy-making committee.  Regional Fed presidents Richard Fisher of Dallas, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia said they would have preferred to keep the “extended period” phrase instead of laying out the 2013 timeframe.  “What it’s telling us is, this was a very divisive meeting and there was a lot of back and forth,” said Sherry Cooper, chief economist with BMO Financial Group and a former Fed economist.

Mortgage refis soar

Mortgage applications increased 21.7% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 5, 2011.  The Market Composite Index, a measure of mortgage loan application volume, increased 21.7% on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 20.9% compared with the previous week. The Refinance Index increased 30.4% from the previous week. The seasonally adjusted Purchase Index decreased 0.9% from one week earlier. The unadjusted Purchase Index decreased 1.2% compared with the previous week and was 4.9% higher than the same week one year ago.  “Amid substantial market turmoil last week, mortgage rates dropped to their lowest levels of the year, and refinance applications jumped more than 30% to their highest levels of the year,” said Mike Fratantoni, MBA’s Vice President of Research and Economics. “Over the past month, refinance application volume has increased by 63%.  Refinance applications for jumbo loans increased by almost 75% relative to last week. Despite these low mortgage rates, applications for home purchase have remained little changed through the summer.”
The four week moving average for the seasonally adjusted Market Index is up 9.7%. The four week moving average remained unchanged for the seasonally adjusted Purchase Index, while this average is up 13.7% for the Refinance Index.  The refinance share of mortgage activity increased to 75.6% of total applications from 70.1% the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.1% from 6.6% of total applications from the previous week.

QE3 coming?

Goldman Sachs reviewed its position on further monetary stimulus, saying that further quantitative easing had a greater than ever chance of being implemented in the United States.  “We now see a greater chance that the FOMC (Federal Open Market Committee) will resume quantitative easing later this year or in early 2012.  We’ve changed our call because the committee’s reaction to incoming economic data is more dovish than previously thought,” Jan Hatzius, chief U.S. economist Goldman Sachs said in a note.  “The policy commitment to keep the funds rate at ‘exceptionally low levels…at least through mid-2013′ was more aggressive than we had anticipated. We are surprised that there is a date, even more that it is almost two years in the future,” he said.  He added that the Fed had been explicit, more so than anticipated, about preparing to use “these tools” – the same language used in September 2010 which paved the way for the last round of quantitative easing (QE).

“We see a recession risk of about one in three and if that were to happen the committee would of course ease further. The most likely route to be deployed initially by the Fed would be ‘conventional’ QE but it could be even more aggressive such as rate caps or interventions in non-government securities market,” Hatzius said.  Although more QE was now Goldman’s base case there was a possibility that it might not occur if the economy turned out stronger than forecast and if inflation posed a higher hurdle to further stimulus.  “Also the anti-Fed backlash late last year might argue against further QE but the policy could be tweaked so instead of a large-and-scary upfront number they might choose to specify a smaller monthly flow of purchases,” he added.

WSJ – Freddie’s losses narrow

Freddie Mac posted a $2.1 billion loss during the second quarter, down from a year-ago loss of $4.7 billion.  The mortgage-finance giant paid $1.6 billion to the government and asked for $1.5 billion in new aid during the quarter. That marked the fourth consecutive period in which, after making its regular dividend payment to the government, the company didn’t generate a loss for taxpayers.  The report came on the same day that Standard & Poor’s downgraded the long-term credit rating of Freddie Mac and its larger cousin, Fannie Mae, to AA-plus from AAA. That stemmed from S&P’s decision late Friday to cut the credit rating of the U.S. government, which effectively nationalized Fannie and Freddie three years ago.  The U.S. government has pledged to keep Fannie and Freddie afloat by injecting unlimited amounts of money into both in order to keep mortgage markets functioning. Fannie and Freddie are required to pay a 10% dividend to the government on those infusions. Over the past year, Freddie Mac has absorbed $2.1 billion in government aid to cover, in part, the cost of $6.4 billion in payments to the Treasury. The cost of the government’s bailout of Freddie stands at $51.9 billion. Fannie Mae last week reported a net loss of $2.9 billion for the second quarter and asked the government for another $2.8 billion on Friday, bringing its tab to $89 billion.

Freddie’s quarterly loss stemmed in part from losses on derivatives that are used to hedge the firm’s exposure to swings in interest rates. The firm also added $2.5 billion to its loss reserves, up from a $2 billion addition in the first quarter. While mortgage rates have fallen to new lows over the past two weeks, Chief Executive Charles “Ed” Haldeman Jr. warned that “labor market weakness and households’ worries about their financial security” had damped home sales, prompting a “cautious” outlook.  While both companies ran up huge losses in the two years following the government takeover, Freddie has shown glimmers of stability in recent quarters. That stems in part from the size of its loan book, which is about 40% smaller than Fannie’s, and because Freddie guaranteed fewer risky loans than Fannie.

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 150 high-value, high-profit
properties

* Owner of one of Florida’s largest Real Estate firms,
running 4 different offices, supporting over
420 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!

* In 2010, Chris’ 4 Central Florida real estate offices
closed 2,786 sides for a closed sales volume of
$392,912,927!

* 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

]]> http://shortsalesriches.com/blog/nuwire-banks-now-prefer-short-sales-to-foreclosures/feed 0 Foreclosures Down http://shortsalesriches.com/blog/foreclosures-down http://shortsalesriches.com/blog/foreclosures-down#comments Fri, 13 May 2011 21:05:29 +0000 admin http://shortsalesriches.com/blog/?p=2009    Smart Real Estate News & Commentary by Chris McLaughlin May 13,

2011

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More political interference

Calling housing “the biggest headwind on the economy right now,”

Obama broached two relatively new ideas for the White House:

Longer-term mortgage modifications and principal reductions.  “In

addition to these short-term loan modifications, we want to see

if we can get longer-term loan modifications. And in some cases,

principal reduction, which will be good for the … person who

owns the home, but it’ll also be good for the banks over the long

term,” Obama said.  Both ideas would require Congress to pass

laws to force the banks to cooperate, and principal reduction is

sure to stir Wall Street banks, because it is direct interference

by the government in private finance.  When Obama campaigned, he

had talked about pushing for policy to give bankruptcy judges the

ability to write down principal owed on homes whose owners are

bankrupt, but when he took office, he stood on the sidelines of

legislation that would have allowed principal reductions, and his

administration said that current housing policy was good enough.

House Republicans passed a bill to kill the administration

programs that most experts have gauged a failure.

Inflation up

The Consumer Price Index, the government’s key inflation measure,

rose 3.2% over the last 12 months ended April 30, according to

today’s report from the Labor Department. It was the biggest

12-month jump since October 2008. Half of the increase was due to

rising energy prices, the government said.  Meanwhile, so-called

core-CPI, which strips out volatile food and energy prices and is

considered a better long-term predictor of inflation, rose 1.3%

from a year ago.  Gas prices alone surged 3.3% in April, and are

up 33.1% over the past year.

Overall, prices jumped 0.4% in April, in line with forecasts from

economists surveyed by Briefing.com.  Core CPI rose 0.2% during

the month, surpassing economists’ forecasts, which called for a

0.1% tick higher.

MBA – CEO testifies

David H. Stevens, President and CEO of the Mortgage Bankers

Association (MBA), testified before the Senate Committee on

Banking, Housing and Urban Affairs’ Subcommittee on Housing,

Transportation and Community Development on “The Need for

National Mortgage Servicing Standards.”  Following are portions

of his remarks:  “Presently,  servicers face a growing number of

checks and balances, ranging from federal laws and regulations,

such as RESPA and TILA, to fifty state laws, regulations, and

local ordinances, as well as court rulings and FHA, VA, and Rural

Housing servicing requirements. These requirements are in

addition to Fannie Mae standards, Freddie Mac standards, and

other contractual obligations. In short, servicers are faced with

complex and often contradictory rules and regulations, many of

which are still emerging.  What is the answer?  A consolidated

servicing standard that could drive these reforms.  Creating an

industry standard would streamline and eliminate many of these

overlapping requirements, providing clarity and certainty for

borrowers, lenders and investors alike.  It is critical that all

of the federal regulators involved act in a coordinated manner to

establish one national consolidated servicing standard that

applies to the entire industry, rather than piling on requirement

after requirement.”

“A national standard should start with a complete analysis of

existing servicer requirements and state laws governing

foreclosures.  Development should include an open dialog with

stakeholders in the servicing arena, all of whom must ultimately

implement and comply with the national standard.  MBA has

initiated this process by convening a blue-ribbon Council on

Residential Mortgage Servicing.  That Council examined the entire

servicing model and is forming recommendations to improve the

system for all stakeholders.  I am pleased to announce that we

are releasing the preliminary White Paper from the Council today

and ask that it be included as part of my written testimony.  

In the White Paper, the Council aims to examine the current

servicing model, address public misconceptions relating to

servicing practices and incentives, and educate the public on the

role and compensation of servicers.   I believe this White Paper

will provide useful information to you and other policymakers

that are currently debating national servicing standards.  I

encourage this subcommittee to use MBA and it’s Council on

Residential Mortgage Servicing as a resource going forward.  In

conclusion, as we develop servicing standards, I will urge you to

pay careful attention to the interdependence of servicing and the

impact that changes to the servicing system will have on the

economics of mortgage servicing, tax and accounting rules and

regulations, and the effect of the new requirements on Basel

capital requirements and on the TBA market.  Servicing does not

exist in a vacuum; instead it is part of a broader ecosystem

which involves all the varied elements of the mortgage industry.

The housing market remains fragile.  Therefore, when considering

changes to the current model, policy makers must be mindful of

unforeseen and unintended consequences that could ultimately

result in higher housing costs for consumers and reduced access

to credit.”

Retail sales up .05%

Total retail sales increased 0.5% last month, the Commerce

Department said. Sales rose 0.9% in March and have risen every

month since July 2010.  Economists had expected a 0.6% gain,

according to consensus estimates from Briefing. com.  Sales

excluding autos and auto parts were up 0.6%, roughly in line with

estimates.  Despite the overall increase in retail sales,

economists said the data suggest that consumer spending may be

slowing down.  Sales at gas stations were up 2.7% in April. Food

and beverage retailers had a 1.2% increase in sales, while

grocery store sales were up 1.5% last month.  Gas prices have

surged this year, with the national average near $4 a gallon. In

addition, food prices have risen sharply due to poor crop yields

and higher production costs due to the spike in energy prices.

Many economists had anticipated a bump in sales during April due

to the Easter holiday, which occurred later in the month than it

normally does.  But department store sales actually fell 0.2% in

the month, according to the report.

NAR – questions Dodd-Frank Act

The National Association of Realtors (NAR) says that a proposed

rule to define qualified residential mortgages (QRM) under the

Dodd-Frank Wall Street Reform and Consumer Protection Act (the

Dodd-Frank Act) would unnecessarily restrict access to home

ownership.  On July 21, 2010, President Barack Obama signed the

Dodd-Frank Act into law. A provision in the Act requires that

financial institutions retain 5% of the risk on loans they

securitize. The purpose is to discourage excessive risk taking

and create strong incentives for responsible lending and

borrowing. Exempt from the requirement are certain QRMs; FHA and

VA mortgages are also exempted.  Six agencies are developing the

risk retention regulation – the Department of Housing and Urban

Development, Federal Deposit Insurance Corp., Federal Housing

Finance Agency, Federal Reserve, Office of the Comptroller of the

Currency, and the U.S. Securities and Exchange Commission.  The

proposed rule narrowly defines QRMs, requiring an 80%

loan-to-value, which necessitates a 20% down payment. The rule

would also limit mortgage payments to 28% of gross income, a very

tight standard.

Following are some of NAR’s remarks:  “As the leading advocate

for housing and home ownership, NAR firmly believes Congress

intended to create a broad QRM exemption – strong evidence

shows that responsible lending standards and ensuring a

borrower’s ability to repay have the greatest impact on

reducing lender risk, and not high down payments.,” said NAR

President Ron Phipps, broker-president of Phipps Realty in

Warwick, R.I. “Saving the necessary down payment has always

been the principal obstacle to buyers seeking to purchase their

first home. Proposals that require high down payments will only

drive more borrowers to FHA, increase costs for borrowers by

raising interest rates and fees, and effectively price many

eligible borrowers out of the housing market.”

According to NAR Research, 60% of recent home buyers made less

than a 20% down payment, and it would take 14 years for a typical

person to save up a 20% down payment to buy a median-priced home.

 NAR wants federal regulators to honor Congressional intent by

crafting a QRM exemption that includes a wide variety of

traditionally safe, well underwritten products such as 30-, 15-,

and 10-year fixed-rate loans; 7-1 and 5-1 ARMs; and loans with

down payments in the 5% – to 20% range with mortgage insurance,

where required, and with other features found in low-risk loans

such as no prepayment penalties or balloon payments.

Business inventories up

The Commerce Department said inventories increased 1.0% to $1.48

trillion, the highest level since November 2008, after increasing

by an upwardly revised 0.7% in February.  Economists polled by

Reuters had forecast inventories rising 0.8% after a previously

reported 0.5% increase in February.  Inventories are a key

component of gross domestic product changes and March’s

bigger-than-expected gain could see the government raise its

first-quarter GDP estimate.  The economy grew at a 1.8% annual

rate in the first quarter, with inventories accounting for 0.93

percentage point, after a 3.1% pace in the fourth quarter.

Business sales rose 2.2% to $1.20 trillion in March, the highest

level since July 2008, after rising 0.5% the prior month. March’s

percentage increase in sales was the largest since March 2010.

March’s sturdy sales pace pushed down the

inventory-to-sales-ratio (which measures how long it would take

to clear shelves at the current sales pace) to a record low 1.23

months from 1.24 months in February.

NY foreclosure courts face 7 year backlog

According to RealtyTrac, at the rate the New York court systems

are currently working through the backlog of foreclosure cases,

it will take more than seven years to clear.  New York is a

judicial state, whereby foreclosures are completed through the

court system. But as cases mounted, the state developed the

largest foreclosure timeline in the country.  It currently takes

an average of 900 days for a foreclosure to wind through the New

York system, according to RealtyTrac, which maintains a count of

filings at the county level.  At the end of April, New York held

an inventory of 39,000 properties that received the initial

foreclosure notice or had been scheduled for auction but remain

unsold. Daren Blomquist, the editor of the RealtyTrac’s monthly

reports, said there is some estimation involved because the firm

doesn’t automatically remove a property from the active inventory

if there has been no update or sale within a certain number of

days.  New York averaged 314 scheduled auctions and 224

repossessions to REO per month so far in 2011. That’s down from

roughly 700 auctions and 520 REO each month last year. Assuming

only half of the 39,000 ends up being foreclosed and the rate of

repossession holds, it would take 87 months to clear this

inventory, Blomquist said.  New York implemented new rules giving

homeowners more protection in February, which may further delay

not only the process but a recovery.

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 150 high-value, high-profit

      properties

    * Owner of one of Florida’s largest Real Estate firms,

     running 4 different offices, supporting over

     420 agents, uniquely positioning him to help

     thousands of investors make money in the

     biggest market opportunity ever!

   * In 2010, Chris’ 4 Central Florida real estate offices

      closed 2,786 sides for a closed sales volume of

      $392,912,927!  

    * 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

]]> http://shortsalesriches.com/blog/foreclosures-down/feed 0 HAMP found lacking, again http://shortsalesriches.com/blog/hamp-found-lacking-again http://shortsalesriches.com/blog/hamp-found-lacking-again#comments Tue, 14 Dec 2010 19:15:12 +0000 admin http://shortsalesriches.com/blog/?p=1879 Smart Real Estate News & Commentary by Chris McLaughlin December 14, 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

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HAMP found lacking, again

Last April, the Congressional Oversight Panel found the program to be struggling to get off the ground despite having been in action for a year and a half. The latest evaluation of the Home Affordable Modification Program (HAMP) came out Tuesday and the result was — same deal.  HAMP has undergone tweaks since April. But the Congressional Oversight Panel, created to issue periodic reports on the TARP bailout program, found little improvement in performance.  Instead of helping 3 million to 4 million struggling mortgage borrowers keep their homes, as originally projected, HAMP will prevent only about 700,000 to 800,000 foreclosures. That number is dwarfed by the 8 million to 13 million foreclosures expected to occur by 2012.  Through the end of October, there have been 519,648 permanent modifications made.  And, since the Treasury Department lost the authority to further restructure the program at the end of October, bolstering its prospects is no longer likely, the report said. In fact, banks are offering more modifications through their own process than through the government’s.  The new report cited several reasons for the program’s failure. For one, servicers, the companies hired by banks to manage the loans, earn extra profits through fees imposed during foreclosure. Because of that, servicers were preventing or delaying modifications.  Another big obstacle was that many loans in trouble often came burdened with second mortgages — home equity loans or lines of credit — that had to sign off on potential deals.  Because so many homes are worth less than the borrowers owe, there is little money to cover the first loan, let alone a second mortgage. So many banks in the second position refused to sign off unless they were paid something.  The oversight panel also faulted Treasury for not having effective means of collecting and analyzing HAMP data. The department, said the panel, did not even set meaningful goals against which to weigh the program’s effectiveness.  Because participation has been so limited, HAMP will probably only spend about $4 billion of the $30 billion allocated for it.  even the loans that have been permanently modified through HAMP have not performed well. Many have already re-defaulted, and that means taxpayer money down the drain.

 Retail sales up

The Commerce Department said total retail sales rose 0.8% last month, fueled in part by deep discounting on holiday merchandise.  Economists surveyed by Briefing.com on average had forecast an increase of 0.5% for November, compared to a revised 1.7% jump in sales the prior month. October sales were originally reported to have increased 1.2%.  Sales excluding autos and auto parts rose 1.2%, compared to a revised 0.8% gain in ex-auto sales in October. Ex-auto sales were originally reported to have increased 0.4%.  Economists had forecast a rise of 0.6% in the measure for November, according to Briefing.com.  The government report showed sales at clothing stores rose 2.7%, were up 2.3% at sporting goods and hobby stores, increased 2.8% at department stores and climbed 1.3% at general merchandise sellers. Online sales rose 2.1%.  Higher gasoline prices fueled gas station sales to a 4% increase in November.  But there were a few weak pockets as well in last month’s report. Electronics sales dipped 0.6%, a figure also reflected when Best Buy, the No. 1 electronics seller, reported a miss on its sales and profit last quarter earlier Tuesday.  Furniture purchases slipped 0.5%.

 BOA finds new way to profit

 Bank of America (BOA) and hedge fund firm Fortress Investment Group have found a new way to profit from foreclosures – by collecting the tax debts of people who can’t afford to pay their property taxes.  Then they package the debts as securities and sell them to investors.  The investigative journal for the Center for Public Integrity noted that BOA’s securities division bundled $301 million worth of owed taxes which Fortress then converted into bonds to pitch to private investors.  Tax debt buyers can assess interest charges and a host of other fees and expect an estimated return of seven to ten percent from the deals.  If the debt still isn’t paid after a certain period of time, buyers can seize the properties through foreclosure.  Public records won’t show who purchased these securities, at what prices they were traded, or the anticipated returns they bring it, because the bonds were sold in private.  A BOA spokesman, William Halldin, denied that the bank and Fortress had acted together in bidding in the auctions.  Halldin said, “Our bids were made independently of any other organization.  Any suggestion that they weren’t independent is simply incorrect.” 

 The journal further claims that financial institutions, including several beneficiaries of federal bailout funds, are energetically finding new money-making avenues from the hot foreclosure market.  They stand-in as tax collectors and as an extension of that role, help local governments to significantly improve their budgets by also finding new owners for abandoned properties.  For example, in Florida, Miami-Dade County, raked in more than $274 million in June last year from the sale of approximately 60,000 property tax liens.  The property tax lien market, estimated at $5 billion and growing, has not come under much scrutiny or legislation.  There is no industry watchdog and regulations have simply not been able to keep up with the fast pace of foreclosures.  Buyers of property tax debts typically hop from state to state to take part in quick online auctions without having to reveal their association with Wall Street, and without registering their operation.  It seems like government officials are not only used to selling property tax debts to these virtually unknown limited liability companies but that their only interest is the large cachet of money the business reaps in.  The only thing required by the government is a tax identification number.

 Frugality?  Not so much

 Private sector debt fell by $165 billion in the third quarter. That is just a quarter of the rate of decline a year ago, Capital Economics notes. But what’s more, government debt issuance more than canceled out that drop, expanding by $380 billion during the period ended in September.  That gap, if you can bear it, stands to get even bigger in coming quarters should Congress approve the deficit-expanding tax deal reached this month by the White House and congressional Republicans.  That shift is not exactly reassuring the many fiscal hawks who warn that U.S. profligacy will not end well. They say the wider the budget gap, the bigger the mountain of debt sitting atop U.S. assets. Both of those trends, they claim, will push the dollar toward collapse in an inflationary crisis reminiscent of a banana republic.  If the ever-growing U.S. budget deficit is exhibit one in this lecture, exhibit two is the staggering level of debt piled up on all levels of society, as measured by the ratio of nonfinancial debt to economic output. Though there has been some talk of Americans getting their financial houses in order, there is not a lot of evidence of it to look at this number (see chart, right).  While financial firms have indeed cut their debt by 16% or so since the financial crisis broke out two years ago, nonfinancial debt – that carried by consumers, government and nonfinancial businesses — remains just 2 percentage points below its bubble-era peak, at 243% of GDP.  The unexpected rise in consumer spending is part of the reason economists at the likes of Goldman Sachs and UBS have been raising their U.S. growth forecasts lately.  “This is a pretty important shift,” Goldman economist Jan Hatzius said this month. “This is why are we turning more upbeat on U.S. growth after being downbeat for the past five years.”

 WSJ – it’s taking longer to foreclose

 Two years ago, the state began requiring that banks and borrowers attend settlement conferences before a foreclosure takes place.  While the conferences are popular with borrowers and have succeeded in helping some families keep their homes, banks have been reluctant to participate. That, and recent revelations that some lenders have improperly submitted foreclosure documents, has prompted judges to take a harsher stance with lenders.  The foreclosure process typically begins after a borrower misses three consecutive monthly payments and ends once the lender repossesses the home or the borrower brings the loan current. Nationwide, there were 2.1 million mortgages in some stage of foreclosure as of October, according to research firm LPS Applied Analytics. 

 The average loan in foreclosure had been in default for 492 days as of October, up from 289 days at the end of 2005, according to LPS.  In New York and New Jersey—another state with consumer friendly laws—the waits are longer. The average loan in foreclosure had been in default for 604 days in New York and 544 days in New Jersey as of October.  “We try and help as many people as we can,” says New York Supreme Court Judge Michael Ajello. “We set up a conference and I try and persuade and cajole the banks to reduce the payments,” he says. But the banks, he adds, “are not very cooperative.”  The Mortgage Bankers Association, which represents some of the nation’s biggest banks, said that banks aren’t trying to be uncooperative but in many cases loan modifications won’t help borrowers because they are unable to meet payments regardless.  At Staten Island’s Richmond County Supreme Court, which has one of the biggest foreclosure caseloads in the city, tensions between borrowers, lenders and judges are rising every week.  The court now hosts settlement conferences four days a week—double that of last year—with about 40 borrowers scheduled to appear each day.

 Two more banks prepare to pay back TARP

 Two regional U.S. banks plan to repay their government bailout loans, a sign of health that could put pressure on other lenders to shed government aid.  Huntington Bancshares said it was issuing stock and bonds to help repay $1.4 billion it received under the U.S. Government’s Troubled Asset Relief Program in November 2008.   First Horizon National Corp said it is selling debt and equity to pay off $867 million of TARP aid.  Huntington’s shares fell after the news because the bank will sell so much equity to repay the government, analysts said. First Horizon’s shares rose as investors cheered its move to shed government support.  Analysts said these repayment plans could be the first of another wave of TARP repayments, and suggest that the U.S. banking system is continuing to heal after the 2008 crisis.  Banks that have yet to repay the government should think about doing it soon, said Jeff Davis, bank analyst at boutique bank Guggenheim Partners.  “If you’re a bank that does wait now, the market might be left to assume there are deeper problems,” Davis said.  The offerings from Huntington and First Horizon come one year after the largest U.S. banks — including Citigroup Inc., Bank of America Corp., and Wells Fargo & Co., raised tens of billions of dollars to repay their government bailout aid.  The first wave of banks to repay TARP came in the summer of 2009, and included Goldman Sachs Group Inc and JPMorgan Chase & Co.

 CNBC’s Olick – negative equity

 ”Just because you owe more on your mortgage than your home is worth doesn’t necessarily mean that you are no longer able to afford your mortgage. For many Americans who bought their homes during the housing boom, little has changed for them financially other than what the appraiser has determined on paper.  What has changed are attitudes, and attitudes can be dangerous.  22.5 percent of U.S. borrowers were in a negative equity position on their homes at the end of Q3, according to a new report from CoreLogic.  The authors of the study warn that deteriorating home prices now will likely push the percentage back up in Q4.  The definition of home ownership, at least according to the Census, includes homeowners in a negative equity position. ‘However, homeowners in negative equity are not likely to behave similarly to homeowners with equity, because their financial interest (the equity) has disappeared and has only a small prospect of returning soon, given price trends,’ note CoreLogic authors.

 Underwater borrowers are more likely to behave like renters, which means they’re not going to invest much in home improvement. They are also more likely to walk away from their commitment, although not in the waves some had predicted.  The Obama Administration has been pushing lenders, Fannie Mae and Freddie Mac to write down principal on underwater mortgages in order to put borrowers back into a positive equity position.” Interestingly, the latest push is for borrowers who are current on their mortgages. They lenders argue, why should they give money voluntarily if the loans are still performing? They don’t even do that very often when the loans are in trouble!  The answer is: attitudes.  The Administration is clearly concerned that more borrowers will either walk away from their commitments or stop spending money on their homes, which are usually their single largest investment.  But is the Administration’s answer—to give borrowers back a few percentage points of equity on paper—really going to fix that and change owner attitudes? No, especially since so many Americans got used to taking money OUT of their homes to pay for all those lovely upgrades.  The change has to come in real home price appreciation.  That is the only thing that is going to give homeowners that much-needed faith in the market, that confidence to stay where they are and spend, not some measly equity handout that won’t amount to much and may just prompt the borrowers to put their house on the already glutted market. 

 And how do you get home price appreciation?  Get rid of that glut of inventory—especially the foreclosures. I’m back on my investor high horse again. Stop offering handouts to underwater borrowers who don’t need them to pay their mortgages and start focusing that same money on eating up empty houses and restoring real home price appreciation through a competitive marketplace. If you help well-vetted, responsible investors buy up the properties and rent them to all the families that lost their homes, you will do a lot more good.

 Now for our real estate education section…

 Blind-Sided by Insufficient Short Sales Advertising?

Have you been blindsided by insufficient short sales marketing strategies? According to several different research studies the answer is probably in the affirmative. Take for instance a new survey conducted by Adweek Media in conjunction with the Harris poll; despite substantial increases in innovation and creativity among internet advertisers, consumers are still “blind” to many advertisements. In another recent study, researchers found that consumers are increasingly blind to advertisements that are too familiar….and (much to their shock) advertisements that represent too much “change”.

Confused yet? No need. Here at the Short Sales blog we take pride in providing clear cut solutions to all your short sales needs including effective marketing strategies. There are three main points that should form the basis of all marketing strategies for the short sale investor and real estate professional:

1. Learn what to do – and what not to do – to attract attention online. Innovation and creativity is important but be sure to spend wisely. For example, banner ads – once considered the mainstream of internet advertising – are woefully out of date…in fact, they ranked near the bottom in terms of impact upon consumers/viewers. On the other hand, social media marketing was found to be highly effective despite relatively mundane formats.

2. Don’t go with the status quo. There are certain times and situations when prospective clients actually desire the status quo; for example, when selecting a reputable baby-sitter or perhaps searching for a funeral director….but most of the time the status quo simply comes across as boring. For real estate, it could be considered one of the deadly sins. Lack of ingenuity, innovation and ambition are NOT going to impress prospective clients. Not sure where you stand? Ask a few friends to take a quick look at your business cards, website, blog, Facebook page and other marketing materials then check back 24-48 hours later to see what they remember most. If they can’t recall anything, you are in dire need of an update. If they can recall 3-5 items then you are probably running with the majority of the pack but certainly not in a leadership position. If they recall more than a half dozen items give yourself a big pat on the back…at the very least you are memorable.

3. Don’t go overboard. After reading item number two above it might seem like a good idea to do anything to get noticed…and depending on where you landed in the dull category, even negative publicity might be an improvement. However, it’s never a good idea to make a habit out of negative publicity. Research indicates that people or concepts too far outside of someone’s norm also tend to be overlooked by clients. By definition, real estate is considered a complex transaction by the majority of people: It routinely involves legal concepts, financial constructs, psychology and much more. On one hand, you want to provide valuable information but in a user-friendly and engaging way. If you work with first-time homebuyers be sure to cover the basics while simultaneously meeting the advanced information needs of investors or others. At the same time, it is important to become memorable without making people uncomfortable. Finding the right balance isn’t simple but sooner or later, those that manage to carve out a niche will have a better chance of retaining clients in the long run. A great logo, appealing incentive program, slightly off-beat appearance or nearly any form of recognition is good…just keep it within a comfort zone that is accessible to the majority of people.

4. Add interaction. A final report by Unicast indicates that consumers are more likely than ever to share and respond to social marketing sites such as Facebook and Twitter. Video abandonment remains problematic but is beginning to show signs of improvement as users (and content providers) grow more technologically savvy.

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
–

]]> http://shortsalesriches.com/blog/hamp-found-lacking-again/feed 0 Mortgage mods slow http://shortsalesriches.com/blog/mortgage-mods-slow http://shortsalesriches.com/blog/mortgage-mods-slow#comments Tue, 26 Oct 2010 17:36:51 +0000 admin http://shortsalesriches.com/blog/?p=1809 Smart Real Estate News & Commentary by Chris McLaughlin October 26, 2010

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Mortgage mods slow

There were 28,000 permanent mortgage modifications reported in September under the Home Affordable Modification Program, known as HAMP. That’s down from more than 33,000 in August.  A total of 495,898 borrowers have received permanent loan modifications since HAMP was launched in 2009. Of that half-million homeowners, 11% redefaulted on their new lower-cost loans after nine months. After six months, less than 10% of modified loans were delinquent.  Banks start by offering trial modifications to see if homeowners qualify for the program and can afford the new payments. Nearly 1.4 million trials have been started thus far, with 35,297 of them happening in September.  Raphael Bostic, assistant secretary of the U.S. Department of Housing and Urban Development, said the Obama administration’s efforts have helped “millions of families” stay in their homes, though no one else seems to agree with him. 

“With many unavoidable foreclosures still in the pipeline, it’s clear that we have a hard road ahead,” Bostic said in a statement.  Indeed. Meanwhile, according to the Special Inspector General for TARP, a congressionally mandated watchdog for the program The Troubled Asset Relief Program has so far “fallen woefully short” of preserving homeownership through the Obama administration’s modification efforts.  “For example, as SIGTARP has noted in past quarterly reports, increased moral hazard and concentration in the financial industry continue to be a TARP legacy,” according to the report. “The biggest banks are bigger than ever, fueled by government support and taxpayer-assisted mergers and acquisitions.”

Ford makes record profit

Dearborn, Mich.-based Ford posted net income of $1.7 billion, or 43 cents per share, up from $997 million, or 29 cents a share, a year earlier. Analysts surveyed by Thomson Reuters expected Ford to report a 38-cent-a-share profit.  Ford’s previous best third-quarter net income was $1.1 billion reported in 1997.  The automaker cited a strong product line, momentum in North America and continued success at Ford Credit as areas of growth.  “It’s been the same story all year long,” said David Whiston, an automotive analyst at Morningstar. “Better pricing in North America, and that offsets the small losses in Europe. The North American market is a real earnings driver.”   Ford also announced plans to further strengthen its balance sheet by paying down its revolving credit line by $2 billion and prepay the remaining $3.6 billion in debt owed to a retiree health care trust.  “Ford sales continue to surge due to a stronger product lineup and improved consumer image,” said Jesse Toprak, vice president of auto trends at TrueCar.com, in a statement. “Their retail sales are strong and transaction prices have been increasing this year, contributing to an improved bottom-line for the automaker.”

Home prices drop

Home prices fell 0.2% from July after five consecutive months of gains, according to the S&P/Case-Shiller composite index of 20 metro areas. However, prices rose a modest 1.7% compared with a year earlier, the housing group reported today.  It was, said David Blitzer, spokesman, “a disappointing report … indicating that the housing market continues to bounce along the recent lows.”  The year-over-year rise fell short of expert expectations as put together by Briefing.com, who predicted a 2% year-over-year rise.  One city that bucked the trend was Las Vegas, where prices inched up 0.1% month-over-month. However, it continued to be the worst performer compared to last year, with prices down 4.5%. Prices in Sin City are down 57% from their peak, which was reached in August, 2006.  Detroit scored the best monthly gain, up 0.5%; San Francisco was up 7.8% year-over-year, the most of any city.  Prices fell 1.1% in Dallas – the worst month of any of the 20 metro areas.

Volcker – no short term inflation

Paul Volcker, former chairman of the Federal Reserve, says the United States will face neither a problem of rising inflation for several years nor a damaging spell of falling prices.  “Inflation is not a problem right now. It won’t be a problem next year, it won’t be a problem for several years,” said Volcker, who is now chairman of the Obama administration’s Economic Recovery Board.  “I see no possibility, frankly, that a deflation will take place,” Volcker said during a panel discussion on financial reform at Boston College.  “Over a period of time, price stability will be conducive to a strong economy,” he added.  The Fed, under Chairman Ben Bernanke, is widely expected to go ahead with efforts to spur inflation, which the central bank sees as its best chance to lift an economy that some see as being on the verge of falling back into recession and a downward spiral in business activity.  The United States, facing massive budget deficits, is caught in a tough situation where a big new spending program is probably unfeasible, but draconian budget cuts like those now being enacted in the UK are also unlikely, he said.  However, according to Mohamed A. El-Erian, chief executive officer at Pacific Investment Management Co, Federal Reserve Treasury purchases will likely spur global inflation while failing to lower U.S. unemployment.

Olick – sales worse than we think

Noise.  There’s an awful lot of it in the report on September existing home sales from the National Association of Realtors.  Yes, it was the biggest monthly gain in 28 years, but it was also the third worst sales month on record. This was thanks to the historic plunge in home sales in July, after what we first thought was the closing deadline for the home buyer tax credit.  September’s data still has government stimulus in it, as it’s showing the final closings from the tax credit. Thirty-two percent of home buyers in September were first timers and a whopping 29% paid in cash, which really gives you an idea of where the mortgage market is today. Sales were still 19 percent below September of 2009 levels, so that tempers the big gain as well. The median sales price also fell 2.4 percent year over year and is the lowest reading since March. 

If you take out the seasonal adjustments in September, there were actually 35,000 fewer home sales in September than August, or a 8.5 percent drop. We always use the seasonally adjusted numbers, because home selling is a very seasonal business, but you can’t ignore the raw stats on this one. The most important number in this report, however, is that 35 percent of all sales in September were of “distressed” properties, or foreclosures and short sales. We all know a huge chunk of that goes away in October, thanks to the foreclosure servicing issues and resulting moratoria.  In a speech today before a conference on the future of housing finance, Fed Chairman Ben Bernanke said the Fed “is evaluating potential effects of these [foreclosure servicing] problems on the real estate market and financial institutions.”  I think the answer to that is in today’s home sales report. The housing market is looking at a rough road.  “Bottom line, the data is an improvement off a very depressed level,” notes Peter Boockvar of Miller Tabak. “But with the robosigner, foreclosure moratorium taking center stage at the very end of September, which today’s figure didn’t capture and neither will Oct (this number measures closings), the figures towards year-end will look much different.”

Now for our real estate education section…

THE #1 Secret to Success

Chances are you have heard it all before; How to make a million before the age of 30. How to outsource everything and work only 4 hours each week. How to live the life you love without time or financial constraints. When confronted with these promises, there are two types of people; those that believe it wholeheartedly and those that reject it.

If you were to ask the average real estate investor why they either accept or reject each premise, chances are you wouldn’t be persuaded to change your own position from the resulting response. In most instances, the rationale boils down to little more than personal philosophy, hope or blind faith. However, ask an experienced and successful short sale investor whether or not they concur and chances are you would be surprised by the response.

The Top 20

The top 20 percent of professionals in nearly any industry represent the “cream of the crop”. They are not necessarily the “best of the best” (a title reserved for those in the top 2 to 5 percent) but rather substantially “better than average”. There is reason for optimism in this situation because there is plenty of room for newcomers, it doesn’t require all the advantages and it is attainable…IF you understand some basics of how and what matters most when generating business.

Common Ground

Does success boil down to the power of positive thinking or is it something else entirely? Well, studies have shown (repeatedly) that it’s a little bit of both. Positive people tend to be fun, engaging and successful because other people like to be around them. It’s not necessary to be the smartest (although intelligence and preparation certainly helps) nor the richest (there are plenty of ways to finance a property or find others to do it for you). No, the one shared trait that makes or breaks success is simply the ability to build a customer base. Think about this for one moment. Would you rather follow the trail of a relative newbie with a fanatically following of tens of thousands or the leadership of an expert who is all but unknown? Both have something to offer but the message is unlikely to meet critical density without the support of the masses. The same applies in a business or investment; without other people, all the hard work and acquisitions have no outlet. The flow of information…and finances…stops.

Key Points

By now you are probably thinking “terrific but what about some real tips”. Well, here they are. When researchers examined the practices of the “top 20″ real estate professionals they found some interesting facts that every short sale investor can use to their advantage. For example, nearly 90% of their business comes from referrals…90 percent! In order to capitalize on this trend, savvy real estate professionals create an aggressive program designed to make contact with past and present clients at least weekly. The result? Greater growth and a rising percentage of market share.

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
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