Real Estate News & Commentary by Chris McLaughlin, July 1, 2009

http://www.shortsalesriches.com

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

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REITs have a fantastic second quarter

Real estate investment trusts (REITs), which were written off by analysts not so long ago, had a blockbuster second quarter this year. The Dow Jones Equity All REIT Total Return Index, which tracks 114 publicly traded REIT stocks, rose 28.9% in the April-June quarter, the biggest quarterly gain since the index debuted in 1989. Just 5 REITs posted losses while 7 firms posted returns in excess of 100%. The spectacular performance signals a change in investor sentiment. “The fear of REITs going to zero is clearly far less today,” said Alexander Goldfarb, an associate director at Sandler O’Neill + Partners LP. Since March this year, REITs have raised over $13 billion from investors. Jon Bortz, chief executive of LaSalle Hotel Properties, said, “We’d been through a pretty challenging period over the last 12 months. The recovery had to do with belief that the world was not going to come to an end.” REITs have restructured their capital structure by reducing debt in their balance sheet. Some analysts believe REITs have to reduce their debt further if they have to be viable in the long-term. Sectorally, hotel REITs rose 73.8% in the second quarter, regional mall REITs rose 59.3%, retail REITs rose 43.2%, and manufactured homes rose 4.9%.

Construction defects hit the housing sector

A large number of homeowners across the country are confronting defects in their homes largely on account of construction faults. As the housing sector expanded aggressively in the last couple of decades, the industry has been besieged with a shortage of skilled manpower and quality construction materials. In addition, tardiness of municipalities in inspecting and certifying homes contributed to the problem. Criterium Engineers, a building-inspection firm, has estimated that 17% of newly built houses in 2006 had at least two significant defects, up from 15% in 2003. Paul Amirata, vice president of claims at Axa Insurance, says construction-defect claims being filed are “pretty severe in terms of the total damage alleged.” The drop in real-estate values has exacerbated the problem. Those with faulty houses find that repairs often cost more than the value of the home. In addition, many do not have the equity to leverage in order to pay for repairs. In case of house defects what is the remedy for homeowners? The National Association of Home builders believes litigation is an inefficient way of resolving issue related to construction defects and says homebuyers should consider using “alternative dispute resolution including mandatory, binding arbitration in consumer contracts.”

Home loan modifications rise in the first quarter

According to a report released by the Office of the Comptroller of the Currency and the Office of Thrift Supervision, the number of loan modifications rose in the first quarter of this year. The report also said there was an increase in mortgage delinquencies and foreclosures in the first quarter. John Dugan, Comptroller of the Currency, said: “While I’m very concerned about the rise in delinquent mortgages and foreclosure actions, the shift in emphasis by servicers to more sustainable, payment-reducing modifications is a positive step that should show significant benefits in the coming months.” Servicers carried out 185,156 loan modifications in the first quarter; this is a rise of 55% from the previous quarter. Seriously delinquent mortgages – loans that are 60 days or more past due – rose 9% from the previous quarter. Delinquencies in prime loans increased by over 20% from the previous quarter and foreclosures stood at 2.5% of all serviced loans. Despite the bad news, analysts believe the loan modification program introduced by the Obama administration is gaining traction and will benefit a large number of homeowners in the coming months.

Consumer confidence drops in June

The Conference Board (TCB), an industry group, said consumer confidence dropped in June after rising in May. TCB’s index of consumer attitudes declined to 49.3 in June from a reading of 54.8 in May. The Present Situation Index, which measures overall consumer sentiments toward the present economic situation, dropped from 29.7 in May to 25.8 in June. Millan Mulraine, economics strategist with TD Securities, said: “On balance, this was a disappointing report as it has clearly bucked the trend of improving consumer sentiments in the past few months. Moreover, with the details of the report uniformly weak, we are left with the impression that this was an outright slump in consumer confidence.” Among the consumers who participated in the survey conducted to gather information on consumer sentiment in the current quarter, 4.6% said they had plans to buy an automobile within 6 months; in contrast to 5.7% in the previous quarter. Those with plans of buying a home dropped from 2.8% to 2.7% while those planning to buy a major appliance dropped to 26.5% from 29.2%. Inflation rate expectations for 12 months rose to 5.9% from 5.6% in May. “Consumers are making a more somber and accurate assessment of the economy and their own financial position,” said Mark Vitner, senior economist at Wachovia. “Consumers may be thinking less bad is not good enough.”

Wall Street firms looking to sublet office space

During boom time, financial firms took office space as though there was no tomorrow. In the current slowdown many firms are giving up or looking at subletting excess space.  According to real-estate brokerage Jones Lang LaSalle, 8.9 million square feet of high-quality, class “A” office space is available in midtown Manhattan for sublet. John Goodkind, a broker with Newmark Knight Frank, says about 10% of the high-end commercial space, amounting to 380,000 square feet, have been given up by financial firms in Greenwich. Analysts say it is a classic buy-high, sell-low situation.

New York private-equity firm Quadrangle Group has offered a three-year sublease for 10,000 square feet at $85 a square foot, a discount of 32% to the 2006 rate. Taconic Capital Advisors has offered 50,000 square feet near Central Park at $80 a square foot, denoting a 22% discount to the rate being paid by Taconic. Hedge funds and other firms, when they sublet space, are likely to lose millions of dollars over the life of the building lease. Buyers looking for space are getting great bargains. Brian Rance, U.S. managing partner of law firm Freshfields Bruckhaus Deringer, says, “It’s a complete buyer’s market.”

Now on to our real estate investor education section…

Sellers – Learn how to Sell Your Home Fast

Whether you are a short sale investor, broker or homeowner these tips for making your home sell fast are sure to streamline the process. Professionals in the field can create a checklist for potential sellers or homeowners can use the following steps to take matter into their own hands and attract legitimate short sale offers with quick closing times.

Begin preparing the paperwork as soon as possible. Your agent or short sale investor is often able to help. Typically you will need the following items:

Hardship letter

Tax Returns

Bank Records

HOA, Property Taxes and other pertinent outlays associated with the property.

Copy of Mortgage, liens or other monies owned on the property.

Put out the word. Let everyone know you need to sell the home – fast. Use works like ‘motivated seller’ or “distressed homeowner” to indicate a willingness to work with buyers able to provide a fast closing.

Contact the lender to let them know your situation.

Perform maintenance and upkeep as you are able. If finances are an issue, try to make the property appear as attractive and well maintained as possible.

Create a list of what you need the most from this deal. For example, if you need a fast closing avoid bankruptcy then say-so when speaking with the agent or potential short sale buyers. If you need a new place to live or rent after closing then mention that as well. Often these items can become part of the negotiation process to help make the deal work.

Identify personal property prior to accepting a final offer. If you intend to take the appliances be sure to specify this in advance. Likewise, it’s important to bring all items that will remain with the home (good and bad) as well as be removed from the home prior to entertaining offers.

Make a folder of all contact information and paperwork. Keep it accessible when speaking with real estate agents or potential buyers. Remember, everything must be in writing and never sign something you don’t fully understand.

Avoid entertaining multiple offers all at once. While this might seem like a good way to increase the odds of a successful sale, it often creates unnecessary delays that could result in your losing the home or growing farther into debt. Instead, ask to see proof of financing or other indication of a quick closing.

Keep it realistic. Even the most reputable short sale offer is likely to be somewhat slow given the large number of sales currently going through the system. A lot of sellers are searching for solid short sale offers so increase your odds by responding quickly to all inquiries and remaining patient throughout the process.

Start Early. The sooner you start the better the odds of selling your property before it becomes critical or urgent.

See you at the top!

Chris McLaughlin

http://www.shortsalesriches.com

PS:

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Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com

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

About the author:

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

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

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

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

Real Estate News & Commentary by Chris McLaughlin, June 23, 2009
http://www.shortsalesriches.com

“2 Careers That Boom in a Recession!”
I’ll tell you about one of these for fr*ee
in my no-charge, no-cost, no-obligation
webinar right here live Tuesday at
8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/443058482

Why would I do that for no charge?  Because
I want a chance to tell you about the other
high-income opportunity, too.

And I can’t do it in an email.

But if you’re finally ready to blast out of
this economic mess, then get a move on… I’d
hate for you to miss out, because we always fill
up a day or so early.  See if there’re any spots left:

https://www2.gotomeeting.com/register/443058482

——–

Existing-home sales rise for the second straight month

According to the National Association of Realtors (NAR), sale of existing-homes rose to a seasonally adjusted annual rate of 4.77 million units in May, denoting a rise of 2.4% over the April figure. This is the second straight month of increase in sale of existing-homes, due to a plentiful supply of homes and availability of attractive mortgage rates. According to NAR, this is the first back-to-back rise since August and September 2005. “While sales may not have yet reached an absolute bottom, clearly a bottoming process is underway,” said Wachovia, a financial services firm. The total number of existing-homes available, at the end of May, stood at 3.80 million units; this represents a 9.6-month supply at the current sales pace, down from a 10.1-month supply in April, according to NAR. Lawrence Yun, NAR chief economist, expressed concerns about “faulty valuations that keep buyers from getting a loan.” Yun said: “Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales. In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment.” Yun warned of a “delay in housing market recovery” and a “further rise in foreclosures” if the appraisal problems are not quickly corrected.” Regionally, existing-home sales in May rose 3.9% in the Northeast, 9% in the Midwest, remained unchanged in the South, and dropped 0.95% in the West.

The state of the nation’s housing

Despite the current slump, the long-term prospects for the housing industry are not bleak, according to the “The State of the Nation’s Housing 2009″ report, released by Harvard University’s Joint Center for Housing Studies (JCHS). The report details factors such as unemployment and the credit crisis leading to problems in the sector. Home equity is positively correlated with consumer spending, and plunging home values have pulled down consumer spending and economic growth in the last couple of years. Analysts say that the current recession provides a painful but a much needed correction to the housing market. But is there a silver lining anywhere? The so-called echo boomers, who are the children of baby boomers, will be a big source of housing demand in the next year and beyond, according to the report. “Echo boomers are larger than the baby boomer population. Couple that with immigration and you have the seeds, the possibility of a housing recovery,” said Nicolas Retsinas, director of JCHS. The report states that minorities will drive 73% of household growth in 2010–20, with Hispanics leading the way at 36%. Given the lower average incomes and wealth of minorities, the increase in minority households “could add significantly to the nation’s already widespread housing affordability challenges,” according to the report.

Government ownership of Fannie and Freddie is bad

James Lockhart, Chairman of the Oversight Board of the Federal Housing Finance Agency, the regulator of Fannie Mae and Freddie Mac, says that the government should not be running Fannie Mae and Freddie Mac. The two firms have been losing money since the current credit crisis started, and the government has invested $85 billion in equity of the 2 companies. In addition, the Treasury and the Federal Reserve have bought over $700 billion of mortgage securities from both the firms. Despite the government support, the turnaround of the two companies is not yet in sight. According to Lockhart, it will take another year or two before the bottom lines of Fannie and Freddie rebound. Lockhart believes that there is a moral hazard in the government owning the mortgage firms. “What I have seen is that government insurance programs are high-risk,” said Lockhart. “It is often difficult in a political environment to calculate or charge an actuarially fair price.” If the government is offering cheap insurance, banks will have an incentive to make loans they shouldn’t. And that will lead to an increase in losses for the 2 firms down the road. Some lawmakers say that the 2 firms should be broken up into smaller firms. Congressman Paul Kanjorski says, “I think it would be bad for the mortgage market to get rid of them completely. But if they were smaller, perhaps next time we won’t be in the situation where these firms are too big to fail.”

Number of bank failures this year: 40 and counting

Last week, regulators closed three banks, bringing the number of bank failures to 40 so far this year. Cooperative Bank of Wilmington, North Carolina, with $970 million in assets and $774 million in deposits; Southern Community Bank of Fayetteville, Georgia, with $377 million in assets and $307 million in deposits, and First National Bank of Anthony, with $156.9 million in assets and $142.5 million in deposits were closed last week. The Federal Deposit Insurance Corporation (FDIC), which insures up to $250,000 per account at member institutions, will take a hit of over $363 million on account of the 3 failures. Amid the recession and a rise in delinquent loans, the pace of bank failures has been rising, from 3 in 2007 to 25 in 2008, to 40 this year. Last year, Washington Mutual became the largest bank to fail in the U.S. history. FDIC’s list of “problem” banks had 305 firms at the end of the first quarter this year. It looks as though there are more failures to come in 2009.

Laid off from Wall Street? The CIA could be your next employer

The Central Intelligence Agency (CIA) has embarked on a recruitment drive to hire finance and economics professionals, as the number and sophistication of frauds rise. “Economics, finance and business professionals, if the quest for the bottom line is just not enough for you, the Central Intelligence Agency has a mission like no other,” says an advertisement from the agency. The agency will conduct rigorous background and medical checks, and a lie-detector test on the recruits. Salaries range from $60,000 for fresh graduates to $160,000 for experienced professionals, in addition to generous benefits. Ron Patrick, a spokesman for recruitment and retention at the CIA, said: “Our economic analysts are looking at counter terrorism; they’re looking at counter proliferation issues, crime issues, and drug issues.” According to Patrick, the response has been good so far. The agency has received several hundred resumes from a variety of applicants including fresh graduates and laid-off bankers. “Typically the people that come to the CIA want to serve the government, they want to serve their countries. It’s a different mindset perhaps than serving a company or serving profit as a bottom line,” said Patrick.

Now on to our real estate investor education section…

What’s Up with Title Insurance on Short Sale Flips in Florida?

According to recent reports, the Attorney’s Title Fund (a major underwriter in Florida) has recently notified attorneys to exercise caution when underwriting short sale flips created with options or similar contracts… but what are the facts behind the situation? Does this represent an end to short sale profits? Of course not.  It may require certain modifications and further disclosures, or perhaps it means you use a different title insurance underwriter. Let’s take a look at the stipulations outlined by The Fund on their website (http://www.thefund.com/portal/news/index.jsp?id=1011632#item).

1. No violations of restrictions listed in the payoff letter or closing instructions….so don’t knowingly commit fraud or ignore specified contractual obligations.  This is common sense!
2. No misrepresentations related to the value or ownership of the property to any party…again, the bank must be told that you are the seller and that you intend to resell the property.  Again, nothing new here.
3. All disbursements must be made in conformation of HUD-1 settlement statements…again, abide by what is in writing.
4. Simultaneous closings are to be treated as individual transaction independent of one another.  (That’s what we teach at Short Sales Riches…you NEVER use C’s money to pay off A!  Each transaction must be separate and distinct).
5. If any of the above situations are not met, prior approval must be provided before insuring the transaction.

In a nutshell, The Fund has taken the position that short sale deals using option contracts should comply with the actual terms and conditions of the contract. Of course, that is hardly earth shattering news and is simple common sense in most cases. It highlights the importance of having a solid paper trail behind your every move…not only does it protect your investment but it’s a solid CYA measure. But, what happens if you find yourself facing a short sale gone bad due to an insurance related issue? Start by taking these steps:

1. Provide copies of all paperwork. Make sure your bases are covered by using tried and tested techniques that use proper disclosure.
2. Always have a spare. Think of it like that extra key you have floating around just in case you need it. The same applies to every professional relationship; no matter how happy you are with your current broker, banker or insurance underwriter take the time to have a secondary resource lined up “just in case.”
3. Comparison shop. The plain fact of the matter is this…short sales make sense. That is why the Federal Government recently updated legislation to make it easier for short sales transactions to take place and provided financial incentives to encourage brokers, bankers and others to participate. Where there is demand someone will step in to fill the gap even if your own insurance agency decides not to participate.
4. Follow the program and the advice of your legal counsel.  All too often people take short cuts instead of doing what attorneys have advised them to do.  In this case, our program clearly indicates that you MUST inform the lender that you intend to resell the property for a profit, and you MUST use cash to fund the A to B transaction and NOT the cash from C’s end lender.  The transactions must be separate and distinct.  But all too often someone watches a webinar and thinks they don’t need to invest in the system and that they can figure it out on their own.  Not a bright idea….and it just leads to negative media attention that’s not focused on the good short sale reselling is doing in getting our market moving again.  ‘Nuf said.

———

See you at the top!
Chris McLaughlin

http://www.shortsalesriches.com

PS:

“2 Careers That Boom in a Recession!”
I’ll tell you about one of these for fr*ee
in my no-charge, no-cost, no-obligation
webinar right here live Tuesday at
8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/443058482

Why would I do that for no charge?  Because
I want a chance to tell you about the other
high-income opportunity, too.

And I can’t do it in an email.

But if you’re finally ready to blast out of
this economic mess, then get a move on… I’d
hate for you to miss out, because we always fill
up a day or so early.  See if there’re any spots left:

https://www2.gotomeeting.com/register/443058482

Copyright Loss Mitigation Institute 2009.
All Rights Reserved.

http://www.shortsalesriches.com

http://www.shortsalescoach.com

http://www.sixfigurebpo.com

http://www.reomillionaireclub.com

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…

http://www.shortsalesriches.com/blog

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

About the author:

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

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

running 4 different offices, supporting nearly

450 agents, uniquely positioning him to help

thousands of investors make money in the

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

Real Estate News & Commentary by Chris McLaughlin, April 29, 2009
http://www.shortsalesriches.com/welcome.html

No money, no credit – but an honest desire to succeed?
That’s all it takes to get into the lucrative business of
finding and reselling short sale properties.  We’ve had
people go from zero to six figures in less than six months!
See if there’re any spots left for this webinar Thursday at
8:30 PM ET, 5:30 PM PST:
https://www2.gotomeeting.com/register/671475562

Economy declines 6.1%
In the first quarter of 2009, the U.S. gross domestic product shrank almost as much as it did in the fourth quarter of 2008, according to a government report today.  The drop was much worse than expected.  According to economists surveyed by Briefing.com, expectations were for a drop of 4.7% in gross domestic product, but the actual drop turned out to be 6.1% — the biggest drop in 26 years.  The two major influences are businesses pullbacks in spending, accounting for 2.6 percentage points of the overall decline in GDP; and inventory reduction during the quarter, which contributed another 2.8 percentage points to the drop in GDP.  State and local governments also cut back on spending.

Mortgage loan application volume down 18.1%
The Mortgage Bankers Association (MBA) announced that the Market Composite Index, a measure of mortgage loan application volume, decreased 18.1 percent on a seasonally adjusted basis to 960.6 from 1172.2 a week earlier.  On an unadjusted basis, the Index decreased 17.4 percent compared with the previous week and increased 62.7 percent compared with the same week one year earlier.  The refinance share of mortgage activity decreased to 75.3 percent of total applications from 79.7 percent the previous week, and the adjustable-rate mortgage (ARM) share of activity increased to 2.1 percent from 1.4 percent from the previous week.

Home ownership declines
According to the US Department of Commerce Census Bureau, the rate of U.S. homeownership slipped in the first quarter to the lowest level since the start of the decade.  U.S. homeownership dropped to 67.5 percent from 68 percent a year earlier, driven by a sharp decline among younger buyers as well as among African-American households.  Today, 74.7% of adult whites own their homes, and blacks are the smallest segment of mortgage borrowers, with only 46.1% of the population currently owning their home.  Hispanics followed at 48.6%, with “all other races” experiencing a homeownership rate of 57.4%.

Six banks fail stress test
Bloomberg says that at least six of the 19 largest U.S. banks require additional capital, according to the results of the so-called “stress-tests.”  Fed Chairman Ben S. Bernanke, Treasury Secretary Timothy Geithner, and other regulators are scheduled to meet this week to discuss the tests, but Geithner has suggested that the options for raising capital include converting government-held preferred shares dating from capital injections made last year, raising private funds, or getting more taxpayer cash.  Bank of America and Citigroup – two of the banks in question – are currently appealing.  According to an April 24 analysis by Morgan Stanley, three of the other four banks are likely to be SunTrust Banks Inc., Keycorp, and Regions Financial Corp.

Now on to our real estate investing education section…
Signs of the Times – How Short Sale Investors Can Spot the True Turn-Around
At the first sign of slowing declines and a few stocks going up in value, the media is eager to report that the worst is over. Before you run out and begin buying up stocks or bonds it might be a good idea to review the signs of a real bottom. Expect a true turn-around to take place after the following events have been established:

Debt Liquidation. While the big bank bail-outs and automobile manufacturers might seem to have drained the Federal Reserve, remember what we spoke about earlier this week…the giant derivative mess is still waiting in the sidelines with numbers that literally dwarf everything else to date. Wait until the true debt liquidation takes place before getting overly excited by the early signs of a supposed recovery.
Failures.  Sooner or later the federal government will stop bailing out bad companies and instead, turn their sights on trying to preserve what is left of the American economy. In a Darwinian struggle for survival, weak companies will fail while larger companies purchase assets for pennies on the dollar. Don’t expect the government to make a major announcement restricting all the bail-outs, instead, simply keep a close eye on spending to see the signs of slowing and eventual capitulation related to the bail-outs. Plain and simple, the federal government won’t be able to afford the true cost of throwing good money at bad business.

Wall Street Woes. Short sale investors already know how fickle the media and traditional economists can be when it comes to investment advice so it should come as no surprise that they will once again be wrong when it comes to Wall Street. When you begin hearing that all stocks are now ‘worthless’ then start searching for signs of the bottom….the same way that real estate has been nearing its own bottom presently. Remember, the tendency is always toward an over-correction prior to a true turn-around.

The Big Event. Every turn around is preceded by a “big event.”  While we don’t pretend to know the future, we can learn a little from the past and take an educated guess that the big event preceding the true turn around could borrow from the pages of history in the form of a major monetary policy change, national bank holiday or other watershed event that “re-sets” the currency and economic system. Already nations from around the world are calling for a new reserve currency to be issued by the International Monetary Fund while the Internet itself is rampant with reports speculating on the emergences of the Amero in much the same way Europe adopted a co-existent currency in the Euro. Whatever form the big event takes, it is certain to reduce those holding dollars, stocks and bonds to potential ruin.

Take time to review the history of other nations in the grip of economic uncertainty to determine how well real estate performed. Indeed, it is one of the few assets that lead to wealth after the true turn-around took place. Meanwhile, keep your eyes and ears open for opportunity to establish your financial future via short sale investments….the time to buy the best bargains is always on the way down – not up. That is when you will really want to sell then reap the rewards of all your hard work and determination.
See you at the top!

Chris McLaughlin
http://www.shortsalesriches.com/welcome.html

Don’t miss our webinar Thursday night at 8:30 PM ET, 5:30 PM PST:
https://www2.gotomeeting.com/register/671475562
Copyright Loss Mitigation Institute 2009.
All Rights Reserved.
http://www.shortsalescoach.com
http://www.shortsalesriches.com
http://www.reomillionaireclub.com
http://www.sixfigurebpo.com

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

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

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 flipping of distressed homes.  Owns portfolio of nearly 100 high-value, high-profit properties.
* Owner and Supervising Broker of one of Florida’s
largest Real Estate firms, running 4 different
offices, supporting nearly 450 agents, uniquely
positioning him to help thousands of investors
make money in the biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in Real Estate Investing, Entrepreneurship, and
Wealth Building
* On twitter: http://twitter.com/mclaughlinchris
* On facebook:
http://www.facebook.com/addfriend.php?id=709199143
—

And so it goes.  Another up and down day on Wall Street, with anxiety as high as it has ever been, reminiscent of the few days post 9/11.

What the heck happened?

Goldman Sachs reported the worst quarter since they went public with their 3rd quarter profit plunging 71%.

Lehman Brothers now trades for pennies and is bankrupt.  Barclays is reportedly offering $2 billion for its broker unit, which essentially means pennies on the dollar.

Bank of America scoops up Merrill Lynch.

And Washington Mutual was downgraded to “junk status” by Standard & Poors, following another “junk” rating by Moody’s Investor Service last week.

And the story of the day is whether the government will come in and bail-out AIG.  My former colleague at TheStreet.com, Jim Cramer, says “AIG is too big to fail” and that the government needs to come to the rescue.  Let’s just make sure the AIG corporate folks get their golden parachutes before the bailout, right?  But let’s recognize that AIG has a trillion, that’s with a t not a b, in assets.  A meltdown of a trillion dollars in assets would send shock waves throughout our economy that might make $4 a gallon gas look like $7 a gallon.  Other financial institutions with exposure tied to AIG would surely fail as well.  And as I say, that’s just a trillion reasons why foreclosures and distressed properties will be here for the foreseeable future.

What, why is this all related to real estate?  In this economy, all the big financial news gets back to one thing: real estate.  So let’s see what else happened today.

Well for starters the Fed didn’t raise interest rates today, which would have sent the stock market down another 500 points had they.  They held them steady.  The Fed is in a catch 22.  On one hand, there are real inflationary pressures.  On the other hand, growth is slowing and needs more stimulus.  In typically FedSpeak, the Fed said: “The downside risk to growth and the upside risks to inflation are both significant concern to the committee.”

But the simple matter of national headlines, with major companies like Merrill, Lehman, and AIG struggling, will inevitability lead Congress to “over-correct,” which will likely mean that the availability of credit from non-government back sources will be longer in coming.  Have you tried getting a loan that isn’t FHA lately?  Have you tried getting a commercial loan?  It is much tougher, and with more regulation it is likely to get even more complicated.  There are no more third-party down payment assistance programs, as a few of the bad ones ruined the fun for the good ones.

And so we come back again. To distressed properties.  To short sales.  To REO properties.

It is estimated that foreclosures will top over 6 million.  The Fed is busy trying to sort out the messes caused by major financial institutions that made the wrong bet on mortgage backed securities.

So who’s gonna get us out of this mess?

The Fed has done its part by providing more liquidity, but don’t ask for the banks to help us much. They are too busy sending out loan denial letters.  It is time again for creative financing, for wrap around mortgages, and even contracts for deed.  That’s how you get deals done in a market where banks don’t like to work with you.

And who knows how to do this?  Realtors and investors.  These two players will be the folks that lead us out of the darkness.  So stay tuned … we’ve only just begun to sort this stuff out.

Yours for short sales riches,

Chris McLaughlin
e-mail: info@shortsalesriches.com
web: http://www.shortsalesriches.com/welcome
phone: (800) 452-7627

P.S.: For those interested in our product, we actually include 5 CDs with the Short Sales Riches System.  Check it out at http://www.shortsalesriches.com/welcome

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