TEAM EMPOWERMENT MORTGAGE CHATTER: March 18; Radio Segment; Redfin and Agent Comments on Listings; Killing an Elephant with a Bazooka; Once-In-A-Lifetime Opportunity for Buyers

To preserve your happiness & decrease any stress you have, you have to enjoy yourself!  

166 MPH on the NASCAR Racing Experience in North Carolina is a great way to do so…


“Think in the morning. Act in the noon. Eat in the evening. Sleep in the night.” — William Blake: Was an English poet, printmaker, and artist


Last Friday I announced that I’d be featured as a co-host on the 910AM Bay Rea Real Estate segment on Sunday from 6-7 PM. I will be on there again this coming Sunday – as a regular co-host. You can listen through 910AM or on your mobile phone. We will also feature links on my website for you as well on Monday morning just incase you’re not able to listen to it on Sunday, check out my website to see the links Monday Morning –



Registered users of Redfin’s website can now see what the brokerage’s agents thought of listings they’ve toured, whether “the lawn needs to be mowed” or the home “showed well,” CEO Glenn Kelman announced in a blog post.

The comments that Redfin agents make in “Agent Insights” notes will also be e-mailed automatically to listing agents, Kelman said.

Given the sheer number of homes Redfin agents tour, the new feature will be a “game changer,” for consumers, he said. The 13,793 Agent Insights currently available for homes on the market represent 35 percent of active listings in Irvine, Calif., and 31 percent of Seattle listings, Kelman wrote.

Redfin will give the client who requested the tour two days to decide whether they want to suppress Agent Insight comments.

“The reasoning behind this is that if you tour a hot property with Redfin, you shouldn’t have to worry that your agent will tell everyone else about it before you’ve had a chance to make your own move,” Kelman said. “The customer who requested the tour comes first.”

Only registered users of Redin’s virtual office website (VOW) will be able to see Agent Insights.

Under the terms of a November 2008 settlement between the Department of Justice and the National Association of Realtors, Redfin and other VOW operators are allowed to provide registered users of their sites with a broader range of property data from multiple listing services, which Kelman said includes the notes that agents take on home tours.

“This is exactly the kind of communication the Department of Justice’s historic settlement with the National Association of Realtors was designed to protect,” Kelman wrote.

That doesn’t mean that buyers and sellers will be comfortable with this “degree of candor,” Kelman acknowledged.

He said Redfin almost offered access to agents’ notes 18 months ago, after the settlement was finalized, but “couldn’t find a way to make it work for our agents, our buyers, our sellers, our peers in the industry.”

By e-mailing “Agent Insights” to listing agents and giving prospective buyers the power to suppress their public display, the company hopes it has found a way to balance the interests of those groups, Kelman said.

The company plans to pay close attention to the feedback it receives on the new capabilities.

In 2007, Redfin was fined by Northwest MLS for publishing reviews of properties for sale on the company’s Sweet Digs blog. The reviews were authored by writers hired by Redfin to visit the properties in person.

Redfin appealed the fine, but shifted the focus of its blogs to be sources of information about markets it serves, analyzing price trends and recent sales.


There’s an old saying that talks about “killing a flea with an elephant gun”. I think that may somewhat trivialize the issue at hand and I don’t want to do that. The issue is a big one, a serious one. So, I modified the saying just a bit to establish that I understand the gravity of the situation. What is the issue? Those damn loan officers! What I mean is that regulators, politicians and the media have chosen to blame loan officers (LOs) for the economic meltdown.

Why did people take loans they couldn’t afford? Their loan officer talked them into it! Why did they get approved for those loans? The loan officer pushed loan programs that ignored basic qualification items like income, credit and/or assets! How about those inflated appraisals? It must be because the loan officer had too cushy of a relationship with the appraiser! It goes on and on…

Let me admit some things:

The standards for entering the mortgage industry were pitifully low and many unqualified (and potentially unscrupulous) people started selling mortgages. That has now been addressed with testing and licensing.

Loan programs were too liberal. Those loan programs are virtually gone.

Many consumers got caught up in the home buying frenzy and they began to use their home’s appreciation like an ATM. The correction we are now enduring is fixing that issue.

With all that being said, the regulators have taken steps to corral the cowboys. The results are clear. The number of licensed LOs is down from a high of 450,000 to estimates of about 115,000 today. Those who are left have survived reduced loan products, testing, licensing AND the scorn of a reluctant public who views the LO with a suspicious eye. Those who are left are qualified professionals who are looking to serve their clients with solid financial advice and counsel. There are still some bad apples of course just as there are in any industry. However, the weeding out process has had a dramatic impact already.

But, that wasn’t enough. Bring out the Bazooka – LO Compensation. Effective April 1st (assuming there is no last second change or delay), the way LOs are paid is going to change. Without going into all the nuts-and-bolts, for the most part, the mortgage BROKER (who just a few years ago represented 70% of all loan originations) will become a dying breed with projections of less than 15% of originations in 2011. Individual LOs will now be compensated based on nothing other than the loan amount for a transaction and/or an hourly wage. (Some lenders are working on “bonus monies” tied to some other quantitative and qualitative metrics, but those payments represent a somewhat gray area at the moment.)

The Consequences

It’s too late for whining and there isn’t a likely outcry from a brainwashed public to rise up in defense of the loan officers. But, there does need to be an understanding by every one of the likely consequences:

More Loan Officers are likely to leave the industry as their income is slashed..estimates of 75,000 LOs by 2012 are not uncommon.

Loan Volume will continue to consolidate to the 4 major banks, some regional banks & credit unions and some large mortgage banks with the smaller mortgage banks and mortgage brokers folding into larger companies or folding all together.

The additional cost to cover the additional expenses for accounting and compliance resulting from this regulation (projected to be 20-30 basis points) will increase the costs of borrowing money.

More loan products (like state mortgage programs that are below market interest rate programs) could go away because LOs need to be paid the same on those programs as they are on other programs and companies will not be able to afford to do that.

LOs will need to do more volume to replace their lower commissions and customer service will suffer.

The good LO is now poised to pay an even steeper price for the LO who was part of the problem but has now left the industry. I believe in transparency. I believe LOs who take advantage of customers (in loan product steering or the timing of the locking in of the loan, for example) have been eliminated or can be controlled in other ways besides this vague directive. I do expect some dissenting opinions on this blog post. However, I am hard pressed to find another industry that discloses as much as we are required to do (in terms of costs) to the consumer. And now we are being told by the government how to dissect the revenue. What’s the next weapon to kill the elephant?


Business Insider’s Money Game interviewed real estate expert Barbara Corcoran earlier this week. This is what she said about buying in this market:

“We have a regular real estate miracle happening right now. We not only have record low prices, but we also have cheap money.”

A second real estate icon, Donald Trump, just a few weeks ago said:

“This is a great time to go out and buy a house. And if you do, in 10 years you’re going to look back and say, ‘You know, I”m glad I listened to Donald Trump’.”

Maybe it’s time to start listening to the people who have made fortunes buying and selling real estate. They may know best!!


Your tax return is due by April 18, 2011 (the deadline was extended three days this year because of weekends and holidays). If you haven’t filed yet, make sure you haven’t forgotten the following 10 tax deductions, which are often overlooked by real estate agents and brokers.

1. Business clothing with logos

2. Car expenses if you take standard mileage rate

3. Home telephone expenses

4. Business gifts

5. Continuing-education courses

6. Tax-preparation fees

7. ATM fees, credit card fees, and interest

8. Subscriptions

9. Greeting cards

10. Websites


A California state assemblyman is introducing legislation that would bill banks $20,000 for every home foreclosure they execute in the state.

San Fernando Valley-based Assemblyman Bob Blumenfield’s office said in a fact sheet released Wednesday that the bill would help make up for costs associated with foreclosures, such as property tax losses.

The money collected would be used for school districts, police and fire departments, small-business loans and other applications.

Amy Schur, who directs advocacy group Alliance of Californians for Community Empowerment, which is supporting the bill, says its language is currently being vetted by the legislature’s legal staff.

Blumenfield spokesman Anthony Matthews did not return a phone call. A message was left with Mortgage Bankers Association spokesman John Mechem.


Generation X – adults ages 31 to 45 – are expected to lead the recovery in the housing market, according to real estate experts in a recent webinar produced by the National Association of Home Builders. During the event, speakers highlighted results of a survey of 10,000 buyers in 27 metro areas.

While Generation X isn’t the largest population group – making up 32 percent of the population compared to 41 percent of baby boomers – it’s the most mobile age group, says Mollie Carmichael, principal of John Burns Real Estate Consulting in Irvine, Calif., the company that conducted the survey.

“They are in full force with their careers, and they need to accommodate growing families,” Carmichael says.

This generation is coming with their own set of house preferences that may differ from other generations. Even though home sizes continue to shrink, first-time buyers and younger families are looking for more room to grow, Carmichael says. Nearly 50 percent said they prefer a home with a large lot and in a suburban development. Only 21 percent said they are looking for a traditional or “walkable neighborhood,” according to the survey.

“They want something compelling, from a design or personalization standpoint,” Carmichael says.

And many want “green,” energy-efficient features, too. Regardless of age group, 70 percent of buyers said in the survey they are willing to pay $5,000 more for a home with “green” features.

Most buyers also said they’d be willing to pay a premium for such housing characteristics as dark wood cabinets, a separate tub and shower, and a fireplace in the living room.


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