“Most of the stress people experience comes from inappropriately managed commitments they make or accept.” – David Allen: Nightingale – Conant author & productivity consultant

 

 

 

 

 

HOUSE PRICES: WHERE THEY WILL BE IN THE SPRING

Many sellers want to wait until the spring before putting their home on the market. This might be for any of several reasons:

• They don’t want to be inconvenienced during the holiday season.
• They believe that they will see more potential buyers and as a result will get a higher price.
• In the northern part of the country, they might not want people walking through the snow and then into their house.
• All of the above

In a normal real estate market, this may make sense. However, this market has been anything but normal. This spring will also see some abnormalities. The biggest difference will be the direction prices will take.

In years past, the spring market would favor the seller because increased demand would outpace any increase in supply: the number of houses coming onto the market would not be as great as the number of buyers newly entering the market. In most situations, when demand is greater than supply, prices increase.

The reason this spring will be different is that the supply of homes coming to the market will be dramatically impacted by foreclosure properties being released by the banks. Many believe this increase in inventory will far outweigh buyer demand. In situations where supply is greater than demand, prices decrease.

Will This Actually Happen?

RealtyTrac, in their latest foreclosure report, explained:

“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork. While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up.

This will impact prices.

What Do Experts Believe the Impact Will Be?

Here are the pricing projections by several major entities:

• Zillow believes we will not see a bottom in prices until the first quarter of 2012.
• Standard & Poors thinks prices will drop %5 in the next few months.
• JP Morgan Chase believes prices will depreciate 6 to 7% over the next six months.
• Barclays says prices will fall 7% by the end of the first quarter of 2012.

Bottom Line

You may pay a hefty price for the convenience of not having your property on the market right now.

 

 

WHY DO YOU WANT TO BUY A HOME?

If you are in the market to buy a home of your own, you need to ask yourself one question: WHY?

It seems like a simple enough question yet it is not. Experts are predicting that, in many markets, prices will continue to soften. That has caused many buyers to stay on the fence of indecision hoping to buy at the optimum time. If the reason you are buying is to do a quick “flip” of the property to make money, waiting most definitely makes sense.

What if the reason you are moving isn’t about finances however. Does it still make sense to delay? That depends on why you are buying. What if your purchase is more about improving the quality of life for you and your family? Or moving into a school district where your child’s talents will be maximized? Or being closer to friends and family? There is a cost to delaying any of these decisions.

We realize everyone wants to make a sound financial decision no matter the actual reason for moving. Delaying in a hope to “time” the market might not make sense however. Forbes.com addressed this issue in an article by John E. Girouard last week:

“Trying to time the housing bottom is as much folly as trying to time stocks or any other investment vehicle. In fact, it’s greater folly because if housing prices do fall further, it’s likely to be because mortgage rates are rising, which would mean that over the long term that slightly lower price you may have paid could end up costing more in carrying costs than you saved.”

He went on to say:

“My answer to those who ask whether now’s the time to buy a house is that the American Dream is and always was alive and well. It has nothing to do with the direction of housing prices but everything to do with your financial situation, income stability, ability to shoulder the costs, and if the home you have your eye on is your version of the American Dream…a home you love that you hope to live in for an extended period.”

Bottom Line

Don’t make buying a home solely a financial decision. Is the real reason you want your own home more important than money? Only you know the answer.

 

 

 

BEST DAY TO LIST REAL ESTATE FOR SALE: FRIDAY

Sellers should list their home on a Friday for the best chance of selling it, according to Seattle-based brokerage Redfin.

Redfin analyzed data for 1.2 million listings in 16 markets nationwide over the past 21 months. The brokerage found that of all listed homes in those 16 markets, those listed on a Friday were 12 percent more likely to sell within 90 days, and homes listed on a Thursday or Friday sold, on average, for slightly closer to list price: 94.4 percent compared with 93.9 percent when homes are listed on a Sunday or Monday. Put another way, that’s a $1,000 difference on a $200,000 home.

Homes listed on a Friday were also 18.8 percent more likely to be toured by Redfin customers. Homes listed on a Sunday or Monday were the least likely to be toured.

“Our theory is that since homebuyers tend to tour homes on the weekends (Saturday and Sunday have 2.5 times more tours per day than weekdays), homes listed on Fridays are the freshest in buyers’ minds when they’re making their weekend plans. It also seems likely that many homebuyers sort their weekend ‘must see’ lists by date listed, going to see the freshest homes first so they have the best chance of getting in on a potential good deal before other buyers,” the brokerage said in a blog post about the findings.

“These factors put homes listed on Friday in front of more touring buyers on the weekend (which our touring data bears out). More tours leads to more offers, and more offers leads to a better price and a better chance of selling.”

In one respect, Sunday beat out any other day of the week: Homes listed on Sunday attracted slightly more online page views than the average on Redfin.com.

While the vast majority of homes are listed on weekdays, no one weekday was especially popular, with between 17 percent and 19 percent of homes listed on any given weekday. About 19 percent of homes were listed on a Friday during the time period studied, Redfin reported.

 

 

US HOMEBUILDERS LESS PESSIMISTIC IN OCTOBER

U.S. homebuilders are less pessimistic about the struggling housing market, but not enough to signal a recovery any time soon.

The National Association of Home Builders said Tuesday that its index of builder sentiment this month rose from 14 to 18.

Any reading below 50 indicates negative sentiment about the housing market. It hasn’t reached 50 since April 2006, the peak of the housing boom. The index has been below 20 for all but one month during the past two years.

Last year, the number of people who bought new homes fell to its lowest level dating back nearly a half-century. Sales this year haven’t fared much better.

Builders are struggling to compete with foreclosures, which have made the price of previously occupied homes more competitive. Many buyers are having difficulty obtaining loans or meeting higher down payment requirements. Low appraisals are scuttling some deals after contracts have been signed. Some buyers want to upgrade to a new house but are holding off because they can’t sell their home.

David Crowe, the builders group’s chief economist, said some builders are shifting their assessment from “poor” to “fair,” but few are changing their views from “fair” to “good.”

The trade group has identified several pockets of strength. Home construction, prices and employment have been improving in those areas.

The two biggest cities cited – New Orleans and Pittsburgh – were suffering through economic downturns during the housing boom. New Orleans is rebuilding after Hurricane Katrina in 2005; Pittsburgh has evolved from a city dependent on the steel industry to a diverse economy with jobs in health care, education and technology.

Smaller metro areas where energy and agriculture are the primary economic drivers have also shown improvement, the trade group said. Of 23 “improving” metro areas highlighted by builders, seven are located in Texas alone.

While new homes make up a small portion of sales, they have an outsize impact on the economy. The builders’ trade group says each new home built creates an average of three jobs for a year and generates about $90,000 in taxes.

Separate gauges of current single-family home sales and foot traffic of prospective buyers increased four and three points each, to 18 and 14, respectively. A survey of sales expectations over the next six months rose seven points, to 24.

An index of builders’ outlook in the West rose nine points, to 21. The Midwest and South rose 4 points, to 15 and 19, respectively. The Northeast was unchanged at 15.

Read more: SF GATE ARTICLE

 

 

 

WHEN WILL REO SALES FINALLY REACH THE PEAK?

Properties repossessed through foreclosure may not peak until 2013, HousingWire reports, quoting several analysts and recent reports.

Foreclosure sales are expected to reach 1.48 million properties in 2013, according to analysts from Bank of America Merrill Lynch.

However, with the surge, “we do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller,” the analysts said.

The increase in foreclosures is expected to mostly change from private banks’ portfolios — which nearly half are from now — to the government’s backlog of properties, with an increase in foreclosures forecasted from Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development’s portfolios. Overall, they are expected to liquidate about 595,000 properties in 2013.

To handle the expected surge, the government continues to consider ideas, including proposals of turning some of the foreclosures into rentals and a plan from the Federal Housing Finance Agency to refinance more underwater borrowers so they’ll be less likely to walk away from their property.

But some analysts are skeptical that a surge in foreclosures will come without an intervention from the government.

“Do they really think that the government under any administration would let 500,000 homes hit the mark and crash prices all over again, six years after the first crash?” Scott Sambucci, chief analyst at Altos Research, told HousingWire.

 

 

 

HOW TO GO FROM 0-30 LISTINGS IN 30 DAYS

In this session successful agent and coach Hoss Pratt shares how he went from 0 – 30 listings in 30 days using a marketing arsenal that targets FSBO’s and expired listings. He’ll share with you how you can set up your daily plan for maximum effectiveness, his powerful 89 point marketing plan you can make your own, and proven scripts and dialogues you can use to get the listing every time.

You’ll leave this session with a copy of his perfect day plan, his 89 point marketing plan, and his performance guarantee that you can make your own.

REGISTER HERE

 

 

GOV’T OFFICIALS URGE BANKS TO HELP ‘UNDERWATER’ BORROWERS

A new plan by state and federal officials could help more “underwater” borrowers qualify for refinancing assistance. The plan is being pushed by state and federal officials as part of ongoing settlement talks with banks over alleged foreclosure abuses.

“The plan under consideration 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 reports.

Many borrowers have been unable to refinance because they don’t have enough equity in their homes to qualify.

About 75 percent of all borrowers who are underwater — those who owe more on their home than it is currently worth — have “above market” mortgage rates, according to CoreLogic. Refinancing could reduce their mortgage rates by at least one percentage point, resulting in a big savings to the nearly 8 million underwater home owners, according to CoreLogic.

The ongoing settlement talks are among federal officials and the five largest lenders, Ally Financial Inc., Bank of America Corp., Citigroup Inc., J.P. Morgan Chase & Co. and Wells Fargo & Co. Any settlement reached in the talks would apply only to mortgages owned by banks, not by investors in mortgage-backed securities.

 

 

LENDERS ARE MAKING MORE LOANS

While the growth has been modest, banks are starting to make more loans again, The New York Times reports. Yet, the lending does tend to favor the strongest corporate and consumer borrowers, the article notes.

With more stringent underwriting criteria the last few years, many borrowers have expressed concern over the increasing trouble in qualifying for a loan today.

But “the narrative that banks aren’t lending is incorrect,” Timothy J. Sloan, Wells Fargo’s chief financial officer, told The New York Times. “Lending is strong, and based on what we’re seeing,” it will “continue to grow.”

Citigroup, for example, recently announced loan growth in the third quarter compared to a year ago in nearly all of its businesses.

The growth in loans is likely due to record-low interest rates and more borrowers seeking cash on their credit lines, experts say.

However, home lending still remains down. Mortgage and home equity loans have dropped more than 6.2 percent since peaking in late 2007 and early 2008, according to Federal Reserve data.

“I don’t think the lending window is open near enough to what you need to see to get the economy growing, businesses expanding, and to bring the unemployment rate down,” Bernard Baumohl, the chief global economist at the Economic Outlook Group, told The New York Times.

 

“The proper function of man is to live, not to exist. I shall not waste my days in trying to prolong them. I shall use my time.” – Jack London

 

 

WALL STREET JOURNAL & FORBES: IT’S TIME TO BUY A HOME

We believe very strongly that now is the time to buy a home. Some will say we are just saying this to create real estate transactions and commissions. Because of that, today we will quote what those outside the real estate profession are saying to the people who look to them for financial advice.

The Wall Street Journal

Last week, in an article entitled It’s Time to Buy That House, the WSJ told their subscribers:

“It’s an excellent time to buy a house, either to live in for the long term or for investment income…Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”

In an article two weeks ago, MarketWatch.com (the on-line blog for WSJ) told their readers:

“Now could be the best time in history to buy a home.”

Forbes.com

In a report to their subscribers, Capital Economics reported that:

“The previous declines in house prices and the more recent drop in mortgage rates to record lows have created an unusual situation in which the median monthly mortgage payment is more or less the same as the median rental payment.”

Why is this important? Last week, Forbes explained to their readers

“If rents simply kept up with inflation at a 3.2% annual increase, a $1,500 rent payment would cost that renter nearly $900,000 over the next 30 years. The same $1,500 payment made to their mortgage would be only $540,000 (because the payments don’t increase with inflation).”

They went on to explain the advantages of homeownership during retirement:

“Even with a dismal 1% growth rate over 30 years, a $300,000 property would appreciate well over $100,000 giving the homeowner an additional nest egg for retirement”

At a time when retirement is becoming much more challenging, an extra $400,000 (or likely more) can make a major difference not to mention the impact of NOT having to pay a mortgage. How much less would you have to save for retirement if you didn’t pay the mortgage?”

Bottom Line

When the iconic financial newspaper and the iconic financial magazine say that it now makes financial sense to purchase a house, perhaps it’s time to buy a home.

 

 

10 STEP PROVEN FACEBOOK FARMING STRATEGY

 

Have GREAT success using Facebook pages coupled with “old fashioned” neighborhood farming…getting to meet so many people in our neighborhood, and providing lots of cool stuff for them.

10 Steps:

1. Create a neighborhood page on our website. I include photos, videos, listings, neighbor testimonials, etc.
2. Create a neighborhood Facebook page with lots of photos.
3. Door-to-door (yep, I know this is where I lost almost all of you) – using clear door hanger bags and a 5×8 postcard with two pieces of candy – promoting the Facebook page for the neighborhood. Without knocking or bugging people, just hang them on the door handles.
4. Do this 4-6 times over the course of a 3 month period.
5. Watch your page numbers grow.
6. Start interacting with neighbors/residents – from yard sales, lost pet notices, HOA info, etc. and including photos, videos, etc.
7. Throw little contests – drawing for a $25 gift certificate for a local restaurant. All they had to do was “like” the post and share a comment on what they love about the neighborhood. Draw a winner – on video, meet the winner in person, give all of the other participants “consolation prizes” (candy bars) delivering everything IN PERSON.
8. As you deliver things in person, ask them to do video testimonials of what they love about living in the neighborhood. You can put those testimonials up on our web page and push a couple through to the Facebook page.
9. Another contest – this one was simply a promo on who loved a particular yogurt store in our neighborhood. This can give you additional people to meet in person (giving everyone a $2 gift certificate).
10. Start to do direct mail in your neighborhood to capitalize on the door-to-door and Facebook pages. This will help keep promoting the Facebook page – then use the Facebook page as our way to meet people IRL and build relationships with them.

Your goal is to become THE neighborhood realtor – the one everyone knows – the one that loves the neighborhood.

You will be building trust relationships with people – so that when I have something real estate related, it’ll be looked at and considered, not just thrown away.

Catch Christina Ethridge live at Agent Reboot Boise where she will be on a panel about Social Media Insights – Making the Smartest Investment of Your Time.

 

 

 

 

USE A COUPON TO BUY A HOME?

More real estate professionals are jumping in the coupon-frenzy by luring home buyers with group coupon deals to use in their home purchases. Buyers have to purchase the coupon in order to get the discount.

 

For example, a buyer may purchase a coupon for $30 and then use the coupon to receive $1,000 cash back at closing when they buy a home, such as in a coupon-deal offered by Prudential Carolina Sun Real Estate in Charleston, S.C.

Builders and some real estate professionals have started to use the coupons as a way to attract more buyers. For example, Van Metre Homes, a builder in Virginia, used HouseTipper to promote its coupon deal of $5,000 in closing costs. HouseTipper sold about 13 coupons at $50 each, and at least half of the coupon buyers have signed contracts for homes by the builder.

Some real estate agents are also using Groupon to offer coupon deals. But the new HouseTipper is a collective buying platform directly targeted at the housing and home and garden sectors and works with home builders, real estate brokers, lenders, and other housing-related companies.

 

 

 

TALK THAT MAKES A DIFFERENCE ON CAPITOL HILL

On the day the Wall Street Journal ran an op-ed online calling for federal action to get the housing market moving again, a group of lawmakers, industry leaders, and policy strategists were devising ways to do just that.

Sen. Johnny Isakson (D-Ga.) called for allowing underwater home owners to use money from their retirement accounts to help them stay in their home rather than lose it to foreclosure. Rep. Dennis Cardoza (D-Calif.) called for lenders to refinance mortgages of troubled home owners without requiring an appraisal. Richard Smith, president and CEO of national real estate brokerage giant Realogy Corp. called for a share equity program and also to make federally backed mortgages assumable.

 

These were just a few of the ideas to come out of a day-long meeting, hosted by two policy think tanks, the Progressive Policy Institute and Economic Policies for the 21st Century, that these and other housing leaders participated in to find solutions to the housing crisis.

“This meeting called by the private sector is the kind of meeting that ought to be taking place on Pennsylvania Avenue and in the Capitol of the United States of America,” said Sen. Isakson.

NAR President Ron Phipps set the tone of the conference when he said the market is capable of self-correcting but it needs two things. First, it needs the federal government to stop intervening (or threatening to intervene) in the market in the wrong way such as by imposing a 20 percent down requirement in the qualified residential mortgage (QRM) rule or by talking about curbs to the mortgage interest deduction. Piecemeal federal intervention in foreclosure processing isn’t helping, either. Second, it needs the government to intervene in smart ways. Hence, the search for solutions like those offered up by Sen. Isakson, Rep. Cardoza, and others.

Had the conference, called “New Solutions for America’s Housing Crisis,” been merely a talkfest among policy strategists, many of the ideas for getting housing moving again might not get to the ear of Congress as quickly as many would like. But with several lawmakers there, including Sen. Isakson, Rep. Cardoza, and Sen. Jeff Merkley (D-Ore.), half the battle of getting the ear of Congress has already been won. Sen. Isakson is a widely respected leader in the Senate on real estate issues and Rep. Cardoza has been on the forefront in seeking solutions to the housing crisis, as you would expect he would be: his district is in California’s central valley, one of the hardest-hit areas in the country. In some parts of his district, underwater home owners outnumber those with positive equity by a factor of three-to-one.

In his Wall Street Journal piece, Neal Lipschutz made an important observation. “There are reasonable proposals offered from many corners that don’t spell stimulus in capital letters but would do some good,” he said. The housing conference, which got underway just about the time his piece came out, makes it clear that iT’s not because of a shortage of ideas that the housing market is stuck in neutral. What’s needed, rather, is leadership, said President Phipps. “We’ve had plenty of talking about blame,” he said. “We need to get to solutions.”

 

“I do not think there is any other quality so essential to success of any kind as the quality of perseverance. It overcomes almost everything, even nature.”

– John D. Rockefeller

 

 

 

 

MEN VS. WOMEN: HOW THEY DIFFER IN REAL ESTATE

It’s the battle of the sexes in a new analysis by Trulia, which pits the sexes against each other to find out whether male or female real estate agents tend to list the most homes, whom tends to list the priciest homes for sale, and which sex is outnumbered in the industry.

Some of Trulia’s findings:

-Who dominates:  More women work in real estate than men, according to Trulia. For example, Trulia found big pockets where females outnumbered men in the industry, such as in Mississippi and Oklahoma where there are 64 percent more women working as real estate agents than men.

-Who lists the most homes: Men tend to list more homes for sale, according to Trulia, when looking at the average number of homes that men and women put up for sale by state. For example, in North Dakota, men had 129 percent more homes for sale on the market than females.

-Who lists the priciest homes: Female real estate professionals tend to list more expensive homes than males, according to Trulia. In West Virginia, for example, homes for sale by female real estate agents were 63 percent more expensive than those listed with male agents. (Trulia notes in its article that pricing a home to sell factors in a lot of things about the property and neighborhood and does not necessarily reflect how aggressive an agent is on the pricing.)

TRULIA ARTICLE (READ MORE)

 

 

CREATING MARKETING IDEAS THAT PRODUCE LOVE AFFAIRS

I want you to have an affair. Have a REALLY good one. One that will make everyone invozlved in it smile for years to come. Can you imagine yourself in this scenario? I can and I am. Right now.

OK. Stop right there and listen very closely. I am NOT suggesting a PHYSICAL affair. On the contrary. I am talking about having a life long affair – more than just an engagement with your audience. I mean, get out there and make some waves, ruffle some feathers and make some noise!

When it comes to real estate marketing and social media, you have to do things that will make people stand up and take notice – make a move. It takes effort and diligence. It takes having a plan and sticking to it. There is no “Plan B” involved.

One brokerage that has just released their newest social media marketing initiative is Long Realty, and they have this one covered in lipstick kisses! Eighty-five year ago, Long Realty was founded (in 1926), and they wanted to honor that by involving their sphere, community and audience throughout their Arizona marketing area. The marketing department got together and built a community-outreach campaign, called “Why I Love Arizona”.

The Concept:

An online photo contest where individuals are encouraged to submit photos of why they love Arizona. Photos are submitted and voted on by the public. There is a deadline for submissions and a specific period of days for voting. The photo with the largest amount of votes wins $1,926 (the year Long Realty was founded).

Long Realty’s Marketing & Technology Vice President, Kevin Kaplan, created a contest website, http://www.WhyILoveArizona.com where the contest is live and as of this morning, 290 images had been submitted. The contest started this week. Kaplan also put into place several turn-key online and offline tools for their agents to easily enable their own spheres to take part in the contest. A number of major media outlets, including newspapers, news and radio stations have partnered with this initiative and provided substantial exposure.

The Outcome:

The beauty of this campaign is that it engages both their immediate and peripheral audiences on many different levels. It:

1. Directly relates to THEM

2. Focuses on a POSITIVE

3. Community BUILDING

4. Contains a sense of URGENCY

5. Uses many facets of SOCIAL MEDIA

6. Encourages social media SHARING

7. Drives TRAFFIC and TIME ON SITE

8. Generates LEADS

9. Has an END RESULT: IT GIVES THEM SOMETHING THEY WANT!

Long Company’s CEO, Rosey Koberlein, explained the relevance and importance of the campaign: “Every person has a different experience in Arizona. We want to learn more about the areas people enjoy most. At Long Realty we love Arizona, and we see this campaign as an opportunity to celebrate our state and motivate citizens to do their part in making it an enjoyable place to live.”

The Seducer

Images. Right from the toddler years until the day we die, images are by nature highly visual and pleasing to the eye – we all like looking at them. They are also excellent for website traffic and time on site (and ultimately Google ranking). Long Realty Company has taken the perfect tool and turned it into a lead generating machine. And so can you.

So what can you learn from this and takeaway to use yourself? Sure you may not have a couple of thousand dollars to giveaway on a regular basis, but by honing in on the strategy, you can create life long love affairs with your audience and subsequent clients too. Have a meeting with your Broker and your office as a whole, and create quarterly or bi-yearly campaigns that will bring you the outcomes noted above.

 

 

 

 

 

BUYERS WANT A DEAL — OR A STEAL?

Buyers are still looking for homes, but they won’t settle for anything less than a great deal, say real estate professionals.

“All the buyers across the board want everything in a house,” says Karin Batterton, a Coldwell Banker real estate agent in Baltimore. “They want it completely done. They want all the newest, trendy materials, and they want it for 2005 prices.”

Regardless of buyers’ high desires these days, the homes that are selling tend to be the ones where sellers price their homes the most competitively.

“When you have realistic sellers, then we have competitive bidding on houses and you might even see that price go up,” Batterton told WBAL-TV. “When you have an unrealistic seller, then you have a house on the market for a long time, and it just depends.”

READ MORE

 

 

 

 

 

 

HOUSEHOLD INCOME POSTS BIG DROPS SINCE 2009

The recession officially ended in June 2009, but the big dent to most households’ pocketbook didn’t happen until the years following it, according to a new study.

Household income has posted some of its biggest drops in the last two years, moreso than during the recession itself, according to the study by two former Census Bureau officials.

From June 2009 to June 2011, median household income dropped 6.7 percent to $49,909. Yet, during the recession (December 2007 to June 2009), household income fell only 3.2 percent.

In total, household income has dropped 9.8 percent since the start of recession to June of 2011 — the largest drop in decades.

There has been “a significant reduction in the American standard of living,” wrote Gordon W. Green Jr., who wrote the report.

Since the recession and beyond, the number of unemployed persons has risen and the hourly pay of employed people has not kept up with the pace of inflation, the authors note.

 

“As human beings, our greatness lies not so much in being able to remake the world…as in being able to remake ourselves.”

– Mahatma Gandhi

 

5 QUICK TIPS FOR OCTOBER

1. We Must Be Prepared For EVERY Appointment

We can’t miss one single opportunity. We must be able to close each appointment. Every agent should have 4 different and distinct ‘conversation’ manuals:

Listing Manual

Buyer Manual

Price Correction Manual

Negotiation of Offer Manual

Each manual should be filled with visuals, charts, graphs, and articles that help buyers and sellers make the correct decisions for themselves and their families. If you do not have all 4 manuals, start creating them immediately.

2. We Must Be Prepared For The Pre-Appointment Appointment

The appointments mentioned above are usually scheduled, thus giving us time to properly prepare. We must also be prepared when someone asks us about the market when we just ‘bump into them’ (ex. at the store, movies or sports event). If you have a smart phone, make sure you have loaded a few great visuals to show when you are faced with one of these impromptu meetings. If you don’t have a smart phone, keep a few pieces of paper with you showing the same information.

HINT: The smart phone is a much cooler way to do this.

3. Attend Conferences and Classes That Will Help Your Business

We hope to see you in Anaheim at NAR’s REALTORS Conference & Expo.

4. We Must Start Building The Foundation For a Great 2012

Happy New Year!! Many of the deals we put into contract from now until the end of the year will actually close in 2012. Almost every buyer we meet and listing we take in the next three months will close next year. You are now building your 2012 income. If you had a successful 2011, great!! Now you must work hard in order to reach your 2012 goals. If 2011 was a challenge, the good news is it’s over. Start building the foundation for a fabulous 2012.

5. We Must Manage Our Expectations Properly

Some of us are judging our daily success by whether or not we did a deal (listing, listing sold, buyer sale) that day. If we did not, we see our effort as futile. We must make sure that we instead quantify success based on whether we did the activities that success requires. As an example, if a person is losing weight, they can’t judge success by the pounds they lost that day. Instead, they have to judge their success in terms of whether they ate properly and exercised. If they eat wisely and exercise, the weight loss is guaranteed to come. If you do the activities that will create deals, the deals are guaranteed to come.

The appointments mentioned above are usually scheduled, thus giving us time to properly prepare. We must also be prepared when someone asks us about the market when we just ‘bump into them’ (ex. at the store, movies or sports event). If you have a smart phone, make sure you have loaded a few great visuals to show when you are faced with one of these impromptu meetings. If you don’t have a smart phone, keep a few pieces of paper with you showing the same information.

HINT: The smart phone is a much cooler way to do this.

 

 

REDISTRIBUTING WEALTH TO THE RICH?

Many people are placing the concept of homeownership under attack. There is more and more debate whether we should limit government assistance to homeowners. The administration just came out with their Reforming America’s Housing Finance Market: A Report to Congress. The report acknowledges the advantages of homeownership:

“…which has helped millions of middle class families build wealth and achieve the American Dream.”

The paper also talks about curtailing a century of government assistance for American homeownership (ex. the elimination of Fannie Mae and Freddie Mac):

“But our plan also dramatically transforms the role of government in the housing market. In the past, the government’s financial and tax policies encouraged housing purchases and real estate investment over other sectors of our economy, and ultimately left taxpayers responsible for much of the risk incurred by a poorly supervised housing finance market.

Going forward, the government’s primary role should be limited to robust oversight and consumer protection, targeted assistance for low- and moderate-income homeowners and renters.”

At the same time it speaks of increasing its support for rental housing:

“The Administration believes that we must continue to take the necessary steps to ensure that Americans have access to an adequate range of affordable housing options. This does not mean all Americans should become homeowners – we should ensure that there are a range of affordable options for the 100 million Americans who rent, whether they do so by choice or necessity.”

In a press release announcing the administration’s points, Housing and Urban Development Secretary Shaun Donovan is quoted:

“We must continue to take the necessary steps to ensure that Americans have access to quality housing they can afford. This involves rebalancing our housing priorities to support a range of affordable options, from promoting much-needed financing for quality, affordable rental homes to ensuring the availability of safe, and sustainable mortgage products for current and future homeowners.”

This is not just a matter of semantics. In his prepared testimony before the House Committee on Financial Services, Treasury Secretary Timothy Geithner said:

“Our goal is not for every American to become a homeowner.”

The administration is taking a strong stance against government’s role in supporting homeownership. This would be a major change in policy. Assistance for homeownership has been important to America for a century. Many young people were able to attend college because their parents were willing and able to refinance their home to pay the tuition. Many American business owners got their start-up capital by taking an equity loan on their house. Renters won’t be able to ask their landlords to help pay their child’s college tuition. Renters can’t expect landlords to finance the development of the new product they discovered.

If we start to create a land with greater numbers of renters, those able to still purchase property will get wealthier collecting the rents from those who can no longer attain the American Dream. The administration calls for more support for these developers:

“The Administration will explore ways to provide greater support for rental housing. One option would be to do so by expanding FHA’s capacity to support lending to the multifamily market.”

This will lead to the redistribution of wealth in this country with the owners of the rental units building family wealth with profits generated by this real estate.

Diana Olick in an article for CNBC Realty Check quotes Democrat Melvin Watt of North Carolina:

“…there’s not going to be any home ownership at the low income level…Rich people will have home ownership and rich people will make money on apartment rentals, but we’ll be a renter nation for low-income people.”

We have to make sure this is the America we want.

 

 

 

FORECLOSURE FILINGS DROP, BUT MORE TROUBLE AHEAD?

Foreclosure filings dropped 6 percent from August to September and marking a 38 percent decrease since September 2010, RealtyTrac reports in its latest report.

“While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up,” says James Saccacio, RealtyTrac chief executive.

Already, foreclosures have posted slight increases when looked at on a quarterly basis. Following three consecutive quarterly decreases, foreclosure filings reversed trend in the third quarter, inching up slightly by less than 1 percent, RealtyTrac reports.

“This marginal increase in overall foreclosure activity was fueled by a 14 percent jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months spent trying to clear the chimney of sloppily filed foreclosures,” says Saccacio.

Meanwhile, the foreclosure process continues to be a lengthy one. Banks are taking an average of 366 days to from start to finish in the foreclosure process–that’s up from an average of 318 days during the second quarter, according to RealtyTrac.

Some states are posting even longer delays. For example, in New York, the foreclosure process took an average of 986 days–the longest in the country. In New Jersey, foreclosures dragged on average for 974 days. Foreclosures were moving faster in Texas: Texas had the fastest foreclosure process with an average of 86 days.

 

 

NAR: GOVERNMENT PLAYS VALUABLE ROLE IN HOMEOWNERSHIP

Owning a home has had long-standing government support in the U.S. because homeownership benefits individuals and families, strengthens communities, and is integral to the nation’s economy, the National Association of REALTORS® said in testimony today.

NAR President-Elect Moe Veissi outlined the association’s recommendations for housing finance reform before the House Financial Services Subcommittee on International Monetary Policy and Trade.

“We must be better stewards of the U.S. housing finance system if it is to thrive and effectively serve American home buyers and mortgage investors into the future,” Veissi said. “Repairs to our current housing finance structure must be made, but we must be careful that changes to the system do not come at the expense of homeownership opportunities for middle- and lower income Americans.”

Toward that end, NAR supports H.R. 2413, the “Secondary Market Facility for Residential Mortgage Act of 2011,” introduced by Reps. Gary Miller, R-Calif., and Carolyn McCarthy, D-N.Y.

“H.R. 2413 offers a comprehensive strategy for reforming the secondary mortgage market and gives the federal government a continued role to ensure a consistent flow of mortgage credit in all markets and all economic conditions,” said Veissi. “Moreover, it supports the use of long-term fixed-rate mortgage products.”

Veissi testified that full privatization of the secondary mortgage market would all but eliminate products like the 30-year fixed-rate mortgage and that mortgage interest rates would be unnecessarily higher and unaffordable for many Americans, shutting otherwise qualified buyers out of the market.

“The 30-year fixed-rate mortgage is the bedrock of the U.S housing finance system, and without government support, there’s no evidence that this type of mortgage would continue to exist,” said Veissi.

Private firms’ business strategies would focus on optimizing their profits, creating mortgage products that are more aligned with the goals of their business than in the best interests of the nation’s housing policy or consumers.”

Veissi said that while the size of the government’s participation in housing finance should decrease if private capital is to return to the market and function properly, the federal government must have a continued role in the secondary mortgage market to avoid losing long-term, fixed-rate mortgage products and keep borrowing costs affordable for consumers.

“Continuing government participation in the secondary mortgage market is critical to ensuring that qualified home buyers can obtain safe and sound mortgage financing products even during market downturns, when private entities have historically pulled back,” Veissi said.

Recent reductions to the conforming loan limits by the federal government are already having an impact on mortgage liquidity according to early data from an NAR survey, which found that consumers who are now above the new lower conventional conforming loan limit are experiencing significantly higher interest rates and the need for substantially larger down payments.

Veissi said that the housing and economic recoveries have been slow and that activities that force economic activity to be constricted further should be resisted.

“For hundreds of years, this country has understood the value of homeownership because it helps families build wealth, supports community stability and contributes to our economy. We need to make sure that future housing policies continue to reinforce our long-standing value of homeownership, for the future of our families and our country,” said Veissi.

 

 

NEW ZILLOW SERVICE ALLOWS AGENTS TO ADVERTISE REAL ESTATE DISCOUNTS, DEALS

Online real estate portal Zillow has launched a new service, Zillow Special Offers, that allows agents to promote incentives for working with them in a home-sale transaction.

The feature is part of Zillow’s Premier Agent Program, a paid advertising and lead-generation service that can provide greater visibility to agents and real estate listings at Zillow.com.

The special offers are posted by listing agents participating in Zillow’s Premier Agent Program and are seller-funded, according to an announcement at the Zillow Blog. “These seller-funded incentives give buyers a little something extra after closing, such as a $3,000 credit off closing costs or a gift card to go buy those new appliances or blinds … extras that make the listing stand out!” the blog post states.

Also this week, Zillow announced that it has integrated its Zillow Mortgage Marketplace functionality into its popular iPhone app, which, according to apps-ranking site TopAppCharts.com, continues to be the most popular real estate app in Apple’s App Store, and today ranked sixth in the store’s “Productivity” category.

Zillow in June had launched Mortgage Marketplace as a separate app, and TopAppCharts ranks that app No. 1 in a keyword search of “mortgage” apps for iPhone, ranking No. 19 in the App Store’s “Finance” category. The Mortgage Marketplace allows users to request loan quotes and use mortgage payment and affordability calculators.

“This integration gives Zillow iPhone app users easy access to research, shop for and compare mortgages without ever leaving the app they use to search for homes,” the company said in an announcement.

Zillow also reported that a significant part of the company’s traffic is related to its mobile apps. People “are viewing more than 2.5 million homes on Zillow every day from a mobile device,” the company reported.

 

 

SOLUTIONS FOR HOUSING: BIG FIXES OR SMALL TWEAKS?

The housing market doesn’t necessarily require a major overhaul for a recovery, a panel of experts said yesterday morning at the Mortgage Bankers 2011 Convention & Expo in Chicago. A handful of relatively minor tweaks should hasten a turnaround that is already underway in some respects.

“I take a great deal of solace in recent numbers,” said Moody’s Chief Economist Mark Zandi. “The stability in nondistressed prices is encouraging and suggests an underlying stability in the overall housing market. If you can implement policies that reduce the share of distressed sales of the total market, housing should see a dramatic recovery quickly.”

There are three fundamental problems with the housing sector today, Zandi said:

1. Valuation: Housing values until recently were very high compared to incomes and respective rents, he explained. Housing prices are back to normal in relation to income, but still a bit high compared to rents.

2. Overbuilding: There’s been some debate about how much excess inventory actually exists. Zandi speculated that it could take a couple of years to work through that surplus, if there were no major changes in supply and demand.

3. Foreclosure: There are about 3.4 million first-mortgage loans in foreclosure right now, he said. “I do think we’re going to have more price declines, but I think the share [of distressed sales of the total market] will go down over the next year.”

These are significant problems, to be sure. But a mix of simple solutions should go a long way in alleviating those issues. First, government-sponsored enterprises Fannie Mae and Freddie Mac should make it easier to do refinancing and principal reductions, said Jared Bernstein, a former economic policy adviser to vice president Joe Biden and a speaker on that panel.

Second, the attorneys’ general suit against banks that improperly handled mortgage documentation must reach a resolution, Zandi said. Once that’s complete, the number of distressed sales will go up in the short run as foreclosures and REOs that were held up by the suit hit the market, but will decline long term.

Finally, credit needs to get back to normal, pre-boom and -bust levels. The loans being made right now are of “outstanding quality,” said panelist Brian Chappelle, a partner with Potomac Partners in Washington, D.C. He added that the average credit score of an FHA borrower today is 705. However, there aren’t enough qualified borrowers to absorb the current supply of properties.

Proposals such as GSE reform and risk-rentention rules are still important for avoiding another extreme boom-and-bust cycle in the housing market, Zandi said, but they don’t really get at the challenges of today’s environment like those simple solutions.

“Our problems are not drastic,” he said. “We don’t need to do one big thing to fix all of this. We’ve gone a long way to right the wrongs in this industry. There’s just a few things we need to do around the edges. If you can implement policies that reduce the share of distressed sales of the total market, housing should see a dramatic recovery quickly.”

“The purpose of human life is to show compassion and the will to help others.” by Albert Schweitzer

AN APPLE A DAY HAS PASSED AWAY. BUT HE HAS LEFT A BASKET FULL OF LEGACY.

I never met him, but I knew him.

I never talked to him, but he spoke to me often.

I never saw him present live, but my vision of him is burned into my brain.

Steve Jobs has left the earth, but his legacy and remains are among each of us, and will be touched every day for decades.

When I learned of his death, I was so saddened I couldn’t write. I just sat there in disbelief, realizing that the life of the business hero I followed would no longer be alive to announce the next amazing technological product.

After a few hours, I posted this on all of my social media outlets:

Steve Jobs has passed away, but his legacy will live longer than any of us. I am sad that my business hero has gone to his final reward, and forever grateful for what he has done to my world, both in business and in life. Thank you Steve, for a Jobs well done.

The laptop, the iPod, the iPhone, and the iPad were created and improved beyond the imagination or the capability of 1,000 of his peers. The great Bill Gates tried and failed – many times – to top Apple products. So have every one of his competitors.

And Jobs did all of this with quiet dignity, genius, eloquence, and simplicity.

If you own an Apple product, any Apple product, there’s one thing you don’t need – an instruction manual. I have been using everything Mac, and everything Apple, since 1984 and I have NEVER read one word of “how-to” instruction. Part of Jobs’ design genius was to make every product intuitive.

One man reinvented the computer, the operating system, the music player, and the cell phone (now called a smartphone), and created a tablet to fill a market space that no one even knew was void – the iPad. The iPad2 is changing the face of book publishing, and book distribution, the same way the iPod changed music and music distribution.

Amazing? No – genius.

PICKING THE RIGHT AGENT IS CRUCIAL

The National Association of Realtors (NAR) released their Existing Sales Report two weeks ago and in the report they discussed a troubling trend: cancelled contracts are increasing dramatically. NAR defined the issue:

‘Contract failures – cancellations caused largely by declined mortgage applications or failures in loan underwriting from appraised values coming in below the negotiated price.”

NAR explained that 18% of all contracts were cancelled in August. This compares to 16% last month and 9% in August of 2010.

The percentage of cancelled contracts has doubled in the past year!!

It is extremely important that both buyers and sellers pick the right real estate professional to assist them with their real estate needs.

BUYERS

Make sure your agent can not only help you find the home of your dreams but also find you professional assistance with all aspects of the transaction (mortgaging, title, etc.)

SELLERS

Realize that your agent must sell the home twice:

• to a qualified buyer
• to the bank (through the appraiser).

The second sale may be more difficult in this market than the first.

Bottom Line

It is imperative in this housing market that both buyers and sellers use a true real estate professional to guarantee that the deal will actually reach the closing table.

HOUSE PRICES TO FALL OVER NEXT SIX MONTHS

In a normal real estate market, it may make sense to wait for the spring buyers’ to appear before placing your house up for sale. The current real estate market is anything but normal however. The increase in supply of distressed properties will overshadow any increase in demand for housing over the next 6 months. This is reflected in the findings of two groups: Clear Capital and JPMorgan Chase.

Dr. Alex Villacorta, Director of Research and Analytics at Clear Capital explained last week:

“The housing market has yet to demonstrate the fundamentals necessary to overcome a seasonal slowdown over the next six months, which drives our projected 3.2 percent drop in national home prices through the first quarter of 2012.”

HousingWire quotes analysts at JPMorgan Chase:

“Home prices could dip another 6% to 7%, before hitting rock bottom in early 2012.”

Bottom Line

If you are thinking of selling, it would be wise to put your house on the market before prices fall again.

HUD OFFERS GRANTS TO FIGHT HOUSING DISCRIMINATION

The U.S. Department of Housing and Urban Development is awarding more than $28 million in grants to organizations in 33 states to help investigate allegations of housing discrimination and promote equal housing opportunities.

“Last year, HUD filed more Fair Housing Act charges than any year since 2002,” John Trasvina, HUD assistant secretary for Fair Housing & Equal Opportunity, said in a statement. “The Fair Housing Initiatives Program grantees play a vital role to enhance our civil rights law enforcement efforts.”

The grants will be available to use for investigating alleged housing discrimination and enforce the Fair Housing Act, as well as to educate the public and housing providers about their rights and obligations under fair housing laws.

Eighty-four housing organizations and non-profit agencies will receive funds. To view the list of agencies, visit http://www.hud.gov.

THIS TIME WE ARE SOUNDING THE ALARMS

One of the things I often hear from people I meet is that real estate and mortgage professionals should have seen the current housing crisis coming and done something to prevent it. We should have realized that easing lending practices would lead to millions of families buying a home they could never afford. We should have warned our neighbors not to use their homes as ATMs. We should have realized that the economy could never withstand such growth and was about to crash.

Maybe these people are correct. Looking back, perhaps we could have been better stewards of the home buying process. We are committed to not making that same mistake again. Now, if we see a possible challenge in the future, we will speak up. That is what caused the writing of this blog post.

WE MUST SOUND THE ALARMS!

ALARM: Homeownership Percentage Has Dropped Dramatically!!

MSNBC.com, in an article entitled Housing Bust Worst Since Great Depression reported:

“The analysis by the Census Bureau found the homeownership rate fell to 65.1 percent last year – analysts say the U.S. may never return to its mid-decade housing boom peak in which nearly 70 percent of occupied households were owned by their residents.”

ALARM: People Are Losing Hope in the American Dream

In the same article, Patrick Newport, economist with IHS Global Insight is quoted saying:

“The changes now taking place are mind-boggling: the housing market has completely crashed and attitudes toward housing are shifting from owning to renting. While 10 years ago owning a home was the American Dream, I’m not sure a lot of people still think that way.”

ALARM: The Safety and Well Being of the Family Being Sacrificed

If we look at Fannie Mae ‘ s quarterly National Home Survey, as far back as we can go, the top four reasons for buying a home are the same. The top four reasons people buy a home are:

It means having a good place to raise children and provide them with a good education

To have a physical structure where their family feels safe

It allows for more space for their family

It gives them control over what they do with their living space including renovations and updates.

Are children no longer important? Is safety less of a consideration today? Is the pride of homeownership soon to be forgotten? We must look at the long range consequences of being a renters ‘ society.

ALARM: Building Family Wealth Being Threatened

Let’s look at homeownership as an investment. The Federal Reserve does a survey every 3 years. In 1998 the average Homeowner’s net worth exceeded that of renters by 31 times. In 2001 it was 36 times and eventually in 2007 it was all the way up to 46 times that of renters. Now, homeownership isn’t about a guaranteed financial short-term return – the market goes up, down and back up again. We have to be prepared for the long-term and a key component to wealth is homeownership. Even in these toughest of times, the wealth of the homeowner is over 30 times that of renters.

At a time when we are discussing the gap in wealth between the top 1% and the other 99%, how does the less fortunate paying rent to pay off the mortgages of the more fortunate make any sense?

Bottom Line

Homeownership is important to the American family. If we lose this as a basic concept, what else do we lose? We didn’t realize the consequences when it was too easy to buy a house a few years ago and we are paying a price for that. We will pay an even larger price if we don’t realize the consequences of it being much too difficult for many to own a home today. SOUND THE ALARMS!

“It is the nature of thought to find its way into action.” – Christian Nevell Bovee: Was an American author and lawyers in the late 1800s

 

2011 TAX CREDITS AVAILABLE FOR ‘GREEN’ UPDATES

Adding “green” technology into a home can help home owners save in a long run but some home owners may not be able to afford the costly upfront investment. Several tax credits are available to help home owners–and buyers–save on “green” updates.

Here are two main tax credits available for those interested in making energy efficient improvements to their homes:

1. Wind, Solar, Geothermal and Fuel Cell Tax Credit: This tax credit is available for both existing homes and new construction. Home owners can receive a credit up to 30 percent off the cost of their improvements between Jan. 1 and Dec. 31 of this year. The following “green” updates qualify: Geothermal heat pumps, solar panels, solar water heaters, small wind energy systems, and fuel cells.

2. Qualified Energy Efficiency Improvements: This credit gives a 10 percent tax credit for purchases that were “placed in service” between Jan. 1 and Dec. 31, 2011. According to the National Association of Home Builders: “The maximum credit for a taxpayer for all taxable years being $500, and no more than $200 of such credit may be attributable to expenditures on windows. This rule means that taxpayers who have claimed $500 or more of this tax credit in prior years, particularly 2009 and 2010, can no longer participate in the program.”

Learn More About What Upgrades Are Eligible As Well As How To Apply.

 

 

HUD WANTS HOUSING COUNSELING FUNDS BACK

The Department of Housing and Urban Development is asking Congress to restore funding for its housing counseling program, which it says is “important to the recovery and stability of our housing markets.”

The program faced major cuts in April. Congress slashed $88 million in HUD nonprofit counseling funds for 2011.

“This cut jeopardizes the vital consumer protections housing counselors provide nationwide, and restoration of these funds is important to the recovery and stability of our housing markets,” Deborah Holston, HUD’s acting deputy assistant secretary for single family housing, told a House subcommittee Wednesday.

About half of the clients in the counseling program in 2009 and 2010 sought foreclosure prevention assistance. HUD points to research such as from the Government Accountability Office that found counseling resulted in fewer defaults. Also, borrowers who received National Foreclosure Mitigation Counseling program funds before a loan modification had a 53 percent better chance of bringing their mortgage up-to-date.

“This program has far-reaching effects throughout our economy, and the services it supports will continue to be vital to the ongoing recovery,” Holston told the subcommittee.

READ ENTIRE ARTICLE HERE

 

 

HOW TO PICK YOUR LENDER

In the whirl wind that surrounds the home buying and mortgage process, how can a consumer be sure that they are working with the right lender? I mean there are so many choices…here’s some things to consider:

What type of company is it?

There are mortgage brokers, mortgage bankers and banks/credit unions. Mortgage brokers have been hamstrung by many of the recent regulatory changes and typically lack the actual ability to approve and/or lock a loan. Banks are usually limited in program choices and hamstrung by tighter underwriting. Mortgage bankers have the financial stability and direct lending capability of the bank coupled with the wide product menu and expertise of the mortgage broker. From a global perspective, I see mortgage bankers as a clear winner.

How does the company operate?

Many people are dismayed when they find out where their loan is processed or underwritten…or where the appraiser is from. It is important to work with a company (and their affiliates) who understand the nuances of your local market. Asking the questions up front can save you headaches down the road.

What about the individual loan officer?

Your relationship with your LO (and their processor/assistant) becomes the most important ingredient to a successful transaction. How well do they educate you about the process, the requirements…the factors that determine your approval or the interest rate you will get? Many LOs are “order takers”. Others are weak in follow up or communication. This is difficult to determine on your own which is why the referral from another person who used them or your real estate agent has far more value than most people know (until it’s too late).

Too many people stay focused on quoted rates and fees and neglect to see the whole picture of what is needed from a lender. Look for great communication, superior information and education, understanding of the local market and someone who looks at your application as something more than a number. Be prepared to pay a little more to get a better experience (even though it might not cost you any more)….in the long run, lowering stress can be more important.

ZACKRY COOPER & TEAM

**WORKING WITH ZACKRY COOPER & TEAM EMPOWERMENT YOU WILL FIND THAT YOU WILL BE PRESENTED WITH QUALITY CUSTOMER SERVICE. OUR TEAM PROVIDES YOU WITH A WEEKLY UPDATE (WORLD CLASS WEDNESDAY UPDATES) WHILE IN CONTRACT SO ALL PARTIES INVOLVED KNOWS WHAT’S GOING ON. ZACKRY WORKS TO HELP EDCUATE NOT ONLY YOU AS THE REALTOR BUT YOUR BUYERS ON WHAT LOAN PROGRAMS ARE AVAILABLE TO THEM AND WHAT WORKS BEST FOR THEM AS WE STRIVE TO MEET THEIR PURCHASING GOALS TOGETHER. AS YOUR PURCHASE LENDING TEAM WE ARE PROVIDED WITH IN-HOUSE UNDERWRITERS, PROCESSORS AND APPRAISERS. CONTACT ZACKRY COOPER TODAY ABOUT CLOSING YOUR PURCHASE WITHIN 25 DAYS**

 

 

DEFAULTS SOAR 33%, BIGGEST MONTHLY GAIN IN 4 YEARS

A new wave of foreclosures hit in August, as banks picked up the pace in taking action against home owners who have fallen behind on their mortgage payments, RealtyTrac Inc. reported Thursday.

The number of U.S. homes that receiving an initial default notice rose 33 percent in August from July. That increase represents the biggest monthly gain in four years, according to RealtyTrac.

“This is really the first time we’ve seen a significant increase in the number of new foreclosure actions,” says Rick Sharga, a senior vice president at RealtyTrac. “It’s still possible this is a blip, but I think it’s much more likely we’re seeing the beginning of a trend here.”

The uptick in foreclosure activity follows after months of a slowdown in foreclosures, which started last fall, with banks reviewing foreclosure policies and paperwork after facing lawsuits and criticism over how they processed foreclosures. Some banks even temporarily halted their foreclosures as they more carefully reviewed pending cases. The slowdown was also blamed on court delays in some states.

But some housing experts say the increase in foreclosure activity actually could be good for the housing market. A faster turnaround in foreclosures could help clear the glut of shadow inventory hovering over the market, which many say has caused home values to plummet.

The “bloated foreclosure pipeline now presents the greatest obstacle to a housing market recovery,” said Josh Levin, a Citi analyst. About 3.7 million more homes are in some stage of foreclosure than in a normal housing market, Levin said.

Banks are on track to repossess about 800,000 homes this year – down from more than 1 million last year, Sharga said.

Overall, 228,098 U.S. homes – or one in every 570 U.S. households – received a foreclosure-related notice in August, a 7 percent increase from July. However, that represents a 33 percent decline from August 2010.

 

 

SELLERS SAY THEIR HOMES ARE WORTH MORE

Seventy-five percent of home owners say their homes are worth more than the recommended listing price, according to real estate professionals recently surveyed by HomeGain. On the other hand, 68 percent of home buyers say homes are overpriced.

However, home owners may be getting more realistic about falling home values. Forty-five percent of home owners say they expect home values to decrease within the next six months, while 47 percent of real estate professionals say they expect values to also decrease within that time period.

HomeGain surveyed more than 500 real estate professionals and 2,200 home owners for its third quarter home values survey.

 

Top 5 States Where Home Prices Will Rise in the Next 6 Months

Real estate professionals surveyed were most optimistic about these housing markets to see a rise in home values in the next six months:

• Arizona
• Florida
• Texas
• California
• Ohio

 

Top 5 States Where Home Prices Will Fall in the Next 6 Months

Real estate professionals surveyed expected these housing markets to see a drop in home values in the next six months:

• New Jersey
• Pennsylvania
• North Carolina
• Georgia
• Virginia

 

 

OPEN HOUSE FLYER EXAMPLE

Need an open house flyer for the upcoming weekend? If so, contact my assistant, Sherrell Ayers before 3:00 pm TODAY to get one created for your open house!

“The best thing workers can bring to their jobs is a lifelong thirst for learning.” – Jack Welch

 

 

HOUSES UNDERWATER: THE TIDE IS ABOUT TO RISE

 

Two separate housing reports came out in the last week which discussed different challenges facing the current real estate market. The first was CoreLogic’s Negative Equity Report and the second was JP Morgan Chase’s Home Price Monitor. Each report delivered some difficult news. However, if you piece both reports together, we can see future challenges are in store for home values.

 

Negative Equity

When a home’s current value is less than the existing mortgage on that home, the house is said to be in a “negative equity” situation (other terms used to describe this situation are “underwater” and “upside down”.

 

The CoreLogic report stated:

 

“…that 10.9 million, or 22.5 percent, of all residential properties with a mortgage were in negative equity at the end of the second quarter of 2011… An additional 2.4 million borrowers had less than five percent equity, referred to as near-negative equity, in the second quarter. Together, negative equity and near-negative equity mortgages accounted for 27.5 percent of all residential properties with a mortgage nationwide.”

This is important because studies show that people in a negative equity situation are more likely to default on their mortgage payments than people who have equity in their homes.

 

Home Prices

Many experts believe that housing prices will soften through this winter. According to an article in HousingWire, analysts from JP Morgan Chase announced in their recent Home Price Monitor:

 

“Home prices could dip another 6% to 7%, before hitting rock bottom in early 2012.”

Let’s Combine the Information

The CoreLogic report said there are an additional 2.4 million households with less than 5% equity. The JP Morgan Chase report said that prices will drop another 6 to 7% in the next six months. That leaves an additional 2 million+ homes in the near future that will be faced with the decision to pay (or not pay) the mortgage payment on a house no longer worth the amount of that mortgage.

 

Bottom Line

History has shown that a percentage of those 2 million+ homes will enter the distressed property category as some families decide it no longer makes sense to pay their mortgage. Any increase in short sales or foreclosures will impact prices in an area.

 

 

 

 

WESTERN STATES POST BIG JUMP IN FORECLOSURE STARTS

 

Foreclosure filings and sales jumped significantly throughout areas in the West, reversing what had been a declining trend the past several months, ForeclosureRadar reports. The surge was driven by a drastic increase in filings by Bank of America, the company reports.

 

Bank of America and related entities posted a 116 percent increase from July to August in foreclosure starts, ForeclosureRadar reports in its August 2011 report. Foreclosure starts represent the first notice filed, either a notice of default or notice of trustee sale, depending on the state.

 

“Bank of America appears to be primarily responsible for the surge in foreclosure starts this month,” says Sean O’Toole, CEO of ForeclosureRadar.com. “Since their average time to foreclose has recently increased to more than a year, it is unclear that these foreclosure starts will lead to an increase in foreclosure sales anytime soon.”

 

The following is data comparing July to August 2011 foreclosure filings for the western states ForeclosureRadar analyzed in its latest report.

 

Arizona

 

Notice of default: n/a

 

Notice of trustee sale filings: +15%

 

Properties sold back to bank (REO): -8.1%

 

California

 

Notice of default: +69.5% (its highest level in a year)

 

Notice of sale: +6.1%

 

Sold back to bank: +12.3%

 

Nevada

 

Notice of default: +44.2%

 

Notice of sale: -9.9%

 

Sold back to bank: +1.2%

 

Oregon

 

Notice of default: +35.6%

 

Notice of sale: n/a

 

Sold back to bank: +243.3%

 

Washington

 

Notice of default: n/a

 

Notice of sale: +3.9%

 

Back to bank: -29.4%

 

 

 

 

 

 

‘RESPONSIBLE HOME OWNERS’ TO GET AID IN EXPANDED PROGRAM

The Obama administration is expected to allow more home owners to take advantage of current low interest rates by expanding its two-year old refinancing program, the Home Affordable Refinance Program.

To a joint session of Congress on Thursday, President Obama vowed to help “responsible home owners” refinance their mortgage so that they could reduce their monthly mortgage payments. It’s “a step that can put more than $2,000 a year in a family’s pocket, and give a lift to an economy still burdened by the drop in housing prices,” Obama told Congress last week.

 

The Home Affordable Refinance Program was originally designed to help home owners who could not qualify for loans from private companies. Fannie Mae and Freddie Mac would then offer loans at lower rates to borrowers with mortgage debts up to 125 percent of the value of their homes.

 

Through the end of June, the companies had refinanced only 838,000 mortgages through the program with critics mostly blaming the low number on falling home values and strict income requirements that reduced the number of eligible borrowers.

 

The Obama administration announced late last week that they plan to issue new guidelines for the program in the coming weeks, The New York Times reported.

 

 

 

 

 

STAY PROFITABLE WITH A BUDGET AND GOALS

 

The economic crisis and the housing downturn have put a damper on realty firms’ profitability, and many are having trouble shifting to new business models.

 

Experts say the housing boom enabled agents and brokers to operate inefficiently, but falling home prices have since put downward pressure on commission income and forced them to pay closer attention to their operations.

 

In order to remain profitable, experts say firms need to create a budget and impose reasonable goals for themselves and their agents. They should make generating profits a primary goal, which can be accomplished by developing separate budgets for the company and its agents and budgeting to turn a profit. By giving agents goals, they will be motivated to succeed and to communicate regularly with the brokerage. A SWOT (Strengths, Weaknesses, Opportunity, Threats) analysis is important to ensure that goals are being met, flagging big outstanding expenses and other potential problem areas and reviewing the budget every quarter.

 

Among other things, brokerages need to track the coming and going of funds by monitoring deals; track the success of each agent to ensure they are profitable, which will boost the company’s profitability in turn; and consider partnering with a firm like Lone Wolf, which offers brokerWOLF and WOLFconnect to boost office efficiency by managing accounting and back office functions.

 

“In any moment of decision, the best thing you can do is the right thing,the next to best thing is the wrong thing, and the worst thing you can do is nothing.”

– Theodore Roosevelt: was the 26th President of the United States

 

 

LISTING AGENTS AND COMMISSION INCOME

**Brought to you by blogger: Ken H. Johnson, Ph.D., – Florida International University and Editor of Journal of Housing Research**

The Research

How can agents maximize their commission income? The options are straight forward. Agents can choose to specialize in selling property to people. They can choose to specialize in selling property for people, or they can choose to have a balance between listing and selling closings. Casual arguments can be made for all three approaches. Until recently, however, there was no statistical evidence to settle this argument leaving agents to rely on unsubstantiated arguments such as “list to live” and “sell to survive”.

Johnson, Zumpano, and Anderson (2007)[1] directly investigate the question of how agents specialize and the impact of their choices on their commission income. Specifically, they investigate the effect of specializing in listing versus specializing in selling versus a balanced approach and resulting commissions.[2] Their findings clearly indicate that specializing in listing dramatically increases agent income. In fact, agents that specialize in listing average a whopping 81% increase in annual commission income over the typical agent. Interestingly, agents that seek a balanced approach experience an average annual loss in commission income of 14%. For those that specialize in selling, the loss in income is substantial at an average loss in commission income of 81% – the exact opposite performance from those specializing in listing.

Implications for Practice

For the first time, agents have clear evidence on which strategy (listing/selling/balanced) is best. Clearly, they should seek to specialize in listings as the statistical evidence indicates an increase in their annual commission income. It seems as many have suspected that time spent developing a sound inventory of listings is key to success and a long career in the industry. On the other hand, specializing in selling or producing a balance between selling and listing closings leads to less income on average.

Obviously, it is very difficult for less experienced agents to be as proficient as more experienced agents in acquiring, selling, and closing listings. But, make no mistake about it, learning how to be a good listing agent is critical to their ultimate success in the business. Therefore, while early in their career, an agent might need to “sell to survive”. They should be aware that eventually they will need to “list to live” a long time in real estate.

Endnotes

[1] Johnson K.H., L.V. Zumpano and R.I. Anderson, Listing Specialization and Residential Real Estate Licensee Income, Journal of Real Estate Research, 2007, 29:1, 75-89.

[2] They define specialization in listings as the ratio of closed listing transaction to closed selling transaction that is greater than 1.1. For a balanced approach the ratio ranges between .9 and 1.1, while for selling specialization the ratio is less than .9.

 

 

 

 

WHY DO FAMILIES ACTUALLY BUY A HOME?

 

THE MAJOR REASONS PEOPLE BUY A HOME

It means having a good place to raise children and provide them with a good education

You have a physical structure where you and your family feel safe

It allows you to have more space for your family

It gives you control of what you do with your living space (renovations and updates)

 

 

 

 

 

WHERE HOME PRICES HAVE DROPPED THE MOST

 

California cities have seen their home values drop by the largest percentage in the last five years, with some metro areas posting losses of up to 67 percent in that time period. California cities occupied six of the top 10 metro areas with the largest drops, according to a recent Zillow study based on its home-value estimates and Zillow Home Value Index.

 

Overall, “there will be many ups and downs in home values before this is over, and we continue to expect a true bottom in 2012, at the earliest,” says Stan Humphries, Zillow’s chief economist. “There are still hazards in the form of a full foreclosure pipeline, high negative equity, and fluctuations in demand.”

 

The following are seven cities that have seen home values drop the most since the housing boom, according to Zillow:

 

1. Merced, Calif.

July 2011 Zillow Home Value Index: $106,514

Zillow Home Value Index 5 Years ago: $328,813

Value difference (by percent): -67.6%

 

2. Modesto, Calif.

July 2011 ZHVI: $128,777

ZHVI 5 Years Ago: $352,599

Value difference: -63.5%

 

3. Stockton, Calif.

July 2011 ZHVI: $150,061

ZHVI 5 Years Ago: $404,036

Value difference: -62.9%

 

4. Las Vegas

July 2011 ZHVI: $117,084

ZHVI 5 Years Ago: $303,656

Value difference: -61.4%

 

5. Vallejo, Calif.

July 2011 ZHVI: $190,521

ZHVI 5 Years Ago: $468,071

Value difference: -59.3%

 

6. Salinas, Calif.

July 2011 ZHVI: $282,289

ZHVI 5 Years Ago: $664,404

Value difference: -57.5%

 

7. Daytona Beach, Fla.

July 2011 ZHVI: $95,193

ZHVI 5 Years Ago: $220,436

Value difference: -56.8%

 

 

 

MORE HOME BUILDERS STRUGGLE TO STAY AFLOAT

 

Sales of new homes this year are on pace to reach the lowest level on record. After peaking in 2005 at 1.3 million units, the annual rate was 298,000 units in July.

 

New home builders are struggling to compete against existing homes and foreclosures that are selling for big discounts – a struggle that is now going on nearly five years in some markets.

 

Some builders are keeping business afloat by pulling back on land purchases to conserve money as well as drastically reducing their staff.

 

Other builders – such as Toll Brothers, known as a major builder of “McMansions” – are looking to new ventures, like expanding into urban areas by building condos, a stronger area of growth nowadays. And some builders are offering more of a diverse mix of homes to try to appeal to the largest pool of buyers.

 

“The market is not deep enough or big enough to support all the builders,” Alex Barron, an analyst with the Housing Research Center, told The Wall Street Journal. “There needs to be some consolidation. I don’t think that means [mergers or acquisitions]. I just think that means there has to be a shakeout.”

 

 

——————————————————————————–

 

NAR TO HOST HOUSING SUMMIT

As the leading advocate for homeownership, the National Association of REALTORS® will host a summit of policy makers, industry leaders, and government stake holders to develop strategies to help stabilize and revitalize the nation’s housing market and economy.

 

“Homeownership is an investment in your future, strengthens our communities, and is integral to our nation’s economy,” said NAR President Ron Phipps, broker-president of Phipps Realty in Warwick, R.I. “Our goal is to develop solutions and recommendations for Congress and the administration so that they can develop strong housing policies to stabilize the nation’s housing market and lead the country out of today’s economic struggles.”

 

The event is scheduled to take place early in October in Washington, D.C. While planning is still underway, NAR expects that REALTOR® leaders will join legislators, government officials, business leaders, top industry executives, and economists to design a housing recovery plan that will address today’s critical homeownership, mortgage finance and real estate investment challenges.

 

A housing recovery is key to America’s economic strength, and NAR wants to make sure that any proposed legislation and regulatory rules or changes to current programs and incentives help address industry issues and don’t further exacerbate problems within the fragile real estate industry.

 

“To move the real estate market and economy forward there needs to be a broad discussion among all stakeholders about what needs to be done to reshape real estate in America and put the country back on the right track,” said Phipps. “We look forward to delivering valuable recommendations and solutions to promote home ownership and restore the nation’s housing industry and economy.”

 

Additional details about the housing summit will be posted in the coming weeks at http://www.realtor.org.

 

 

 

 

 

OPEN HOUSE FLYER EXAMPLE

 

Do you have an open house this weekend? Do you need a flyer? Let us know and we’d be happy to create a flyer for you. The flyer provides potential buyers with both Realtor and Lender information, and 3 different payment scenarios. Email my assistant, Sherrell at sayers@rpm-mtg.com with your property address and purchase price to get the flyer created. Please email Sherrell prior to 3:00 today for your flyer.

 

“Logic will get you from A to B. Imagination will take you everywhere.” – Albert Einstein: Was a theoretical physicist

 

RPM MORTGAGE NOW OFFERING FHA FLIPS WITHIN 90 DAYS AND MORE THAN 20% INCREASE IN VALUE!

 

Criteria that MUST be met for an FHA Flip within 90 days:

If the property value has increased from the prior sales by more than 20%, a second full appraisal is needed, along with a property inspection that is to be provided prior to docs. The property inspector must have no interest in the property or relationship with the seller.

• Minimum 680 FICO Score
• Minimum 3 months reserves – Retirement accounts may be used to meet min reserve requirements
• Minimum of 3 years continuous employment history. No employment gaps within the last 3 consecutive years allowed.
• Max DTI of 50%
• The name of the owner on the title report must match the seller’s name on the purchase contract
• If the seller is an entity (LLC, Trust, etc), documentation showing legal registration of the entity such as articles of incorporation with the seal, or business license
• The borrower(s) can have no affiliation with the entity of any kind. The correspondent does not need to provide evidence to meet this requirement. PNMAC will investigate through a public records search and other resources.
• The property cannot have been sold in the 12 months prior to the transaction in which the seller acquired the property.
• The subject transaction cannot include a transfer or other special arrangement between buyer and seller.
• The property must have been fairly and openly marketed through MLS, an auction or as a For Sale by Owner offering in a newspaper or other publication. If the property is not listed on MLS, documentation such as the auction roster or the For Sale by Owner advertisement must be included in the loan package.
• Non arm-length transactions are prohibited

FOR MORE DETAILED INFORMATION ABOUT OUR FHA FLIPS PROCESS AND INVESTOR GUIDELINES, FEEL FREE TO CONTACT ME.

 

 

TOP REASONS TO OWN A HOME

There’s good reason that over half of all Americans are homeowners. Social and financial benefits are key factors when it comes to deciding to buy. Home ownership allows people to grow wealth slowly over time, to hold assets that build equity, and to bring stability into chaotic lives.

Despite these facts, homeownership rates have taken a hit since the recession in 2009. Falling home prices along with reduced access to credit has kept many would-be buyers from entering the market. According to Morgan Stanley, the current homeownership rate is around 59.2%. This is lowest rate since the Census Bureau began tracking in 1965. Has this reduction been a fear-based one?

The top benefits of homeownership haven’t changed, even in the face of a down economy. Here are the top five:

1. Savings: Be sure to check out the calculator at the end of this article. You’ll find that long-term homeownership is still a way to get big savings.

2. Tax Breaks: They’re not on the chopping block just yet. Many homeowners are still able to take the mortgage interest deduction (MID) each year, along with great rebates and credits associated with upgrades made to your home.

3. Equity: When you pay a landlord, it’s money down the drain. When you pay on a mortgage, you are paying towards owning a piece of something. You may still owe $100,000, but perhaps the home is worth $200,000. This means you have $100,000 worth of equity you’ve built up over time.

4. Budgeting: Unless you live in a rent-controlled apartment (and not many do), then each lease renewal could mean a jump in prices. A fixed-rate mortgage, however, means your monthly payment is the same amount for the life of the loan. A $1,000 a month payment on a 30-year mortgage is the same now as it will be in 30 years!

5. Security: When you own, it’s yours. You can paint, improve, and decorate. The trees and flowers are yours to enjoy — for a lifetime if you wish. Most homeowners are in neighborhoods with other homeowners, meaning more time to build relationships and friendships. Recent studies have also shown that homeowners rank themselves as healthier than their renter counterparts.

Should you rent or buy? For a strictly financial evaluation, be sure to check out The New York Times’ Interactive calculator to crunch the numbers. This advanced calculator takes into account everything from yearly costs to selling costs and broker fees.

Experts have recommended for years that if you’re planning on staying put for 5+ years, buying becomes an increasingly better deal. You have time to recoup any extra expenses found in closing costs and are now making an investment in your future through home price appreciation. Once your mortgage is paid off, you’ll have a real asset. That brings real stability.

Home affordability is at near record highs. Now is a good time to run the numbers and see if buying makes good financial sense. If it does, then you’re in store for a wealth of benefits that only homeowners can experience.

 

 

 

 

HOW TO RESCUE THE HOUSING MARKET: FORECLOSURES!

If the Obama administration really wants to save the housing market, it should speed up the foreclosure process — not prolong the inevitable, experts say.

Four years into the housing crisis, the real estate market is still teetering on the edge. The Obama administration has tried one program after another to stem the tide of foreclosures with limited success. And it is continuing to look for ways “to ease the burden on struggling homeowners,” though no new initiative is imminent, the White House said this week.

But some housing experts argue that the administration should go in a different direction than it has in the past. Instead, they say it’s time to focus on pushing many of those delinquent borrowers through the foreclosure process and putting foreclosed properties back into use.

While some of the 2.2 million loans in foreclosure can still be saved, many are too far gone, they say. Some 37% have not made a payment in more than two years, while another 34% have not made a payment in 12 to 23 months, according to Lender Processing Services.

“Loans enter into foreclosure, but never come out,” said Thomas Lawler, founder of Lawler Economic & Housing Consulting. “If this keeps going on, you have a continual overhang that never goes away.”

Delaying foreclosure increases the percentage of homeowners who’ll likely never catch up, Lawler said. In 2009, only 6% of delinquent borrowers were more than two years behind. And it means vacant properties still in limbo could fall even further into disrepair, hurting the value of the surrounding housing market.

Lawler is not the first to warn about the consequences of slowing the foreclosure process. Since the housing crisis began, several experts cautioned that foreclosure prevention efforts may only prolong the pain.

Accelerating foreclosures is tricky, however, especially since it is largely the purview of the states. But the administration could work with state officials to speed the process, especially on vacant homes, he said.

The push would come at a time when many mortgage servicers have slowed foreclosure efforts as they resolve shoddy paperwork practices. Foreclosure filings in July dropped to their lowest level since November 2007, due to processing delays and foreclosure prevention measures, according to RealtyTrac.

Getting rid of the glut

Another key to helping the housing market is facilitating the resale of homes that have already been foreclosed upon, experts said. This glut of vacant properties will continue to weigh on home values until they are sold.

“They can’t be a glacier hanging over the market with everyone waiting for it to fall,” said Jim Gaines, research economist at The Real Estate Center at Texas A&M University. “Those properties have to clear the market.”

A first step could be to sell off the foreclosed properties owned by Fannie Mae, Freddie Mac and the Federal Housing Administration. Collectively, they own 248,000 homes, about 31% of the foreclosure inventory.

The administration and the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, are already looking for ways to unload these foreclosed homes. Earlier this month, they put out a request for ideas, including possible bulk sales of inventory. Also, they are interested in turning many of these properties into affordable rentals, which are sorely lacking in many communities. Experts interviewed agree this would be a good move for the market.

To entice investors to purchase these homes, as well as other foreclosed properties owned by banks, the administration could advocate for changes to the tax code, Gaines said. For instance, more favorable capital gains or depreciation rules could attract buyers.

The case against foreclosure

Of course, not everyone agrees that pushing people through the foreclosure process is the best solution to the housing crisis.

David Min, associate director for financial markets policy at the Center for American Progress, argues that there are many homeowners who can be saved if their payments can be adjusted to affordable levels or if some of their principal is forgiven. This particularly applies to those who are only a few months behind.

Foreclosure is very costly for servicers, homeowners and neighborhoods, he said.

“There are a lot of other options that make more sense” than foreclosure, Min said. “It’s just so destructive to value. We should be pulling every lever we can.”

Mediation, for instance, could help some homeowners avoid foreclosure, he said. Some 23 states and the District of Columbia currently have programs that require mortgage servicers to sit down with borrowers and discuss the homeowners’ options, though many began only in the last year. More than 70% of mediations end in a settlement, often restructuring the mortgage to a sustainable level, according to the center.

Helping those still current with their payments can also give the housing market — and the economy — a lift, albeit a somewhat marginal one, experts said.

For instance, the administration could revamp its refinancing program aimed at allowing underwater homeowners to take advantage of today’s lower interest rates. Improvements could include reducing some of the upfront costs and underwriting requirements.

Lowering borrowers’ monthly payments would give people more money to spend. And, for those on the edge, it could make it more likely that they will stay in their homes.

“It would be helpful to some borrowers with high rates,” Lawler said

 

 

 

FORECLOSURE DELAYS REACH NEW RECORDS

 

Delinquent home owners are living in their homes longer, rent-free. Home owners with a loan in foreclosure haven’t made a payment, on average, for 20 months or 599 days–a new record, according to new data by Lender Processing Services Inc.

 

Of nearly 1.9 million loans that are 90 or more days delinquent–but not yet in foreclosure–42 percent of the home owners have not made a payment in more than a year, with an average delinquency of 397 days–another record, LPS reports.

 

The slowdown in foreclosures was most evident in judicial foreclosure states. At the current rate of foreclosure sales, judicial foreclosure states would require 111 months to work through inventories of loans that are 90 or more days delinquent or in foreclosure. On the other hand, non-judicial states would be able to clear inventories in about 32 months, according to LPS data.

 

 

 

 

 

FORECLOSURES HURT YOUR HEALTH, STUDY SAYS

 

The higher the foreclosure rates, the more risks to your community’s health, posits a new study.

The increasing number of foreclosures in Arizona, California, Florida, and New Jersey were found to coincide with a rise of stress-related health problems in those states, finds new research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University.

 

The researchers, who examined hospital-visit numbers and foreclosure rates for ZIP codes across the country, found that areas in the top fifth of foreclosure activity had more than double the number of hospital visits for preventable conditions–which generally don’t require hospitalization–than the areas in the bottom fifth of foreclosure activity.

 

Researchers found that an increase of 100 foreclosures coincided with a 7.2 percent increase in emergency room visits and hospitalizations for hypertension, and an 8.1 percent rise for diabetes among people aged 20 to 49. The foreclosure increase was also associated with a 12 percent increase in hospital visits related to anxiety, also among the 20 to 49 age group. Plus, foreclosure increases also were found to have a nearly 40 percent jump in hospital visits for suicide attempts, although those numbers still remain low.

 

“You see foreclosures having a general effect on the neighborhood,” Currie told The Wall Street Journal. “Everybody’s stressed out. There is a connection between people’s economic well being and their physical well being.”

 

 

 

 

OBAMA EXPECTED TO UNVEIL PLAN TO REVIVE HOUSING

The Obama administration is expected to announce a new mortgage relief program next week to help struggling home owners stay in their home and reduce the number of foreclosures, Reuters reports.

 

While the exact details of the proposal are still unknown, analysts are speculating that President Barack Obama is likely to announce a plan that would help more borrowers to refinance loans, allowing them to lower their monthly payments and ward off possible foreclosure.

 

The refinancing plan will reportedly apply to loans backed by government-owned Fannie Mae and Freddie Mac or the Federal Housing Administration, allowing more home owners who have been unable to refinance due to poor credit, owing too much above their home’s current value, or unemployment, to take advantage of current low interest rates.

 

Other lawmakers who have pushed for such a move have argued that by lowering home owners’ monthly payments, it would free up cash for other spending, which will help stimulate the overall economy.

 

 

“Logic will get you from A to B.

Imagination will take you everywhere.” 

– Albert Einstein: Was a theoretical physicist

PLEASE NOTE, OUR OFFICE WILL BE CLOSED ON MONDAY 9/5/11  IN OBSERVANCE OF THE LABOR DAY HOLIDAY,RETURNING TUESDAY 9/6/11

 

RPM MORTGAGE NOW OFFERING FHA FLIPS WITHIN 90 DAYS AND MORE THAN 20% INCREASE IN VALUE!

 

Criteria that MUST be met for an FHA Flip within 90 days:

• If the property value has increased from the prior sales by more than 20%, a second full appraisal is needed, along with a property inspection that is to be provided prior to docs. The property inspector must have no interest in the property or relationship with the seller.
• Minimum 680 FICO Score
• Minimum 3 months reserves – Retirement accounts may be used to meet min reserve requirements
• Minimum of 3 years continuous employment history. No employment gaps within the last 3 consecutive years allowed.
• Max DTI of 50%
• The name of the owner on the title report must match the seller’s name on the purchase contract
• If the seller is an entity (LLC, Trust, etc), documentation showing legal registration of the entity such as articles of incorporation with the seal, or business license
• The borrower(s) can have no affiliation with the entity of any kind. The correspondent does not need to provide evidence to meet this requirement. PNMAC will investigate through a public records search and other resources.
• The property cannot have been sold in the 12 months prior to the transaction in which the seller acquired the property.
• The subject transaction cannot include a transfer or other special arrangement between buyer and seller.
• The property must have been fairly and openly marketed through MLS, an auction or as a For Sale by Owner offering in a newspaper or other publication. If the property is not listed on MLS, documentation such as the auction roster or the For Sale by Owner advertisement must be included in the loan package.
• Non arm-length transactions are prohibited

FOR MORE DETAILED INFORMATION ABOUT OUR FHA FLIPS PROCESS AND INVESTOR GUIDELINES, FEEL FREE TO CONTACT ME.

 

 

 

 

TOP REASONS TO OWN A HOME

There’s good reason that over half of all Americans are homeowners. Social and financial benefits are key factors when it comes to deciding to buy. Homeownership allows people to grow wealth slowly over time, to hold assets that build equity, and to bring stability into chaotic lives.

Despite these facts, homeownership rates have taken a hit since the recession in 2009. Falling home prices along with reduced access to credit has kept many would-be buyers from entering the market. According to Morgan Stanley, the current homeownership rate is around 59.2%. This is lowest rate since the Census Bureau began tracking in 1965. Has this reduction been a fear-based one?

The top benefits of homeownership haven’t changed, even in the face of a down economy. Here are the top five:

1. Savings: Be sure to check out the calculator at the end of this article. You’ll find that long-term homeownership is still a way to get big savings.

 

2. Tax Breaks: They’re not on the chopping block just yet. Many homeowners are still able to take the mortgage interest deduction (MID) each year, along with great rebates and credits associated with upgrades made to your home.

 

3. Equity: When you pay a landlord, it’s money down the drain. When you pay on a mortgage, you are paying towards owning a piece of something. You may still owe $100,000, but perhaps the home is worth $200,000. This means you have $100,000 worth of equity you’ve built up over time.

 

4. Budgeting: Unless you live in a rent-controlled apartment (and not many do), then each lease renewal could mean a jump in prices. A fixed-rate mortgage, however, means your monthly payment is the same amount for the life of the loan. A $1,000 a month payment on a 30-year mortgage is the same now as it will be in 30 years!

 

5. Security: When you own, it’s yours. You can paint, improve, and decorate. The trees and flowers are yours to enjoy — for a lifetime if you wish. Most homeowners are in neighborhoods with other homeowners, meaning more time to build relationships and friendships. Recent studies have also shown that homeowners rank themselves as healthier than their renter counterparts.

Should you rent or buy? For a strictly financial evaluation, be sure to check out The New York Times’ Interactive calculator to crunch the numbers. This advanced calculator takes into account everything from yearly costs to selling costs and broker fees.

Experts have recommended for years that if you’re planning on staying put for 5+ years, buying becomes an increasingly better deal. You have time to recoup any extra expenses found in closing costs and are now making an investment in your future through home price appreciation. Once your mortgage is paid off, you’ll have a real asset. That brings real stability.

Home affordability is at near record highs. Now is a good time to run the numbers and see if buying makes good financial sense. If it does, then you’re in store for a wealth of benefits that only homeowners can experience.

 

 

 

HOW TO RESCUE THE HOUSING MARKET: FORECLOSURES!

If the Obama administration really wants to save the housing market, it should speed up the foreclosure process — not prolong the inevitable, experts say.

Four years into the housing crisis, the real estate market is still teetering on the edge. The Obama administration has tried one program after another to stem the tide of foreclosures with limited success. And it is continuing to look for ways “to ease the burden on struggling homeowners,” though no new initiative is imminent, the White House said this week.

But some housing experts argue that the administration should go in a different direction than it has in the past. Instead, they say it’s time to focus on pushing many of those delinquent borrowers through the foreclosure process and putting foreclosed properties back into use.

While some of the 2.2 million loans in foreclosure can still be saved, many are too far gone, they say. Some 37% have not made a payment in more than two years, while another 34% have not made a payment in 12 to 23 months, according to Lender Processing Services.

“Loans enter into foreclosure, but never come out,” said Thomas Lawler, founder of Lawler Economic & Housing Consulting. “If this keeps going on, you have a continual overhang that never goes away.”

Delaying foreclosure increases the percentage of homeowners who’ll likely never catch up, Lawler said. In 2009, only 6% of delinquent borrowers were more than two years behind. And it means vacant properties still in limbo could fall even further into disrepair, hurting the value of the surrounding housing market.

Lawler is not the first to warn about the consequences of slowing the foreclosure process. Since the housing crisis began, several experts cautioned that foreclosure prevention efforts may only prolong the pain.

Accelerating foreclosures is tricky, however, especially since it is largely the purview of the states. But the administration could work with state officials to speed the process, especially on vacant homes, he said.

The push would come at a time when many mortgage servicers have slowed foreclosure efforts as they resolve shoddy paperwork practices. Foreclosure filings in July dropped to their lowest level since November 2007, due to processing delays and foreclosure prevention measures, according to RealtyTrac.

Getting rid of the glut

Another key to helping the housing market is facilitating the resale of homes that have already been foreclosed upon, experts said. This glut of vacant properties will continue to weigh on home values until they are sold.

“They can’t be a glacier hanging over the market with everyone waiting for it to fall,” said Jim Gaines, research economist at The Real Estate Center at Texas A&M University. “Those properties have to clear the market.”

A first step could be to sell off the foreclosed properties owned by Fannie Mae, Freddie Mac and the Federal Housing Administration. Collectively, they own 248,000 homes, about 31% of the foreclosure inventory.

The administration and the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, are already looking for ways to unload these foreclosed homes. Earlier this month, they put out a request for ideas, including possible bulk sales of inventory. Also, they are interested in turning many of these properties into affordable rentals, which are sorely lacking in many communities. Experts interviewed agree this would be a good move for the market.

To entice investors to purchase these homes, as well as other foreclosed properties owned by banks, the administration could advocate for changes to the tax code, Gaines said. For instance, more favorable capital gains or depreciation rules could attract buyers.

The case against foreclosure

Of course, not everyone agrees that pushing people through the foreclosure process is the best solution to the housing crisis.

David Min, associate director for financial markets policy at the Center for American Progress, argues that there are many homeowners who can be saved if their payments can be adjusted to affordable levels or if some of their principal is forgiven. This particularly applies to those who are only a few months behind.

Foreclosure is very costly for servicers, homeowners and neighborhoods, he said.

“There are a lot of other options that make more sense” than foreclosure, Min said. “It’s just so destructive to value. We should be pulling every lever we can.”

Mediation, for instance, could help some homeowners avoid foreclosure, he said. Some 23 states and the District of Columbia currently have programs that require mortgage servicers to sit down with borrowers and discuss the homeowners’ options, though many began only in the last year. More than 70% of mediations end in a settlement, often restructuring the mortgage to a sustainable level, according to the center.

Helping those still current with their payments can also give the housing market — and the economy — a lift, albeit a somewhat marginal one, experts said.

For instance, the administration could revamp its refinancing program aimed at allowing underwater homeowners to take advantage of today’s lower interest rates. Improvements could include reducing some of the upfront costs and underwriting requirements.

Lowering borrowers’ monthly payments would give people more money to spend. And, for those on the edge, it could make it more likely that they will stay in their homes.

“It would be helpful to some borrowers with high rates,” Lawler said

 

 

FORECLOSURE DELAYS REACH NEW RECORDS

Delinquent home owners are living in their homes longer, rent-free. Home owners with a loan in foreclosure haven’t made a payment, on average, for 20 months or 599 days–a new record, according to new data by Lender Processing Services Inc.

Of nearly 1.9 million loans that are 90 or more days delinquent–but not yet in foreclosure–42 percent of the home owners have not made a payment in more than a year, with an average delinquency of 397 days–another record, LPS reports.

The slowdown in foreclosures was most evident in judicial foreclosure states. At the current rate of foreclosure sales, judicial foreclosure states would require 111 months to work through inventories of loans that are 90 or more days delinquent or in foreclosure. On the other hand, non-judicial states would be able to clear inventories in about 32 months, according to LPS data.

 

 

 

 

 

FORECLOSURES HURT YOUR HEALTH, STUDY SAYS

 

The higher the foreclosure rates, the more risks to your community’s health, posits a new study.

The increasing number of foreclosures in Arizona, California, Florida, and New Jersey were found to coincide with a rise of stress-related health problems in those states, finds new research by Janet Currie of Princeton University and Erdal Tekin of Georgia State University.

The researchers, who examined hospital-visit numbers and foreclosure rates for ZIP codes across the country, found that areas in the top fifth of foreclosure activity had more than double the number of hospital visits for preventable conditions–which generally don’t require hospitalization–than the areas in the bottom fifth of foreclosure activity.

Researchers found that an increase of 100 foreclosures coincided with a 7.2 percent increase in emergency room visits and hospitalizations for hypertension, and an 8.1 percent rise for diabetes among people aged 20 to 49. The foreclosure increase was also associated with a 12 percent increase in hospital visits related to anxiety, also among the 20 to 49 age group. Plus, foreclosure increases also were found to have a nearly 40 percent jump in hospital visits for suicide attempts, although those numbers still remain low.

“You see foreclosures having a general effect on the neighborhood,” Currie told The Wall Street Journal. “Everybody’s stressed out. There is a connection between people’s economic well being and their physical well being.”

 

 

 

 

OBAMA EXPECTED TO UNVEIL PLAN TO REVIVE HOUSING

The Obama administration is expected to announce a new mortgage relief program next week to help struggling home owners stay in their home and reduce the number of foreclosures, Reuters reports.

While the exact details of the proposal are still unknown, analysts are speculating that President Barack Obama is likely to announce a plan that would help more borrowers to refinance loans, allowing them to lower their monthly payments and ward off possible foreclosure.

The refinancing plan will reportedly apply to loans backed by government-owned Fannie Mae and Freddie Mac or the Federal Housing Administration, allowing more home owners who have been unable to refinance due to poor credit, owing too much above their home’s current value, or unemployment, to take advantage of current low interest rates.

Other lawmakers who have pushed for such a move have argued that by lowering home owners’ monthly payments, it would free up cash for other spending, which will help stimulate the overall economy.