How much do you know about your SHORT SALE?

OK... How much do you know about your short sale? If you have been selling any real estate lately, you know that short sales are common in every area and state of the market. From what the people who know are saying, we need to get used to short sales.

I was in a meeting today with a senior VP for Bank of America. The meeting was pretty generic in nature in that much of the content was the company line on the general short sale subjects. One topic discussed hits home on a variety of levels.

That topic was investor approvals. From the Realtor standpoint, we think how hard can it be? Get an offer, approve it, close it. I didn't know this but any loan could have multiple investors. It is not uncommon for a loan originator to sell different components of the loan to specialty investors.

The VP spoke of a scenerio of a first loan with 4 investors and a second loan with 3 investors. All different. All with a stake in the loan. Each has to agree on a settlement for a short sale to be approved. This explains why it takes so long in many cases to get an approval. It also explains why in many cases approval is not agreed to by the investors.

If you read my last blog, it spoke to the IndyMac/FDIC "arrangement" for shared loss in REO properties and how the investors have monetary incentives to foreclose instead of modify or agree to a short sale.

The question I had for the VP was.. "What is the obligation of the bank to disclose who the individual investors are in a short sale transaction to the borrower/agents/buyer?" The borrower has never been told who these investors are for the most part. Maybe some are in bankruptcy. Maybe some are in a situation where they don't want to report a loss in a particular quarter. Maybe some want the property because of some sweetheart deal with the FDIC.

The reply was... "A listing agent should have access to that information."

Ok, that doesn't really answer the question. I was asking what the disclosure threshold is on the bank's part. You know... Truth in Lending, all that. The question went unanswered.

Ok, what is my threshold for disclosure about individual investors to my clients? What is the threshold for the Seller's disclosure to the Buyer? What is the threshold for the Buyer's agent to the Buyer? Do we say... "The transaction isn't really a transaction until the bank approves it... well not really the bank... well yes, the bank, and... oh yeah... there are a couple, three investors who have to approve it too... But that is just for the first... the second... you get the idea..."

I asked my broker to check with legal. They hate me.

I wish I had the answers. I am wondering about the clients who come back to us at some point in the future and say... "You never told me about that... here is my attorney's name and number."

I don't want to make this into anything more than it is... So, what do you think? Let me know.

How much do you know about your short sale?

You can contact me via my website at www.bigmark.net You will find all kinds of interesting content there. Including the best search engine for civilians in the business. Search any listing in the MLS, even commercial listings and REO's.

Is the FDIC Killing Short Sales?

If you have the time, check out this article about short sales and see if it's affecting any of your transactions.

Is the FDIC Killing Short Sales
by Alexis McGee on October 21, 2009

IndyMac Bank (now OneWest Bank), is holding one of my clients hostage, demanding a $75k promissory note, or they will proceed to foreclosure. For the life of me, I couldn't figure out why they were doing this. The BPO came in at the contract price of $275k, with a net to IndyMac of $241k.

What advantage could there possibly be for them to proceed to foreclosure? Yesterday, I figured it out. You see, IndyMac was taken over by the FDIC and sold to OneWest Bank in March/2009. Guess who the investors are behind OneWest? George Soros, Michael Dell, Steve Mnuchin (former Goldman Sachs executive), and John Paulson (hedge-fund billionaire).

Now, listen to the deal they got from the FDIC.... Basically, they purchased all current residential mortgages at 70% of par value (70% of the outstanding loan amounts). They purchased all current HELOCS at 58% of Par Value!!!

Next, in order to "sweeten the pot", the FDIC stepped in and guaranteed the following: For any residential mortgages where OneWest experiences a loss, the FDIC will step in and cover anywhere from 80%-95% of the loss. The loss is calculated using the ORIGINAL LOAN BALANCE, not the amount that OneWest paid for the loan.

Let's use my clients situation as an example: Loan Amount is $478,000, plus 6 months of missed payments, for a grand total of $485,200. OneWest pays $334,600 for the loan. We have an all cash offer of $241,000, net to OneWest. So, let's do the math, shall we?

The net loss, according to the FDIC formula is the ORIGINAL LOAN AMOUNT minus the amount of the offer. In this case, $485,200-$241,000, or $244,200. Next, the FDIC, according to their Loss Share Agreement, writes a check to OneWest for 80% of the so-called "net loss".

So, in this case, OneWest gets a check from Uncle Sam for $195,360 (.80 X $244,200). Add the $195,360 to the sales price of $241,000, and you get a grand total of $436,360. Remember, OneWest paid $334,600 for the loan. So, OneWest puts $101,760 in their pocket, thanks to the FDIC.

Folks, that is over $100k of our hard-earned tax dollars! So, you ask...Why does this program hurt short sales? Because, our brilliant government offers this SAME PROGRAM FOR FORECLOSURES! The only difference is, the government picks up 80% of the tab on all of the extra costs associated with a foreclosure (BPO's, upkeep, utilities/maintenance, legal fees, etc.)

So, If I'm OneWest, why would I want to waste my time negotiating through a Short Sale, when I can make the same amount of money (if not more) by just letting it go to foreclosure? And we wonder why nobody can get a Loan Modification? Why would OneWest approve a loan modification for this guy, when they can foreclose and make over $100k? And, to add injury to insult, they have held this loan for 6 months!

Not a bad ROI, huh?

What infuriates me the most is that in my particular case mentioned above, they have the guts to hold my client hostage for a $75k promissory note, after they are already making more than $100k on the sale!!! This is his primary residence, 1st Position loan, and OneWest has NO RECOURSE! Imagine if they could make $100k, then get a deficiency judgement!

Talk about making some big bucks!

The scary thing is that over 50 banks have Shared Loss Agreements in place with the FDIC. Some of them include: Bank of America (go figure), CitiMortgage, Wells Fargo, etc.

This entire agreement between the FDIC and OneWest can be found here, on the FDIC website. It's all there, for the world to see! They have it all layed out. All of the formulas, worksheets, etc.

Wait, it gets better...The FDIC just announced that it needs to start borrowing money from the U.S. Treasure in order to replenish it's deposit insurance fund (the same fund being used to pay all of these banks in the Loss Share Agreements).

How about that? Let me know what you think.

Contact me at my website: www.bigmark.net Check out the great real estate content. Search real estate listings around the state of California on the best search engine for civilians in the business. The Rockcliff Gateway.

Not enough of a good thing..

We are rapidly approaching the end of the first time buyers tax credit program. I know it has had an impact on my business. I also know that it will help many of my clients pocketbooks. Not to mention the Sellers, agents, lenders, title companies, appraisers, inspectors, etc, etc.

We've heard alot about extending the program. We've heard alot about a new program for all homebuyers. It looks like we are done with it.

Just another case of not enough of a good thing. Check out this article from USA Today.

http://www.usatoday.com/money/economy/housing/2009-10-20-white-house-home-tax-cred_N.htm?csp=34

I guess someone reached into Uncle Sam's pocket and it was empty.

Let me know what you think about the program and if it is/was worthwhile.

Mark Wilson

Check out my website at: www.bigmark.net Let me know what you think, search for listings (even commercial) with the best real estate search engine in the business, follow me on Twitter, see YouTube videos, and check out all of the great content.

Commercial Prices Fall as Vacancy Rates Rise

Check out the article below from the Daily Real Estate News and the New York Times. It speaks to the growing vacancies in the commercial real estate market. This seem to be an indicator of the future in commercial real estate values.

Commercial Prices Fall as Vacancy Rates Rise
The value of commercial property is being driven by vacancy rates—the higher the vacancy rate, the lower the price.

At the height of the boom, a high vacancy rate was sought after because the buyer could fill the space and raise rents. Today, finding tenants is a major challenge in many areas and buyers will pay more if a building has guaranteed tenants for the long term. Robert Von Ancken, the senior appraiser for Grubb & Ellis in New York, estimates that substantial vacancies cost a seller as much as 30 percent of value.

“Investors today are very hesitant to make a mistake by underwriting improvement, decreasing vacancy, or increasing rent,” says Scott A. Singer, the executive vice president of the Singer & Bassuk Organization, a New York company that arranges financing.

Source: The New York Times, Terry Pristin (09/15/2009)

Now I'm not one to predict doom and gloom in the future for commercial real estate values. But I am hearing from local investors that are very concerned about where the market is going and how they will react if there are no options for them.

This goes back several blogs where I've been talking about banks taking a more active roll in loan mods. They can help investors work with tenants to lower their rents and modify the loans for those investors until the economy makes a turn upward.

I think the key is to keep people (tenants) working and get federal money so banks can make lower interest rate commercial loans and mods.

Keep the tenant in business, keep the cash flow moving, keep property values from taking a drastic plunge caused by foreclosures, keep low cost money available for investors to purchase commercial real estate. If the banks haven't learned from the recent residential roller coaster, they will suffer the same mistakes and losses.

Tell me what you think!

Mark Wilson

mark@bigmark.net

check out my website at: www.bigmark.net

Search residential and commercial real estate listings. Lot's more stuff too.

IRS on YouTube: Tax Breaks for Homebuyers

Every once and a while I see a good use of social media, other that finding out what's for dinner.

The California Association of Realtors tweeted about the IRS using YouTube to tell taxpayers about tax breaks for buying real estate.

Kinda cool. YouTube is free too. (I like it when the government doesn't spend money.. which is almost never)

Here is an example:

To see more of these videos, check out this link:

http://www.irs.gov/irs/article/0,,id=212289,00.html

Now I have to acknowledge that this is a great use of social media.

The next thing you know... we'll be Twittering our Congressmen and Senators about re-doing the medical system.

Wouldn't that be interesting... having a direct link to the Congress. They would have to hire people to organize the tweets and report the consensus to Congress. (creating jobs) They could hear directly from their constituency.

That would almost be like a... well... a democracy. (twitter is free too)

We'd be able to say that social media really can impact our lives in a positive way.

Ok...ok, sorry... I'm getting off track. Back to the IRS videos. If you'd like to see more, check out my website at: www.bigmark.net and click on the "The Tax Man" button.

While you are there check out the "GATEWAY". It's the best real estate search engine for civilians in the business. There is more great stuff there too.

Let me know what you think.

Commercial Real Estate Market decline slows according to the NAR.

Being a hybrid realtor, working with commercial and residential clients, I've noticed a lot of similarities between the two markets.

With this latest decline, people are loosing their jobs, businesses are closing. Property values are declining, short sales are happening, and foreclosures have hit both markets. Many sources tell you that the worst is yet to come. There are significant numbers of mortgages in jeopardy.

As I'm proof reading this, I'm getting depressed. I have many friends and clients who are feeling the "pinch". But there may be some good news out there. We are hearing that the residential market may have hit bottom. Here is a press release from the National Association of Realtors that identifies some positive trends in the commercial market too. Check it out:

http://www.realtor.org/press_room/news_releases/2009/08/decline_slowing

It says the trend of decline in the commercial real estate market is slowing. That may or may not be a long term trend. I hear talk about commercial foreclosures around the corner.

If you have read any of my blogs in the past you may be able to guess what the theme of my comments will be... (I'll try to keep it short)

The commercial market has certainly been affected by the recession. Less in the economy means less jobs which means more businesses closing which means more vacancies which means less rent which means less ability to make mortgage payment which means investment portfolios are smaller which means... you get the idea.

One tool that the residential market has has some success with is loan modification.

I see loan mods helping the commercial markets as well. Work it from the bottom up... If a landlord can get a loan mod, they can negotiate with a tenant who may be having troubles to lower their rents which may help keep the business in operations which means jobs can be saved which means more cash in the economy. I think?? Or the banks can foreclose and become landlords, or try to sell investment properties in a down soft market. Which means... for another blog.

Let me know what you think...

Hi End Homes not recovering. But why? Don't be seen holding the trophy home!

I've just come off of having a trophy home listing. Literally NO homes sold in the area in over a $Million spread for over 6 months. $2M to $3M sales price, NOTHING. This in an area know for exclusivity, quality of life, and great schools. At any given time there were at least 2 dozen homes in that $Million spread price range.

We saw lending criteria for jumbo loans loosen and money become availble. We saw the lower end market pick-up significantly. We saw some sellers drop their price to what seemed like crazy rock bottom pricing. We all seemed to be chacing ourselves because there was NO MARKET. Very frustrating.

Even if you got an offer... how would we get the appraisal?

I saw this piece from CNN Money that says the high end market isn't rebounding and may take a couple more years to come around. Check it out:

http://money.cnn.com/2009/08/07/real_estate/expensive_homes_miss_recovery.fortune/index.htm?section=money_latest

In my opinion, there is one significant factor the article doesn't address. They mention the lack of demand. But, there are still people who can afford these homes. It looks to me like nobody wants to be seen holding the trophy home. In down times, it's better to stay under the radar. At least that's what it feels like to me.

Here is an example of what I'm talking about... an unnamed family member just bought a new BMW Z4 roadster. When they told me about the new car, they said.. "dont' tell anyone about it." .."we don't want anyone to know we bought it.".. "not with the down economy and people having financial troubles."

I think a little good news, good economic news, will bring the market back faster in the upper end. It may be starting to happen.

Let me know what you think.

HUD trying to Mod Loans. Banks need to step up.

Listen to this NPR interview interview of HUD Secretary Shaun Donavan. I think it shows that the Federal Government is providing a path for Banks to modify loans. But it will take effort from the Banks to recognize that loan mods work for them too.

Here is the whole article: http://www.npr.org/templates/story/story.php?storyId=111436558

I'm convinced that mods are a better solution than foreclosure for struggling homeowners. But I'm not convinced that homeowners walking away from their homes because of devaluation is the wrong thing in all cases.

The Secretary comments, "where will they go?" and "their homes are more than homes..". I get it... Homeowners lives are centered around their homes. Schools, friends, kids, all that stuff.

We need banks to step up and increase the number of loan mods they are doing. We need them to loosen their criteria for mods. And at the same time we need the federal government to step up and put some more of the stimulus money to work to provide more mods and incentives for the banks to participate.

Let me know what you think...

Lender may need some help with processing Loan Mods

I spoke to a client yesterday that was trying to get a loan mod. He has been talking to his lender for months. He lost his job 6 mos. ago and has been unable to get a job since then. He's living on savings and has made all of his payments to date. He bought at the peak.

He has not heard from his lender for almost 60 days. He just found out through an account manager that the mod department had rejected his file and had failed to inform him. This all took place in June.

My advice was to re-apply for the loan mod. Since the federal guidelines with President Obama's Making Home Affordable program are out there for mods, his lender may have a better program now. I also told him that he may not have made the cut for eligability due to the volume of mod's. He wasn't into the "Red Zone" yet.

I saw this article this morning that gives an indication that the loan mod wave has saturated or even overwhelmed the lenders ability to keep pace with the requests for mods.

Read this article from PR Newswire reported in Forbes. It just goes to show that it may take persistance from the borrower to get the mod.

I think it also gives us a message for our clients and people who come to us for information. We need to tell them to keep at it...stay focused... and it may take some time to get the mod.

Here is the article:

http://www.forbes.com/feeds/prnewswire/2009/07/24/prnewswire200907240952PR_NEWS_USPR_____PH51495.html

Let me know what you think and if this helps you or any of your clients.

How to Keep Your Home and Avoid Foreclosure from Freddie Mac

If you have been following this blog, you have heard about this video from Freddie Mac. It is a resource for people in jeopardy of being foreclosed on. I have received quite a bit of feedback from my clients and other people who have seen it. The feedback is overwhelmingly positive.

That's why I've decided to post it again. Please take the time to view it yourself. But more importantly, share it with anyone you know who may benefit from this information.

Check it out:

If you'd like further information about foreclosures or any real estate subject, go to my website:

http://www.bigmark.net

Follow me on Twitter, check out YouTube videos, follow this blog, or download a real estate app for your smartphone. And as always, you can access the best real estate search engine for civilians in the industry at the Rockcliff "Gateway" or call me @ (925) 890-6400

More Content, More Places, Better Results!

New requirements for Good Faith Estimate disclosures might cause some problems

Here is information about a new requirement that is part of the MDIA. (Mortgage Disclosure Improvement Act) I received this information from the CAR (California Association of Realtors)

So think about this one... you have a transaction in escrow, everything is coming together. You are about 30 to 45 days into this. Contingencies are removed. The Buyer is scheduled to sign loan docs at 3:30pm this after noon. The moving van is in the Sellers driveway. COE is just a couple days away. Sign, fund, close.

Retail interst rates drop an eighth with the lender at noon. Now what?

Ok, ok. I don't know the answer. I tried the link below but no luck. I guess the site is flooded with Realtors checking it out. But what if you have to re-draw the Good Faith Estimate and wait 3 days or no funds? What happens if the answer is yes? Can the Buyer waive the 3 day wait period? What about the Seller?

Ok, ok. You wait the 3 days, docs are drawn, Buyer is scheduled to sign... It happens again... or worse... the rate goes back up. Does the process start all over again?

Maybe I'm getting worked up over what might happen. I know that's never a good thing. But how do you explain to the Seller that it will only be a couple more days in the hotel?

Check out this information and let me know what you think about it. Better yet tell me your wildest dream worst case scenario. I'll put it in a future blog.

New disclosure rules could affect close of escrow:

Starting July 30, if the APR on an initial Good Faith Estimate is no longer accurate (within a 0.125 percent range) at close of escrow, a lender must generally provide a residential borrower with a new disclosure and a three-day right to rescind before consummating the loan.
REALTORS® are forewarned that, because of this new three-day waiting period, a lender's failure to timely provide corrected disclosures has the potential of delaying funding of the loan and close of escrow.

This new requirement is part of the Mortgage Disclosure Improvement Act (MDIA) implementing new loan procedures to protect borrowers and foster greater transparency in mortgage lending.

For more information on the MDIA, including its applicability, details of the three-day waiting period, and other requirements, go to

http://www.car.org/legal/other-legal-features/realegal-chart/2009-realegals/realegal-7-17-09/?redirectFrom=login.

California New Housing Market Improving says CBIA

I have been selling new construction homes for many years. I have several friends and clients who are builders and developers. So I try to keep my ear to the ground with anything concerning the New Construction Market.

I saw this article from the California Building Industry Association directed to my via the California Association of Realtors. The article claims that the new construction market in CA is improving. Check it out:

http://www.cbia.org/go/cbia/newsroom/press-releases/california-new-home-market-slowly-improving-cbia-announces1/

I love the conclusion...it says that local and State governments need to remember that we need to build more not less homes and condos. That's great. Right now we don't need to tell the government entities...we need to tell the BANKS!

Ask any builder about what they have to deal with to get a construction loan. If they can at all. Because of the perceived risk, the Banks are killing the industry.

We should be asking the government to provide an FHA program for development. Ferderal guarantee, lending guidelines, maybe even a resale program for the finished product. Keep the builders building. The small guys would be able to stay in business. Keep people working!

What do you think?

YouTube from FreddieMac for people facing foreclosure: Finally a good use for Social Media

In this age of everyone telling us that social media is the latest, greatest way of getting business done. I'm sure you've heard the pitch... drop some $$ and you get secrets to using social media to capture leads and influence people.

Farm the internet. You'll make more money than you can count. If you aren't using it you will get left in the dust. Whatever!

Facebook, Twitter, YouTube, LinckIn, ActiveRain, the list goes on and on. Here is a great use of socail media.

Check out this YouTube video from Freddie Mac. It is produced for people facing foreclosure. Pass it on to your clients and fellow agents. It may help the stress levels and feeling of helplessness for these folks.

http://www.youtube.com/FreddieMacWeb

If the right person gets this video, you will have used social media to capture a lead and influence people.

Let me know what you think.

Check out my website for more helpful information and tools for anyone in the real estate market today.

Mark Wilson

www.bigmark.net

(925)890-6400

Foreclosures are down 11% Nationwide - Why aren't we hearing this from the News guys?

I was looking for a topic to blog today and ran across this article in Business Week. It seem like good news. But I don't think it goes far enough to explain the data. Check it out.

http://www.businessweek.com/the_thread/hotproperty/archives/2009/07/foreclosures_fa.html

The data shows foreclosures down 11% nation wide. It acknowledges that in some areas the drop is much more significant. It also says that home sales are up too.

Does this mean the economy is recovering? Well, I don't know about that but what I think it does show is that the banks, homeowners, and realtors are working hard to modify or short sale people out of their extended positions and try to keep homeowners in homes where possible.

The fact that home sales are up indicated that people not only have the ability to purchase homes, but they are feeling like they are getting a relatively good deal in the process.

Because the foreclosure rate has slowed, inventory levels have remained moderate to low. Low interest rates and lower prices are creating a little more stability in the market.

Is that recovery?

I think it's the first step. All we need is a little good press....a little consumer confidence... And the process has to continue between banks, borrowers, and realtors. Get people into homes they can afford, and keep stability in the housing market. Why aren't the news guys telling us about this?

Let me know what you think,

Zillow traffic is through the roof. I'll bet their value for your home is off!

I get this all the time... Zillow says that this house sold for $X. Zillow says that 12345 Main St. is for sale. Just 'cause Zillow says it doesn't make it so...

Here is an article from PR Newswire giving traffic statistics for Zillow. They are quite impressive.

Zillow.com(R) Traffic Grows 67 Percent Year-over-Year in First Half 2009

Amid real estate market uncertainty, homeowners, buyers and sellers turning to Zillow(R) in record numbers for research and advice

SEATTLE, July 1 /PRNewswire/ -- Real estate Web site Zillow.com today announced it broke multiple records for site traffic and user activity in the first six months of 2009. An average of 8.3 million unique users visited Zillow each month during this period, which is an increase of 67 percent year-over-year(i). Additional milestones include: 44 percent year-over-year growth in page views in the first half of 2009. 35 percent more for-sale listings on the site in the first half of 2009 versus a year earlier, as the result of more listings feed partnerships with brokerages and Multiple Listings Services. In total, 3.6 million listings are posted on Zillow today. More than 535,000 people have downloaded the Zillow iPhone App since its launch in late April, more than any other real estate-related app. Consumers submitted 265,000 loan requests on Zillow Mortgage Marketplace in the first six months of 2009. Lenders responded with 3.5 million custom loan quotes during this same period. "Home prices continue to drop in many areas, mortgage rates change constantly, and people have a lot of questions about their homes and their local markets. This is driving record numbers of people to visit and engage on Zillow.com," said Spencer Rascoff, Zillow's chief operating officer. "In addition to seeking real estate listings and data, potential buyers and sellers are voracious for information and are asking questions in Zillow Advice, and getting answers from real estate professionals in their communities." The Zillow Directory of real estate professionals now lists nearly 200,000 real estate agents, and more than 12,000 lenders who have created a profile and are active on the site. In fact, 25 percent of Zillow's monthly traffic - or 2.1 million unique visitors in June - self-identified as a real estate professional. If you've read this far you probably are impressed. I am. The question is... Why aren't these people asking realtors? Well maybe they are. I know I say "don't trust Zillow for anything but a ballpark guestimation." "Go to my website and search the MLS. It will give you better results." What do you think of Zillow? Please visit my website at: www.bigmark.net You'll find many great resources to help you navigate the real estate world. World class search engine, smart phone application, YouTube, Twitter and other helpful things. Visit or give me a call today. Mark Wilson - J Rockcliff Realtors, Inc. (925) 890-6400 mark@bigmark.net

225 Alamo View Place Walnut Creek - Custom Home

Check out a new listing of mine. It's 225 Alamo View Place in Walnut Creek. 5 bedroom - 5 full baths. 3900 sqft. Completely remodeled. Walnut floors, slab granite, home theatre, salt water pool and spa, steam - dry sauna. It is a short sale. Asking $1,175,000. Priced for a fast sale.

Here is a YouTube video: http://www.youtube.com/watch?v=GMYGdH3pafc&fmt=22 It's in HD.

Contact me directly for a showing. (925) 890-6400 www.bigmark.net

Reasearch shows that as many as 25% of Foreclosures are from people who can afford their payments

Here is an interesting article from Market Watch. It says that as much as 25% of foreclosures are from people that can afford thier payments. Check this out:

http://www.marketwatch.com/story/why-those-who-can-pay-walk-away-from-mortgages?siteid=rss

Here are a few of my thoughts about the article.

With 25% of defaults are made by people that can "afford" their payments. These people are taking a calculated loss approach to their equity, credit, and housing. I can't say if they are right or wrong.

Many don't have another option. They can afford rent. Probably can sustain the hit to their credit for a few years too. Who knows there may be amnesty in the future.

Many banks are taking the Jessie James (of West Coast Chopper fame) approach with their customers. Jessie James has a "Pay Up Sucker" tatoo on the palm of his right hand.

Doesn't matter what the rate is. Doesn't matter what the property value is. Doesn't matter that the neighbor hasn't made a payment in 10 months and is still in the property.

Hopefully the federal TARP for loan mod programs will give these people another option. Get a loan mod to lower their loan balance and payment. The borrower stays in the house. The lender continues to get payments. No foreclosure, no further excessive devaluation of the property. The bank gets some relief.

Lenders currently offering voluntary loan mods to their customers are showing a much lower foreclosure rate that the JJ lenders. Many have learned throughout this process that it makes better scenes to mod than kicking the customer to the curb.

I have even seen commercial lenders in the market place trying this approach with heavily leveraged commercial property owner. Mod the rents, mod the payments, mod the loan. Again a more equitable solution than taking the property.

And a better use of federal funds than creating bigger government. (No offense to Jessie James)

What do you think?

Happy 4th of July - What are you doing for the 4th?

Vacations, picnics, parties, BBQ's.. What are you going to do this 4th of July? Not to be cute but I wonder what the vacancy rate is in Honolulu this weekend. You know, with N Korea threatening.

Well, here's what I'm going to do... I have a nephew that has just come home from Iraq. The family is getting together in Elk Grove for a BBQ. He has just completed two tours in Iraq. Interestingly enough with the same division as my dad served in the Pacific in WWII. I can't tell you how proud we all are of him...and happy he's in one piece.

If you haven't made plans, check this out:

Vacations, picnics, parties, BBQ's.. What are you going to do this 4th of July? Not to be cute but I wonder what the vacancy rate is in Honolulu this weekend. You know, with N Korea threatening.

Well, here's what I'm going to do... I have a nephew that has just come home from Iraq. The family is getting together in Elk Grove for a BBQ. He has just completed two tours in Iraq. Interestingly enough with the same division as my dad served in the Pacific in WWII. I can't tell you how proud we all are of him...and happy he's in one piece.

If you haven't made plans, check this out:

http://www.calvarytemple.org/component/option,com_events/task,view_detail/agid,90/year,2009/month,07/day,02/Itemid,26/

"The Flag" formerly "The Singing Flag" is a real old fashioned 4th of July event. It takes place at the Dave Brubeck Park in Concord. There are fireworks, speeches, songs, and some military displays. The fireworks are some of the best around on the 4th.

You may have to stand for the Star Spangled Banner.

The shows are tonight (2nd), Fri, and Sat at 7:30pm. It runs about 2-2.5hrs. You won't be disappointed. My hot tip is to watch the fireworks from the Concord Vietman Veterans Memorial. You can avoid the crowd. But the event, close up is very fun. Fun for all ages. Bring the kids.

Fly your flag!

"The Flag" formerly "The Singing Flag" is a real old fashioned 4th of July event. It takes place at the Dave Brubeck Park in Concord. There are fireworks, speeches, songs, and some military displays. The fireworks are some of the best around on the 4th.

You may have to stand for the Star Spangled Banner.

The shows are tonight (2nd), Fri, and Sat at 7:30pm. It runs about 2-2.5hrs. You won't be disappointed. My hot tip is to watch the fireworks from the Concord Vietman Veterans Memorial. You can avoid the crowd. But the event, close up is very fun. Fun for all ages. Bring the kids.

Fly your flag!

Google Voice - Revolutionize Realtor Communication Logs

If you don't know what Google Voice is, don't feel bad. I asked around the office and not many people know about it.

I think that Google Voice will become a tool that Realtors can't live without. That may be an exageration, but we will be able to manage our phone calls and voice mails just like emails. Save them in a log for that rainy day when someone asks for your communication log. If you know what I mean.

Check out this CNET article. It talks in a bit more detail about the service.

http://news.cnet.com/8301-17939_109-10272937-2.html

Sign up for the invitation for the launch. It's free.

Fears about the future for the Commercial Real Estate Market

In this era of challenging times, there is no lack of people taking a "gloom and doom" outlook on the future. Weather it is the economy, politics, real estate, money....everything.

I guess it's only human nature. I could go on and on about this topic, but I think there is an important "silver lining" we can draw from these time.

First, I'd like to show you an article from Time. It illustrates some concerns about the Commercial real estate market. The premise is that we are about to see... I think you should read the article.

http://www.time.com/time/business/article/0,8599,1901718,00.html?xid=rss-business

Ok, so there are some challenges ahead in the Commercial Market. But the "silver lining" I mentioned is that we are learning.

Realtors are learning. We are learning ways to put deals together. (no deals, no food) Banks are learning how to deal with loan modifications, foreclosed properties, and short sales more efficiently. (something is better than nothing) Consumers are learning that there are opportunities out there to achieve their real estate goals.

The article from Time assumes that the Commercial Market will suffer the same mis-steps and mistakes of the past residential decline. My contention is that the Commercial Market will have learned from the residential experience.

Banks know now that it is better for them (and consumers) to work together to solve the problems a declining economy brings. My guess is that they will modify, modify, modify. Working with the consumer to modify their loans, re-negotiate rents, short sale properties can help minimize bank losses. Consumer losses too.

I also guess that there are alot of smart people in the market. Many have experienced these things first or second hand. I'm hopeful that the Commercial Market will not suffer from the same mis-step and mistakes.

What do you think?

Reverse Mortgage Problems - or just a Robert Wagner thing?

I saw this article from Reuters about reverse mortgages.

http://money.cnn.com/2009/06/08/real_estate/reverse_mortgages.reut/index.htm?postversion=2009060813

You know, the commercials on TV for reverse mortgages have always scarred me. I always thought it was a Robert Wagner thing. According to the article, it seems that regulators have had issues with the practices of many reverse mortgage lenders.

I think this probably stems from the fact that not very many people understand how the reverse mortgage works. Also, the fact no bank gives anything away for free.

In these tough economic times you hate to think that lenders are preying on older people. Hopefully, the recommendations in the article are taken seriously. And abusers will be dealt with harshly.

Let me know what you think:

More about the Foreclosure Moratorium

You know it's funny. I talked to alot of people yesterday about the foreclosure moratorium in California. Almost everyone said that they had heard about it but didn't know much about it.

I find that interesting because most of these people were telling me that we were to expect a "wave" of foreclosures in June. They had heard that foreclosure notices were up and the market would be flooded with properties, dropping home values even more than what has already occured.

Another thing I find interesting is that many lenders I come in contact with are saying that their companies are trying to work out modifications at a much higher rate than ever before. They are convinced that loan modifications are better for them, the consumer, and the market in general. I agree.

Here's an article from the Sacramento Bee about the foreclosure moratorium. It's a little opinionated but good.

http://www.sacbee.com/business/story/1943201.html?storylink=omni_popular

Let me know what you think

Foreclosure Moratoriumin California for the next 90 days

If you haven't heard, the State has enacted a moratorium on foreclosures for the next three months. The governor signed the bill in February.

Here's a short article from the Mercury News: http://www.mercurynews.com/news/ci_12585513?nclick_check=1

This will give homeowners who are struggling with staying out of foreclosure a chance to take a deep breath and look hard at their situation. Three months isn't a long time to wait, but with some good signals in the real estate market and loan modification programs out there, struggling homeowners have choices.

The best advice I can think of for homeowners is to consult a Realtor. They will probably have information about specific loan modification programs, whether lender driven or government driven. A Realtor will be able to help determine market value for your home and the saleability of you property as well.

They can explain the process of selling in a "short sale" situation too. Many lenders are have gotten better at working out the details of a "short sale". We are actually closing more of them now than in the past.

Let's hope this works out to be a good move for the overall health of our real estate market and the economy.

Let me know what you think!

First Time Buyer Tax Credit - Many are taking advantage

When I sat down to write this...I had a clear idea of what I wanted to say. My message was going to be that the first time buyers tax credit was being taken advantage of by many people and the legislature was making plans to suppliment and extend the program into the future. The market is being affected positively. Finally something that is working! That sounds like a good thing.

Check out this article from USA Today.

http://www.usatoday.com/money/economy/housing/2009-06-22-homebuyer-credit-may-be-extended_N.htm

So, that said... as I was reading some more on the topic, I stumbled across an article from CNN Money. (I'm not going to put a link in for it)

It was dealing with the same story. Lots of people using the program. But their spin was that we are all going to hell in a handbasket because the First Time HomeBuyers Tax Credit program was running out of money and the market is still showing signs of instability. The feeling I took away from the article was not very positive.

What a load of hooey! My perspective is that CNN Money wanted a negative story. They took a positive and made it a negative. Don't ask me why. Disaster sells?

I think it's important for us, as Realtors, to know the difference. How we communicate to our clients and the public in general makes a huge difference. We need to know the difference. We are advocates.

Ok, I'll go rest now.

Board of Governors of the Federal Reserve System - Press Release 6-24-09

I guess this can be some heavy reading but check out what the FRB has to say about the sustainable economic growth in a context of price stability...whatever that means. I think what they are trying to say is... go out and buy stuff. Prices will be low for a while until the majority of folks figure out there are deals out there. If I can paraphrase.

Press Release

Release Date: June 24, 2009

For immediate release

Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.

The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.

In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Donald L. Kohn; Jeffrey M. Lacker; Dennis P. Lockhart; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.

I got this information from the California Association of Realtors. Dues are due.

3 Articles - Same data - May home sales

It's funny but I'm always looking for material for this blog. I can find interesting material everywhere. Good news, bad news, news news. Check out these 3 articles.

The first article is from Portfolio.com in Portland:

Existing home sales drop in MayJun 23 2009 5:13PM EDT

The pace of existing homes dropped 3.6 percent in May, according to figures released Tuesday by the National Association of Realtors.

read the full article here:

http://www.portfolio.com/news-markets/local-news/portland/2009/06/23/existing-home-sales-drop-in-may

Here is article #2 from the Los Angeles Times:quoting Bloomberg News

Home resales in U.S. rise 2.4% in May to 4.77 million rate

Bloomberg News

7:09 AM PDT, June 23, 2009

read the full article here:

http://www.latimes.com/business/la-fi-homesales-wire24-2009jun24,0,2268595.story

Here's the third atricle from the California Association of Realtors:

For release:

Thursday, June 25, 2009

C.A.R. reports May home sales increased 35.2 percent, median home price declined 30.4 percent

read the full article here:

http://www.latimes.com/business/la-fi-homesales-wire24-2009jun24,0,2268595.story

The first two articles are quoting the same figures from the National Association of Realtors. The third article is from the California Association of Realtors and only shows what's happening in California.

I find this all so confusing. No wonder we feel like no one know's what's going on. No one does.

$6 Billion in Federal Money for Foreclosures: I want some!

I didn't know that the Federal Government is subsidising foreclosure purchases. They are. It is though HUD. Money is targeted by them.

The formula gives California over $529.6M out of the $6Billion. I want some!

I stumbled across this article from CNN Money.

Check it out:

http://money.cnn.com/2009/06/23/real_estate/money_for_foreclosures/index.htm?postversion=2009062405

Let me know if you know of any local programs or any other access to the funding for my clients.