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Real Estate News 1.7.2014

Losing jobless benefits hurts people, local economies
“That’s how much the economy will slow down as a result of 1.3 million people losing their federal jobless benefits on Dec. 28, according to Mark Zandi, chief economist of Moody’s Analytics.”

Senate Confirms Yellen as Fed Chair
“The United States Senate voted Monday to confirm Janet Yellen as chair of the Federal Reserve following Ben Bernanke’s departure at the end of January. She will be the first woman to take the job in the Fed’s history.”

Are ‘Tortoise’ Markets Beating ‘Hares’ In Home Price Recovery?
“After observing a “first in, first out” recovery over the past year in which markets hardest hit during the housing downturn experienced the fastest-paced recovery, Clear Capital is now examining whether the housing market, in fact, follows the allegory of “The Tortoise and the Hare.” The analytics firm observed price movement and offered its predictions for the new year in its Home Data Index released Monday.”

Regulator Reports Improving Loan Performance for 4th Straight Quarter
“The performance of first-lien mortgages serviced by large national and federal savings banks continued to improve in the third quarter of 2013, reports the Office of the Comptroller of the Currency (OCC). It marked the fourth consecutive quarter the agency has recorded greater loan performance among regulated entities.”

United Wholesale Ranks No. 1 Among Wholesale Lenders in Q3
“United Wholesale Mortgage (UWM), one of the nation’s fastest-growing wholesale lenders, has good reason to celebrate going into 2014: The company was ranked on MortgageStats.com as the No. 1 wholesale lender in the country for the third quarter of 2013.”

Homes’ Days-on-Market Remain Low in November
“Following a post-summer slowdown in the market, homebuyers across the nation put a little more force on the accelerator in November.”

Housing Recovery Remains on Firm Footing as Americans’ Housing Sentiment Bounces Back From an Autumn Dip
“WASHINGTON, DC – Year-over-year gains in Americans’ attitudes toward homeownership demonstrate that the housing recovery continues to move forward on firm footing despite a drop in housing sentiment during the fall, according to Fannie Mae’s December National Housing Survey results.”

Renewal of jobless benefits clears Senate hurdle
“(Reuters) – A White House-backed bill to renew jobless benefits for 1.3 million Americans narrowly cleared a U.S. Senate Republican procedural roadblock on Tuesday.”

MBA: Mortgage Credit Availability Essentially Flat in December
“Mortgage credit availability increased slightly in December, the Mortgage Bankers Association reported this morning in its Mortgage Credit Availability Index.”

QM Fails to Deter Bank from Offering IO Loans
“Bank of the West will keep originating and holding in portfolio the interest-only loans that the Consumer Financial Protection Bureau’s new rules assign more liability to starting Friday.”

Home prices increase 11.8%
“Home prices, including distressed sales, escalated 11.8% in November 2013 when compared to a year earlier, representing the 21st consecutive monthly year-over-year increase in home prices nationally.”

Mortgage credit loosens a bit
“Accessing mortgage credit is getting a bit easier, a new report from the Mortgage Bankers Association (MBA) says.”

Failure to launch generation: Why household formation for younger Americans continues to lag while home prices soar. 46 percent of younger Americans living with older family members.
“Many are giddy about the rise in home prices.  Yet gains in home prices with no subsequent gain in income are merely a repeat of the previous bubble with a different tune.  In the last bubble, the memory has seemed to faded, the impetus for funky loan products came because incomes were not rising and products that offered additional leverage were taken up to mask the growing decline of wages.  In the last couple of years, the tinder that lit this latest run came from the Fed’s artificially low rate eco-system.  The difference this time is that the gains in home prices largely went to big investors that now dominate the market.  In the midst of all this trading, the homeownership rate has fallen.  Household formation for younger Americans is dismal.  The economy officially exited the recession back in the summer of 2009 (half a decade ago this summer).  So why is housing formation so weak when it comes to younger households if the economy is supposedly booming?”

US dominates list for foreign real estate investors
“Global real estate investors are flocking to the U.S.”

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Real Estate News 1.6.2014

FHFA Recovers Nearly $8B from Banking Institutions in 2013
“As conservator of Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA), recovered nearly $8 billion on behalf of taxpayers in 2013 through settlements with financial institutions.”

Realtors’ Confidence in Market Tempered by Credit Access Concerns
“Realtors expressed overall confidence in the market tempered by concerns regarding credit availability, according to the latest Realtors Confidence Index from the National Association of Realtors (NAR).”

Homes’ Days-on-Market Remain Low in November
“Following a post-summer slowdown in the market, homebuyers across the nation put a little more force on the accelerator in November.”

Online Technology Likely to Play Larger Role in Mortgage Process
“A recently released borrower survey on shopping habits shows increasing reliance on online tools when mortgage shopping, though many still find the learning curve too steep.”

Is Real Estate Headed For A Fall?
“There are various people who think that both real estate and stocks are vastly overpriced. Last week, for example, the stock market closed with the S&P 500 over 1,800 for the first time while the Dow topped 16,000. How much higher can these measures go — or must they fall?”

As interest rates rise, hybrid mortgages may be a good option
“WASHINGTON — Higher mortgage rates for 2014? Count on it. Could this be the year to check out hybrid mortgages, which haven’t been popular lately? Maybe.”

Housing tear-downs on the rise as real estate rebounds
“The front-end loader swung to the right and took a bite out of the shingled roof of the quaint cottage. The roar of the engine and crackle of buckling lumber carried down Elm Avenue in Manhattan Beach.”

Home buyer bargains? Many markets are back to normal (VIDEO)
“Real estate expert Michael Corbett weighs in”

The Best Online Tools for Your Housing Search
“There was a time when the only way to find homes for sale was to engage a real estate agent to send you listings or drive up and down the streets scouting “for sale” signs.”

Mortgage Borrowers Use Technology to Advantage
“It’s been said that a little education goes a long way. The same can be said, apparently, for a little mortgage technology.”

Watt at FHFA Seen as Enigma in Fannie-Freddie Market: Mortgages
“Mel Watt’s first act overseeing Fannie Mae (FNMA:US) and Freddie Mac came before he officially started.”

New law Ability to Repay tightens mortgage regulations
“Mortgage lenders will soon have to work under stricter regulations after passage of the federal government’s Ability to Repay rule, designed to reign in loose lending standards that officials blame for contributing to the Great Recession.”

Economists Spar Over U.S. Recovery
“PHILADELPHIA—Economists John Taylor and Larry Summers exchanged pointed words Saturday about the best approach to spurring the economic recovery.”

Home Price Data Point to Moderation
“Clear Capital, Truckee, Calif., said the double-digit home price growth experienced over the past two years appears unsustainable going into 2014, as prices move into a “slow and steady” mode.”

What to watch out for in the 2014 MBS market
“The year ahead remains murky for investors even as the Qualified Mortgage (QM) rule takes effect and the Qualified Residential Mortgage (QRM) is hammered out, but there are signs of optimism for normalization.”

Housing analysts: Denver beats Phoenix in deadly animal cage match
“Clear Capital’s Home Data Index (HDI) market report confirms the consensus – home prices recovered strongly in 2013.”

When your Realtor goes mum…here’s why
“Questions Your Realtor Can’t Answer

You may be a single woman looking for a home and neighborhood where you can feel safe at night. Or a family with children who would like other kids to live nearby for easy play dates.”

Freddie Mac Announces First Multifamily K Certificates Offering This Year, K-714
“MCLEAN, VA–(Marketwired – Jan 6, 2014) – Freddie Mac (OTCQB: FMCC) today announced a new offering of Structured Pass-Through Certificates (“K Certificates”) backed exclusively by fixed-rate multifamily mortgages with a 7-year term. The company expects to offer approximately $1 billion in K Certificates (“K-714 Certificates”), which are expected to price the week of Jan. 6, 2014, and settle on or about Jan. 28, 2014. This is Freddie Mac’s first K Certificate offering this year.”

Move inland or leverage your life: The gentrification of the California middle class pushes many to use ARMs to leverage into homes they cannot afford.
“I am convinced that Californians enjoy having a sordid affair with real estate.  The amount of justifications that get thrown around during booms and busts would be enough to fill a diagnostic manual for any aspiring psychologist.  It is fairly well accepted that mortgage rates will only move in one direction from this point forward.  So why would anyone lock into an artificially low rate via an ARM that is set to adjust in a short timeframe?  Many Californians are opting for ARMs to compete with big money investors over the tiny crumbs of inventory out in the market.  After all, home prices will be up in 5, 7, or 10 years and by that time you’ll be playing the equity ladder game once again, right?  The usage of ARMs is surging for the non-investor share of buyers.  A big reason is that California is largely unaffordable for the masses.”

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Real Estate News 1.3.2014

Job search: One year and counting…
“Lena Rouse has merely one resolution for 2014: Finally get a job.”

The smart home is a pipe dream
“At next week’s Consumer Electronics Show in Las Vegas, the tech industry will try to convince us that our homes will be completely automated in the next five years. Don’t believe the hype.”

Sell your home without a real estate agent
“How do I sell my home without using a real estate agent? — Bill, Chicago”

Luxury sales drive Manhattan home prices higher
“New York’s new mayor is vowing to shrink the divide between the wealthy and everyone else. But when it comes to the real estate market, he is facing an uphill battle.”

Fannie Mae, Freddie Mac got $7.9 billion in bank settlements in 2013
“WASHINGTON —  Fannie Mae and Freddie Mac collected $7.9 billion from large financial institutions to settle suits over bad mortgage-backed securities purchased by the seized housing finance giants during the subprime housing boom, their federal regulator said.”

Fannie Mae, Freddie Mac may be too profitable to shut down
“WASHINGTON — Federal officials swooped in to rescue mortgage finance giants Fannie Mae and Freddie Mac in 2008 with the largest of all the financial crisis bailouts — a combined $187.5 billion — because they were considered too big to fail.”

Morningstar Executive Gives Assessment of New CFPB Rules
““Under the new CFPB [Consumer Financial Protection Bureau] rules, servicers will have to provide very detailed and accurate information to borrowers about each aspect of their loans and/or any foreclosure procedures that may occur,” according to Richard Koch, SVP at Morningstar Credit Ratings.”

Industry Completes 50K Loan Modifications for Homeowners in October
“The HOPE NOW Alliance recently announced that an estimated 50,000 homeowners received permanent, affordable loan modifications from mortgage servicers during October 2013. This total includes modifications completed under both proprietary programs and the government’s Home Affordable Modification Program (HAMP).”

Alternate Home Price Index Records Weaker Gains
“While the S&P Case-Shiller Home Price Indices for October showed a significant 13.6 percent year-over-year leap, other measures saw more subdued gains for the month.”

Average private RE investment vehicle reaches $511M
“The average size of private real estate investment vehicles that closed in 2013 hit $511 million — the highest level recorded by Preqin since the start of its data analysis.”

Residential construction spending hits 2008 levels
“Construction spending on private, residential projects reached a seasonally adjusted annual rate of $346 billion in November, up 17% over November 2012. That’s the fastest pace since mid-2008.”

Lenders search for plan B
“Lenders and borrowers are looking to other avenues of borrowing as mortgage rates continue to rise and competition heightens among financial institutions.”

2014 housing forecasts filled with euphoria: Estimates looking at higher rates combined with higher prices and stagnant incomes.
“Euphoria unlike housing inventory is in plenty supply when it comes to 2014 real estate forecasts.  The glue holding the housing market comes from investors and generous banking policy.  The one thing about economics unlike other hard sciences is that it happens in real-time.  It also assumes certain rules are fixed but that really act more like clay to fit the whims of the power structure.  It was interesting to see how few analysts at the end of 2012 predicted the massive run-up in real estate prices during 2013.  What is typical of course is that analysts usually go with the momentum so it is no surprise that predictions for 2014 are rosier than they were for 2013 even though most are forecasting higher interest rates and most will acknowledge that this current pace is unsustainable.  Yet higher rates will add pressure on income constrained households.  Investors are already showing signs of pulling back in certain markets.  Let us examine the 2014 real estate forecasting landscape.”

3 ways Dodd Frank law will roil real estate in 2014
“Chris Dodd and Barney Frank have long since retired, but the namesake legislation they craftedfour  years ago is about to unleash sweeping changes in the mortgage and real estate markets.”

Can Selling Real Estate Make You Rich?
“When Roman Serra, a 29-year-old with a master’s degree in art, decided to switch careers, he enrolled in a two-week real-estate course. He took a personality test online and went through a short interview at Chicago real-estate firm Baird & Warner, where he took the class. If he passes his broker’s license examination in January, he is guaranteed a spot as an independent contractor and a desk at one of the company’s 22 offices. He says studying wasn’t difficult compared with his days in college. “I wouldn’t personally consider it intense,” he says.”

AZ real estate player, reality TV star in trouble for operating without license
“PHOENIX (CBS5) – A reality TV star made a name for himself bidding on foreclosed homes. Now he’s underwater, accused of operating without a license.”

Three Northern California Real Estate Investors Agree to Plead Guilty to Bid Rigging at Public Foreclosure Auctions
“WASHINGTON—Three Northern California real estate investors have agreed to plead guilty for their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.”

Real Estate in 2014: A Need-to-Know Guide
“After year of struggles, the housing market roared back to life in 2013. The rebound will continue in 2014, but the pace will slow.”

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Real Estate News 1.2.2014

Buy-and-rent investors get squeezed

“It’s getting harder to make a bundle buying up foreclosures and renting them out.”

Silicon Valley investor: Split California into 6 states

“Is the most populous American state too big for its own good?”

Market Analysts Expect Slowdown in Housing Recovery in 2014

“The housing market recovery is entering a new phase, according to the analysts at Capital Economics. They say the rapid bounce in home prices seen this year, which was driven by investors and tight supply conditions, will soon start to moderate, and the next stage of the recovery will be characterized by strengthening activity among owner-occupants and mortgage-dependent buyers, as well as a much more moderate pace of house price inflation.”

GSEs Reach Foreclosure Prevention Milestone

“As the year closes, the Federal Housing Finance Agency (FHFA) is celebrating a critical milestone.”

U.S. Consumer Confidence Bounces Back

“Consumer confidence saw a boost in December on heightened optimism for the job market, the Conference Board reported Tuesday.”

McLean Mortgage Introduces RateFlex Program

“In Virginia, McLean Mortgage Corporation announced the release of its RateFlex Program, a new concept designed to aid homeowners and prospective homebuyers in today’s volatile interest rate environment.”

U.S. factory, jobs data show underlying strength in economy

“(Reuters) – U.S. factory activity held near a 2-1/2-year high in December and the number of Americans filing new claims for jobless benefits fell again last week, suggesting the economy was poised for stronger growth in 2014.”

MBA Economic/Mortgage Finance Commentary: Fed Begins Taper; Weakness Persists in Housing

“Recent macroeconomic data paint a picture of a strengthening economy, strong enough that the Federal Reserve is willing to begin to ease its foot off of the gas pedal. However, recent housing market data is not nearly as strong; particularly purchase mortgage application volume which is running 10 percent behind last year’s pace.”

Adjustable-rate mortgages regain popularity as prices, rates rise

“When Michael Shuken recently bought his family’s first home, a four-bedroom in Mar Vista, his adjustable-rate mortgage helped them stay on the pricey Westside.”

Mortgage tax break expires despite bipartisan support in Congress

“WASHINGTON — A 6-year-old tax break for struggling homeowners who won reductions in their mortgages has expired, alarming housing advocates and lawmakers who said it still was needed despite the real estate market rebound.”

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Real Estate News 12.30.2013

Minimum wage to rise in 13 states on Jan. 1
“Starting January 1, minimum wage workers in 13 states and four cities will see higher paychecks.”

U.S. housing markets to watch in 2014
“Texas and California led recovery of the market in 2013. What are the next hot spots to watch for? Here are five cities to keep an eye on.”

5 biggest housing comebacks of 2013
“Six years later, the U.S. housing crash has grown more distant as the market continues to recover from record foreclosures and spiraling home prices. Here are five regions that experienced the most pronounced recoveries in 2013.”

Many Americans feel economy isn’t improving
“Despite a recent string of positive economic news, Americans say they aren’t feeling the improvements.”

Unemployment benefits for 1.3 million expire
“Michelle Marshall is one of the 1.3 million long-term unemployed Americans who is losing her jobless benefits.”

Pending Home Sales Edge Up in November
“WASHINGTON (December 30, 2013) – Pending home sales stabilized in November with a slight gain, according to the National Association of Realtors®. Monthly increases in the South and West offset declines in the Northeast and Midwest.”

Is Mortgage Market Deconsolidation Temporary or Here to Stay?
“In 1998, the top 10 mortgage lenders held around 40 percent of the market. By 2010, their share increased to nearly 80 percent; since then, it’s dropped down to around 60 percent.”

Even in Buyer’s Market, Homeownership Expected to Decline
“Zillow expects conditions next year to be a bit friendlier to homebuyers—but that doesn’t mean we’ll necessarily see more owner-occupied housing, experts at the real estate marketplace say.”

2013 in Review: The Consumer Financial Protection Bureau
“Mortgage industry commentators may argue (and they certainly have) about the Consumer Financial Protection Bureau’s (CFPB) performance over the last year, but one thing is certain: The bureau knows how to command headlines.”

Trulia Economist Sees 2014 as ‘Year of the Repeat Homebuyer’
“As prices continue rising in the new year—albeit at a slower pace—investors will begin to ease back from the purchase market, but repeat homebuyers will be there to pick up the slack, according to Trulia’s predictions for the housing market in 2014.”

Feature: New World Order
“The veterans of this business can remember when market conditions were “normal”—when REOs ran in the neighborhood of 150,000 a year, delinquency rates were just around 4 percent, and you only needed a credit score of 620 to qualify for a prime mortgage loan.”

Commentary: What’s in Store for Housing in 2014, Part 1
“Many economists and market observers have suggested the market is poised for continued growth as the recovery enters its third year, and there are positive elements in play that provide some reasons for optimism.”

Jobs, Population Growth, Low Prices Create Investment Opportunities
“Analysts at HomeVestors and Local Market Monitor say the formula for a nearly risk-free single-family investment opportunity is one part job growth, particularly in lower paying jobs, and one part population growth, mixed with relatively low home prices.”
The next article is from Christmas eve but I thought you may want to see it.

20 Cities with Biggest Foreclosure Discounts
“As the housing market continues to recover in 2014, finding a foreclosure deal is more important than ever to ensure you get the most bang for your buck and land a home with built-in equity. RealtyTrac has identified the top 20 U.S. cities with the deepest discounts still available on foreclosure homes, including several markets on both coasts, from the high end to the low end, and plenty in-between.”

Fannie Mae Reaches $591 Million Repurchase Agreement with Wells Fargo
“WASHINGTON, DC – Fannie Mae (FNMA/OTC) has reached a $591 million agreement with Wells Fargo to resolve repurchase requests on certain loans originated prior to 2009.  After adjustments for prior repurchases, Wells Fargo will pay Fannie Mae $541 million in the fourth quarter of 2013 and be released from repurchase liability for these loans, with certain exceptions. “

Fannie, Freddie give non-investor home buyers ‘first look’ period
“WASHINGTON — An important resource for first-time home buyers and others who find themselves in unfair competition with deep-pocket investors bearing cash just got better: The two biggest players in the mortgage market, Fannie Mae and Freddie Mac, are now giving non-investor shoppers 20-day exclusive rights to bid on and buy new listings they are selling.”

Nov. home sales fall to a 5-year low in Vegas
“The Las Vegas market turned into the comeback kid after investors flooded the city in the wake of the real estate bust.”

LPS: Home price increases slowed in October
“October proved to be a tepid month for home prices, with no state increasing more than a full percentage point, according to Lender Processing Services’ most recent U.S. Home Price Index report.”

Flagstar Bancorp reaches $10.8 million repurchase settlement
“Flagstar Bancorp (FBC), the holding company for Flagstar Bank, has entered into an agreement with Freddie Mac to resolve substantially all of the repurchase requests and obligations associated with loans originated between Jan. 1, 2000, and Dec. 31, 2008, reaching a total amount of $10.8 million, the company announced in a press release.”

New home sales and mortgage apps see growing divergence
“The November new home sales data from the U.S. Census Bureau includes “some surprisingly positive data points, and a continued divergence from the weekly purchasing applications trend as released by the MBA,” according to research from Compass Point Research & Trading.”

U.S. Stocks Little Changed as Home Sales Miss Estimates
“U.S. stocks were little changed, as the Standard & Poor’s 500 Index headed toward its biggest annual gain since 1997, after data showed contracts to purchase previously owned U.S. homes rose less than forecast in November.”

YEAR IN REVIEW: Stabilizer sums business scene in 2013
“One word: Stabilizer.
With its twists and turns, moments of trepidation, transition and glory, 2013 was a year Inland Southern California’s retail giants, small business, manufacturing companies, banks and real estate industry gained surer footing.”

Where did all the single family homes go? Half of foreclosed homes still occupied and big investors not reselling properties. Investors purchase $1 trillion in real estate since 2011.
“The real estate market has slim pickings for traditional buyers.  Funny thing that we have to use the “traditional” preface since the market is overrun with a hoard of investors.  I am seeing this with my own two eyes.  You are seeing it as well.  In most ordinary cases a rise in prices would be accompanied with some sort of rise in supply.  Yet this is no ordinary situation.  Scouring over a few reports I found that nearly half of foreclosed homes are still occupied.  In places like California and Miami this number is closer to 60 percent.  When these homes finally get fully repossessed, they are likely going to big money investors that end up holding on to the property, removing it completely from the market.  There is little doubt that investors are a big part of the market.  Since 2011 they have purchased over $1 trillion in real estate.  With razor thin inventory, this is a big deal.”

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GURU IS NOT A FOUR-LETTER WORD -PART 1- THE TERM

Have you ever heard the term “guru” used in real estate blogs, articles or other posts on real estate communities and social media? I’m sure you have. But, have you EVER found ANY of them using the term in a positive manner? I never have, not a ONE! Typically, in its derogatory fashion the term guru is used to describe or identify someone who is really not truly knowledgeable about the real estate investing game, or maybe someone who basically “overcharges or scams” a new unwitting student to real estate investing/speculating. Most of the time the person writing or making the comment is trying to make a point, but instead of constructively referring to their own facts or supporting their own position or point of view with something concrete, they just site complaints of the many that decided to pay the “ridiculously over-inflated prices for basic real estate investing education” and move on to use a comparison between themselves (or someone they want to pump-up as the good guy) and the devious elusive “guru”.

The point is that anytime someone wants to make themselves look good, win public opinion and prop themselves up as the savior of the wannabe real estate investor community, all they have to do is taint the reputation of someone else teaching real estate by labeling them a guru. I’ve read so many real estate articles and posts where the title “guru” is used in a derogatory fashion I’m starting to think it has never had any other meaning but a derogatory one. I happen to respect and revere the term guru. But I keep seeing it in article after article, post after post especially by individuals trying to benefit from undeserved accolades (much as the real estate “gurus” they are trying to besmirch.) This is probably not the wisest method of trying to make an intelligent point, as it basically amounts to no more than demeaning or degrading the term “guru” and then applying it to whomever, or whatever the writer or speaker is trying to deface. But unfortunately, most folks buy it!

For the record, I must admit that over past years I’ve been guilty of making similar unwise and immature statements myself about a host of things. Honestly, I think we all do it, occasionally without regard for the damage we may cause to others or the impact we can have on someone else’s decision making. But when connected to real estate it’s become an epidemic!

For the sake of accuracy, let’s take a closer look at the true original meaning of this big bad term “Guru”. As I’m sure most of you already know, according to Merriam-Webster “guru” pronounced gu•ru noun ˈgu̇r-(ˌ)ü, ˈgü-(ˌ)rü also gə-ˈrü, is defined as

    : a religious teacher and spiritual guide in Hinduism

    : a teacher or guide that you trust

    : a person who has a lot of experience in or knowledge about a particular subject

“In Hinduism, a personal spiritual teacher. In ancient India, knowledge of the Vedas was transmitted through oral teaching from guru to pupil. The rise of the bhakti movement further increased the importance of gurus, who were often looked on as living embodiments of spiritual truth and were identified with the deity. They prescribed spiritual disciplines to their devotees, who followed their dictates in a tradition of willing service and obedience. Men or women may be gurus, though generally only men have established lineages.”

So actually the TRUE meaning of the term guru is pretty cool, and deciding to continue to sarcastically use it to demean someone we are basically trying to crush is extremely inappropriate.

I suppose the appropriate term to use for such an awful underhanded individual would be closer to “Charlatan” pronounced char•la•tan/ˈSHärlətən,ˈSHärlətn/ and defined as

Noun: charlatan; plural noun: charlatans

1.  A person falsely claiming to have a special knowledge or skill; a fraud.

Synonyms: quack, sham, fraud, fake, impostor, hoaxer, cheat, deceiver, double-dealer, swindler,      fraudster, mountebank.

YEA… THAT’S THE TICKET!

As for the actual title of guru, well I suppose anyone that has ever helped us in any way to see, learn or understand anything we wanted to master by explanation or actual example (even if the only thing we learned from them was that real estate is definitely not for us) then I’d say the person we received that wonderful gift from could, in fact, be considered our guru… whether we paid them or not! 

Oh, by the way, I LOVE GURUS!  😉

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Today’s Real Estate News 11.26.2013

GSEs Update Short Sale Policies

“Fannie Mae and Freddie Mac announced changes to their Servicing Guides Monday aimed at helping more borrowers avoid foreclosure through short sales and deeds-in-lieu of foreclosure (DILs).”

Report: October Cool Down in Temperature Only

“Cooler temperatures didn’t necessarily mean a cool down in October activity, according to recent data. Despite a seasonal slowdown in activity, the housing market continued to post some positive metrics in October, reports the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey, which aggregates approximately 2,000 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.”

Negative Equity: A New Way of Life in the Recovery

“Fast-paced price increases have helped bring many underwater homeowners afloat. In the third quarter, 1.4 million homeowners rose to the surface as their home values once again outranked their equity, according to the Zillow Negative Equity Report released Thursday.”

Pending Sales Slip to Lowest Reading in Nearly a Year

“Pending home sales slipped a bit further in October, reflecting an overall declining trend amid mixed regional numbers.”

Top 25 Hipster Zips for Returns on Rental Properties

“While the precise definition of hipsters is elusive — which is likely just how they want it — there’s no doubt the culture surrounding the hipster lifestyle has a major impact on local real estate markets, and mostly in a positive way.”

Signs Point to Economic Volatility in the Near Term

“WASHINGTON, DC – The temporary government shutdown and debt ceiling negotiations dealt a blow to consumers in October, and foreshadows likely continued market volatility during the next few months, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research Group. In line with previous forecasts, the Group expects modest economic growth of approximately 2.0 percent for 2013 as a number of unresolved fiscal and monetary policy decisions weigh on consumer confidence. Factors including the appointment of a new Federal Reserve chair in January and the budget and debt ceiling issues that will remain until the first few months of next year are expected to suppress consumer spending – a key driver of economic growth. However, growth still is expected to pick up to 2.5 percent for 2014 once the fiscal drags wane and as labor market conditions improve further.”

Freddie Mac Multifamily Prices 19th Securities Offering This Year, K-035

“MCLEAN, VA–(Marketwired – Nov 25, 2013) – Freddie Mac (OTCQB: FMCC) recently priced a new offering of Structured Pass-Through Certificates (“K Certificates”), which are multifamily mortgage-backed securities. The approximately $1.3 billion issuance of K Certificates (“K-035 Certificates”) is expected to settle on or about December 5, 2013.”

Home prices rise 11%

“Home prices continued to climb in third quarter, rising 11% from a year earlier.”

Realtors® Applaud DeMarco for Heeding Warnings, Leaving GSE Loan Limits As Is

“WASHINGTON (November 26, 2013) – The following is a statement by National Association of Realtors® President Steve Brown: “Realtors® welcome today’s announcement from the Federal Housing Finance Agency that the current limits on conforming loans will remain in effect until further notice. As the leading voice for homeownership, NAR opposes lowering the ceiling on loans eligible for backing by the government-sponsored enterprises. Lower loan limits would increase costs for consumers and reduce their access to conventional mortgages.”

Insight: A new wave of U.S. mortgage trouble threatens

“(Reuters) – U.S. borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country’s biggest banks.”

U.S. residential building permits reach 1 million, a 5-year high

“The number of U.S. residential building permits issued in October surpassed 1 million, the highest level in five years, the Commerce Department reported Tuesday.”

FDIC reports positive trend in loan balances, failed banks

“The bad news about banks in the third quarter is that their net income declined 3.9% from the same quarter last year, according to the latest Quarterly Banking Profile released today from the Federal Deposit Insurance Corporation (FDIC).”

Colony American Homes to launch rental securitization

“Securitization deals backed by rental income continue to attract market interest as more families turn to rentals over homeownership amid tighter lending standards.”

FHA mortgage loans no longer best option after rule change

“The most popular type of mortgage for buyers with low down payments keeps getting pricier and less appealing as more buyers question whether it’s still worth getting an FHA loan.”

Wells Fargo’s Lofrano Was ‘Critical’ to Fraud, U.S. Says

“Wells Fargo & Co. (WFC) Vice President Kurt Lofrano played a “critical role” in helping the bank hide fraudulent home loans that cost the U.S. $189 million, the U.S. government claimed in a filing in Manhattan federal court.”

Some call on city to explore eminent domain to combat blight

“A California city’s controversial plan to use eminent domain to help its residents burdened with mortgages worth more than their homes has caught the eye of some Baltimore leaders, who say the city might benefit from the program.”

What Have Mortgage Settlements Done For Homeowners Lately?

“This week, JPMorgan Chase agreed to a $13 billion settlement with the Justice Department over the sale of faulty mortgage securities that led to the financial crisis. It’s the largest settlement with a single company in U.S. history.”

Chinese buying up California housing

“At a brand new housing development in Irvine, Calif., some of America’s largest home builders are back at work after a crippling housing crash. Lennar, Pulte, K Hovnanian, Ryland to name a few. It’s a rebirth for U.S. construction, while the customers are largely Chinese.”

3 Mortgage Stocks to Buy Now

“This week, three mortgage stocks are improving their overall rating on Portfolio Grader. Each of these rates an “A” (“strong buy”) or “B” overall (“buy”).”

Housing inventory disappears in California for the fall: Number of homes for sale reverses steady increase from February lows. Where did the housing inventory go?

“For most of the year, housing inventory was steadily increasing across the nation. In California, it appeared that inventory hit a bottom in February of this year. At that point, there were 109,000 homes available for sale. The latest figures going out to October showed 127,000 homes available for sale and this was down from 134,000 reached in August. There has also been a steady decline of homes available for rent. The cash investor crowd is still out buying in large numbers. The drop in inventory is typical for the fall and winter selling seasons in normal markets. However this drop in inventory is likely being brought on by other factors including the jump in interest rates and also, the perception that the market may be softening. The number of listings with price cuts was 17 percent earlier this year. Today it is up to 28 percent. Where did the inventory go?”

Troubled hedge fund sitting on real estate gold

“Hedge fund manager Steve Cohen has at least one easy way to make up some of the $1.2 billion he recently agreed to pay the government: Cash in on SAC Capital Advisors’ sprawling real estate holdings that stretch across three continents.”

Chinese real estate influence extends to the Big Apple

“Chinese buyers are fast becoming players in the cutthroat world of Manhattan real estate, and that keeps high-end real estate broker Dolly Lenz busy.”

What Homebuyers Can Be Thankful for in 2013

“Homebuyers have had it tough lately, suddenly finding themselves in a sellers market as summer came along. And mortgages suddenly cost more too — when you could even get one. But of course Thanksgiving isn’t about looking at negatives. So, if you can, look past that elephant-in-the-room that is the credit crunch and take stock of what’s now on the table for those homebuyers with the capital.”

Why Is High-End Real Estate So Hot Right Now? (VIDEO)

“Nov. 25 (Bloomberg) — Ziel Feldman, founder of HFZ Capital Group, and Kevin Maloney, co-founder of Property Markets Group, discuss luxury property market trends with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)”

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No Longer Posting Real Estate News Articles

Due to my eminent retirement, we will no longer be providing articles on a daily basis. If I find anything that I consider highly interesting or valuable, I will post it. For relevant real estate related articles & postings, please “like” The Norris Group on Facebook and visit their website www.TheNorrisGroup.com. Aaron Norris’ “Real Estate News Round Up” is exceptional!

Also, you can click HERE to see all of the sources that I typically go to for real estate information.  

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Submitting a very low offer on an REO, agent perception

Question:

Hello Tony,

Thanks for your excellent “tip” after the Inland Empire Investors Forum meeting in Corona about pursuing the REO Pendings, instead of the Actives, for any that fall out.

I have one question that I hope you can lend some perspective on.

If the REO Broker’s lender accepted the high, over-listing offer that keeps happening in Moreno Valley on the homes that I’m making offers on… what is the conversation like with the REO Broker when I can still only offer 65 percent of ARV minus repairs, and that isn’t very close to the listing price… lower than probably several other all cash or hard money offers they got the first go-round?

Obviously, your brokers call you and they know what you’ll pay. I am dealing with these brokers for the first time, as I will not use my buyers agent. I’m going to be asking these REO brokers (or their own buyers agent) to write up my offer directly if the pending sale falls out… but it will more than likely be much lower than the asking price.

Because of the over-bids on low REO inventory, I get the feeling I would be upsetting them or getting off on the wrong foot with them with the TNG offer I need to make.

Just curious how you perceive that conversation if you were me (essentially unknown to them), how you think that would go, and is it a risk for the first impression or relationship building you teach in your course.

Also, as I mentioned, I’m interested in your small group mentoring program when you get it up and running again.

Thanks for your consideration.

Best regards,

B.S.

Answer:

Sorry it’s taken so long to get back to you. Here’s the short answer, I never worry about how an agent “feels” about my offers or me, for that matter, that’s counterproductive. Next time you’re speaking to an agent, start the conversation with a question. Ask them this, “If you’re listing a property for sale, and you had one of these two offers to choose from, would you like the highest offer or would you like the one that’s going to close escrow?” Obviously, they would love to have the highest one close escrow. But, in today’s market that’s far from reality. There are just too many hurdles to clear from the moment the offer’s accepted to that closing that can screw up that deal. It’s not your job to educate experienced brokers and agents. But unfortunately, that’s exactly what you end up having to do. And this is exactly the reason why I place such importance and emphasis on you staying on top of the specific day to day changes affecting your target market.

40.5% of buyers could not secure a mortgage. 36.5% of buyers changed their mind. 5.6% of buyers did not have a down payment. 0.0% of owners decided not to sell. And a whole bunch of other ones ran like hell once they figured out how much they’d have to spend on fixing that house.

Do yourself a favor, stop worrying about all the other offers – cash or otherwise. Focus your attention on the numbers that you need to hit so you can secure a profitable deal. Stop listening to your mind giving you all the reasons and excuses why everyone is going to hate you. If I’ve said it once, I’ve said it a million times,
“your mind is not your friend.” – Vernon Howard.

Focus on providing a solid offer that you can stand behind and close on without hesitation. Make sure that you remind the agents you’re working with of the percentage of fall outs that are presently being experienced in the market due to all of the reasons that I’ve already stated. Over time, this is what will give your offers their strength and solidify your deals.

This may take a little bit of time and some effort on your part. But just like any other mental conditioning, it’s your job to consistently remind them of the nightmare of accepting a supposedly “higher, better” offer that will, more than likely, crash and burn, in exchange for your superior offer that WILL close escrow and secure them a commission check.

Piece of cake, right?

Best,
Tony