What to expect of 2011 and on?
2011 will be a great year.
The economy will stop dropping, will touch bottom. It will most likely remain there for a few years; For some areas of the economy and the Country, it will probably continue to drop throughout 2011 and part of 2012. These unlucky areas will be the areas that have not been greatly affected so far, like the big homes, the expensive condos, etc... In communities where prices have not dropped more than 10 or 20%.
I think we will see the typical 50% drop in prices throughout the Country, not only in a few areas, so if you have been spared, brace yourself.
The Government will continue to inject money into the economy, to boost what would eventually should pull us out of this depression, but in general, it won't be effective, the most it will be able to do, is to keep it sort of stable. We will learn to adjust to the world as we had it in 2009, and we will adjust, it will help us be more conscious of our spending, will teach us to save, to use credit wisely, to buy what we need, not what we want. Our nation will become better, we will be more critical of our government, the abuse by big companies. We will see many, many changes in technologies, in the energy sources, in the finance world, and all those changes will be good, citizens will again become important, big companies will have to deal with what Americans want and stop trying to get our last penny.
The big Oil, insurance, pharmaceuticals, banks will become less and less popular, and the voters will become more and more indignant of the damage these companies have inflicted.
Americans will be more and more entrepenurial, as the best and more effective strategy against unemployment and sub-employment, from 15% entrepeneurs we will go to 25% in this decade.
Business that create efficiency, that save money, that create solutions instead of products, business that care about consumers, products that are basic, products that are trully useful will thrive and will become strong and lead the way.
In the end, we will be better, every year we will improve, while our economy absorbs the abuse of the last decade. That will be the theme of the decade.....ABSORTION.

IS IT OVER?....NOT

You can see that the housing and credit crisis is not over, we still have 2011 as a major shakedown. Be prepared for more of the same for another year. The Option ARM loans are the ones that will be reseting in 2011, the short term advantage is that rates are low, but how long will they stay low, is another question.

The number of days since the average borrower in foreclosure last made a mortgage payment is close to 500!!!


Banks can’t foreclose fast enough to keep up with all the people defaulting on their mortgage loans. That’s a problem, because it could make stiffing the bank even more attractive to struggling borrowers.
In recent months, the number of borrowers entering severe delinquency — meaning they missed their third monthly mortgage payment — has been on the decline, falling to about 700,000 in October, according to mortgage-data provider LPS Applied Analytics. But it’s still more than double the number of foreclosure processes started.
As a result, banks are taking progressively longer to foreclose. The average borrower in the foreclosure process hadn’t made a payment in 492 days as of the end of October, according to LPS. That compares to 382 days a year ago and a low of 244 days in August 2007.
In other words, people who default on their mortgages can reasonably expect, on average, to stay in their homes rent-free more than 16 months. In some states such as New York and Florida, the number is closer to 20 months.
That’s a meaningful incentive, and it’s likely to grow unless banks manage to boost their throughput. Speeding up the process won’t be easy, as demonstrated by the banks’ continuing legal troubles related to robo-signers, bank employees who signed foreclosure affidavits without properly checking the required loan documentation.
Millions of Americans still are paying their mortgages even though they owe more than their homes are worth. The more banks’ backlog grows, the more likely they are to join it, adding to the already giant pile of foreclosures weighing on the housing market

December 12 & 19, San Diego Bay Boat Parade of Lights

Spectacular event--free to view! The Annual Port of San Diego Boat Parade of Lights features a large fleet of private craft decorated and illuminated for the holidays. The boat parade will travel a 7-mile route from Shelter Island to Coronado.

December 12, Annual Pacific Beach Holiday Parade


A community holiday parade that features floats, marching bands, color guards, community groups, children marching groups, clowns, Santa Claus, and more.

Time: 1:00 pm – 4:00 pm

Parade Route: Garnet Ave/Haines St, Garnet Ave., Bayard St/Garnet Ave.

For more information visit http://www.pacificbeachfest.com/

December 12, Gaslamp Holiday Pet Parade

A pet parade where pets and people can dress up in costume and march in a parade through the Gaslamp Quarter with the hope to win a prize. The event isn’t just for dogs; any pet will do. A fun parade to watch or participate in. This event includes a Pet Expo.
Time: 1:20 pm – 4:00 pm / Pet Expo 2:00 pm – 5:00 pm

Parade Route: Starts from the Hilton Hotel parking lot at 5th & L Street. Admission $10.00 per pet & owner for the parade & costume contest.

For more information visit http://www.gaslamp.org/

December 3 & 4, Balboa Park December Nights

Free community festival. Balboa Park holiday extravaganza featuring two days of light displays, nativity, Santa, musical & dance presentations, plus shopping, and holiday food & spirits. More than 80 museums & cultural organizations will be open for this event. Participating museums will be free to the public from 5:00 to 9:00 each evening.

Time: Fri 5:00 pm – 10:00 pm / Sat Noon – 10:00 pm

Location: Balboa Park

For more information visit http://www.sdhpr.org/

CHRISTMAS IN SAN DIEGO
December 3, Coronado Christmas Parade –

Open House – Snow Mountain

The holiday season in Coronado starts when Santa arrives by ferry at the Coronado Ferry Landing. A festive parade along Orange Avenue follows, while merchants keep their doors open late for shopping. Santa lights the 75-foot star pine Christmas tree located in the center of town as the community band plays holiday music. Snow Mountain is open from 3:00

to 8:00 pm. The evening finishes with 2 concerts at 2 different locations.

Time: Refer to website for schedule

Location: Ferry Landing Marketplace – Coronado

For more information visit www.coronadovisitorcenter.com

CAN YOU BELIEVE THE BANKS???
I have tried to decypher America's largest bank's approach to short sales.

 

I understand that they have a huge percentage of assets that should not be called assets any more, and the moment they recognize this truth they probably will go out of business or at least be in deep, deep trouble.

 

The problem that I see, is that, instead of dealing with it and establishing a plan, they are simply waiting and pretending, waiting for a miracle and pretending nothing is wrong. The people that gets affected by this lame attitude is: homeowners that want to short sale, end their nightmare and go on with their lives; and Real Estate agents, who work like dogs to get a sale through, just to find ourselves immersed in this bureaucratic ocean of crap, playing the waiting game, the foreclosure l. The bank probably does not have the intention to authorize a short sale because their reserves are low, they could inform the agent to not come back until 6 months from now, because they cannot afford to foreclose or short sale that house at that moment, get a number and we will call you.... then the agent could go on and continue to collect sellers and place them in that huge line and wait for the number to come up, but NO, how could it be so easy. The bank, instead, prefers to ask for 5 lbs of documents, to upload them in their stupid Internet portal, to lower our commissions, to send another 5 lbs of documents, to go back to square one if the buyer got tired of this load of crap, and then when you think its over, after 6 or 8 months..... They transfer the property to one of the paper companies they have created to hide the ball:

• Home loan Servicing LP
• Realtime Resolutions
• LRC
• Moscodilis LLP

Collection agencies, or outsourcing companies designed to transfer the blame for whatever happens, to allow to play the game: wait and pretend.
Do you really think they have the "investor" voicing an opinion if Mr. Smith should bring $2,000 more to the table? or if they are going to pay HOA or not?, The investors only know that they bought a financial instrument, and are receiving their interest payments, they don't give a rat's ass where the money is coming from. There is really no investor reviewing the files, this would take years to do, just do the math. They have just created this scripted crap to have a story to tell to all the real estate agents, who cares about us?, we are disposable, the only use they see for us, is that they may also decide to sell stuff to us and get what is left of our retirement money (designations, courses, portals, lists of asset managers, seminars, conferences and all that %^&* crap).

 

I was scared in the begining of the possibility of Banks going broke, this would be the end of the world, I thought. Now, I have come to the conclusion that nothing would happen, life would go on, they probably deserve to go broke, they probably need to be replace with a fresh batch of independent investors that would begin lending money and would create a system based on supply and demand and all the principles that gave birth to our great Nation.
Its about time we allow all these TO BIG TO FAIL entities to start failing and allow us, the people to breath and live free again, when did we turn communist? when did all go away?
To hell with the banks, to hell with the oil companies, to hell with the pharmaceuticals, to hell with the insurance companies, to hell with Republicans and Democrats, WE NEED HEROES, WE NEED AMERICANS THAT LOVE AMERICA.

Luxury homes…the so-called McMansions are going into default at a faster rate than anyone expected. Expect this trend to only increase.


Why is this happening with the least risky, most able to pay borrowers?
Chronic negative equity. In many cases the owners have made the financial decision to do a strategic default.

Nationally, housing prices might continue to fall....FHA
For those of you who are hold-outs in the belief we are experiencing a double dip in home prices…this new report from the FHA should convince you.
The Federal Housing Administration (FHA) submitted their annual report to Congress today and they predict a continuing decline of home prices going into the future.
In a report by the FHA on their government website, the administration reported that insurance claims declined which means either less people are buying homes and need FHA assistance, or the prices have declined and less money is needed to backstop home purchases.
FHA’s study finds that since last year, the capital reserve ratio held steady, insurance claims declined significantly, and the economic value of FHA’s single-family insurance program grew by more than $1 billion, from $3.6 billion in 2009 to $4.7 billion in 2010.
Like last year’s report to Congress, this accounting shows that FHA is sustaining significant losses from loans insured prior to 2009 and its capital reserve ratio remains below the congressionally mandated threshold of two percent of all insurance-in-force. However, the report concludes that under conservative assumptions of future growth of home prices, and without any new policy actions, FHA’s capital ratio is expected to approach two percent in 2014 and exceed the statutory requirement in 2015.
“It’s clear that FHA is in a stronger position today than we were just one year ago,” said FHA Commissioner David H. Stevens. “While we are not yet completely out of the woods, based on the evidence we’re seeing, FHA is weathering the economic storm while helping to create a firm foundation for our nation’s recovery.”

FHA’s capital reserve ratio measures reserves in excess of those needed to cover projected losses over the next 30 years. The independent actuarial reviews of the MMI Fund estimate FHA’s capital reserve ratio to be 0.50 percent of total insurance-in-force this year, falling fractionally from 0.53 percent in 2009. The difference is primarily attributed to the use of much more conservative assumptions regarding future house price growth than were used last year, which also resulted in an $8.5 billion decrease in economic value. However, that decrease was offset by a variety of factors, including an $8.7 billion increase in value due to better credit quality, loan performance, and the premium increase implemented earlier this year.

Since over 40% of home purchases go through the FHA each year, they are a very good barometer in determining the strength of the home markets, and in determining the direction of home values. Many monthly reports that come out of government agencies are based on faulty accounting methods, and in many cases, simple phone surveys. This report by the FHA is tied solely to applications and contracts that required FHA insurance for home purchases.

SHADOW INVENTORY, A SCARY SHADOW!
The worst kept secret in the real estate industry is the amount of time a delinquent (defaulting) homeowner can live in theirhome without making a payment.No hard numbers are known but estimates are that close to 10,000,000 defaulting owners are living in homes that they are not paying a dime for.Wall Street Journal published a state by state graph showing the average time that borrowers spend in their homes during delinquency and foreclosure: See Graph Here.Here are the states with the highest number of ‘living free’ days:500-600 days: Florida and New York and others400-500 days: California, Nevada, Washington State, Texas, Ohio, Indiana and many others..200-400 days: The rest of the country.Bottom line, the most amount of time someone can live payment free…600+ days. The LEAST amount of time is nearly a year.

Peace of Mind: Title Insurance



Cyborgs are signing documents. The powers that be are scratching their heads in confusion. And MERS is ... well, who knows. In states like California, with its infamous unemployment rate hovering at 12 percent, a real estate industry in an earnest nosedive is the last thing anyone needs.

Unfortunately, that could be the outcome without a swift resolution. And with foreclosures and short sales making up a huge part of the California market, there are many - Realtors, investors, escrow companies, contractors, the surrounding real estate service sectors - whose livelihoods depend on how these issues will ultimately play out.

On this week’s Norris Group Real Estate Radio Show, Kurt Pfotenhauer, CEO of American Land Title Association (ALTA), joins host Bruce Norris for a discussion about the title industry’s take on the situation.

First up, one of the most talked about acronyms in the industry these days: MERS (or Mortgage Electronic Registration Systems).
“Our experience with MERS, speaking on behalf of a broad swath of our membership, is that MERS played an excellent role in bringing some much-needed efficiency to the marketplace,” Kurt said.

The system is fairly simple. A title searcher goes into the public record and finds the MERS name on the mortgage. With it is a MERS Identification Number. Plug that into the MERS system and you know who owns an official interest, who has been assigned the interest, and where the servicing rights are.
Before MERS, every change in assignment would have to be done at the local courthouse, which added cost. Even worse, courthouses would get behind and lien releases could take months.

“MERS was intended to bring order to a fairly chaotic situation,” Kurt said. “It’s delivered on that.”

Having cleared that up, Bruce drives at something many have been wondering:
“We hear rumors of Stewart Title placing restrictions on policies for properties foreclosed on by JP Morgan,” Bruce said. “Was that a temporary concern, or do you think there are insurers that are going to sidestep the issue by not insuring some transfers?”
“I appreciate the opportunity to clear this up,” Kurt said. “The title industry has continued to provide insurance on REO properties. Fidelity, the largest title insurer in the country, last week announced they would not insure any property on which they did not have an indemnity agreement with the bank that owned the property. That’s the first real restriction that I’ve seen on this REO market. “

In an effort to keep REO markets running smoothly, ALTA was working with Fannie, Freddie and lender groups to create an indemnity agreement. Kurt envisioned a handshake where the bank says to the title company: “I warrant that we have followed proper procedure foreclosing on this property. Should there by any issue surrounding the foreclosure, we’ll hold you harmless for the legal costs that you incur defending.”

However, last week the title industry came out against an industry-wide indemnity agreement, as the current operational and procedural review by the banks gave the title industry assurance this wasn’t necessary. As long as confidence in the chain of title can be obtained, title insurance would be insured sans indemnity waiver.

As this story unfolds, we may find overlays in the market depending on the title company and the banks that own the foreclosed properties. Investors who buy at the courthouse steps may find themselves in a position where a lender won’t provide a warranty if required and/or a title company that’s risk averse.

“Every title insurance company has a different appetite for risk. My guess is, if you’re persistent, you’re going to be able to find a title insurance company that’s comfortable with the risk,” Kurt said.

The talk then turns to Bruce’s inbox: “Every weekend I get an email about another lender no longer existing. So what happens to title insurance - let’s say there’s a warranty from a lender who no longer exists on Friday?”
Kurt explained that that it’s an issue individual title companies are considering. While there won’t be a one-size-fits-all solution, title insurers and lenders have equal interest in seeing the market work smoothly.
“And if a title insurance company goes upside down and you’re holding one of those policies?” Bruce asked.
“The title insurance industry is very strictly regulated as to its capital requirements,” Kurt said. “It’s a monoline insurance, meaning we can’t commingle the reserves for title insurance reserves with any other kind of reserves. It’s made the industry extraordinarily solvent even through this down cycle."
“I think you can say the title industry has been a regulatory success story, because it’s still around to provide the protection it promised.”
Bruce then asked about the effect of title insurance binders when exiting a property, and Kurt explained that they provide a company standing behind your ownership claim.
“There’s always some grey area in the law, some nuance to the law and its application,” Kurt said. “I think what that does is give future owners or lenders confidence that the collateral or the property is there. And that’s the whole benefit of this system. Without those guarantees commerce doesn’t move around as quickly.”
In recent months, stories have circulated in the media regarding foreclosed homeowners breaking into their former houses and taking possession. “We know of several cases where a trustee sale buyer buys on the courthouse steps, fixes up the house, and the previous owner attempts to move back in,” Bruce said. “Then these guys are getting sued for quiet title actions. Had they had policies, that legal indemnification would kick in and there would be attorneys from the insurance world protecting their interest. Is that accurate?”
“Exactly right,” Kurt said. “And more importantly, there probably would have been due diligence done to discover any flaws or potential claims against the title prior to getting mugged by it.”
Kurt said it best when he said the real benefit of this insurance is peace of mind. You know what you have is yours. Somebody has done a very thorough job in establishing that - and in the unlikely case it’s challenged - you have somebody there to handle the claim.

ECONOMY AND THE VOTE
This week is one big week for the markets. Since Sept 21st at the conclusion of the FOMC meeting when the Fed announced it was prepared to buy more treasuries the bond and mortgage markets have had a yo-yo ride. On the announcement it set up a big move lower in rates taking the 10 yr down 40 basis points, then markets began to see an easing move as a step to increase inflation and the bond and mortgage markets turned and now sit about where interest rates were prior to the FOMC meeting. On Wednesday the FOMC will actually announce what the Fed intends. Unless there is some form of shock and awe the Fed's easing move may simply be another failed attempt to revive the housing markets and the economy.
Economic data ends the week with the employment report on Friday. In the meantime the data calendar has key data ;points everyday this week except Tuesday, election day. The election is the least of the issues this week as there is little doubt Republicans will take the House but likely not the Senate. Talk of grid-lock with the change in Congress; normally considered good, grid-lock this time is something to avoid with the economy barely holding on. Nothing expected from the elections until January when the new Congress gets underway, in the meantime the lame duck Congress is all about scrambling the eggs. Extending the tax cuts coming at the end of the year is the main event.
Difficult to predict how the bond market will take the FOMC policy statement on Wednesday, in the meantime the rate markets will likely stay about where they are. Friday's Oct employment report is expected with just 60K non-farm private job growth and the unemployment rate unchanged at 9.6%. Unless job growth exceeds 100K a month it doesn't even cover the new entries in the job market let alone those that have lost jobs in the recession.

GREAT TIPS TO IMPROVE YOUR CREDIT SCORE.

Many are taking advantage of interest rates at historic lows, either by re-structuring debt with a refinance or purchasing a new home. However, the recent economic crisis has created even tougher guidelines and credit requirements and there are some things that consumers must be aware of when applying for a loan.


Leading nationwide credit expert and President of Credit Resource Corporation, Linda Ferrari, developed the top 10 credit don'ts during the loan process, to help you get your arms around those things that can unknowingly wreak havoc on your loan transaction.

1. Don't do anything that will cause a red flag to be raised by the scoring system

2. Don't apply for new credit of any kind

3. Don't pay off collections or charge offs

4. Don't max out or over charge on your credit card accounts

5. Don't consolidate your debt onto 1 or 2 credit cards

6. Don't close credit card accounts

7. Don't pay late

8. Don't allow any accounts to run past due-even one day!

9. Don't dispute anything on your credit report

10. Don't lose contact with your mortgage and real estate professionals

MARKET RECAP

We can't say that the post-tax credit lull is officially over, but recent housing data lead us to believe it is. Housing starts again surprised on the upside, increasing 0.3 percent in September to 610,000 seasonally adjusted annual units, after jumping 10.5 percent in August. More importantly, single-family starts were noticeably stronger, increasing 4.4 percent month-to-month.
Gains in the immediate future might be tougher to come by. Permits declined 5.6 percent, lead by an acute decline in the multi-family segment, which tumbled 20.2 percent after a 9.8 percent rise in August. The bad news on multi-family permits – which tend to be volatile anyway – is offset somewhat by the good news that single-family permits edged up 0.5 percent.
Improving sales and more construction helped lift the Housing Market Index – a gauge of homebuilder sentiment – to a 16 reading in October after posting at 13 in September. Although the sentiment is still low, it should continue to improve: the HMI component for sales expected in the next six months rose to 23 from September's 18.
We don't want to minimize legitimate concerns, but the tendency is to extrapolate near-term news farther into the future than it probably deserves. Admittedly, news has been underwhelming due to tax-credit expirations, sluggish job growth, shadow inventory build up and foreclosure-gate, but these things can pass as quickly as they come. Indeed, we are already seeing reports that last week's fears of a country-wide foreclosure meltdown were seriously overdone.
In the meantime, mortgage rates remain stable (which also means they show little inclination to go lower), as do home prices, so it's important to keep the long term in perspective. Few people doubt that there's a high probability that a refinance or a home purchase today will look like a very savvy investment five years hence.
the economy.
Another Reason We Think Home Prices Have Bottomed

Last week we discussed quantitative easing and the prospect of the Federal Reserve injecting more money into the banking system. The scuttlebutt on the street says the Fed could pump another trillion dollars into the system through Treasury-bond purchases. It's no slam-dunk, though; the money supply is already at an all-time high, according to the St. Louis Bank of the Federal Reserve.

Because of heightened uncertainty, new money has had only a minor impact on consumer prices. In other words, consumer-price inflation remains low (though prices haven't been falling either). Much of the inflation associated with the new money has shown up in the investment markets instead, particularly in stock and gold prices.

We think it's only a matter of time before consumer prices come under inflationary pressure. The fact is that even if the Federal Reserve doesn't add more money to the system, the banks could. They are sitting on $980 billion of excess reserves, which could easily be drawn into the loan markets, thus further expanding the money supply.

All this money and the potential for even more money will help keep home prices stable in nominal terms. And it's these nominal values that serve as the basis for home appraisals and loan amounts. In other words, if the Fed's goal were to maintain a median home price of $200,000, it could theoretically pump enough money into the economy to make it happen. It wouldn't necessarily be a good idea, but it is an option if price stability were the goal.

Home Buying and Selling Tips for Fall

Here are some of their tips for fall buyers and sellers:

Fall Sellers:

Replace faded summer plants with fall-blooming flowers and add autumn decorations to the home.

Expect low-ball offers and be prepared with higher counter offers.

Freshen up listing photos by shooting pictures that make it less obvious that the seasons have changed.

Price the home to sell. A price that is a little lower than the competition may be a winning move.

Be willing to show the property and hold open houses whenever potential buyers are ready

Fall Buyers:

Look for motivated sellers who have a reason to move on by the end of the year.

Explore new constructions. Builders are often interested in selling before the new tax year.

Beware of fall maintenance issues. Consider overflowing gutters and leaf-covered lawns.

Shape offers carefully. Even in this market it is possible to turn sellers off with a too-low bid.

Fall Maintenance

1. Check your heating system including filters, pilot lights and burners. Have the system serviced by a qualified professional. Cleaning and servicing now can save you money later. Learn steps to boost your furnace's efficiency and how to replace your furnace filter.

Bank of America Foreclosures to Resume in 23 States (CA not included yet)


Here’s a list of the 23 states in which Bank of America will begin reissuing foreclosures:
Connecticut, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont, Wisconsin
Bank of America will resume mortgage foreclosures in 23 states.

The bank, which earlier this month stopped foreclosures across the nation, announced its plans to restart foreclosure sales in nearly half of those states by October 25, which is next Monday. Chase Bank, PNC Bank and Ally GMAC have all stopped foreclosures in those 23 states.
The bank reported that it had not found any improper paperwork so far. It will resume 102,000 foreclosures next week as a result of the decision.

“Our initial assessment findings show the basis for our foreclosure decisions is accurate,” Bank of America said in a statement. “Our decision to review our process and later, to extend our review to all 50 states, has been an important step to give customers confidence they are being treated fairly.”

California Latinos: Paying the High Price of Foreclosure
Latinos and African Americans in California have experienced significantly higher foreclosure rates than non-Hispanic borrowers in the state, according to the Center of Responsible Lending. These communities represent more than half of all foreclosures, with 48% of foreclosures on Latinos and 8% on African Americans. The study analyzed more than 600,000 foreclosures.

A DAY OF JOY FOR HUMAN KIND!!

What a glorious day!, they have rescued the 33 miners in Chile!
For the last two months we have grown used to listening about the terrible ordeal that these poor men and their families were enduring, imagine being trapped a mile under the surface, with slight to none chances of surviving. It went from a headline news to a second rated notice, except for these poor people.
Today billions of people around the world watched, with tears in our eyes, the exhiliarating moments of a great triumph of man kind, of our technology, or persistence, and more than anything, the miracle of life.
It made me think. How lucky we are, no matter how trapped we feel by our economy, our joblessness, our family problems, when we compare our ordeal to what these men went through, all our problems sudenly seem so, so small, so pale.
This day, today, is without a doubt, the happiest day of all of these guy's lives, and why are they so happy?, because they now are aware that no matter how poor they are, how bad their situation was, it can always be much worse and how ever their life was before being trapped, it was a life worth living, they could look at the sunset, admire the beauty of nature, they were loved by their families, they could enjoy the wonders of God's creation for free, and they had taken all of this for granted, as we all do.
We are so immersed in our little world, that we forget to enjoy the truly amazing things that God placed are around us every day.
That is why we all cried, that is why, this is a great day for all of us, humans, because this fantastic event in that tiny town in Chile, has given us all, a chance to reflect, to rethink our priorities, to appreciate what we have, and to praise our God and thank him for making this life so amazingly wonderful!

Foreclosure Moratorium, Robo-Signer Fiasco Should Be Resolved Soon.


The White House, yielding to common sense, opposes a national moratorium on foreclosure sales on the grounds that it would harm the housing market. (Finally something good from the Obamas)

David Axelroid, a White House senior adviser, said on CBS’s “Face the Nation” on Suday: “I’m not sure about a national moratorium because there are, in fact, valid foreclosures that probably should go forward.”
That brings up the question of what a valid foreclosure is. My definition: When a homeowner hasn’t made mortgage payments in at least three months, and the servicer has notified all necessary parties that it intends to take back the property, and the borrower doesn’t reach some sort of accommodation with the servicer, then a foreclosure is valid.

Some readers commented last week that mortgage servicers forged documents. The robo-signing issue has nothing to do with forgery. The robo-signers aren’t accused of faking documents. They’re accused of not closely reading the documents, which mostly are legal boilerplate.
Other readers say the foreclosing servicer should be required to prove ownership of the loan. I’m not sure what the argument is here. The borrower doesn’t send checks to the servicer. After a few months, that same servicer starts the foreclosure process. Obviously, the servicer works on behalf of the owner (or owners) of the loan.

When two servicers foreclose, I can see where ownership of the loan becomes a valid question. But I don’t think there are a lot of cases of multiple servicers foreclosing on the same loan.

Hot off the press from Bloomberg.
It appears that the robo-signer…foreclosure moratorium will be resolved this week.
Title insurers are in talks with banks and regulators to obtain warranties from lenders assuring they followed proper procedures before selling foreclosed homes, said Kurt Pitohouse, head of the insurers’ trade group.
“Everyone sort of sees the same risks, and that’s the good part,” Pitohouse, chief executive officer of the American Land Title Association, said today in a telephone interview. “You just have to craft a solution that’s acceptable to all the parties, and we’re making progress.”
Bank of America Corp., the biggest U.S. lender, on Oct. 8 extended a freeze on foreclosures to all 50 states amid concern by federal and state officials that homes are being seized based on faulty information. The Charlotte, North Carolina-based bank agreed that day to issue warranties for Fidelity National Financial Inc., the largest title insurer, said Peter Sidransky executive vice president and chief legal officer for Fidelity.
“It’s a representation that there are no issues going forward and an indemnity if someone makes a mistake,” he said.
JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC Mortgage unit have also stopped repossession cases in 23 states where courts supervise home seizures, amid allegations that employees submitted documents with unverified or false data to speed the process.
End of Week

A decision on the warranties may be reached by the end of the week, Pitohouse said. The assurances would help lenders resume foreclosures of homes with mortgage defaults and continue selling off their backlog of repossessed properties, he said. Pitohouse wouldn’t name the companies or regulators involved in the talks.
Fidelity National shares have dropped 10 percent this month. The company had about 38 percent of the market in the second quarter, according to the title insurance association. Shares of Santa Ana, California-based First American Financial Co., the No. 2 insurer, have fallen 5 percent.
Costs for title insurers to defend customers and reimburse for lost properties rose to $480.5 million in the first half of 2010, an increase of 14 percent from a year earlier, according to the American Land Title Association.
Among the tasks performed by title insurers is reviewing the public record for a court order that confirms a bank owns a particular property before it’s foreclosed on, Pitohouse said.
“Court rulings on valid foreclosures are going to be challenged,” he said. “That means we may get pulled into litigation.”

Preventing Risks
The warranties in the works are intended to protect title insurers from similar risks in the future, Pitohouse said.
Bank of America’s agreement with Jacksonville, Florida- based Fidelity National calls for the lender to cover the title insurer’s costs in the event of an error in the company’s processing of foreclosure documents, Sidranski or (Charransky, as his friends call him) said. The bank will notify the insurer in each case that the foreclosure complies with state laws and regulations.
Bank of America is in talks with other title insurers for similar agreements, said Richard Bramhall, the bank’s chief title officer. He declined to name the other companies.
“Our goal is to restore order to the chaos,” he said. “We’re optimistic that this will help calm the waters in regard to all the anxiety you see all over the country.”

The Eco boomers to the rescue!!!

There are many names for the Echo Boom generation: Gen Y, Generation Next, Net Generation, Millennials, Boomerang Generation and Trophy Generation, to name a few (OK, several).
Regardless of what you call them, the members of this generation are quickly coming of age; some are even starting to enter the housing market and there are many, many more to follow.
Echo boomers were born roughly between 1982-95 -- they are largely the offspring of baby boomers.
Fast forward to 2010. There are approximately 76 million echo boomers between 15 and 28 years old, making them second in size only to the baby boomers (age and population figures cited here represent an approximation based upon information found in studies done by the National Association of Realtors, current U.S. Census data, Wikipedia, and various media sources).
According to current U.S. Census figures, 67.2 percent of this generation can be expected to become homeowners by their mid 30s, which equates to just over 35.5 million households (U.S. Census homeownership rates are calculated based on households, not people).
The National Association of Realtors' 2009 Profile of Home Buyers and Sellers predicts that of this 35.5 million, 21 percent will be single female buyers, 12 percent will be single males, and 61 percent will be married couples or partners (couples/partners are counted as a single household).
It's worth pointing out here that the aforementioned U.S. Census figures also state that since 1982, homeownership rates have fluctuated very little; anywhere between 64 percent and 69 percent during this 28-year span.
As you wrap your head around those figures, think about the impact that this generation is going to have on housing in the coming years. According to a recent economic report by Moody's, builders are currently developing about 500,000 housing units a year.
Add into this equation that the echo boomers will be buying homes alongside repeat purchasers from other generations and you can quickly surmise that in the foreseeable future we are going to have a shortage of housing in the "more affordable" markets (where homes are priced at or below the area's median price).
The onset of the echo boomers in the housing market is a stark reminder of how important our community's growth-management plans are. The sheer size of the Echo Boom generation will have a powerful effect on housing demand over the next decade, but will there be enough homes to meet that demand?


Current studies say no, reinforcing the importance of implementing smart growth management NOW. The first wave of change will likely occur in the more affordable price ranges -- especially in those areas that are close to job centers. Over time, the effect will fan out and be felt by the outer suburbs, causing a chain reaction of sales up the price points.
The Echo Boom generation has been defined as high-tech, high-touch, social-networking, iPod-listening natives of the digital realm who trust their peers' advice over most forms of advertising. This is the generation that will likely find the home of their dreams on a 4G wi-max third-generation iPad and will contact their real estate agent via Twitter or text message.
But as foreign as some of this may sound to some of you, they are (and will be) homebuyers nonetheless, and real estate professionals and companies need to continue to adapt to this generation's expectations and habits.

So, the moral of this story is that I believe that the echo boomers represent the silver lining for the real estate market and U.S. economy. That might be a lot of responsibility for a single generation, but they're unarguably emerging as the next heavyweights in housing, and I might add: not a moment too soon.

BANK OF AMERICA TAKEN HOSTAGE!!!

A disgruntled Realtor took Bank of America hostage this morning. Apparently frustrated by the endless abuse he had suffered from the Institution during the past 3 years, according to sources.
He demanded the President of that Institution, to acknowledge the horrible way that the bank has been managing the short sale negotiations.
A passer by said he overheard the crazy Realtor shout: "Do you think it is funny? to waste my time for months, pushing paper, gathering information, waiting hours on the phone, being treated like dirt by incompetent personnel, and in the end see the house go to foreclosure?" "Who the f%^&k do you people think you are?"
One of the hostages who was able to escape on time, said he heard the Supervisor plead for his life, crying to the Realtor: "Please, I swear I will approve all your short sales from now on, please", but the Realtor didn't look very impressed by his cowardly conduct.

A group of local Realtors gathered outside the branch, but not simple "looky loos", to the surprise of our correspondent, they were there "To support our hero, it was about time somebody stand up to the Banks and tell the story, we ALL feel the same way"
The masses chanted: "HEY HEY WE WON'T GO, ITS THE BANK THAT HAS TO GO!"

The National Association of Realtors had no comment,
A Washington correspondent asked President Obama in a briefing this morning, what was his opinion about this crisis, and he limited his comments to: "it was bound to happen sooner or later, Banks have to be more proactive and reasonable"

We will keep you informed as this crisis develops.

United Press Corporation

This is just a joke, it is not true, I hope it helps you air some of that frustration you, the Realtor have accumulated. Have a blessed day.

Are we finally going to get a break from all the nonsense that we have been put through?




This is breaking news from REO Insider...and great news at that...It appears that we will see some greater support in the form of actual Short Sale Laws from our government...Limiting the time a bank can respond to a short sale request from it's borrowers...
Rep. Robert Andrews (D-NJ) and Rep. Tom Rooney (R-FL) have introduced a bill in the house H.R. 6133 - Prompt Decision for Qualification of Short Sale Act of 2010; that would force lenders to make a yes or no decision on a short sale within 45 days of the short sale request. This could be huge in facilitating short sales.

There appears to be widespread support for the bipartisan proposal. The National Association of Realtors supports the effort, and NAR President Vicki Cox Golder said:

"As the leading advocate for homeownership issues, NAR believes that quicker attention to the short sales process is vital to help homeowners who are underwater and their communities, as well as the nation's


Credit for this goes to: Harris Real Estate University....Great news!

FORECLOSURE ROULETTE, IS IT THE NEW GAME IN OUR NATION?

I read this article, posted by Sean O'Toole, founder of Foreclosure Radar, I found it incredibly interesting, and the more I think about it, the more I think it is right on the money.

The reality is that through financial engineering (interest only, subprime, swaps, option ARMs, negative equity, stated income, etc.,) we created trillions in excess mortgage debt that has left millions of homeowners underwater, financial institutions on the brink of collapse, and the FDIC nearly insolvent. Back in September 2008 it became clear that financial collapse was imminent, and the federal government did what it does best – bailed out those who caused the crisis while leaving taxpayers holding the bag for the losses. Pulling this hat trick off required one simple ruse – getting everyone to believe that those losses ultimately wouldn’t be very big.
To do this the government changed the rules. The FDIC who previously forced banks to get bad assets off their books became a leading proponent of saving homeowners with loan modifications that likely just delay the inevitable. With a little government pressure, the supposedly independent Federal Accounting Standards Board was pressured into letting banks account for loans at theoretical values based on computer models rather than current market value.
Next they began rolling out an acronym soup of programs, which they promoted as being help for America’s homeowners – HAMP, HAFA, HARP, 2MP and more. But the reality is that to date these programs have resulted in little more than delays. The government and lenders say that these failures are due to complexities of implementation, difficulty reaching homeowners and a sundry other things. But what if these programs were never intended to succeed? What if they were simply intended to create delays, provide false hope, and maybe get the banks a bit more cash out of homeowners in the form of trial loan modification payments?
Sounds like a crazy conspiracy theory, I know, but hear me out.
The problem faced by both lenders and the government is that they can neither afford to kick homeowners out, or bail them out. For lenders, either scenario forces losses to be recognized, while thanks to mark-to-model accounting rules, and little or no pressure to foreclose from the FDIC, they can instead leave non-paying homeowner in place and push those losses into the future. Many believe that most major corporations manage earnings, what could be more perfect than getting to choose when, and if, they recognize mortgage related losses. For the U.S. government either scenario is political death. Politicians have no appetite for allowing banks to put families on the street en masse through foreclosure, nor forcing banks to deal with the problem through bankruptcy cram-downs or other means. At the same time they realize their constituents who do pay their mortgage (or rent) simply won’t stand for a taxpayer funded bailout of their upside down neighbor. Instead, it seems they believe bailouts should be saved for the truly deserving like the executives and corporate shareholders of banks, AIG, GM, etc.
If we aren’t willing to either kick non-paying homeowners out of their homes, or bail them out, what other option is there? The answer is clear. It’s the same thing we’ve done with national deficits for years. Trade tomorrow for today, with a policy of extend and pretend. I have no doubt this is the present policy, and that this will be the policy for years to come as we work through wiping out the trillions in excess negative equity that was created during the bubble.
A member of the audience during my talk asked if this policy was really possible, after all we can’t just let non-paying homeowners stay in their homes forever. If paying homeowners figured that out, everyone would stop paying, and then our financial system would crumble. I agree, and it’s clear the banks realize this too. But it is a problem that is easily solved by the diabolical game of Russian roulette. So long as lenders continue to foreclose on at least a handful of homeowners each month, in what from all appearances is a completely random game of chance, they’ll keep those willing and able to pay their mortgage doing so. Those who decide not to pay their mortgage will find themselves playing today’s update on the Russian game, Foreclosure Roulette, wondering each month whether they’ll get another free month in their prison of debt, or finally be shot and forced to move.

Sean O'Toulle /houseINsandiego

How to payoff your mortgage in half the time

Save Thousands of dollars...payoff your mortgage early
I will give you step by step instructions on how to payoff your 30 year home loan in 15 years or even less and save thousands!!

Difficulty level: Easy

Instructions:

Things You'll Need: An amortization schedule

1. 1 It's easy to save tons of money when you payoff your house early
If you have a fixed interest rate mortgage on your home with no prepayment penalty, you can pay off your 30 year mortgage debt in 15 years and save lots of money on interest.
This strategy applies to any fixed rate mortgage whether it be 40 years or 10 years.

2. 2 Here's how....
1. Ask your mortgage company for an amortization schedule. An amortization schedule, it is a table detailing each chronological payment on an amortized loan, they are generated by an amortization calculator. They should be able to email it, or maybe you can create it from your bank's website, worst case scenario it will cost you about 20 dollars. (Think of a changing banks)
2. When you receive it, look at your current payment. It will have a breakdown of your payment showing amount of principal, interest, taxes, insurance and your principal balance after that payment.
You will be amazed at how small the amount is of principal. There is a reason for this...most of the interest you pay is in the first years of your mortgage.
3. On the amortization schedule, look at your current payment due.
4. Pay your total monthly payment plus next months principal payment. If you wish, you can pay more than 1 extra principal payment.
5. Write out 2 checks...1 for your current payment and the other for additional principal.
6. On your check where it is labeled memo, write additional principal.
7. There will also be a place on your payment coupon to write in additional principal and your total payment.
8. After you write the amount, check it off your amortization schedule so you can keep up with your payments.
When you do this, you eliminate that months interest, thereby decreasing your mortgage debt. You can now pay off your mortgage debt in half of the time or less e. g. 360 payments into 180 saving boatloads of interest money.
You will be amazed at how small the extra principal amount is and how much interest you save!!

ECONOMIC UPDATE

Dominating last week's financial news was a precipitous plunge in sales of both new and existing homes for the month of July.
Sales of existing single-family homes, townhomes, condominiums and co-ops during July dropped a shocking 27.2 percent to a seasonally adjusted annual rate of 3.83 million units, down from June's downwardly revised rate of 5.26 million units, according to figures from the National Association of REALTORS®. Existing housing sales in July were the lowest figures on record since NAR's existing home sales data began in 1999.
Single-family home sales (the lion's share of existing home sales) dropped 27.1 percent to a seasonally adjusted annual rate of 3.37 million in July, down from 4.62 million in June. This was the lowest single-family home sales rate since May 1995, according to NAR.
Once again, the end of the homebuyer tax credit incentive was chalked up as the main driver in July's plummet.
"Consumers rationally jumped into the market before the deadline for the home buyer tax credit expired," said Lawrence Yun, NAR chief economist, who added that the poor sales pace will likely continue for a few months. "Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September."
While July's existing home sales were off by an alarming amount, prices continued to hold their line. The median price for all types of existing homes was $182,600 in July, up 0.7 percent from a year ago.
Despite the fact that total housing inventory at the end of July increased 2.5 percent to 3.98 million existing units, which represents a 12.5-month supply at the current sales pace, Yun does not predict a tapering in home prices.
"Over the short term, high supply in relation to demand clearly favors buyers," he said. "However, given that home values are back in line relative to income, and [given] very low new-home construction [rates], there is not likely to be any measurable change in home prices going forward."

Sales of new single-family homes during July dropped to a record-low rate of 276,000, which was 12.4 percent below June's revised rate of 315,000, according to figures released last week by the Census Bureau. This is the lowest rate on record since 1963.

In terms of pricing and inventory, the median sales price of new houses sold during July was $204,000 and the average sales price was $235,300. The estimate of new houses for sale at the end of July was 210,000, representing a 9.1-month supply at the current sales rate.

"A double-digit drop suggests to me that there wasn't just a tax effect at work in July, but a change in sentiment, a change in the willingness to make such a big purchase," FTN Financial chief economist Christopher Low told the Los Angeles Times. "It is especially surprising given where mortgage rates were. It is just a reminder of how much work there is still left to do before housing can be deemed healthy again."

HOUSEINSANDIEGO
If you or someone you know is falling behind on mortgage payments, we have a plan to help!
Time is of the essence, let us take that burden off your shoulders, go and live your life with your family and allow us to handle this issue.

THE END OF THE McMANSIONS???

If you own a McMansion and are having a tough time hanging on to it (trying to refinance, going through hardship) it is time to really think if it is worth the pain and suffering, the following article might shed some light on the future of your McHeadache:

"Tey’ve been called McMansions, Starter Castles, Garage Mahals and Faux Chateaus but here’s the latest thing you can call them — History.
In the past few years, there have been an increasing number of references made to the “McMansion glut” and the “McMansion backlash,” as more towns pass ordinances against garishly large homes, which are generally over 3,000 square feet and built very close together.
What sets a McMansion apart from a regular mansion, according to Wikipedia, are a few characteristics: They’re tacky, they lack a definitive style and they have a “displeasingly jumbled appearance.”
Well, count 2010 as the year the last nail was hammered into the McCoffin: In its latest report on home-buying trends, real-estate site Trulia declares: “The McMansion Era Is Over.”
Just 9 percent of the people surveyed by Trulia said their ideal home size was over 3,200 square feet. Meanwhile, more than one-third said their ideal size was under 2,000 feet.
“That’s something that would’ve been unbelievable just a few years back,” said Pete Flint, CEO and co-founder of Trulia. “Americans are moving away from McMansions.”
The comments echoed those made in June by Kermit Baker, the chief economist at the American Institute of Architects.
“We continue to move away from the McMansion chapter of residential design, with more demand for practicality throughout the home,” Baker said. “There has been a drop off in the popularity of upscale property enhancements such as formal landscaping, decorative water features, tennis courts, and gazebos.”
“McMansions just look and feel out of place today, given the more cautious environment everyone’s living in,” said Paul Bishop, vice president of research for the National Association of Realtors.
And homebuilders are heeding the call: In a survey of builders last year, nine out of 10 said they planned to build smaller or lower-priced homes.
Even in Texas, the land of go big or go home, they’re downsizing.
Diane Cheatham, owner of Urban Edge Developers in Dallas, said today, the average size of home they’re building is 2,200 square feet, down from 2,500 in 2005 — which was considered small for Dallas back then.
She said the trend there is more toward building green homes instead of big homes. Right now, they’re building a 1,200-square-foot uber-green home for a couple that’s downsizing from 3,000-square feet, Cheatham explained.
1,200? Some of the hair in Texas is bigger than that!
"We’ve never built one that small,” Cheatham confessed, but added: “I think that’s just a good example of the trend right now.”
For a little historical context, 1,200 square feet was the average home size in America in the 1960s. That grew to 1,710 square feet in the 1980s and 2,330 square feet in the 2000s.
What’s more, many in the real-estate business say they think this trend of downsizing, or “right-sizing,” as Flint likes to call it, is here to stay.
"This is absolutely a long-term effect,” he said. “Think of families with small children who’ve been foreclosed upon … When these teenagers are in a position to buy a home, they won’t want to go through these experiences they saw their parents go through.”
Of course, the question becomes, what do we do with all these McMansions that have already been built?
It’s tempting to make jokes about what you might do with a former McMansion but with crime on the rise in neighborhoods littered with abandoned McMansions, Christopher Leinberger, in an article for the Atlantic, asked a sobering question: Is this the next slum?
Luckily, people are starting to get creative: A film collective in Seattle has taken over a 10,000-square foot McMansion there, using it for both living and work space. They turned a wine closet into an editing room and tossed a green screen in the garage. And in a suburb of San Diego, one couple turned a former McMansion into a home for autistic adults.

The demise of the McMansion has stirred a growing chorus of murmurs in the real-estate community about the possibility that it may force a dramatic redesign of the suburban McMansion tracts into mini-towns of their own, turning these icons of excess into more practical spaces like offices, banks, grocery stores and movie theaters.

Though, given some of the poor quality of materials and craftsmanship, it begs the question, would it be better to just tear them all down and start from scratch?

Credit to Harris Real Estate University .. houseINsandiego Realty

SLOWLY RECOVERING, BUT SIGNS ARE STILL POSITIVE!

The already choppy economic recovery will continue its slow advance this year, but growth will deteriorate as its primary contributors — government stimulus and manufacturing — lose steam. Furthermore, no new economic drivers have emerged to propel the recovery into a self-perpetuating expansion, suggesting below-trend GDP growth will persist through the second half. The impact of the government stimulus on GDP growth has declined slowly since peaking in the third quarter of 2009, while the manufacturing sector, which returned to expansion mode during the third quarter of last year, began losing momentum three months ago.


Strength in the manufacturing sector through the early stages of the recovery was fueled by accelerating exports and business inventory restocking following the severe correction cycle; however, both drivers lost vigor in recent months. During the second quarter, exports advanced just 0.4 percent, a significant slowdown from the first quarter of 2010 and fourth quarter of 2009, when exports grew 4.5 percent and 6.8 percent, respectively. The impact of business inventory growth also declined during the second quarter, accounting for just over 1 percentage point of the overall GDP figure, versus contributions of more than 2.6 percentage points during the previous two periods.

Recent manufacturing sector indicators reflect weakening but also point to a somewhat orderly slowdown as opposed to a steep drop-off, which should help keep the recovery intact. In July, a leading manufacturing index slipped 70 basis points to 55.5, though the monthly figure indicates continued expansion in the sector. These weaker index results can be largely attributed to reduced orders, a possible sign the post-recessionary boost from business inventory building has run its course. A few bright spots remain, as industrial production rose modestly in July after declining in the previous month. Autos led factory output, a positive shift after the sector’s near collapse last year. Gains were also notable in other segments, including high-tech goods and business equipment, suggesting companies are beginning to satisfy pent-up demand after a prolonged period of conservation.
(Credit to Hessam Nadji, Marcus & Millichap) houseINsandiego Realty

HOW TO GET THE BANK TO REMOVE THE RIGHT TO PURSUE A DEFICIENCY JUDGEMENT IN A SHORT SALE (In CA)

Under CA Code of Civil Procedure 580(d) the lender may not seek a deficiency after a non-judical foreclosure even if it is a recourse loan. So if the lender does not approve a short sale without the deficiency language, then in most cases, it would be in the best interest of the seller to accept a foreclosure. The lender will then bear the higher cost of disposing an REO and will not have the benefit of enforcing a deficiency on the borrower. This point needs to be raised with the lender's negotiator and if they do not have the authority to remove the deficiency then escalate to higher levels of management. Our firm has enjoyed a good deal of success in having the deficiency language removed from approval letters with many lenders, including BofA, using this argument. You might consider consulting an attorney for legal advice or have an attorney argue the point for you.  (Credit to author Bob Hagan) houseINsandiego.

WHAT EVER HAPPENED TO OUR ECONOMY?

When it comes time to assign blame for what our Country is going through, We all have plenty of candidates, the "Sub Prime" loans, corruption, Obama, the housing bubble, the Mortgage bankers, Wall street, etc... But, have you stopped to think, what is the true underlying cause of this "Recession" soon to be "Depression"? Have you noticed that if everybody blames it on something different, it might be because there are many different things that happened? and maybe they are all right.

I will give you my humble opinion: It is the Baby Boomer DEMOGRAPHICS!!!

The good old "Baby Boomer" generation, has always impacted our modern economy, from its inception back in 1945 until NOW!
As Baby-boomers came into this world, our (I am one of them) massive numbers (78 Million babies), became the largest generation ever to walk on the face of the earth, our presence demanded a special treatment through every phase of our growth, so we have seen everything on the path of this huge group adapt to serve it, hail the Baby Boomers!, the disposable diapers made their appearance in the early years, you then saw the biggest "generational gap" when as teenagers we rebelled against older standards and started the Rock and Roll era, in the 50's, then we created drugs and peace movements to complement our idealistic and rebellious college years; the economy felt our impact and suffered the worst inflation ever in the 70's, when we incorporated into the work place and having disposable income; we then boosted the stock market through the biggest bull markets ever seen when we started investing in our 401k's in the 80's; We then created the world's largest credit bubble when we turned to our 40's and bought into the biggest and nicest homes money could buy, twice the size of the previous generation's homes (the McMansions) in the 90's. And finally, as we entered our 50's when we are expected to start settling and preparing for retirement, we stopped spending.
This sudden drop in the money flow that our economy, and the world had grown so used to, made a huge impact in the value of everything, starting with houses, which immediately stopped appreciating....the bubble had burst, values started dropping fast, and on their downward path they exposed the high risk formulas that had been used to provide the massive amounts of easy credit that was used to fuel the massive housing boom...these bad news profoundly affected the stock market, this in turn jeopardized the bank's ability to grant financing to the industry, this in turn was a nasty blow to all the economic activity and pretty soon, this crisis touched everything and aligned all the different industries to the beat of a single and deathly pessimistic tune, a vicious cycle that could only be interrupted by a massive influx of money. 

By the time the Government was able to act, it was too late, we wasted precious time waiting for Bush to step down, for Obama to be in, we now have a tremendous problem fueling on lack of jobs, lack of spending, an over leveraged economy, assets that have lost 50% of their value. What would pull us out of this crisis would be again, massive spending, but originating from consumers, the people not the government, we cannot cure the over leveraged economy by borrowing more money, so this time, I am afraid, this cure will not work.
The Government has been trying hard to substitute the required spending with the "bailouts", but sooner than later we will discover that there is not enough money that can be injected, that could turn the tables, specially not "borrowed" money.
And worst of all, pretty soon, the government spending will need to be paid back, interest rates will go up, taxes will go up. Prices of everything will tend to drop, not for good reasons, but because there is no money.... deflation ......depression.
Our problem is over leverage and gigantic debt, you cannot cure this with more debt.
I guess we will have to hold on tight, adjust our economy to what we are going through, because it is going to be like this for many, many years. Each of us will need to focus on being more efficient, on embarking activities that cater to the most basic needs of people, bare necessities, basic housing, basic everything, the rest will see their activity diminish and in some cases extinguish.
They are moving our cheese my friends, we need to focus on looking for cheese where it makes sense, and stop dreaming that our old cheese is going to reappear and things will go back to the way they were a couple years back.

IN THE END, THE AMERICAN ECONOMY WILL COME OUT STRONGER THAN EVER.

We have gone through one of the worst economic crisis in history, a time will come when you will hear the "experts" call it the "second great depression" or something similar.
All the "chicken littles" are going wild with their pessimistic predictions and proclaim that we are going into a deeper mess, but if you think about it....this won't happen.
America is by far the largest and strongest economy in the world, we are 14% of the population, yet produce 47% of the goods and services in the planet.... we are the best! we are not going down that easily.
The Government did the right thing when they applied the bailout money and injected trillions into the economy, because at that point, the only thing that was missing was the money, modern economies are more about perception than having a "standard" or a shiny metal to support the currency, and people that think otherwise are most likely old, and ignorant. You cannot expect a growing society to base its currency on a limited supply of anything, much less gold, leave that to the cave men and rap singers (because of the bling bling).
The crisis we had, was a crisis of confidence; all the different industries in our economies go through cycles constantly, the good part of the cycle is a boom, the bad part is a crisis, or a recession; this time we went through a bigger cycle, where everything aligned and went into crisis at the same time: stocks, housing, automobiles, jobs...... very, very scary. And the only way of pulling out of this is by injecting money... changing the generalized perception that "nothing has value".... When people start seeing job security, when they are busy at work, get a pay raise, more orders, they become confident, they start spending more money and this virtuous cycle moves the economy forward, as simple as that.

The problem with the bailout would be that it generates inflation, because the injected money is just printed, but the great thing that we are starting to see happening, is that it is not only us, who printed money, the rest of the world is now going through the storm that we passed.....and they are now following our steps and bailing out their economies, guess what will happen to inflation.....it will cancel out! We will have a strong economy, growing like crazy, healthier than a few years back....ALELUYA, ALELUYA.

TO PROVE MY POINT, HERE IS WHAT HAPPENED IN EUROPE THIS WEEK:

The sovereign debt concerns in Europe will continue to be the focus; the euro currency is collapsing and we expect more of it this week. A weakening euro, or stated another way, the strengthening dollar, reduces the US export trade as US goods become more costly. Should be another week of high interday and intraday volatility in the US stock and bond markets. Given the uncertainty and fears swirling around Greece and other mid-major European economies, the lack of inflation pressures, investors should look to long term treasuries. The real rate of return when inflation is subtracted is still about 4.00% for a 30 yr treasury. Looking for the stock market to open better on Monday but the rest of the week is questionable. Economic data this week has a few data points and the minutes from the 4/28-29 FOMC meeting on Wednesday. In the present environment most of the US market directions will be led by what the European markets do and what comes from the various ECB and EU officials. Watch the euro currency; as it falls it has a negative implication for the US equity markets and adds some support to treasuries on safety moves. Market volatility will likely remain high

I found this video to be very enlightening as to what can happen, and we should expect in the near future. Not because the economic crisis or any "sky is falling" prediction. Simply because homeowners are smart people, and making payments for a product (a house) that is worth 50% of what they are paying just doesn't add up.
We were raised by our parents, to respect our debts, to be responsible; add to this, the fact that our home is our protected environment, our nest, a place where we take care of our family; all this is what makes us want to keep our homes, to keep on paying more than what it is worth.
But when you stop and think how much is this really costing you, you discover an alarming truth....you are giving away your retirement, you are spending hundreds of thousands of dollars that you will probably never see; you will probably not be able to retire if you decide to keep your home at any cost.
Take a few minutes to watch this video, it is an eye opener.
If, after watching it, you think we can help you short sell your home, contact us, we have a lot of experience doing this. And one thing I am sure will happen is that the Banks and the Government will sooner than later create a big roadblock to prevent "Strategic short-sales" from happening, and that is not far away. If you are thinking of doing it, you better do it now!


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Official Waiting Period After a Short Sale



Fannie Mae is changing the required waiting period for a borrower to be eligible for a mortgage loan after a preforeclosure event. The waiting period commences on the completion date of the preforeclosure event, and may vary based on the maximum allowable LTV, CLTV, and HCLTV ratios (referred to herein as LTV ratios) and occupancy of the property. These new policies will be updated in the Selling Guide, B3-5.3-07, Derogatory Credit Information, and in B3-5.3-10, DU Credit Report Analysis. The new "Official" waiting period after a Pre-foreclosure event:

Announcement SEL-2010-05

Short Sale (With Extenuating Circumstances)                       2 years for 90% maximum LTV ratios


Fannie Mae’s policies for extenuating circumstances remain unchanged and are fully described in the Selling Guide, B3-5.3-08, Extenuating Circumstances for Derogatory Credit.

CRIMINAL CHARGES AGAINST THE BIG WALLSTREET GUYS???

Wow! Shocking security fraud charges against Wall Street behemoth Goldman Sachs are likely to affect the markets in the short term but unlikely to have longer-lasting effects, market experts said.

Stocks dropped sharply and Goldman [GS 158.52 -25.75 (-13.97%) ] in particular surrendered well over 10 percent in share price, but the reaction on trading floors and from portfolio managers is that investors will get over the shock in short term.

"Everything we're dealing with happened a couple of years ago," said Dave Lutz, managing director of trading for Stifel Nicolaus in Baltimore. "Ultimately, once this noise has washed out, it's going to translate into one heck of a buying opportunity."

Anton Schutz, portfolio manager at Burnham Financial Services, called the investigation into Goldman "a witch hunt" and politically expedient at a time when Main Street investors are increasingly suspicious of Wall Street business practices.

The prevailing sentiment was that the damage to Goldman and the financial markets would only provide opportunity.
The negative effect for Goldman Sachs will be "significant," but will be a "short-term problem" for the company, said Dick Bove, an analyst for Rochdale Securities. "Whenever the SEC issues these type of charges against a company, there's generally a long, drawn-out legal battle that will change the company's procedures. But it will be a short-term problem. For the long term, it will pass," Bove said.
However, the quick decline also could set up for those with a more immediate time horizon

"The Goldman news today could cause the same market reaction as (President) Obama’s announcement in January that he would seek to regulate the business practices of our nations banks," said Thomas H. Kee Jr., President and CEO of Stock Traders Daily.
"From there, the market fell hard. From here, because the technicals and fundamentals are showing resistance at the same time, a similar market decline can follow. In January, the technicals and fundamentals lined up too. More importantly though, many short sellers were lined up then, and they are lined up now. There are plenty of similarities. In January, the button was pushed by Obama. This time, it was pushed by the SEC."

All in a day's work!

HOW DOES THE SUDDEN DEATH OF REO'S AND SHORT SALES AFFECT REALTORS?

Responding to concerns about my last posting, I thought I would share my response to an Agent about what I think would happen to our industry in the near term, if REO and Short sales are severely restricted.


I think we need to think that is will be great for the Country and the Economy, and that will result in a more stable and long lasting recovery of our Industry.

Short term, I think it will cancel a great deal of short sales, even the ones that are listed, being negotiated and even those that are ready to close soon. REOs will also be reduced to a minimum.

Minimum and cancellation does not mean, we will have ZERO business. I think it will take 60% to maybe 70% of the properties off the table (will not be foreclosed or short sold), we will still have foreclosures and short sales, and a lot of the ones that accept the 3 month trial will end up trickling back into foreclosure or short sale.

We will also have many investor owned properties in default, that will be harder to qualify to modify and where investors are less likely to negotiate with the banks.

On the bright side, the dissipating of the Shadow Inventory, will make the market very stable, the economy is already recovering and growing, the stability will bring confidence in the system and our economy will begin a very, very strong recovery and we might even see the beginning of a GREAT ECONOMY very soon. This will bring a healthy Real Estate market throughout the Nation, and we will go back to doing great, just like before this meltdown.

The ones that should be sorry, are the handful of agents that horded the REOs and treated the rest of us like crap, the ones that thought they were the "Middle Kingdom", for those, the time to pay the piper is closing in......... and I am sooooo glad.

THE END OF REO AND SHORT SALES IS NEAR?....Quite possibly yes!

The Banking industry, through HAFA, might have pulled out a genius move: To disipate the "Shadow Inventory" cloud, without writting off their debt, without changing non performing loans to the liability column, without affecting the balance of their reserves..... They did this, plus: They removed the stigma of a "Tsunami" of foreclosures that would bring prices down.


Plus: They are keeping America in their houses.



All these was accomplished in a swift move, in which Banks decided to contact millions of borrowers in default, some already involved in short sale of their homes; offering a 3 month trial period at a very reduced monthly payment, with the promise of modifying their loan if they pay ontime.



The smart thing about this is, that banks will not reduce the principal owed by the borrower, they simply will drop rate, will extend the term, will do whatever it takes to reduce the monthly payment, to a level that the homeowner will qualify to pay, and schedule an escalation of this payment during the next 5 years, ending with a payment similar to where it was at the beginning, after 5 or 7 years. After all, the Fed. rate for banks is something like 1%, so whatever the banks do, they will still be making a profit.

By the time the borrower realices that his payment is too high (after 5 or 7 years), properties will most likely will be back to the value they had before the big drop, so if the borrower decides to sell, it would not be a short sale anymore.



Genius..... the only victims, unfortunatelly are the Realtors, but this is just the first 3 to 5 months, in the end, the whole economy benefits from this great idea, and that itself means a great Real Estate market with regular sales, no more REO Gurus or Gods, in the near future.

God Bless America!!!

ECONOMIC INDICATORS (Explained):

The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, rose 8.2% in February after a revised 7.8% decrease in January. The February reading was the largest gain since October 2001. MEANS BUYERS ARE BACK, HOUSES ARE NOT DROPPING IN PRICE....THIS IS GREAT!


According to the Federal Reserve, consumer credit debt fell in February by $11.5 billion, an annual rate of 5.6%. Economists had forecast that consumer debt would rise by $500 million. Consumer credit rose in January by $10.6 billion, ending a record 11 consecutive months of decline. MEANS PEOPLE ARE NOT SPENDING AS MUCH AS THEY WERE BEFORE THIS CRISIS, WE ARE BEING MORE CONSERVATIVE...THIS IS GOOD, SLOWS THE RECOVERY BUT IS GOOD.

Sales at U.S. retail chains rose 9.1% in March. It was the largest monthly jump since recordkeeping began in 2000. Economists had anticipated a 6.3% increase. WE ARE MORE CONFIDENT, WE ARE SPENDING WHERE IT IS NEEDED...THIS IS GOOD.

Initial claims for unemployment benefits unexpectedly rose by 18,000 to 460,000 in the week ending April 3. Continuing claims for the week ending March 27 fell by 131,000 to 4.55 million..THIS IS NOT GOOD, WE STILL HAVE BIG UNEMPLOYMENT, THE ECONOMY IS GETTING STRONGER AND JOBS WILL BE BACK, UNFORTUNATELLY THEY ALWAYS TAKE A LONG TIME TO DO SO.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending April 2 fell 11%. Purchase volume increased 0.2%. Refinancing applications fell 16.9%...MORE HOME BUYERS, THIS IS GOOD...NOT THAT MANY REFINANCING, IS OBVIOUS...THERE IS NO EQUITY!

The Commerce Department said wholesalers increased their inventories by 0.6% in February following a revised 0.1% rise in January. Sales at the wholesale level rose 0.8% in February, marking the 11th straight monthly gain..THIS IS GOOD, IT SHOWS CONFIDENCE IN THE ECONOMY...THIS IS ALL WE NEED TO BRING IT BACK!


WE ARE THE WORLD....WE ARE THE CHILDREN....LA LA LA LA LA

SOCIAL MEDIA, THE NEXT BIG WAVE???
I think Social Media will be the future "dot.com" trend, right now it might be worthless, silly and aparently pointless, specially for those of us who are more analytical and business oriented. But sooner than later, a critical mass of users will be reached, and social media will then become an incredibly powerful tool, software will take advantage of it, windows or whatever the leading company is at that time will incorporate tools that we haven't even dreamed about, based on social media network. All because in the end, it is a NETWORK, and incredibly intricate network like we have never seen before. There will be a time when we will all be connected to it, and it will become the most powerful network ever.




GOD BLESS THE FUTURE !!!

What do you think?

Strategic Defaults…Who Is Doing Them, How Many Are Happening…How Bad Will It Get?


Back in 07 when this phenomena was one of those topics we would receive criticism for reporting on. The critics suggested that by reporting the topic we were somehow endorsing agents to counsel their clients to walk-away from their mortgage obligations.

Of course, nothing could be further from the truth…if anything we coached agents how-to help homeowners keep their homes.

Now, several years into the never ending real estate bubble deflation death spiral strategic defaults have gone…as the kids say…viral. When we were growing up the understanding was that the last thing you don’t pay is your mortgage. In other words, always pay your mortgage. Now, oh my…how times have changed.
Of course, the new HAFA Guidelines actually seem to give incentives to defaulting homeowners to do short sales or deeds in lieu. At this point, we applaud the Obama Administrations continued focus on slowing the rate of foreclosure. Read about the new 2010 Treasury Department Short Sale Guidelines NOW. The market will shift back to the positive once the rate of foreclosures stops increasing.
Afterall, its hard for anyone to have confidence in the housing market when you are constantly hearing about home values sliding and foreclosure rates increasing….

Interesting story from Reuters….

How widespread are strategic defaults? Laurie Goodman and her team at Amherst Mortgage Insight yesterday released a report that shows they are indeed on the rise and for reasons we might suspect: negative equity and a more borrower-friendly environment.

The second reason should be kept in mind as we consider President Obama’s soon-to-be-announced plan to encourage principal reduction. If the plan is structured so that it gives incentives to default in order to secure principal forgiveness, well, expect defaults to spike.
Strategic default isn’t necessarily synonymous with mailing your keys to the bank and walking away. It may simply mean a borrower choosing to stop payments to the bank when economic incentives would have him do so. Amherst has come up with a novel metric to measure strategic default — the “default transition rate.” DTR looks at the percentage of borrowers who’ve never been more than one payment behind on their mortgage suddenly missing two payments in a row.
Lo and behold, negative equity leads more folks to strategically default, regardless of their credit score and whether they took out a liar loan:

Aparently, borrowers are intentionally defaulting to take advantage of the [HAMP] modification program. Or at least to take advantage of extra time living in the house rent free, courtesy of the modification program.

Amherst concludes:
Borrowers respond to their economic incentives. This has always been the case, be it for refinancing or for defaulting on mortgages that are deeply underwater. Over the past year, however, property values have been largely steady, but the environment has become much more kind to borrowers. There have been foreclosure moratoriums, the emergence of the HAMP modification effort, and the attendant increases of time spent in the delinquency/foreclosure pipeline, as well as a stretching out of the liquidation process in judicial states. As a result, borrowers can stay in their home rent free for a much longer period than was previously the case. However, few of these benefits apply to investor properties. Thus, when we look at the difference pre- and post-HAMP in the behavior of owner-occupied borrowers versus that of non-owner occupants—we find a dramatic difference in performance. Owner-occupied borrowers behave far worse than their non-owner occupied counterparts.

THE END OF THE GREAT RECESSION? IS IT TIME TO CELEBRATE?

Breaking News: Case/ Shiller Housing Index Shows Second Month In A Row Of INCREASE IN SALES!

“The animal spirits seem to be coming back,” said Robert Shiller, Yale economics professor and developer of the Standard & Poor’s/Case Shiller Home Price indexes. “The psychology does seem to be changing.”

The national home-price index released on Tuesday rose for the second straight month in June, fueling hopes the housing downturn, which is in its third year, is waning. Still, the index was off roughly 15% in the second quarter from the year-ago period. See Economic Report.

In a teleconference Tuesday, Shiller was reluctant to call a definitive bottom in home prices, saying he’s seeing “conflicting signals” in the housing market.

Well then, I will do it. There is a clear bottom in most housing markets for homes that are less than $200,000. Will this last? I think it will. There first time buyers and investors out there that there won’t be any further significant value decreases for homes less than $200k. Now, with that said, if the ‘First Time Buyer Credit of $8,000′ is not renewed….and if the banks make the mistake of dumping too many foreclosures on the market too fast…all bets are off.

On the positive side, the rise in home prices in May and June is a “sudden break in momentum” from years of nearly steady, punishing declines that may signal a turning point. “The roller coaster is now going up,” Shiller said.

Yet he noted what appeared to be a housing recovery in early 2008 “fizzled” when prices resumed their decline. And a long-term chart of home prices makes it look like “we are still in the process of a bursting bubble.” Shiller expressed “great reluctance” to forecast where prices will go from here with the U.S. economy in the midst of the most severe recession since the Great Depression.

Where will prices go? There WILL BE more depreciation for the more expensive…non first time buyer/ Investor price ranges. In some cases this depreciation will be dramatic. We are predicting that the next wave of foreclosures will force the ‘upper end’ housing markets to lose as much as 30%+ over the next 12-24 months.

“Unemployment looks like a bad indicator for the housing market,” Shiller said.

There are other challenges that could snuff out the nascent revival in home prices. One of the biggest threats is the mounting wave of foreclosures as more strapped borrowers struggle to meet their monthly mortgage payments. The First-time buyer tax credit is set to go away in November, and rising interest rates could also dampen sales, economists say.

The First-time buyer tax credit is set to go away in November, and rising interest rates could also dampen sales, economists say.

IF they don’t renew the buyer credit then YES…we are in trouble. But, they will. And I bet they will increase the ‘$credit’ AND make it available to everyone.

Here is an interesting thought for you….the $8000 buyer credit created demand..in many markets there has been so much demand that agents are selling the less expensive homes in 24 hours. What has this in turn caused…competing offers and increasing prices. So, someone was motivated to buy a home because they were getting a ‘credit’ from the government…they may of thought..”heck yeah I will buy now…I will get $8000 in free money”. As a result of this prices are pushed up. Buyers pay MORE for the home than they other wise would have. So, their $8000 in free money is in essence wiped out by the increase in price they are paying….

Indeed, recent experience has taught homeowners that prices can be very volatile, said David Blitzer, chairman of the index committee at S&P, during Tuesday’s call.

On a national level, home prices are back to levels last seen in 2003, but the cities that saw the biggest run-ups also fell the hardest.
“The idea that they could never go down was wrong,” Blitzer said.
He added the data coming out of the housing market in recent months have been encouraging, but warned against breaking out the champagne just yet. Commenting on so-called shadow inventory, he said many sellers have been waiting for an uptick in house prices to put their homes on the market, Blitzer said. This could exacerbate the supply glut and push a recovery further into the future.

Source: MarketWatch.com

TAX CREDIT HAS BEEN EXTENDED!!!

Governor Arnold Schwarzenegger’s proposal to extend the $10,000 first time home buyer tax credit has been passed by California Legislature. The tax credit would begin May 1st, 1 day after the Federal Tax Credit ends April 30th.


The previous California tax credit limited to a total of $100 million for new home purchases only was exhausted eight months before the proposed deadline. The initial bill credited over 10,000 home buyers. The new bill appears to double the amount assistance.

New California First Time Home Buyer Tax Credit Highlights

• $200 million in funds available on a first come, first serve basis – could help over 20,000 home buyers

• New homes for any taxpayer and new/existing homes for first time home buyers

• “Qualified principal residence” means a single-family residence, whether detached or attached, that is purchased to be the principal residence of the taxpayer, is eligible for the homeowner’s exemption under Section 218, and has either never been occupied or is purchased by a first-time home buyer.

• $10,000 tax credit or 5% of purchase price (whichever is lower)

• Credit given in 3 payments to a taxpayer’s personal income tax returns over 3 year period

Combine reduced prices in homes, 40 year low in interest rates and an incentive back from the state of California and you have the Perfect Storm. If this doesn’t cause a small frenzy during peak purchase season (Spring and Summer), I don’t know what will.

LADIES AND GENTLEMEN......START YOUR ENGINES!!!!