Archive for September, 2007

As if we all didn’t see this coming. Discount brokers are hitting hard times in the market and Foxtons out of New Jersey has stated that it might be headed for bankruptcy. Foxton’s announced that they will be laying off approximately ALL of their staff. I wonder if I can buy one of those cool minicoopers at a good price?

Discount brokers can only thrive in a market that is hot and where the liquidity of real estate is fast paced. The problem is that real estate is NOT a liquid asset, except in a boom such as the one we just had.

The reason owners pay a 6% Realtor commission is because in traditional markets, you need a professional to help sell your house. They have an in, they know of people looking to move in to the area, this is what you are paying for.

Although I know we all have mixed feelings on Realtors, I can assure you that the value of a good Realtor is becoming more important than ever.

As if we didn’t know already, Henry Paulison stated today that the mortgage problem is not a reflection on the real economy but a problem caused by bad lending practices. I guess he is trying to shift the heat of this foreclosure news onto the lenders and as far away from him as possible.

What is wrong with this country? Now the government has decided to enable Fannie Mae and Freddie Mac to bail out homeowners.  Uncle Sam is not responsible for buyers who over extended themselves. The market needs to let this play out and unfortunately people need to get hurt for this correction to work. The proposed government bailouts are nothing more than temporary solutions, while at the same time telling the public its ok to screw up and not read what you sign.

Come on people.. if you are old enough to sign a legal document, then you need to be responsible enough to read what you sign! Ever here of the saying “Buyer beware”?

You have to read this, I took it from Diana Olick’s blog on CNBC. Times are already becoming desperate!

It seems local New York City reporter Lou Young, of WCBS, came upon a story about two mortgage brokers in New Rochelle, NY, who lost money on an investment property and so, in order to keep afloat, turned the home into a brothel. They tried to sell, then tried to rent, but none of it really panned out. One can only assume the mortgage business wasn’t helping this couple either. The couple, and their four employees, were arrested, after police raided the home last Friday night. The officers were tipped to the brothel from a posing on Craig’s List offering dominatrix services, not to mention a grand opening special.

This couple of mortgage brokers were just trying to find some cash to float their loans, much like Countrywide I guess. It kind of makes you think. Thanks to Keith at Housingpanic for the tip.

Here is the time when the career jumpers are all leaving the industry. Countrywide has decided to lay off over 25% of their work force and others are soon to follow. This means on a local level too. If you just got into this industry and you are in it for the long haul then this is a great time to be in the business. As people in your office take new careers and “stay active” you can expand your business and “stay profitable”. Explore new areas and visit old customers who may have been stubborn to sell or list before all the news.

Realtors!

This is an awesome opportunity to get in to the short sale business. When a short sale is accepted by a bank, they will ALLOW a Realtor to get their commission paid even if they accept an offer lower than the property value. In the 80’s, when the market crashed, it was common practice for Realtors to do short sales. You DO NOT need to be a lawyer to work this transaction and DO NOT let a lawyer tell you that you need them. This is a normal practice, but only used a lot when the markets are down, so it seems complicated and foreign. Learn how it’s done and get your edge!

Have we not been talking about this for weeks, even months. The data lag is finally catching up with the news in the industry, or is it. Think of it as a ripple effect, first the industry people working the streets start to feel and see whats going on. Most of the time this feeling is kept quiet, being that bad news directly effects their pockets. Then it’s rumored but never confirmed until some report with actual statistics is shown, which is actually from data 3 months ago.

So what does this mean to the investor. It means that you can stay ahead of the trend by playing the market just like the stock brokers do. Don’t buy or sell the news! Figure it out for yourself with local real estate professionals. If this news is 3 months behind, don’t you think they will be at least 3 months behind the news when it starts to go up?

BY ANDREW KITCHENMAN

Sunday, September 02, 2007Mercer County has been swept up in the mortgage meltdown affecting the nation, as foreclosures increase and residents face the re sults of taking out subprime mort gages with higher interest payments.

Foreclosure filings have risen from 728 through Aug. 20, 2006 to 928 for the same period this year, a 27.5-percent increase, according to the Mercer County Clerk’s office.

Some of those who can’t make their mortgage payments should never have received approval for the loans, according to Phyllis Sa lowe-Kaye, executive director of New Jersey Citizen Action, which provides mortgage counseling.

“They target low- and moderate-income minorities in urban areas,” Salowe-Kaye said of subprime lenders. She recalled one New Jersey resident with a $40,000 income who took out a $400,000 mortgage by claiming that renters would cover much of the mortgage cost.

New Jersey Citizen Action has provided counseling to hundreds of residents at its loan counseling center in Trenton.

The problem isn’t limited to cities like Trenton. While County Clerk Paula Sollami-Covello said the number of foreclosures in Tren ton traditionally has led the count, the past year has seen foreclosures increase in suburban municipalities such as Hamilton.

While mortgages that are listed under foreclosure in public notices often are resolved before an actual sheriff’s sale, the increase in foreclosure notices in some Mercer municipalities has been stark.

Trenton had 166 foreclosure no tices in the first seven months of this year, an increase of 29 over last year; Hamilton increased from 40 to 50; and Lawrence increased from 13 to 23, according to Jeff Posner, owner of SheriffSalesOnline.com, a Web site that tracks both initial filings and notices.

The root cause of many recent foreclosures is the wave of subprime mortgages, according to mortgage experts. Subprime mort gages are given to people with low credit scores due to missing payments or having limited credit histories. Subprime mortgages have higher interest rates and fees than conventional mortgages. continue