Home Prices Continue to Crash

Honest is the best policy, correct?  Below is what I’m hearing.  Of course I would rather delight you by saying the opposite…. like, “The market is improving” … “Yes, you can sell your house for that high price” … etc.  But then I would not be serving you well.  If you are wanting to sell your home, then maybe you better sit down before reading the following.

“There is no reason to believe that the housing markets are going to reach bottom anytime soon. The overly optimistic estimates that there would be a mid-2009 recovery are being proved wrong. Fewer Americans signed contracts to buy previously owned homes in November as credit markets seized up and a deteriorating labor market signaled the housing slump will extend into a fourth year. It seems that the actual rate of home value depreciation is picking up pace…not slowing down….

The index of pending home resales fell 4 percent to 82.3, the lowest level since the series began in 2001, from a revised 85.7 in October, the National Association of Realtors said in a report today in Washington. Pending sales fell in all four regions.

A financial crisis that worsened in the final months of 2008 deepened the economic recession, extending the slump in home sales and prices. President-elect Barack Obama has pledged to enact measures to ease foreclosures and save or create 3 million jobs to boost the economy.

Realtors, expect Obama to become the ‘Mortgage Loan Mod President’.

“The housing stress just doesn’t end,” said Ethan Harris, co-head of U.S. economic research at Barclays Capital Inc. in New York.

Economists expected November pending sales to fall 1 percent after an originally reported drop of 0.7 percent in the prior month, according to the median forecast of 34 economists in a Bloomberg News survey. Estimates ranged from a drop of 5 percent to a gain of 1.5 percent.

Today’s home-sales report showed declines of 7.2 percent in the Northeast, 6.7 percent in the Midwest and 2.4 percent in the West. Pending sales fell 2.2 percent in the South.

The NAR states tell the same story….

Year-Over-Year Drop

The Realtors group, whose pending sales data go back to January 2001, started publishing the index in March 2005. The gauge was down 5.3 percent from November 2007.

Pending resales are considered a leading indicator because they track contract signings. Closings, which typically occur a month or two later, are tallied in the Realtors’ monthly existing-home sales report. That report for December is scheduled to be released Jan. 26.

The financial and credit market collapse that intensified in September stifled a housing market that had been showing some signs of stabilization.

In a separate survey released today, the Realtors group said housing starts in 2009 are likely to fall 28.6 percent to 646,000 from 904,000 last year. Median existing-home prices are likely to be $198,100 this year, little changed from 2008, and the median price of new homes will be $231,700, compared with $228,800 last year, the group said.

Existing Homes

Purchases of previously owned homes, which account for about 90 percent of the market, fell 8.6 percent in November from the prior month and median prices fell 13 percent from a year earlier, the biggest decline on record. November sales of new homes, which account for the remainder, dropped to the lowest level in 17 years.

Ok, this next part is going to sound more dire than the previous stats…the rate of homes entering into foreclosure. One in 10 Americans fell behind on mortgage payments or were in foreclosure in the third quarter, the Mortgage Bankers Association reported last month. The share of mortgages 30 days or more overdue and the share of loans already in foreclosure both jumped to all-time highs in a survey that goes back 29 years, the association said.

Home values continue to plummet with no signs of a housing recovery…

With the economy gripped by a recession, average house prices have fallen by about a quarter from their peaks in mid- 2006, according to the S&P/Case-Shiller home price index.

Builders are shell-shocked. Lennar Corp., a U.S. home construction company that builds in 14 states, on Dec. 18 reported its seventh straight quarterly loss.

“We’re in the midst of a downward spiral and the momentum is building,” Chief Executive Officer Stuart Miller said on a conference call with analysts.”   

From Tim Harris – Harris Real Estate University

Banks That Went Bust | Is Your Bank On This List?

Updated List of bank failures…….

Bank Name	Closing Date	Updated Date
PFF Bank and Trust, Pomona, CA	November 21, 2008	November 21, 2008
Downey Savings and Loan, Newport Beach, CA	November 21, 2008	November 21, 2008
The Community Bank, Loganville, GA	November 21, 2008	November 21, 2008
Security Pacific Bank, Los Angeles, CA	November 7, 2008	November 7, 2008
Franklin Bank, SSB, Houston, TX	November 7, 2008	November 7, 2008
Freedom Bank, Bradenton, FL	October 31, 2008	October 31, 2008
Alpha Bank & Trust, Alpharetta, GA	October 24, 2008	October 24, 2008
Meridian Bank, Eldred, IL	October 10, 2008	October 10, 2008
Main Street Bank, Northville, MI	October 10, 2008	October 10, 2008
Washington Mutual Bank, Henderson, NV and Washington Mutual Bank FSB, Park City, UT	September 25, 2008	October 20, 2008
Ameribank, Northfork, WV	September 19, 2008	October 20, 2008
Silver State Bank, Henderson, NV En Español	September 5, 2008	October 20, 2008
Integrity Bank, Alpharetta, GA	August 29, 2008	October 20, 2008
The Columbian Bank and Trust, Topeka, KS	August 22, 2008	October 20, 2008
First Priority Bank, Bradenton, FL	August 1, 2008	October 27, 2008
First Heritage Bank, NA, Newport Beach, CA	July 25, 2008	October 20, 2008
First National Bank of Nevada, Reno, NV	July 25, 2008	October 20, 2008
IndyMac Bank, Pasadena, CA	July 11, 2008	October 27, 2008
First Integrity Bank, NA, Staples, MN	May 30, 2008	October 20, 2008
ANB Financial, NA, Bentonville, AR	May 9, 2008	October 27, 2008
Hume Bank, Hume, MO	March 7, 2008	October 27, 2008
Douglass National Bank, Kansas City, MO	January 25, 2008	October 20, 2008
Miami Valley Bank, Lakeview, OH	October 4, 2007	October 20, 2008
NetBank, Alpharetta, GA	September 28, 2007	October 20, 2008
Metropolitan Savings Bank, Pittsburgh, PA	February 2, 2007	October 20, 2008
Bank of Ephraim, Ephraim, UT	June 25, 2004	April 9, 2008
Reliance Bank, White Plains, NY	March 19, 2004	April 9, 2008
Guaranty National Bank of Tallahassee, Tallahassee, FL	March 12, 2004	October 20, 2008
Dollar Savings Bank, Newark, NJ	February 14, 2004	April 9, 2008
Pulaski Savings Bank, Philadelphia, PA	November 14, 2003	July 22, 2005
The First National Bank of Blanchardville, Blanchardville, WI	May 9, 2003	October 20, 2008
Southern Pacific Bank, Torrance, CA	February 7, 2003	October 20, 2008
The Farmers Bank of Cheneyville, Cheneyville, LA	December 17, 2002	October 20, 2004
The Bank of Alamo, Alamo, TN	November 8, 2002	March 18, 2005
AmTrade International Bank of Georgia, Atlanta, GA En Español	September 30, 2002	September 11, 2006
Universal Federal Savings Bank, Chicago, IL	June 27, 2002	April 9, 2008
Connecticut Bank of Commerce, Stamford, CT	June 26, 2002	October 20, 2008
New Century Bank, Shelby Township, MI	March 28, 2002	March 18, 2005
Net 1st National Bank, Boca Raton, FL	March 1, 2002	April 9, 2008
NextBank, N.A., Phoenix, AZ	February 7, 2002	October 20, 2008
Oakwood Deposit Bank Company, Oakwood, OH	February 1, 2002	October 20, 2008
Bank of Sierra Blanca, Sierra Blanca, TX	January 18, 2002	November 6, 2003
Hamilton Bank, N.A., Miami, FL En Español	January 11, 2002	October 20, 2008
Sinclair National Bank, Gravette, AR	September 7, 2001	February 10, 2004
Superior Bank, FSB, Hinsdale, IL	July 27, 2001	October 20, 2008
The Malta National Bank, Malta, OH	May 3, 2001	November 18, 2002
First Alliance Bank & Trust Company, Manchester, NH	February 2, 2001	February 18, 2003
National State Bank of Metropolis, Metropolis, IL	December 14, 2000	March 17, 2005
Bank of Honolulu, Honolulu, HI	October 13, 2000

Sellers In Denial About Home Values | Zillow 2008 Q3 Surve

Again, Zillow hits it out of the park.

Big hats off to Zillow for producing this information.

There is no doubt that Zillow does the best job producing housing reports that are useful for Realtors. Every agent should have this information at the ready.

The Q3 Survey, fielded October 7-9, 2008 (the worst week in stock market history, by the way), asked homeowners their perception of their home’s value over the past year, and what they think will happen to their home’s value in the coming months.

The results are kind of baffling. While the perception gap did narrow, still half of U.S. homeowners do not think their home’s value has declined over the past year. Specifically:

* 32% think their home’s value increased in the past 12 months
* 17% think their home’s value held steady
* 51% think their home’s value declined

In reality, three-quarters (74%) of U.S. homes lost value in the past 12 months, according to Zillow’s Q3 data.

As long as sellers are on denial about the value of their homes…inventory will continue to build, values will continue to plummet, the rate of foreclosures will rise….and the housing crash will last for years and year. Realtors, give this information to all of your sellers. Remember, you are the only true “Hope For Homeowners”….help your real estate market one seller at a time.

The following chart breaks down responses by region, and you can see that homeowners in different areas of the country hold a more (or less) realistic view. In the West, where the most homes are losing value (85% of homes in the West declined over the past year), homeowners are more realistic — with 65% of homeowners saying the value of their own homes has declined. In the Northeast, the perception gap is widest.

Meanwhile, optimism continues into the future for a good chunk of homeowners:

* 21% believe their home’s value will increase in the coming 6 months
* 40% believe their home’s value will stay the same
* 40% believe their home’s value will decrease

(Click graphic to see larger view)

What does all of this mean?

We as Realtors need to sharpen our pricing skills and get used to telling home owners things they don’t want to hear. Lets be clear, being a Realtor is an honor. I’m being trusted to help someone with one of the most significant decisions of their lives. I want to be 100% honest with my sellers…100% of the time. It’s time to understand the reality of this market.

Mortgage Bail Out Goes BYE-BYE

Remember all the hype about the $700 billion dollar bailout…and how “housing would be saved”?….

We were ’sold’ into believing that the almighty Federal Government will save housing. Well, it seems that maybe….just maybe….the Fed overstated their true intentions. Put another way, no bail out for the housing and real estate industry…..no ”fix” for the housing crisis. From a news release on Wed…

The Bush administration on Wednesday largely abandoned its plan to buy up toxic mortgage assets and said it will focus its $700 billion financial bailout fund on making direct investments in financial institutions and shoring up consumer credit markets.

The U.S. Treasury Department initially promoted the financial rescue package approved by Congress last month as a vehicle to buy illiquid mortgage assets from banks and other institutions to spur fresh lending.

Maybe they never really intended to do anything in the first place to help housing….

that plan never got off the ground and U.S. Treasury Secretary Henry Paulson told a news conference asset purchases were not the most effective use of the funds.

This next quote from Sec. Paulson is very telling…..

Paulson was unapologetic, saying that by the time the rescue bill was passed on October 3, it was clear the asset purchase plan would take too long and would not be sufficient to calm roiling markets.

Ok, fine, So they never really intended to do anything truly helpful to help the real estate industry. Now they are counting on the new FDIC and or FHFA proposal to ’save housing’. Listen, we are all for helping homeowners and end the housing crash but…

We have to realize that Realtors are the key to ending this housing crash.

I will say this again…REALTORS ARE THE Solution for this Real Estate Market Mess…

How?

Simple, we are the front line soldiers. We are in the unique position to work hands on to truly help homeowners. This evening millions and millions of agents will be sitting at the kitchen tables meeting with homeowners who are having to work through their own personal housing crisis. We must learn how to truly help all of those homeowners who so desperately need a solution.

In every market their are hundreds of thousands if not millions of homeowners that need the services of agents who possess the skills that this market demands. These skills will help these desperate homeowner.  That’s why I’m specializing in doing Short Sales.

As a realtor specializing in Short Sales I’m learning how to sell in this market…Learning how to sell homes when others are saying…”nothing is selling”. Learning how to successfully close short sales when others are saying….”Short Sales Never Close”. Stop hoping that somehow the market will magically return to the ‘ole glory days’…that won’t happen…. at least for a LONG TIME!

Hard, cold reality:

1) The real estate markets will continue to slide for at least another 24 months. If the recession worsens, expect the depreciation cycle to last another 3-5 years.

2) Once the market stops (or at least slows) the rate of depreciation…the home values will NOT simply bounce back. Expect that it will take 8-10 YEARS before homes eventually are worth close to peak 06-07 values.

 Being a  Realtor, selling real estate is an honor. Being the person who helps someone buy a home is an incredible thing. And learning how to help people in troubling situations is a great opportunity.  WHY?

Because most other agents and brokers WON’T take the time and make the effort to learn. They will try to rest on their old market skill set. These brokers and agents are trying to ‘ride out’ this downturn hoping their ever dwindling savings last long enough.

I’m here for you.  Call and let’s see if there is a way I can help you.  Are you looking towards a foreclosure?  Then give me a call or email me.

10 Step System to Thrive In This Market

1. Wake Up. Stop spending money out of habit. For the next week keep a log of everywhere your money goes. Be totally awake and aware whenever you grab for your wallet. Start questioning yourself on every purchase.

2. Know How Much You Cost to Exist. You are spending money every day-even if you never leave your house. Your housing expenses, your utilities, your food etc. Know exactly how much you are spending per month (see point 1) and then divide by 30. That will tell you exactly how much you cost to exist every day. Bet its more than you think.

3. Go Through Every Bill and Question It. Start with your insurance, price shop. Cut back on Starbucks. Is a cup of coffee really worth $3? 

4. Drop Your Spend-y Friends. You know who they are. These are the friends who always want to “go shopping.” People who live to spend should be kept at an arms length in this market. Some people see all of their worth in how others see them. Ask yourself if you think this way as well…become aware of your thought regarding your consumption.

5. Stop Thinking of Yourself as a Consumer. When was it that us Americans went from being called ‘citizens’ to being called a “consumer.” You are not what you consume. You are not what you drive, what you wear.

6. Track Your Time…Hour by Hour. For the next week, now that you are tracking your expenses, track your time. Keep a log of what you are doing hour by hour for the next week. Be honest with yourself about where your time is going. Here is the thing, chances are you are ‘working’ 8+ hours per day but, only doing things that will result in a pay check for 1-2 hours per day.

7. Pay Off All Your Debts. Imagine what you would feel like if you had no debts. Most agents work because they have to. They have so much legacy overhead. Meaning, they are paying off the luxury bling-bling lifestyle that they may have been living from the past sellers market. Pay that debt off.

8. The More You Learn The More You Will Earn. You already know this to be true. But, man is it ever true for this market. 

9. Save Money and Protect It. Now that you are in control of your spending, have paid off your debts…start saving. Simple savings plan system. Take 10% (or more) from every penny you earn. If your Mom gives you $100 for your birthday save $10.  ANY extra money that comes in … sock away 10% of it. Pay yourself first. 

10. More Intensity vs Simply More Time. Yes, you will have to work hard in this recession. Chances are you will have to work harder now than you ever have to before. But, be careful not to confuse ‘Time Spent Working’ with ‘Instensity’. In other words, focus on what you are getting done during the day vs simply how much time you are spending.

Yes, this market is tough, but instead of focusing on how hard it is use this time as an opportunity to sharpen your spending habits.  You’ll be better for it!

Hope for Homeowners (H4H)implemented on Oct. 1, Guidelines are stiff!

Here is some great information that will explain the very detailed rules and restrictions that support the Hope for Homeowners initiative that kicked off at the first of October. If you are trying to keep your home and reduce your payments. This program is very restrictive and will most likely not be able to help everyone. Remember that even if you don’t fit the mold for Hope for Homeowners, there are still opportunities with loan modifications that may be offered by your lender.

H4H program allows troubled homeownerss to keep their home, while enabling lenders to receive a Federal Housing Administration (FHA) guarantee on the loans. Under the terms of the voluntary program, lenders agree to refinance the existing mortgage at 90 percent of the current appraised value and assume the loss on the remaining balance; the new loan is an FHA guaranteed 30-year, fixed rate, fully amortized, fully documented loan; and the homeowner must forgo a portion of the home’s future appreciation to FHA when it is sold.

NOTE: Homeowners, contact your existing lender and/or a new lender to discuss how you may qualify for the H4H program.

The HOPE for Homeowners (H4H) program was created by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. H4H is an additional mortgage option designed to keep borrowers in their homes.

The program is effective from October 1, 2008 to September 30, 2011.

As many as 400,000 homeowners could avoid foreclosure through this program over the next three years. If you are having trouble making your mortgage payments, HOPE for Homeowners may be able to help you, by refinancing your loan into a new 30-year fixed-rate loan with lower payments.

How the Program Works

There are four ways that a distressed homeowner could pursue participation in the HOPE for Homeowners program:

1. Homeowners may contact their existing lender and/or a new lender to discuss how to qualify and their eligibility for this program.

2. Servicers working with troubled homeowners may determine that the best solution for avoiding foreclosure is to refinance the homeowner into a HOPE for Homeowners loan.

3. Originating lenders who are looking for ways to refinance potential customers out from under their high-cost loans and/or who are willing to work with servicers to assist distressed homeowners.

4. Counselors who are working with troubled homeowners and their lenders to reach a mutually agreeable solution for avoiding foreclosure.

It is envisioned that the primary way homeowners will initially participate in this program is through the servicing lender on their existing mortgage. Servicers that do not have an underwriting component to their mortgage operations will partner with an FHA-approved lender that does.

Step 1: Cost-Benefit Analysis

Lender considerations:

Given their fiduciary responsibilities and financial obligations, lenders will assess their portfolio and perform a cost-benefit analysis to determine the feasibility of offering this program to struggling homeowners.

1. Affordability versus value: lenders will take a loss on the difference between the existing obligations and the new loan, which is set at 90 percent of current appraised value. The lender may choose to provide homeowners with an affordable monthly mortgage payment through a loan modification rather than accepting the losses associated with declining property values.
2. Borrower eligibility: Lenders that determine the H4H program is a feasible and effective option for mitigating losses will assess the homeowner’s eligibility for the program:

o the existing mortgage was originated on or before January 1, 2008;
o Existing mortgage payment(s) as of March 1, 2008 exceeds 31 percent of the borrowers gross monthly income;
o The homeowner did not intentionally default, does not have an ownership interest in other residential real estate and has not been convicted of fraud in the last 10 years under Federal and state law; and
o The homeowner did not provide materially false information (e.g., lied about income) to obtain the mortgage that is being refinanced into the H4H mortgage.

Consumer considerations:

The lender will disclose to the homeowner the benefits of the program:

* Home retention,
* New affordable mortgage based on current appraised value,
* 10 percent equity

The lender will also disclose to the homeowner the costs of the program:

* 3 percent upfront mortgage insurance premium and a 1.5 percent annual premium,
* Equity and appreciation sharing with the Federal government, and
* Prohibition against new junior liens against the property unless they are directly related to property maintenance.

Step 2: Negotiations Between Borrowers and Lien Holders

If the lender refinancing the loan does not hold the senior mortgage lien, it will need to secure an agreement from the existing lien holder to waive all prepayment penalties and default fees on the existing loan and accept the loan proceeds from the H4H loan as payment in full. The loan amount (including the 3 percent UFMIP) for the new H4H loan cannot exceed 90 percent of the current appraised value of the property.

The lender will engage existing subordinate mortgage lien holders to extinguish all subordinate liens on the subject property. To entice subordinate lien holders to participate in the negotiation process and release their liens, FHA has the authority to share its future appreciation entitlement with them.

Step 3: Originating an H4H Mortgage

The lender will qualify the homeowner for the new H4H mortgage using the guidelines established under the terms of the program’s unique statutory requirements, ensuring the homeowner has the capacity to make the new payment on the H4H mortgage in a timely manner.

During underwriting of the loan, the lender will calculate the future appreciation interest amount for each subordinate lien holder in accordance with instructions provided by FHA.

At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD’s appreciation share.

Following funding of the loan the lender will record – in addition to the typical security instrument and note for the first mortgage – a shared equity note and mortgage (SEM) and a shared appreciation note and mortgage (SAM). These mortgages will be serviced by FHA.

The lender will also submit the new mortgage for insurance to FHA, certifying that it has been originated, underwritten and closed in accordance with the H4H program guidelines.

Step 4: Fulfilling H4H Mortgage Obligations

Upon sale of the property, the homeowner will use their sale proceeds to pay off the H4H mortgage as well as the shared equity and shared appreciation mortgages.

FHA will provide instructions to the settlement agents regarding subordinate lien holders who are entitled to a portion of any appreciation. The lien holder that previously held the highest priority will receive payment up to the full dollar amount of its interest, not to exceed the amount of available appreciation, and so on, until all prior lien holders are satisfied or the amount of available appreciation is exhausted. All remaining appreciation is remitted to FHA.

In instances where the homeowner failed to make the first payment on their new H4H mortgage, the H4H statute prevents FHA from paying claim benefits to anyone holding the mortgage.

What are my choices if I’m behind in my payments?

If you are behind on mortgage payments right now, chances are, you are in the middle of a storm.  It’s scary, it’s unpredictable and you have stuff flying at you from all directions.  The most important thing you can do is to keep moving and keep taking action.  Like all storms, this too shall pass. 

What do I do?  What are my options?  Can I save my credit?  Will I ever be able to by a house again?

First of all, I am astounded by the mountains of misinformation and downright incorrect data that is flying out of the media on a daily basis on the subject of foreclosure and what you can do about it.  Literally, there are “best selling authors” and gurus in the financial arenas passing out ridiculous advice.  Advice that if followed would be the kiss of death on one’s credit and put them out of the home buying business for at least the next 5 to 7 years.  Listen, there are other options.  You just need to seek out the right professionals who have the proper skills, training and expertise to navigate you through this crazy storm and get you back on dry land.

Option 1: Loan Modification – This is the option for someone who has suffered some hardship and wants to stay in their home and has the ability to make a mortgage payment at a potentially lower monthly and possibly lower interest rate.  Bottom line, while they may not like it, the banks would rather take a little less than loose the entire thing to foreclosure.

Option 2:  Short Payoff – This option is for the individual who has the ability to continue paying the mortgage, yet has to move due to something such as a job change.  The bank accepts less than is owed and agrees to an unsecured line of credit for a small percentage of the deficiency at a very low interest rate.  This allows the homeowner to sell and move on and not destroy their credit.

Option 3:  Short Sale – This option is for the person who has suffered a hardship (job loss, reduced hours, reduced income, death, divorce, injury, etc.) and does not want to stay in the home.   The home is marketed and sold and the bank accepts less than what is owed on the property and in many cases we can get them to agree in writing to waive the deficiency judgement.

A question some people ask when they are dealing with the stress of a situation like this is, what’s the difference?  I’m out anyway.  What does it matter if it goes to foeclosure?  The short answer is, “THERE’S A HUGE DIFFRENCE!”  I won’t go into too much detail here because you can explore the other sections of this site for more detailed descriptions pertaining to the impact on your credit each option has.  Basically, in a short sale scenario, communication and negotiation accurrs.  We deliver documention supporting the hardship and explain why the homeowner cannot continue to make the mortgage payments.  We are very clear with the bank about the fact that the only other option is foreclosure.  For the bank, a foreclosure is normally a 12 -18 month ordeal with hundreds of thousands of dollars in costs, liability and headaches.  They are not in the home selling and maintaining business, they are in the money lending business.  For every dollar they have tied up in foreclosed inventory that is approximately four dollars they cannot lend.  It behooves them to sell short and cut their losses rather than the alternative.

Short Sales are the best alternative for the homeowner, the bank, the neighborhood and the home values in the surrounding real estate market.  The home is sold quickly and usually close to or at market value.

In some cases, we have seen people back in the game and qualified for a home loan in a soon as nine months following a short sale.  Results vary, and the average is around twenty four months. 

There is light at the end of the tunnel.  As I mentioned earlier, keep moving.  Don’t stop.  Keep taking action and you are sure to make it out the other side.  And once you’re through it and releaved and breathing easier when all is said and done, it never seams quite as bad as it did when you were right in the thick of it.

I am an HREU Certified Foreclosure Prevention and Short Sale Specialist.  If you ever have any questions or require my assistance in any way, I am always happy to chat with you at no obligation.  My direct line is 407-376-1943 and you can email me at Sandy@RealEstate-Orlando.net   

What’s Really Going To Happen With the Bank Bailout?

Billionaire Mark Cuban summed it up here:

1. The Bailout Hits. Euphoria on Wall Street. Stock Market goes up.

2.  Banking Balance Sheets improve, Banks of all types say the problem is solved. They loan money to their biggest corporate and very rich clients. They have to, they dont want to lose their business. Of course, those corporate and rich clients borrow as much as they possibly can because they dont know when and if credit will dry up.

3.  Wall Street Analysts say they are optimistic that retail sales will be stable with last year, and possibly even up as consumer confidence has shown increases

4. We start to hear complaints from consumers and small businesses that loans are not available to them , or when they are, the terms are unreasonable.

5. Dec sales for retailers are below last year and below analyst expectations.  Retailers say its due to lack of credit availability to consumers.

6. Mortgage default rates start to increase

7. Stocks fall hard

8. The Treasury Department says it underestimated the amount of money that needed to be pumped into the system in order to create liquidity for MainStreet.  They announce they will use the ANTICIPATED profits from the 1st bailout to fund the next 500B of bailout

9. They time the 2nd 500B “investment for the taxpayers” to be on the 101st day of the new administration.

10. The Recession grinds on and on and on

So…this means again MORE foreclosures, more shortsales.  

ARE YOU FACING A FORECLOSURE?  UNSURE HOW TO HANDLE WHAT YOU ARE FACING? 

Give me a call at 407-376-1943. Let’s talk.

Pricing Homes in TODAY’S Market

The following is a quote from this month’s Sept. 2008 Real Trends commentary section regarding the elusiveness of the market turning in a more positive direction. 

“There is a key point here. The longer that sellers and real estate sales professionals put off pricing homes at today’s market the longer the period of time it will take for a market to recover. Listings that are overpriced, regardless of the metropolitan area where they are located, result in the continuation of a stagnant market. This will continue to be the case so long as buyers and/or investors pursue great values in the purchase of housing. 

For brokerage firms, getting sales professionals to price homes correctly must now be considered among the most important initiatives that a firm can engage in. Not only do overpriced listings cost the brokerage and sales professional’s money and time but they stretch out the time for when markets can return to health.”

Price adjustments on homes that are not selling are a critical element of what we do to get homes sold and closed.  If we as an industry and our customers expect the market to be better tomorrow than it is today, pricing is the key. 

If you are trying to sell your home you should be meeting with your Realtor every 3 to 4 weeks and getting a significant price adjustment to better position your property in the market place and affect a sale.

The question is:  Do you or do you not want to sell your home? 

 

Obama Loan Modification Program

Found this on NYPost. Great advanced info on the soon to be announced Obama Mortgage Loan Mod Program…. A cornerstone of the economic recovery plan that President Barack Obama is expected to unveil Monday will be modifying problem mortgages…. In other words, as we have been predicting for almost a year on this blog Loan Modifications with principle reductions were inevitable. In a nod to Main Street over Wall Street, sources familiar with the plan say Treasury Secretary Tim Geithner plans to allocate almost half of the remaining $350 billion in funds from the Trouble Asset Relief Program to the so-called “Mo Mod,” or mortgage modification, platform. “Mo Mod” is an algorithmic mortgage processing program that can rewrite up to 500,000 loans a month, and will be a major part of Treasury’s plan to help repair tattered bank balance sheets. The 21-day “Mo Mod” program works by structuring a new mortgage that more accurately reflects a home’s worth so that a troubled borrower no longer owes more on their home than the property is worth. The process then enables a lender to pool these new mortgages together into securities that reflect more accurately a home’s value, which makes them less risky for investors. As outlined, this plan will be much broader in scope than the Federal Deposit Insurance Corp.’s plan with IndyMac, which was initiated by FDIC Chairman Sheila Bair and has only been able to rework about 5,000 mortgages since last summer. But it will also bail out borrowers who helped trigger the housing crisis by taking out loans they were unable to pay back from the outset, something that has drawn criticism because it effectively rewards the bad behavior of rogue borrowers and lenders. The “Mo Mod” platform relies on proprietary technology developed by a Ponte Vedra Beach, Fla.-based real-estate appraisal firm Smithfield & Wainwright, which built the system over 20 years and uses it for banking clients looking to liquidate mortgage holdings. A spokesperson for Smithfield & Wainwright declined to comment on the plan. The Treasury Department did not return calls. Stopping the slide in housing prices is a priority for the Obama administration, which is also considering providing government guarantees for home loans that have been modified by their servicers in order to stem a surge of foreclosures that’s hammering property values. The “Mo Mod” plan comes as a record 19 million US houses stood empty at the end of 2008, and, according to real-estate Web site Zillow.com, US homeowners lost a record $3.3 trillion in equity last year. About one-third of owners whose home values drop 20 percent or more below their loan principal will “hand the keys back to the bank,” said Norm Miller, director of real estate programs for the School of Business Administration at the University of San Diego. “When you’re underwater and prices continue to fall, you tend to walk,” Miller said in an interview. “It’s a downward spiral that’s tough to stop because it feeds on itself. Foreclosures encourage other foreclosures and falling prices discourage buying.”