TheREALTYgram Blogger

Going to San Francisco to Real Estate Connect;Special Foreclosure Workshop to Help Homeowners

I am heading to the top real estate conference of the year in July, Real Estate Connect, in San Francisco in July. I will be speaking at a pre-conference Foreclosure Workshop titled, "Relationships 2.0: How to Help Homeowners While Closing Business" on July 23, 2008.

The Real Estate Connect Conference is sponsored by Inman News. The confab assembles real estate industry leaders to share thoughts and ideas in one of the most highly charged and provocative meetings in the industry.

Foreclosure Fair in Tucson Smashing Success!

Almost 500 homeowners facing foreclosure met in the Tucson (AZ) Convention Center yesterday and attended workshops and one-on-one counseling sessions with loss mitigators and lenders. Many of these people will keep their homes. Sadly, there was no REALTOR participation at the event.  The event was sponsored by Pima County, with partners that include Freddie Mac, HUD, state regulatory agencies, lenders, ACORN, The Urban League, and Legal Aid.

Additional workshops are being planned for Tucson and other locations throughout Arizona.

New Foreclosure Data Released;Lehigh Valley Ranks 81 On National List

RealtyTrac™ has released its first annual 2006 U.S. Metropolitan Foreclosure Market Report, which ranks the foreclosure rates of the top 100 metropolitan areas. This year’s report, based on data captured over the first quarter of 2006, shows  Indianapolis, Atlanta and Dallas having the highest foreclosure rates among the nation’s largest 100 metropolitan areas. Cities in the Sun Belt and Rust Belt generally had the highest foreclosure rates in the first quarter of 2006, while cities in the Northeast and Gulf Coast documented some of the lowest.

"Indianapolis documented a foreclosure rate of one foreclosure for every 69 households, while Atlanta’s foreclosure rate was one foreclosure for every 70 households. Other top-10 foreclosure rates ranged from one foreclosure for every 99 households in Dallas-Fort Worth to one foreclosure for every 140 households in Canton, Ohio and Las Vegas."

The Lehigh Valley (PA) area ranks 81 on the list.

“Indianapolis narrowly edged out Atlanta as the city with the highest foreclosure rate in Q1,' said James J. Saccacio, chief executive officer of RealtyTrac. 'Most of the cities with the highest foreclosure rates have above-average unemployment rates and below-average home price appreciation. Unemployment is a major reason why homeowners stop making mortgage payments, and slow home price appreciation can make it harder for homeowners in default to refinance or sell to stop foreclosure.'

 

"Saccacio added that other economic factors such as decreasing affordability, rising interest rates and speculative buying can also fuel foreclosures. He cited Jacksonville, Fla. and Las Vegas Nevada, both of which documented foreclosure rates in the top 10 despite below-average unemployment and above-average home price appreciation.“Because of the high home prices in many areas, more home buyers have stretched themselves financially with creative, and often risky financing that involves adjustable interest rates, interest only and negative amortization loans' he said. 'Home buyers with these types of loans are more susceptible to default and foreclosure when interest rates move higher."

 

NAR Reports Rising Revenues In Ancillary Services;But Still Wants To Keep Banks Out Of Real Estate

Revenues are up at large real estate offices that offer a menu of services including  mortgages, home warranties, title insurance, and homeowner's insurance, according to a report by the National Assn. of  REALTORS^®. The report pointed to Howard Hanna Smythe Cramer of Pittsburgh, which posted a total sales sales volume in 2005 of 53,649 transactions, and income derived from ancillary services that accounted for some 43% of the firm's income.

NAR's stance against banks in real estate remains the same. The group continues to demonstrate a colossal  HQ (hubris quotient) in this regard.

Do REALTORS® Really Think They Can KeepBanks Out Of The Real Estate Business?

“It's good to shut up sometimes." - Marcel Marceau

REALTOR^®/proponents of federally chartered banks being granted permission to operate real estate brokerages have been keeping a low public profile since the 2002 knockdown round, but they've been busy behind the scenes gathering strength. Consider the following facts:

1. The largest real estate companies in the country strongly SUPPORT federally chartered banks in real estate through their own network at The Realty Alliance. Member companies must have closed a minimum of $500 million is residential sales volume in t he previous calendar year and completed a minimum of 5,000 transactions sides in that same period. They are members of NAR.

2. Each of the 75 largest firms in the real estate business now has its own director on the NAR Board of Directors.

3. There is substantial representation by Realty Alliance members serving in leadership throughout NAR.

4. Some 29 states and the District of Columbia already allow state-chartered banks to engage in real estate activity.

2002 Revisited: Correspondence from Realty Alliance to NAR (excerpt  taken from an Inman News Article 02/25/2002):

"The letter calls NAR's position 'hypocritical,' 'fundamentally wrong' and 'objectionable' because it would bar banks from real estate brokerage activity even though brokerages operate mortgage banking, insurance and title insurance businesses and certain state-chartered banks and subsidiaries of the Federal Savings & Loan Association are permitted to engage in real estate brokerage.

"The letter also warns that NAR's legislation, if it proves successful, could trigger 'retaliatory' legislation from the banking industry. 'If federal banks were indeed prohibited from engaging in real estate brokerage, how long would it be before the powerful banking lobby took steps to prevent real estate brokerages from participating in the mortgage banking, insurance and title insurance business?' the letter asks.

"The letter also argues that allowing nationally chartered banks into real estate brokerage would increase competition, attract more capital to the industry and benefit consumers. 'Increased competition from companies of size would benefit consumers by making all of us sharpen our skills and improve the services we provide,' the letter said.

"The letter closes with a not-so-subtle warning that NAR's failure to reconsider its position could result in "a breakdown of the relationship between The Realty Alliance and NAR."

Banks in real estate linkage:

NAR on banks in real estate
Realty Alliance letter to NAR 2002
Why banks should be allowed in real estate    
Bring on the banks
Howard Hanna U.S. Senate testimony
Industry "visionary" sees banks in real estate 2002 Testimony before Congress
2002 Hearing in U.S. Senate
Trends in real estate 2003 (MN)

Colorado RE/MAX 100 Agent, Loan OfficersBusted On Home Loan Forgery Charges

A district attorney in Colorado  has indicted RE/MAX 100 real estate professional Ricardo Medina and independent loan officers Nancy Rios and Perla Alvarado on charges of forgery, theft, and conspiracy under the Colorado Organized Crime Control Act, according to the National Assn. of REALTORS^®. (Note that NAR has already stripped the REALTOR^®  designation from Medina in its press release.)

The charges stem from their involvement in a scheme that provided $6.5 million in federally insured home loans to undocumented Hispanics. Medina is accused of targeting Hispanics who would not have qualified otherwise and then working with Rios and Alvarado to forge documents such as loan applications, credit letters, check analyses, W-2 employment forms, utility bills, and employment verification letters in order to secure loans backed by the Federal Housing Administration for applicants.

"They didn't even have to come up with any money," says Scott Storey, Jefferson County District Attorney, adding that some of the loans went into default. Doug Anderson, president of Washington Park Mortgage in Denver and former president of the Colorado Association of Mortgage Brokers, says loan fraud remains a problem because the state does not require licensing for mortgage brokers.

From The Denver Post:

"Certain banks in Colorado and across the nation allow undocumented workers to take out home loans if they have an Individual Taxpayer Identification Number, which the IRS issues to workers regardless of immigration status.

"But many Hispanics, even with an ITIN number, fail to qualify for loans because they lack a credit history or cannot prove sufficient employment - and that's where forged documents come in.

" 'There's a huge number of these kinds of transactions and it's happening under our noses,' said Doug Anderson, president of Denver-based Washington Park Mortgage.

"Bob Brown, of the Colorado Bureau of Investigation, said Medina, Rios and Alvarado each lived "lavish lives," with salaries of several hundred thousand dollars a year."

I Found A Golden Nugget In An E-Mail Signature Line

I found this book in an e-mail signature line from John Reilly, my e-PRO cyber professor. After clicking the link and reading the description I ordered it immediately. It looks like a winner and I can hardly wait for delivery. Check out the review on Amazon.com: 

From Library Journal "Sophisticated real estate players will appreciate the revisions made to this highly comprehensive dictionary of terms. All of the entries are brought into conformity with the 1986 Tax Reform Act. Controversial topics that have resulted from this legislation, such as the IRS definition of a dealer in real estate, are treated well. ... a section containing over 300 abbreviations is a helpful touch."

"From abandonment to zoning, and over 2,800 terms in between, The Language of Real Estate has every term that real estate professionals need. this industry best seller is a must have for all students, practitioners, and educators. Highlights include:
* Appendix boasts over 350 commonly used abbreviations.
* Subject classification index lists terms by topic.
* Spanish key terms help both ESL students and those who will be working with ESL customers."

Financial Thrill Seekers EyeReal Estate Derivatives Market

This may be the finance junkie/couch potato's version of virtual bungee jumping. The National Assn. of REALTORS^®  reports that there is a new derivatives market in the offing:

"The National Council of Real Estate Investment Funds has teamed up with Credit Suisse First Boston LLC to establish a real estate derivatives market, providing new opportunities to institutional investors interested in real estate investments.

" 'This could be an effective way of investing in different sectors of real estate in the private marketplace as an alternative to owning the underlying real estate, and also providing some degree of liquidity,' says Gumbiner Savett Inc. managing principal Scott Farb. 'This could be an effective way to hedge long positions in the ownership of properties.'

"Among the institutional investors keeping an eye on developments are the California State Teachers' Retirement System, the Public School Employees Retirement System of Pennsylvania, and the Los Angeles City Employees' Retirement System."

Pension plan administrators may want to read a New York University Study of Derivatives and Risk Management Practices by Institutional Investors.

Career Transition To Real Estate?There's A New Blog Even For That

Many people who enter the real estate business arrive from other industries. Some are looking for a career change. Others have been downsized. Some are just tired of corporate life. There's a baby blog just launched by Gailann Bruen, LCSW, called Reinvent Yourself NOW! Gailann is a self-described "career change maven" who loves her job. Her first post, Tips to Survive Downsizing contains "Do's" and "Don'ts" that we should all consider regardless of where we stand in the employment picture. Gailann has an extensive background in mental health, stress management, trauma, as well as vast financial expertise. (Gailann taught graduate level financial courses at New York University some years ago.) I'm looking forward to more posts in the days ahead. This is one blog to watch!

The Good The Bad And The Ugly:Real Estate Gurus And Scam Artists Revealed

Thinking about plunking down hundreds of dollars for a get-rich-quick plan you saw on that last infomercial? Signed up for an all-day seminar that promises to be the first stop on that road to riches? Think again. John T. Reed, real estate investor and author,  rates more than 100 purported real estate investment gurus and seminar organizations and offers a Real Estate B.S. Artist Detection Checklist. Here's a sample:

Carleton Sheets (Not Recommended) "Carleton Sheets’ books generally have directories of stuff like HUD regional offices, repeated blank forms, pages for “notes.” His books, other than the one on nothing-down, are double spaced, have large type and huge margins, skip lines between paragraphs, and have lots of blank pages and pages with just four or five words on them...Creative Tax Strategies is a slop job of a book on real estate tax law. If Sheets turned this in as part of a university course or real estate or tax law, the professor would give him an F and chew him out."

"Robert Allen (Not Recommended), author of the book Nothing Down, also says what Sheets says. When I dug up the documents on one of the deals where he actually used this 'technique,' the lender was Bank of America. Their written policy at the time, which I have a copy of, said they would make no mortgage loans where there was any secondary financing, let alone nothing-down financing. In that deal, Allen had the second that was taken back by the seller recorded one day after the closing on the sale and the first mortgage. This is called a 'silent second' and is done to reduce the chances that the first mortgage lender will find out about it. In other words, the bank making the first mortgage loan did not agree to the nothing-down second, rather they were apparently told there was none."