I hate to be the bearer of bad news, but it appears the Real Estate industry is still ripe with fraud.
Here is my best advice for sellers trying to sell in today's market. This will ensure you receive ALL offers and not what your Realtor wants to show you. Yes, they are supposed to present all offers, but they may not. How do you really know?
Demand your realtor list your email address in the private comments of your properties MLS listing...assuming they did in fact list it in the MLS and haven't kept a pocket listing.
Simply create a new gmail address at gmail.com show you can trash it after your closing. Tell your Realtor to add this email address for ALL offers in the private remarks section of the MLS listing. This area is only available to MLS agents. Now you'll know you are getting all offers and prevent your Realtor from selling to a friend at a reduced price.
Hint Hint...This save asset managers from unscrupulous Realtors as well...
Friday, November 4, 2011
Wednesday, October 26, 2011
Obama's or really FHFA's new expansion of the HARP refinance program.
There is little need to worry you'll miss a chance to apply for the new Obama/FHFA refinance program. These are for loans underwater, refinanced before March 2009, and are owned (not serviced by) Fannie Mae and Freddie Mac. Comments to the main lenders and servicers will by submitted by November, expect to be able to apply for consideration of these changes no earlier than mid December.
Here is some insider commentary from Rob Chrisman.
"The hype from Monday's HARP 2.0 announcement about making it easier for credit-impaired borrowers to refinance might give the impression that it will filter through into the economy and the housing market. It is a good step, but in a conference call from Credit Suisse, analysts pointed out "this is not a game changer" to housing or the economy. They estimate 720k borrowers will be able to refinance which translates to between $2 and $3 billion in interest savings; so not much impact to the economy or housing. But many investors are focused on HARP 2.0's reps and warrants information. The biggest surprise may have been that Fannie and Freddie will waive their rights to demand refunds from lenders after flawed loan underwriting in many cases. FHFA Acting Director Edward DeMarco told reporters the companies would offer "substantial" relief from buyback demands when HARP is used without providing "blanket or absolute" waivers, except for fraud. Fannie Mae and Freddie Mac also will remove ceilings on the permitted difference between loan amounts and property values and reduce or eliminate certain upfront fees charged for weaker credits, the FHFA said. The mortgage-finance companies will also nix appraisals in more instances and require on-time payments only over the prior six months, rather than as long as one year. Look for specifics by 11/15.
Here is some insider commentary from Rob Chrisman.
"The hype from Monday's HARP 2.0 announcement about making it easier for credit-impaired borrowers to refinance might give the impression that it will filter through into the economy and the housing market. It is a good step, but in a conference call from Credit Suisse, analysts pointed out "this is not a game changer" to housing or the economy. They estimate 720k borrowers will be able to refinance which translates to between $2 and $3 billion in interest savings; so not much impact to the economy or housing. But many investors are focused on HARP 2.0's reps and warrants information. The biggest surprise may have been that Fannie and Freddie will waive their rights to demand refunds from lenders after flawed loan underwriting in many cases. FHFA Acting Director Edward DeMarco told reporters the companies would offer "substantial" relief from buyback demands when HARP is used without providing "blanket or absolute" waivers, except for fraud. Fannie Mae and Freddie Mac also will remove ceilings on the permitted difference between loan amounts and property values and reduce or eliminate certain upfront fees charged for weaker credits, the FHFA said. The mortgage-finance companies will also nix appraisals in more instances and require on-time payments only over the prior six months, rather than as long as one year. Look for specifics by 11/15.
Thursday, September 1, 2011
Freddie Mac Loan Prospector LP Open Access Relief Program
By: Michael A. Foote
A frequent occurrence today in the life of a loan originator involves telling your optimistic potential borrowers that they don’t have enough equity to refinance and lower their payments. A fact that rubs salt in the wound is that the clients have undoubtedly made all their mortgage payments of time for many years.
To aid in helping underwater or low equity borrowers refinance into a new lower fixed rate interest rates, Fannie Mae and Freddie Mac have developed and launched a very successful refinance program. Fannie Mae’s program has seen wider adoption as LP Open Access was not pushed to many third party providers. Most likely the lack of interest was due to the banks potential losses from the program.
In any event LP Open Access is now more widely available from brokers and banks alike.
The program offers up to 105% LTV and unlimited CLTV which basically means if your home was worth $100,000 and you owed $105,000 on your first mortgage and $100,000 you would potentially be able to refinance that $105,000 first mortgage and leave the 2nd mortgage where it is at.
Although the second lien holder needs to subordinate, that lender has an incentive to approve the subordination since the borrower is most likely saving money on the first leaving an even less likely chance the borrower would default on the second mortgage.
So, if a borrower is at 6% fixed he could easily get a new mortgage rate in the 4% range with NO Mortgage Insurance. A full appraisal is required for this product and the existing loan cannot currently contain MI and the loan also must have been originated/funded prior to May 31, 2009. Minimum required FICO scores are also near or as low as 620. This program follows the temporary and permanent high cost loan limits. 1-Unit to $729,750 for another couple weeks then it will drop to $625,500 in high cost areas. 1-4 Units are eligible up to $1,403,400 and will drop to $801, 950 as noted earlier.
The program is clearly worthwhile and to find out if you are qualified you only need your mortgage professional to look-up your property address. This requires the last four numbers of the borrower as well.
If you are preliminarily qualified for the LP Open Access Relief Refinance Program, the process is very similar to getting a regular mortgage, in fact, it is almost identical.
Rates and programs are 30 and 15 year fixed are the only options available and rates are in the range of regular 30 year fixed agency paper. In some cases even lower.
So if you’ve been turned down recently for a refinance make sure you’ve looked at all options. Don’t fret. Call your local mortgage broker professional and ask about the LP Open Access Relief Refinance Program and its sister product, Fannie Mae DU Refinance Plus.
Michael Foote is a twenty plus year real estate and mortgage professional with multiple state licensing and over $1 billion dollars in personal production.
Thursday, August 25, 2011
More refinance help?
According to this article, the government may be seeking to prime the pump for refinances once again. It's already possible for some homeowners to refinance at todays low rates even if they are underwater. But most underwater borrowers still dont qualify. Although no details have been released, additional loosening of credit guidelines could help spur the economy by allowing those with no equity to seek payment relief and ultimately have more disposable cash. We'll see what turns out and I will of course get you all timely information.
http://www.cnbc.com/id/44269404
http://www.cnbc.com/id/44269404
Wednesday, June 29, 2011
There are approximately 4.1 million loans nationwide that are 90 days delinquent or in foreclosure, according to Lender Processing Services’ May Mortgage Monitor report.
LPS said in its report that foreclosure sales totaled 78,676 at the end of May. The combination of serious delinquencies and foreclosures outnumber foreclosure sales by 50:1.
LPS said the East Coast has experienced the worst fall in foreclosure sales, led by Washington, DC with a decline of 96%, then Maryland at 80%, New York at 79% and lastly New Jersey at 75%.
“There are still significantly fewer foreclosure sales than there were before moratoria were put into place, and foreclosure sales are declining,” the Jacksonville-based mortgage processing and technology firm said.
The overall delinquency rate for the nation is 7.96%, a month-over-month decline of only 0.1% and a yearly drop of 18.3%. However, the firm said delinquencies are almost double and foreclosures are eight times higher historical norms.
More than 40% of loans that are 90 or more days delinquent have not made a payment in over a year, while 33% have gone two years without any payments.
New problem loans—loans that were current six months ago and were 60 or more days delinquent at the end of May—are now at 1.27%, which is less than half the peak high experienced in 2009.
The firm is also concerned about negative equity loans, in which 30% of current loans are at risk of having negative equity. Of the 70% of loans in foreclosure with negative equity, over 35% have a combined LTV of more than 150%.
“The equity impact on new seriously delinquent loans is significant, with loans significantly underwater defaulting up to 10 times as much as loans with equity,” the firm said.
.
LPS said in its report that foreclosure sales totaled 78,676 at the end of May. The combination of serious delinquencies and foreclosures outnumber foreclosure sales by 50:1.
LPS said the East Coast has experienced the worst fall in foreclosure sales, led by Washington, DC with a decline of 96%, then Maryland at 80%, New York at 79% and lastly New Jersey at 75%.
“There are still significantly fewer foreclosure sales than there were before moratoria were put into place, and foreclosure sales are declining,” the Jacksonville-based mortgage processing and technology firm said.
The overall delinquency rate for the nation is 7.96%, a month-over-month decline of only 0.1% and a yearly drop of 18.3%. However, the firm said delinquencies are almost double and foreclosures are eight times higher historical norms.
More than 40% of loans that are 90 or more days delinquent have not made a payment in over a year, while 33% have gone two years without any payments.
New problem loans—loans that were current six months ago and were 60 or more days delinquent at the end of May—are now at 1.27%, which is less than half the peak high experienced in 2009.
The firm is also concerned about negative equity loans, in which 30% of current loans are at risk of having negative equity. Of the 70% of loans in foreclosure with negative equity, over 35% have a combined LTV of more than 150%.
“The equity impact on new seriously delinquent loans is significant, with loans significantly underwater defaulting up to 10 times as much as loans with equity,” the firm said.
.
Tuesday, June 21, 2011
California Pending Home Sales Rise - Finally some not so bad news
This is a excerpt from National Mortgage News published today.
California pending home sales increased in May, resulting in the first year-over-year increase in 18 months, according to the California Association of Realtors.
The index in May rose 1.6% from the previous month, which is based on contracts signed. Compared to May 2010, this year’s index was up by 12%.
“May marked the largest annual increase since August 2009,” said Beth Peerce, president of the California Association of Realtors.
“May’s increase in pending sales is consistent with our expectation that home sales in the second half of 2011 should be higher compared with the second half of 2010. As a result, annual sales for all of 2011 should match or exceed last year’s annual pace.”
The total share of distressed properties sold remained the same from April to May at 48%. However, the total is up 2% in May 2010. Madera County had the most distressed homes sold last month at 90%, followed by Lake County at 80% and Solano County at 71%.
Of the distressed properties sold throughout the state, REO sales was the same from month-to-month at 28%. This share is also up 2% from the same time period last year.
Statewide short sales were down from May 2010 by 1%, currently at 19% of the total monthly sales.
California pending home sales increased in May, resulting in the first year-over-year increase in 18 months, according to the California Association of Realtors.
The index in May rose 1.6% from the previous month, which is based on contracts signed. Compared to May 2010, this year’s index was up by 12%.
“May marked the largest annual increase since August 2009,” said Beth Peerce, president of the California Association of Realtors.
“May’s increase in pending sales is consistent with our expectation that home sales in the second half of 2011 should be higher compared with the second half of 2010. As a result, annual sales for all of 2011 should match or exceed last year’s annual pace.”
The total share of distressed properties sold remained the same from April to May at 48%. However, the total is up 2% in May 2010. Madera County had the most distressed homes sold last month at 90%, followed by Lake County at 80% and Solano County at 71%.
Of the distressed properties sold throughout the state, REO sales was the same from month-to-month at 28%. This share is also up 2% from the same time period last year.
Statewide short sales were down from May 2010 by 1%, currently at 19% of the total monthly sales.
Tuesday, May 31, 2011
New Opportunity for Loan Consultants with NMLS Identifier
If you are looking for a home with great technology, great pricing, all the products you desire, brick and mortar for your client meetings in a high end office, fantastic processing, AND leads, AND a draw, AND benefits, then please shoot me an email to michael.foote@caliberfunding.com and I will share the details.
Friday, May 20, 2011
SBA Lending is back
In another sign of improving business climate, SBA Chief Karen Mills talks about the rebirth of SBA Lending. Click Here to Read More.
If you are a small business owner and are interested in finding out more about SBA loans, please give me a call at 949-584-4600 and ask for Michael Foote. We can discuss your business needs and see what programs are best suited for you and your future.
If you are a small business owner and are interested in finding out more about SBA loans, please give me a call at 949-584-4600 and ask for Michael Foote. We can discuss your business needs and see what programs are best suited for you and your future.
Friday, May 13, 2011
Ethics?... Morals? ...
The definitions of ethics and morals are below for you review, but I believe most of us know what the definitions of those words are, or at least have a vague notion of their connotation.
In my industry many of us have had to take courses specifically focused on teaching us about the ethical moral considerations in the real estate and mortgage businesses. Realtors, specifically, are required to adhere to a specific set of ethical and moral behavior.
Of course many Realtors don't believe in actually applying these ethical and moral considerations in their business practices. You mean I have to show my seller ALL the offers, for reallies! But I have a buyer too, and I can double-end the deal??? What is a real estate agent to do. Well how about doing the right thing dammit!
It's my belief that, for many, ethics and morals are topics they need to know so they answer questions on their real estate agent examination. By the way the process for obtaining a real estate license is about as easy as it was to get a stated income loan in 2005...Pulse, check, Signature check, Willing lender, Check check! Honestly I think the DMV's written test may be more difficult.
So why am I blowing the whistle on my own peers? I mean its tough out there. People are just trying to get by. Because the disease of greed seems to have gotten a bit worse in some respects, or has it?
It seems the mortgage business is much more legitimate these days, with the elimination of certain products, a redonkulous expansion of disclosure requirements, very tight caps on commissions and the fact the feds will put your cute little butt in federal F-you in the a## prison. Mortgage companies, banks, and brokers seem to get it...Or do they?
Law enforcement and industry reporting indicate that mortgage fraud activity continued to increase in 2009 and 2010. FBI mortgage fraud pending investigations increased 71 percent from 2008 to 2009. HUD-OIG pending investigations increased 31 percent from 2008 to 2009. FBI mortgage fraud-related FinCEN SAR filings increased 5.1 percent from 2008 to 2009.
OK so maybe the mortgage business is still working on itself....
But surely the real estate community has improved itself?
http://www.fbi.gov/boston/press-releases/2011/two-defendants-sentenced-in-real-estate-scam
Google "Real Estate Fraud" and you get 36,600.000 results...Ok that's not fair because I googled "Cupcake Fraud" and still get 7,690,000 results
OK, so maybe the real estate community is still working on things too...
So what have we learned...the mortgage and real estate industries will always have a few bad apples at least - probably more like half the barrel in reality. But what about the rest of them/us. Well short of committing an actual crime, there are ethical and moral boundaries. These apply to ONLY REALTORS® and I'm not going to type the registered sign everytime either, so if I say Realtor I mean REALTOR®. So let's talk a look at a few as they are good rules for all: The complete list can be found here.
Standard of Practice 1-5 : REALTORS® may represent the seller/landlord and buyer/tenant in the same transaction only after full disclosure to and with informed consent of both parties. (Adopted 1/93)
This one is a classic and I was able to see it broken first hand today. Do you really think a Realtor or real estate agent or broker can truly represent both the buyer and a seller in a transaction? Well maybe, I am sure it can happen...sometimes...maybe.. But this should not be allowed. Does a sports agent represent both the team and player? Does a divorce attorney generally represent both the husband and wife (husband/husband or wife/wife in Massachusetts)? Does a alleged criminal mind if the prosecuting attorney represents him too? Seriously folks, if you let a broker, agent or Realtor represent both side, be prepared to lose.
Standard of Practice 1-6 : REALTORS® shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95)
Another timeless classic. What is better, an offer from a true third party represented by a Realtor not related to the listing agent or an offer from the listing agent? Well that certainly depends on who you ask doesn't it? What is the listing agent brings an offer in from one of his buyers? It happens, not all the time but it goes on...And this counts if the listing agent used the name of his wife, sister, brother, uncle, aunt, college frat brother, or any other moron that will rent his/her license and share his/her side of the commission with the listing agent.
If a Realtor, agent, broker has an offer from a client they represent for a property they have a listing on, that amounts to a potential 100% increase in their commission. The deal I saw today, amounted to an extra $18,000 dollars into the pocket of the listing agent, not to mention the bonus/spiff/pop/desk fee the agent received from the mortgage company he/she referred the loan to, because the rate being offered is well above the rate I saw quoted from another "lender".
If you were making an offer on that property and weren't being represented by the listing agent, do you really, honestly,ever think your offer has a chance. Maybe...but I would bet $18,000 you would lose out. "Sorry, we went with highest and best"..and the shocker...The listing agent is the ONLY one who knows what the next highest and best offers were and guess what, you just missed it.
I will finish with Articles 4, 5, and 6, wherein my day ended finally and again resulted in a pretty frustrated yours truly left holding the bad and a stakc of paper and wasted toner. I'm not a hater, I don't want to lie cheat and steal. So if someone is willing to do that to beat me out, and the client is too stupid to realize it, then I guess that is what it is.
Article 4 : REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative. (Amended 1/00)
Standard of Practice 4-1 : For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract. (Adopted 2/86)
Article 5 : REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.
Article 6 : REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent.
When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation. (Amended 1/99)
Standard of Practice 6-1 : REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. (Amended 5/88)
When a Realtor, agent or broker receives compensation, a bribe, fake desk rental fee, bogus marketing agreement, or cash in a paper bag, in return for referring clients to these companies WITHOUT full disclosure you have violated your ethics as a Realtor and RESPA. Hell even with full disclosure this is wrong. It's actually wrong even if it's disclosed and the money came in a paper bag. But you get the point.
When a Realtor, agent or broker unjustly disparages a mortgage company or a professionally licensed originator, knowingly, to the detriment of your client, you've violated your ethical code and violated RESPA.
When a Realtor, agent or broker takes a short sale listing and misrepresents the parties of the transaction to a state or federal bank, they've committed bank fraud and wire fraud. When a Realtor, agent or broker misleads a buyer into taking a more expensive loan from a related company or connected third party to line his/her own pockets, they've committed a federal crime, Truth In Lending, RESPA, Business and Professions Laws, California Real Estate Law....and probably a whole host of other crap an prosecutor can lay on you.
And so I say to the, Future Defendent #1, be prepared to be prosecuted and go to jail.
And when that day comes, please know I will NOT be able to put money on your books. But please say hello to Mr. Madoff. He's kind of butch and maybe you can be his next back door deal. I know you won't like it, because I didn't enjoy it today.
Say hello to Bubba for me.
********************************************************************************
Learn it, Live it, Love it!
ethics — n
1. ( functioning as singular ) See also meta-ethics the philosophical study of the moral value of human conduct and of the rules and principles that ought to govern it; moral philosophy
2. ( functioning as plural ) a social, religious, or civil code of behaviour considered correct, esp that of a particular group, profession, or individual
3. ( functioning as plural ) the moral fitness of a decision, course of action, etc: he doubted the ethics of their verdict
moral –adjective
1. of, pertaining to, or concerned with the principles or rules of right conduct or the distinction between right and wrong; ethical: moral attitudes.
2. expressing or conveying truths or counsel as to right conduct, as a speaker or a literary work; moralizing: a moral novel.
3. founded on the fundamental principles of right conduct rather than on legalities, enactment, or custom: moral obligations. capable of conforming to the rules of right conduct: a moral being. 5. conforming to the rules of right conduct ( opposed to immoral): a moral man. 6. virtuous in sexual matters; chaste. 7. of, pertaining to, or acting on the mind, feelings, will, or character: moral support. 8. resting upon convincing grounds of probability; virtual: a moral certainty. COLLAPSE
–noun
9. the moral teaching or practical lesson contained in a fable, tale, experience, etc.
10. the embodiment or type of something.
11. morals, principles or habits with respect to right or wrong conduct.
In my industry many of us have had to take courses specifically focused on teaching us about the ethical moral considerations in the real estate and mortgage businesses. Realtors, specifically, are required to adhere to a specific set of ethical and moral behavior.
Of course many Realtors don't believe in actually applying these ethical and moral considerations in their business practices. You mean I have to show my seller ALL the offers, for reallies! But I have a buyer too, and I can double-end the deal??? What is a real estate agent to do. Well how about doing the right thing dammit!
It's my belief that, for many, ethics and morals are topics they need to know so they answer questions on their real estate agent examination. By the way the process for obtaining a real estate license is about as easy as it was to get a stated income loan in 2005...Pulse, check, Signature check, Willing lender, Check check! Honestly I think the DMV's written test may be more difficult.
So why am I blowing the whistle on my own peers? I mean its tough out there. People are just trying to get by. Because the disease of greed seems to have gotten a bit worse in some respects, or has it?
It seems the mortgage business is much more legitimate these days, with the elimination of certain products, a redonkulous expansion of disclosure requirements, very tight caps on commissions and the fact the feds will put your cute little butt in federal F-you in the a## prison. Mortgage companies, banks, and brokers seem to get it...Or do they?
Law enforcement and industry reporting indicate that mortgage fraud activity continued to increase in 2009 and 2010. FBI mortgage fraud pending investigations increased 71 percent from 2008 to 2009. HUD-OIG pending investigations increased 31 percent from 2008 to 2009. FBI mortgage fraud-related FinCEN SAR filings increased 5.1 percent from 2008 to 2009.
OK so maybe the mortgage business is still working on itself....
But surely the real estate community has improved itself?
http://www.fbi.gov/boston/press-releases/2011/two-defendants-sentenced-in-real-estate-scam
Google "Real Estate Fraud" and you get 36,600.000 results...Ok that's not fair because I googled "Cupcake Fraud" and still get 7,690,000 results
OK, so maybe the real estate community is still working on things too...
So what have we learned...the mortgage and real estate industries will always have a few bad apples at least - probably more like half the barrel in reality. But what about the rest of them/us. Well short of committing an actual crime, there are ethical and moral boundaries. These apply to ONLY REALTORS® and I'm not going to type the registered sign everytime either, so if I say Realtor I mean REALTOR®. So let's talk a look at a few as they are good rules for all: The complete list can be found here.
Standard of Practice 1-5 : REALTORS® may represent the seller/landlord and buyer/tenant in the same transaction only after full disclosure to and with informed consent of both parties. (Adopted 1/93)
This one is a classic and I was able to see it broken first hand today. Do you really think a Realtor or real estate agent or broker can truly represent both the buyer and a seller in a transaction? Well maybe, I am sure it can happen...sometimes...maybe.. But this should not be allowed. Does a sports agent represent both the team and player? Does a divorce attorney generally represent both the husband and wife (husband/husband or wife/wife in Massachusetts)? Does a alleged criminal mind if the prosecuting attorney represents him too? Seriously folks, if you let a broker, agent or Realtor represent both side, be prepared to lose.
Standard of Practice 1-6 : REALTORS® shall submit offers and counter-offers objectively and as quickly as possible. (Adopted 1/93, Amended 1/95)
Another timeless classic. What is better, an offer from a true third party represented by a Realtor not related to the listing agent or an offer from the listing agent? Well that certainly depends on who you ask doesn't it? What is the listing agent brings an offer in from one of his buyers? It happens, not all the time but it goes on...And this counts if the listing agent used the name of his wife, sister, brother, uncle, aunt, college frat brother, or any other moron that will rent his/her license and share his/her side of the commission with the listing agent.
If a Realtor, agent, broker has an offer from a client they represent for a property they have a listing on, that amounts to a potential 100% increase in their commission. The deal I saw today, amounted to an extra $18,000 dollars into the pocket of the listing agent, not to mention the bonus/spiff/pop/desk fee the agent received from the mortgage company he/she referred the loan to, because the rate being offered is well above the rate I saw quoted from another "lender".
If you were making an offer on that property and weren't being represented by the listing agent, do you really, honestly,ever think your offer has a chance. Maybe...but I would bet $18,000 you would lose out. "Sorry, we went with highest and best"..and the shocker...The listing agent is the ONLY one who knows what the next highest and best offers were and guess what, you just missed it.
I will finish with Articles 4, 5, and 6, wherein my day ended finally and again resulted in a pretty frustrated yours truly left holding the bad and a stakc of paper and wasted toner. I'm not a hater, I don't want to lie cheat and steal. So if someone is willing to do that to beat me out, and the client is too stupid to realize it, then I guess that is what it is.
Article 4 : REALTORS® shall not acquire an interest in or buy or present offers from themselves, any member of their immediate families, their firms or any member thereof, or any entities in which they have any ownership interest, any real property without making their true position known to the owner or the owner’s agent or broker. In selling property they own, or in which they have any interest, REALTORS® shall reveal their ownership or interest in writing to the purchaser or the purchaser’s representative. (Amended 1/00)
Standard of Practice 4-1 : For the protection of all parties, the disclosures required by Article 4 shall be in writing and provided by REALTORS® prior to the signing of any contract. (Adopted 2/86)
Article 5 : REALTORS® shall not undertake to provide professional services concerning a property or its value where they have a present or contemplated interest unless such interest is specifically disclosed to all affected parties.
Article 6 : REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent.
When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation. (Amended 1/99)
Standard of Practice 6-1 : REALTORS® shall not recommend or suggest to a client or a customer the use of services of another organization or business entity in which they have a direct interest without disclosing such interest at the time of the recommendation or suggestion. (Amended 5/88)
When a Realtor, agent or broker receives compensation, a bribe, fake desk rental fee, bogus marketing agreement, or cash in a paper bag, in return for referring clients to these companies WITHOUT full disclosure you have violated your ethics as a Realtor and RESPA. Hell even with full disclosure this is wrong. It's actually wrong even if it's disclosed and the money came in a paper bag. But you get the point.
When a Realtor, agent or broker unjustly disparages a mortgage company or a professionally licensed originator, knowingly, to the detriment of your client, you've violated your ethical code and violated RESPA.
When a Realtor, agent or broker takes a short sale listing and misrepresents the parties of the transaction to a state or federal bank, they've committed bank fraud and wire fraud. When a Realtor, agent or broker misleads a buyer into taking a more expensive loan from a related company or connected third party to line his/her own pockets, they've committed a federal crime, Truth In Lending, RESPA, Business and Professions Laws, California Real Estate Law....and probably a whole host of other crap an prosecutor can lay on you.
And so I say to the, Future Defendent #1, be prepared to be prosecuted and go to jail.
And when that day comes, please know I will NOT be able to put money on your books. But please say hello to Mr. Madoff. He's kind of butch and maybe you can be his next back door deal. I know you won't like it, because I didn't enjoy it today.
Say hello to Bubba for me.
********************************************************************************
Learn it, Live it, Love it!
ethics — n
1. ( functioning as singular ) See also meta-ethics the philosophical study of the moral value of human conduct and of the rules and principles that ought to govern it; moral philosophy
2. ( functioning as plural ) a social, religious, or civil code of behaviour considered correct, esp that of a particular group, profession, or individual
3. ( functioning as plural ) the moral fitness of a decision, course of action, etc: he doubted the ethics of their verdict
moral –adjective
1. of, pertaining to, or concerned with the principles or rules of right conduct or the distinction between right and wrong; ethical: moral attitudes.
2. expressing or conveying truths or counsel as to right conduct, as a speaker or a literary work; moralizing: a moral novel.
3. founded on the fundamental principles of right conduct rather than on legalities, enactment, or custom: moral obligations. capable of conforming to the rules of right conduct: a moral being. 5. conforming to the rules of right conduct ( opposed to immoral): a moral man. 6. virtuous in sexual matters; chaste. 7. of, pertaining to, or acting on the mind, feelings, will, or character: moral support. 8. resting upon convincing grounds of probability; virtual: a moral certainty. COLLAPSE
–noun
9. the moral teaching or practical lesson contained in a fable, tale, experience, etc.
10. the embodiment or type of something.
11. morals, principles or habits with respect to right or wrong conduct.
Wednesday, May 11, 2011
How long do you have to wait to buy a home after short sale, foreclosure, or BK?
Friday, April 29, 2011
Don't call me if you don't want the truth...
Well this is more of a vent than a post.
I am no longer surprised at the consumer who, in an effort to make sure they aren't getting screwed, ends up doing just that to themselves.
You see many in my industry feel that consumers just want to be lied to. Yeah I said it, and you know I am right. In fact, we all want to hear what WE want to hear and unfortunately some out there prey on that fact.
If I can only go 75% on a property there is someone out there who says they will go 80%. Or their valu eis higher that my estimated value...Sure!! Why wouldn't you think some cubicle jockey in Michigan at Quicken with about 5 minutes of experience can comp a property better than me, who lives in California, and is REal Estate Broker.
And by the time the consumer realizes they are hosed, and gets the offer I presented originally, from the liar, it's too late.
So if you are a prospective client and you DONT want to hear the truth, please call Quicken Loans, they will tell you want you want to hear ALL DAY LONG...becuase they are in Michigan and don't care.
ARGH!
I am no longer surprised at the consumer who, in an effort to make sure they aren't getting screwed, ends up doing just that to themselves.
You see many in my industry feel that consumers just want to be lied to. Yeah I said it, and you know I am right. In fact, we all want to hear what WE want to hear and unfortunately some out there prey on that fact.
If I can only go 75% on a property there is someone out there who says they will go 80%. Or their valu eis higher that my estimated value...Sure!! Why wouldn't you think some cubicle jockey in Michigan at Quicken with about 5 minutes of experience can comp a property better than me, who lives in California, and is REal Estate Broker.
And by the time the consumer realizes they are hosed, and gets the offer I presented originally, from the liar, it's too late.
So if you are a prospective client and you DONT want to hear the truth, please call Quicken Loans, they will tell you want you want to hear ALL DAY LONG...becuase they are in Michigan and don't care.
ARGH!
Tuesday, April 26, 2011
Mortgage Brokers will be your only ally against the big banks
It’s been several years since the real estate and financial crisis began. For my old company it started in the beginning of 2007 and has continued with little relief over three plus years. With the instant evaporation of the subprime product and subsequent elimination of option arms, neg ams, stated income, and others, the real estate market continues to slump.
And while the private money that funded loan volume in the past disappeared the government stepped in with FHA loans and the increase of purchases by Freddie Mac and Fannie Mae. But the government didn’t stop there; they decided there was something wrong with the rules and guidelines that led to the crisis.
No one can argue that there were not significant problems within the mortgage industry. In fact, many of us in the industry started sounding alarm bells in 2005 and 2006 seeing that guidelines and underwriting standards has greatly declined.
So where does that leave us now? Many insiders know that when a financial crisis happens, we all fall back to the big banks. Those big banks have taken a big the opportunity to seize market share and now control effectively all mortgage lending in the nation.
How did they do this you ask? The banks have quietly taken the stance that the mortgage broker was the sole factor that led to the decline of western financial civilization. But there is one problem with that analysis; the brokers had NOTHING to do with underwriting guidelines. That’s right, how can the broker be blamed for creating and spreading a product created in the offices and cubicles of the biggest investment banks.
Were there bad brokers? Oh yes, and bank lenders, appraisers, title companies, escrow companies, funders, reviewers, executives, investment bankers, ratings agencies, and pretty much every position along the mortgage chain.
But now the government has gone too far and it continues to make changes both legally and legislatively that have little to no basis in reality, and worse, do little to help and only seem to force higher costs on consumers.
The bottom line is if the government would have enforced RULES ALREADY IN PLACE, many of the problems we are experiencing today could have been limited. Sure we would have had adjustment in values as has happened on multiple times.
And while the private money that funded loan volume in the past disappeared the government stepped in with FHA loans and the increase of purchases by Freddie Mac and Fannie Mae. But the government didn’t stop there; they decided there was something wrong with the rules and guidelines that led to the crisis.
No one can argue that there were not significant problems within the mortgage industry. In fact, many of us in the industry started sounding alarm bells in 2005 and 2006 seeing that guidelines and underwriting standards has greatly declined.
So where does that leave us now? Many insiders know that when a financial crisis happens, we all fall back to the big banks. Those big banks have taken a big the opportunity to seize market share and now control effectively all mortgage lending in the nation.
How did they do this you ask? The banks have quietly taken the stance that the mortgage broker was the sole factor that led to the decline of western financial civilization. But there is one problem with that analysis; the brokers had NOTHING to do with underwriting guidelines. That’s right, how can the broker be blamed for creating and spreading a product created in the offices and cubicles of the biggest investment banks.
Were there bad brokers? Oh yes, and bank lenders, appraisers, title companies, escrow companies, funders, reviewers, executives, investment bankers, ratings agencies, and pretty much every position along the mortgage chain.
But now the government has gone too far and it continues to make changes both legally and legislatively that have little to no basis in reality, and worse, do little to help and only seem to force higher costs on consumers.
The bottom line is if the government would have enforced RULES ALREADY IN PLACE, many of the problems we are experiencing today could have been limited. Sure we would have had adjustment in values as has happened on multiple times.
Saturday, April 23, 2011
A Little Interest Rate Perspective
I get asked about where rates are going and I usually respond with, "if I knew that, I'd be retired on a beach somewhere". The reality is no one really knows where rates are going. But one thing is for sure, when rates are near zero there is no place for them to go but up. Here is a link showing the history of the prime rate from 1947 to present. The all time high was 21.50%!! Holy Prime Rate Batman! Can you imagine what it was like to qualify for a mortgage then! http://www.wsjprimerate.us/wall_street_journal_prime_rate_history.htm
Let's look at what a mortgage payment would be at 21.5% assuming a $300,000 loan amount....Yeah..that's going to be $5,384.01 per month for 30 years....and of yeah that doesn't include taxes, insurance, HOA, mortgage insurance.
Luckily we are no where near that today that same scenario at today's 4.875% give us a payment of $1,587.62, much more manageable I think you'd agree.
But what if rates started to skyrocket? Rates historically can rise as much as 4% in a year, or more.
Are you still holding on to that adjustable? Don't get caught holding the bag - convert EVERYTHING you have financed to long term fixed debt before it's too late.
Let's look at what a mortgage payment would be at 21.5% assuming a $300,000 loan amount....Yeah..that's going to be $5,384.01 per month for 30 years....and of yeah that doesn't include taxes, insurance, HOA, mortgage insurance.
Luckily we are no where near that today that same scenario at today's 4.875% give us a payment of $1,587.62, much more manageable I think you'd agree.
But what if rates started to skyrocket? Rates historically can rise as much as 4% in a year, or more.
Are you still holding on to that adjustable? Don't get caught holding the bag - convert EVERYTHING you have financed to long term fixed debt before it's too late.
Friday, April 22, 2011
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Monday, March 28, 2011
Emotional toll of a short sale
No one really talks about it, but what about the emotional toll of a short sale?
Short sales are all the rage in the real estate industry. And when I mean rage, I mean bad rage. Realtors and property owners alike would agree that the short sale process is cold, unorganized, slow, tedious, and downright depressing.
Here are some basic statistics about the housing market today. They fluctuate based on who you ask, but in general they are true:
• 25%-30% of all mortgaged homes are worth less than the balance of their mortgage(s)
• More than 1 in 10 mortgagors are behind on the mortgage
• Some say over 5 million foreclosed homes could hit the market throughout 2011
These are some sobering statistics, but it leads us to our point. A homeowner, you, or someone you know, that is in default and pursuing a short sale is not alone. Sure it feels like they are alone. Many people don’t feel able to freely discuss financial difficulties because of the fear of being ridiculed, ostracized, worrying the kids, and a whole plethora of personal reasons. The fact is it’s hard to deal with these issues and many people feel similarly.
The plain truth is a short sale owner will be leaving their home and that in itself is filled with unknowns, fear, and emotional angst. No one likes not knowing where you are going to live. How much it will cost? Where it will be? Will the kids like the new school or neighborhood? Moving is particularly hard for families when kids have roots and have grown comfortable. For those of you that moved as kids most certainly understand.
Many people relocate and kids can be taught that moving can be a good thing, exciting, a new adventure. And the same is true for the homeowner. You are going on a journey and you’ll be leaving where you’ve been. You’ll meet new people, see new areas, and enjoy new local restaurants. And most importantly you’ll be with your family, together, and ready for the new challenges that life consistently presents.
You see a house is just a bunch of wood, cement, tile carpet and other stuff.
A home does not make a family;
A family makes a home.
Financial strains can be the cause of arguments between husband and wives, or worse with children. The stress can and will most likely make emotions run high and patience run thin. It’s important during the stressful short sale process to take a step back when things get loud or stressful and focus in on what the problem really is. Would you normally be fighting or arguing about this? Are your daily issues being exacerbated by the financial situation? Stop and take a deep breath. It is remarkable how just stopping and relaxing for a moment can clear some of the stress and allow you to focus on the important items.
It is important to avoid procrastination. Let’s suppose you are notified an offer of your property has been accepted. Now you need to plan and execute. But first you have to get out of your own way. Some are better than others, but many of us procrastinate and it’s important to not let your emotions take control. You should always have been looking for a rental property. Most likely you will not be able to buy a home for awhile. And that is OK.
Take this freedom to enjoy being a renter and letting the property owner handle being a real estate owner. There advantages to being both a renter and owner. Focus on the good of renting. Lower costs, less maintenance, no landscaping, no HOA fees, more or less room depending…There are many advantages – just look and you’ll see. More importantly, you’ll feel better.
Remember, you are not alone. A home does not make a family, a family makes a home. Obtain the services of a Real Estate Broker/Realtor. Consult your tax expert and whenever possible consult an attorney with expertise in short sales and their legal ramifications. Your Realtor/Broker should be able to offer significant advice and direction if you are contemplating a short sale transaction.
Short sales are all the rage in the real estate industry. And when I mean rage, I mean bad rage. Realtors and property owners alike would agree that the short sale process is cold, unorganized, slow, tedious, and downright depressing.
Here are some basic statistics about the housing market today. They fluctuate based on who you ask, but in general they are true:
• 25%-30% of all mortgaged homes are worth less than the balance of their mortgage(s)
• More than 1 in 10 mortgagors are behind on the mortgage
• Some say over 5 million foreclosed homes could hit the market throughout 2011
These are some sobering statistics, but it leads us to our point. A homeowner, you, or someone you know, that is in default and pursuing a short sale is not alone. Sure it feels like they are alone. Many people don’t feel able to freely discuss financial difficulties because of the fear of being ridiculed, ostracized, worrying the kids, and a whole plethora of personal reasons. The fact is it’s hard to deal with these issues and many people feel similarly.
The plain truth is a short sale owner will be leaving their home and that in itself is filled with unknowns, fear, and emotional angst. No one likes not knowing where you are going to live. How much it will cost? Where it will be? Will the kids like the new school or neighborhood? Moving is particularly hard for families when kids have roots and have grown comfortable. For those of you that moved as kids most certainly understand.
Many people relocate and kids can be taught that moving can be a good thing, exciting, a new adventure. And the same is true for the homeowner. You are going on a journey and you’ll be leaving where you’ve been. You’ll meet new people, see new areas, and enjoy new local restaurants. And most importantly you’ll be with your family, together, and ready for the new challenges that life consistently presents.
You see a house is just a bunch of wood, cement, tile carpet and other stuff.
A home does not make a family;
A family makes a home.
Financial strains can be the cause of arguments between husband and wives, or worse with children. The stress can and will most likely make emotions run high and patience run thin. It’s important during the stressful short sale process to take a step back when things get loud or stressful and focus in on what the problem really is. Would you normally be fighting or arguing about this? Are your daily issues being exacerbated by the financial situation? Stop and take a deep breath. It is remarkable how just stopping and relaxing for a moment can clear some of the stress and allow you to focus on the important items.
It is important to avoid procrastination. Let’s suppose you are notified an offer of your property has been accepted. Now you need to plan and execute. But first you have to get out of your own way. Some are better than others, but many of us procrastinate and it’s important to not let your emotions take control. You should always have been looking for a rental property. Most likely you will not be able to buy a home for awhile. And that is OK.
Take this freedom to enjoy being a renter and letting the property owner handle being a real estate owner. There advantages to being both a renter and owner. Focus on the good of renting. Lower costs, less maintenance, no landscaping, no HOA fees, more or less room depending…There are many advantages – just look and you’ll see. More importantly, you’ll feel better.
Remember, you are not alone. A home does not make a family, a family makes a home. Obtain the services of a Real Estate Broker/Realtor. Consult your tax expert and whenever possible consult an attorney with expertise in short sales and their legal ramifications. Your Realtor/Broker should be able to offer significant advice and direction if you are contemplating a short sale transaction.
Thursday, February 24, 2011
Top Five Things to do when preparing for a short sale real estate transaction?
Preparation is the key to a smooth and successful short sale transaction. As with many things in life, proper planning is always the preferred method when approaching a financial transaction. And that is just what a short sale transaction is, a financial transaction involving multiple parties all with different goals or objectives.
So to make sure you are fully prepared to even start the short sale process here are the essential items any real estate broker will need to begin the analysis.
#1. Two years of personal financial documents. I’m talking everything you would need to apply for a mortgage loan. Essentially that is just what you are doing. The lender that has to approve your short sale needs to know if you really can’t afford the current mortgage. They will always look to see if there is a easier way to save their investment before a short sale, mainly loan modification.
#2. Previous loan documentation. Gather everything you have on the previous loan(s) you’ve had on the property from the time you purchased it until now. This will give the broker a clearer understanding of you current loan terms and future adjustments. An old appraisal can also aid in the short sale process as the current lender is able to see previous values as compared to NPV or net present value.
#3. Get the property on the market. There is no short sale without a buyer, and now more than ever, buyers are a selective breed. Gone are those days of standing in line the night before to buy a new property the next day. Buyers are scarce. For many reasons it’s harder to get financing. So buyers can be picky. The earlier your broker can get marketing your property the better.
#4 Negotiate for a release of all future liability. One of the keys to any successful short sale is making sure the seller does not owe anything more after the short sale is closed. When at all possible make sure to consult your CPA, Real Estate attorney, and Real Estate broker when considering a short sale.
#5. Stay patient and resolved. If this short sale is for your primary residence, this is much more emotional than if this is an investment property. So it’s important to maintain an analytical approach whenever possible. There will be people coming into your home and it makes the prospects of moving out that much more heart wrenching. So know that you are not alone and although this will be a blemish on your credit, in time, it will become less and less of a concern for creditors seeking to lend to you later.
So to make sure you are fully prepared to even start the short sale process here are the essential items any real estate broker will need to begin the analysis.
#1. Two years of personal financial documents. I’m talking everything you would need to apply for a mortgage loan. Essentially that is just what you are doing. The lender that has to approve your short sale needs to know if you really can’t afford the current mortgage. They will always look to see if there is a easier way to save their investment before a short sale, mainly loan modification.
#2. Previous loan documentation. Gather everything you have on the previous loan(s) you’ve had on the property from the time you purchased it until now. This will give the broker a clearer understanding of you current loan terms and future adjustments. An old appraisal can also aid in the short sale process as the current lender is able to see previous values as compared to NPV or net present value.
#3. Get the property on the market. There is no short sale without a buyer, and now more than ever, buyers are a selective breed. Gone are those days of standing in line the night before to buy a new property the next day. Buyers are scarce. For many reasons it’s harder to get financing. So buyers can be picky. The earlier your broker can get marketing your property the better.
#4 Negotiate for a release of all future liability. One of the keys to any successful short sale is making sure the seller does not owe anything more after the short sale is closed. When at all possible make sure to consult your CPA, Real Estate attorney, and Real Estate broker when considering a short sale.
#5. Stay patient and resolved. If this short sale is for your primary residence, this is much more emotional than if this is an investment property. So it’s important to maintain an analytical approach whenever possible. There will be people coming into your home and it makes the prospects of moving out that much more heart wrenching. So know that you are not alone and although this will be a blemish on your credit, in time, it will become less and less of a concern for creditors seeking to lend to you later.
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