If the only people you listened to were . . .

   If the only people you listened to were Loan Officers, you might wonder how any real estate deal ever gets closed because all real estate agents are egotistical, greedy, incompetent idiots. Likewise, if one only listened to Real Estate Agents, you would hear exactly the same complaints about Loan Officers. And oh yes, everyone is in total agreement that the other side knows nothing of how to communicate and is totally ignorant of what it takes to get a real estate deal to closing. Here is the first paragraph of an article I read yesterday:


“Ten years of experience in the real estate industry and last week I went through four contract extensions, a six hour settlement waiting for HUD-1 approval and scrambling around getting documents signed the following day so that the loan wouldn’t be recalled, all for the same transaction! There has to be an easier way and in my opinion it starts with good communication between the Loan Officer and Realtor.”


   I’m afraid we have all participated in a closing from hell, and the business being what it is, we will probably get dragged into another one. Heaven help us! What does it take to close the deal with the fewest problems? Here are the things that need to be mutually understood, completely, by all parties, buyers, sellers lenders and all their respective agents and assistants. Each agent has their own client’s interests to protect, but without mutual understanding and respect, everyone looses.


   The first thing I think we can all agree is necessary to bring a contract to a smooth closing is complete, open and timely communication.


   In today’s market preapproval is exceedingly important. Realtors put in a lot of work finding the property which fits their client’s desires. If the loan officer has not done a complete job in the preapproval stage, the Realtor’s work is for naught. While a Loan officer is not legally able to share certain private information; it is helpful for the Realtor to know exactly how the approval or qualification letter was generated. The loan officer may reveal the following:


   1. Was documentation collected to verify the information taken for the loan application i.e., paystubs, bank statements, tax returns, credit reports, etc.


   2. Has the borrower’s loan application been run through a desktop underwriting program? 

   “Form Letter” pre-qualifications don’t get it anymore. In today’s world, an 830 FICO may not get a buyer a mortgage.


   3. Is the borrower in need of closing help from the seller, if so how much? If sufficient information has been collected to issue a preapproval, the Loan Officer should be able to address the issue of closing costs, and tell both the client, and the Realtor that help with closing costs will or will not be needed. There is no sense going to the closing table without the closing costs being covered. Potentially the buyer may be getting down payment assistance from a government agency. Down payment assistance is not normally disclosed in a pre-approval or prequalification letter. This is important information that may impact the seller of a property. It should be disclosed at time of the contract offer so that the seller can make an informed decision and complete disclosure helps the buyer and seller to build a relationship of trust in the transaction.


   4. Realtors need to know from the start what it will take to get the deal done. Many solutions can be negotiated, but not after the deal is set. Knowing the numbers and facts up front will make the deal easier for all concerned.

    5. Both sides need to have a list of the people involved in the transaction and their contact information. On the lender’s side, the names and contact information for: the loan officer, office or branch manager, and possibly even the processor; and the same goes for those on the Realtor’s side. The title company should be included, especially if there is a foreclosure or short sale involved. Then there are all the others who may or may not be involved in every deal, but if they are they should be included on the list, the Accountants, attorneys, inspectors, engineers, etc. Sometimes there are synergies and relationships that may be called upon to expedite the total process. When everyone is working as a team, the goal is getting the buyers and sellers to the closing table in the most expedient way possible.


   6. Everyone should know, to the best of the collective knowledge, what the time frames are for the various steps to approval. All parties should be informed, in a timely manner, if any problems crop up along the way. Much of the frustration in any transaction is generated from expectations that are shattered by misinformation and maybe even outright deception. There are a significant number of people that need to be kept informed of the progress in a transaction. When everyone is clambering for info and no clear answers are being given, the transaction starts to fall apart. Buyers waffle, sellers refuse extensions, and everyone begins to panic. Phone calls increase and stress levels go off the charts.


   7. Answer and return phone calls. The first thing everyone thinks when they don’t get return calls is that something is wrong. Even bad news can be managed more easily if approached immediately and honestly. If you have set hours during which you will receive phone calls, then you must have set hours when you will return phone calls. It is important that calls be returned to those who are expecting them, in all cases. Also send regular email up-dates. We are in an age of constant communication, it is expected and it is required. Send regular email updates to keep all parties informed of progress or delays. Communication is the key and updates are the grease making for a smooth contract closing.


   The common consensus is Realtors hate Loan Officers, and Loan Officers hate Realtors. In my opinion we are on the same team, the team that makes things happen for our clients. To do that, both Realtors and loan officers must respect what the other does and everyone must work together to create transactions that leave the clients happy and ready to refer!

Apartments Stage a Comeback

Apartments Stage a Comeback as
Renters Return in Surprising Numbers
June 23, 2010 7:56 AM,
By Ben Johnson, NREI Contributing Writer


   After two years of rising vacancies and slumping rents, apartment owners have reason to be cheerier these days.
   According to the latest survey of 169 markets across the U.S. by researcher Reis, the national apartment vacancy rate peaked at a record 8% in the fourth quarter of 2009 and remained unchanged in the first quarter of 2010. Asking rents increased by a scant 0.1% in the first quarter, but that was the first gain since the third quarter of 2008.
  Some 20,000 apartment units were absorbed in the first quarter of 2010, which is the strongest first-quarter showing in the past 10 years, according to Victor Calanog, director of research at Reis. “The multifamily market appears to be on the cusp of recovery. If so, pricing and transaction activity will rise and the window of opportunity for landing good deals may close soon,” says Calanog.
  Rental demand drove the occupancy rate for downtown Chicago apartments higher in the first quarter, to 93.6% from 91.4% in the fourth quarter of 2009, according to consulting firm Appraisal Research Counselors.
  The latest results surprised long-time industry watchers, including Robert Bach, senior vice president and chief economist at Grubb & Ellis. However, Bach is concerned about the abundant supply of empty condos and single-family homes that are entering the rental market in hard-hit areas like South Florida and Phoenix. He believes they are casting a shadow over traditional apartment communities, and siphoning off potential renters.
  “I’m surprised the apartment fundamentals have bottomed out this quickly, but as long as there are these shadow units out there, then it’s going to be interesting to see if the apartment market can recover independent of that,” says Bach.
  The rest of 2010 will be a telling barometer, notes Calanog. “The next two quarters will offer critical perspective as to whether positive rent growth is sustainable.” Calanog does expect the vacancy rate to improve over the next five years, dropping to 6.6% in 2014.
  Unemployment stings young Americans
  Certainly one of the most closely watched keys to the short-term apartment market turnaround is the jobs picture. According to the U.S. Bureau of Labor Statistics, the U.S. economy added 290,000 jobs in April, the largest gain since March 2006. That followed a revised 230,000 increase in March. Still, the overall unemployment rate rose from 9.7% in March to 9.9% in April, a sign that more Americans are starting to look for jobs.
  According to some observers, danger lurks at the deep end of the renter pool. The primary renter market base, people aged 20-30, comprises 70% of the total U.S. apartment market, and that segment is recovering more slowly than others.
  As an example, the unemployment rate among Americans aged 20-24 was 15.8% in March, but jumped to 17.2% in April. “The unemployment rate for young people has climbed faster than it has for the labor market in general,” says Sam Chandan, global chief economist and executive vice present at researcher Real Capital Analytics.
  According to Chandan, the rental pool is not being supported by new entrants of young people graduating with jobs. “We need job growth among the younger age groups to drive apartment demand. There’s got to be some replacement there.”
  Compounding the situation, one of the biggest challenges to recovery in this market is older, more skilled workers who are willing to take lower paying jobs just to find work. Typically this segment is more inclined to own rather than rent. “This is an issue that’s going to weigh on the performance of the apartment market,” says Chandan.
 

Get Pre-Approved For A Mortgage

      Why And How To Get Pre-Approved
   Are you already shopping for a home, or even thinking about buying one? Whether it is your first home or your tenth, you will probably have to get a mortgage. Yep, sooner or later you will have to step up to the plate and find the company who will make that mortgage loan for you. And in this turbulent market, it is best to be pre-approved for the mortgage you need before you begin shopping for a home
     The Advantages Of Getting Pre-Approved
   The biggest advantage of getting a pre-approved for a home mortgage is that it is proof positive of how much you can borrow. The mortgage market has changed significantly in the last few years, and that which used to be a slam dunk, can be, in today’s market, much more difficult and trying. Getting Pre approved can be a significant time saver as you will not waste time and effort hours searching for that “just right” home only to find out that you can’t qualify for the mortgage. Sellers will also be more motivated to work with you if they know you are able to afford their asking price. Sellers will also take any offer you make more seriously if they know you are pre-approved for a mortgage. It’s the next best thing to shopping with cash!
   If you are looking at foreclosed or short sale property (that’s where the terrific bargains are), many sellers of such properties will not even consider an offer to purchase if it is not accompanied by a Pre Approval or Commitment Letter from an legitimate lender. In addition, real estate agents will be more willing to spend time assisting you with your search if they know you are pre-approved for a mortgage. Pre-approval is a big help to the seller, the realtor, as well as you - the buyer.
     How do you get pre-approved
   Contact a Mortgage Broker. Why do I suggest a Mortgage Broker rather than a Bank? Simply because they will have more options available to you, both in terms of programs and lending sources through a multitude of banks, not just one. Better yet- find a company which is both a Mortgage Broker and Banker and you will have the best of both worlds.
   It is important for you to start the pre-approval process as soon as possible. A good Mortgage Advisor will, after taking your initial application, “pull” your credit report, provide you with a copy, and go over the report in fine detail with you. Unfortunately, it is all too common for credit reports to contain inaccurate information, and a mistake on your credit report could mean that you are charged a higher interest rate or be turned down for the loan. There may well be corrections that need to be made before you can be pre-approved and your Mortgage Advisor will help you get these done.
   You will also have to provide documentation to your Mortgage Advisor that covers all aspects of your financial situation. This will include tax returns, pay stubs and other information to support the income you are claiming, as well as asset statements (checking, savings, 401k, etc.) to prove your ability to provide a down payment. The Mortgage Advisor, in return, will provide you with information about the mortgage program options, monthly payments on the mortgage loan, closing costs, and other information about the mortgage process.
   After the application package is compiled and reviewed, the Mortgage Advisor will submit it to the lender and the "Underwriting" process begins. Once the paperwork is approved, the mortgage lender will issue a Pre-Approval Letter which outlines the terms of the mortgage approval.
     Check out potential lenders, and start your pre-qualification process now!

Fewer and Fewer Adding To The GDP.

Bad Employment Numbers

May’s unemployment figures came in Friday morning at the announced rate of 9.7%, which was slightly better than the 9.8% which the prognosticators were expecting. While the “experts” were expecting 500,000 jobs to be added, the number was 431,000, but there’s more to the story.


Of that 431,000 total jobs, over 411,000 of them were temporary jobs at the Census Department. Government jobs that produce nothing, only suck dollars out of the pockets of the increasingly miniscule numbers of private sector workers who do produce something. That’s us folks, the working stiffs.


You got me right, I said we, you and me, the taxpayers hired over 95.3% of all the people who found jobs in May. To make matters worse, 22,000 of the “New” jobs reported for April weren’t real, they were a mistake in someone’s calculation. In reality, the decline is being attributed more to people giving up on trying to find another job, than it is of fewer laid-off workers.


There’s a closer reading of the report that is worth mentioning even though the “experts in the Bond Market have chosen to ignore it. The hourly earnings that were reported for May showed a 0.3% increase. This is purported as good, because the earnings average rose three times faster than the 0.1% that was expected. Of course, what that really means is that probably 95% of the new jobs started at a higher rate than the other 5%. You certainly can see where that line is going.


I haven’t taken the time to try to determine what the ratio of ALL the governmental workers is to ALL the private sector workers, but if private sector workers are the only ones who really contribute to the Gross Domestic Product; and some of them only shuffle the papers to make it look like they are producing, that leaves even fewer of us to support the suckers (literal denotation).

IMNTBHO
Dave Skibowski

I guess they’re not kidding

SUBPRIME IS BAAAACK

GE Financial, the GE Mortgage folks are bringing back the subprime loan in the UK!  Woops, they are not calling it SUBPRIME, because “That suggests the inability to pay!” No, now they’re called “COMPLEX-PRIME” loans.

The interest rate on these mortgages will be fixed for two years at 5.99% after which time it will become a floating rate. (Sounds like the kind of loan that brought on the Great Mortgage Debacle) Oh yes, Borrowers can get this loan, even if they have defaulted on two loans previously including mortgages, and even if they have an outstanding judgment!

Next thing they'll bring back is the 'pick-a-payment-plan' and delude people into believing that a mortgage payment of $300.00 a month is the amortizing payment for a $300,000 house. I’m glad WAMU has gone to Mortgage Purgatory, as they were the inventors of the “Option Arm” the quickest way to foreclosure on the STUPIDER side of the mortgage debacle. . . as if the 2/28 ARM wasn't bad enough.

By the way, it’s not only GE which is a US based company, HSBC the Swiss banking giant is a co-perpetrator.

If the Brits are doing it, can we be far behind?

IMNTBHO

Dave Skibowski

Are you kidding me?

The Federal Housing Finance Agency wants Fannie & Freddie to go back into markets that are underserved, which on the surface sounds like a good idea. However, this also sounds much like the phraseology used in the Community Reinvestment Act.

You remember the CRA, that’s the one that said that requirements should be lowered so people who couldn’t afford to pay for a home could buy one anyway, which IMNTBHO was the start of the housing debacle. (well, those were not the exact words, but the operatives are the same.)

Seems to me that Fannie’s and Freddie’s core business is to purchase well underwritten loans, made by people who can properly qualify and have provable income to pay for the home they are purchasing, no matter where or what the home is.

IMNTBHO
Dave Skibowski

Here is what the FHFA has to say . . .
Read On
FHFA Proposes Rule On Underserved Markets
BY MORTGAGEORB.COM ON WEDNESDAY 02 JUNE 2010

The Federal Housing Finance Agency (FHFA) has sent to the Federal Register a proposed rule implementing provisions of the Housing and Economic Recovery Act of 2008 (HERA) that establish a duty for Fannie Mae and Freddie Mac to serve very low-, low- and moderate-income families in three specified underserved markets - manufactured housing, affordable housing preservation and rural markets.

The proposed rule, implementing HERA's pre-conservatorship provisions, would require the government-sponsored enterprises (GSEs) to take actions to increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for underserved markets while adhering to the requirements of conservatorship.

As described in the proposed rule, while the GSEs remain in conservatorship, they are expected to continue to fulfill their core statutory purposes, which include their support for affordable housing. The FHFA says its approach to implementing the "duty to serve" provisions of HERA is to limit the proposed rule to existing core business activities at Fannie and Freddie and to require that they not engage in new lines of business as a result of the "duty to serve" proposed rule.

The proposed rule would also establish a method for evaluating and rating GSE performance in each underserved market this year and in subsequent years, and it describes the transactions and activities that would be considered for compliance.

The enterprises would be evaluated on the following four statutory assessment factors:
• the development of loan products, more flexible underwriting guidelines, and other innovative approaches to providing financing;
• the extent of outreach to qualified loan sellers and other market participants;
• the volume of loans purchased relative to the market opportunities available, subject to the statutory condition that the FHFA not establish specific quantitative targets; and
• the amount of investments and grants in projects that assist in meeting the needs of the underserved markets.

Under the proposed rule, Fannie and Freddie would each be required to provide a plan for underserved markets against which the GSE would be evaluated and rated “satisfactory” or “unsatisfactory” for assessment factors in each underserved market on an annual basis.

Comments on the proposed rule are due 45 days from the date of publication in the Federal Register.
SOURCE: Federal Housing Finance Agency

Macleans.ca » Blog Archive We’re too broke to be this stupid «

Macleans.ca » Blog Archive We’re too broke to be this stupid «: "We’re too broke to be this stupid"

This is a well put article, well worth reading.
Dave Skibowski