People. Howdy.
"Median Home Prices Show Signs Of Stability" was the title of an article written in USA Today, today.
"Home prices rose in 40% of U.S. cities in the fourth quarter of last year" was in the 1st paragraph. Looks good, but are we done with home prices dropping faster then grandpa's dentures? Let's see. 40% of the cities went up, so the other 60% went down or remained the same. Still not bad. let's dig deeper.
"The national median price was $172,900, or 4.1% below the fourth quarter last year. That was the smallest year-over-year price decline in more than two years" is what the article said later. Well, not plummeting like we were, but not as zippidy-do-da as the title suggests. Further still.
January foreclosures were still up 15% from a year ago, more people will be upside down on their mortgage (eliminating them to sell their home and buy another place, regardless of prices) & we are about to have another record year in foreclosures. It will be much worse if there's not an extension for the Federal tax credit for home buyers.
The good news: Home prices are very affordable and interest rates are fantastic. People don't seem as desperate as before and unemployment actually improved recently (.3%, not much but better than a stick in the eye, unless your job is to take sticks in your eye).
Eventually, we'll be alright!
Check out the article (click on the title) and let me know how full of it I am.
God Bless.
Thursday, February 11, 2010
Wednesday, February 10, 2010
One West Bank And The Dirty Word
Hello People.
This is how it went down and is going downer.....
Indymac was seized by the FDIC in July of 08 because it had a ton of bad loans out and there was a semi run on the bank. Anyway, the FDIC turned around and sold Indymac and all of it's bad loans to newly formed One West Bank. In order to get the sale done the FDIC had to sell it at 70 cents on the dollar amount of the loans. Doesn't sound too evil yet. Just hold on brother.
The side deal was that on any foreclosure or short sale loss taken by One West Bank the FDIC would reimburse One West Bank 80%. Not 80% of what One West bought it for (remember the 70 cents on the dollar?) but of the original loan amount. Did you hear me? I can't hear you screaming?
Some real disturbing #s, are you ready? It gets pretty ugly. You've been warned.
A short sale on a house is completed at a purchase price of $250,000. With fees and all of that junk, lets say that One West Bank nets $200,000. The original loan was $400,000. Leaves OWB with $200,000 and a loss of $200,000. The FDIC gives them (very nice people at FDIC) 80% of the loss, or $160,000. OWB has $360,000 in their pocket, net. Wait! They only paid $280,000 for the loan. Nice net of $80K without doing to much, eh?
Is it any wonder why loan modifications are as mythical as a unicorn or celibate NBA star?
Check out a video (click on the title) describing this and let me know if you're pissed off.
God Bless.
This is how it went down and is going downer.....
Indymac was seized by the FDIC in July of 08 because it had a ton of bad loans out and there was a semi run on the bank. Anyway, the FDIC turned around and sold Indymac and all of it's bad loans to newly formed One West Bank. In order to get the sale done the FDIC had to sell it at 70 cents on the dollar amount of the loans. Doesn't sound too evil yet. Just hold on brother.
The side deal was that on any foreclosure or short sale loss taken by One West Bank the FDIC would reimburse One West Bank 80%. Not 80% of what One West bought it for (remember the 70 cents on the dollar?) but of the original loan amount. Did you hear me? I can't hear you screaming?
Some real disturbing #s, are you ready? It gets pretty ugly. You've been warned.
A short sale on a house is completed at a purchase price of $250,000. With fees and all of that junk, lets say that One West Bank nets $200,000. The original loan was $400,000. Leaves OWB with $200,000 and a loss of $200,000. The FDIC gives them (very nice people at FDIC) 80% of the loss, or $160,000. OWB has $360,000 in their pocket, net. Wait! They only paid $280,000 for the loan. Nice net of $80K without doing to much, eh?
Is it any wonder why loan modifications are as mythical as a unicorn or celibate NBA star?
Check out a video (click on the title) describing this and let me know if you're pissed off.
God Bless.
Monday, February 8, 2010
Don't Tell Me What To Do!
Yo People.
There's a saying about how opinions are like a certain body part and how everyone has them and they all stink. A little cynical. I prefer a little more optimistic outlook on opinions. We all have them and they're all good as long as you don't bother me with yours (I said a little).
Anyway, opinions on what's a good deal in real estate vary vastly from Victor to Vivien (stupid). If you think something is a good deal you should go for it. Don't let other people tell you what a good home purchase or a good investment should look like. These are personal decisions and should be tailor made to fit you. You'll have to live with the outcome whether it be good or bad.
Now, that being said, you should get enough info to make sure your real estate purchase is exactly (or as close as exactly as possible) what you want. The price of a house is just the beginning. How much will it cost to do repairs (get estimates from licensed professionals, not from some in law you are trying to give a job to so they will get off your couch)? What type of loan do you qualify for (make sure you do the #s correctly)? What will your monthly payment be (I said do the #s correctly)? Will your spouse leave you for buying a home without a roof (she will)? These all have to be investigated in order for you to make that personal investment/ home purchase. Be very wary (stupider) of a price on a home that is too good to be true. It is.
The reason I'm bringing all of this up is because people want a deal when they buy real estate (duh) but sometimes they don't know what a deal is. If you can buy a home for $200K and it's worth $300K, sounds good. Even if you have to put in $50K for repairs it still sounds good, right? The answer: Maybe. If that $50K has to come out of your own pocket instead of being in your loan then maybe. A 20% down payment on $200K is $40K and on $300K is $60K. Do you want to come up with $90K cash and get a better purchase price, or come up with $60K cash and keep some money in your purse for college, emergencies, food? Sometimes, for some people, it's less painful to buy a house that doesn't need that much work and keep the money that would've went to repairs in their own pocket. Some people have a lot of cash laying around (call me) and would love to jump on a deal like that.
My point is everybody's different when it comes to buying a home or investment property. Some like to hold on and play/ pray for appreciation. Some want their money going into an investment that is going to make moo la right now. Some just want a place to raise their kids or to hide their mistress. It doesn't matter what you want it only matters that you know enough info to get exactly what you want.
Check out an article by CNN Money (that almost talks about the same thing) by clicking on the title.
Happy hunting and God Bless.
There's a saying about how opinions are like a certain body part and how everyone has them and they all stink. A little cynical. I prefer a little more optimistic outlook on opinions. We all have them and they're all good as long as you don't bother me with yours (I said a little).
Anyway, opinions on what's a good deal in real estate vary vastly from Victor to Vivien (stupid). If you think something is a good deal you should go for it. Don't let other people tell you what a good home purchase or a good investment should look like. These are personal decisions and should be tailor made to fit you. You'll have to live with the outcome whether it be good or bad.
Now, that being said, you should get enough info to make sure your real estate purchase is exactly (or as close as exactly as possible) what you want. The price of a house is just the beginning. How much will it cost to do repairs (get estimates from licensed professionals, not from some in law you are trying to give a job to so they will get off your couch)? What type of loan do you qualify for (make sure you do the #s correctly)? What will your monthly payment be (I said do the #s correctly)? Will your spouse leave you for buying a home without a roof (she will)? These all have to be investigated in order for you to make that personal investment/ home purchase. Be very wary (stupider) of a price on a home that is too good to be true. It is.
The reason I'm bringing all of this up is because people want a deal when they buy real estate (duh) but sometimes they don't know what a deal is. If you can buy a home for $200K and it's worth $300K, sounds good. Even if you have to put in $50K for repairs it still sounds good, right? The answer: Maybe. If that $50K has to come out of your own pocket instead of being in your loan then maybe. A 20% down payment on $200K is $40K and on $300K is $60K. Do you want to come up with $90K cash and get a better purchase price, or come up with $60K cash and keep some money in your purse for college, emergencies, food? Sometimes, for some people, it's less painful to buy a house that doesn't need that much work and keep the money that would've went to repairs in their own pocket. Some people have a lot of cash laying around (call me) and would love to jump on a deal like that.
My point is everybody's different when it comes to buying a home or investment property. Some like to hold on and play/ pray for appreciation. Some want their money going into an investment that is going to make moo la right now. Some just want a place to raise their kids or to hide their mistress. It doesn't matter what you want it only matters that you know enough info to get exactly what you want.
Check out an article by CNN Money (that almost talks about the same thing) by clicking on the title.
Happy hunting and God Bless.
Sunday, February 7, 2010
How I Rock The Mic
Hi People.
I've been the infrequent panelist on a radio show called The San Diego Money Makers (catchy).
I was on yesterday (Feb 6th) when we talked about V.A. loans and the difficulties they present, loan modifications and how they are the new "unicorn" in the real estate industry, appraisals and how that is the new "dirty" word in real estate and some other good stuff. So, give it it a listen and be kind, I'm very sensitive.
Click on the title to hear yesterday's podcast.
God Bless.
I've been the infrequent panelist on a radio show called The San Diego Money Makers (catchy).
I was on yesterday (Feb 6th) when we talked about V.A. loans and the difficulties they present, loan modifications and how they are the new "unicorn" in the real estate industry, appraisals and how that is the new "dirty" word in real estate and some other good stuff. So, give it it a listen and be kind, I'm very sensitive.
Click on the title to hear yesterday's podcast.
God Bless.
Thursday, February 4, 2010
Less
What it look like, People?
Yikes! Realtors are running for the hills. The gold rush in California real estate has been over since mid '06 and the # of Realtors who got out of the game are representing.
The # of licensed Realtors fell 29,247 in California during '09. Down 5.5% in '09 and down 12% since '07. Oh my! That's mucho less real estate phone calls and people knocking on your door. Have you noticed fewer people with little shiny badges stating their name and realty association with forced smiles? How about people preaching the good gospel from "our first lady of the market is just fine and do not pay attention to depreciation and now is the perfect time to buy/ sell" church? Less bench ads, less mailers and less vanity license plates stating "#1 in SD".
This stat doesn't even talk about the people with an active real estate license who aren't working as a realtor anymore.
What does it mean? I do not know. Hopefully it will shake out all of the unprofessional in the real estate industry.
Prediction: This year the # will change. How's that for cowardly?
Read what the Orange County Register says (not exactly the Wall Street Journal) on the subject by clicking on the title.
God Bless.
Yikes! Realtors are running for the hills. The gold rush in California real estate has been over since mid '06 and the # of Realtors who got out of the game are representing.
The # of licensed Realtors fell 29,247 in California during '09. Down 5.5% in '09 and down 12% since '07. Oh my! That's mucho less real estate phone calls and people knocking on your door. Have you noticed fewer people with little shiny badges stating their name and realty association with forced smiles? How about people preaching the good gospel from "our first lady of the market is just fine and do not pay attention to depreciation and now is the perfect time to buy/ sell" church? Less bench ads, less mailers and less vanity license plates stating "#1 in SD".
This stat doesn't even talk about the people with an active real estate license who aren't working as a realtor anymore.
What does it mean? I do not know. Hopefully it will shake out all of the unprofessional in the real estate industry.
Prediction: This year the # will change. How's that for cowardly?
Read what the Orange County Register says (not exactly the Wall Street Journal) on the subject by clicking on the title.
God Bless.
Wednesday, February 3, 2010
Deficiency Judgement Or F... You, Pay Me.
Yo People.
Ray Liotta's character in "Goodfellas" said it best, "F... you, pay me! That's what's going on in the foreclosure and short sale world. You fall on hard times and you can't continue to make your mortgage payments. The bank says "give us 'da money". You say "I can't. I lost my job, I have a sixth grade education and a broken hip". The bank says "we'll take your house you expletive". You say "that sucks, but I understand & you gotta do what you gotta do". So, the bank either forecloses on you or maybe they'll allow you to do a short sale. In either case, you could owe them the deficiency amount. Huh? You could owe the bank what they eventually lost.
If you owe $300K and the bank only gets $200K (just simple math, there are all kinds of fees and expenses but it's all bottom line stuff) you will potentially owe the bank $100K. But you got the house? F... you, pay me. You said I could do a short sale? F... you, pay me.
Here in California there is a situation where you will not owe that deficiency. It's called non-recourse. It means if the money borrowed was used to purchase your home (not money to remodel, send kids to college or fix your broken hip) the banks have no recourse to come after the deficiency. Nice.
If you are in that situation where your mortgage is becoming too unbearable you need to talk to your accountant, your realtor and perhaps a bankruptcy attorney. These people will protect you as much as possible.
Read the article from CNN Money by clicking on the title.
God Bless.
Ray Liotta's character in "Goodfellas" said it best, "F... you, pay me! That's what's going on in the foreclosure and short sale world. You fall on hard times and you can't continue to make your mortgage payments. The bank says "give us 'da money". You say "I can't. I lost my job, I have a sixth grade education and a broken hip". The bank says "we'll take your house you expletive". You say "that sucks, but I understand & you gotta do what you gotta do". So, the bank either forecloses on you or maybe they'll allow you to do a short sale. In either case, you could owe them the deficiency amount. Huh? You could owe the bank what they eventually lost.
If you owe $300K and the bank only gets $200K (just simple math, there are all kinds of fees and expenses but it's all bottom line stuff) you will potentially owe the bank $100K. But you got the house? F... you, pay me. You said I could do a short sale? F... you, pay me.
Here in California there is a situation where you will not owe that deficiency. It's called non-recourse. It means if the money borrowed was used to purchase your home (not money to remodel, send kids to college or fix your broken hip) the banks have no recourse to come after the deficiency. Nice.
If you are in that situation where your mortgage is becoming too unbearable you need to talk to your accountant, your realtor and perhaps a bankruptcy attorney. These people will protect you as much as possible.
Read the article from CNN Money by clicking on the title.
God Bless.
Tuesday, February 2, 2010
Legal VS Moral And Your Deposit $
Hi People.
The difference between legal and moral is a very gray line. The law is only man's feeble attempt at justice. That's why there are so many people who get mad at a court's decision to punish too lightly or too severely in any type of legal scenario, from a terrorist to a jaywalker.
Same goes in real estate where the law usually comes down to what's in the contract.
So, first of all, know what's in the contract! Don't let it come down to "but I thought that meant....", it does not matter. What you thought is irrelevant, it's what you signed.
But, there are plenty of situations in real estate where you might have to sign something, even if you don't like it that much, in order to buy or sell a home.
A good example of that is the contingency periods on a contract. If you're a buyer in competition for a house you might accept a shorter or stricter contingency period, leaving your deposit a bit vulnerable. If you're the seller & only one person wants your house and they want certain contingency periods elongated, then you might have to or possibly lose that buyer.
But, either one of the scenarios does not eliminate your right to fight for the deposit if something goes against you when the contingency period is not on your side. I only suggest doing this when you feel that you have been wronged and that you are morally correct. Otherwise you're kind of creepy.
If you are a buyer in escrow and your contingency periods are up and something happens where you can not go through with the purchase, the seller will want to keep your deposit. If you think you're being screwed, fight him. He can't (or at least he's not supposed to) open a new escrow without cancelling (everyone has to sign this cancellation to make it valid) the current escrow. Meaning, he can't resell his house without all parties agreeing on the cancellation.
If you are a seller and the buyer still has his contingency periods you have hardly any leverage. You want to resell your house and the buyer (contractually) is in the right. If you get a new buyer then just sign the cancellation that gives the buyer their deposit. But, if you feel you have been wronged do not sign the cancellation until you get a new buyer. While you're waiting for a new buyer try to negotiate with the old buyer that you keep some of the deposit money.
In either case, the only thing the other party can do is threaten to take you to mediation, arbitration or small claims court. Don't go. Negotiate up to that point and if they don't budge, sign the cancellation because you will lose. When you do lose you will be stuck with the court costs. It does not matter if you are morally right, the courts do not care.
Whatever your situation, go with what your heart says. Trying to jerk someone will come back on you.
God Bless.
The difference between legal and moral is a very gray line. The law is only man's feeble attempt at justice. That's why there are so many people who get mad at a court's decision to punish too lightly or too severely in any type of legal scenario, from a terrorist to a jaywalker.
Same goes in real estate where the law usually comes down to what's in the contract.
So, first of all, know what's in the contract! Don't let it come down to "but I thought that meant....", it does not matter. What you thought is irrelevant, it's what you signed.
But, there are plenty of situations in real estate where you might have to sign something, even if you don't like it that much, in order to buy or sell a home.
A good example of that is the contingency periods on a contract. If you're a buyer in competition for a house you might accept a shorter or stricter contingency period, leaving your deposit a bit vulnerable. If you're the seller & only one person wants your house and they want certain contingency periods elongated, then you might have to or possibly lose that buyer.
But, either one of the scenarios does not eliminate your right to fight for the deposit if something goes against you when the contingency period is not on your side. I only suggest doing this when you feel that you have been wronged and that you are morally correct. Otherwise you're kind of creepy.
If you are a buyer in escrow and your contingency periods are up and something happens where you can not go through with the purchase, the seller will want to keep your deposit. If you think you're being screwed, fight him. He can't (or at least he's not supposed to) open a new escrow without cancelling (everyone has to sign this cancellation to make it valid) the current escrow. Meaning, he can't resell his house without all parties agreeing on the cancellation.
If you are a seller and the buyer still has his contingency periods you have hardly any leverage. You want to resell your house and the buyer (contractually) is in the right. If you get a new buyer then just sign the cancellation that gives the buyer their deposit. But, if you feel you have been wronged do not sign the cancellation until you get a new buyer. While you're waiting for a new buyer try to negotiate with the old buyer that you keep some of the deposit money.
In either case, the only thing the other party can do is threaten to take you to mediation, arbitration or small claims court. Don't go. Negotiate up to that point and if they don't budge, sign the cancellation because you will lose. When you do lose you will be stuck with the court costs. It does not matter if you are morally right, the courts do not care.
Whatever your situation, go with what your heart says. Trying to jerk someone will come back on you.
God Bless.
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