BloodhoundBlog

There’s always something to howl about.

Author: Brian Brady (page 17 of 27)

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

March 29, 2008

Facebook Made Easy: A Tutorial For Marketers

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Travis Greenlee, on www.facebookmadeeasy.com, produced a Facebook tutorial that outlines how to get up and running. He gives it to you in five 3-4 minutes videos. Grab a pen and legal pad and take some notes instead of watching the Brady Bunch rerun. In thirty minutes, you’ll have a clear understanding about how to use a social utility to meet referral partners and/or customers.

Travis has a weblog and specializes in teaching “solo-professionals” (sound like any of us?) how to benefit from online marketing. His podcasts are short and informative.

If you’re coming to Unchained, the Facebook Made Easy tutorial is required viewing for The Way of the Hunter session, with me. For extra credit, subscribe to Travis’ podcast. For independent study, Listen to his free “Expert Training Series” or watch his free Virtual Practice Builder webinar.

March 24, 2008

The Real Estate Bailout Act of 2008

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

When successful financiers achieve a certain level of success, they up the ante and practice social engineering. Robert Rubin, Jon Corzine, and Hank Paulson  advanced to government service after piling up the pesos at Goldman Sachs (in financial circles, we say those two words with hushed reverence). After decades of whipping and driving the markets, the titans answer the call of noblesee oblige and decide to play with EVERYBODY’s money. While I haven’t risen to the austere positions Messrs Corzine, Rubin, and Paulson have, my friend Nick and I

have a little idea about how to save the American real estate market.

Let’s start with the premise that lenders are taking 20-30% hits on short sales. Then, let’s have the US Treasury loan 30% of the balance, of the aggregate debt, to homeowners whom request it, in order to pay down the first mortgage (or second mortgage). If I have $200,000, in aggregate liens against the property, the US Treasury will lend me $60,000, to pay down those aggregate liens, to $140,000. This reduces the lenders exposure.

What type of loan will the Treasury make to homeowners?

The term can be for the lesser of:

1- the remaining term of the first mortgage

2- 65 less the age of the primary borrower.

The interest rate can be the corresponding term treasury rate, plus .5% (for administrative costs). Maybe we can use some of that “yield spread” to coerce a few mortgage brokers to “originate” this government debt (okay, that was completely self-serving). For a 42 year old, with a 27 year term on his first mortgage, the term of this new government loan (in second position) would be 23 years (65-42=23). If a 23 year treasury bond yields 4.1%, than the note rate for the new loan will be 4.6%.

The borrowers never have to make a payment on this debt; it accrues like a negative amortization loan. In the aforementioned example, the balance would grow to about $168,000, after 23 years. With a first mortgage paid down to $140,000, we’re banking on Read more

March 23, 2008

JP Morgan Ups Bid For Bear Stearns

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Have we reached the bottom of the credit crisis? Not likely but we are definitely going through, what Barry Johnson calls, price discovery.

From The New York Times via Yahoo News:

JPMorgan Chase & Co (JPM.N) is in talks to increase its offer for Bear Stearns CosBear Stearns, (BSC.N) to $10 per share in an effort to pacify angry shareholders of Bear Stearns, the New York Times reported in its online edition.

“The Fed, which must approve any new deal, was balking at the new offer price on Sunday night after several days of frantic, secret negotiations,” the newspaper reported, citing people involved in the negotiations.

I said, earlier this week, that this deal may very well QUANTIFY the bottom:

Here’s the part we’re all forgetting. 30% of the Bear Stearns stock is owned by the employees and Joe Lewis own another 10%. Both these “stakeholders” are a tad more than pissed at the weekend looting that happened when the power went out at Bear. Thursday, the stated book value was some $80. The value of their headquarters’ building is eight bucks a share. Manhattan real estate was supposed to be holding up pretty well in this real estate decline. I “get” lowball offers but 20 cents on the dollar for the building and firm that comes with it?

I reported that this was an asset play for JP Morgan, last night; they certainly assume some risk with Bear’s mortgage-laden portfolio. I thought the offer was scary, not derisory when I saw it. A pit formed, in my stomach, when I thought that valuations were THAT low. If Bear Stearns, a respected securities form could be devalued THAT much by mortgages, what would happen to the economy?

Hunker down, folks! Hunker down for a heavyweight fight between Joe Lewis and Jamie Dimon. The currency trader versus the bean counter. The cowboy versus the storekeeper. If we’re fighting about WHERE the bottom is , today, the bottom might be just around the corner.

In my annual market report, I said:

Today, we can feel the bottom amidst the Read more

March 20, 2008

HousingPanic ALMOST Got It Right: How To Overcome Commodization By Employing The Dollarization Discipline

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Housing Panic (housingpanic.blogspot.com) ALMOST got this one right.

I frequent Activerain.com; I cut my blogging teeth there and have made many friends and business connections through Activerain.com. Though I criticize the site frequently, I criticize it because I love the sense of community there and want it to thrive.

New Bloodhound, Barry Cunningham, hosted Broker Bryant (see Bloodhound interview here) on RealEstateRadioUSA, Tuesday. The topic was defending the fees you charge your customers. The interview is pretty interesting and the Barrys couldn’t quite get Broker Bryant to articulate it the way they might have liked. I’m lucky; I know the Barrys and listen to RealEstateRadioUSA. I think they were looking for a practitioner to properly define the services he offers and “dollarize” the offering- Bryant didn’t do that.

Broker Bryant defended his position, on his Active Rain web log, and tried to flip the question around to the Barrys. I think Bryant walked in unprepared for the interview. He usually does an excellent job defining his value, in public, and has hundreds of happy clients who comment on his ActiveRain web log. I don’t think the Barrys wanted Bryant to line-item his “costs” as much as they wanted him to line-item the value the costs incurred bring to the consumer. The Barrys are quite meticulous about defining your value to a consumer; I remember that on each and every customer call, now.

Here’s where the Housing Panic boys ALMOST got it right. They exposed a featured post, on Active Rain, about how fees are split. REALTOR Kim Carpenter did a great job with graphics explaining how she greases lots of people to get a house sold. That’s EXACTLY what a consumer DOESN’T WANT TO HEAR. I don’t care who YOU have to pay to sell my house, I care how much I pay to get my house sold. Here’s Kim’s conclusion:

So, there it is! Please don’t ask me to cut my commission. It has been cut! FOUR times, it has been cut! I promise I will give Read more

March 18, 2008

Will the Fed Buy Mortgage Backed Securities In the Open Market?

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

I never post my Mortgage Rates Reports here.  They’re boring unless you are thinking about buying a home or refinancing your mortgage.  Today, it seems plausible that the Fed is shifting its open market activities from buying treasuries, to buying mortgage-backed securities, in order to bolster liquidity in the mortgage industry.

Here’s what I said:

We call this phenomenon stagflation and it’s REALLY  bad for the economy.  The Fed has been aggressively cutting interest rates and the declining housing market is closing down mortgage companies, investment banking firms, and real estate brokerages.  What more can the Fed do to help?

The Fed can (and will) buy mortgage-backed securities. 

Rather than to buy treasury notes in the open market, the Fed will be buying mortgage-backed securities.  They will want to get those assets off investment banking firms’ balance sheets and provide stability to the MBS market.  Remember when I said that only the uneducated pay attention to the treasury note to determine the direction of mortgage rates?  Today is proof.

The spread between treasury notes and mortgage-backed securities has been widening these past six weeks. Why?  America was considered to be a sub-prime nation;  everybody was expected to default on their home loans.  Expect the Fed to prop up the MBS market in the next 4-6 weeks.  That will be bad for treasury notes and good for MBS.

Remember when I compared this to the junk bond crisis of the early 90’s and advised you not to panic?   Now is the time to take action.  There will be some great opportunities to lock into a low mortgage rates during the rest of this month.  If you’re closing a loan in less than 14 days, lock your rate.  Otherwise, float and see mortgage rates decline a bit.

Thoughts?  I don’t care if it’s good or bad policy, I care if its a realistic move on the Fed’s part.  I think they’re doing it now and will increase that activity in the near-term.  If I’m right, we’ll see lower mortgage rates and the Treasury/MBS spread will narrow.

March 17, 2008

Stealing Bear Stearns: Joe Lewis Ain’t Pulling Punches

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Joe Lewis taught us all what the word “derisory” meant today when he described the Bear Stearns sale to JP Morgan Chase. Lewis doubts the shareholders will approve the sale to Jamie Dimon’s financial services powerhouse.

Joe Lewis invested some 9 figures in the cash-strapped investment bank, last year. Bear Stearns cried poor on Friday, cut a deal with Jamie, over the weekend, and announced the sale Sunday night. The Fed lent JP Morgan the money to buy Bear Stearns. President Bush and Treasury Secretary Paulson endorsed the deal by 10AM PST today.

Fortune rewards the swift, no? Of course, I can’t forward lock a loan with Chase because I can’t get a wholesale lending rep to stop by my office and get me codes for their website. I’m guessing if I offered the $300,000 loan for ten grand, I might get a better response from Chase.

Here’s the part we’re all forgetting. 30% of the Bear Stearns stock is owned by the employees and Joe Lewis own another 10%. Both these “stakeholders” are a tad more than pissed at the weekend looting that happened when the power went out at Bear. Thursday, the stated book value was some $80. The value of their headquarters’ building is eight bucks a share. Manhattan real estate was supposed to be holding up pretty well in this real estate decline. I “get” lowball offers but 20 cents on the dollar for the building and firm that comes with it?

I reported that this was an asset play for JP Morgan, last night; they certainly assume some risk with Bear’s mortgage-laden portfolio. I thought the offer was scary, not derisory when I saw it. A pit formed, in my stomach, when I thought that valuations were THAT low. If Bear Stearns, a respected securities form could be devalued THAT much by mortgages, what would happen to the economy?

Hunker down, folks! Hunker down for a heavyweight fight between Joe Lewis and Jamie Dimon. The currency trader versus the bean counter. Read more

March 17, 2008

UNCHAINED: The Way of the Hunter

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

The BloodhoundBlog UNCHAINED Social Media Marketing Conference, brought to you by Zillow, was referenced by Teri Lussier, last night.

Greg Swann outlined his session, The Way of the Farmer:

Day 1, Class 2: The Way of the Farmer, dominating the Long Tail to dominate your farm Six 20-minute segments:

Segment 1 — Listing strong to farm strong
Segment 2 — Building single-property web sites
Segment 3 — Using engenu to dominate the long tail
Segment 4 — Zestifarming to dominate Zillow
Segment 5 — Blogging listings with engenu
Segment 6 — Belly-to-belly farming the Web 2.0 way

Here’s my session, Day 1, Class 1: The Way of the Hunter:

1- Why Ubiquity Works

2- Setting Traps- Sites that Can Expose You To Consumers
a- LinkedIn
b- Yahoo
c- MySpace
d- Facebook
e- Zillow
f- Trulia
g- Active Rain
h- You Tube
g- Gather

3- Baiting the Traps- providing relevant consumer content to match up with the community

4- Building a Community- getting eyeballs that keep coming back

5- Getting commitment- how to convert engaged consumers to permission based marketing participants

6- Channel marketing- building a referral network online

There’s our first morning for you. 4.5 hours of intense classroom work. We’ll have an accompanying workbook for all attendees and everyone will get a DVD of the event.

Keep in mind that the price is still discounted at $199.

I’ve heard tons of criticism about our pricing strategy; everyone remarks that we’re not charging enough. Greg and I recognize that 2008 is hardly a banner year for most folks. We further recognize that now, more than ever, practitioners need to learn about how to rework their marketing efforts to be more in line with consumer behavior.

Unchained is going to be a business saver for many folks; jump on the discounted conference fee while it lasts.

March 16, 2008

Bear Stearns Employees Wake Up To Tenuous Employment Prospects

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Bear Stearns employees will wake up on St. Patrick’s Day and wonder about their future. JP Morgan Chase bought Bear Stearns, a venerable Wall Street institution, for about 2.5% of the firm’s stated book value. The sales price was just 20% of the value of the Manhattan headquarters alone.

How safe are the jobs at Bear Stearns?

Jamie Dimon, JP Morgan’s CEO, cut his teeth in the brokerage and banking business under Wall Street legend Sandy Weill. He rose with Sandy as Weill made his comeback move after being ousted as American Express’ Chairman. Weill took control of Primerica and leveraged it through acquisitions of Shearson Lehman (bought from his nemesis, American Express), Travelers Insurance and ultimately Citigroup. Weill, and protege Dimon, were able to build the empire through cost-cutting in the name of economies of scale.

That doesn’t bode well for Bear Stearns’ employees.

Like the Countrywide/ B of A merger, we have a culture clash ahead. Bear Stearns vertically integrated into the mortgage industry, eventually owning its own wholesale lending channel. Bear violated the “Chinese Wall” securities brokerage firms try to respect; they bought their customers. JP Morgan owns Chase bank, a VERY conservative bank that owns a mortgage operation. The bean counters just bought the cowboys and in this era of “fiscal responsibility”, the cowboys will be kicked off the range.

Jamie Dimon doesn’t own a ten gallon hat.

JP Morgan bought Bear for its brokerage operations not its mortgage banking business. The $82 discount to stated book value suggests that JP Morgan will keep the prime performing mortgages, for its Chase Manhattan Mortgage portfolio, and most likely rid itself of all other mortgage assets. They can afford a helluva lot of losses on those mortgage assets with the discount they got.

What’s that mean to the mortgage market?

Less liquidity. While Bear Stearns Mortgage was reinventing itself to be a conservative lender, they were aggressively pricing their loans. Less liquidity and elimination of the price leader means higher costs, long-term.

Like their Countrywide cousins, Bear Stearns Mortgage employees Read more

March 14, 2008

Ashley Alexandra Dupree on AmieStreet.com: How To Profit When The Long Tail Search Is YOU

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Ashley Dupree turned into a media target, in 36 hours, and AmieStreet.com immediately started selling her tracks. In the tradition of making hay while the sun shines, Ash uploaded a new single, Move Ya Body and compiled an album, “Unspoken Words“, both offered on AmieStreet.com.

Look at the world we live in; social media marketing. Ashley Dupree was “outed” through her MySpace profile (which promptly drew over 2 million hits in 18 hours- after she took my advice) and started profiting off the exposure.

AmieStreet.com is an online music download site where the community determines the price of the downloads by “bidding” the price from FREE to 98 cents. Ash is maxed out at the top bid- for BOTH of her songs. While her Myspace profile has 6 million hits, her “page views” on Amie Street are over 264,000. Here’s the cool part; her “listens” are over a quarter of a million. Virtually everyone who clicks through to Ashley Dupree’s AmieStreet.com store is listening to her music.

Would we even be talking about this in 2004?

Of course not. Social media marketing was buying advertising links on MySpace or “cold-calling” people you met on LinkedIn. I tried it a few times and was confused about the ROI so I abandoned it. I focused on building communities on both sites, instead.

I’m fascinated by this whole Ashley Dupree story because the mainstream media came into OUR world, the Web 2.0 world, to break the story. Equally as fascinating is the fact that OUR world, the Web 2.0 world, allows Ash to immediately profit from her art. Ashley Dupree disintermediated the onerous process of a recording contract, studio time, and pre-release marketing and got her product to market in less than 36 hours!

We all talk about the “long tail search” and how we can profit immensely off the consumer niches exposed to us by the internet. What I’m learning from the Ashley Dupree story is that it’s no longer the big who eats the small, it’s the fast that eats the slow…which begets this Read more

March 13, 2008

Where’s Ashley Dupree’s MySpace? With A Few Lessons From Martha Stewart, She Could Have Been America’s Sweetheart

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Memo to Ashley Alexandra Dupree: America is the land of “reinventing yourself”. Ask Sidney Biddle Barrows, Vanessa Williams, Donald Trump, or even Daryl Strawberry how forgiving the American public is. Americans crave drama, revere celebrity, and have a sense of justice about them.

Mac Daddy El abused the public trust, as did Pete Rose; that’s a tough obstacle to overcome. Martha Stewart did the same but carefully atoned and controlled her public image to turn the greatest of haters around; that’s what we’ll discuss today.

How can Martha Stewart’s case study teach Ashley Dupree how to become America’s Next Sweetheart? More importantly, what can you learn from Martha’s PR/Marketing strategy to boost your online marketing efforts?

Who is Ashley Dupree and why do we care about her? Ashley is a budding songwriter and singer with a compelling story. She was cast into the limelight as Eliot Spitzer’s paramour; taking a few large a month for companionship. Now I don’t want to comment on the morality of prostitution; in 49 states, it’s illegal. Whether you’re an Emporer’s Club “provider” or a sex worker trolling Grand Central, the State of New York considers prostitution a crime. The allegations against Ashley have not been proven in a court of law and frankly, I don’t care if she did it or not. Why?

Most Americans view her actions as a private matter; one look at her MySpace profile shows that 5 million people have shown an interest in her. Many well-wishers have sent messages of support. Ash is getting some eyeballs. Let’s look at Martha Stewart’s case study to see how Ash can go from being just another R&B wannabe to America’s Sweetheart.

Martha Stewart built an empire selling crafts and lifestyle. The “ultimate homemaker” lifestyle turned into OmniMedia Corporation, selling magazines, producing television shows, and creating her own “lines” of products. That almost came crashing down some 4 years ago when she was convicted of insider trading.

I was in Las Vegas, with my securities trader friends, when the decision Read more

March 7, 2008

Mortgage Complaint? Welcome to The World Of Consumer-Policing at Zillow Mortgage

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

How can Zillow Mortgage become the online edition of the Better Business Bureau for mortgage lending?

It just did.

The future of consumer complaints is in transparency; breaking down the walls of the “smoke filled rooms” where industry insiders shear sheep and protect their own. This mortgage crisis has seen government response, spun as “consumer protection” but clearly designed to protect the mortgage industry. It sucks.

It sucks because the mortgage industry was a drunken frat party, from 2002-2006. Hustlers invaded our business and gang raped the borrower. First we slipped you a mickey by confusing the mortgage product offerings. Next, we practiced prestidigitation by getting you to focus on payments while reaping in enormous profits through secondary market transactions. Finally, when you couldn’t handle the intense pressure of your “new” loan, the government rallied around us like a college administration protects a red-shirted football star.

You (the consumer) are culpable, as well. You stuck your head in the sand and defined a long-term financial plan as the length of a mortgage prepayment penalty. You eschewed due diligence for the immediate gratification of an SUV or ATV, paid for by your withdrawn home equity.

Done. It’s time to heal.

You (consumers) need to start getting educated. You need a forum where you can get transparent answers to hard questions. You need to know that you’re talking to a mortgage professional who knows the difference between principles and principal.

We (the mortgage originators) need to know that we’re competing for your business against legitimate competitors, not some lead.bot service that parses your volunteered information and sells it to six of us.

You ( the consumer) need a public forum to air complaints about our service offering; real complaints. We’ll take forever to return phone calls, forget to disclose a loan condition, and change up loan terms as loan programs are canceled by lenders. That’s an unfortunate reality of the world I live in today. Demand for mortgage money is high while supply is low.

You can complain against me on the wide-open platform Zillow Mortgage provides.

…and I can Read more

March 7, 2008

Zillow Mortgage: Zoriginators’ Delight or Bane?

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Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Greg Swann covered the big Zillow Mortgage announcement so I won’t regurgitate the details here.  I will weigh in my opinion and speculate about the consumer offering.

I share Greg’s enthusiasm for an independent originator database.  The industry can’t get it together and the Federal government may be violating the Constitution if they remove the licensing authority from the states.  While the National Association of Mortgage Brokers contemplates, private industry acts; and act they did.  Here’s the other cool part; both banker-employed and broker-employed originators are required to register with Zillow and have their employment verified.  Zillow accomplished what the government couldn’t.

What Greg may have missed is that lead aggregators, like Lending Tree, really don’t offer much of a background check.  If the credit card is good, they’ll sell leads. What Zillow has done is to disintermediate the lead aggregators and that, is a good thing.  The unlimited access to consumers will be a great offering for originators because it will allow them to focus their efforts on delivering good customer service to Zillow readers.  Originators who are not good marketers or who desperately want a consumer-direct channel may find joy in the Zillow offering.

I’m not one of those originators because I focus my efforts on referral relationships with Realtors, accountants,  and financial planners.  I’m not one of those originators but I want to play.  Why?  The offer is just too damned interesting to pass up.  Competition will be key as Zoriginators try to compete for business.

Now, here’s my opportunity to be critical of the Zillow mortgage offering; they may attract the very least talented originators. We’ll see when the consumer offering comes out.  The traditional “order takers” of the mortgage industry ,with time to engage in anonymous repartee with consumers, are not the most talented of our industry.  In fact, they may lack the courage (and financial reward) to properly educate consumers about the appropriate loan product for their financial situation.  Let’s face it; if you create a model that encourages the commoditization of a financial product, you leave little incentive to attract the heavy lifters who educate and Read more

March 6, 2008

The Beat Goes On…and The Beat Goes On

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

The Fed reported that home equity is at its lowest since World War Two:

Homeowners’ portion of equity slipped to downwardly revised 49.6 percent in the second quarter of 2007, the central bank reported in its quarterly U.S. Flow of Funds Accounts, and declined further to 47.9 percent in the fourth quarter — the third straight quarter it was under 50 percent.

That marks the first time homeowners’ debt on their houses exceeds their equity since the Fed started tracking the data in 1945.

The total value of equity also fell for the third straight quarter to $9.65 trillion from a downwardly revised $9.93 trillion in the third quarter.

Home equity, which is equal to the percentage of a home’s market value minus mortgage-related debt, has steadily decreased even as home prices jumped earlier this decade due to a surge in cash-out refinances, home equity loans and lines of credit and an increase in 100 percent or more home financing.

Perhaps this is the cause?

U.S. mortgage foreclosures rose to an all-time high at the end of 2007 as borrowers with adjustable-rate loans walked away from properties before their payments increased, the Mortgage Bankers Association said today.

New foreclosures jumped to 0.83 percent of all home loans in the fourth quarter from 0.54 percent a year earlier. Late payments rose to a 23-year high, the organization said in a report today.

“We’re seeing people give up even before they get to the reset because they couldn’t afford the home in the first place,” said Jay Brinkmann, vice president of research and economics for the Washington-based trade group.

The solution to the first problem?  Let it happen.  Banks will close.  Wall Street will get hammered and the country will go into a recession.  The best way to cure a hangover is sobriety, not a “hair of the dog that bit you”.

March 5, 2008

Mortgage Fraud: Did You Do It?

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Mortgage fraud seems to be the hot topic, today. I attended a party this weekend where I was pelted with questions and varying opinions about the topic. Many came from the legal crew, a few from bankers, but most were from worried consumers. The former two groups scared the crap out of the latter. Each question that was posed was answered by each of these three parties:

CORPORATE ATTORNEY: Any lie on a federal form is a felony.

PERSONAL INJURY ATTORNEY: Were you coerced by the mortgage broker? Most clients were and you could sue for damages.

BANKERS: If it’s a portfolio loan, we may pursue legal action. If we securitized it, it was built into the pricing.

My opinions to some common questions, about mortgage fraud, are below:

If I obtained a loan as a stated income loan, did I commit fraud?

Not if you didn’t lie. Stated income loans were designed for those with erratic income or rising income. The best litmus-test would be to pull the 3-6 bank statements prior to application. If the monthly deposits mirrored your “stated” monthly income, you didn’t lie. If you grossly overstated that amount, you lied and probably committed fraud. Cash flow rules.

I bought a second home with the intention to use it as a vacation rental property. I financed it as a second home, did I commit fraud?

Not if you resided in it for at least 15 days each year. It’s a “vacation” home and if you used it for vacations, you’re fine. You are still allowed to rent out a vacation home.

I bought a property, in my daughter’s name, as an owner-occupied home but she rents rooms out to students. Did I commit fraud? 

FHA has the “kiddie-condo” program. Actually, that means that you can be a non-occupying co-borrower and still get a owner-occupied rate. If your daughter qualified on her own, and you helped her with the down payment by signing a gift letter, you might be liable for taxation but the transaction appears to be legit.

I have funky employment. It’s not steady so I coerced my existing employer to “fudge’ the dates on a Verification of Employment form. Read more

March 3, 2008

Hate Twitter ? Become A Media Mogul With It

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

I’m talking to Teri Lussier about Twitter, a lot. I didn’t get it until I decided to post relevant mortgage market information on the Twitter feed. Let’s assume you HATE Twitter (or just don’t get it). Let’s assume that you don’t have the time to Tweet.

Q: How can your business benefit by using Twitter?

A: Eyeballs- Be the destination place.

Think of Twitter as the television airwaves, twitter streams as “TV channels”, and your blog or website as the cable company. If you can host multiple channels (Twitter streams) on your website/blog, you win eyeballs. More importantly, you win loyalty as the destination place for real-time, user-generated information.

I’m starting an experiment, for Andy Kaufman to analyze, in his Twitter presentation at our upcoming Unchained conference. I’ll be asking input from Andy and Teri Lussier as I try this idea. The goal is to drive more traffic to my web log and become an information destination for potential customers;

I want to be San Diego’s Twitter Cable Company. Here’s my plan:

1- Create a landing page for my web log (www.TwitDiego.com) with a “channel guide” for Twitter streams,

2- Evangelize the utility of Twitter as an information tool to relatively low-tech users. The Saint James Academy Parents (and faculty), The Lomas Santa Fe Country Club, The Villanova Alumni in San Diego, Pacific Beach nightlife, Gaslamp nightlife, North County restaurant reviews, The San Diego State University, RealEstate.com agents, etc, etc.

3- Offer streams or “channels” to each user group.

4- Market www.TwitDiego.com to everyone I meet. I did this yesterday, at the beach, to a soccer mom. She’s setting up a Twitter account and accepted my offer of a webinar for the soccer moms.

Sit back and watch my mortgagereport profile on Twitter get more followers, my web log get more traffic, and my community grow.

This is a wild hare idea. All CONSTRUCTIVE comments or suggestions are welcome.

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