There’s always something to howl about.

Author: Brian Brady (page 19 of 27)

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

Conforming Loan Limit of $650,000, FHA Loan Limit of $729,000

A conforming loan limit of $650,000 and an FHA loan limit of $729,000 are being telegraphed as part of the Economic Stimulus Package of 2008.

Inman News reports that Congress backed a temporary loan limit increase to $625,000:

The government-sponsored enterprises, or GSEs, may soon be allowed to back loans up to $625,000 nationwide and $700,000 or more in high-cost areas, according to published reports on the negotiations.

The Bush administration had previously tied any increase to the conforming loan limit to tighter regulatory oversight of Fannie and Freddie, where accounting scandals led both companies to fire top managers and restate several years of earnings.

Of course, that’s only the first step; the proposal has to work its way through the Senate and be signed by the President. While the common knowledge has been that President Bush won’t allow a GSE loan limit increase without greater regulatory oversight, mortgage insiders believe that he backed off that condition today.

The word inside the Beltway is that the deal has been fast-tracked for approval (by The Senate and President) under the following terms:

1- GSE (conforming) loan limits will be temporarily increased to $650,000 and remain in place until 12/31/2008. That means that states like California, Illinois, New York, Massachusetts, and New Jersey will get some much needed relief.

2- FHA loan limits, currently locked at $362,790, will be recalculated to 125% of the county’s median price, with a limit of $729,000. This is useful for states like California where the conforming loans are subject to LTV decreases due to declining market conditions. FHA loans aren’t subject to those blanket LTV guidelines. This loan limit hike is expected to be permanent, unlike the temporary GSE hike.

Nothing is rock-solid; it’s all rumor at this point. The Senate will play with the numbers but the Beltway Crowd says that President Bush has signaled the loan limits he will support, today. Expect this to be a reality sometime between Valentine’s Day and St. Patrick’s Day.

Why the sudden reversal from Bush?

It’s the economy, stupid.

Housevalues.com Invades Activerain.com: Guerilla Warfare Needed

Housevalues.com invested close to $3 million in Activerain.com. I chuckled about the irony of a lead company paying for leads, yesterday. I also reported that the Active Rain community was politely swallowing this shocking news. You see, for 18 months, the little purple pill has always been, “If you blog it, they will come” (‘they’ meaning customers).

Jon Washburn’s community press release generated comments like this one, posted by Ann Cummings:

Congratulations on the funding. Like others, I’m no fan at all of any lead generation companies. And I’m glad to read Mike Nelson’s comment above about this not being that kind of opportunity for them nor an advertising opportunity for them. That was a concern of mine when I saw this announcement over on BloodHound earlier. Thanks for the clarification, Mike.

I hope this funding allows you to bring all kinds of great positive things to AR and Localism – that would be terrific indeed!!

Ann

No surprise there. Ann’s a nice lady and adopted the cautiously optimistic attitude I would expect from her. She’s hoping for the best but ready for the worst (if it happens).

Later, demons were exorcised by some (understandably) jaded members who felt that Housevalues “took” their money by promising a product that failed to deliver. On cue, the Housevalues advocates expressed their opinions. Greg Nino from Houston said:

House Values or any other lead generation company is the current future. In case anyone needs to be reminded, the Internet is where prospects turn into dollars and sense. A lead that comes from your computer or how it gets in you contact management system is a mute point. What does matter is that House Values has been instrumental in launching careers for some and sadly not able to spoil others.

I have concern for anyone outside my market who claims Internet leads are either a waste of time or a waste of money. Effort being left out because that is what usually is for the typical naysayer. If your in my market carry on with your thoughts. I Read more

Activerain.com and HouseValues.com- The Ultimate Irony

Activerain.com received a capital infusion to the tune of $2.75 million from Housevalues.com. It was announced on Inman News, posted here, on BHB, and explained on Activerain.

Housevalues has suffered an erosion of market value since its post-IPO “pop” in early 2005. It added 50% from its IPO price and held steady through out 2005. As the real estate market declined, so did the value of Housevalues.com; it’s stock price plummeted below $10, in May, 2006 and has steadily declined to its current sub $3/share.

While many members of Activerain.com are showing a stiff upper lip, they are exhibiting cautious optimism. Most REALTORs have had less than stellar results with the Housevalues.com advertising/lead generation platform and are wary of the portal’s high-pressured telemarketing operation.

What does Housevalues.com get for its $3 million? Activerain.com has 66,000 members, probably 10-15% of them active. While the press release from Jon Washburn states that the member’s content is not released to Housvalues.com, one would think that the investor has a first right of purchase for the remaining stock. If the rumor of the equity ownership is correct (35%), Housevalues could purchase the Company for about $9-10 million, members’ information and all.

What Move.com said was worth $33 million, Housevalues.com is buying at a substantial discount. Activerain has a “great franchise”, just like Countrywide does. What Bank of America saw in Countrywide, House Values sees in Active Rain.

I just think the irony of the lead generation company paying for leads is worthy of a chuckle. Hat tip to Jon and Matt for making the sharks pay for the meal.

Our story so far: Trying to keep up with developments in the ActiveRain saga? These are all the BloodhoundBlog posts to date:

Five Times More Effective Than E-mail ?

I explained how important it is to “bridge the digital divide“:

The phone call separates the wheat from the chaff, the signal from the noise, the serious from the frivolous. When attacked, on my home weblog, I offered a three-way call, to explain my math. The drive-by commenter scurried away, too important to deal with the likes of me. His attitude was that he wanted to win a blog comment war, not educate nor be educated.

Tim Sanders, a likeable expert, offers more credibility to my theory:

As I mentioned before in a previous post, research indicates that tone of voice is five times more effective at conveying your intentions than words on paper (or in an email). When you pick up the phone, you increase your effectiveness at resolving customer service issues.

The alternative is hiding behind email and hoping for the best.

Pick up the damned phone!  Enough said.

The Future of the Fishwrap Classifieds

Fishwrap: Thank you for calling the classified sales department of the Middletown Journal, Southern Middle County’s premier newspaper. How may I help you today?

REALTOR: Good morning, this is Bill Smith from Middletown Fine Properties, over on Pennsylvania Avenue. I just took a new listing and am holding an open house this Saturday.

Fishwrap: Congratulations, Bill! I’m sure you’ll sell that home in no time with our new Strategic Selling Program, here at the Journal.

REALTOR: Hmmmm…what’s up with that? Did you drop your classified advertising rates now that more people are going online to start their home search?

Fishwrap: Well, Bill, we actually raised our rates because of the added value we’re bringing you.

REALTOR: Added value? Uh, oh. Can’t I just advertise my open house?

Fishwrap: Bill, you know that 83% of the public is now going online to start their home search, right?

REALTOR: Uh, yeah. That’s why I subscribe to Realtor.com

Fishwrap: We go even better than that. Bill. What used to cost $85 for a classified ad in the Journal, now costs $125…BUT, we distribute your advertisement and listing information to Zillow.com and Trulia.com. We’ll also write a blog post for you on Activerain.com, Realtown.com, AND place your listing on Craigslist.org for you. We’re a one-stop advertsiing shop for Realtors now! Think of us as your local advertising agency to assist you with online media buys. If you allow us to throw in financing information, from Bank of America, and have them feature it on their real estate center website, the cost drops to the original $85!

REALTOR: …but…but…I use Brian Brady for all my client financing.

Fishwrap: Hold on, Bill. If First American Title places a banner across on your online ads, the cost drops to $55 for what used to cost you $85 ! How’s that sound?

REALTOR: Well, what has Brian really done for me lately? Furthermore, First American is a great brand name, what have I got to lose? Let’s go for it!

Fishwrap: Read more

Follow Mortgage Rate Movements On Twitter

I didn’t understand the allure of Twitter until I went to Inman Connect. I originally thought it was “text-chat” until I read Greg Swann’s post about microblogging on Twitter. Now, I offer Mortgage Rates Report, the “lock or float” service, on Twitter.

Click this link for my Twitter feed.

Here is what you can expect from the Mortgage Rates Report feed on Twitter:

1- Market sensitive updates- I’ll only tweet you if there is a move in the market with advice to float or lock.

2- Communication at least once a week.

3- I won’t be responding to questions on Twitter- just broadcasting market sensitive information

Buying Countrywide: Why Bank of America is the WRONG Buyer

Countrywide (CFC) has been acquired by Bank of America. This should come as no surprise to Bloodhound readers; we discovered the weakness at CFC last Spring and speculated about the price last Summer. Robert Kerr, Matt Heaton, and Bob Wilson, all Bloodhound readers, tipped me off to conjecture, asked all the right questions, and provided insightful commentary as I chronicled the descent; it was a demonstration of the power of weblogging. The Bloodhound community got this story correct while Wall Street was still starry-eyed about the strength of the “Mozilo franchise”.

Stock picking is not our mission at Bloodhound; industry analysis is. The Countrywide acquisition will be a nightmare for Bank of America (BA) for one simple reason- they really don’t know the mortgage business. BA is a bank, and a damned fine one at that. Their grew their asset base by acquiring regional banks. Bank of America is not and will probably never be a real player in the residential real estate finance arena.

Why? They’re bankers. It’s a cultural thing. Bankers react while brokers (Wall Street) create. Bankers imitate while brokers innovate. Let me give you some examples:

  1. BA lauds it’s Teacher Flex and Neighborhood Advantage programs as innovative thinking. The not so secret reason is that these loan programs were REACTIONS to the NCNB merger; NCNB had a less than enviable lending record in lower-income census tracts. The creation of those loan programs was a direct response to mandates imposed upon BA. BA was dragged, kicking and screaming, into the “homeownership mandate”.
  2. BA botched their sub-prime mortgage product line. They entered a business they didn’t understand and sold it at the worst possible time.
  3. Bank of America alienated over half of the retail origination channel when it cut off mortgage brokers. I think they bought CFC to shore up their weak retail origination business. That will fail, also. The cultural divide between these two companies is huge.

Here’s the dirty little secret for REALTORS; BA is not your friend. Read more

The Todd Kaufman Problem Is Your Problem, Too

I’ve been saying this ever since I started marketing on social networks:

PICK UP THE DAMN PHONE, PEOPLE!

Just look at this mess! Now, egos are involved so we’re now at a point of mutually assured destruction.

The digital divide. I’m talking about the importance of bridging the digital divide, next week. This debacle is yet another example of how dangerously potent misinterpreted information, transmitted on the internet, can be. The simple act of pressing ten digits can initiate a REAL connection. Try it with a commenter and you’ll be surprised with the result; you’ll make a friend for life.

Let me tell you my story:

I started writing here, last Christmas. I was having dinner, right before New Year’s, and checked my e-mail on my new, bad-ass cell phone…incoming Bawld-Mail; it was Jeff Brown. Rather than Twitter, e-mail, or comment on a blog post, I called him. That call was worth about 40 grand.

I’ve moderated a group on MySpace, for Realtors, since 2005. Before Active Rain came along, it was letting me peek at 4-5 loan opportunities a month. Active Rain? More profitable than the Jeff call. Christine Forgione chuckled about my yellow postcard but she knows who I am.

Ten digits. Ask Laurie Manny what happened when she put MLS search buttons on her blog. The phone numbers came streaming in…begging for help. No tweets- ten digits. Ask Rhonda Porter what happened when she closed comments on her weekly mortgage rate posts. The calls started coming in.

Unfair? Opaque to the consumer? Are we trolling to trick people into becoming leads when we insist on taking the conversation off-line? I don’t think so.

The phone call separates the wheat from the chaff, the signal from the noise, the serious from the frivolous. When attacked, on my home weblog, I offered a three-way call, to explain my math. The drive-by commenter scurried away, too important to deal with the likes of me. His attitude was that he wanted to win a blog comment war, not educate nor be educated.

Do you want to be even MORE powerful in your on-line marketing efforts? Try to set up a meeting, like investment guru Read more

Goals! by Brian Tracy

The concept of lifetime education is embraced by successful people everywhere. While a college education is an invaluable experience, most of what I’ve learned about sales, marketing, investing, and business has come from books, tapes, CDs, seminars and Russ-casts.

There are a lot of “success marketers” out there. Rather than criticize some of the fugazi, I’ll highlight one of my favorite authors, Brian Tracy. I started reading Brian Tracy’s sales training books some 10-15 years ago. Brian gives direct advice like “come to work an hour before everyone else”. What appears to be a 400-page “no-brainer” guide actually works if you implement his advice.

As luck would have it, Brian offices about 4 blocks from my home and has his mane coiffed at the same salon as I do. One afternoon, about 3 years ago, we shared neighboring chairs and I had a 20-30 minute conversation with the man. He graciously accepted my compliments and suggested I read his new book, Goals ! and the accompanying Goal Planner workbook. I have read it each December since that day.

Goals! was published in 2003 and explains the 7 key elements of goal setting and the 12 steps required to set and accomplish goals of any size. Suggestions like become an expert in your field, associate with the right people, and make a written plan of action are not furtive. Mr. Tracy gives actionable ideas for implementation that are written in plain English; no metaphysical overtones nor MBA-speak.

The Goal Planner is not a workbook of revelation. If you perform the simple exercises, over a 30-day period, the ten bucks spent will be returned within the first 60 days. It’s not a bad way to kick off the new year.

Brian Tracy International has a whole goals package available but most of us won’t take the time to watch the DVDs and listen to the audio. If you want some simple direction for the new year, grab the book and workbook, spend a weekend reading, and start 2008 with clarity.

Happy New Year Read more

Mortgage Cicerone: Tony Gallegos

Tony Gallegos posted his top bloggers’ list of 2007.

Many of the lists published are a beauty pageant and none, to this date, mean a whole lot to MY industry; residential real estate finance. Tony’s participation in MTG.net is a measured and intelligent position. It has to be; Tony is a senior executive for a big bank. While the originators were bickering with The X Broker, Tony was pointing out the strength of both sides’ arguments. When I chronicled the curse at Countrywide, the Countrywide employees went bonkers. Tony offered measured but cautionary advice to those folks about the reality that lurked in the bowels of the balance sheet.

If you’re a loan originator, Tony’s the real deal. He closed 400 units in one year. Here’s the trick; he did it with one processor, no team…just one processor. What this whole thing means, if you’re a loan originator, is that you listen to Tony Gallegos and you read The Mortgage Cicerone. If strength comes from restraint, Tony is the modern day Charles Atlas. While you won’t see him writing many opinion pieces (as bank executives shouldn’t), you will see him pointing you to relevant information…like a guide, a Cicerone.

The Mortgage Cicerone points us to three unsung voices in his 2007 list:

Joe Zekas from Yo! Chicago. I met Joe, on Active Rain, last year. One thing I’ve learned to dread is the Zekas comment; they’re always incisive and usually correct. Joe takes on the MSM in this post but don’t start cheering. Two of my favorite Zekasms are his take on treating people like leads and his rules for what NOT to do on a weblog. Even more astounding are: 1. some genius hasn’t called him arrogant and 2. there is no Fake Joe Zekas blog floating around the internet.

Brett Rogers, of BeatCanvas.org , offers intelligent commentary. His post, The Second Handers, summed up my thoughts about the rugged individualism that made this country great.

Dan Melson, of Searchlight Crusade, is one Read more

Unchained Social Networking: Setting Up a Facebook Profile

I was a latecomer to Facebook. I was an early adopter of MySpace and, as a marketer, still prefer the open access to user data MySpace provides. Facebook profiles are “closed” to the public unless you have a “connection”. As a user you may love that but as a marketer it’s a little bit annoying.

Facebook is better for social networking with contacts and/or friends than MySpace. They encourage independent developers to create applications for Facebook users. Facebook is much more “geeky” inasmuch as you can customize your profile with widgets while MySpace does not. It is a great resource for pure “pull” marketers; we (if you are playing my game) are not pure “pull” marketers; we gently push people.

Facebook’s closed access reminds me of the original LinkedIn gated access feature. LinkedIn realized that the gated access feature inhibited utility so I suspect that Facebook will ease it’s restrictions in the near future.

Once in, the applications ARE terrific. You can throw sheep at your friends, “poke” them, and do other adolescent things if you wish (but we don’t care about them). Some of the useful professional applications for our kind are are RSS feeds to a blog, CribFinders, etc.

Let’s get started. Go to www.Facebook.com

1- Click the green “sign up” button

2- Let’s stick with the personal profile. The “business” profile has limited reach. Fill out your name AND “at a company” in the drop down menu. This is important because you may have a greater reach across “networks” if you work for a large franchisor, like Keller Williams. Use your professional e-mail address; that determines your access. Fill out your password selection, birthdate, and captchka, and hit SIGN UP.

3- Retrieve your confirmation e-mail and click the activation link.

4- Use the “Find Friends” link and import your address book. It’s safe; they don’t e-mail your friends nor store that data. You control the invitations. When you’re finished, click “next”.

5- Populate the profile information. Entering your company data and alumni affiliations are important to future networking capabilities.

6- Read more

Unchained Social Networking: Setting Up A LinkedIn Profile

LinkedIn is the first social network I joined. I received an invitation in 2003. Back then, the network was dominated by tech types networking for jobs. I set up a profile and was BLOWN AWAY by the rich user-provided content. I was a National Sales Manager, in 2003, and new to San Diego. I used LinkedIn to connect with loan originators (to recruit) and potential clients (the refinance craze was underway in 2003).

Unchained Rule #1 of Social Networking: Bridge the Digital Divide

Jeff Brown is a master at this. If Jeff makes a connection, on the internet, he does some homework (click through to a blog, Googles their name) to see if there is potential synergy. Jeff then calls them and introduces himself.

I did the same thing in 2003. I keyword searched, on LinkedIn, to see if I could find Villanova alumni, Knights of Columbus, and independent stockbrokers in Southern California. The first two were affinity groups and the latter was my ideal referral source. I Googled the potential prospect’s name and found contact information for them. I called and introduced myself to them IN A NON-THREATENING, LOW KEY manner. The responses ranged from annoyance to acceptance, heavily laden with surprise. Most tech people were communicating through the “gated-access” approach that was the signature of Linked In. I had more success than failure with my “digital bridge” call. If you’re polite and professional, most users respond well.

Okay, let’s get you set up. Click here to get to the start page. This will open in a new window so you can follow along with my instructions.

1- Click the yellow “Join Now” button at the bottom of the page.

2- Fill out the contact information. Use your primary, professional e-mail address. Click the “Join LinkedIn” button.

3- Fill out the user survey for how you might use LinkedIn- click “Save Settings”

4- Start building your network three ways:

a- import your e-mail contacts (extremely safe and they don’t spam anyone)

b-“Reconnect” with past colleagues through a company Read more

Florida First, Certainly California, Next Nevada,and Absolutely Arizona

Lenders don’t love us no’ mo’. Want a vacation crib in Miami? How about an investment property in Orlando? Show up with 40%, no seller carry-backs allowed, thankyouverymuch.

This e-mail came in this morning from IndyMac Bank :

Florida Guideline Restrictions

Transactions securing properties located in the state of Florida are subject to the following restrictions/limitations:


For all Loan Programs:

  • All loans are restricted to Full Documentation

  • Primary Residence transactions:

  • – The maximum LTV and CLTV otherwise available for the transaction type must be reduced by 5%.
    – The Borrower’s current primary residence must be sold and closed prior to,
    or concurrently with Indymac’s funding.
    – If the to-be-secured property is a single family residence, condominium or planned unit development, it must be located within an established project. An established project is one in which 90% of the total project units have been sold, and the subject property has been previously occupied / owned by someone other than the developer.

  • Second Home and Investment Property transactions are limited to a maximum 60% LTV / CLTV.

Remember I said, back on April 1, 2007 that IndyMac was conservative? Every other lender followed suit. Today it’s Florida; the other three states will be next. This is why my outlook for housing in 2008 is bleak.

Do not despair, though. While this will virtually halt activity it will “right-price” (that’s my new phrase) the market…QUICKLY. Expect Florida prices to drop like a ball off a table, in February, when the rest of the lenders pucker.

…and then there will be buyers. Oh, there will be buyers.

PS: If I sound giddy it’s because the “muddy waters keep getting clearer” and I can see the bottom.

Technology is a TOOL Not a Solution

There is a formidable conference, next month, that entertains the marriage of technology and real estate. I’ll be sharing the stage with one of the guys who started the whole RE.net, Dustin Luther. Kris Berg, Jim Duncan, Dan Green, and Jay Thompson, all giants in this space, will be contributing to the collective conversation as featured speakers.

Technology and real estate brokerage is an extraordinary marriage that is approaching its 10th or 15th anniversary, amid a misunderstood and sometimes tumultuous relationship. If you attended one on Dustin Luther’s “Relevance on the Internet” seminars, you might remember his history of the courtship. Dustin explained that the tech guys saw the large margins in our businesses as an opportunity to profit off of market inefficiencies. Of course, when they got their heads under the hood they found that the engine runs a little differently than they thought.

Online mortgage lending seemed to be the easiest way to disintermediate my kind. My kind responded with an explosion of product offerings that made the consumers beg for a helping human hand. Today, as the popularity of the 30 year fixed conforming loan is rising, the opportunity to disintermediate, once again, seems imminent. The need to “de-commoditize” your service offering, as a mortgage adviser, is more prevalent now than ever before. The banks and government are conspiring to limit consumer choices and do away with my kind in a cartel-like affront not seen since James Fisk and Jay Gould tried to corner the gold market, in 1869.

Advise and timely execution is all an independent mortgage originator has to offer, right now. Our “wholesale access” to residential real estate capital is dwindling and the information advantage we hoarded is being liberated by the transparency of information technology. Yet the very tool that contributed to our demise, information technology, can be the most important weapon in our arsenal as we fight our way to survival.

Success in this game will be a migration towards the concept of fiduciary from the bonds of functionary. If the consumer values you as Read more

Some of the Many Are Consumers

I went to a high school run by the Jesuits. Think “Dead Poets Society” with Roman collars. The teachers were a little bit Pope John Paul II, a whole lot of Vince Lombardi, and, as is necessary to the development of young men, a healthy amount of Thomas Jefferson. The Jesuits are often admired for their ability to develop the “whole man”: intellectual, athletic, social, and most importantly, moral.

We were encouraged to be irreverent in the reverence of our school. The very irreverent actions we engaged in were seen by the Jesuits as an exhibition of curiosity. Pranks performed, under the guise of “school spirit”, were not only tolerated but encouraged. When it was suggested that one of our rival’s star basketball players was being bribed to attend a certain college, we waved checks in the stands when he attempted his free throws. Brother John, the Prefect of Discipline, may have handed down the ceremonial J.U.G. that day but the practice of pranks was generally tolerated.

Rarely did our pranks elevate to the status of unconscious insult. I say “rarely” because it did happen, about once a year. When it happened, it was usually the product of a good intention with garnered support from the crowd. In short, we took it just a bit too far without the forethought of the consequences of our actions.

The consequence was much harsher than a JUG; it was a speech attacking our moral fiber by none other than the President of the school. That sage old priest, a modicum of morality, started off the admonishment with a request to “walk a mile in the victims’ moccassins” and ended with the horrendous revelation that we, in our ignorance, injured some (or many) of those without the benefits we had.

Ouch! That admonishment always resulted in a bevy of boys, walking around with humble and contrite hearts, wondering if we would ever amount to the “whole man” St. Ignatius Loyola envisioned.

I’m going to digress from the high school story but I’ll bring it Read more