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Category: Dirty Laundry (page 3 of 9)

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December 18, 2009

Unchained melodies: Real Estate’s 50 Most Inconsequential Online

by

Suburban Phoenix Real Estate Broker

Author website

Apparently I have been voted onto the Inman “News” list of Real Estate’s 50 Most Inconsequential Online. I have no direct evidence of this, just a bunch of tweeted twaddle that Tom Johnson turned me onto last night. Needless to say, I don’t plan to spend $80 to feed my already quite corpulent vanity.

This is my third or fourth year on the receiving end of this evolving “honor,” and, with some exceptions, Inman’s list is comprised of a company I am less and less comfortable keeping. BloodhoundBlog has always been about the consumer for me, and about practitioners who know how to put the consumer first. Alas, the RE.net by now just looks like more of the same — more sleazoids looking for ways to sucker broke-ass agents into paying three bucks a pop for rotten eggs. Deadwood was a fun TV show, but I don’t want my name soiled by the real estate equivalents of Al Swearengen.

I do want to take a moment to apologize to Brad Inman, though. I have offered up what I thought was sound business advice to the man — coated, to be sure, in what might seem to be a bitter pill. But I had assumed that Inman was a grown-up, and, as a demi-billionaire, presumably capable of dealing with a certain amount of acerbic wit. It turns out though — as certain lyrical twitterbirds have pointed out to me — that Brad Inman is in fact an infantile encephalic retarded paraplegic with a harelip — and thus my jibes aimed at him were not sporting. This, at least, is the only conclusion one can draw from the plaintive tweeted bleatings about my criticisms of Big Bad Brad that have emerged from other names on Inman’s list of Real Estate’s 50 Most Inconsequential Online.

Which is, just by itself, a good reason to say to hell with the whole magilla.

Meanwhile I can think of only one tune so perfectly suited to the occasion, Big in Japan by Tom Waits:

If you want to do right by your clients, you have no need to lean on me as Read more

December 14, 2009

The Rates Aren’t The Only Thing That Matters….. (My thoughts on how to create healing in the housing market)

by

Mortgage Officer

Author website

A couple of thoughts about this article from the New York Times:

  • It’s true.   Anecdotally, I’d have to say that depending on the day, anywhere from 30-50% of the people who I discuss refinancing with are either not able to do it because their income has fallen or because property values have dropped.  Now wait, you’re probably thinking, “I thought that the government was allowing people to refinance even if their mortgage was over 100% of the value of their property.    They are, but there are a couple of caveats to that:
  • The loan has to be with either Fannie Mae or Freddie Mac and a substantial portion of the market isn’t with either one of those.   If you want to find out whether your loan is with either one of them, check Fannie Mae Loans or check Freddie Mac Loans to find out.
  • If you have a second mortgage/home equity line of credit on your house and the combined balance of the two loans exceeds 105% of the value of your home (but is less than 125%) then you can still refinance, but the pricing adjustments that Fannie and Freddie charge are so extensive that unless your interest rate is over 6%, it’s probably not worth refinancing.
  • If you are like a LOT of people in today’s economy, your credit score isn’t quite as high as it used to be.   It might be because you’ve had struggles to make some payments on time, it might be because you’ve had some of the credit lines cut on some of your credit cards (thereby lowering your credit scores because you’ve got too much of your available credit tied up), it might be a variety of reasons.   But the end result is the same.   In order to get the best possible rate, you need to have either:
  • A 5% equity position in your house and no second mortgage or
  • A first mortgage of no more than 80% of the Read more
December 1, 2009

HAFA, HAMP and other assorted worthless acronyms….

by

Mortgage Officer

Author website

Okay, I’ve got to admit, it’s been one of those days, but I can’t stand by and not say what I’m thinking about this new “short sale” program.    I’m already hearing a lot of Realtors and others saying, “This is great news!”    Well, hold on a minute…..

I’m going to go through some of the main points of the HAMP Update that was issued yesterday and that our President spoke about today.    You can find the entire thing at Hamp Update if you want to read it for yourself.  If you want to read the entire directive, you can find that at Directive.   The bold and italicized portions are quotes from the official documents.   The regular print is my thoughts…….

Supplemental Directive 09-09 provides guidance to servicers
There’s the first clue that something’s not going to go well.   It provides guidance. 

The definition of guidance according to Wikipedia is: Advice (opinion), an opinion or recommendation offered as a guide to action, conduct. 

See where the problem is?   It’s guidance, it’s not mandatory.   So, Uncle Sam can say, “Now, Mr. Banker, you really should do this……”    And the Banker can say, “(Well, we really shouldn’t print that.)”

provides servicers with the option to determine the extent to which short sales or deeds-in-lieu will be offered under this program.  (This is actually from the Directive).    

It provides options.   It allows the servicer to determine the extent to which they offer them under this program.

So, once again, what do we have?   We have Uncle Sam saying, “Now, Mr. Banker, it would be really nice if you did this……”   And the Banker can say, “____________________.”

The effective date of this Supplemental Directive is April 5, 2010.
Excuse me, but what the heck is the rush for?   I mean, they rolled out the HASP refi program to lenders the day that they made it public to consumers so we were getting calls on it before we even knew what was what.    Now they are giving the banks four months to decide whether they want to participate?    Why not next Monday?

With either the HAFA short sale or DIL, the servicer may not Read more

November 26, 2009

A look back at the last decade in real estate, what I got right, what I got wrong — and where things go from here

by

Suburban Phoenix Real Estate Broker

Author website

My friend Andrew Breese asked me to go through my own history, in light of both the real estate boom and the bust, detailing where I was wrong and where I was right.

Very big job, and it would be a long essay to write, so I’ve elected to go through it in video instead.

Click on the graphic below to watch the video.

November 25, 2009

What am I thankful for? That we surfed the payables and survived!

by

Suburban Phoenix Real Estate Broker

Author website

This time last year, I crashed my car, totaling it. We used the insurance money to pay off our most urgent bills, so we weren’t able to replace it for quite a while. We had an old Mercury that I used until its lack of a working air conditioner made that impossible. After that, I rented cars when I needed to show. For three solid months I escorted buyers in an amazingly awful rented Ford Taurus. It was literally painful to drive — backache-inducing — but it was only $500 a month to lease.

The last two quarters of 2008 and the first two quarters of 2009 were all action, no traction, so we lived by surfing the payables — paying nothing before it absolutely had to be paid, and paying nothing at all on bills that didn’t have to be paid — including the mortgage.

And that’s a story that had a deferred happy ending. We got hit with a foreclosure notice much earlier than I was expecting. Business had picked up markedly by then, so we redeemed our pawn ticket earlier than we absolutely had to. Even so, it’s not an experience I would commend to anyone.

We got hit with a couple of judgments over very late debts, but that’s just business. We’re current on everything current, and we’re chopping down the old-growth debts one-by-one. It’s not pleasing to me to be a dead-beat, but, while we might be late, we’ve never skated on a debt and we never will.

Meanwhile, the world is young again. In the first five months of 2009, we didn’t make enough to pay the pet food bills. In the last seven months, we made enough to get current on the mortgage, to get current on our current accounts, to retire a bunch of past accounts, to buy me a new laptop and (as of today) a new iMac, and to put a decent used car under my buyer’s butts.

Better still, we’ve been rolling on a six-figure pipeline for months — no hopes, no maybes, no blue-sky wishful thinking — and it’s been rolling along nicely. This Read more

November 6, 2009

Homebound hounds: You’re going to have break those chains on your own this year in San Diego

by

Suburban Phoenix Real Estate Broker

Author website

I think it should be obvious by our lack of self-promotion, but we ended up not putting anything together for BloodhoundBlog Unchained in San Diego. I can’t speak for Brian, but I’ve been wall-to-wall with work for months, and I haven’t had time for anything else.

I’ll go through the PayPal records tonight to make sure everyone’s money is refunded.

Meanwhile: If you see any NAR grand poobahs, be sure to kick ’em in the shins for shifting all your November move-ups into December. Christmas may be good, Thanksgiving not so much…

October 29, 2009

With help like this…

by

Realtor, Media Mogul

Author website

Robert Worthington is right.  Do you want to know how right he is?  According to Goldman Sachs, who ought to know about government intervention, the feds interventions into the housing have pushed home prices 5% higher on a national average than they would have been otherwise, Goldman Sachs estimates in a report released late Friday.

The government over the past year has slowed the pace of foreclosures through moratoria and the drive to modify mortgage terms to keep more borrowers in their homes. It also has pumped up demand for housing by giving tax credits to many first-time home buyers and by driving down mortgage interest rates. As a result, home prices in some areas have risen in recent months, particularly for homes that appeal to investors and first-time buyers. Bidding wars for the more attractive bank-owned homes have become common.

But these artificial props won’t last forever and may have created a false bottom in the market. “The risk of renewed home-price declines remains significant,” Goldman economist Alec Phillips writes in the report, “and our working assumption is a further 5% to 10% decline by mid-2010.” – WSJ

If they’re right, rather than a healthy market heading into 2011, what do you think we might actually have?  We could be looking at falling home prices, rising interest rates and a government whose currency is faltering.  Does it sound like a double dip?  Will you be happy that the functions of the market were tampered with once you realize the misery has been extended, for years? Remember to say thanks to the NAR, thanks to the NAHB, thanks to the Feds and most of all, thanks to us realtors who supported the larceny.  But, at least you may have universal access to a health care waiting list.

October 22, 2009

Atlas Twitched?

by

Realtor, Newlywed

Author website

In effort to stem public outcry the government today announced that they were limiting the salaries of the top 175 executives for companies that have received federal bailout money.

Will this be the event that causes the best and brightest our country has to stop being exactly what we need in this time of economic strife? Will the best and brightest stay with the companies that so need their talents for a fraction of what they could earn on the free market OR will they do what capitalists have done previously? Will they leave for bigger paydays and more options to earn what the market will bear? I am betting that the majority will follow the opportunities that present themselves in the form of job offers from companies that are in better financial shape and can offer a better financial package. Perhaps one without government run healthcare too. The companies that are in trouble will be forced to struggle with 2nd tier talent to help guide them through the upcoming months. I also predict that we might see a company fail as a direct result of this short sighted action.

This to me seems like the first step towards the very thing that Ayn Rand described in Atlas Shrugged. The thought that this might actually become something other than a work of fiction scares me. What will be next? Will I have to share my commissions with agents who are not working because I am making too much money (A guy can dream now right?) Will our countries talent be wooed by other countries that need our intellectual capital to continue to grow?

While it is disheartening to see reports that the bailout money was used on executive pay and bonuses it is even more troubling to see that our government has decided to step in and force businesses to act and think like government agencies.

Today is a very sad day for the cornerstone of America our capitalistic system.

October 20, 2009

I was joking – honestly, I was really joking!

by

Mortgage Officer

Author website

Approximately a month ago, I was getting a client approved for a mortgage with mortgage insurance and while going over the details of what we needed to document the deal, the customer deadpanned to me, “Where do I go to get the bloodwork done?”    My response, “Nah, we don’t need that —- yet.”

The report below is actually from England but it now appears that the government is going to start requiring mortgage lenders in England to ask questions about how much their borrowers spend on tobacco and alcohol.

Now, if you ask me, I think that tighter restrictions in terms of downpayments, debt to income ratios, credit scores, job histories, cash reserves, etc. all make sense.   But whether my neighbor spends more or less on alcohol than I do, I can’t see what substantive difference that makes in our ability to repay our mortgages.  (Hint – I’m not the one who spends more on alcohol.)

The pendulum is swinging too far in the other direction in some areas and not far enough in others.

Tom Vanderwell

Homebuyers face questions on alcohol and smoking under new mortgage rules – Times Online

Homebuyers could be forced to provide detailed information about the amount of money they spend on alcohol each month to qualify for a new mortgage under a new clampdown on reckless lending.

In a sweeping review of the mortgage market published today, the Financial Services Authority (FSA) said lenders needed to be far more rigorous about their financial checks of potential borrowers.

It said lenders should delve deeper into homebuyers’ personal spending including the amount they spend on alcohol and tobacco.

Spending on shoes, clothes and childcare could also be assessed under a new, industry-wide “affordability test”.

At present, the FSA does not prescribe rules about assessing a consumers’ ability to repay a mortgage and practices vary from one lender to the next.

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October 17, 2009

A Look Back – What Has Changed and What Hasn’t…..

by

Mortgage Officer

Author website

In July of 2008, I wrote a piece as a guest post on Paul Kedrosky’s site, Infectious Greed.    I called that piece The Top 7 Things Every Home Buyer Should Know.   The piece got a lot of “press” and actually got me interviewed by the New York Times.    I was talking with the reporter who I’ve gotten to know at the New York Times about a month ago and we realized that it was almost exactly a year since he had ran the piece, “Considering the 7 Year Plan.”    He made a comment at that point, “It would be interesting to see what, if anything, has changed over the last year in your opinion of what a home buyer needs to think about.”     I agreed and decided at that point to do that.

So this is the introduction to what will be a 7 part series over the course of the next week or so.   I’m going to take each item, one by one, and look at what my view was in July of last year and then factoring in what I think has or has not changed over the last 15 months.

Here’s a hint for you – out of the 7 parts, I think that we’re going to find that at least 3 or 4 of them have changed substantially.

I’ll have the first one up in a day or two.

Thanks for listening in/reading what my thoughts are…..

 

Tom Vanderwell

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October 14, 2009

Why the Housing Bubble hit some areas harder than others.

by

Realtor, Media Mogul

Author website

I don’t know if you’re familiar with Randall O’Toole from the Cato Institute, but he’s much better reading than Lawrence Yun.  I was just acquainted with one of his latest works entitled How Urban Planners Caused the Housing Bubble.

If you’re in real estate, it is a must read.  I live in a strict Growth Management state from a public planning perspective.  As a freedom loving individual, it is frustrating.  But this analysis not only talks about the costs of planning, but the volatility it introduces into the market and why.  It compares different policies of various states.

The correlation between planning practices and pricing volatility is uncanny!  Fed policy, the Community Reinvestment Act and other hair brained political practices can’t explain the phenomenon without the inclusion of growth managment into the equation.  The costs for growth managment are also staggering!  For real estate nerds, it is required reading!

October 10, 2009

How To Be More Honest: Accounting For Morons.

by

Instigator, anthill kicker.

Author website

The worst thing that ever  happened to me was November of 2003.  I made, as a Realtor $57,000 in closings (without a team) in one month.  In early December, I added another $19,000 to that pile of money.  Because of my phone banging good times, I didn’t have expenses or marketing that created it, my willingness to endure rejection, and a booming economy created that opportunity.

I remember that number, those numbers because I added them and re added them.  It made me a big dude.  I was happy and proud about a $76,000 run in about 20 days.  Proved that banging the phones works, validated me as a person.   I was king of the world, at 27.  Hot wife, money in the bank, Acura RL in the driveway.  What’s not to dig?  (Heh).

Yesterday’s Awards Don’t Pay Tomorrow’s Bills

Well, the fact that you read your own press.  See, I took most of December off.  “I earned this break.”  I said as we went to Oregon.   Bought a new house on a stated deal, pissing $40k on a down payment (Because you know, I now make $60,000 a month, you know?).   Didn’t work in January because I had myself convinced that I was earning $60,000 a month.  I was that good, I could turn it on.  Get it?  I rounded up to a number I only did once, and didn’t worry because that’s who I was. (In my head).

Payments came due, and my money was gone, mostly on BS and needless luxuries, and maintenance for the rentals we’d bought.   But I didn’t worry, because … wait for it… I made $60,000 a month.

It was true.  I made nearly $60,000 a month…ONCE.  The rest of the year was just over 5 figures per month, with two months that were less than $3,000.  But my ego declared that I was a heavy hitter, banging the phones and making $60,000 a month.  It wasn’t till late February, only 1 closing on the year that I began to worry.   I had 3 crap listings, no buyers, and my customer service had become rake like.

But, a little Read more

September 29, 2009

Do Today’s home prices reflect their market value?

by

Realtor, Media Mogul

Author website

Can you really look at a buyer today and tell them that they are buying their home at a good price?  Sure, you can tell them how the price they are paying compares to what folks have been paying the last few months, or few years.  But that doesn’t mean that what you are seeing is the true market price!  The actual market price can’t be determined without a free market.  Right now, we have anything but a free and stable market in real estate.

Take the government’s free ice cream housing promotion, also known as the Homebuyer Tax Credit.  The issue I’m concerned about isn’t that it is going to cost taxpayers about 15 billion dollars if it is allowed to expire on November 30.  Nor is the issue that it has cost $43,500 that we, our children and grandchildren will somehow have to pay for each new buyer attracted into the program according to the NAR numbers.  The issue is it has artificially increased the value of homes in the market by $8000 and that will end on November 30th, or sometime.

So, that $250,000 home your client just bought and put a mortgage on is really only worth $242,000 when that market distortion is removed.  With an FHA loan, and a program to use the tax credit for a down payment, guess who is already upside down in their purchase?  Does this sound anything like the too recent past?

Our tax code is already heavily skewed towards home ownership.  With our government’s current spending spree and their desire to raise taxes, could the sacred mortgage interest tax deduction eventually be reduced?

While that is probably not the immediate threat, the current rulers prefer government solutions to allowing the private market to function.  Be it FHA or State Housing Programs for low income borrowers, a monetary policy of rock bottom interest rates and the mortgage interest deduction the programs and the proposals coming forth further distort the market.

This makes the biggest risk in a real estate investment strategy or even a home purchase predicting the future changes in artificial supports to the market Read more

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Welcome to BloodhoundBlog, the national real estate industry marketing and technology weblog written by, for and about real estate professionals. Better yet, welcome to the wired world of real estate. We are busily inventing Real Estate 2.0 – technology, marketing, service and salesmanship. Like all Bloodhounds, we are smart, frisky and fiercely independent. We've built a spot on the earth – beloved over all – where each one of us can be who we are, no matter who that might be. We are committed to an idea of excellence that will flush the bums, the con-men and the crybabies out of the real estate industry. If you yearn to have your failures excused, your moral lapses absolved or your boo-boos kissed, seek elsewhere. But if you are sick to death of mediocrity – welcome home. Read all about us, subscribe to our feed and steel yourself for the hunt. We work hard, we play hard, we learn everything we can – and we bow to no one.

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