* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

*****************

Web 3.0: Going … going … GONE TOMORROW! 

There was so much excitement about the latest Internet lead

generation system that brings you to the top of Google to get

buyers and sellers, that it is almost completely SOLD OUT!

 The doors will officially close tomorrow—Saturday–so jump

on this—if it is still available—to be one of the last to claim

your latest tool to take overcome this Recession:

 https://www2.gotomeeting.com/register/584339539

*****************

Tax credit voted in

It’s here!  The U.S. House of Representatives has just voted (403-12) to extend and expand the homebuyer tax credit, and it’s on its way to the President for his signature…he’s expected to sign it today.  Not only does it extend the tax credit, but it expands it.  The items carried over until April 30, 2010 are:  Amount of Credit ($8000 or $4000 married, filing separate) and Definition for Eligibility (May not have had an interest in a principal residence for 3 years prior to purchase).  The items added to the credit, from December 1 to April 30 are, for current homeowners:  Amount of Credit ($6500 or $3250 married, filing separate); Effective Date (Date of Enactment); Definition for Eligibility (Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years); Termination of Credit (Purchases after April 30, 2010); Binding Contract Rule (So long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close); Income Limits ($125,000 – single $225,000 – married Additional $20,000 phase out); Limitation on Cost of Purchased Home ($800,000 Effective Date of Enactment); Purchase by a Dependent (Ineligible Effective Date of Enactment); Antifraud Rule (Purchaser must attach documentation of purchase to tax return).

Unemployment over 10%

According to the long-awaited report from the Labor Department, in October unemployment rose to 10.2% for the first time since 1983 – much worse than expected.  There was a net loss of 190,000 jobs in October, an improvement from a revised estimate of 219,000 job losses in September, but far worse than the 175,000 jobs forecast by economists surveyed by Briefing.com.  This is the 22nd straight month of job losses.  The Obama administration estimated last month that 640,000 jobs were created or saved by the federal stimulus package passed earlier this year but, while that makes good politics, it’s nothing compared to the 7.3 million jobs that have been lost by the economy since the start of 2008.  Today’s report comes one day after Congress voted to extend unemployment benefits by up to 20 weeks. There are now a record 5.6 million people who have been unemployed for six months or longer, as the average time an unemployed person has been out of a job hit 26.9 weeks. According to a survey of top forecasters by the National Association of Business Economics last month, the consensus estimate among economists was that unemployment would hit a high of 10% in the final three months of this year and the first quarter of 2010.  But get this – the five economists with the most bearish forecasts had expected unemployment to rise to 10.2% in the fourth quarter of this year before hitting 10.5% in the first half of next year.

Short sales don’t hurt credit scores

Sarah Davies, vice president of VantageScore, at the Loan Modifications Conference now underway in Dallas, Texas, says restructuring plans on a mortgage, whether in the form a forbearance, modification or short sale, have a relatively insignificant effect on the consumer’s credit score.  VantageScore measures the generic consumer’s credit score and his or her likelihood of slipping into 90-plus day delinquencies on a scale of 501 to 990. If a servicer reduces a consumer’s original loan amount from 10-to-30%, the consumer’s credit score is only increased by three to 18 points, depending upon the consumer’s initial standing. Borrowers in the top-tier of credit scores, averaging an 862, receive only a three-point increase. Lower tier borrowers, in the 625 range, can receive an 18-point jump.  The credit score increases because the total amount of debt owed is reduced, and the borrower becomes inherently more reliable, Davies said.  However, foreclosure and bankruptcy can more severely affect the consumer’s credit score. If a borrower, who maintains good credit, is foreclosed, his or her credit score can decrease by as much as 140 points. Bankruptcy for someone in good credit standing results in a reduction of 365 points from the consumer’s credit and a mark on the file for seven to sometimes 10 years, Davies said.

Mortgages rates drop

Freddie Mac said the average rate for a 30-year fixed-rate mortgage (FRM) was 4.98% with an average 0.7 point, down from an average 5.03% the previous week. One year ago, the average rate for a 30-year FRM was 5.88%.  It said the average rate for a 15-year FRM was 4.4% with an average 0.6 point, down from 4.46% the previous week. A year ago, the rate was 5.88%. Freddie said the five-year Treasury-indexed adjustable-rate mortgage (ARM) was 4.35% this week, with an average 0.6 point, down from last week’s 4.42%. The one-year Treasury-indexed ARM averaged 4.47% with an average 0.5 point, down from last week when it averaged 4.57%. At this time last year, the 1-year ARM averaged 5.25%.  Bankrate.com’s survey of major US banks and thrifts put the 30-year FRM 5.35% with a 0.31 point, even with the previous week. A year ago, Bankrate.com’s survey was 6.44%. It says the 15-year FRM is 4.72%, down from $4.74% in the previous week.  Bankrate.com put the five-year ARM 4.64% this week, even with the previous week.

Commercial and Multifamily Mortgage Originations Remain Low

According to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations,  commercial and multifamily mortgage loan originations for the third quarter of 2009 were 12 percent lower than during the second quarter of 2009, and 54 percent lower than during the same period last year.  The 54 percent overall decrease in commercial/multifamily lending activity during the third quarter was driven by year over year decreases in originations for all property types.  When compared to the third quarter of 2008, the decrease included a 62 percent decrease in loans for retail properties, a 59 percent decrease in loans for health care properties, a 58 percent decrease in loans for industrial properties, a 56 percent decrease in loans for office properties, a 46 percent decrease in hotel property loans, and a 40 percent decrease in multifamily property loans.

Now on to our real estate investing educational arena …

Friday File – More Real Estate Humor

 Ahhh…autumn weekends. Chances are you might be out and about with family or friends, visiting fall festivals or simply cruising around the countryside searching for your next short sale. Whatever the weekend has in store, it’s sure to be just a little bit better if you start it with a smile on your face. To help, here’s our newest Friday File to help you make the most of government lingo and double-speak.

Filibuster = a well known stalling technique that allows government officials to read (at least partially) the bill before voting or, when used as a “sister” to the “dust buster”… a way of collecting (for the record) official sounding statements to eliminate personal responsibility in order to stay on the safe side for the next election.

Sustainable Communities – once put together, you have no hope of respite. They keep going and going and going….

War On = We need funding fast so declare a war in order to enact the emergency funding mechanism rather than go through the normal debate and votes…ie, the war on drugs, the war on poverty, etc…

Biosolid Fuel = Recycled sewage

Consumer = American citizen

Taxpayer = American citizen

Voter = American citizen

American Citizen = Endangered species being overtaken by “citizens” (small case).

Competitive = Lowest bidder wins.

Satisfactory = It barely passes but with any luck, won’t kill the end user.

Revenue Enhancement = For us silly not you! We are going to raise your taxes till you squeal.

Change = Retroactive, future and present modification of the entire economy, healthcare system, tax structure and political system.

Double-Think = Modern day media literacy

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–

* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

*****************

Get To The Top of Google ENCORE this Thursday 

There was so much excitement about our webinar that

we held today on getting to the top of Google rankings

to generate leads for buyers and sellers…that we’re holding

an encore Wednesday night at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/893489507

*****************
Home sales up

The September Pending Home Sales Index from the National Association of Realtors (NAR) spiked 6.1% to 110.1, consolidating a 6.4% gain in August. It was far better than expected, and the index’s highest level since December 2006, when it stood at 112.8.  A panel of analysts surveyed by Briefing.com had forecast a 1.2% rise.  Analystshave traced much of the improvement to the government’s first-time homebuyer tax credit program, which gives up to $8,000 in tax credit to new homebuyers. It’s estimated that between 200,000 and 400,000 additional sales have been made because of the credit. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” says Lawrence Yun, NAR’s chief economist.  “Clearly, buyers were eager to get business done before the credit’s November expiration,” said Mike Larson, a real estate analyst for Weiss Research. “So I wouldn’t be surprised to see some give back in pending sales over the next month or two.”

 MBA — Quarterly Mortgage Bankers Performance Report

 The Mortgage Bankers Association (MBA) just released its most recent Quarterly Mortgage Bankers Performance Report measuring the performance of independent mortgage bankers and subsidiaries of banks, thrifts and hedge funds.  Why do you care?  Because along with the news that mortgage brokers are making a profit come all sorts of helpful stats that give a snapshot of the state of the market:

• Simple average borrower FICO score for loan originations was 721 in the second quarter 2009, compared to 714 in the first quarter 2009.

• Average pull-through (the number of closings divided by the number of loan applications) rose to 73 percent in the second quarter 2009 from 67 percent in the first quarter 2009. 

• 96 percent of the firms in the study posted pre-tax net financial profits in the second quarter 2009.  In the first quarter 2009, 85 percent of the companies posted profits.  Only 53 percent of the companies were profitable in the fourth quarter 2008.  

• The average production volume for each firm was $280.9 million in the second quarter 2009, compared to $213.9 million in the first quarter 2009 and $125.6 million in the fourth quarter 2008.

• The average gross dollar volume for both refinancings and purchases increased in the second quarter 2009.  The share of refinancings to total originations for this sample dropped to 62 percent in the second quarter, from 66 percent in the first quarter. This share was still significantly higher than 42 percent for the fourth quarter 2008.

Bye bye TARP repayments

The government is highly unlikely to recoup all the money it plowed into AIG, Citigroup, Fannie Mae and General Motors, but CIT is the first bailout to go to zero — in just 11 months.  The New York-based small business lender we reported about yesterday said all its common and preferred shares will be canceled, wiping out the $2.3 billion Troubled Asset Relief Program (TARP) investment the Treasury Department made last December.  CIT, with $71 billion in assets, missed its quarterly dividend payment due in August.  According to a report issued last month by SNL Financial, there were 32 other TARP recipients that did so as well, and eight of the banks behind on their dividend payments have at least $100 million in Treasury loans, including two that are publicly trying to raise capital – a tough task at the moment.

First Bancorp (FBP), San Juan, Puerto Rico, a $20 billion institution that took $400 million in TARP funds in January. It recently shook up its board and named a new CEO, after an investigation by the board’s audit committee. A spokesman said the bank stopped paying dividends this summer under federal guidelines that say a bank can pay out dividends only if it is making enough profit to do so.  Other big banks that have missed TARP payments are First Banks, Pacific Capital Bancorp., Dickinson Financial, Central Pacific Financial, and Anchor Bancorp.

Home sales up

The September Pending Home Sales Index from the National Association of Realtors (NAR) spiked 6.1% to 110.1, consolidating a 6.4% gain in August. It was far better than expected, and the index’s highest level since December 2006, when it stood at 112.8.  A panel of analysts surveyed by Briefing.com had forecast a 1.2% rise.  Analysts have traced much of the improvement to the government’s first-time homebuyer tax credit program, which gives up to $8,000 in tax credit to new homebuyers.

 It’s estimated that between 200,000 and 400,000 additional sales have been made because of the credit. “What we’re witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month,” says Lawrence Yun, NAR’s chief economist.  “Clearly, buyers were eager to get business done before the credit’s November expiration,” said Mike Larson, a real estate analyst for Weiss Research. “So I wouldn’t be surprised to see some give back in pending sales over the next month or two.”

 Fed meets on rates

Federal Reserve officials will meet this week to weigh economic data against the risk, reinforced by a persistently weak job market, that a burgeoning recovery remains on shaky ground.  A 3.5 percent annualized jump in third quarter gross domestic product revived debate between analysts who believe a sustainable turnaround is under way, and those who think growth will falter once a heavy dose of stimulus fades.  An immediate shift in the central bank’s policy, including any tinkering with its pledge to keep interest rates low for an “extended period,” appears unlikely. 

 The third quarter GDP report on Friday signaled the end of the recession, but government stimulus, including the “cash for clunkers” incentive for auto purchases and a $8,000 tax credit for first time homebuyers, may be the main reason.  Despite signs factory activity is picking up, consumers are facing major challenges.  Chief among them is a jobless rate just below 10 percent, which is expected to continue climbing into next year.  Even those who have managed to hold onto their jobs have stagnant incomes.  The employment outlook raises doubts about whether growth can be sustained when the effects of the government’s stimulus program fade.

Construction spending up

The Commerce Department says total construction spending was up 0.8 percent in September, much better than the 0.3 percent drop that analysts had forecast. The August performance was revised down to show a 0.1 percent drop rather the 0.8 percent gain first reported. The overall increase reflected a 3.9 percent rise in spending on residential construction, the biggest jump in housing activity since July 2003.

 A big part of the activity in recent months may have reflected a rush by builders to start projects that could qualify for a tax credit of up to $8,000 offered by the government to first time home buyers, and that tax credit is due to expire on Nov. 30, although there’s an extention for potential buyers who have sales agreements signed by the end of April. Those buyers would have until the end of June to close on their new homes. Total construction spending grew to $940.28 billion at an annual rate in September. It was the first increase after four straight declines but still left construction spending 13 percent below the level of a year ago.

 Now on to our real estate investing educational arena …

Know & Control – The Short Sales Advantage

Risk. Uncertainty. When it comes to investing, there is a lot left unknown. Even the most knowledgeable and vigilant investors often feel they have barely scratched the surface of available information. Irregular accounting methods, outright lies, fraud, irrational exuberance and a host of other real or imagined situations are prone to leave the average investor feeling overwhelmed if not intimidated.

The first step in becoming a successful investor is to know and accept what you can or cannot control….and learn to distinguish the difference well in advance. Otherwise, you are likely to face an endless series of dreamy infatuations, dashed hopes and very real resentments. Here to help sort things out is a starter list of each.

What you can’t know or control:

What the stock market will do. Yes, there are oodles of great guesses and sophisticated software but in the end, you really can’t know for certain or control the outcomes on your own.

• What any one stock, bond or company will do. In fact, if you do know for certain chances are you have other concerns…like insider trading.
• What a mutual fund will do. Despite what those confident sales promo’s would have you believe, the facts are far more simple…it’s far from certain.
• Where interest rates are heading. From savings and bonds to credit cards and mortgages, trying to second guess interest rates over the immediate long term is rarely easy.
• What the economy will do. Inflation, deflation, stagflation…and in which order? Many great minds debate but few come to a consensus.
• What the dollar will do. Perhaps in the long term it is possible to predict the outcome of the dollar but investors have gained – and lost – entire fortunes waiting for the tide to turn.
• What everyone will do. Seriously – most of us can barely predict the behavior of our spouse or children much less the insanity of markets.

What you can know and control:

One of the greatest advantages of investing in short sales is the high degree of control each investor is able to make over their own rate of return. Unlike stocks, bonds, mutual funds or FOREX, short sales put the power of making a real return in your hands.  Here is what you can know and control when investing in short sales:

• The price of any property purchased including financing, transaction fees and other costs.
• What interest rate you will pay – if any. Perhaps you are dealing with cash or simply using leverage; either way, you have the option of working with fixed rate loans and other predictable expenses.
• What people need. Sometimes it doesn’t matter what the economy or other people will do…often it’s enough to understand what they need. Fortunately, needs tend to stay roughly the same over time. Affordable housing, food, safety. Basic but not boring when you are brining in profits by providing for the most essential needs of others.

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–

* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

*****************

Follow the Short Sales Riches & FixAFlip Funding Team:

Chris McLaughlin:

Twitter: http://www.twitter.com/mclaughlinchris

Facebook: http://www.facebook.com/mclaughlinchris

Fan Page: http://www.mclaughlinchris.com

Nathan Jurewicz:

Twitter: http://www.twitter.com/shortsalekid

Facebook: http://www.facebook.com/shortsalekid

*****************

CIT Group files Chapter 11

CIT Group Inc., a key lender that helps retailers stock their shelves,

filed for Chapter 11 bankruptcy protection Sunday in New York after months of struggling to avoid collapse. The company provides badly needed credit to thousands of small and mid-sized businesses, and is a critical part of the flow of capital in the retail sector.  It works with 2,000 vendors that supply merchandise to more than 300,000 stores.  About 60 percent of the apparel industry depends on CIT for financing. CIT stressed that its lending operations will continue to operate as it proceeds through bankruptcy with the hope of shedding $10 billion in debt. Chairman and CEO Jeffrey M. Peek said the company’s prepackaged reorganization plan “will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy.”  CIT expects to emerge from bankruptcy by the end of the year, but even one day that vendors are cut off from much-needed financing could create a bottleneck, resulting in shipments of merchandise left on docks or in vendors’ warehouses.  CIT’s Chapter 11 filing is one of the biggest in U.S. corporate history, following Lehman Brothers, Washington Mutual, WorldCom and General Motors. The filing wipes out current holders of its common and preferred stock, meaning the U.S. government will likely lose the $2.3 billion in taxpayer funds it sunk into CIT last year to prop up the company.

Jobs to pick up in 2012

According to a survey by the National Association of Business Economics, the consensus forecast is that job losses will continue through the end of this year, with many economists not expecting unemployment to peak until next summer – 44 top economists expect an addition of only 12,000 jobs a month in the first quarter of next year, and that monthly job gains won’t top the 150,000 level — which is generally thought of as what is needed to keep pace with population growth — until the end of 2010.  “People cut so quickly that they cut things they shouldn’t have, not just fat but also muscle and bone,” said Robert Brusca of FAO Economics. In the most troubling sign, more than a half of the economists surveyed said they didn’t expect a recovery to pre-recession levels in the job market until 2012 while a third said they didn’t believe a full job recovery would occur until 2013 or beyond.

Banks finally “getting” short sales? 

Larry Murphy, president of the real estate monitoring firm SalesTraq, says he thinks banks are starting to realize it makes better financial sense to allow owners to sell homes through short sales than to repossess them. For example, of the 35,742 closings in Clark County, Nevada through the first three quarters, 75 percent were foreclosures and only 10 percent were short sales. But Murphy says that of the 11,249 contingent sales in place of homes on the Multiple Listing Service, 71 percent are short sales and 21 percent are sales by lenders of homes that were foreclosed.  The reason banks are increasingly interested in signing off on short sales is economic: The median price of homes sold through foreclosure is $116,900, compared with $150,000 for homes sold through short sales.  “I would like to send this to every bank,” Murphy says of information about short sales. “It says that when you foreclose on a property and throw the owner out, the house sits vacant and sometimes the owner trashes it on the way out, the lawn dies and the homeowners association fees don’t get paid.” 

Banks geared up their departments to handle foreclosures and now will have to do the same for short sales, Murphy says.  “The solution may not be as easy as it appears for banks to quit foreclosing on properties and start doing more short sales,” Murphy says. “It is … whether banks finally get it. It represents an opportunity and why I am not going to predict the second tsunami of foreclosures that we have been talking about the past six months. It has not materialized yet in Las Vegas, and if it hasn’t materialized in the worst city in the worst county in the worst state in the nation, then it may not happen throughout the rest of the country.” Dennis Smith, president of Home Builders Research, says the federal government has changed the rules for short sales, simplifying and standardizing them.  The bad news, he says, is that thousands of bank employees who have been specializing in loan modifications will have to be trained to handle short sales, which will slow the process.

Foreclosures pick up in suburbs

A report from RealtyTrac says dramatic increases in foreclosures in Q309 came in suburban areas previously believed to be stable, such as Boise, Idaho, up nearly 22% from Q209, and Provo, Utah, which rose nearly 11% in the same period.  In several states, foreclosure activities drifted toward smaller towns with previously self-sustaining industries. Chico, California in Sacramento Valley, an agricultural hub, had a 98% increase in foreclosures from Q308, according to the report.  “You’re moving from Phoenix to Prescott, you’re moving from Las Vegas to Reno,” said Rick Sharga, the vice president of marketing at RealtyTrac.

Sharga sees the foreclosure crisis coming in three waves, and with this new data, the market is showing signs of the second one.  “That first wave of foreclosures cratered the economy, which created job losses, which created the second wave. Now, we’re seeing prime rate loans affected by unemployment. And the third wave will be really a repeat of wave one, except this time we’re going to see a switch of Option ARM and Alt-A loans out for the subprime loans. It will probably be as big but somewhat shorter lived.”  Sharga said that he expects a peak in foreclosures in 2010, only a marginal improvement in 2011 and a return to normal monthly foreclosure activity sometime in 2012.

Rental vacancy rate up, homeowner rate steady

According to the latest data released by the Census Bureau, the rental vacancy rate was 11.1% in Q309, an increase from 9.9% in Q309 and 10.6% in Q209, the homeowner vacancy rate held steady at 2.5% from Q209 to Q309, which is lower than Q308’s 2.8%, and the homeownership rate was 67.6%, nearly even with the 67.9% in Q309 and 67.4% in Q209.  Rental vacancy was higher inside principal cities and in the suburbs in Q309 than in Q209, but rates outside metropolitan statistical areas (MSAs) remained level year-over-year. Homeowner vacancy rates were higher in principal cities than in suburbs and outside MSAs during the quarter. Vacancy rates in principal cities and in the suburbs were lower than their respective rates a year ago, while the rate outside MSA’s was not statistically different from last year’s rate, the Census said.  Approximately 85.5% of the housing units in the US during Q309 were occupied and 14.5% were vacant.

Now on to our real estate investing educational arena …

Short Sales Investment Self -Defense

When it comes to short sale investing, there are plenty of self-proclaimed “black belts” but upon closer inspection, the facts are far less impressive; the vast majority of belt holders simple are attempting to keep their tunics drawn with a few modest colors scattered about. But low and behold, gaining a black belt in martial arts shares ample similarity to the same self defense strategies used in short sales. Both require dedication, commitment and practice as well as mental stamina. Take our quick short sales self-defense quiz to see where you rank:

Answer True or False to the following ten questions…

1. One of my major goals for investing is to have fun and challenge myself.
2. I have the confidence required to beat the market when others are taking a beating.
3. If I purchase a dozen properties then I have all the diversification needed.
4. I am able to control my returns by buying the right mix of properties.
5. Which properties I purchase are more important than how I finance them.
6. A percentage point or two doesn’t really matter in the long run.
7. I want to work with people and professionals I like even if it costs a little more.
8. I don’t know enough to manage my own money.
9. A good broker/agent/other will give me the inside scoop to buy or sell in time.
10. With the current market, a return above 10 percent is good.

Now let’s see how you rate. Hopefully you responded honestly (after all, you are only hurting  your self). Give yourself 1 point for every “false” response above and subtract a point for each “true” response. It’s worthwhile to examine why each of the above should be a false response…

1. Although it is certainly nice to have fun and challenge your self with any investment, it is not a “major” goal. The major goal is to maximize returns. Save the fun and challenge for the gym.
2. Confidence is great but forget what the self-help guru’s tell you…it doesn’t replace an objective process that saves time while helping navigate the system. Results are what matter.
3. Maybe – but maybe not. Diversification isn’t just concerned with numbers but rather types of properties, geographical location, financing options and much more. There are more choices in real estate so learn to use them for your advantage.
4. You are able to control your returns by buying at the right price, obtaining the best rates, estimating repairs and keeping costs to a minimum. Don’t’ forget taxes!
5. No, financing matters…a lot. Know the limits to financing including maximum number of mortgages for each underwriter, LTV ratios used etc…
6. Yes, it matters. Remember, you can still make money but you could have made more. Learn to deal with the details to maximize profits and minimize losses. Over the long term, 1-2 percentage points can make or break a fortune.
7. It’s nice to work with people you like but it’s business…treat it like such. Find the most competent professionals you can afford to get the best results. Save the feel-good stuff for church and family night out.
8. Either learn or go gamble – gambling is more fun than investing and you will have the same outcome in the long run.
9. Sometimes but that is the cherry on top…don’t expect them to do your job. They are brokers or agents not investors. You are the investor so act like it.
10. Shesh. If you are willing to settle for 10 percent return then short sales may not be your ticket to wealth creation. Tune in to one of our free webinars to learn what real returns look like then stop settling for less.

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–

* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

*****************

Follow the Short Sales Riches & FixAFlip Funding Team:

Chris McLaughlin:

Twitter: http://www.twitter.com/mclaughlinchris

Facebook: http://www.facebook.com/mclaughlinchris

Fan Page: http://www.mclaughlinchris.com 

Nathan Jurewicz:

Twitter: http://www.twitter.com/shortsalekid

Facebook: http://www.facebook.com/shortsalekid

*****************
Delinquency rates up

According a report from California-based real estate market consulting firm Foresight Analytics, total delinquencies for first-lien residential mortgages grew to an estimated 11% during Q309.  The final figures for the third quarter are not due until the end of November, but Foresight’s report bases its data on earnings reports and call report filings from banks.  Residential delinquencies increased from 10.2% in Q209 and from 6.4% from the second quarter of 2008, according to the report. The delinquency rate rose approximately 1% every quarter since the Q108, except for a quick blip in Q408.  “We have been expecting the rate of increase to slow, but clearly this has not yet occurred,” said the report. 

Nonaccrual rates for residential mortgages also jumped to 4.7% in Q309 from 3.8% in the previous quarter, and delinquencies in commercial mortgages also ballooned for the quarter. The rate hiked to 4.7% in Q309 from 4.1% in the previous quarter and more than doubled the 2.1% rate a year ago, according to the report. “The delinquency rate has been increasing at an accelerated rate since Lehman Brothers’ collapse in September 2008 and the ensuing severe credit crunch and economic downturn.”  The delinquency rate in commercial loans is still well below the 8% delinquency rate in the third quarter of 1991, but the rate still worries analysts in light of a weak economy, constricted credit availability and a large number of commercial mortgages coming due the next few years.

Interest rates up

Freddie Mac’s weekly survey said the 30-year fixed-rate mortgage (FRM) interest rate inched up last week to 5.03% for the week ending Oct. 29, up from 5% in the previous week. A yevar ago, the rate was 6.46%.  A separate survey of large US banks and thrifts conducted by Bankrate.com put the 30-year FRM at 5.35% with an average 0.37 point. That’s an increase of 1 basis point from the previous week. One year ago, their estimated rate was 6.77%.  Freddie Mac said the 15-year FRM rate was 4.46% with an average 0.6 point, up from 4.43% last week, and Bankrate.com said the 15-year FRM was 4.74%, up 2bps from last week. Anyway, to make a number filled story short, interest rates are up.  Bankrate.com goes further and says that sales have increased, prices are down and supply is starting to decline. Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School of Business, said in the Bankrate.com survey that the housing market is not at a false bottom.  “These are strong numbers, but not surprisingly strong numbers,” Wachter said. “The fundamentals are in place for a recovery — however, a slow recovery.” 

White House claims jobs saved and created 

According to a report released by the Obama administration, its stimulus program has created or saved 650,000 state and local jobs.  Maybe this time things will be different, but last time the White House released a job creation report it turned out so full of overstatement and errors that among other things, it reported an award to a French vaccine maker as 100 times the actual amount.  The numbers in this report, like last report, are drawn from tens of thousands of self- reportings from state and local recipients as well as private companies.  The White House claims to have created or saved at least 650,000 state and local jobs, but says the actual number of jobs created so far is likely closer to 1 million, since its report on stimulus job creation only focused on $150 billion of the $339 billion in American Recovery and Reinvestment Act funds spent so far.  “We’re solidly on track to create or save 3.5 million jobs by the time this program winds down,” administration economist Jared Bernstein told CNN on Friday. “There’s a lot more ammunition in that Recovery Act. The stimulus package is absolutely working, both in GDP terms and in terms of saving or creating jobs.”  Yup.  The White House maintains that the funding saved the country from slipping into a depression and fueled the 3.5% growth in the economy in the third quarter. Republicans point to the rising unemployment rate, now at a 26-year high of 9.8%, as a sign that the recovery act is a failure. 

Consumer spending down

The Commerce Department says consumer spending plunged in September by the largest amount in nine months, and incomes, the fuel for future spending, were flat.  Spending dropped 0.5 percent in September, and economists worry that the recovery could falter in coming months if households cut back on spending to cope with rising unemployment, heavy debt loads and tight credit conditions. Some economists believe that consumer spending will slow sharply in the current quarter, lowering GDP growth to perhaps 1.5 percent.

Analysts said the risk of a double-dip recession cannot be ruled out over the next year.  The 0.5 percent drop in consumer spending in September followed a 1.4 percent surge in August which was propelled by the big jump in car sales that month as consumers rushed to take advantage of the clunkers’ incentives. Last month’s drop in spending resulted in a boost in the savings rate to 3.3 percent of after-tax incomes, up from 2.8 percent in August. Many analysts believe households will keep striving to increase savings in the months ahead, which would hold back spending in the months ahead, weakening the recovery.

31% of consumers say access to mortgages is harder

Financial services information provider Bank Administration Institute (BAI) measures consumer views across five areas: financial stress and the economy, access to credit, fees and disclosure, managing personal finances and consumer trust. The index’s findings indicate that one-third of consumers feel their financial situation has deteriorated in recent months, but few expect conditions to grow even worse. 

Of those surveyed, 31% indicated that access to mortgages is worse now than six months ago, while only 5% said it improved. The projections indicate that 12% of respondents expected access to improve in another six months, while 15% expect access to worsen.  “In today’s fast-changing scenario, consumer opinion counts more than ever before and technology has made the consumer highly empowered,” said Haragopal Mangipudi, global head at Finacle. “Presented with diverse and ever-dynamic consumer segments, banks need to anticipate changing requirements and fine-tune business strategy.”

Now on to our real estate investing educational arena …

Friday File – Real Estate Humor

Ready for the weekend? Well, ready or not here it comes so you might as well begin it with a smile on your face. Here to help is a quick guide to real estate lingo and sales-speak that would put even the best double-talking politician to shame. Who knows, it might even help provide a different perspective on properties while you are out and about this weekend.

Low/No Maintenance Yard = The former owners paved over everything so there is no grass for the kids or pets. Forget buying a lawnmower and opt for a pressure washer instead. As a plus, parking is plentiful.

Quaint = So small only one person at a time can enter the kitchen and three is a full house.

Move-In Ready = We painted and called the carpet cleaner.

Seasonal Creek = Flash flooding alert!

Neighborhood Watch = The busy-body that lives next door knows everyone’s business and will call the police to report your dog the first time it gets out.

Country Living = Bring emergency rations since you are sure to get lost trying to find the property.

Cozy = Leave your king sized bed and overstuffed furniture behind.

Three Season Sunroom = Non permitted addition without insulation.

Near Transportation = Jets fly overhead, school bus stops in front yard and interstate is 20 feet away.

Nature Lovers Delight = Raccoons rip through the trash 3 times per week and your car insurance will go up after colliding with deer every year.

Energy Efficient = So small you can use a camp stove to heat the house.

Close to Everything = We didn’t sell when we should have so they built the mall around us.

Corner Lot = Constant traffic or the local neighborhood hang-out where kids of all ages congregate 24/7 and neighbors walk their dogs to do their ‘business’.

Meticulously Maintained = All original fixtures, appliances, cabinets and carpeting dating back at least 20 years or more.

Desirable Neighborhood = 20% premium based upon snob appeal.

Stunning Views = You will need a 4×4 to get up the driveway.

Lots of Storage Space = Unfinished attic or basement that is too small to do anything else with.

Completely Remodeled = There was a fire/flood/other so we covered it up quick with a bit of plaster then painted over it so nothing shows – just don’t look behind the walls, windows, attic or floor.

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–

* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

******************

An Interview with Mr. X: A Loss Mitigator Spills the Beans

This guy used to be well respected by banks.  He processed

nearly 6,000 short sales for lenders too big to name here.

He was one of them.  He attended their office parties.

He’s sat down to dinner beside them.  Socialized and went

to sporting events with them.

If there’s a tactic or strategy the bank’s kept hidden from

investors, he knows it. And he’s ready to spill the beans,

tonight, on a fr-ee webinar, right here:

https://www1.gotomeeting.com/register/280411465

*****************

Will the Homebuyer credit be extended?

Senate Democrats are close to compromising on a provision that would extend the first-time homebuyer tax credit, according to Regan Lachapelle, a spokeswoman for Senate Majority Leader Harry Reid, D-Nev.. In fact, the Senate will extend the $8000 tax credit for first-time homebuyers until April 2010, with a separate $6,500 credit for second home purchases.  Legislation creating the extension could be included in a bill that will extend unemployment benefits and could go to debate as early as this week, according to numerous media reports. What we don’t yet know are the terms of the extension.

Some reports indicate the extension would run through June 2010 and expanded to include all homebuyers, not just first-time purchasers, and others that would extend the full credit to first-time buyers until April 1, with $2,000 reductions every quarter until it dissolved at the end of 2010.  The National Association of Realtors (NAR) and National Association of Home Builders (NAHB), along with the Mortgage Bankers Association (MBA) continue to lobby federal officials to extend the credit.  According to the latest Department of Housing and Urban Development (HUD) and Census Bureau data, the rate of new home sales declined 3.6% in September, and some have speculated the impending expiration of the credit is contributing to the decline.

Government stumbles around in the private sector

The House Financial Services Committee, along with the US Treasury Department, released a draft version of legislation designed to address systemic risk and the issue of “too big to fail” institutions. The “Financial Stability Improvement Act of 2009″ sets up the Financial Services Oversight Council to monitor systemic risks and gives authority to the Federal Reserve to step in where regulators fail to quickly address developing problems among firms that pose systemic risk. The legislation also provides for orderly winding-down of failed firms and puts an end to “too big to fail,” according to a Committee statement.  Under the legislation, the costs involved in resolving a failing firm would be repaid first from the assets of the failed firm at shareholders’ and creditors’ expense. If any costs remain after that, they would be repaid from assessments on all large financial firms. 

Large institutions with assets of $10bn or more would essentially pay for winding down of failing firms through a resolution fund, which would provide for a flexible repayment period to avoid potential pro-cyclical effect of assessments on large firms. “In this instance we follow the ‘polluter pays’ model where the financial industry has to pay for their mistakes — not taxpayers,” the Committee said.  That means, I suspect, that taxpayers will pay.  If it doesn’t mean that, at the very least it means that the government is sticking its large inept nose into places it doesn’t belong.  Taxpayers shouldn’t pay for failures, but I can’t think of a better way to encourage corporatism and cronyism than to make major competitors responsible for each other.  If a company fails, the government should let it fail, and not “stimulate” it to a slow painful death.

New home sales down

The Commerce Department said new home sales fell 3.6% to a seasonally-adjusted annual rate of 402,000 last month, from a downwardly revised rate of 417,000 in August. Briefing.com had expected September new home sales to rise to a rate of 440,000 units.  Adam York, an economist at Wells Fargo, said: “We’re attributing most of the decline to the potential expiration of the new home-buyer tax credit…it’s getting harder to buy a house and no one wants to close after the credit expires.”  Congress is expected to extend the credit, but the terms are still being debated.  Not everyone attributes the drop to the tax credit though.  Mark Zandi, chief economist at Moody’s Economy.com, argues that first-time homebuyers are more likely to buy an existing home than a new home, which would  mean that the tax credit is less of an issue for new home sales. Zandi attributed the increase in new home sales over the past five months to low interest rates and more aggressive FHA lending. And he adds that these recent increases haven’t been spectacular. “All we can say is the new home market is stabilized.”

Cash for Clunkers cost $24,000 per car

An analysis released yesterday by the automotive Web site Edmunds.com has tallied up the taxpayer bill for the Cash for Clunkers program, and it comes in at a whopping $24,ooo per car with very little to show for it.  In fact, only 125,000 of those were vehicles that would not have been sold anyway.  The program gave car buyers rebates of up to $4,500 if they traded in less fuel-efficient vehicles for new vehicles that met certain fuel economy requirements. A total of $3 billion was allotted for the rebates.  The average rebate was $4,000, but if the overwhelming majority of sales would have taken place anyway at some time in the last half of 2009, it means the government ended up spending about $24,000 each for those 125,000 additional vehicle sales.  Of course the Department of Transportation (DOT) disagrees:  “It is unfortunate that Edmunds.com has had nothing but negative things to say about a wildly successful program that sold nearly 250,000 cars in its first four days alone,” said Bill Adams, spokesman for the DOT. “There can be no doubt that CARS drummed up more business for car dealers at a time when they needed help the most.”  Edmunds.com’s estimate of the sales increase generally matches what industry experts had thought, said George Pipas, a sales analyst with Ford Motor Co.

Economy grows more than expected

The Commerce Department reported today that the economy grew at a 3.5 percent pace in the third quarter, the best showing in two years.  Many analysts expect the pace of the budding recovery to be less than stellar because of rising unemployment and continuing difficulties by both consumers and businesses to secure loans.  Still, the much-awaited turnaround ended the streak of four straight quarters of contracting economic activity, and is the first increase since the spring of 2008, when the economy experienced a short-lived uptick in growth.  The third-quarter’s performance was slightly better than the 3.3 percent growth rate economists expected.  The jump largely reflected car purchases spurred by the government’s Cash for Clunkers program and housing purchases, which jumped at an annualized pace of 23.4 percent due at least in part to the $8000 tax credit. It was the first time since the end of 2005 that spending on housing was positive.  A major concern is whether the economy can continue to stand on its own feet after government supports are gone…many economists predict economic activity won’t grow as much in the months ahead as the impact of Obama’s $787 billion in government spending and tax cuts fades. 

Now on to our real estate investing educational arena …

Short Sale Resources: Awesome Websites You Never Knew Existed

Every once in awhile it pays to sit down and spend a bit of time updating your favorite bookmark lists and learning to use valuable online tools and resources. Believe it or not, there is an entire world of exceptional tools just waiting to save you both time and money. Here are a few of this year’s best as selected by CNN/TIME Magazine and others:

Academic Earth: MIT made history a few years ago when they placed hundreds (and then thousands) of courses online for free – now AcademicEarth.org has taken it one step further by compiling video courses from leading universities around the nation. Whether you would like to brush up on your sales and marketing skills, take real estate or business courses or review some accounting trends this is the goldmine of free learning.  www.academicearth.org

CraigLook: Everyone knows Craigslist but knowing it isn’t always loving it. Over the years Craigslist has remained almost unchanged – to the point it is at risk of becoming a living relic. Enter CraigLook.com, all the same information of Craigslist complete with the bells and whistles that make searching and selling easier than ever. Sign-up for an RSS browser, search within 250 of a zip code plus specific other criteria to help buy and sell short sales. www.craiglook.com

PropertyShark: This free service cuts through the online clutter to help isolate the information you need when making offers on real estate. Although it isn’t yet available in all areas, PropertyShark.com is a superb single source of information for price history, comps, tax info, owner names, demographic information, flood and fire maps, pre-foreclosure notifications and much more. www.propertyshark.com

Upcoming – Beta Versions

The following are still in beta so use at your own risk. However, beta is a great way to try before you buy or get a head-start using the latest and greatest technology before it becomes mainstream.

NewsforWhatyouDo: This collaborative news reader is for professionals only. Discover new sources of information, share and distribute links including blogs, join discussion and save time by filtering only that news you need to know. Residential real estate is a popular group so give it a try at www.newsforwhatyoudo.com

MyInfoQ: Another beta site, this is getting ready to go public shortly. Tag anything, anywhere then track data, events, people or whatever hits your interest. www.myinfoq.com.

Acrobat.com: You have heard the name before but this is an entirely new experience. Adobe.com combines Brio (online meetings), Buzzword (word processor) and Share (file sharing) for complete collaboration anytime, anywhere. It’s free and ultra easy to use. Visit www.acrobat.com to try.

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–

* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

******************

Fix A Flip … A Revolutionary Way to Close More Deals!

We’ve been flooded with phone calls and e-mails begging
us to reopen Fix A Flip … so today you get another
chance!  If you’ve been frustrated by not being able to close
your flip transactions due to 30 to 90 day seasoning
requirements, this program is for you!

Join us for a webinar tonight at 8:30 PM ET, 5:30 PM PST:

 https://www2.gotomeeting.com/register/570893394

*****************
Home prices rise – Case-Shiller

The Standard & Poor’s/Case-Shiller home price index of 20 major cities climbed 1 percent from July to a seasonally adjusted reading of 144.5. While prices are down 11.4 percent from August a year ago, the annual declines have slowed since February.  It shows a widespread turnaround with prices rising month-over-month in 15 metro areas since June.  “If the increases are consistent across the markets, this is key,” said Susan Wachter, Wharton School real estate professor, before the index was released. “Then we’re seeing the formation of a bottom.” However, rising unemployment and more foreclosures could stifle the rebound. Another unknown is whether a temporary federal tax credit for first-time buyers will be extended to help boost sales. The real estate industry is lobbying Congress to extend the credit past the Nov. 30 deadline. Top Democrats in the Senate are pressing a plan that would prolong the credit but gradually phase it out over the next year. 

Dodd tries to buy votes 

Senate Banking Committee Chairman Chris Dodd, a Democrat, in what amounts to cynical vote buying, proposed an immediate interest rate freeze on existing balances for the estimated 700 million credit cards in circulation.  Dodd is in trouble with voters after being tied to a sweetheart loan scandal earlier this year.  Spokeswoman Kirstin Brost said the bill was not a political maneuver and only reinforced Dodd’s views that more consumer protections were needed.  “At a time when families are struggling to make ends meet, jacked-up rates can quickly create crushing debt,” Dodd said in a statement. “People need to be responsible with their money, but they shouldn’t be taken to the cleaners by outrageous rates.”  Banks say that capping interest rates would cut their profits and force them to lend less money, which would reduce spending and worsen the economy.  Congress has already passed legislation that puts new rules for credit card lenders into effect come mid-February. The law, signed by President Barack Obama in May, limits when and how banks hike rates. It does not set a cap on the amount of interest lenders can charge. Dodd’s bill is unlikely to go anywhere.

Fannie Mae announces relief for investors 

Fannie Mae announced that its new Payment Reduction Plan (PRP) will provide forbearance for borrowers who are ineligible for the Home Affordable Modification Program (HAMP).  The mortgage principal and interest payments will be reduced by up to 30% for borrowers qualified for PRP, which replaces Fannie’s HomeSaver Forbearance program. PRP reduces the payments by 30% rather than the previous 50% under HomeSaver Forbearance, because permanent solutions are closer to 30%, Faith said.  Faith added that non-owner-occupied properties became eligible under PRP, and owners will receive new options and support for their investment properties and second homes – even though they do not fit under the HAMP umbrella.  The US Treasury Department provides capped incentives to servicers for the modification of eligible loans on the verge of foreclosure through HAMP. The PRP will grant transitional support for borrowers who do not qualify for HAMP while more permanent mortgage solutions are determined, according to Brian Faith, a vice president at Fannie Mae.

NABE – more jobs gained than lost 

U.S. companies are planning to hire and invest more in the near future, according to a survey released yesterday by the National Association for Business Economics (NABE).  The survey of 78 NABE members also showed that more companies increased capital spending during the third quarter of 2009 than cut spending, for the first time since October 2008.  “NABE’s October 2009 Industry Survey provides new evidence that the U.S. recovery is underway,” said William Strauss, a senior economist at the Federal Reserve Bank of Chicago.  NABE said job losses “appear to be slowly abating” with the percentage of firms cutting payrolls falling to 31% in the quarter from 36%. The percentage of firms adding jobs doubled from an all-time low of 6% to 12% in October.   Unemployment stands at a 26-year high of 9.8% in the United States. Economists surveyed by Briefing.com expect another 175,000 jobs were lost in October after employers shed 263,000 jobs in September.

Reverse mortgages have hidden dangers 

Panelists at the Information Management Network’s 15th annual ABS East gathering in Miami Beach conference said that in the last two years reverse mortgages have moved beyond the needs-based senior and now see a significant mix of borrowers tapping into the market.  This year alone, the percentage of owners with homes valued at above $400,000 is increasing to up to 39% of the reverse mortgage claims in some markets.  The panel also said the market is set to grow dramatically, with predictions that the next leg of growth in structured finance will come by way of reverse mortgage resecuritizations, despite warnings that the product is particularly vulnerable to misuse and even fraud. 

Annual reverse mortgage volume has topped 110,000 units and $17bn, with top banks like Wells Fargo and Bank of America and large insurance companies like Genworth and MetLife leading the way. Despite a slowdown in originations due to the recession, reverse mortgage originations are continuing at a record pace.  “In the reverse mortgage market, seniors face some of the same aggressive lending practices that were common in the subprime lending boom,” said Tara Twomey, an NCLC attorney and author of the report. “Well-funded marketing campaigns and perverse incentives to brokers are targeting seniors’ home equity and using reverse mortgages as their tools.”

Now on to our real estate investing educational arena …

Head Games – What it Really Takes to Become Wealthy

You have heard of the power of positive thinking but do you really have what it takes to become wealthy with short sales? The plain and simple fact is that many people think they are using positive thinking strategies for working their short sale investments when in reality they are simply playing head games.  See how you score with this set of short sale “truth serum” questions…then learn how to stop playing game and start investing for real wealth and success.

1. Do you have 20, 10, 5 and 1 year goals written down on paper…or are they simply stuck in your own mind? Research has consistently demonstrated those that actually write down goals are much more likely to accomplish them later. If your short sales goals are just in your own mind it’s an indicator you are playing head games rather than setting the stage for long term accomplishment. Put them on paper – be specific.  What is your net worth goal at each stage? How many homes for what average profit are required to get you there? What is your acceptance ratio? How many offers will you need to make each week/month to achieve that goal?
2. Do you focus on attitude or actions? Although attitude can change behavior – it’s much more likely that behavioral actions will change your attitude. Having a positive attitude is important but attitude alone will not close a deal; instead, your attitude is likely to reflect your degree of preparedness and successful closing of short sale deals. Don’t fall for the trap of believing all that is required is simply a good attitude – remember, actions speak louder than words. Get a proven plan of action that works then get busy implementing that plan every day.
3. Have you named your constraints? Everyone has obstacles and objections that limit their investment potential but have you taken the time to actually list each and every one of them? The first step in learning how to live without limits is to put them into proper perspective. Write them down then take a long hard look…which ones are true impediments to your success and which ones are merely “dislikeable”? For example, if you wanted to double your short sale profit potential, you already know how many additional offers will need to be made each month (assuming you have already worked out numbers 1 and 2 above); how will you fit that time into your existing schedule in order to reach your goal? Is it impossible to turn off the television for a few extra hours each week or just a question of determination? The choice is yours but be sure not to engage in self sabotage – name each constraint then list the solution beside it.

Learning to live without self imposed limits is easier than you might think but it does require a few simple steps; clarity, competence and concentration. These 3-C’s of success are the cornerstone to every short sale investor.  Do you have the clarity required to truly accomplish your goals are you merely in the day-dream or talking stage? If you aren’t acting then take a long hard look; lip service is cheap. Competence is essential to any short sale strategy but fortunately for novice investors, it’s also possible to purchase expertise: doctors, lawyers and even real estate brokers all routinely sell their expertise. Make it work for you buy committing to your own success. Concentration requires focus, determination and dedication to pursue your goal without becoming bored, fearful, anxious or allowing other negative emotions or situation to interfere.  Add them up to see where you stand then join us for a free webinar fill in the gaps.

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–

* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

******************

Fix A Flip … A Revolutionary Way to Close More Deals!

We’ve been flooded with phone calls and e-mails begging
us to reopen Fix A Flip … so today you get another
chance!  If you’ve been frustrated by not being able to close
your flip transactions due to 30 to 90 day seasoning
requirements, this program is for you!

Join us for a webinar Tuesday at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/570893394

*****************

Home sales up 

The National Association of Realtors (NAR) says that existing home sales increased nearly 10% from August to September, and that sales activity is at its highest level since July 2007.  September is the fifth month to post a month-over-month gain out of the last six months. September’s 9.4% increase brings existing sales to a seasonally adjusted annual rate of 5.57 million units, up from 5.1m in August. September 2009’s rate is 9.2% higher than the same month a year ago. July 2007’s rate was 5.73 million.  NAR’s chief economist Lawrence Yun said the increase in market movement is due to low prices and mortgage rates and a surge in first-time homebuyers.  “Much of the momentum is from people responding to the first-time buyer tax credit, which is freeing many sellers to make a trade and buy another home.”  But Yun warned that the market is still underperforming, and while there are indications of price stabilization, there is a need for more buyers in the market.

Hafa confirmed

Herb Allison, the assistant secretary for Financial Stability, in testimony before the Congressional Oversight Panel (COP), confirmed the US Treasury Department’s plans to develop a foreclosure alternatives program with funds from the Troubled Asset Relief Program (TARP). Under the Home Affordable Modification Program (HAMP), the Treasury allocates capped incentives to servicers that modify qualifying loans on the verge of foreclosure, but the new program will provide incentives for short sales and deeds-in lieu of foreclosure when borrowers are unable or unwilling to complete the HAMP process.  “We are aware that there are many borrowers whose modifications under HAMP will not be sufficient to keep them out of foreclosure,” Allison said.  The Foreclosure Alternatives Program can help prevent foreclosures and minimize the damage on borrowers, financial institutions and communities, Allison said.  Laurie Maggiano, the chief of the Homeowner Preservation Office at the Treasury, released information on the forthcoming initiative, which she called the Home Affordable Foreclosure Alternatives (HAFA) program. 

Debt ceiling approaching

By Friday, after another week of massive debt sales by the Treasury Department, Roughly $211 billion will separate what the country owes from its self-imposed credit limit.  The $12.104 trillion debt ceiling could be breached by the end of November, and it is also expected that lawmakers will raise the ceiling, as they have done more than 90 times since 1940.  If they don’t, the government could be forced to shut down. But that’s not the worst that could happen — the reason lawmakers will eventually approve an increase is because without one ultimately the value of U.S. bonds would sink, jeopardizing the portfolios of countries and investors around the world who invest in U.S. debt. 

But if they don’t do it before the ceiling is reached, “the U.S. Treasury must engage in some legerdemain to create additional headroom,” wrote Standard & Poor’s managing director John Chambers.  And that option is bad all round, since the government will have to draw from either government securities currently held in a 401(k)-type plan for federal employees, a Civil Service Retirement and Disability Fund, or by selling $16 billion worth of the government’s dollar holdings in a special currency stabilization fund.

Jobs looking better than atrocious

The National Association for Business Economics (NABE) says the number of employers planning to hire workers over the next six months exceeded the number expecting job cuts for the first time since the recession began in December 2007.  The survey of 78 NABE members also showed more companies increased capital spending during the third quarter of 2009 than cut spending. It was the first time that happened since October 2008.  NABE said job losses “appear to be slowly abating” with the percentage of firms cutting payrolls falling to 31% in the quarter from 36%. The percentage of firms adding jobs doubled from an all-time low of 6% to 12% in October.  Unemployment stands at a 26-year high of 9.8% in the United States. Economists surveyed by Briefing.com expect another 175,000 jobs were lost in October after employers shed 263,000 jobs in September.

 Home prices up

According to Radar Logic’s Residential Property Index (RPX) housing market report, home prices and home sales in 25 metropolitan statistical areas (MSAs) increased 1% and 1.9%, respectively, from July to August.  The average price change from July to August for the past 10 years is 0.1%, but Radar Logic said the first-time homebuyer tax credit, which nears expiration, is adding demand in the market. The real estate data and statistic firm applied the same explanation to an increase in home sales volume, which for the past 10 years averaged a 2.4% decline between July and August.  Radar Logic president and CEO Michael Feder said, “Pending sales and mortgage applications for purchase suggest that strength in the RPX could continue for the next few months, though given the expected seasonal decline in activity in the fall, that strength could take the form of a modest price gain or a milder-than-average price decline through the winter. The threat of pending foreclosures to the housing market is, in our view, overstated and we believe there is strong evidence that housing supply and demand are returning to more normal levels.”

Now on to our real estate investing educational arena …

The Keys to Unlocking Hidden Homes & High Profit Opportunities

Like most hidden treasures there is opportunity for huge reward for those willing and able to persevere in short sale but you will need a treasure map and key; otherwise, it’s easy to lose your way and spend years stumbling about without anything to show at the end. Depending upon your area and income, you probably have a “wish list” in mind when it comes to properties you would like to purchase and the resulting profit to be made. Unfortunately, the traditional real estate sales system isn’t likely to help; not because they don’t have a process in place – most brokers and agents have a system in place for buying and selling real estate – but they don’t have the RIGHT process in place. Dealing with short sales is different. Using the wrong tools or “map” will actually work against you rather than in your favor. 

Key #1 – Banish the idea of a smoothly run, perfect lender application and approval process. While banks would love to have you believe they are the picture of perfection, the sad truth is something a little less complete chaos especially with months of back-logs, quotas, lost paper trails and other problems that have plagued the industry. Don’t get discouraged – this is pure opportunity for those that are prepared to make their jobs easier!

Key #2 – Finding the best homes is a numbers game…and competitive. The MLS and other popular foreclosure websites are not the best sources for finding short sale opportunities. Remember, only a small fraction of potential short sale homes are actually listed…and those may not be the prime properties. Keep in mind, 100% of short sale properties are “hidden” at some point and time so learning how to find them before they become listed or in the public awareness is a tremendous advantage.

Key #3 – Approval tracking systems are designed to spit you out. Think of it like job hunting; the first round of applications and resume’s are not reviewed in order to find the right candidate but rather to weed out those that are clearly not the ‘right type’; likewise, short sale offers are quickly reviewed for fit with the weak links rapidly removed from the pending work load. Make sure your system works to stay on the top of the list rather than be eliminated in round one.

Key #4 – Savvy short sale investors begin by circumventing the “traps and pitfalls”. Right or wrong, lenders are just like anyone else; they need to maximize time and efficiency so use a series of steps in an attempt to eliminate poor candidates and discourage those that would otherwise waste their time. Unfortunately, many novice short sale investors do indeed become discouraged and quit long before ever having time to taste success. Again, it’s important to find a system that works so you cut through the path of obfuscation and instead go directly to the real route that gets results.

Key #5 – Identify your suspects, prospects, opportunities and targets. For novice short sale investors attempting to go it alone, it will be important to track all your efforts for several months in order to determine your close rate. For example, let’s assume you select a specific neighborhood and identify 1000 “suspects” which you make initial contact with. Of those, 100 “prospects” respond (or 10% response rate). From those 100 prospects, you identify 10 actual opportunities where the homeowner is properly position to accept and offer and you have a reasonable expectation of closing on the deal. From those 10 opportunities, you select 1-2 targets for acquisition. Of course, results will vary tremendously depending upon the area, offer, process used etc…but this provides exactly the information required to hit your target short sale goals each month or quarter. Simply determine in advance how many suspect you will start with in order to achieve the desired number of acquisition targets then work the system you have in place.

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–

* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

******************

Fix A Flip … A Revolutionary Way to Close More Deals!

We’ve been flooded with phone calls and e-mails begging
us to reopen Fix A Flip … so today you get another
chance!  If you’ve been frustrated by not being able to close
your flip transactions due to 30 to 90 day seasoning
requirements, this program is for you!

Join us for a webinar Tuesday at 8:30 PM ET, 5:30 PM PST:

https://www2.gotomeeting.com/register/570893394

*****************

The next collapse

If there’s another real estate collapse on the way, it’s in commercial real estate, and the FDIC closing Chicago’s Corus Bank last month may have signaled the beginning of it.  Corus, whose balance sheet full of bad construction loans, was just one of many banks that have this type of debt on their books, and refinancing the $2 trillion in commercial mortgages is going to be tough as property values decline.  In this new age of cautious lending, few banks are willing to refinance loans.  Michael Haas, a real estate attorney at Jones Day, says, “There is a hesitancy to extend credit when there is a real possibility that the real estate may be worth less than it was a few years ago.” In a situation similar to the subprime crisis, we may be looking for a wave of foreclosures and loan defaults that could, in turn, trigger a collapse in the market of the structured bonds backed by commercial real estate and construction debt.

MBA objects to new legislation 

The Mortgage Bankers Association (MBA), like most of us who believe government has no place in the nation’s business, objected to legislation passed by the House Financial Services Committee that would create a consumer financial protection agency.  The bill continues the patchwork approach of state and local laws that present challenges for lenders in multiple states, and ultimately lead to increased costs for consumers.  MBA’s Chairman, Robert E. Story, Jr. says:  “MBA has also expressed concern about the creation of a new government bureaucracy that could result in financial institutions facing conflicting regulatory guidance from two regulators – the CFPA and their existing prudential regulators.   A better approach would be to create a national regulator for mortgage banks that would regulate for both consumer protection and safety and soundness.  Existing federal regulators could then be empowered to enforce consumer protections on the financial institutions they oversee.  Moving forward, MBA will continue to work to make these and other improvements to the bill in the hope of finding common ground on a consumer protection bill that we can support.”

2010 is shaping up for a weak recovery 

The Federal Reserve is in no rush to pull back its extensive economic life support measures.  Chicago Federal Reserve President Charles Evans said: “We have to think about our exit policy and are looking at it very carefully, but at the moment, that’s not our first order concern, at the moment, its policy accommodation.  I think that the recovery is going to be very unsatisfactory in 2010.”  Evans, who will vote on the Fed’s policy-setting panel in 2010, said he expects unemployment to rise above ten percent.  The Fed has cut rates to near zero and pledged to hold rates there for an extended period.  Its next policy-setting meeting is Nov. 3-4 and it is not expected to signal any movement toward an exit then.  High unemployment and low inflation rates both indicate that policy accommodation is in order, and with economic growth, household spending will be restrained and businesses will face weaker demand for their goods and services, Evans said. “It is not going to feel like a recovery for some time.”

Freddie Mac – increased delinquencies

Freddie Mac announced today that its mortgage investment portfolio grew by an annualized 7.3 percent rate in September, while delinquencies on loans it guarantees accelerated.  The portfolio increased to $784.2 billion, for an annualized 3.4 percent decrease year to date, and delinquencies, which increase stress on the company’s capital, jumped to 3.33 percent of its book of business in September from 3.13 percent in August and 1.22 percent in September 2008. The multifamily delinquency rate accelerated slightly in September to 0.11 percent from 0.10 percent in August. A year earlier it was 0.01 percent.

IRS gives Homebuyer Tax Credit to aliens and minors 

Ok, we knew it would happen, right?  We all love the tax credit – if only the government didn’t have to be the one administering it.  The Treasury Inspector General for Tax Administration (TIGTA) believes the Internal Revenue Service (IRS) may have paid out millions of dollars in first-time homebuyer tax credits to individuals not eligible to receive the $8,000 credit.  Nearly $4 million of incorrectly paid credits were due to both alleged fraud and filing errors on claims by 580 taxpayers less than 18 years old. The youngest of these was 4 years old, TIGTA head J. Russell George said in prepared testimony to the House Ways and Means Oversight subcommittee.  TIGTA also found 3,200 taxpayers with Individual Taxpayer Identification Numbers (ITIN) claiming the credits. ITINs are used to track income tax for resident aliens, in lieu of a social security number, and it’s possible that as much as $20.8 million in tax credits was paid to resident aliens ineligible for the credit.  As of August 22, 2009, more than 1.4 million taxpayers claimed the tax credit for homes purchased in 2008 and 2009, representing total foregone tax revenue of about $10 billion, according to estimates presented by Government Accountability Office (GAO) director of strategic issues James White.

Now on to our real estate investing educational arena …

Who’s Your Seller?

By far, one of the surest signs of a novice short sale investor is the tendency to think of the homeowner as the actual seller. While s/he certainly has a legal right to the property and therefore a “say-so” in whether or not to accept an initial offer for a short sale, when it comes down to the hard and fast fundamentals of the deal, more often than not the actual lender is closer to what most people would consider the actual “seller”.

If this seems counter-intuitive, chances are you are not alone. Many homeowners actually believe they are the “sellers” as well; in fact, it’s not uncommon to hear things like “Send me an offer and I’ll consider it” or “How much will you pay me for the property?”. Of course, that is understandable since most homeowners never really realized they didn’t truly own the property to begin with…the bank did (and still does). However, what is forgivable among distressed homeowners seeking financial relief is unforgivable among short sale investors; you simply must know and understand your seller in order to work a successful transaction.

Take time to consider a few facts; first, the lender is the only party able to make the final determination on whether or not to accept the short sale offer, subject of course to the homeowners’ approval. They can determine what constitutes an acceptable net and even change their mind when it suites them to do so – make it your business to understand what the seller needs and wants to make the deal work …the real decision maker, not the homeowner.  For example:

1. Have you used the correct state commission form containing all required disclosures for both buying and selling?
2. If you are using your own purchase and sale contracts/option etc, have you verified each includes all necessary verbiage and disclosures?
3. Do you have appropriate contracts in place with agents specifying the working relationship?
4. Do you have appropriate disclosures, verbiage and properly positioned details of each transaction when buying/selling a property?
5. Does the BPO accurately reflect the property?
6. Have you verified all the “math” so the Net is properly attributed? Don’t make it harder than it needs to be for the seller to approve your deal!
7. Do you understand all legal requirements related to “double closings”? If not…learn them. This is a major cause of confusion and loss of confidence when purchasing short sale investments!

Serious about short sales? Get to know your seller then adopt a tried and true system that works rather than spending all your time talking about investing.  Interested in learning more? Attend a free webinar to learn more about short sales in less time than you ever thought possible.

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–

* Follow me on Twitter: http://www.twitter.com/mclaughlinchris

******************

Fix A Flip … Replay Comes Down Soon!

We’ve been flooded with phone calls and e-mails begging
us to reopen Fix A Flip … so today you get another
chance!  If you’ve been frustrated by not being able to close
your flip transactions due to 30 to 90 day seasoning
requirements, this program is for you!

Watch the replay here:

http://www.shortsalesriches.com/fixaflipwebinar
(please allow a few minutes to upload)

*****************

House prices down 0.5%

According to the 10-City Composite Index of house prices released by real estate market data provider Altos Research, house prices declined 0.5% in September and 1.1% during the third quarter.  The index is a measure of home prices based on summaries of metrics associated with active residential property listings. After bottoming out at $470,017 in January, it gradually increased to $509,030 in July before again declining and was $503,401 in September.  Of the 26 markets Altos Research examines, asking prices increased in only five, including Los Angeles, which experienced a 1.5% increase, the largest of the 26 markets. Phoenix had the largest monthly decrease of 3.7%.  Inventory also declined in 23 of 26 markets. All of the 26 markets except San Francisco had a median days-on-market of 100 or more in September. Miami had the slowest inventory turnover rate at 251 days.  Altos said prices are likely to continue showing modest declines throughout the seasonally weak fall and winter months of 2009, and that this year’s downturn would likely have been worse were it not for historically low mortgage rates and the first-time home buyer tax credit.

Initial jobless claims up

A consensus estimate of economists surveyed by Briefing.com had expected 515,000 new jobless claims, but the Labor Department announced that there were 531,000 initial jobless claims filed in the week ended Oct. 17, up 11,000 from an upwardly revised 520,000 the previous week.  The 4-week moving average of initial claims was 532,250, down 750 from the previous week’s revised average of 533,000. The government said 5,923,000 people filed continuing claims in the week ended Oct. 10, the most recent data available. That was down 98,000 from the preceding week’s ongoing claims, and would — if they are not revised — mark the first time since late March that continuing claims were below 6 million.  The figures do not include those who have moved to state or federal extensions, nor people who have exhausted their benefits.  The 4-week moving average for ongoing claims fell by 59,250 to 6,030,750 from the prior week’s revised average of 6,090,000.  “Despite the relatively steady improvement in weekly claims since April, this also suggests that the employment market remains weak,” said Jim Baird, analyst at Plante Moran Financial Advisors.

Foreclosures to slow in 2010?

University Financial Associates (UFA), a risk management firm based in Ann Arbor, Michigan, says that after a 30% climb over the last four years, foreclosures will decline in 2010.  (In other news, the Titanic has stopped sinking…)  Dennis Capozza, a professor of finance with the Ross School of Business at the University of Michigan and founding principal of UFA, suggests that a combination of a slowing of house price depreciation, a reviving economy, tighter underwriting of recent loans and the “burnout” of poor-performing vintages from three to five years ago. Every quarter UFA analyzes representative mortgage loans in the serviced portfolio of all outstanding mortgages and estimates the probability of prepayment and default in every month of the loan’s future life, according to the report.  Analysts input loan-to-value ratios, credit scores and UFA’s own zip code level economic scores into the quarterly assessment. UFA collects zip code level analysis to extrapolate a national forecast. “Working against the welcome decline in foreclosures is the steep increase in unemployment, which will interact with the large numbers of homeowners who are underwater to prevent even greater declines in foreclosures that could have been expected without high unemployment,” Capozza said.

7,000 people run out of unemployment benefits every day

Democrats in the Senate introduced a bill two weeks ago to lengthen benefits in all states by 14 weeks, with those who live in states with unemployment greater than 8.5% receiving an additional six weeks.  Senate Republicans want to add several amendments, including paying for the increased benefits with stimulus funds rather than by extending a longstanding federal unemployment tax through June 2011. Senate Democrats took a step last night to limit the debate on the bill and steamroll it through as early as the end of next week. If it passes, the Senate legislation must then be reconciled with the House version, which extends benefits by 13 weeks for those living in high-unemployment states.  Ain’t it grand when lawmakers stop worrying about who is going to pay for things?

Commercial real estate still suffering

Residential real estate and manufacturing sectors of the economy are reporting positive improvements, but commercial real estate remains one of the weakest sectors. According to the Federal Reserve Beige Book, recovery in that sector is unlikely for at least nine more months.  The Beige Book is an economic indicator published eight times a year by the US central banking regulator. Commercial real estate conditions were described as either weak or deteriorating across all of the 12 districts measured in the report. The inability to obtain credit was cited as a problem for businesses wanting to purchase or build commercial space, leading to increasingly low demand and high vacancy rates.  Public, nonresidential construction activity funded by federal stimulus projects provided a bright spot in the Cleveland, Chicago, Minneapolis, and Dallas districts, but gains were often offset by state and local government cutbacks.

Now on to our real estate investing educational arena …

Cities of the Future: Trends to Cash-In

The area of future studies remain a perpetual favorite among visionaries and investors alike; some enjoy the prospect of living life as it “could be” while others take a more pragmatic approach in an attempt to understand what it “would be”. Whatever your personal outlook, take a glimpse at the cities of the future to map your destination into the opportunity of tomorrow:

Small Town Revival: What the industrial age did for major cities like New York and Los Angeles, the Internet or age of information is likely to do for small town America. Without the need to be limited by time and space, a growing number of people are seeking small town convenience combined with amenities like hospitals, parks and recreational pursuits. It’s a trend likely to continue far into the foreseeable future especially in those areas most likely to appeal to Baby Boomers with relatively affordable cost of living ratios.

Grass Roots Government: While nation states are going global an equally powerful force is shaping the face of the nation…a back to basics grassroots movement whereby those with similar taste and style, hobbies and even political outlook find it expeditious to live in close proximity. Look for neighborhoods that reflect a shared purpose, lifestyle or outlook to attract like-minded people.

Downsized Flexibility: Frugal living combined with empty nest’s is creating a revived demand for smaller homes that use less energy and cost less to insurance and maintain. However, small shouldn’t be confused with conservative; consumers expect greater function and flexibility than ever. Luxury bathrooms, ultra-modern conveniences and outdoor amenities are only a few of the mandated expectations required to attract the ultra-chic buyers.

Leisure Means More:  Whether it’s taking a walk in the park, going for a swim or simply the ability to take the dog out for a stroll, leisure is more meaningful than ever. People no longer want to settle for rest and relaxation two week out of the year while they spend hours every day sitting in traffic and fighting for parking. Look for areas that allow homeowners, renters or other buyers to integrate leisure opportunities into their daily life. Nearby parks, bike paths, museums, restaurants and other activities should be close and convenient.

Change of Shopping Habits: Amazon and eBay have changed the way America shops; what used to be considered a “risky” endeavor has become increasingly mainstream while strip plaza’s and malls continue to fight for their fair share of shoppers. Expect to see this trend continue far into the future with niche shopping becoming the rage of the future “in person” experience.

The Bottom Line: In much the same way that investors don’t want to buy properties near major manufacturing plants or industrial employers only to watch the company close and the town to slowly shrivel away; understand the long and short term potential for any property you purchase. In many instances you will want to sell quickly while occasionally it may make sense to hold a purchase over the long term. Learn to recognize the trends then use each to your advantage when working your short sales strategy.

See you at the top!

Chris McLaughlin

**************

Copyright Loss Mitigation Institute LLC 2009.

All Rights Reserved.

http://www.shortsalesriches.com
http://www.shortsalescoach.com
http://www.sixfigurebpo.com
http://www.reomillionaireclub.com
http://www.youtube.com/shortsalesriches 

*************************************************
Finally, a blog for Real Estate professionals
that want up-to-the-minute news, & how it impacts
us and our market…
http://www.shortsalesriches.com/blog

*************************************************

About the author:

Chris McLaughlin is widely known as America’s top
Real Estate Attorney and Investment Consultant.

    * As the top Florida foreclosure and pre-
      foreclosure expert, he oversees more than
      100 short sale & REO closings each month
   * Long-time authority on real estate investing
      and rapid reselling of distressed homes.  Owns
      portfolio of nearly 100 high-value, high-profit
     properties
    * Owner of one of Florida’s largest Real Estate firms,
     running 4 different offices, supporting over
     400 agents, uniquely positioning him to help
     thousands of investors make money in the
     biggest market opportunity ever!
    * Highly sought-after speaker, consultant, and
      seminar leader for current trends and hot topics
      in Real Estate Investing, Entrepreneurship, and
      Wealth Building
    * Follow me on Twitter: http://twitter.com/mclaughlinchris
    * Add me on Facebook: http://www.facebook.com/mclaughlinchris
    * Join my Fan Page: http://www.mclaughlinchris.com
–