Peter Schiff talks about the US economy and how spending our way out of recession is not the answer. Its not possible to spend your way to economic recovery, it just increases debt which in the long term is going to cause more harm than good. The message is simple, don’t buy into the spin from the government. Home rental prices are falling due to unemployment, the real story with inflation is not being told!
Featured on the national news in Australia today was a story about a social media marketing company usocial, the story reported how the young owner was sitting on a company worth more than a million dollars at the ripe old age of 25. So when you start looking the services offered and the way usocial is exploting these big media sites it makes you wonder how and why it is allowed to happen. And the prices charged are not exactly low by any stretch of the imagination. An investment $600 will get you to the front page of Digg, $350 takes you to the front of del.icio.us and a few of the others will set you back $200 a pop. No wonder the company is worth so much!
Then there are the other services such as buying thousands of twitter followers, facebook friends and views on youtube, no doubt these services work quite well but the question of how ethical these tactics are and what effect this type of marketing has on sites like Digg. In effect manipulation undermines the whole Digg concept if people can simply go out and buy space on the front page, the question needs to be asked what is Digg doing about it?
Now that the market in Southern California is improving and there are a good number of equity (normal) sales in inventory, I’ve noticed a surge in the number of For Sale by Owners (FSBO’s) and discount brokerage listings. Since prices are still down, these equity sellers are trying to squeeze every dollar they can out of their homes, which is totally understandable. I’ve got absolutely nothing against anyone who wants to save money. I love to save money. The truth of the matter is, going with a discount,MLS entry-only broker or FSBO can cost a seller thousands of dollars! “But I’m saving thousands of dollars by not hiring a full service agent to sell my home…right?” WRONG! No offense to anyone, but unless you’ve sold dozens of homes recently, you don’t know what you are doing.
Little things you don’t think about will cost you money. I recently sold a FSBO property to a buyer client of mine and we got the property for $25,000 less than we should have been able to because the owner didn’t know what they were doing. They were the nicest people in the world, but they had no clue how to sell a home. “But I’m getting free advice from a family member who’s got a real estate licence…” So what! If your family member doesn’t live and work in the area where you are selling, they don’t know how to properly price your home.
Improper pricing is the biggest mistake FSBO’s make. They usually go to high and wind up chasing down the market, but sometimes they go too low and could sell for much more. These sellers think they’ve done a great job because they sold quickly and at full price. But, in reality, they could have sold higher if they had had good advise on pricing and negotiation.
So, let’s crunch the numbers. A $500,000 house that is listed FSBO will cost the seller only 2.5-3.0% of the purchase price to pay the buyer’s agent. So, they save the listing agent’s commission… right? WRONG! If a good agent who knows how to market the property and negotiate the deal can get you $525,000 or $535,000 for the property you’ve actually lost $10,000 – $20,000 by selling yourself. The same goes for discount brokers. Discount listings are viewed by the public as discount properties and sell for less!
The moral of the story is; if you are thinking of selling, or wondering what your home is worth, do yourself a huge favor and talk to a real, full-time, professional Realtor. If you think one Realtor is giving you the run around, then talk to more than one. There are plenty of agents to choose from. Don’t approach selling your home with a discount mentality. How would your teeth feel or look if you approached dentistry with a discount mentality. If you have a bad experience with a Realtor, then fire them and hire another. You’ve invested years in your home. Isn’t it worth an extra couple of hours to know you are getting the most out of it when you sell?
Australian real estate is in demand, at least in the lower price range in Sydney NSW -
Strong demand for the cheaper more affordable residential homes is prompting buyers to pay tens of thousands of dollars more than the advertised listing price on websites and has even sparked a punch-up at an auction in Sydney’s Parramatta.
Turnover in the middle to lower end of the market has doubled for many real estate agencies in recent weeks, are we starting to see the start of a new real estate bubble?
Agencies previously focused on more highly priced property have expanded into the less expensive mortgage belts in Sydney and Melbourne’s west to cash in on the increased demand, as sales in the top end have slowed during the global financial crisis.
The US Treasury Secretary, Tim Geithner, recently unviled the Obama administration’s plan to help get lenders to grant more short sales. The main thrust of the proposal calls for the government to give banks $1000 for each short sale they grant and $1500 to the home owner to aid with relocation costs. Like many of the other plans advanced by the federal government to help distressed homeowners this one seems long on promises and very short on details.
I’ve completed many short sale transactions in San Diego. I really don’t see how the extra $1000 is going to get the lender to get off the block any faster and make the sale happen. The layers of bearaucracy at one of these lending institutions makes the federal government look organized. Maybe the government should use the $1000 to pay for termite repairs the lender refuses to cover, so the buyer doesn’t walk away from the deal after six months of waiting.
It takes a committee of people just to get a short sale file ready to submit to an investor. A short sale file at Bank of America passes through 3 negotiators hands before it can close. The 1st negotiator makes sure everything is in the file, the 2nd submits the file to the investor (who is the only one who can really approve it) and the third facilitates the rest of the transaction. It takes at least six weeks for the file even to make it to the phase one negotiator. I don’t think throwing a $1000 at that mess is going to make it go any more smoothly.
I certainly appreciate the government is trying to help, but if they are going to help, they need to address the whole problem. I’ve seen some recent approval letters from B of A which try to force the borrower to sign on for years of collection activities, post short sale. These tactics are only going to prolong the misery by creating hundreds of thousands of new bankruptcy filings over the next several years.
Let’s figure out a way to really attack the heart of the problem. I’m not really for big government, but since they are already throwing billions at this problem, why not spend it wisely. Perhaps they should ask some every day Realtors in San Diego or elsewhere what the real problems with short sales are. A real on-the-ground understanding of the problem is the only way to solve it.
For the month of June 2009, in fact, the Standard&Poor’s Case-Shiller index found prices up in 14 of the 20 major markets it covers — and up nationally by one half of one percent.
That’s the first monthly gain in the heavily publicized Case-Shiller index in three years!
•New home building is beginning again even in the hardest-hit markets. In California, June bullding permits soared by 17 percent over May. In the high-cost San Francisco area they were up by 20 percent.
•In Florida, sales of existing homes jumped by 28 percent, according to the Florida Association of Realtors. Condo sales were up by an average 37 percent for the month. And despite the foreclosures still weighing down Florida transactions, average prices in June managed to rise by two and a half percent!!
Home sales are up, new housing starts up, new construction permits up, and now the last of the doomsayers say that home prices are in fact moving up.
Other indexes that get less attention on the evening news began trending more positive a few months earlier, such as the federal government’s “FHFA” index.
But the Case-Shiller news, late though it was, should send a loud message to consumers: We’re past the low point of the cycle on prices: If you were waiting to buy at the bottom, well – we’ve passed that point.
Case-Shiller found prices in Cleveland up 4 percent for the month, Dallas up by close to 2 percent, San Francisco, Washington DC and Chicago up by a percent or more.
In his very latest video blog Peter Schiff talks about the falling US dollar and the economic recovery that is happening in other parts of the world particularly the Asian stock markets. The US dollar is taking a battering and has hit it’s lowest levels since September last year, with the amount of paper the US government has printed the devaluation of the US currency is happening quickly. The impications of a falling US dollar are serious, inflation, higher interst rates and an economy in much worse shape than it already is.
Loan modification by definition: This is a process whereby a homeowner’s mortgage is modified and both lender and homeowner are bound by the new terms. Common loan modifications are lowering the interest rate, reducing the principal balance, ‘fixing’ adjustable interest rates, increasing the loan term as we have outlined below, forgiveness of payment defaults & outstanding fees, or any combination of these.
Home Loan Modification Type one – Straight Capitalization Loan Modification
With this type of loan modification, any back interest owing is added back to the loan principal. The new total loan balance is amortized using the same conditions and loan terms of the existing mortgage. With this type of loan modification the payments are going to be higher than the original loan, so this type of loan modification is used to bring any delinquent interest current. In order to qualify for a straight capitalization loan modification the borrower would have to prove that they would be able meet the higher monthly payments.
Home Loan Modification Type 2 – Loan Modification with Term Extension
This type of loan modification extends the loan term (how long you have to pay the loan off). This will result in lower monthly payments and bring some immediate relief to the borrower. With this type of loan modification, the term of the loan is only extended to whatever the length of the original term was. So if the original loan was for 30 years, the term extension could then be extended for up to 30 years.
Loan modifcation is a very real option for the many people who are currently facing difficulties meeting repayments. Getting a home loan restructured can save you from a situation where you may be forced to sell or even worse the banks may foreclose on your property.
In the normal progression of a mortgage, payments of interest and principal are made until the mortgage is paid in full (or paid-off). Under normal circumstances until the mortgage is paid, the lender holds a lien on the property and if the borrower sells the property before the mortgage is paid-off, the unpaid balance of the mortgage is remitted to the lender to release the lien. Generally speaking, any change to the mortgage terms is a modification, but as the term is used it refers a change in terms based upon either the specific inability of the borrower to remain current on payments as stated in the mortgage, or more generally government mandate to lenders.
Residential mortgage credit quality continues to weaken, with both delinquencies and charge-offs on the rise at FDIC-insured institutions.
This trend, in tandem with upward pricing of hybrid adjustable-rate mortgage (ARM) loans, falling home prices, and fewer refinancing options, underscores the urgency of finding a workable solution to current problems in the sub-prime mortgage market. legislators, regulators, bankers, mortgage servicers, and consumer groups have been debating the merits of strategies that may help preserve home ownership, minimize foreclosures, and restore some stability to local housing markets
Under the financial rescue package, the Treasury plans to directly inject $250 billion of capital into U.S. banks in exchange for preferred shares. Nine of the largest U.S. banks were essentially arm-twisted into signing on for the first $125 billion in capital infusions.
The Mortgage Loan Modification process provides for either a permanent change in one or more of the terms of a mortgagor’s loan, which allows a loan to be reinstated if the loan is behind or past due and results in a payment the mortgagor can afford.
Lenders will need to collect all of the following documentation.
Cover letter, stating what’s in the submission package
Client Authorization Form, signed by all borrowers, one for each different lender (if more than one)
IRS Form 4506 – T, Request for Transcript of Tax Return, one for each borrower
Two months’ worth of paystubs, all borrowers
The last two years’ tax returns, all borrowers
Year-to-date Profit and Loss statements for each business owned (self-employed and entrepreneur borrowers only)
Schedule of Real Estate Owned, especially if they own more than one home
1003 Loan Application
Recent appraisal or county property value assessment
Copy of personal budget for all borrowers, including everything from debt payments to utility bills, from the monthly food budget to gym membership dues, and everything else the client’s spends money on.
Florida real estate – Check the latest homes for sale in Florida. Some intersting data has been released showing Cape Coral is a hot spot for sales activity, with 4,633 sales and less than a 1 yr supply of inventory. Lee County is looking better with overall inventory level standing at 17.53 months, down from 30.57 last year. Median single family home actual sale prices were down 37.89%. Two areas that actually saw a rise in mean average sales prices in 2008; Bonita Spring-Estero and Central Fort Myers.