Realtor Coaching & Training: New York
Harris Real Estate University students have been aware of the consumer shift away from the so-called McMansions.
The homes that were built by the now aging baby boomers. Status oriented homes that often had 5+ bedrooms and 3000+ square feet. HREU Students who are doing short sales know that a majority of their new short sale listings are these types of homes as downsizing boomers discover they have few options.
Agents, 2010 IS the year of the short sale. New Treasury Department Guidelines take place April 5th. Are you ready for the massive expected increase in short sales? Learn the new ways to list and sell short sales. Earn your HREU CDPD. Watch the FREE Agent Short Sale Secrets video and grab your FREE Short Sale Secrets book NOW.
The glut of unsold McMansions will certainly force a massive continued drop in property values. This will lead to more owners of these luxury homes to be underwater with few alternatives (if they have to sell) other than foreclosure or short sale. Refinancing isn’t an option. Millions of these homes were purchased in the last 5 years using the ARMs. Once those mortgages reset and interest rates rise….the inevitable churning of foreclosures continues.
There is a shift occurring in the housing demands of young professionals away from suburban lifestyles and a renewed interest in urban living, said keynote speaker Carol Coletta, president and CEO of CEOs for Cities, speaking at the 11th Annual North Texas Housing Summit, hosted by the Federal Reserve Bank of Dallas. The firm’s national network of urban leaders specialize in identifying trends for metropolitan development.
Colletta’s assertions at the event included:
- College graduates are a city’s primary economic driver
- Younger generations continue to desire to live in urban, inner city communities, creating communities with a more diverse income spectrum, creating neighborhood stability.
- Stability doesn’t necessarily come in the form of homeownership, because the financial and banking systems haven’t caught up to what consumers and citizens want out of their housing options.
- The millennial generation is more likely to want to rent or own urban apartments and condominiums rather than single-family houses.
Timothy Bray, director of the Institute for Urban Policy Research at the University of Texas at Dallas, said multi-family and mixed-use developments built near employments centers enable potential buyers to spend less on commuting, thereby releasing more disposable income. Fort Worth Mayor Mike Moncrief added that their city planners are demanding more out of developers who want to do business in the city.
CEOs for Cities is a national cross-sector network of urban leaders from the civic, business, academic and philanthropic sectors dedicated to building and sustaining American cities.
Source: HousingZone.com
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Price cuts seem to be slowing down in some markets, which indicates the real estate market could well be stabilizing.
Video interview with Heather Fernandez, Truila.com, and CNBC’s Diana Olick.
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Ok, let me start by assuring you that what you are about to read is real….and is happening now.
Here goes, servicers are testing a program to literally PAY homeowners NOT to default. Lenders are terrified that national trend to do a strategic short sale or foreclosure will increase as more borrowers lose faith that their homes will be worth what they owe.
(We have been reporting on strategic walkaways since 2007 and expect that folks ridding themselves of their own toxic assets will create yet another surge of defaults.)
From the LVG site:
Loan Value Group has built a multi-factor loan-level econometric model to assess the risk of strategic default. While the model takes into account many relevant variables, ultimately the key driver of strategic default is the borrower’s response to negative home equity.
- Once home equity becomes hopelessly negative, the borrower loses the rational incentive to continue paying, whether he can afford to or not. Some of these borrowers then default
- 29% of all US mortgages have negative equity today, representing 15 million homes
- Analysis suggests that over 10 million mortgages are at significant risk of strategic default
Default is rational for many borrowers: while they forfeit their home, they rid themselves of a mortgage liability of even greater value. Since the homeowner has negative equity in the home, it is not worth continuing to make mortgage payments.
“Surprisingly, strategic defaulters with good credit scores who remain current on their other credit lines can quickly rehabilitate their credit scores after foreclosure — faster than many realize, according to Sarah Davies, a senior vice president at VantageScore, a credit scoring and consumer analytics firm owned jointly by the nation’s three major credit reporting agencies. ‘You can pull yourself out of any major impact from foreclosure in 24 months,’ she said.” (source: Homeowners Walking Away from Underwater Mortgages, Miami Herald, October 24, 2009)
Ok, I will translate. They have created some sort of formula to identify the homeowners they deem most likely to do a strategic default or short sale. Next, they proactively contact the borrower and offer them mula to stay put. As in here is a check to stay…The payments would be on average less than $10,000, but LVG believes this is enough to keep borrowers from becoming “walkaways.”
Again, from their site:
Since Mortgage Default Risk is a discretionary, rational decision made by the homeowner, an effective solution must provide incentives for the homeowner to choose not to default, rather than subsidies to enable him to make payments.
Since this decision to default is driven by negative equity rather than the loan’s affordability, the solution must target the homeowner’s balance sheet rather than income.
Harris Real Estate University students…will this program work? Do you think upside down homeowners will keep their homes if offered $10,000 in cash?
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Harris Real Estate University students…you need to pay attention to what is being said in this excellent CNBC (Thanks Diana Olick) video:
Know that the topics discussed in this video will have a direct effect on our industry and your income:
You need to pay very close attention to these emerging topics: Abolishing the GSE’s and Principal Mortgage Writedowns.
This video will give you a clear indication of what the government is considering. You need to ask yourself what will happen if there is a new program to reduce principal mortgage balances and if at the same time the GSE’s are abolished. (Assume that if Fannie and Freddie are killed off that rates, terms and qualification standards will be dramatically altered).
These are epic…rule changers for our industry. Pay attention.
1) Fannie Mae and Freddie Mac are on a path of destruction. Many are calling for the GSE’s to be abolished!
2) NOW, the GSE’s are providing 75% of all new mortgages.
3) 3 proposed options: Nationalization of the GSEs, Improved GSE structure or turn them over to the private sector.
4) Combined with FHA Fannie and Freddie ARE the mortgage market. Private banks are not lending…no GSE’s….no mortgages.
5) Get this…112 BILLION that has been spent..that will never be paid back…and they are expecting another 112 BILLION in upcoming losses! (anyone out there still think we are near bottom?)
6) Principal mortgage writedowns are gaining momentum…10% off all mortgages 25% upside down…and 25% of all mortgages 10% upside down. In the US roughly HALF of all homes are owned…no mortgage. Of the other half…35% are now upside down.
Agents, if you aren’t listing and selling REOs now…what the heck are you waiting for? Watch the FREE Agent REO Secrets video and download the FREE Agent REO Secrets book NOW.
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Not feeling festive this holiday season?
Well…we have breaking real estate news that will make you smile….
HIGHEST LEVEL OF HOME SALES SINCE 2007! Watch this video…..RECORD INCREASES IN HOME SALES!
AND….we aren’t done….more great housing news. After you have watched this video ….watch the 2 videos that we created for you that discuss the NEW 2010 Treasury Department Guidelines for Short Sales…The entire short sale process has been streamlined in anticipation of 2010 being the year of the Short Sale. WATCH THE VIDEOS NOW.
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Harris Real Estate University students (and future students) do you have any idea how long we have been waiting to share articles like this one with you?
Many years ago we started teaching agents to do short sales. I can clearly remember at our very first short sale training event the number one question we had from fellow agents was…
“What is a short sale”
Have times ever changed! Now it seems EVERYONE is talking about short sales. In most major markets the home sales ARE short sales (and REOs)
Here is a great story about how short sales will dominate the market in 2010 (along with REOs).
If you’re in trouble on your mortgage and can’t get a loan modification, check out the Obama administration’s new standardized short-sale plan that’s scheduled to roll out during the next several months.
The program, outlined Dec. 1 by the Treasury Department, is an attempt to streamline what has traditionally been a contentious, time-consuming process by requiring lenders and others to use nationally uniform documents, timelines and financial incentives.
A short sale involves a lender or investor agreeing to collect less than the balance owed on a mortgage debt out of the proceeds of a negotiated sale of the property. Often, a short sale is the last alternative to foreclosure available to distressed homeowners and banks. Say you’ve lost your job and fallen behind on your mortgage payments. With little or no income, you can’t qualify for a modification program.
In this situation — grim as it is — your best move may be to see if your lender will accept a short sale. Though the idea sounds straightforward, in practice it is not. First, the bank needs to be convinced that a short sale will yield it more money at the bottom line than a foreclosure.
This usually means you need to bring in a real estate agent who knows the ropes and can pull together the key information needed by the bank: recent comparables on closed sales, local market trends and the likely selling price of your house.
Plus, you’ll need to have a buyer — one who will pay a price acceptable to the bank and who has financing to close the deal. If you happen to have a second mortgage or home-equity credit line, you will also need to negotiate how much that lender will receive from the sale proceeds.
That can be tricky. In depressed real estate markets, the second lien may be worthless in a foreclosure because plummeting property values have wiped out the collateral. Yet that same bank is in a pivotal position: It has the legal power to block the short sale by refusing to sign on to the deal.
Equally troublesome in short sales is the fact that banks, mortgage servicers and bond investors often have conflicting requirements for documentation and financial yields that can complicate and drag out the haggling for months.
Enter the Obama administration’s new streamlining plan.
Thousands of agents have received their HREU CDPD* (Certified Distressed Property Designation). We have made it easy for you to learn everything you need to know to easily list and sell short sales. Watch the FREE Short Sale Secrets video and grab your FREE Short Sale Book. If you would like to go ahead and enroll now for only $97 call 1-866-422-9497 or sign up here.
Besides requiring lenders and servicers to use uniform documentation, preapproved short-sale terms and accelerated turnaround times, the plan also provides financial incentives for key players:
– Homeowners who successfully complete a short sale under the program receive $1,500 to defray relocation costs.
– Mortgage servicers can receive $1,000 per case.
– Investors get $1,000.
– Second-lien holders receive up to $3,000 from the sale proceeds.
Even real estate agents get something. The rules prohibit banks from forcing them to cut their commissions from the listing agreement as part of the final deal.
Sounds like a formula for encouraging a lot more short sales, right? The jury will be out on that for months, and most major lenders are still studying the fine print of the program. But early reactions from big banks appear to be positive.
Dave Sunlin, a senior vice president for Bank of America, said: “We’re very pleased. We welcome any effort to reach standardization for all parties” involved in short sales.
Faith Schwartz, executive director of Hope Now, a Washington-based group representing the country’s largest banks, mortgage servicers, bond investors and consumer counseling organizations, said the plan should bring “uniformity and standards” to a process usually characterized by “mayhem” among the negotiating parties.
Scott Brinkley, a senior vice president for First American, a firm that provides market data for banks, said, “You’re going to see a lot of cooperation” by lenders and investors.
As you know we have been offering short sale training for years and years now. We were the first national coaching company to teach agents how to do short sales…and we are by far the largest. Thousands of agents have received their HREU CDPD* (Certified Distressed Property Designation). We have made it easy for you to learn everything you need to know to easily list and sell short sales. Watch the FREE Short Sale Secrets video and grab your FREE Short Sale Book. If you would like to go ahead and enroll now for only $97 call 1-866-422-9497 or sign up here.
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Important Breaking News: Housing Taking Another Downturn?
Housing Double Dip?
Seems that the latest housing information is not as rosey as many expected. HREU Students should not be surprised by any of this information. Clearly, we are years (and years) away from any sort of leveling off. Estimates are that there are 12-15,000,000 homes that will be REOs over the next 1-3 years.
Are YOU ready to become a REO Listing Agent? Join us for tomorrow’s FREE How-To list REOs teleconference or webinar. Go here now for all the call-in info.
Here is the CNBC Video…
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