Monday, December 7, 2009

New Push on Mortgage Relief

Another timely article…this is interesting! If you tie it all together, there are a lot of balls in the air that are going to shape the next year to two years for our industry…interesting!


In the latest move to bolster its $75 billion foreclosure-prevention plan, the Obama administration on Monday will outline new efforts designed to increase the number of borrowers who receive mortgage relief.

The Treasury Department on Monday will announce plans to appoint officials to monitor the actions of the largest mortgage servicing companies on a daily basis. It also will announce it is requiring mortgage companies to develop and report to the administration their plans to increase the number of completed modifications, a Treasury spokeswoman said.

While more than 650,000 borrowers have been given trial mortgage modifications under the plan, few borrowers have received permanent modifications. Many borrowers complain that it is difficult to get a permanent fix even once they have made trial payments; some have been required to send in duplicate paperwork or even ended up further behind on their mortgage payments.

The Treasury won't release the number of completed modifications until December, but the spokeswoman said it is in the "tens of thousands." It is too early to know what portion of trial modifications will become permanent, she added.

Based on their initial experience, some mortgage executives expect 25% to 35% of borrowers enrolled in the trial program to qualify for final modifications.

The stakes for the economy of a successful modification program are high. To stop further home price declines, some economists argue that the share of home sales that are foreclosures and other distressed properties must remain stable. Foreclosure sales fell this year because of moratoriums and stepped-up modification efforts, helping stabilize home prices.

The Obama administration program provides financial incentives for mortgage companies and investors to reduce loan payments to affordable levels for troubled borrowers. Borrowers first make reduced payments under a trial program. To receive a permanent modification, borrowers must make three payments during the trial period and provide a hardship affidavit and other documents.

For borrowers who do receive a trial modification, few are becoming permanent. Some borrowers can't make the required payments during the trial period, mortgage companies say, often because the reduced payment still isn't low enough or they have suffered another financial setback.

In other cases, borrowers in the trial program aren't providing a hardship affidavit and other necessary documents or the paperwork doesn't match the information provided verbally. In still other cases, the loan may not pass a "net present value test" used to determine whether a modification is less costly to the lender or investor than a foreclosure.

Meanwhile, the number of borrowers falling behind on their loan payments continues to outpace the administration's efforts to help them. Roughly 1.56 million loans that were current in March were at least 60 days past due in October, according to LPS Applied Analytics. That's more than double the number of trial modifications.

Mortgage companies have stepped up efforts to collect documents, but many borrowers say firms are frequently disorganized and ask repeatedly for the same paperwork or offer confusing information.

John Fitzpatrick, a home builder in Ohio, made his first $1,464 trial payment in June. Three months later, Bank of America Corp. sent him a statement indicating he should pay $2,038, his monthly payment before the trial modification. Mr. Fitzpatrick said he has continued to make the lower payment on the advice of his attorney. Mr. Fitzpatrick said he believes he has provided all the required documents; in mid-November, he sent in another set of papers at the mortgage company's request. A Bank of America spokesman said the statement with the higher payments "was sent out in error."

Some borrowers are ending up in worse shape after seeking help under the government program. Jennifer and James Pugliese, of Scranton, Pa., were struggling, but still current on their mortgage when Litton Loan Servicing offered them a trial modification that reduced their loan payments by nearly 50% to $758. But after making successful trial payments, the couple was turned down for a final modification. Because the trial payments are considered partial payments if the modification fails, the Puglieses are now more than $5,000 behind on their mortgage; their credit score dropped after Litton reported to the credit bureau that the couple had entered the Obama program.

"There is no way we can recover at this point," said Ms. Pugliese, who received a foreclosure notice last week. "We are pretty much resolved to losing the house or filing for bankruptcy." When their loan payments were cut, the couple used the extra cash to pay other debts, she says.

A spokeswoman for Litton, a unit of Goldman Sachs Group Inc., said: "Litton is following the program's guidelines for eligibility qualifications, modification trial periods and credit reporting. Loans that do not pass the net present value test are not eligible" for a modification under the Obama program.

-WSJ (Ruth Simon)

Wednesday, September 9, 2009

Behind FHA Strains, a Push to Lift Housing

Interesting article...and it definitely shows that the public's demand is there as in the case of California accounting for 13% of all FHA loans in July! California areas have FHA loans to $729K...people want to buy if we can find a way to get them money! Jumbo money needs to be more available!

Friday, August 28, 2009

Housing Lifts Recovery Hopes

Sales of existing homes in July jumped at the fastest rate in 10 years, sending stock prices up around the globe on hopes that the U.S. housing market -- a driver of the world's largest economy -- is stabilizing after years of decline.

Sales of single-family homes increased 7.2% in July from a month earlier to a seasonally adjusted annual rate of 5.24 million units, the National Association of Realtors said Friday.
The monthly increase was the largest since 1999, when the NAR began collecting data for all types of homes -- its measure includes condominiums and cooperative apartments. It marked the fourth monthly rise in a row. Sales also were up 5% from July 2008, showing the first gain from the year-earlier level since November 2005.

The good news on housing came as Federal Reserve Chairman Ben Bernanke issued a mostly optimistic report Friday on the state of the U.S. economy.

"Fears of financial collapse have receded substantially," Mr. Bernanke said at the Federal Reserve's annual retreat at Jackson Hole, Wyo. "After contracting sharply over the past year, economic activity appears to be leveling out, both in the U.S. and abroad, and the prospects for a return to growth in the next year appear good."

The housing report pushed the Dow Jones Industrial Average up 155.91 points, or 1.7%, to close at 9505.96. The Dow has risen five of the past six weeks.

The increase in home sales came as buyers rushed to lock in bargains on foreclosed homes and tap a federal tax credit for first-time buyers that is set to expire in a few months. Yet home sales remain nearly 20% below the pace of 2006, when the housing boom was peaking. Housing economists and even some real-estate agents caution that the recovery is fragile.Related
* Economists React: 'A Long Way to Go'
* Housing: A 'Wave' of Foreclosure Listings?
* Souring Loans Compound Mortgage Woes

For now, low prices and attractive financing are enticing buyers. Jodi Janiga, 32 years old, is using a loan insured by the Federal Housing Administration to buy a two-bedroom townhouse in Green Valley, a Las Vegas planned neighborhood with golf courses and sidewalk statues. That required her to put about $4,200 down on the $119,000 property. Three years ago, similar townhomes in the area sold for $280,000.

"It was a smoking deal," said Ms. Janiga, a schoolteacher who says she bid on nearly 15 homes.
"The buyers are back, and they're buying," but mainly the lowest-priced homes, said Teresa Boardman, a real-estate broker in St. Paul, Minn. Many potential sellers of higher-quality homes are waiting to put them on the market if prices start to rebound, she said.

The economic outlook is crucial for housing demand, as many potential buyers will hold off as long as they fear job losses.

Most economists say the U.S. economy, which began contracting in December 2007 in what is the deepest and longest recession since World War II, has started growing again. The Fed said manufacturing output rose 1% in July, the strongest increase since December 2006. U.S. exports rose in May and June. Consumers are still dragging on the economy, though, as a high jobless rate, stagnant wages, tight credit and a renewed eagerness to save have restrained spending.
The Realtors said a survey of agents showed that foreclosure-related sales accounted for 31% of July transactions. But foreclosures are a much bigger factor in some markets, particularly in parts of Florida, Nevada, Arizona and California. In the Las Vegas area in July, bank-owned properties accounted for 73% of all sales, according to the Greater Las Vegas Association of Realtors.

Distressed sales continue to push down prices. The median U.S. price in July was $178,400, down 15% from a year earlier.

Sales were also strong in some metro areas that haven't been hit hard by foreclosures, said Tom Lawler, a housing economist in Leesburg, Va. These include Des Moines, Iowa; San Antonio and Roanoke, Va. "I think people who decided to check into the [home-shopping] process were pleasantly surprised by prices and mortgage-credit availability," Mr. Lawler said. The FHA is insuring mortgages for people with down payments of as low as 3.5%.
Housing also has grown more affordable.

On average, a U.S. household with a median income in the second quarter of this year could afford a home costing 71% more than the median price, according to Moody's Economy.com. Three years ago, such a household could have afforded a home only 5% over the median.
Compared with a year earlier, unit sales in July were up 3.3% in the Northeast, 8% in the Midwest, 5.4% in the South and 1.8% in the West, the NAR said.

Sales have been aided by a federal tax credit of as much as $8,000 for first-time home buyers. That stimulus will end Nov. 30 unless Congress extends it.[Housing Recovery Lifts Hopes]
Sens. Christopher Dodd, a Connecticut Democrat, and Johnny Isakson, a Republican from Georgia, have introduced legislation to extend the credit, increase it to as much as $15,000 and make it available to all home buyers, not just first-timers. Senate Majority Leader Harry Reid backs an extension of the credit.

"Congress is not going to endanger the fragile beginnings of a housing recovery by letting the credit lapse," said Howard Glaser, a mortgage-industry consultant in Washington.
Inventories of unsold homes are falling but remain high. And many potential sellers are staying out of the market, waiting for signs of rising prices before trying to sell. That could lead to a bulge in inventory later.

Some 1.8 million homeowners are currently in foreclosure, and the number of future foreclosures could top one million, says Torsten Slok, senior economist at Deutsche Bank. "It's safe to say that we still have a significant amount of foreclosures ahead of us," he said, adding: "It's still not a healthy housing market when you have one third of sales coming from foreclosure sales."—Sara Murray and Corey Boles contributed to this article.

By JAMES R. HAGERTY and NICK TIMIRAOS of the WSJ

Thursday, July 16, 2009

Mortgage Firms Struggle to Redo Hard-Hit Loans

This is a very good article that puts some solid detail about the realities of mortgage modifications.The thought behind it makes sense for some...but what about the investors that are losing big time...INTERESTING...big brother is watching!

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Morgan Stanley chief John Mack recently made a new friend, he told shareholders in April -- a Southern woman who had benefited from the big bank's stepped-up efforts to modify loans under a new federal program aimed at keeping borrowers in their homes.

"I'm now invited -- if I ever visit Memphis, Tennessee -- to drive two hours south to have dinner with her and her family," Mr. Mack said.

Steve Applegate of Lake Mary, Fla., has tried without success to modify his $750,000 home loan through Saxon Mortgage Services Inc.

But by some measures, Morgan Stanley's mortgage-loan servicing firm, Saxon Mortgage Services Inc., has a long road to go. An April Credit Suisse Group analysis of how quickly companies have renegotiated loans ranked Saxon last among 18 mortgage-servicing firms. Saxon has modified just 6% of the loans it oversees that originated between 2005 and 2007. By contrast, Litton Loan Servicing, a Goldman Sachs Group Inc. unit, modified 28% of its loans.

Such firms are at the center of a grand government experiment aimed at halting foreclosures and the collateral damage they cause neighboring homes. New foreclosure notices will total 2.4 million this year, which could trigger price drops in 69.5 million nearby homes, estimates the Center for Responsible Lending, a financial-services research and policy firm. At an average decline of $7,200 a house, that translates to a potential drop of $502 billion in total U.S. property values.

The government plan, rolled out in February and called the Home Affordable Modification Program, or HAMP, will pay mortgage-servicing firms to modify mortgages and find other ways to keep people in their homes. But the program's sheer scale and the speed with which it was rolled out has created a new set of problems for some of the 27 firms charged with carrying it out.

A look at Saxon provides a window into the challenges these mortgage servicers now face as they attempt to salvage the loans of three million to four million Americans. Mr. Mack declined to comment through a spokeswoman, but Saxon says that as soon as HAMP launched, it was flooded with requests from borrowers.

The company, based in Irving, Texas, has hired or expanded contracts with four outside companies to help handle the influx, and it recently added a late shift from 4 p.m. to 11 p.m. to manage the extra work. Even the volume of paperwork at one point grew unwieldy -- an internal audit in mid-May found that Saxon's scanning equipment was overloaded with materials sent in by borrowers, leading to delays and lost documents.

Staff lacked the training and experience to modify so many sour loans. During the housing boom, Saxon's mortgage-servicing employees did little more than send monthly statements in the mail and track down delinquent borrowers. Like other mortgage servicers, Saxon was essentially the link between borrowers and the investors who owned pools of mortgages. It handled the day-to-day business of collecting payments on behalf of those investors, and when borrowers fell behind, of covering the payments until it could collect. When borrowers defaulted, Saxon would either modify the loans or foreclose.

Now, firms like Saxon are under pressure to stem foreclosures at all costs. That means many employees need to be trained in an entirely new set of skills. Under HAMP, reworking a single loan can be a time-consuming process with many steps, from calculating a borrower's debt-to-income ratio, to negotiating with investors who own different slices of the loan pool, to figuring out which type of modification works best for each borrower. Loan specialists need to study multiple guidelines, online tutorials and a HAMP data dictionary with terms such as "underlying trust identifier."

In May, shortly after the government program kicked off, Anthony Meola, Saxon's chief executive, gave his employees a call to arms. Standing atop a makeshift stage in the middle of Saxon's call center in Fort Worth, Texas, Mr. Meola barked into a microphone: "You are getting a chance to help preserve the American dream. Think about what you could do -- you can save someone's home!"

Saxon also has a financial incentive: The government is paying servicers $1,000 for each loan they modify, with another $1,000 annually for up to three years if borrowers stay current. In all, the U.S. could provide as much as $18.6 billion to the mortgage industry, investors and borrowers.

Yet there is growing concern among some lawmakers that loan modifications aren't moving fast enough. In late June, 20 Democratic senators wrote to Treasury Secretary Timothy Geithner, whose agency is the architect of the housing program, to ask him to put more pressure on mortgage-servicing firms. The group cited a recent report from a foreclosure program administered by NeighborWorks America, a Washington network of affordable-housing organizations, that found homeowners still were being forced to wait, on average, 45 to 60 days for help.

On July 9, Mr. Geithner sent a message to the mortgage-servicing firms that have signed up for the modification program and told them to ramp up their efforts. "We believe there is a general need for servicers to devote substantially more resources to this program," Mr. Geithner wrote, including adding staff and call centers. He said the agency would begin publicly reporting each firms' results starting in August, and that Freddie Mac, the government-controlled mortgage buyer, would be auditing a sample of declined requests to make sure no borrowers were denied incorrectly.

Saxon so far has completed nearly 17,000 loan modifications where borrowers have submitted income verification and other documentation and made their first payment. In total, it has given initial approval of 28,000 modifications where the borrower has provided spoken information about income, a process that underscores the government's desire to move things along quickly.
Still, some Saxon borrowers have endured long waits. Diana Wiles, a 54-year-old lab technician in Fremont, Mich., was approved in February for a modification on a $113,000 home-equity loan which cut her interest rate to 1.75% from 6.75%.

She says Saxon told her not to make her March loan payment and it would send her documents to sign and return. But the documents didn't arrive -- and Saxon charged her a late fee for missing a payment. Ms. Wiles made another attempt to modify her mortgage, and this time, Saxon screened her to see if she qualified under HAMP. But when the firm requested she put property taxes and insurance in an escrow account, as the U.S. program required, she balked. "I didn't trust them after all we had been through," she says.

Over the next six weeks, she resubmitted her financial information twice and called Saxon weekly, without a clear answer.

After The Wall Street Journal inquired about Ms. Wiles's case, she received a package confirming terms of an approved loan modification, setting her mortgage rate at 1.75% for five years beginning Aug. 1. A Saxon spokeswoman says her financial documentation only recently had been completed.

But more confusion followed. After her loan package was confirmed, Ms. Wiles received a letter dated June 24 from Saxon that said her first new payment was actually due July 1. Ms. Wiles phoned to clarify and then received another letter dated June 25 that told her to disregard the June 24 letter and that in fact her new loan package would begin Aug 1.

Saxon's borrowers' rate of so-called re-defaulting -- or defaulting on a loan after it's been modified -- has also been higher than most. Of the loan modifications made by Saxon in the first quarter of 2008 where monthly payments were decreased by more than 20%, 34% of the amount owed was delinquent by 60 days or more 10 months after the modification, according to Credit Suisse Group. That compares with an average of 27% delinquent for the 18 servicers Credit Suisse analyzed.

Part of the problem at Saxon is that it didn't ramp up its ability to modify loans as early as other servicing companies. A spokeswoman for Saxon says that when Morgan Stanley purchased the company in 2006, it lacked enough employees and systems to undertake massive numbers of modifications. It wasn't until the spring of 2007 -- after its portfolio of subprime loans had already started to sour -- that Saxon began to focus on modifying loans. Not until the fourth quarter of 2008 did Saxon boost its capacity to handle a large flood of requests.

Some Saxon borrowers have gotten swift modification approvals. Lorraine Rodriguez, a hospital worker in Anaheim, Calif., called Saxon in mid-May. Following an hourlong call, she says, Saxon told her she had been approved for a three-month trial modification starting June 1, cutting her mortgage rate to about 5% from 9.5%. Her monthly payment was cut 42%, to just below $1,900. The new rate "is still a high amount and is tough for us," says Ms. Rodriguez, 57.

Charged with beefing up Saxon's operations is Mr. Meola, an accountant who held senior mortgage positions at Citigroup Inc., PNC Bank, Washington Mutual Inc. and New Century Financial Corp.

Mr. Meola, 52, is the author of a how-to management guide, which offers tips on communications and staying positive. At Washington Mutual, the lender that collapsed in 2008, Mr. Meola teamed up with basketball legend Earvin "Magic" Johnson to build homes for needy communities. Mr. Meola, who oversaw loan production, was a showman and comic in front of sales forces, says a person familiar with his time there.

He joined Morgan Stanley in the spring of 2007 as chief operating officer of its residential mortgage business as the firm was in the midst of a massive spurt of loan originations and securitizations. That growth had enabled Morgan Stanley to climb up the rankings of subprime-mortgage sales. Within a few months, Mr. Meola and Morgan Stanley effectively stopped making subprime loans as the industry collapsed.

At the time it was purchased in 2006, Saxon's portfolio totaled 165,000 loans for an unpaid balance of $26 billion. As of June 30, 2008, the portfolio had grown to 342,404 loans, the bulk of which were subprime, with a balance of $56.9 billion.

By the time the Obama administration and Treasury Department launched HAMP, Saxon was having trouble keeping up with requests for modifications, even as it attempted to get up to speed. Mr. Meola says in the fourth quarter of 2008 he had ordered Saxon to upgrade its call-center systems, improve training and make sure callers were routed to the right employees.
The company has retrained 659 employees on how to implement the government program. It has invested in a new, high-speed scanning software system, which can scan up to 125 documents a minute. Before the change, it took 20 minutes to upload the same amount of documents.

Mr. Meola reviews a sample of calls into the Saxon call center, including analyzing wait times. His checklist, which monitors customer dealings in 30-minute intervals, includes counting the number of denials and available agents.

He's been deflecting criticism from some watchdogs. In April, for example, Saxon executives convened at the Fort Worth unit of the Better Business Bureau. The agency, after receiving a spike in complaints from Saxon customers, had given the company an "F" based on the complaints.

Sitting in a small conference room, members of the bureau told Saxon executives of complaints about service, billing and miscommunications during refinancing, according to an agenda for the meeting. More than 300 people had lodged complaints in the year ending early 2009. Mr. Meola says complaints spiked after Saxon took over a portfolio of 80,000 loans from a troubled rival in 2007. The bureau has since upgraded Saxon to a "D."

Among those who had complained was Steve Applegate, owner of a Lake Mary, Fla., building-supplies business. Hurt by the construction downturn, Mr. Applegate last fall asked Saxon to modify his $750,000 home loan.

Mr. Applegate, a 60-year-old father of two, says he was told in January that he'd been approved for a rate cut to 2.08% from 6.5%, which would cut his $4,063 monthly payment by more than half. But the confirming paperwork from Saxon never arrived, he says, and in March, he was notified he was in default. When he phoned Saxon, a different loan negotiator recommended foreclosure.

He tried to resuscitate the earlier modification. At one point in April, he spent nearly two hours on the phone with Saxon, got disconnected twice, and was routed to four individuals, according to a recording of the call.

In May, Mr. Applegate was informed by Saxon that he had approval under HAMP for a modification starting June 1.

The good news didn't last. When he tried to make a second payment on the modified loan, he was told he hadn't qualified after all. When the Journal asked what happened, a Saxon spokeswoman said that the company had erred in sending him paperwork for a HAMP modification because his outstanding loan balance exceeded the program's limit of $729,750.
Earlier this month, Saxon said it would modify his loan outside the federal program. Mr. Applegate is still waiting.

By CARRICK MOLLENKAMP and SERENA NG of the WSJ

Friday, July 3, 2009

Jumbo Loans = Jumbo Problem!

I believe we all like some of the signs coming in today for Real Estate…at least in the overall number of contracts being written. It does appear that demand is beginning to come around with the discounts offered from many of the REO properties, and short sale scenarios. Couple this with the tax credit, and other incentives towards First Time Homebuyers, and the numbers can be falsely positive.

There is a big…let me re-phrase that: There is a JUMBO Problem that is beginning to scream loudly…and needs attention.

To make sure we are all with a crystal clear understanding, a Jumbo Loan is a single mortgage that is higher than $417k.

Do you know what is required to obtain most Jumbo Loans?
1. 20 to 25% Down Payment (some areas may be higher)
2. A 720 credit score or higher

Most areas have seen an increase in demand of homes that are priced below $450k, and the homes that are above $450k have typically dropped in demand significantly.

There are several reasons for the reduction in the volume of sales for this range, but the primary reason is the difficulty of obtaining financing for a Jumbo Loan. If this situation does not find some relief to have lenders be able to get back to a “healthy” (not sub-prime, and not exotic type loans, but good sensible lending) lending practice for this price range, we will soon be faced with a deeper hole that will perpetuate our existing problems with foreclosures.

What would be considered healthy?

I have talked to several people in the lending industry and the general range would be 10% down payment, and a minimum of 650 on the credit score…with full documentation to prove the relevant facts.

We need the banks to help themselves first.

Until they can attract more buyers to the Jumbo type of loan, the foreclosures in this range will begin to become a significant problem, and pricing could see a significant problem in this range.

So, hopefully lenders can see this and figure out how to assist in increasing the demand in lieu of exaserbating something that will keep supply increasing, and demand decreasing…it is a catch 22 for the lenders, but the risk of doing nothing is greater than trying something.

Tuesday, June 30, 2009

Thursday, June 18, 2009

A Full Day at the Housing Summit

Yesterday was a solid day of learning for me…

I began by going to the Housing Summit, and then went to the Broker’s Council for NAMAR…it was a FULL day!

What I learned is the following:
1. We are right on target with what we have been communicating…Pending sales are rising back to levels of last year, and Supply is coming down everywhere. This is where you would see solid glimmers of hope forming the POTENTIAL for a bottom…everything in markets are driven by supply and demand…
2. Be glad you are not in Clayton County! The median home sales price was like $40k!
3. Forsyth is one of the areas that has been fairing better than most on values of homes, BUT my contention is that is the only county that has still been sliding on volume of contracts…meaning, it needs to come down some more to stimulate more buyers to buy…
4. What will shape the bottom, or not are the following:
a. Interest Rates need to remain low
b. Lending Practices – we need to get back to normal lending practices and allow the “good” credit people to be able to buy homes vs the tight restrictions everyone is facing today
c. Jumbo Money – if the Jumbo Loans are not made more readily available, then the upper end homes will see a very difficult time in selling to someone today…right now, you must have 20% down, and a 720 credit score…this eliminates a lot of people from the potential of buying…
d. GAS Prices! If the gas goes up to $4.00 a gallon, then we could see a terrible time for us all…in many ways…
5. As Banks are being riddled with mass lot take-backs/foreclosures, you will begin to see incredibly priced NEW homes begin to surface in areas…they will be a brand new home that will be priced to compete with a foreclosure…this is brewing, and will begin to be shown in the upcoming months…banks are beginning to get aggressive in pricing or building out of a situation…what will be good, is that it will stimulate people to buy, and that is a necessary thing to get out of the bottom and move into correction…GET YOUR SELLERS ON BOARD WITH THIS AS IT WILL ONLY GET MORE DIFFICULT TO SELL ONCE THIS COMES TO BE!!!!!
6. Most areas have shrunk in inventory, so RE-SALES will have a good ending to the year if they get priced right, and get priced to sell!
7. Gwinnett County is in the process of beginning its “rebuilding” of areas…it is the Gwinnett County Neighborhood Stabilization Program…they have targeted areas that they will be able to buy vacant, and run down homes to rehab and help the overall market conditions.
8. Social Networking is here to stay…if you are not on board with it, you better get on board!

Keep up the great work, and remember this:
You have finished swimming 75% of a huge body of water…it has been a long hard swim…you can either give up, or finish the final 25%...I CHOOSE TO FINISH STRONG!

Monday, June 1, 2009

'Jumbo' Loans, Down-to-Earth Rates

Looking for a mortgage that exceeds $729,750?

Not long ago, you would have been charged about 8 percent interest on a loan that large -- if you could find a lender willing to grant you one.

Now, rates on these "jumbo" loans are much more affordable, having settled in the low 6 percent range, on average, for the past few weeks. But taking advantage of the lower rates remains tough. "Availability is still an issue, and the bar is higher in terms of down-payment requirements and credit scores," said Greg McBride, a senior financial analyst at Bankrate.com, a personal finance Web site.

After the mortgage market began unraveling in late 2007, rattled investors stopped buying jumbos. Instead, they turned to loans that met the requirements of mortgage financers Fannie Mae and Freddie Mac. At the time, the two companies did not buy loans that exceeded $417,000. Rates on loans larger than that shot up. And borrowers in pricey areas like Washington got shut out of the housing market or lost a chance to refinance.

To help lower borrowing costs, the federal government temporarily raised the limit for loans Fannie Mae and Freddie Mac could buy. Now the ceiling is $729,750 on single-family homes in some of the nation's most expensive counties, including many in the Washington region. The higher ceiling, due to expire Dec. 31, also applies to mortgages backed by the Federal Housing Administration.

To check the limits in your area, go to the Department of Housing and Urban Development Web page http://https://entp.hud.gov/idapp/html/hicostlook.cfm.

In areas where the $729,750 ceiling applies, there is now a three-tiered mortgage market. It is structured so that the size of the loan is a main factor in determining its rate.

On a 30-year, fixed-rate loan up to $417,000, the average rate this week was 5.44 percent, according to the research firm HSH Associates. The next best rates apply to loans from $417,000 to $729,750, which averaged 5.72 percent this week. Loans larger than that get hit with the highest rates, which averaged 6.37 percent for the week.

To avoid the highest rates, some borrowers are trying to stay beneath the $729,750 ceiling by taking out two loans while still making a down payment: one loan for $729,750 and another for the balance, said Kerry White, a loan officer at Prosperity Mortgage, a joint venture of Long & Foster and Wells Fargo.

These "piggyback" mortgages are difficult to arrange. But for those who can get them, they are generally a cheaper alternative than taking out a single jumbo loan because they do not expose borrowers to the same stringent credit-score, down-payment and savings requirements, White said. At Wells Fargo, for instance, a borrower willing to make a 20 percent down payment on a jumbo loan must also prove that he or she has enough savings to cover at least 40 percent of the loan amount, not including whatever is stashed away in retirement accounts, White said.

But getting a second loan is not as easy as it once was. In the past, when home prices were climbing, piggybacks enabled borrowers to avoid down payments by using two loans to cover the entire cost of a home. Many of these loans went bad when the housing market soured. Most lenders now demand a down payment and shy away from making second loans.

White managed to help a Washington area lawyer secure a second mortgage recently to help pay for a $2.5 million house. "But he got it only because he was putting 30 percent down," she said. "The small bank that made the second loan was comfortable with that."

These standards are not out of line with current norms, said Bob Walters, chief economist at the online mortgage firm Quicken Loans.

"Borrowers are going to be putting down 20 percent at the very least on a jumbo, and once [the loan amount] gets past $1.5 million, the down-payment requirements go to 30 percent and even 40 percent," Walters said. "The more you're borrowing, the more skin in the game you have to have."

The National Association of Realtors said these requirements have stalled the sales of high-priced homes and hampered the housing market's recovery. The supply of expensive homes is growing, adding to an already bloated housing market, the group said.

Meanwhile, the default rates among jumbo borrowers have been rising because those homeowners lack refinancing opportunities, the association said.

Against that backdrop, Bank of America sees opportunity.

In January, the company started offering jumbos with rates in the high 5 percent range for borrowers who pay one point, a fee equal to 1 percent of the loan that helps lower the rate charged. Borrowers who take out jumbos that are fixed for five years and then adjust every year thereafter are priced in the low 5 percent range. Those jumbo loans are limited to $1.5 million, and Bank of America plans to raise the amount to $2 million in the next few weeks.

"All of us have heard the same complaint: Jumbo buyers with good incomes and strong credit deserve better rates," Vijay Lala, a mortgage-product executive for the bank, said at a recent National Association of Realtors conference.

But anyone who takes out a loan for more than $1 million must have enough cash in reserve to cover at least a year's worth of principal and interest payments, Lala said. Borrowers must also show proof of income and assets to qualify.

Consumers who can meet these criteria have performed well historically, which is why Bank of America is willing to take a chance on them, Lala said.

Bank of America and most lenders that offer jumbos these days are holding on to them instead of selling them to investors, as they did about two years ago. That's because few investors are willing to buy them, said Keith Gumbinger, a vice president at the research firm HSH.

By keeping these loans in their own portfolios, lenders have discretion on what standards they want to impose on borrowers, so it pays to shop around, Gumbinger said. "Lenders can have very different ideas for what they find to be acceptable."

Don't limit your search to big banks, either, said Guy Cecala, publisher of Inside Mortgage Finance. Take a look at community banks.

"Generally, they would like to make a loan locally to someone they know," Cecala said. "You should milk any banking relationships you've got. People who keep their life savings at a community bank have more leverage than somebody walking off the street."

Article Courtesy of WashingtonPost.com, By Dina ElBoghdady

Wednesday, May 20, 2009

Atlanta Market Re-Setting

Atlanta (North) Trends for May...You may be surprised as to the value of a 4 bdrm, 2.5 bath home over the last 2 years and what it has re-set to! As the market re-sets, what are you doing to understand how it is shifting?

Check out this months Talk to Terry here!

Tuesday, May 5, 2009

Bank Rally Prolongs Market's Winning Streak

I don't want to act as though this means we are on the rebound, but if you read the article, it shows that 19 of the large banks facing the stress test are passing! This, coupled with positive cash flows, could make lending become easier in the months ahead...SIGNIFICANT!!! Good article for those of you on the fence!

Wallstreet Journal Article

Tuesday, April 21, 2009

April Edition of Talk to Terry - Are we at the bottom?

The April Edition of TalkToTerry focuses on the changing environment around the North Atlanta Real Estate Market. Is the bottom forming? Is now the time to buy? Only time will tell, but watch for the clues!

Visit http://www.talktoterry.com/ to see this months (and any previous months) video!

Thursday, April 16, 2009

Results Has Great News to Share…First Quarter 2009 Stats are in!!

Bigger is not better…BETTER is better!!

Results is a family owned and operated company that has been in the Real Estate Business for 11 years. We are proud of our rankings as our position in the market place only improves while others are falling.

The Company was formed by the Mother and Son Team of Sarah and Terry Swanson, and is managed by Terry as the Qualifying Broker.

Results approach to Real Estate focuses on Determination, Drive, Passion, and Performance. The first Quarter of 2009 shows that we GET RESULTS!

**Results is #1 Dollar Volume Sold Forsyth by a wide margin!


**Results had SEVEN of the top 50 Agents for Forsyth!

**Results was #2 of all production for office category for Area North Fulton, Forsyth, and Gwinnett

***The important component to being #2 is that we did over 50% of the production Solid Source which has 2,100 agents!!! Our average agent production blows them away! We would rather have a smaller number of agents that are successful, vs. having any agent as a number for the company size.


**We have 6 of the top 100 agents for dollar volume sold in the North Atlanta Market!

Thursday, April 9, 2009

Scared Stiff to Intrigued and Interested

I began my career in Real Estate in 1992. The Country was just coming out of the last big housing downturn from the Savings and Loan debacle.

I did not know anything about the realities of where we were with the economy or housing situation…I was fresh out of College and Bartending, so I thought I had hit the jackpot of a job!

Seventeen years have passed, and looking back, I realize I did not hit the jackpot of a job…I hit the jackpot of a CAREER! I have had ups, and downs. I have made more money, at times, than I ever dreamed possible, and lost more than that in the same breath. In every situation, I enjoyed the experiences of being in the Real Estate business. I have never been as Intrigued and Interested in Real Estate as I am today.

If you don’t feel passionate about Real Estate, you should go and get passionate about something else…I suggest you get passionate about Real Estate!
Today, I look around and see three types of people in the business:
1. The Scared Stiff
2. The Scared Silly
3. The Intrigued and Interested

The Scared Stiff are simply shell shocked by how challenging the environment has become and have not made one single adjustment to their games. At the sales meetings, they have glazed looks in their eyes.

They have become walking Zombies.

Money is going out the door to stay in the business, but nothing is coming in, and they are doing nothing to improve their opportunities. They do not realize that by doing nothing, they are going to receive the same monetary measure in their bank account.

The Scared Stiff sit back and think that nobody is buying, so why try to do anything that would require effort when the result is going to yield nothing.
The Scared Stiff will view everything as the “market’s fault”, and simply see themselves waiting for when the market returns, and their business will do the same. They also believe that those that are making money are simply lucky, or have found the magic pill and are the exception, not the possibility.

Give them an educational article about what is going on, and they are not able to understand anything. This is okay, but they will not feel compelled to ask questions to try and understand…and that is not okay.
The problem with this group is that they are part of the problem with the time frame of the correction. We all know the market is going to change for the better, but nobody truly knows when. Part of when the change happens is going to be the educational process that Realtors take with the general public. In this, only the most talented, and professional Realtors will be able to truly see the signs, and relay them in a professional matter to those on the fence…

This group has two options:
1. Make changes to your game; stop being scared; start moving forward with passion
2. Make changes to your choice of careers

The Scared Silly are going about their game thinking that the only way to make it is to manipulate people and truths…twice as much as they did before the downturn started.

The problem with this group is that they are manipulating things to try and get people to use them in either buying or selling. They will eventually turn off the people they are trying to work with as this type of rhetoric always shines through; and someone that could have been a great prospect decides to do nothing because of the experience they just had with the Realtor.

They believe that nobody really wants to buy or sell today, so their job is to pressure people into doing the action they really don’t want to do.

What this group forgets is that we don’t sell homes, we sell a service, and that is an unspoken sale.

If this group goes to a sales meeting, they believe they know more than the others do, and are not willing to listen for a better way. Their way is the best way, and they will go down trying to prove it.
The Scared Silly are willing to work…they usually work too hard doing things the way they have always done it…only twice as hard! That begins to wear them down, and eventually being broke and burned out will have them leaving the business of real estate.

This group has two options:
1. Relax; change your approach; educate the public once you have educated yourself…STOP trying to think of sales as manipulating someone into doing something they don’t want to do…try it with passion vs. fear based
2. Make changes to your choice of careers

The Intrigued and Interested have distanced themselves further and further from the rest of the pack. They realize it is a game…and the only way you win in a game is to get into it and play with intensity and passion!

This group is amazed at what we are going through as an industry and Country, but are enjoying the game vs. fighting against it.

This group will study the trends of the marketplace and know more about the financing world than they ever knew before. They will read articles. They will look for improvements. They will look for new techniques to add to their performance.

They do not blame things on the market; they study what they need to do, or what new niches to fill…and fill them!

They are willing to participate and help others. They greet each challenge with a view of opportunity.

They educate the clients they work with, and allow the clients to make their mind up after a careful presentation of facts. The clients feel more secure in making a decision today, because they know they are in the right hands. There is no pressure…things just make more sense for the clients.

This group has two options:
1. Keep doing what they are doing, and make a nice living while others are struggling
2. Keep improving every day and crush the competition that is Scared

Someone told me the other day “Change does not cause stress…Resistance to change causes stress!”

In Atlanta, we sold as many homes in 2008 as we did in 2001…not bad! The problem is that we have 40% more agents than we did at that time…the correction of number of agents is happening…only the strongest shall survive!

The great news is that no matter what category you may fall under, you can make the decision to change! It is a market that is going to re-vamp the Real Estate Arena…for the better!

Wednesday, April 8, 2009

A Wealth of Funding for First-Timers

It is no secret that Washington area housing is some of the most expensive in the country, but there's an array of programs designed to assist first-time home buyers.

First-time buyers should get themselves on every list they qualify for, Doug Myrick, the Arlington County homeownership coordinator, said at a recent panel discussion on affordability programs hosted by First Horizon National Corp., a lender.

These plans aren't reserved just for the poorest people. In recent years, the lack of "workforce" housing has propelled many jurisdictions to create programs to assist those with moderate incomes as well as county or city government employees, including teachers and police officers. For example, , a state program in Arlington County could help a single person making up to $86,500 a year buy a residence priced as high as $408,100. Income restrictions vary among jurisdictions and programs.

And there are many programs to help people with low to moderate incomes. The Virginia Housing Development Authority makes annual allocations to local jurisdictions for its Sponsoring Partnerships and Revitalizing Communities (SPARC) loans and HomeStride loans.

Jurisdictions tailor the programs to meet local needs and housing prices. In some Virginia jurisdictions, a purchaser could couple a SPARC loan with a HomeStride loan, which is a deferred payment second mortgage of up to $25,000. Other localities, such as Manassas, don't allow programs to be combined. Many places have additional programs; Alexandria has at least three others. In Maryland, residents apply for loans through approved lenders who then in essence sell the loans to the Maryland Department of Housing and Community Development.

Montgomery County has programs parallel to the state's. Frederick County is working toward implementing several programs aimed at expanding affordable housing, , said Jenny Short, the county's director for Housing and Community Development.

The District has a few programs. One is aimed specifically toward government employees; another is for police officers. First-time buyers in the District who meet income requirements are also eligible for a federal tax credit of up to $5,000.

Other jurisdictions also offer special programs for local government employees such as teachers, police officers and firefighters, as well as to those who work for participating employers. For instance, Maryland's "House Keys 4 Employees" plan matches up to $5,000 where the participating employer and employee would chip in $5,000 each. Arlington County is also partnering with seven local employers for a similar program.

The would-be buyer must follow the jurisdiction's process, which often includes a prescreening followed by several steps. In many cases, the purchaser must take an accredited home buying class. These are given by the government or by approved companies and nonprofit groups.
The federal government defines a first-time buyer as someone who has not owned a home within three years. All the programs require that participants live in the house as their primary residence.

Washington Post
By Sarah Abruzzese

---------------------

I'll keep posting relevant articles that will help keep you in the know!

Monday, March 30, 2009

Fed Keeps Hammer Down on Mortgage Rates

Sometimes we get lost in the immediate things around us, we forget some of the other things the Government has been working on, and how they are affecting our business today…

Great article…and very relevant!

The Government put into play in November the plan to buy Mortgage Backed Securities, and lend a hand to Freddie mac…well, this is one of the big reasons the rates have stayed low…

So, remember, the plans are being added today, and coupled with things of the past, will begin to put the floor in prices and stimulate more buyers to buy…if the homes are priced right!

Fed keeps hammer down on mortgage rates
Mortgage-backed securities purchases could reach $1.25 trillion

By Inman News, Thursday, March 19, 2009.
Inman News

In a bid to keep mortgage rates low, the Federal Reserve said Wednesday it will boost purchases of mortgage-backed securities this year to as much as $1.25 trillion -- a $750 billion increase from a previous commitment.

The move is part of a $1.15 trillion expansion of the Fed's balance sheet that's intended to encourage borrowing and revive the economy. Having effectively slashed short-term interest rates to zero, the Federal Open Market Committee is resorting to other means to stimulate growth.

In addition to stepping up purchases of mortgage-backed securities, the Fed said it would purchase up to $300 billion in long-term Treasury securities over the next six months, and doubled a previous commitment to buy $100 billion in debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

The move should give would-be homebuyers and those seeking to refinance confidence that mortgage interest rates will stay low for months to come. So far, the Fed has used up only $217 billion of a $600 billion program launched last fall to drive down mortgage interest rates.

In November, the Fed kicked off the program with a promise to buy up to $100 billion in debt from Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and $500 billion in mortgage-backed securities backed by Fannie Mae, Freddie Mac and Ginnie Mae. The program has been widely credited with bringing down interest rates on conventional, conforming mortgages to historic lows of around 5 percent.

Some economists worry that the Fed's growing obligations, along with other government spending and tax cuts intended to jump-start the economy, will spur inflation. The committee, which sets monetary policy, issued a statement saying the near-term outlook for the economy is "weak," and that members expect inflation to "remain subdued."

Monday, March 23, 2009

March Edition of Talk to Terry Released!

Hello!

I just wanted to post a quick note and let you know that I have just released my monthly video on what's happening in the real estate market in both the North Atlanta Market and National Market. There is some new updates to my about me page including a new video.

Check it out! http://www.talktoterry.com/

Sincerely with PASSION,
Terry Swanson

Friday, March 20, 2009

How a 'Perfect Storm' Led to the Economic Crisis

I liked the way this broke down relatively quickly what we have been through…read it, some of the best is at the end of it!

Click Here for the article.

Friday, March 13, 2009

How Obama's Plan Would Work for Borrowers

Here are answers to some common questions about the Obama administration's new foreclosure-prevention plan.

What do these programs involve?
One component calls for reducing payments for distressed borrowers through modifications of loan terms, known as loan mods. A second involves refinancing mortgages for some people who are current on their payments but have little or no equity in their homes.

When does this start?
Immediately.

How do I know whether I qualify for a loan modification?
For starters, this program applies only to your primary residence. That could be a home for one to four families, condo, cooperative apartment or manufactured home affixed to a foundation. It doesn't apply to second homes or investment properties, and the home can't be vacant or condemned. It also doesn't apply to mortgages on one-unit homes whose balances exceed $729,750.

And it isn't for people who can easily afford to pay their loans. You qualify only if your mortgage payment is more than 31% of your pretax monthly income. The monthly payment includes principal, interest, taxes, insurance and homeowner association or condominium fees. Income includes wages, salary, overtime, fees, commissions, tips, Social Security, pensions and other items.

You may qualify whether or not you are up to date with your payments, but you will need to show that you don't have sufficient cash or other readily available assets to meet your current payments.

If I think I may qualify, what's the first step?
Call your loan servicer, the company that sends you your monthly mortgage bill. If you want a counselor to help you, you can request free counseling from approved counseling organizations by dialing the Hope Hotline at 888-995-4673. Avoid firms that charge you a fee for helping you get a loan mod.

Aside from lower payments, what are the benefits of participating?
As long as participants stay current on the modified loans, they can get reductions of as much as $1,000 each year in their principal balance for five years.

Can everyone with a hardship be helped?
No. Servicers will apply a "net present value" test to determine whether a loan modification is in the financial interests of the lender or investor who owns the loan. If it isn't, you may not qualify.
Do I have to pay a fee for a loan mod?
No.

How do I know whether I qualify for the refinancing part of this plan?
You must be current on your payments and your loan must be owned or guaranteed by government-backed mortgage companies Fannie Mae or Freddie Mac.

These refinancings are designed for cases in which the loan balance is between 80% and 105% of the estimated value of your home. (Those below 80% should be able to get refinanced without the help of this program by contacting lenders or mortgage brokers.) Loan servicers will use computer programs or other means to estimate the value of your home.

These refinancings also are available for second homes and investment properties in some cases.
How do I find out if my loan is owned or guaranteed by Fannie or Freddie?
Your loan servicer or counselor should be able to determine that. On your own you can contact Fannie by calling 1-800-7FANNIE or visiting this Web site: www.fanniemae.com/homeaffordable. To reach Freddie, call 1-800-FREDDIE or go to www.freddiemac.com/avoidforeclosure.

Do I have to pay a fee for a refinanced loan?
Lenders or mortgage brokers may charge fees, which are likely to vary.

How long will these programs last?
The modification plan ends Dec. 31, 2012, and loans can be reworked only one time under this program. The refinance program ends in June 2010.

Where can I get more information?
The U.S. Treasury has provided information at www.financialstability.gov.

Couresty of WSJ. Written by By JAMES R. HAGERTY

Monday, February 23, 2009

Links of Interest - Stopping the Forclosure Wave

Check out this link of interest. It shows other actions, outside of the first time homebuyer’s tax credit, that are being taken to shore up the foreclosure tidal wave everyone is fearing…this must be stopped, or the values could continue to drop, and lending only to become tighter…

The plan is not going to help those that were not being smart about what they were buying, or lending…that is good…if you were being stupid, there is no foreclosure protection for you is basically what the end states…

This will probably be the beginning of different things the Government will embark on to stop the foreclosure wave…it will not be the only step I am sure…

http://www.apnews.com/ap/db_6775/contentdetail.htm?contentguid=gluREL8h&src=cat&dbid=6775&dbname=Top+Stories&storycount=10&detailindex=2
Sincerely with PASSION!

Wednesday, February 18, 2009

Housing Stimulus Initiative

Hello All!

I just finished my last meeting this morning, and will be returning tomorrow...It has been GREAT!

As you are probably aware, the Housing Stimulus Initiative lead by Johnny Isackson was denied in the overall package, and they simply changed the original version of the $7,500 tax credit to first time homebuyers...

Here is what the changes, of what we understand right now, mean:

  • $8,000 Tax Credit for FIRST TIME HOMEBUYERS only (increase of $500)
  • Does NOT need to be paid back (considerable change)
  • Begins on purchases as of January 1st, 2009
  • Only available to an individual earning less than $75k, and couples up to $150k

That is a quick breakdown...Not at all what was hoped for, BUT there may be more to come...MAYBE!

NAR is lobbying to push a separate initiative specifically to address the housing situation...this will be pushed over the next two weeks.

Apparently, President Obama has indicated to NAR that the first step was to address the Economy, and then address the housing scenario.

NAR is working very close and hard to get other initiatives forward...they will probably not be exactly what we believe will stimulate enough, but every step will be a step further than where we are today...

Over the next week, the full details will be understood in clear detail, but for now, what is above is the closest I can get an understanding of...

THIS IS SOMETHING YOU NEED TO UNDERSTAND AND EMAIL TO YOUR FRIENDS AND CLIENTS!!!!!

Friday, January 30, 2009

Some Good News

Sales of existing homes posted an unexpected increase last month, closing out the worst year for the U.S. real estate market in more than a decade.The National Association of Realtors said Monday that sales of existing homes rose 6.5% to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November.

The results were better than expected. December's sales had been forecasted to fall to a pace of 4.4 million units, according to Thomson Reuters.Buyers were taking advantage of dramatically lower prices, especially in distressed markets like California, Florida and Nevada, where foreclosures have swamped the market.The nationwide median sales price plunged to $175,400, down 15.3%pe from $207,000 a year ago. That was the lowest price since May 2003 and the biggest year-over-year drop on records going back to 1968.

"The economy just simply cannot recover as long as home prices continue to decline," said Lawrence Yun, the trade group's chief economist, who called on lawmakers to include tax credits for home buyers in the economic recovery package being considered by Congress.For all of 2008, there were 4.9 million existing home sales, down more than 13% from a year earlier, and the lowest total since 1997.

And another encouraging sign -- the number of unsold homes on the market in last month fell nearly 12% to 3.7 million. At the current sales pace, it would take 9.3 months to sell all the properties, down from 11.2 months in November.

-Wall Street Journal

Monday, January 26, 2009

Become a Student of the Game - AND WIN!

Believe it or not, there ARE buyers out there, and we will end 2008 with a sales pace to match between the numbers represented in the years 2002 and 2003. This will be somewhere in the low-to-mid 50,000 as far as transactions.

If you do some simple math…that would just mean that there needs to be fewer agents than there are today, and we will all be making the numbers we were making at that time…right? Theoretically, maybe, but the reality is that a big divide will be initiated; and it is going to happen sooner, rather than later.

You need to study the trends, talk the trends, use the tools to find the trends, and understand more today, than we ever have had to.


This does not have to be considered a huge task…it is actually engaging and interesting!

This week, I am dissecting the North Atlanta Corridor, and seeing what are some of the recent trends going on between new homes, retail, and institutional homes.

The Time Period = Contracts written Since 10/01/08

Areas = North Fulton (area 13, 14, 121), Gwinnett, and Forsyth

This is a broad look. You can get a lot more specific if you wish.

New Homes = Homes that were built in 2006 or later.

Institutional Homes = Homes that are owned by an entity (Banks, Corporations, etc)

North Fulton (area 13,14,121)

Total Contracted = 375

New = 47 (this pertains to homes built 2006 or newer)

Institutional = 79 (This included 7 new homes)

Forsyth

Total Contracted = 341

New = 129

Institutional = 83 (this includes 24 new homes)

Gwinnett

Total Contracted = 1,246

New = 281

Institutional = 655 (this includes 97 new homes)

What does all this mean?

The good news is that the number of sales is not that far off from last year’s production.

Inventory levels are coming down in each of the areas. Some of this is due to builders not building, banks not lending, and people deciding that now is not the time to try.

It really does not matter why…the bottom line is that the sooner the levels reach low enough, it will turn to a sellers market eventually…we are moving in the right direction!

Gwinnett had a HUGE number of foreclosures, and institutional homes that sold…a little more than HALF!

Realtors really need to perfect their game twice as much as they are going to war with…here is your example:

· 33% of the buyers in Gwinnett decided to buy a RETAIL home (this is a typical seller that owns their personal home and is selling it)

· 67% bought New homes or Institutional in Gwinnett

It is TOUGH, and you better be very bright to do business in Gwinnett and sell to the 33% of buyers that are buying Retail homes, or specialize in one of the arenas that is pulling the most sales

· 55% of the homes sold in Forsyth were New Homes or Institutional

· 31% of the sales in North Fulton were to New Homes or Institutional

Gwinnett seems to be leading the way with Institutional homes. It is tough to see if this is going to be a trend for the other areas, or if it is only a condition in Gwinnett.

What is clear is that Institutional homes are going to be the competition for some time. These will be lower priced homes that the entity selling is going to look to price them competitively to sell, and you will have to communicate with your sellers the reality…YOU ARE IN COMPETITION WITH FORECLOSURES, BANK OWNED, and CORPORATE OWNED homes…deal with it, or don’t sell today!

I had the pleasure of sitting in a woman’s home that said “I am not going to compete with the foreclosures and giveaway-homes, my home is better!” Her home has been on the market for ONE YEAR! She does not want to drop the price of her home…that is a big part of the oversupply right now, is the people that are sitting and hoping vs dealing with reality…

You have to change your pattern prior to the sellers changing theirs! Study the trends, find the trends, be the expert, and lead the sellers wherever they need to go…even if it means taking it off the market!

Wednesday, January 7, 2009

Bloom Where You Are Planted

This is the statement I read: “Bloom where you are planted.”

There are many choices you get to make in life, and a whole lot more you don’t get to choose.

The plant in this picture did not get to choose where it was planted…but it sure made the best out of it, and is apparently THRIVING where nobody would have reasoned it could!

You are planted…you are in North Atlanta…you are in Real Estate…whether you like it or not, you are planted!

Now, what are you going to do about it?

Think about our smart, and tougher-than-nails plant.

Are you a Knower or a Learner? This is going to be the question that when answered will determine who will be blooming, and who will not stand a chance in 2009.

The Knower would assume that there is no logical way that a plant could exist in such a dry, sloped, rocky area…they would not adapt, and would fade away, never seeing a chance, so why try?

The Learner (our little plant friend) researched with passion, and found the one spot that could possibly work…they owned the area, and had determination to make it the absolute best they could…they paid no attention to the knower and the negative remarks…

Do you see any other plants standing tall around our friend?

You will not be able to get me down about the market conditions, and what the future may hold…I know a lot in the game of real estate, but I constantly seek ways to improve my game today and for the challenges that are ahead…I AM planted…I AM a leaner…I AM blooming…Right here in the Real Estate Arena of North Atlanta!