Foreclosures Numbers With Big Drop, Reaching 2007 Levels

During 2011, one in every 69 homes received a foreclosure filing and 804,000 homes were repossessed — compared to 1.05 million homes that were repossessed during the foreclosure crisis peak in 2010. Foreclosure filings posted a 33 percent drop in 2011, falling to their lowest levels since 2007, RealtyTrac reports.

Foreclosures have plagued many communities, putting downward pressure on overall home prices. In the past five years, more than 4 million homes have been lost to foreclosure.

So is the worst finally over for the housing market?

Not yet, analysts say. Banks took more time to process foreclosures last year, which explains some of the declines, housing analysts note. In fact, the average process time for a foreclosure rose to 348 days in the fourth quarter, up from 305 days one year prior.

The RealtyTrac CEO says that while he expects foreclosures to increase in 2012, he also expects foreclosures to  stay well below the 2010 peak. Refinancing programs, such as the government’s Home Affordable Modification Program, are helping more borrowers lower their payments and avoid foreclosure, although not every homeowner will qualify for these programs.

The biggest problems with foreclosures remains centered in certain areas, particularly where investors helped drive up home prices during the housing boom. For example, Nevada remains the No. 1 foreclosure hot-spot, in which one out of every 16 households received some kind of default notice during 2011. Arizona and California also are continuing to face some of the highest foreclosure rates in the country too, according to RealtyTrac data.

5 Tips For Real Estate Pro’s To Get To Icon Status

As you can tell this post is geared towards those already in the field and I wanted to cover something that is asked time and time again by employees, affiliates and colleagues. As a real estate agent, you may not automatically think of yourself as an entrepreneur, but really, that’s what you are!  You’re building your brand, clientele and entire livelihood from the ground up.  While your business is similar to others in the real estate field, it’s up to you to establish yourself as a legit business and bring growth and success; and that’s a large task!

So, what are some of the key steps you can take to really set yourself up as a solid business, a real estate expert or even an icon in the field?

Now, you may think, “Okay, I can see myself as an entrepreneur, but an icon?  I’m not so sure…”  We’re all aware that to have a dynamic business means to constantly be pushing yourself to continual growth; so aiming for the status of icon in your real estate market or even on a national level can be just the thing to urge you to constantly strive for more.

Does this seem overwhelming yet?  Well, take a deep breath.  Becoming an icon doesn’t happen overnight and will take consistency and a daily committment to provide the best and most innovative service to your clients.

Recently, entrepreneur.com gave five great tips that will help boost you to that iconic level.  Of course, I’ve modified them to make them real estate specific, so take a few minutes to review how you can take your business to the next level!

1. Start blogging- Blogging is a great way to establish yourself as an expert.  You can easily provide pertinent information about your real estate market, your listings, home buying or selling tips and even community events.  Giving people the information they want about the real estate market, their home and the community will keep them coming back for more.  The more you blog on a consistent basis, the more people will begin to see you as a trusted expert in your field and in your community.

2. Market yourself- In being your own brand, marketing is key to your success.  While you may not feel comfortable with self-promotion; it’s really the only way to market your business since you are your business.  Marketing your services, your field of expertise, even your awards or recognitions allows others to get to know you, your values and what you will be able to do for them.  This is just another way to establish yourself as an expert and give an open door to becoming an icon.  Exposure brings recognition, which breeds familiarity and establishes trust.  It’s just how our minds work!

A great way for real estate agents to do this is through a one sheet marketing approach.  We’ve created this for a few of our clients and its been a huge success!  A one sheet is simply a sheet of paper that gives a brief synopsis of who you are, your certifications, area of service, expertise or anything else you want to highlight about you and your business.  They’re perfect for leaving at an open house, giving to potential clients and handing out with your marketing presentation.

3. Create Compelling Content- Whether you’re blogging, writing a buyer or seller page for your website or creating your print marketing material; your content should be compelling.  That means sentence structure and grammar should be impeccable and the topics or advice you are presenting should be up to date and interesting.  Visitors to your website or blog will know when something’s just been thrown on a page, and that will send the message that you are okay with doing the minimum just to get it done.  Why not show how much you care about your business and your customer service ethics through great content?  It will help set the tone for your entire business.

4. Create Products- Did you know that real estate agents can have products too?  While you’re not trying to sell them to make a profit, having products or tools to provide for your clients can help set you apart. Giving your client or potential clients something extra is unexpected, sets you apart and establishes yourself even more as an expert.

5. Take it to the Next Level– Now that you’re seen as an expert in your community, boost yourself to icon by taking it up a notch.  If you’re passionate about selling homes or helping people avoid foreclosure; do all you can to grow in your area of expertise.  Begin to register yourself as an expert on real estate sites or other marketing avenues and network, network, network! Credibility is a key component to being viewed as a leader and expert. Real estate conventions are always looking for speakers in a specific field and the more you put yourself out there, the more likely you are to have opportunities on a national level. Imagine how sought after you’ll be in your community after receiving national recognition!

I know this may seem like a lot to take in and a lot of hard work; and it is!  Reaching your goals will take time, dedication and a focus on the end results.  Remember, taking it a day at a time is key!  You won’t become an icon, or even seen as a real estate expert overnight, but you’ll be encouraged by those daily “wins” and as you see your business begin to grow.

There are certain actions that can be taken and if interested, contact me, I recently launched a mentorship program limited to only a handful of individuals and I can guarantee recognition in basically any syndication including FOX, CNBC, ABC, MarketWatch, The Wall Street Journal, Newsweek, and the list goes on. Credibility is a key component to being viewed as a leader and expert. As in doing anything, there is a process to it. Just like there is a process to become a doctor or lawyer. This will give you a head start, but I can show you exactly how to be one of the leading experts in your area, guaranteed. Just contact me for details. Be blessed and make it a productive day!

Fannie Mae: September Economics and Mortgage Market Analysis

Leading indicators for home sales point to subdued housing demand. Respondents to the Fannie Mae National Housing Survey indicate a continued shift of sentiment toward renting and away from ownership, at least in the near term. In the second quarter, 26 percent of Americans were worried about their job stability. When combined with the 9 percent of unemployed households, more than a third of the potential workforce was worried about their employment status – hardly a strong support for housing demand.

After rising for two consecutive months, pending home sales (contract signings of existing homes) fell in July, which bodes poorly for existing home sales in August and September. Pending home sales generally lead the existing home sales data by one or two months. However, the link between contract signings and closings has weakened lately such that the gains in pending home sales in recent months have not materialized into contract signings. Low appraisals compared to contract prices and concerns about the economy may have led to contract cancellations and delays. Also, some contracts have had to be cancelled because the potential buyers could not sell their current homes.

September Economic Developments
September Economic Forecast
September Housing Forecast

Freddie Mac Finalizes New Modification Option

Freddie Mac finalized requirements for a new modification option that will be made available to qualified borrowers on Oct. 1.

Mortgage servicers must evaluate borrowers deemed ineligible for the larger Home Affordable Modification Program for the new “Standard Modification” beginning in January. Trial period plans can begin in October. Through the new program the borrower‘s principal and interest payments drop at least 10%, according to Freddie.

Since March 2009, servicers granted roughly 791,000 permanent HAMP modifications and extended more than 1.6 million trials through the national program. But servicers canceled more than 763,000 trials because of redefault, not enough documentation or the borrower did not meet the requirements.

In order for a borrower to qualify for a standard modification, he or she must be at least 60 days delinquent. If they’ve missed fewer payments or are current, he or she must be an owner-occupant, in imminent default and provide a hardship document.

The borrower must have already been evaluated for HAMP within 12 months of the Standard Modification. Mortgages on homes without an owner-occupant can be eligible, even vacant homes that cannot be condemned.

The loan-to-value ratio of the mortgage must also be greater than 80%.

Servicers will receive $1,600 for each modification completed before the loan slips into 120-day delinquency. They get $1,200 for a modified mortgage between 120- and 210-days behind. For standard modifications completed after 210 days of missed payments, the servicer gets $400 from Freddie.

The standard modification program will fall under the joint servicing alignment initiative launched in April.

To Build Or Not To Build? How A Strategic Return To The Sector Could Yield Huge Returns For The Savvy Investor.

. . . . a tough question in light of today’s stubborn economic recovery.  Even though we’ve spotted a few bright spots on the economic horizon (a shrinking foreclosure rate, a growing cash-investor class taking advantage of bargain distressed property prices, rising values of existing commercial properties), tepid job growth and an inventory of unsold REOs seem to negate any optimism. Arguably, the building industry has suffered as much as any other sector. Construction of new homes, one key indicator of economic health, posted its largest decline in the past few decades and finds itself struggling with rising material costs in an environment not conducive to raising prices to cover costs. While conventional wisdom suggests that investors should distance themselves from the building and construction industry, first impressions could be misleading. A strategic return to the sector could yield great returns for the smart investor. The secret lies in pinpointing specific demand and if enough demand exists to drive growth. UCLA’s Anderson School of Business’ recent findings echo findings from a number of other sources indicating a consumer “shift” is occurring to affordable rental units from the traditional single family home. Higher down payment requirements, tight credit and other factors make renting a more practical choice for current homeowners and the growing segment of “Echo Boomers” – defined as children of Baby Boomers born between 1975 and 2000. Fannie Mae estimates that the currently available 15.2 million rental units will not meet the growing demand for affordable housing for this group in the future. Similarly, on retail and office market fronts, analysts predict shortages in retail office spaces as businesses expand. While the fate of the traditional single-family home may be unclear at the present time, the need for affordable apartments and commercial square footage is increasing. Demand exists. The economic downturn crippled the construction industry. The credit vacuum created by the voluntary exit of lenders and the FDIC shutdown of banks with non-performing construction loans brought building to a virtual halt. New project starts diminished and ongoing developments that lost financing stalled. These factors combined to stymie the supply of units brought to market. Now that demand is showing signs of returning, some mothballed projects may begin to make sense at today’s prices. The initial infrastructure work leading up to construction (permits, environmental studies, plans, etc.) that comprise the up-front costs and take years to complete, new investors can now obtain for pennies on the dollar. Private equity funds and large banks are once again injecting new capital into projects. Activity is increasing at construction sites nationwide to meet projected demand, providing much-needed jobs to their immediate communities. We recently completed a development project that was able to sell at attractive current levels based on the fact that we saved on both the land cost as well as benefited from existing infrastructure. This in addition to the short time frame from investment to repayment, made the difference. The key factor is to begin in the areas that were located within good markets and avoid those areas that were on the outer rim of the growth pattern.  If the project is well located it should achieve a fair return using very conservative projections. Is it time to build again? The answer depends on finding the right location at the right price at the right time when land is cheap and the up-front costs have already been absorbed by previous investors. The heavily discounted infrastructure and approvals, in my opinion, are the key elements.

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Existing Home Sales Jump Again:

Despite bad weather, U.S. home sales jumped more than expected in December.  Sales of previously occupied homes soared 12.3 percent last month which far surpassed national forecasts of an increase of only 4.5%.  This marks the second straight month of significant gains in sales.  In November, Existing Home Sales surged 6.1%.  The national median home price in December was $169,300 which was only 0.2% lower than levels a year ago.  This is important to note because 36% of homes sold in December where under the “distressed” category.  And even though this is a larger than normal percentage of sales, the national median home price barely moved.  In fact, it actually increased in some ares such as the Midwest (+3.3%).

In other news, Housing Starts decreased from 553K to 529K.  While the media has had a field day of reporting this as bad news…it is actually good news!  The number one reason that the housing industry fell was over supply.  And with supply levels still above where they need to be, any addition to those levels (for example by building even more homes) is not a good idea.

What Happened to Rates Last Week:

Mortgage backed securities (MBS) lost -54BPS from Tuesday’s open (Monday was closed due to the holiday) to Friday’s close which caused 30 year fixed rates to move higher.  MBS generally trade in the opposite direction of positive economic news.  And last week we had a lot of positive economic news with strong results from Existing Home Sales, Initial Jobless Claims, Leading Economic Indicators and more.

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To You Commercial Realtors: Development Loans!

Development Loan Options!

Possibly the most needed loan in the marketplace today is the development loan.  Letting people know you have it slams you with leads and deals because- so few people are doing it.

You see, to a bank, especially in this environment, a construction loan is a huge risk.  No income or cash flow for 1-3 years and you hope there are no delays, etc.  Most of the bad loans on a banks books right now are construction loans gone awry.  Construction loans go immediately to the high risk portion of a bank’s balance sheet and hurts their ratio of good loans to bad loans that they are being graded on by the FDIC when they come in to audit them.  In other words, to a bank, there is NO reason to do a construction loan, it can only hurt the bank.  It is in this area that I have probably worked harder than any other finding good sources for my guys.  And we have OPTIONS for development loans right now, for example we have:

-normal construction loans to 65% Loan to Cost (LTC) for most commercial projects up to $10 Million

-hotel construction loans to 70% LTC in major metro markets to $8 Million

-a hedge fund that can do mega-strong development loans above $10 Million and with a combination of debt, equity and mezzanine, can get up over 80% LTC

-a trade program that is sourced and vetted and can net a project $40 Million for $10 Million on deposit that never leaves the clients control.   I have all the proof of that transaction-something no one else seems to be able to get on trade platform loans-proof!

–FHA construction financing up to 90% LTC from $2 million to $50 million

-and of course, SBA build-out money nationwide

Exciting stuff.  The kind of stuff that can make you hundreds of thousands of dollars this year.  It has taken me over 1 year to find these sources, and I have them available for you and your clients.  Give me a call today at 888-650-9966 Ext.100 for more info on any of these products or to run a scenario by me.

Together, we can have an INCREDIBLE 2010!  Have an awesome week and talk to you soon!

Mike McDevitt

P.S. Remember, I have many options for development and construction money that you probably will not get from any local banks.  Give me a call TODAY to discuss at 888.650.9966 Ext.100.  Be blessed!