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To achieve anything of significance in life requires focus

I read this today on DavidFoster.tv and it met me at my heart. I am going to read it every morning and strive to stay more focused!

Hope you enjoy it…

To achieve anything of significance in life requires focus; not just focus for the moment, but focus over time, a focus that is fixed on learning, growing, and mastering a subject,a problem, or an opportunity.  Here are five signs you’re not focused.

1. You don’t have a plan. If your life is a wandering generality, hoping to just happen to you, then you certainly are not focused.  Your sight is defused, looking at many things instead of the one best thing for you.
2. You can’t assess your progress. Of course if you don’t have a plan, it’s hard to assess where you are. Someone has said that what gets dated gets done.  It takes courage to plan your life and then work your plan.  Are you able to answer this question: “Have you grown over the last 12 months?  Are you making progress toward your life’s goal?”
3. You won’t be still without a baby-sitter. I was raised in a generation where we constantly had to have something going on: the TV, the radio.  Today these are replaced by iPods, iPhones, all kinds of ways in which we get stimulated. But to get focused on anything, you’re going to have to learn how to be still without stimulants, except the subject at hand.
4. You never take the time. To be focused on anything requires time. People often ask me, “How do you write a book?”  It’s this easy and this hard.  Set your butt in a seat for hours on end and focus on the task at hand. Time passes whether you like it or not.  But all the hours I’ve spent writing books that have been published and go around the world in five different languages, is time that I’ve captured forever.
5. You offer no unique insight. The fruit of focus is insight.  A unique observation that is quite unlike anyone else is what creates your unique voice.  It allows you to make a contribution and fly your flag in a crowded market.

As Housing Recovery Lags, Rental Business Set to Boom

I found this very interesting! This is the game to be in right now for sure!

Published: Wednesday, 30 Mar 2011 | 2:03 PM ET

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The severe and prolonged downturn in housing likely will have one notable beneficiary: Demand for multi-family dwellings is expected to rise as more owners switch to renting.

Home For Rent

With foreclosures numbering more than 200,000 a month and lending regulations tightening, more homeowners will be pushed into renting, which in turn will see a demand for apartments and multi-family homes increasing.

“The most severe housing collapse and recession in post-war history will naturally leave scars on the economy for years, with the housing market most vulnerable,” Michelle Meyer, economist at Bank of America Merrill Lynch, wrote in a research note for clients.

“The resulting decline in demand and tightening of credit has triggered a decline in homeownership and downsizing toward smaller homes, which in our view will underpin multifamily construction,” Meyer added.

Jeff Cox
Staff Writer
CNBC.com

Though foreclosures in February saw what is expected to be a temporary drop, RealtyTrac expects that move over the course of several months to reverse as allegations that homes were taken improperly work through the system.

February saw more 225,000 foreclosure notices issued, which amounts to one for every 577 homes in the US. A government program to stem the foreclosure tide has been criticized as largely ineffective and could die a quiet death in Congress.

Indeed, Meyer said the problem is likely to worsen before it gets better, with 4.3 million homeowners “in foreclosure or seriously delinquent.” There also are 3.5 million mortgages in modification, half of which likely will end up in foreclosure. And there are another 1.3 million mortgages 60 days delinquent.

“We believe it is reasonable to expect nearly 8 million foreclosures to enter the market over the next three years,” Meyer wrote. “This means we can expect a steady shift into rentals from foreclosures through 2013.”

Despite all the foreclosures, the homeownership rate remains at 66.5 percent. That is likely to fall to 63 percent over the next five years or so, said Richard D. Hastings, consumer strategist at Global Hunter Securities in Newport Beach, Calif.

“People are more conscious of the operating overhead of home ownership,” Hastings said. “It’s a very expensive thing to own and operate a house as people see their equity is not growing and overall mobility has decreased. There’s been a psychological shift in which homeowners have become much more focused on the burden over time of the operating expenses, and some of them are pretty severe.”

Meyer cites two other factors: Though unemployment is lower for young adults than the rest of the population, they don’t make good potential homeowners due to tighter lending standards. Also, income disparities have grown during the recession, with more wage earners on the lower end of the scale and thus more likely to be renters than owners.

“Policy changes will encourage this shift,” she wrote. “The rhetoric in Washington has started to shift away from the goal of Americans to be homeowners and toward a system that gives them choices between ownership and rentals.”

From an investment standpoint, there will be several options.

Real Estate Investment Trusts, or REITs, have been performing well this year, with the FTSE NAREIT Index showing a total return of 8.29 percent this year. Real estate REITs in particular have been at the top with a 9.09 percent return.

“The multi-family side of commercial is going to continue to look pretty good as long as the execution is done properly with costs under control,” Hastings said. “You get a little bit of pain on some materials costs, but when you’re doing multi-family that can be manageable.”

Meyer at BofA also believes apartment REITs, which have returned 6.5 percent in 2011, will do well, particularly for those that have gotten ahead of the construction curve and will have units available immediately to displaced homeowners.

In addition, she said stocks of construction equipment companies that are “tied to the multifamily market” should perform.

“The silver lining to an otherwise dire forecast for the housing market is that there will be some support to the construction sector from a gain in multifamily building,” Meyer wrote. “At this point, we will take

Foreclosures in top 10 markets!

Foreclosures spread

According a report released Thursday by RealtyTrac, one out of every 9 homes in Las Vegas received some kind of default notice in 2010.  But there is a silver lining: The foreclosure rate is actually dropping in Vegas, down 7% compared to the end of 2009.  In fact, rates fell in all top 10 foreclosure markets of 2010. In No. 2 Cape Coral, Fla., for example, filings dropped 28%. In third place Modesto, Calif., they fell 13%; and forth place Phoenix dipped 7%.  But even as foreclosures fell in the worst-hit areas, they rose in 72% of the 206 metro areas covered by RealtyTrac’s report.  Foreclosures have spread beyond the original bubble cities as the economy melted down. Unemployment rates spiked nearly everywhere, and people out of work can’t make their mortgage payments.  As a result, there is now a cohort of metro areas that didn’t enjoy the housing boom but are now enduring double-digit foreclosure spikes.

For example, Houston foreclosures grew by 26% — the biggest jump by any of the 20 largest metro areas — to one for every 62 households. The city suffered from a bleak job picture, with unemployment rising to 8.6% in November from 8.1% a year earlier.  Atlanta rose to 25th place with a 21% jump in 2010 filings following a 42% spike in 2009. And Salt Lake City filings ballooned by 30% in 2010, good for 27th place.  Bubble state cities still dominate the top of the list, however, accounting for 19 of the 20 top markets. And the easing in these worst-hit markets may be temporary, said Rick Sharga, spokesman for RealtyTrac.  He forecasts a foreclosure rise again in the Sand States this year as banks restart their engines. Overall, he thinks, foreclosures should plateau and stay at about the same level throughout 2012. “Until jobs come back, we won’t see much of a change,” he said.

Initial jobless claims higher

There were 454,000 initial jobless claims filed in the week ended Jan. 22, the Labor Department said today.  That was up 51,000 from the 403,000 claims filed the week before, and much worse than the 410,000 claims economists surveyed by Briefing.com had expected.  Jobless claims have bounced around for months, dipping below the 400,000 mark four weeks ago. Soon after, they began rising again. Since the weekly figures can be volatile, economists look at the four-week moving average to smooth out the week-to-week choppiness. That figure rose 15,750 to 428,750 from the previous week, showing a slightly worse job market.  Continuing claims — which include people filing for the second week of benefits or more — rose to 3,991,000 in the week ended Jan. 15, an increase of 94,000 from the week before.

Olick - what’s behind the new sales surge?

“No, I’m not about to throw a huge bucket of water on a really nice monthly stat that is infusing a modicum of hope in the housing market. I just want to put it all in perspective.  New home sales surged 17.5% in December, month-to-month, according to the Commerce Department, and that brought inventories way down to a 6.9 month supply (the total number of new homes for sale also fell to the lowest level since 1968). Prices of new construction actually bumped up significantly as well, up 8.5% year over year.  It’s important to remember that this particular data series is based on contracts signed in December and not closings, as the Existing Home Sales survey from the National Association of Realtors is. So what happened in December?  From the last week in November, into December, the rate on the 30 year fixed mortgage surged more than half a%age point, briefly touching 5%.

That clearly had the effect of pushing some fence-sitters to the buy side, worried that rates might go even higher, and they would be priced out of the market. Rates have since flattened below 5% with not much going on. The urgency is gone.  To put all this in perspective, while 17.5% seems like a big number, the actual number of homes that sold in December was 22,000, with November being revised down to 20,000. ‘So December is the second worst month in recorded history behind November,’ notes JT Smith of Aristar Funding.

He also notes that 23% of the sales were of vacant lots.  The strange number in the report is a huge 72% jump in sales month to month out West, ’strangely where most of the excess existing home inventory is,’ says Miller Tabak’s Peter Boockvar. I’m wondering if the surge out West isn’t due to the fact that foreclosure sales were halted, so buyers turned to new construction.  ’Net-net, housing continues to bounce along the bottom, as we’re well aware that a bubble of the extend we had takes many years to work through,’ adds Boockvar.  It will be telling to see if this sales pace can hold on and improve, as banks ramp up foreclosures and start putting them back on the market.”

Deficit hits $1.5 trillion

New budget estimates released yesterday predict the government’s deficit will hit almost $1.5 trillion this year, a new record.  The daunting numbers mean that the government will have to borrow 40 cents for every dollar it spends.  The new Congressional Budget Office estimates will add fuel to a raging debate over cutting spending and looming legislation that’s required to allow the government to borrow more money as the national debt nears the $14.3 trillion cap set by law. Republicans controlling the House say there’s no way they’ll raise the limit without significant cuts in spending, starting with a government funding bill that will advance next month.  The CBO analysis predicts the economy will grow by 3.1% this year, but that joblessness will remain above 9% this year. Dauntingly for President Obama, the nonpartisan agency estimates a nationwide unemployment rate of 8.2% on Election Day in 2012.

The latest figures are up from previous estimates because of bipartisan legislation passed in December that extended Bush-era tax cuts, unemployment benefits for the long-term jobless and provided a 2% payroll tax cut this year.  That measure added almost $400 billion to this year’s deficit, CBO says.  The deficit is on track to beat the record of $1.4 trillion set in 2009. That figure reflected huge outlays from the Wall St. bailout. The nonpartisan budget agency predicts the deficit will drop to $1.1 trillion next year.  ”The fiscal challenge confronting us is enormous. To solve this problem, it will require real compromise and a great deal of political will,” said Budget Committee Chairman Kent Conrad, D-N.D. “We need to have both sides, Democrats and Republicans, willing to move off their fixed positions and find common ground.”

Google to get out of real estate

Massive search engine, Google, will take down real estate listings from Google Maps on Feb. 10.  Brian McClendon, vice president Google Earth and Maps, broke the story on the company’s LatLong blog yesterday and said the real estate listing feature is simply not popular enough to justify its existence.  Google first announced the tool in July 2009. Surfers using Google Maps gained the ability to find properties for rent or sale when searching locations.  ”We’ve learned a lot and been excited to see real estate companies use Google Maps in innovative ways to help people find places to live,” McClendon said…yet we recognize that there might be better, more effective ways to help people find local real estate information than the current feature makes possible.  We’ll continue to explore this area.”

Four months after Google launched its real estate listing services, HousingWire broke that the Web firm planned to launch a mortgage pricing tool, the fate of which remains unclear.  Competition also pulled too much traffic from the tool, McClendon added.  Indeed, Web-based real estate information company Zillow is reporting record-breaking traffic, by logging more than 13 million unique users in the traditionally slow real estate month of December.

Now for our real estate education section…

Cash Buyer Myths

One of the most persistent myths in the real estate business involves the concept surrounding a cash buyers. In fact, even seasoned real estate agents and other professionals often succumb to these same myths and misperceptions. Today we are going to spend some time sorting out the facts from the fiction surrounding cash and shed some light on this elusive topic.

Myth #1 - Cash buyers are all rich. WRONG! Cash buyers come in all shapes, sizes, gender and income brackets so stop limiting your client roster due to an out of date mindset. The reality is that many buyers with average incomes are able and willing to pay cash. Common examples can include the sale of a prior property, inheritance, 401k or other withdrawal and even cash advances from other sources including signature loans or credit cards. Don’t place restraint on buyers by assuming cash is out of the question.

Myth #2 - Cash is King. Well, this certainly holds true in many instances but not always. For example, in some situations a seller may actually wish to hold a note as when providing owner financing over a long period of time. In fact, early pay-off is considered a risk to this type of portfolio due to the reduced interest earnings over the lifetime of the loan.

Myth #3 - Cash Can’t Compete with ROI. In the past this was often the case but with real ROI”s in the low single digits, cash deals have investors squealing with delight. For example, let’s assume an investor pays $50,000 cash for a house that rents for $500 per month. Setting aside 2 months worth for taxes and insurance, this investor still recognizes a 10% annual return excluding appreciation! Not a bad investment considering the alternative of leaving it in the bank earning two to three percent.

Myth #4 - It Takes a Lot of Time to Save Enough Cash. While it is true that trying to save up enough cash to buy a property for cash can take years, it is equally true that it doesn’t have to. The key is to set your sights on what will provide quick cash and then use the profits to fund future endeavors. One of the most critical mistakes made by novice investors is trying to shoot for the stars the first time out.

Better yet, rather than trying to fund the purchase of a property all on your own, seek out a partner or provide bird dog services for other investors. Not only will it allow you to earn extra income to pay down bills and pad your investment portfolio, but you will also obtain valuable insight and experience without having to take on excessive risk.

Myth #5 - Cash Kills the Tax Advantages. Buying for cash may not allow some buyers to obtain a mortgage interest deduction but most of the other meaningful tax advantages are still available. Even more importantly, the streamlined time and cost associated with a cash purchase is often more than worth the savings. After all, it doesn’t make a lot of financial sense to spend a dollar in order to save 35 cents. For those that are using real estate as a method to make money, maximizing profits while minimizing expenses is the clear leader in tax strategies; cash allows that plus much more.

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Copyright Loss Mitigation Institute LLC 2010.

My (re)new(ed) M.O. - Live life more simply, like a billionaire…

From WSJ - Housing Gloom Deepens Home Sales Rise, but Economists Don’t See Prices Bottoming Till Late ‘11 or ‘12

By NICK TIMIRAOS

Home sales picked up in September, but the long-term picture for housing is growing grimmer, say analysts and economists who are pushing back forecasts for a housing recovery.

Earlier this year, the housing market appeared poised for a turnaround. Federal tax credits for buyers spurred a flurry of activity, and the economy was adding jobs. That led some economists to forecast housing would hit bottom and begin to recover this year.

Now, some economists don’t see a recovery until late next year or early 2012. “In most markets, the tide seems to be going back out,” said Stan Humphries, chief economist at Zillow.com, a real-estate site. “The momentum is easing.”

Adding to the mounting worries is the foreclosure crisis. Some banks suspended sales of foreclosed homes late last month to address questions about the integrity of the foreclosure process. If a substantial part of the market freezes for some weeks, that could further crimp sales.

On Monday, the National Association of Realtors said sales of previously owned homes ran at a seasonally adjusted annual rate of 4.53 million in September. While that was up 10% from August, the overall level of sales remains weak, and economists believe sales going forward could fall again.

Indeed, half of the 109 economists and housing analysts polled this month by MacroMarkets LLC, a housing-futures firm, expect home prices to bottom next year, but half don’t expect a rebound until 2012.

The growing pessimism is attributed partly to rising inventory in many markets, a trend that doesn’t bode well for prices. The Wall Street Journal’s latest quarterly survey of housing-market conditions in 28 major metropolitan areas found inventories of unsold homes were up in 19 markets at the end of the third quarter, compared with a year ago, with especially large increases in San Diego, Los Angeles and Sacramento.

“We’ll see some additional price declines,” said David Berson, chief economist at PMI Group Inc., a mortgage-insurance company in Walnut Creek, Calif. “The gains we’ve seen can’t be sustained given the current supply situation.”

The housing market typically plays a big role as the economy exits from recession, with a rebound in new home building sparking demand for construction workers and building supplies. “We’re clearly not getting that this time,” said MF Global economist James O’Sullivan. It’s a major reason, he said, that the recovery that began last year has been so lackluster.

To be sure, the housing market is faring better in several metro areas, particularly those with decent job growth such as parts of Texas and Washington, D.C. And the National Association of Realtors said it believed a housing recovery was already taking place, though chief economist Lawrence Yun said it would be “choppy at times.”

But other economists say any talk of a recovery is premature until prices stabilize. In the Realtors’ report, the median home price fell 2.4% to $171,700 in September from a year earlier.

The latest data don’t reflect the suspensions of some foreclosure sales. Monday’s home-sales report noted that foreclosures and other distressed sales accounted for more than one-third of transactions in September.

Earlier this month, Nina Kachakova was days from closing on a two-bedroom home in Sunrise, Fla. But Fannie Mae pulled the listing after Bank of America Corp., which had serviced the loan on the property, announced it was suspending foreclosures. In a letter, Fannie asked to extend the closing until next Tuesday, but added the “extension does not guarantee resolution of title defect within this time frame.”

Ms. Kachakova, who had been outbid on nearly a dozen other properties since May, has already paid $1,800 for an appraisal, home inspection and loan-origination and processing fees for the $135,000 home. “Right now, it’s just a waiting game, and I don’t know if I should start all over,” said the 24-year-old bookkeeper.

Some already-skittish home buyers are asking sellers to further lower their prices to offset the costs of delays.

Kelly Hoemann, 30, chose not to renew the lease on her apartment after going into contract on the $85,000 two-bedroom home in St. Petersburg, Fla., earlier this month. She now faces a foreclosure-related delay. “Come November 1, I don’t have a place to live,” said Ms. Hoemann, who asked Freddie Mac to consider lowering the sales price to $75,000, to give her an incentive to ride out the delay.

At the mortgage bankers’ annual convention in Atlanta Monday, Fannie Mae Chief Executive Michael Williams emphasized the need to fix problems quickly “so it doesn’t create an overhang of [bank-owned] property.”

The recovery could be interrupted most severely in Florida, New Jersey and other “judicial” states where banks must complete foreclosures through court.

“Long after other parts of the country have burned off their excess foreclosure inventory, we will still be digesting ours, that’s for sure,” said Jeffrey Otteau, president of Otteau Valuation Group, an East Brunswick, N.J., appraisal firm.

At the current sales pace, it would take nearly 10.7 months to sell the nation’s inventory of 4.04 million homes, according to the Monday report by the NAR. Six to eight months of inventory is considered healthy.

The housing market isn’t likely to improve until job and income growth picks up. Other intractable problems include high rates of homeowners who owe more than their homes are worth, and the “shadow” inventory of loans, estimated at around four million, that are in some stage of foreclosure, or that have missed three or more mortgage payments.

BofA Halts Foreclosures Bank Expands Freeze After Pressure From Government-Run Mortgage Firm

By DAN FITZPATRICK, DAMIAN PALETTA And ROBIN SIDEL

Bank of America Corp. imposed a nationwide moratorium on foreclosures and the sale of foreclosed homes after it came under intense pressure from a government-run housing-finance giant worried about documentation problems, people familiar with the situation said.

The bank called the halt as concern mounted from legislators and state prosecutors about procedures used by lenders to foreclose on homes. Many banks use so-called robo signers, employees who sign hundreds of documents a day, without carefully reviewing their contents, when foreclosing on homes. Critics say that could result in improper foreclosures.

Freddie Mac, the government-run mortgage-finance company that along with Fannie Mae owns many of the mortgages serviced by banks, pressed Bank of America to expand its search for problems with the foreclosure documentation process, said the people familiar with the situation.

On a call Thursday with several banks that included Bank of America, a Freddie official said the mortgage company wanted the institutions to look at foreclosure documentation across all 50 states, and asked them to consider putting a stop to the entire foreclosure process, say people familiar with the call.

Many in the banking industry fear that the widening paperwork problem could cause further delay on foreclosures and threaten an already weak housing market, which in turn is stalling the broader U.S. economic recovery. On the other hand, it could provide a brief financial respite to people who have defaulted on their mortgages and are still occupying their homes.

As of August, there were more than 4.4 million home loans that were either in the foreclosure process or 90 days past due, according to mortgage research firm LPS Analytics. Since 2006, about 6.4 million homes have been lost through the foreclosure process.

Edward DeMarco, who heads the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, said in an interview that officials were working to find a “tailored” response to the foreclosure problem that won’t cause broader problems for the fragile housing market.

“We are trying to be quick but measured in the approach and the response taken,” he said. “We’re concerned about the whole housing market, and we’re concerned about what this means for taxpayers and other market participants.”

Last week Bank of America, J.P. Morgan Chase & Co. and Ally Financial Inc. agreed to more closely examine documents used in 23 states where a court’s approval is required to foreclose on a home. J.P. Morgan said its review suspended nearly 56,000 foreclosures.

In conversations with Bank of America, Freddie said financial penalties or litigation could result if the bank did not take additional steps, said a person familiar with the conversations. Bank of America told Freddie that an audit of procedures in the 23 states uncovered no errors, this person said.

But Freddie said the work didn’t go far enough and asked for a review in all 50 states, as well a stop to any foreclosure sales, said people familiar with the situation.

Freddie Mac declined to comment.

Bank of America Chief Executive Brian Moynihan said Friday that the bank hasn’t found problems in its foreclosure process, but opted to temporarily halt all foreclosures to “clear the air.” He said the bank wants to “go back and check our work one more time.”

Its decision is expected to stop “a couple of thousand” foreclosure sales scheduled for the next week, according to one person familiar with the matter said. The bank declined to specify how many homes it has in the foreclosure pipeline.

So far, Bank of America is the only lender to expand its foreclosure freeze, but others may be forced to begin or broaden a review, banking executives say. Wells Fargo & Co., one of the nation’s largest mortgage lenders, says it hasn’t stopped foreclosing on any properties.

At this point, J.P. Morgan isn’t expanding its foreclosure moratorium, but is widening its document review beyond the 23 states where it has frozen foreclosures, according to a person close to the bank.

Bank of America services 14 million mortgages, or one out of every five in the U.S., and its loan-servicing portfolio exceeds $2.1 trillion in size.

Of its mortgages, 10 million came from its 2008 acquisition of troubled California lender Countrywide Financial Corp. More than 80% of its delinquent loans were acquired through Countrywide.

A push over the last week from politicians and law-enforcement officials troubled by reports of foreclosure problems only intensified the pressure on Bank of America, which has been working to improve its relations in Washington. It concluded that reviews in just 23 states wouldn’t cut it with elected officials in the other states, a person close to the bank said.

“In this intense political season we are in, it didn’t play well to say do it in some states but not your state,” this person said.

Senate Majority Leader Harry Reid (D., Nev.), whose state has been hit hard by foreclosures, and House Oversight and Government Reform Committee Chairman Edolphus Towns (D., N.Y.), both said Friday they welcomed Bank of America’s move and called on other banks to follow.

Cassandra Toroian, chief investment officer at Bell Rock Capital LLC, a money-management firm, says the additional reviews are unlikely to significantly impact the outcome for homeowners who are facing foreclosure.

“It’s just delaying the inevitable,” she says.

—Robbie Whelan contributed to this article.

Distressed Homes Sell at 26% Discount in U.S. as Supply Swells

Bloomberg reports:

Homes in the foreclosure process sold at an average 26 percent discount in the second quarter as almost one-fourth of all U.S. transactions involved properties in some stage of mortgage distress, according to RealtyTrac Inc.

A total of 248,534 homes that sold in the period had received a default or auction notice or been seized by banks, RealtyTrac said in a report today. The number was up 5 percent from the first quarter and down 20 percent from a year earlier, according to the Irvine, California-based data seller.

“We’re still clearly building up more distressed inventory,” Rick Sharga, RealtyTrac’s senior vice president, said in a telephone interview. “That will either put downward pressure on prices or keep them from going up.”

The discount reflects the average sales price of homes in the foreclosure process compared with properties not in distress, according to RealtyTrac. About 24 percent of all homes sold were in some stage of foreclosure, down from 31 percent in the first quarter. The average price of a distressed property was $174,198, up from $171,971, the company said.

Foreclosures are adding to a swelling U.S. housing supply as an unemployment rate of 9.6 percent and the end of a federal homebuyer tax credit dampen purchases. Home seizures in August reached a record for the third time in five months, with more than 95,000 repossessions, RealtyTrac said earlier this month. Home prices dropped in July, the eighth consecutive year-over- year decline, the Federal Housing Finance Agency said Sept. 22.

‘Extraordinary’ Spike

Distressed sales dropped as a portion of total transactions because the homebuyer tax credit of as much as $8,000 spurred an “extraordinary sales spike,” Sharga said. The benefit expired April 30.

Sales of homes with mortgage distress probably will account for a quarter to a third of all transactions through 2011, up from 1 to 3 percent before the housing crisis, Sharga said.

“Many people elected to use the $8,000 credit as their discount, rather than buy a house that needed $8,000 worth of work,” Sharga said.

Bank-owned properties sold for an average discount of almost 35 percent in the second quarter, little changed from both the previous quarter and a year earlier. Such properties accounted for 15 percent of all U.S. home sales, down from almost 19 percent in the first quarter and 20 percent a year earlier, RealtyTrac data show.

Short Sales

Properties in default or scheduled for auction sold for an average discount of almost 13 percent, down from 16 percent in the previous quarter and 19 percent a year earlier. These homes are often sold in short sales, where lenders accept less than the outstanding loan amount for the property, RealtyTrac said. Sales of properties either in default or headed for auction accounted for 9 percent of all transactions.

The average price was $154,147 for bank-owned properties and $204,932 for homes in default or scheduled for auction, RealtyTrac said.

Nevada had the highest proportion of distressed sales of any U.S. state in the second quarter, with 56 percent of all transactions involving properties seized by banks or at risk of foreclosure.Arizona ranked second at 47 percent, while California was third at 43 percent.

Distressed sales accounted for at least a quarter of total sales in Rhode Island, Massachusetts, Florida, Michigan, Georgia, Idaho and Oregon, RealtyTrac said.

Ohio had the highest average price discount for foreclosed homes at almost 43 percent. Kentucky followed at 41 percent and California was third at 39 percent.

Michigan, Tennessee, Pennsylvania, Georgia, Illinois, Iowa and the District of Columbia all had average distress discounts of at least 35 percent, RealtyTrac said. The company sells default data from more than 2,200 counties representing 90 percent of the U.S. population.

*from Bloomberg.com

Government is now PROMOTING short sales…

By Al Yoon – Fri Oct 2, 7:13 pm ET
NEW YORK (Reuters) – The U.S. Treasury will soon finalize a plan to expand its incentives for mortgage companies to include “short sales” as a way to stem a rising tide of foreclosures, according to a Treasury spokeswoman.
“Short sales,” or sales of homes for less than the balance on existing mortgages, are seen as a key way to supplement other efforts such as loan modifications to steady housing. Unlike most modifications, “short sales” eliminate the problem of negative equity that has become a big reason for defaults as home prices have plunged.
The incentives, first announced in May, would expand the government’s Home Affordable Modification Program that has seen limited success in lowering payments for hundreds of thousands of homeowners deemed eligible. Just 12 percent of homeowners eligible have had their loans reworked, leaving millions more foreclosures to come, the Treasury said on September 9.
More short sales may alleviate fears that a raft of “shadow supply,” or foreclosures in the pipeline, will flood the market and deal a blow to the nascent rebound in housing seen over the U.S. summer months, analysts said. The overhang of supply is currently about 7 million units, or 135 percent of a year’s of existing home sales, according to Amherst Securities Group.
“What they are trying to do is move some of these foreclosures in the pipeline, and bring them to a resolution before (foreclosure) happens,” said Lisa Marquis Jackson, a vice president at Irvine, California-based John Burns Real Estate Consulting. “12 percent of these being modified isn’t enough to clean these up.”
Realtors express frustrations with banks when trying to negotiate a short sale, which can take four to five months to complete, according to John Burns consultants. Buyers often walk away from sales because banks are slow to respond, or balk at the offer.
The Treasury will use up to $10 billion from a previously announced $50 billion pool of mortgage modification funds for payments to address lender concerns that home prices will continue falling in high-cost areas.
Incentives will be calculated on recent declines of local home prices and average home prices in these markets, the Treasury said in May. They would add to other incentives that servicers can receive for reducing loan payments.
In May, the Treasury proposed lenders would receive a $1,000 payment for allowing the owner to sell the house for less than the amount owed on the mortgage, and accepting the proceeds as full repayment. They can also receive $1,000 for accepting a similar deed-in-lieu transaction, in which the deed is simply transferred to the lender instead of going through a costly foreclosure.
Borrowers who agree to short sales or deed-in-lieu deals can received up to $1,500 in closing costs. Treasury also said it will pay second lien holders up to $1,000 to relinquish their claims in such transactions.
“Presumably, the Treasury is trying to help facilitate a transaction that will result in less loss to the lender than in the case of a foreclosure,” John Burns consultants said in a research note dated Oct 1 alerting clients of an impending Treasury announcement.
(Additional reporting by Emily Kaiser and David Lawder in Washington; Editing by Diane Craft)

What you need to know about marketing for Short Sale Leads in Florida

I just wanted to make sure everyone knows the pitfalls that can trap you if you are actively marketing for shortsale leads in the state of Florida.

Here’s an article that was sent to me by Peter Fortunato on the subject:

Frederick A Neustein, Esquire with Law offices of Charles L. Neustein PA

On October 1, 2008, the Florida legislature enacted the Florida Foreclosure Fraud Protection Act. This new law protects homeowners from many of the foreclosure rescue scams, unlicensed loan modification companies, and other questionable companies that are targeting people in foreclosure.

This new law prohibits unlicensed loan modification companies from accepting upfront payment for loan modification services that may never be rendered. It also requires that the homeowner receive specific written disclosures notifying them of their rights with a “cooling off” period. People do need to be protected from unscrupulous vultures who would take advantage of a vulnerable situation.

The Attorney General clarified that this new law will not apply to the Attorney / Client relationship or the way attorneys are paid when they are hired to help distressed homeowners.

Effective October 1st, 2008

501.1377 Violations involving homeowners during the course of residential foreclosure proceedings

(1) Legislative Findings and Intent.–The Legislature finds that homeowners who are in default on their mortgages, in foreclosure, or at risk of losing their homes due to nonpayment of taxes may be vulnerable to fraud, deception, and unfair dealings with foreclosure-rescue consultants or equity purchasers. The intent of this section is to provide a homeowner with information necessary to make an informed decision regarding the sale or transfer of his or her home to an equity purchaser. It is the further intent of this section to require that foreclosure-related rescue services agreements be expressed in writing in order to safeguard homeowners against deceit and financial hardship; to ensure, foster, and encourage fair dealing in the sale and purchase of homes in foreclosure or default; to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms; to provide a cooling-off period for homeowners who enter into contracts for services related to saving their homes from foreclosure or preserving their rights to possession of their homes; to afford homeowners a reasonable and meaningful opportunity to rescind sales to equity purchasers; and to preserve and protect home equity for the homeowners of this state.

(2) Definitions.–As used in this section, the term:

(a) “Equity purchaser” means any person who acquires a legal, equitable, or beneficial ownership interest in any residential real property as a result of a foreclosure-rescue transaction. The term does not apply to a person who acquires the legal, equitable, or beneficial interest in such property:

1. By a certificate of title from a foreclosure sale conducted under chapter 45;

2. At a sale of property authorized by statute;

3. By order or judgment of any court;

4. From a spouse, parent, grandparent, child, grandchild, or sibling of the person or the person’s spouse; or

5. As a deed in lieu of foreclosure, a workout agreement, a bankruptcy plan, or any other agreement between a foreclosing lender and a homeowner.

(b) “Foreclosure-rescue consultant” means a person who directly or indirectly makes a solicitation, representation, or offer to a homeowner to provide or perform, in return for payment of money or other valuable consideration, foreclosure-related rescue services. The term does not apply to:

1. A person excluded under s. 501.212.

2. A person acting under the express authority or written approval of the United States Department of Housing and Urban Development or other department or agency of the United States or this state to provide foreclosure-related rescue services.

3. A charitable, not-for-profit agency or organization, as determined by the United States Internal Revenue Service under s. 501(c)(3) of the Internal Revenue Code, which offers counseling or advice to an owner of residential real property in foreclosure or loan default if the agency or organization does not contract for foreclosure-related rescue services with a for-profit lender or person facilitating or engaging in foreclosure-rescue transactions.

4. A person who holds or is owed an obligation secured by a lien on any residential real property in foreclosure if the person performs foreclosure-related rescue services in connection with this obligation or lien and the obligation or lien was not the result of or part of a proposed foreclosure reconveyance or foreclosure-rescue transaction.

5. A financial institution as defined in s. 655.005 and any parent or subsidiary of the financial institution or of the parent or subsidiary.

6. A licensed mortgage broker, mortgage lender, or correspondent mortgage lender that provides mortgage counseling or advice regarding residential real property in foreclosure, which counseling or advice is within the scope of services set forth in chapter 494 and is provided without payment of money or other consideration other than a mortgage brokerage fee as defined in s. 494.001.

(c) “Foreclosure-related rescue services” means any good or service related to, or promising assistance in connection with:

1. Stopping, avoiding, or delaying foreclosure proceedings concerning residential real property; or

2. Curing or otherwise addressing a default or failure to timely pay with respect to a residential mortgage loan obligation.

(d) “Foreclosure-rescue transaction” means a transaction:

1. By which residential real property in foreclosure is conveyed to an equity purchaser and the homeowner maintains a legal or equitable interest in the residential real property conveyed, including, without limitation, a lease option interest, an option to acquire the property, an interest as beneficiary or trustee to a land trust, or other interest in the property conveyed; and

2. That is designed or intended by the parties to stop, avoid, or delay foreclosure proceedings against a homeowner’s residential real property.

(e) “Homeowner” means any record title owner of residential real property that is the subject of foreclosure proceedings.

(f) “Residential real property” means real property consisting of one-family to four-family dwelling units, one of which is occupied by the owner as his or her principal place of residence.

(g) “Residential real property in foreclosure” means residential real property against which there is an outstanding notice of the pendency of foreclosure proceedings recorded pursuant to s. 48.23.

(3) Prohibited Acts.–In the course of offering or providing foreclosure-related rescue services, a foreclosure-rescue consultant may not:

(a) Engage in or initiate foreclosure-related rescue services without first executing a written agreement with the homeowner for foreclosure-related rescue services; or

(b) Solicit, charge, receive, or attempt to collect or secure payment, directly or indirectly, for foreclosure-related rescue services before completing or performing all services contained in the agreement for foreclosure-related rescue services.

(4) Foreclosure-related Rescue Services; Written Agreement.–

(a) The written agreement for foreclosure-related rescue services must be printed in at least 12-point uppercase type and signed by both parties. The agreement must include the name and address of the person providing foreclosure-related rescue services, the exact nature and specific detail of each service to be provided, the total amount and terms of charges to be paid by the homeowner for the services, and the date of the agreement. The date of the agreement may not be earlier than the date the homeowner signed the agreement. The foreclosure-rescue consultant must give the homeowner a copy of the agreement to review not less than 1 business day before the homeowner is to sign the agreement.

(b) The homeowner has the right to cancel the written agreement without any penalty or obligation if the homeowner cancels the agreement within 3 business days after signing the written agreement. The right to cancel may not be waived by the homeowner or limited in any manner by the foreclosure-rescue consultant. If the homeowner cancels the agreement, any payments that have been given to the foreclosure-rescue consultant must be returned to the homeowner within 10 business days after receipt of the notice of cancellation.

(c) An agreement for foreclosure-related rescue services must contain, immediately above the signature line, a statement in at least 12-point uppercase type that substantially complies with the following:

Homeowner’s Right of Cancellation

You may cancel this agreement for foreclosure-related rescue services without any penalty or obligation within 3 business days following the date this agreement is signed by you.

The foreclosure-rescue consultant is prohibited by law from accepting any money, property, or other form of payment from you until all promised services are complete.

If for any reason you have paid the consultant before cancellation, your payment must be returned to you no later than 10 business days after the consultant receives your cancellation notice.

To cancel this agreement, a signed and dated copy of a statement that you are canceling the agreement should be mailed (postmarked) or delivered to (name) at (address) no later than midnight of (date).

Important: It is recommended that you contact your lender or mortgage servicer before signing this agreement.

Your lender or mortgage servicer may be willing to negotiate a payment plan or a restructuring with you free of charge.

(d) The inclusion of the statement does not prohibit the foreclosure-rescue consultant from giving the homeowner more time in which to cancel the agreement than is set forth in the statement, provided all other requirements of this subsection are met.

(e) The foreclosure-rescue consultant must give the homeowner a copy of the signed agreement within 3 hours after the homeowner signs the agreement.

(5) Foreclosure-rescue Transactions; Written Agreement.–

(a) 1. A foreclosure-rescue transaction must include a written agreement prepared in at least 12-point uppercase type that is completed, signed, and dated by the homeowner and the equity purchaser before executing any instrument from the homeowner to the equity purchaser quitclaiming, assigning, transferring, conveying, or encumbering an interest in the residential real property in foreclosure. The equity purchaser must give the homeowner a copy of the completed agreement within 3 hours after the homeowner signs the agreement. The agreement must contain the entire understanding of the parties and must include:

a. The name, business address, and telephone number of the equity purchaser.

b. The street address and full legal description of the property.

c. Clear and conspicuous disclosure of any financial or legal obligations of the homeowner that will be assumed by the equity purchaser.

d. The total consideration to be paid by the equity purchaser in connection with or incident to the acquisition of the property by the equity purchaser.

e. The terms of payment or other consideration, including, but not limited to, any services that the equity purchaser represents will be performed for the homeowner before or after the sale.

f. The date and time when possession of the property is to be transferred to the equity purchaser.

2. A foreclosure-rescue transaction agreement must contain, above the signature line, a statement in at least 12-point uppercase type that substantially complies with the following:

“I understand that under this agreement I am selling my home to the other undersigned party.”

3. A foreclosure-rescue transaction agreement must state the specifications of any option or right to repurchase the residential real property in foreclosure, including the specific amounts of any escrow payments or deposit, down payment, purchase price, closing costs, commissions, or other fees or costs.

4. A foreclosure-rescue transaction agreement must comply with all applicable provisions of 15 U.S.C. ss. 1600 et seq. and related regulations.

(b) The homeowner may cancel the foreclosure-rescue transaction agreement without penalty if the homeowner notifies the equity purchaser of such cancellation no later than 5 p.m. on the 3rd business day after signing the written agreement. Any moneys paid by the equity purchaser to the homeowner or by the homeowner to the equity purchaser must be returned at cancellation. The right to cancel does not limit or otherwise affect the homeowner’s right to cancel the transaction under any other law. The right to cancel may not be waived by the homeowner or limited in any way by the equity purchaser. The equity purchaser must give the homeowner, at the time the written agreement is signed, a notice of the homeowner’s right to cancel the foreclosure-rescue transaction as set forth in this subsection. The notice, which must be set forth on a separate cover sheet to the written agreement that contains no other written or pictorial material, must be in at least 12-point uppercase type, double-spaced, and read as follows:

“Notice to the Homeowner/Seller

Please read this form completely and carefully. It contains valuable information regarding cancellation rights.

By this contract, you are agreeing to sell your home. You may cancel this transaction at any time before 5:00 P.M. of the third business day following receipt of this notice.

This cancellation right may not be waived in any manner by you or by the purchaser.

Any money paid directly to you by the purchaser must be returned to the purchaser at cancellation. Any money paid by you to the purchaser must be returned to you at cancellation.

To cancel, sign this form and return it to the purchaser by 5:00 P.M. on (date) at (address).

It is best to mail it by certified mail or overnight delivery, return receipt requested, and to keep a photocopy of the signed form and your post office receipt.

I (we) hereby cancel this transaction.

Seller’s Signature
Printed Name of Seller
Seller’s Signature
Printed Name of Seller
Date

(c) In any foreclosure-rescue transaction in which the homeowner is provided the right to repurchase the residential real property, the homeowner has a 30-day right to cure any default of the terms of the contract with the equity purchaser, and this right to cure may be exercised on up to three separate occasions. The homeowner’s right to cure must be included in any written agreement required by this subsection.

(d) In any foreclosure-rescue transaction, before or at the time of conveyance, the equity purchaser must fully assume or discharge any lien in foreclosure as well as any prior liens that will not be extinguished by the foreclosure.

(e) If the homeowner has the right to repurchase the residential real property, the equity purchaser must verify and be able to demonstrate that the homeowner has or will have a reasonable ability to make the required payments to exercise the option to repurchase under the written agreement. For purposes of this subsection, there is a rebuttable presumption that the homeowner has a reasonable ability to make the payments required to repurchase the property if the homeowner’s monthly payments for primary housing expenses and regular monthly principal and interest payments on other personal debt do not exceed 60 percent of the homeowner’s monthly gross income.

(f) If the homeowner has the right to repurchase the residential real property, the price the homeowner pays may not be unconscionable, unfair, or commercially unreasonable. A rebuttable presumption, solely between the equity purchaser and the homeowner, arises that the foreclosure-rescue transaction was unconscionable if the homeowner’s repurchase price is greater than 17 percent per annum more than the total amount paid by the equity purchaser to acquire, improve, maintain, and hold the property. Unless the repurchase agreement or a memorandum of the repurchase agreement is recorded in accordance with s. 695.01, the presumption arising under this subsection shall not apply against creditors or subsequent purchasers for a valuable consideration and without notice.

(6) Rebuttable Presumption.– Any foreclosure-rescue transaction involving a lease option or other repurchase agreement creates a rebuttable presumption, solely between the equity purchaser and the homeowner, that the transaction is a loan transaction and the conveyance from the homeowner to the equity purchaser is a mortgage under s. 697.01. Unless the lease option or other repurchase agreement, or a memorandum of the lease option or other repurchase agreement, is recorded in accordance with s. 695.01, the presumption created under this subsection shall not apply against creditors or subsequent purchasers for a valuable consideration and without notice.

(7) Violations. – A person who violates any provision of this section commits an unfair and deceptive trade practice as defined in part II of this chapter. Violators are subject to the penalties and remedies provided in part II of this chapter, including a monetary penalty not to exceed $15,000 per violation.

ABOUT THE AUTHOR: Frederick A Neustein, Esquire with Law offices of Charles L. Neustein PA
StopForeclosureLawyer.com and the Law Offices of Charles L Neustein P.A. is a Florida law firm focusing on the representation of home owners and investors defending their property from bank foreclosure. The goal of our Florida foreclosure attorneys is to cost effectively stop foreclosure in Miami-Dade, Broward and Palm Beach Counties and all of Florida.

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