Real Estate Prognosticators

Housing Prices Remain Flat - Short Sales Booming

2012-10-22T14:41:00.000-04:00

Case Shiller index below, A Fifth grader can see that the "housing recovery" is non-existent. 'QE' is an utter failure.

Short Sales make up nearly 2/3rds of all real estate transactions. Residential refinances under HARP and other government programs, are locking poor homeowners into bad deals doomed to failure as housing prices will not be recovering for at least a decade.

Fannie, Freddie and FHA/VA, continue to increase obstacles to closing real estate transactions, and it has become exceedingly difficult to qualify for conventional mortgages.

Short Sales will continue to be number one in real estate, so long as 1/3rd of all homeowners are at or underwater.

Real Estate Prognosticators

Buffet Says Banks Victimized?

2012-02-27T16:21:00.001-05:00

Buffett: Banks Victimized by Evicted Homeowners

http://www.bloomberg.com/news/2012-02-27/buffett-says-banks-victimized-by-evicted-homeowners-who-emerged-as-winners.html

From Bloomberg

"Warren Buffett, who controls the biggest shareholding of the No. 1 U.S. mortgage lender, said banks were victimized by some homeowners who refinanced their loans before getting evicted.

“Large numbers of people who have ‘lost’ their house through foreclosure have actually realized a profit because they carried out refinancings earlier that gave them cash in excess of their cost,” Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. (BRK/A), said Feb. 25 in his annual letter. “In these cases, the evicted homeowner was the winner, and the victim was the lender.”

Bloomberg takes a statement from mortgage servicer/bank owner Warren Buffet that accuses predatory homeowners of basically robbing the banks. He calls the lenders the victim and the homeowners 'winners'.

Warren Buffet is out of touch. Please show me the large number of people with all this extra cash lying around from unethical refinancing. Also, where were the banks when the homeowners went to refinance? They went along with the show because they were making enormous amounts of money packaging and selling the notes.

Lets call this piece exactly what it should be called, a piece of Buffett S***

Warren dear, nobody told you to buy that POS company called Bank of America, now live with the good and the bad of your investment. Really, who is he to complain when he personally profited in the hundreds of millions from the robosigning fraud settlement just this past month?

Bloomberg has really gone downhill and Buffett has really lost his mind.

What a sad state of affairs when oligarch bankers like Warren Buffet blame the common man for the ills which they brought to bear.

Real Estate Prognosticators

Bernanke: Housing No Longer Secure Investment

2012-02-10T17:25:00.001-05:00

From Zero Hedge

Ben Bernanke FTMFW Quote Of The Day

And the winner is...

BERNANKE: HOUSING MAY NO LONGER BE VIEWED AS SECURE INVESTMENT

That's right. He just said that. And with that, a Lewis Black moment is coming on...

He also said some other stuff...."

Well it took Bernanke long enough to figure out what those of us in real estate have known since the real estate bubble popped: Real estate can drag down growth just as it can build growth.

The severe imbalances of the mid 2000's have come home to roost in the form of a stagnating economy, as real growth cannot occur with all the negative equity and bad paper still floating about.

Sooner or later the fed, Bernanke and the US government, will figure out that they must allow Fannie Freddie FHA and Ginnie loans to be sold short at true fair market value. Once they do, the US economy can, and will stabilize.

Real Estate Prognosticators

Establishment Mouthpiece Krugman at it again

2012-01-26T11:56:00.001-05:00

A Really Bad Plan for Reviving the Housing Market

As reported by ZeroHedge.com

Here are the bullet points extracted from the Zero Hedge

He says mortgage lenders might loosen up if “the government” (aka taxpayers) were to backstop prices. Do we really need easier credit for home buyers? Have we learned nothing from the disaster this caused in the first place? In fact, the 20% downpayment lenders are now demanding is about as loose as mortgages should ever have gotten. In effect, Wilcox is suggesting that we stimulate the housing market by creating a whole new army of poorly qualified buyers.
Evidently unable to chew gum and breathe at the same time, argumentatively speaking, he talks about stimulating housing demand without even considering supply. Does anyone doubt that there are millions of sellers out there, including banks holding foreclosed loans, waiting for some bids to surface so that they can finally whack-the-mole and get out of Dodge?
It should also be clear (to anyone but a university-trained economist, that is) that the moment “the government” guarantees that buyers cannot lose no matter how much they pay for homes, neither buyer nor seller will much care about the home’s true market value.
Wilcox says that stimulating home purchases would have a ripple effect on the economy. Only an egghead could fail to see that the ripple would be financed by huge news quantities of borrowing collateralized by a wasting asset that produces nothing.
With a straight face, and apparently using Obamacare math, Wilcox informs us that if two million participants were to take advantage of his hare-brained scheme, “the expected net cost to taxpayers would be a few billion dollars annually.” We won’t even comment, since we can hear you laughing at that one already.

Krugman et. al. are absolute dopes who wish to perpetuate the leveraging of debt onto Federal balance sheets. The University trained economist statement above is exactly on point. Any professional working in real estate today understands that there is an ocean of bad paper that has yet to come in with the tide. They also understand that there are millions yes MILLIONS of vacant, bank owned REO properties that are sitting on the sidelines. With the passing of every month, there is a further decline in the existing housing stock of those vacant homes.

Every one of those homes, as well as the rest of the bad paper, will come home to roost. As I have been reporting here on my blog, real estate prices will continue their inexorable decline so long as our monetary policy mimics that of 1980's-Present Japan.

Zombie banks, endless bad paper and frozen credit markets, clearly symptomatic of an unrestrained printing press, and a public private partnership between banking, financial securities and the federal government.

Until and unless the empty houses and bad paper are liquidated, we here at Real Estate Prognosticators continue to be involved heavily in liquidations and short sales as the only viable growth field in residential and commercial real estate now, and going forward through the end of the decade.

Guest Post: BUFFETT/ BANK OF AMERICA/ MITIGATION FIASCO!

2011-08-31T15:42:00.000-04:00

Reprinted with permission from Short Sale SuperstarsBUFFETT/ BANK OF AMERICA/ MITIGATION FIASCO!

Is that Warren Buffett or Jimmy Buffett investing in bank of America? A young drunk Jimmy Buffett might invest in Bank of America, the older one would not. So it must be Warren Buffett. Are you serious? He should have spoken with one of the thousands of real estate investors, agents and short sale negotiators, who try to deal with B of A before he threw his good money into one of the most inefficiently run companies in the world.

Many very experienced investors and negotiators will not seriously consider an attempted purchase of a Bank of America distressed property. Part of the reason is their fault and part is beyond their control.

When Bank of America purchased Countrywide they really got a bag of bull sh-t. The Countrywide loans are a poisonous swill and, if you have ever attempted to purchase one of these proprieties via a short sale from Bank of America, than you know that they often cannot be significantly discounted. On top of that Bank of America/s short sale department is woefully inept.

The natural result of these two factors is Bank of America carrying a huge number of distressed properties on its books. Competent real estate investors have little interest in buying these properties, because they either can not be significantly discounted, or, Bank of America is so inflexible and disorganized that you can not get an offer approved in a timely fashion. Too big to fail, is also too big to succeed.

For Bank of America to rise from the ashes like a Phoenix it will need the cooperation of the government in discounting the numerous Countrywide loans to permit real estate investors to buy them and, re position them so they can enter into the market again. It will also require Bank of America to reorganize its mitigation efforts, to become user friendly, instead of difficult to work with. In all fairness to Bank of America Chase and many other of the lenders are just as difficult and inefficient to work with, when trying to short sale their properties.

It is clear that the economic crisis and the great recession (really a depression) will not subside until the housing market is stabilized. The housing market will not be stabilized until the distressed property inventories at the banks are liquidated and the real estate market resets. At the current pace, and with the current management, the end appears no where in sight.

Real Estate Prognosticators

Short Sale Superstars

Short Sales Close

Guest Post: THE CAMBRIDGE STORY? ANATOMY OF A SHORT SALE

2011-08-17T12:54:00.001-04:00

Republished with permission from Short Sale Superstars.

Tuesday, August 16, 2011

THE CAMBRIDGE STORY? ANATOMY OF A SHORT SALE

On a postlet on the side of this blog is a property 2834 Cambridge Street in Philadelphia, Pa. It is a property in Brewerytown, a gentrifying neighborhood near the Philadelphia Art Museum. It is a short sale property that is being rehabilitated by a cooperative effort of Prime Financial Group LLC and Top Tier Holdings LLC. It is also the perfect example of how a short sale works.

The property was purchased by the previous owner for $235,000.00 in 2007. It had been rehabbed by the seller in 2007, but poorly executed. After the real estate bubble burst the owner could no longer afford to pay the mortgage and it fell into delinquency. Bank of America sold the mortgage to IBM LBPS who pushed forward with a foreclosure. Christine Sherbert, founder of the Montgomery County Real Estate Investors Group, a well known, experienced investor, and re-habber, located the property for the short sale team. In April of 2011, Top Tier Holdings LLC made an offer on the property to IBM LBPS for significantly less than the mortgage pay off amount, of course it was rejected and Prime Financial commenced short sale negotiations on the property on Top Tiers behalf.

IBM LBPS had a interior BPO (Brokers price opinion) for twice what Christine,Top Tier and Prime believed the property was worth. Of course the negotiations bogged down. Prime challenged the BPO and submitted a value challenge, with accompanying comparable prices, and analysis, to IBM LBPS, ultimately convincing IBM to sell Top Tier the property for a fraction of the original IBM value.

Settlement on the property was held in July of this year. With in two days the renovations began on the property by the contractor First Development Corp. The complete exterior/interior rehabilitation will take 6-7 weeks. The funding was provided by a private individuals self directed IRA, with modest cost,s and reasonable interest rate.

At the conclusion of the rehabilitation the property will be worth substantially more than Top Tier Holdings paid IBM LBPS. Jennifer Grosskopf of Coldwell Banker an experienced and has been engaged as the listing agent for the property. The property will be resold before the snow falls on the ground. All of the participants in the process will profit handsomely for their endeavors.

Cambridge is an example of how team work between a investor, short sale negotiator, builder, and Realtor can result in a successful project. Time and time again I hear experienced real estate investors say; "I hate short sales", not my bag baby. But with team work, and creative thinking, they can utilize this product to share in a handsome profit. Before you write off the opportunities in short sales, consider the power that team work can bring to your real estate endeavors!

Real Estate Prognosticators

Short Sales Close

Prime Financial Group, LLC

Short Sale Superstars

Summer Fiasco

2011-08-15T11:58:00.000-04:00

Back from hiatus...

For those who still work in the real estate biz, or who are thinking about jumping in, the summer is and should always be the busiest time of the year. (Hence my absence)

Now that the final days of summer have finally arrived, so to has a chance for reflection, examination and analysis.

A summer of discontent has yielded little surprises. Liquidity continues to dry up as bad debt and government expenditures out-compete any conventional monies. Private money sits on the sidelines while the chaos widens and the crisis deepens.

First the UGLY

Bondholders are suing investors of mortgage notes, investors are suing the servicers of loans, while the servicers and investors sue the defaulted homeowners. The bondholders get bailed out by injections of liquidity by central banks and sovereign wealth funds (ie the government...ie the people) and the US States and the FED are suing everyone and anyone over fraudclosures. Meanwhile, the financial calamity continues it's slow motion train wreck from southern Europe, on North, and from the US North to Canada.

The Euro Bondholders are in the same boat as US bondholders. The bondholders own public debt in these countries, the public debt is allocated in many areas including private banks who have had terrible losses (just like in the US) and who also have been hiding those losses through creative accounting. The destruction will continue unabated.

A little good news...

Interest rates have, and will continue to be, at historic lows. Of course, even people with decent credit and a good down payment cannot get past skittish underwriters. Meanwhile, those with real capital do not need to access the consumer debt trough. If one can manage to prove themselves worthy of taking on mortgage debt, low interest rates represent a small silver lining in an otherwise very dark cloud.

How this all fits together...

Most people do not understand what are often termed complex capital markets.

At present, the markets are no longer complex, they are in downward spiral: They are a black hole.

Central banks keep shoveling money into the pit while losses continue unabated. The people are expected to pay ever higher taxes while the ruse continues. It is like watching a game of musical chairs. When the music stops, however, there will be no scramble, as there will be no chairs, at least not for you or I.

The issue with real estate is simple. Recovery cannot and will not occur until all actors in the market reach a general understanding of the relative value of property. Until and unless the bad loans and the misallocated capital are acknowledged and unwound, real estate will not recover, nor will the real estate market return to "business as usual"

Have you considered short sales and wholesales? We sure think they are swell.

Short Sales Close

Short Sale Superstars

Real Estate Prognosticators

Guess who said this?

2011-06-09T10:37:00.001-04:00

"A 10-25% Slump In Home Prices Would Not Surprise Me At All" From Zero Hedge

From Reuters:

Recent housing and employment data suggests the economy is at a tipping point, while home prices could have much further to fall, veteran economist Robert Shiller said on Thursday.

"My gut feeling is we might see a continuation of the decline (in home prices)," Shiller said.

He added that a 10 to 25 percent slump in real home prices "wouldn't surprise me at all," though he cautioned that was not a forecast.

Well folks, that is the not forecast of the week, heck make it the quarter!

In case you didn't know, Robert J. Shiller is considered a foremost economist, and by the way, he is the is the Shiller who invented the Case-Shiller index.

Real Estate Prognosticators
Short Sales Close
Short Sale Superstars

1 in 5 homes underwater, 1 in 4 have no, or almost no equity

2011-06-07T09:55:00.000-04:00

From zerohedge:

27.7% Of Total US Housing Debt Has Negative And Near-Negative Equity

excerpt: "...Following yesterday's news out of Zillow of a 0.77% drop in April home values compared to March, today we get an update from CoreLogic which in turn looks at the latest trends on "underwater" (or negative equity) mortgages in the US. In summary: "10.9 million, or 22.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2011..."

This is another major report, from another reputable mainstream source, reinforcing what we at Real Estate Prognosticators already know, and have been crowing about for months.

1. Real estate values are declining

2. 10 to 15 million families, or 30 to 50 million Americans, have limited or no access to normal credit markets, and are one hardship away from complete financial calamity.

3. Despite the assertions that the economy is back on track, without a rebound or stabilization in real estate prices, there will be no recovery, and additional declines in GDP and real income will continue.

4. Short sales are the only logical way for buyers, investors and professionals, to extract profit and get real fair market values in home purchases and transactions.

The sooner people realize that short sales will stabilize the real estate market, the sooner recovery in prices in the largest hard asset people will own, can commence.

Real Estate Prognosticators

Short Sales Close

Short Sale Superstars

New Case Shiller Tells Us What We Already Know

2011-05-31T12:20:00.000-04:00

The Avoidable Double Dip:

The artificial stimulation of housing under the American Recovery and Reinvestment Act lasted a paltry 2 quarters. Now the decline has resumed at a sharpened pace. Those buyers enticed by the tax credits have seen most, if not all their equity wiped out in the last six months.

From Zero Hedge : Case Shiller Prolapse Hits New Lows As 20 City Composite Plunges Again
"This month’s report is marked by the confirmation of a double-dip in home prices across much of the nation. The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1% versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels."

The American economy cannot, and will not recover, until housing, one of life's four major necessities (food, water, air are the other three) stabilizes.

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Real Estate Prognosticators
Short Sale Superstars

Housing will decline for 3-5 Years

2011-05-18T15:43:00.000-04:00

Housing Decline
The housing market will decline for another 3-5 years. Governmental and Federal Reserve intervention, in the forms of tax credits, and zero or even negative interest rates (interbank), have failed. This is a structural recession in housing. The recession no longer has anything to do with the unwinding of a speculative bubble. It is now continuing and deepening because of the systemic failure of the current economic system, which is neither capitalist, nor free market.

Housing Losses Are a Financial Disaster (from oftwominds.com)
Correspondent E.M. describes the true scope of the financial disaster that is housing.
Correspondent E.M. responded to $6.5 Trillion Lost, One House at a Time with this succinct account of housing's role in declining household wealth. E.M. is not a realtor or in a housing-related profession; his report on housing valuations in the Atlanta area is that of a knowledgeable observer and does not claim to be a complete statistical survey.
E.M.'s commentary is especially valuable as it examines the underlying assumption of real estate ownership in America--that it is a reliable "wealth building" investment for the average household. If this assumption is invalid, then that should change our perception of housing's value and place in the project of building household wealth.
The idea that "housing is not coming back" is filtering into the mainstream media: On Housing, There Will Be More Lean Years Ahead: Expect another 10 years before U.S. housing prices return to their 2006 highs. (WSJ.com)
Here is E.M.'s commentary:

To say that housing losses are a financial disaster is a modest understatement. I do not think that most people really comprehend how true this is. The main reason this is so is first, leverage and second, the fact the US economy as a whole has over-CONSUMED housing for the time most people have been alive. They just do not know it because they have been duped into believing that housing is an "investment" when in actuality, it is a combination of a speculation (the land) and a long lived consumer durable (the structure).Absent inflation, there is no reason whatsoever for most houses to "increase" in "value". Yet most people believed that there was something magical about housing because "they are not making any more land".... (continue for remainder of article)

When Will it End?
The end of the housing recession will coincide with a default in US sovereign debt, and a restructuring and/or reshuffling of global currencies. Those two events will be resisted at all costs, and may not actually be acknowledged except through hindsight. The losses are in fact a disaster. There can be no doubt that while the increase in values were illusory, the losses are real.

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Real Estate Prognosticators
Short Sale Superstars

City of Los Angeles files suit against Deutsche

2011-05-04T17:12:00.001-04:00

Deutsche Bank just got slapped with a giant lawsuit by the City of Los Angeles.
http://atty.lacity.org/stellent/groups/electedofficials/@atty_contributor/documents/contributor_web_content/lacityp_014320.pdf

The filing can be found here (Pictures throughout)
Part 1
http://www.atty.lacity.org/stellent/groups/electedofficials/@atty_contributor/documents/contributor_web_content/lacityp_014322.pdf
Part 2
http://www.atty.lacity.org/stellent/groups/electedofficials/@atty_contributor/documents/contributor_web_content/lacityp_014323.pdf

Now let's see how much Deutsche will give at settlement...

shortsalesclose.com
Real Estate Prognosticators

Mortgage Mess, Even 60 Minutes picked up the article

2011-04-04T10:01:00.000-04:00

Courtesy of Zerohedge:

"Do you know who really owns your mortgage? As Scott Pelley reports on "60 Minutes" this week, that question has become a nightmare for many homeowners since the invention of mortgage-backed securities. Yes, those were the exotic investments that sparked the financial collapse in this country. And the're still causing problems...."

If 60 minutes picked up this story, then it finally has legitimacy in the MSM. Another piece of good news for those who work with short sales and distressed inventory. More bad news for hedge funds and banks.

Short Sales Close

Real Estate Prognosticators

Short Sales, Shadow Inventory and the Foreclosure Mess

2011-03-28T13:08:00.000-04:00

Short Sales are the future of real estate. This cannot be stressed sufficiently and with enough vigor. Short sales are the market! The same insane, policies, that brought about the boom and precipitated the bust, were adopted in their entirety in 2008, to circuit the natural economic cycle.

Courtesy of Zero Hedge and Reggie Middleton, the graphic below explains the disaster of the housing market and the projections that shadow inventory alone, will forestall recovery 1-4 years. This does not include the regular inventory and new home sales.

http://www.zerohedge.com/article/did-bernanke-permanently-cripple-butterfly-us-housing-answer-more-obvious-many-want-believe

This is the market for short sales. Increased number of distressed homes and homeowners, stiffer credit requirements, and rising interest rates, coupled with shrinking credit availability and credit worthy individuals and institutions, all serve to further evidence that coming in short is the best and only route to success in the real estate market today.

Do you want the greatest return on your time and money?

Get out of the retail market and get into the short sale market, or, be left behind.

Short Sales Close: info@shortsalesclose.com

Real Estate Prognosticators

Short Sale Superstars

The Future of Short Sales, Real Estate and the Value of Reading

2011-03-25T10:08:00.001-04:00

For those of you who have yet to check out some of the valuable resources out there (besides this blog of course) I implore you to check out sites like Zero Hedge, Short Sale Superstars and for the discussion today and a valuable resource tomorrow, of two minds.
Thank you Zero Hedge for your guest post from Charles Hugh Smith, from of two minds,

Guest Post: Phase Shift - The Next Leg Down in House Prices

Real Estate Prognosticators has been of the mind that any recovery in the real estate market is still some time away, at least 3 if not greater than 5 years. We have made mention to a number of reasons for this prognosis. Let us elucidate the present state of affairs through Charles Hugh Smith's mind.

We have clearly hit phase 2 and are quickly on the way to retrenchment and phase 3. This is evidenced by the case-shiller graphic below:

We know the story. It has been repeated now as though we knew it all along. Interventionist policies just after the tech bubble burst, reducing interest rates for far too long and encouraging everyone including spot the dog to get mortgages, led to the boom. Wanton individual speculation, the creation of new kinds of securities, the advent of the power hedge fund, and the major players then betting on it's failure led to the current and continuing bust. This is all in the PAST.

To those who spotted the trends in the early '00's, we commend you. To those looking to understand how to grow money in a turbulent and uncertain period in American and global economics...you must look forward. A decline in the real value of real estate for another 4 years, of up to 40% from present values, spells misery for most in the traditional market. It is time to move into the new status quo.

From Charles Hugh Smith, of two minds:

1. As I reported on Daily Finance, new mortgage broker compensation rules are about to wipe out independent, small mortgage originators and brokers. ...

2. Interest rates will rise.

3. Income for the bottom 90% is stagnant.

4. There are too many houses and not many buyers.

5. The Federal-supported "recovery" is in trouble, politically and financially.

6. Every investor who bought with cash because "this is the bottom" will 1) be underwater and anxious to sell and 2) be out of cash, having bet their capital playing "catch the falling knife" with real estate valuations. Sorry, cash buyers: the knife is still falling.

Let us Digest

If you have been following my blog, you know that we are intensely invested in short sales and the short sale market.

-A further rise in interest rates will continue to erode the possibility for modifications and refinances.

-Stagnation of income will reduce the pool of credit worthy borrowers.

-The bloated inventory will cannibalize itself.

-The deficit and government entitlements will reach a tipping point.

-Those who bought this dip will be punished if they are buying and holding.

The short sale is the only real viable product in real estate today. Those who tell you otherwise are either in Manhattan or Washington, D.C. (Recession proof) or are completely delusional.

Are you positioned properly? Were you aware of the above conditions? Have you come to grasp the reality on the ground?

I welcome all questions and comments.

Real Estate Prognosticators

Short Sale Superstars

Short Sales Close

Short Sales Replace New Home Sales

2011-03-23T13:59:00.004-04:00

A picture is worth a thousand words:

From Zero Hedge: "...Just the wrong kind of record. At just 250,000, this was the lowest annualized new home sales number ever. So on one hand you have a TV clown tell you the housing market bottomed in August 2008..." http://www.zerohedge.com/article/recovery-hopes-surge-record-home-sales

Anyone else think short sales might be a good bet in this market?

Short Sales Close

Real Estate Prognosticators

Short Sale Superstars

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Comments are welcome!

Pennsylvania Short Sales

2011-03-22T15:06:00.002-04:00

Pennsylvania short sales are getting done everyday. Where are the resources? Who do I trust to get the job done properly? Well you have come to the definitive blog and resource for your short sale needs. Look under the favorite links section for some of the best information out there for Pennsylvania short sales. Short sales, Pennsylvania short sales in particular, create tremendous wealth building opportunities for the savvy operator.

Pennsylvania

Pennsylvania: Short sales can be done in every county.

While Pennsylvania by no means had the greatest boom and bust, like California and Florida, Pennsylvania offers unique short sale advantages. These short sale advantages are not present in many of the boomtowns across the now-barren real estate wastelands. McMansions are out of style, and will never recover the prestige and popularity they enjoyed in the middle '00's. Abandoned properties in complete disrepair are also unattractive. A complete rebuild is always one of the least attractive options when it comes to picking viable short sale properties.

Great Short Sale Opportunities in Pennsylvania

Pennsylvania has a broad cross section of newer and older construction. Many of the '60's, 70's and '80's era construction, what I like to call, 'middle aged properties', in the suburbs in and around Pittsburgh, Philadelphia, Harrisburg, the Lehigh Valley and Erie were at time of construction, top quality middle and upper middle domiciles.

The short sale market is exploding when it comes to the 'middle aged' properties. Older properties in excellent locations often need a little cosmetic work, maybe some are dated, but the projects are a way to drive down the short sale price with the bank. These properties are ideal candidates for short sales. Also, a large cross section of buyers are looking for modest abodes, at equally modest prices. With all the available inventory, one of the only ways to differentiate your offerings are by reducing the price.

What a luxury, to be able to reduce the sale price at will and still make a handsome profit! These opportunities abound. Pennsylvania is but one of many states where tremendous value exists in short sales, the hottest market niche today.

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State of the Housing Market

2011-03-21T10:44:00.003-04:00

How can we digest the seemingly endless flood of statistics and reports regarding real estate and housing? The key is to distill the data in a way that it can be understood and applied in a real world medium.

The newest reports released from the National Association of Realtors, as reported by CNN, for the month of February, indicate that: median home price declined 5.2% compared to the previous year. Also, existing home sales fell 9.6% month over month, and a full 2.8% year over year.

All of this news shows that there is no better place to be in real estate than short sales. The importance of this data to a short sale specialist is twofold. One: Reinforces the notion that short sales are where the largest margins exist in the near and midterm. Two: Short sale specialists must not hesitate to offer far less than the first instinct, factoring in a potential decline in overall prices of another 5-10% in the next 6 months, and as much as 20% over the next 18 months.

Credit availability will continue to tighten as interest rates digest increase risk and instability. The shrinking availability in credit and the decline in number of qualified individuals will further hamper the traditional boost in real estate sales seen in the spring and summer months. Qualified buyers know that this is a buyers market and are willing to wait for the best deal. Inventories are at some of the highest level since data has been kept. Even the WSJ thinks that 'Home Sales Will Remain Depressed'.

Further proof of financial distress can be seen with Citi doing a reverse stock split 10-1 in a move to prop up share prices and prevent them from being delisted... for now, and the spin on that story, a reinstatement of their dividend to... $.01/share, 1 cent!

Those investors looking to buy and hold must be prepared to face an additional decline of up to 20% over the next 18 months. To those firms, investors and groups who are able to get short sales approved, bear in mind the potential declines should you choose to hold, as well as the potential declines month over month while the deal is being considered by the bank.

Real Estate Prognosticators
Short Sales Close

Short Sale Ethics

2011-03-16T12:46:00.002-04:00

Disdain and contempt, these are the knee-jerk reactions that Realtors, brokers and their agents feel when it comes to short sales and their negotiators. There is a sense of distrust, that short sales themselves are an unnatural and immoral vehicle for real estate sales. After all, wouldn't resistance be the first reaction to a fundamental paradigm shift?

Not all businesses and businessmen are ethical. This is not a phenomenon to be observed only in the 'backwoods' of real estate, but across all business mediums. Realtors and brokers are used to selling property for their commission. The process includes but is not limited to: networking, professional affiliations, accreditation and marketing. These individuals who own and run these companies know that they have been hit hard, and are scrambling for an ever-shrinking piece of the traditional pie.

Short sales are difficult for Realtors and brokers, because the process is so far outside the norm of their day-to-day business. The idea that their sale is predicated on a successful negotiation by an in-house processor, or even more nerve wracking, an outside third party, would make nigh everyone run for the hills, or at the very least, from these types of deals.

There are ethical operators who can get the job done right, and within a fair period of time. The market for distressed properties with negative equity is now the LARGEST market, and is growing by the day. If you are a broker, Realtor, or one of their agents, now is the time to take another hard look at your business and realize the potential in hiring a skilled operator to process and negotiate these files so that you can get back to the task at hand, selling property.

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Brood Not, Recommit

2011-03-10T00:09:00.001-05:00

You spend years going to school, a ton of money and effort on professional accreditation, and years working for somebody else, and now you find yourself on your own and lost in the social networking quagmire. Let me make you feel a bit better, YOU ARE NOT ALONE! Yes, misery indeed loves company, and in this regard, my good aspiring professional, you are part of the huddled masses.

Fear not! It is worth the late night hot pockets, incessant lower back pain and bifocals before the age of 50! Take comfort in the whir of the computer fan, the endless emails and countless usernames and passwords. The warmth of computer will keep you company while you turn networking into gold. To those who have rejected the digital networking revolution, your days are numbered!

For now, take comfort that if you have made it to this article, on this page, in this corner of the world, than you have indeed reached far! Remember; Pass along each other's names, sites, writings, emails, blogs, websites. Update your databases and your lists. Check your spam folders and your 2nd 3rd and 4th email addresses. Someone is always calling out to you into the digital void. Stay vigilant, stay connected, keep networking.

Charlie Sheen Winning and Short Sales

2011-03-09T11:02:00.002-05:00

Are we winning?
It depends on who you ask. If you ask Charlie Sheen, then yes, we are winning. Short Sales are a frame of mind. They take dedication, follow through and attention to detail. One has to capture the imagination of the bank, the seller and the buyer.

Motivation and Success
Many real estate insiders view short sales and the short sale process as a waste of time and unduly burdensome. True they can be difficult, but it is only those who are motivated to succeed, who will overcome, when faced with intractable mitigation scenarios. Whether by one's own making (Charlie Sheen) or by sheer circumstance of existing in the backwoods of the real estate industry, short sale experts must silence their detractors, overcome the apathetic and forge forward to victory.

To quote Charlie Sheen, "We are winning!"

The Coming Technocracy

2011-03-08T15:26:00.001-05:00

Moving toward a capitalistic, proto-technocracy
Fact: Real Estate is no longer immune to the demands of the coming technocracy.

This sounds like a bunch of crap, what is a technocracy anyway?
Wikipedia has a decent entry in broad pen: http://en.wikipedia.org/wiki/Technocracy. If you only managed to read the first few sentences and are further confused, allow me to clarify:

R.I.P. US Real Estate, it was nice knowing you!

Real estate as we know it is dead in the United States. I am not talking about the days when any Joe or Sally off the street could procure mortgages and flip houses on a whim, that is already well established. The ongoing realignment is technical, and is out of economic necessity.

So get on with it! What has changed? Why should I care?
Traditional experts have now been replaced by technical experts, adept at communicating, navigating and negotiating with servicers, lenders and investors. Bank loan officers have been replaced with alternative funding sources and private cash buyers. New home sales have been replaced with REO's, rehabs and mitigation.

You or your firm must make the appropriate adjustments to your bottom line and business operations.

Short sales and funding questions? We will bridge the gap!
Contact me at: mg.primefinancialgroup@gmail.com p.610-844-8635

First Time Home Buyer Credit and the Next Leg Down

2011-03-07T15:05:00.000-05:00

Moral Hazard

This 'incentive' was designed to create an artificial floor in the housing market and perpetuate the 'green shoots' of recovery. The net result of this artificial meddling has served to prolong the decline at least an additional year. See below:

Lenders, investors and loan servicing companies use a variety of metrics when deciding on valuations for existing inventory, REO's and new loans. The next leg down is visually evident in the picture above.

Short Sales

This data provides additional evidence that short sales are the near and mid term future of real estate. New home construction is at it's lowest levels in over a decade, and existing home sales are largely foreclosures and cash purchases. Now is the time to act.

Short Sales and the end of MERS

2011-03-07T11:36:00.003-05:00

MERS, Mortgage Electronic Registration Systems,http://en.wikipedia.org/wiki/MERS is for all intents and purposes, defunct.

Pending litigation across the country and by any number of states attorney generals, have resulted in an ever deepening quagmire in residential real estate.

Who owns the rights to residential mortgages in this country?

MERS allowed for transfer of rights to mortgages electronically, this was an effort to supersede or go around the established lawful process in most jurisdictions requiring that transfer be recorded in the state and county and be fully notarized.

New court decisions have come down stating that the electronic transfers may be invalid and unlawful. This is a major problem for the major banks, hedge funds and investors, because now all that paper, both good and bad, is subject to full scrutiny. Not only is much of the paper worthless to begin with, but to make matters worse, there is no way to know to whom it belongs.

Why is this a boon to short sales?

Banks and investors are now looking at any and all avenues to sell suspect paper, and at deep discounts. All new transactions are being done outside of MERS and in accordance with state law and regulations. Banks are more than happy to accept real capital at deep discount. The new loan origination also strengthens the had of the lender originating the new paper, assuming they thoroughly vetted the new borrower.

There are millions of properties that are candidates for a short sale, due to the fact that they have zero or negative equity. Compounding the equity problems are the problems above regarding ownership of the notes.

What do I do if my home is worth less than I owe and I need to sell?

Contact this number immediately for a consultation on your options, because everyone has options:
Michael Goldman
610-844-8635
mg.primefinancialgroup@gmail.com

What is a Short Sale?

2011-03-04T13:41:00.004-05:00

There are two types of people who ask, "What is a short sale? Homeowners who are delinquent and have few options, and investors new to the short sale process. Even then, the delinquent and underwater homeowner really never needs to know more than if successful, a short sale can, and will, cure their deficiency.

Why would a homeowner pursue a short sale instead of selling the property outright?

Homeowners whose property values are less than the total mortgage on the property are considered to have no or negative equity. These individuals cannot sell their home for as much as they owe on the mortgage. If they do sell for less than they owe, the seller will owe the difference. Present market conditions are such that not only are people underwater, facing rising costs of food, healthcare and fuel, but they also could not sell even if faced with a crisis such as loss of income, death or divorce. Properties are often underwater to the tune of 10's of thousands of dollars. In most states, creditors may pursue a deficiency judgement that follows the individual until it is paid, leaving debtors with only two options, garnishment until the debt is cured (In the meantime, most credit facilities will be closed to that individual) or a bankruptcy.

Short sale of the property will in most cases, allow the homeowner to avoid deficiency and bankruptcy.

I heard that short sales never get done?

Short sale success rates are directly related to the person/company who is handling the negotiations with the bank. Brokers, real estate agents and attorneys know very little about internal bank policies and protocols in general, let alone with regards to loss mitigation and short sales. Many brokers and Realtors will not be willing to take their time on a homeowner/home in that situation because they look at it as a waste of time.

What can I do if I am a homeowner who is underwater? What can I do if I have negative equity but I need to sell?

Short sale experts are but a phone call or email away. Contact me today to for a free consultation!

Michael Goldman

610.844.8635 mg.primefinancialgroup@gmail.com