http://www.realty.com/ en matthew@matthewdenton.com Copyright 2009 2009-11-10T16:56:00-05:00 http://feedproxy.google.com/~r/Realty-Blog/~3/7fNTv_2i9Og/ http://www.realty.com/blog/compensation-experts-therell-be-brain-drain/#When:16:56:00Z The plan to reign on executive compensation looms further Bank of America’s spokesman, Scott Silvestri , recently commented that competitors not subject to pay restrictions already “…are exploiting this situation by identifying our top performers and using pay concerns to recruit them away for fair market compensation.” He’s talking about the government’s gradual regulation over executive compensation with the leadership of pay czar Kenneth Feinberg.  If you’ve been following this blog, we’ve featured several posts about this controversial issue.  And until now, we’ve not been swayed by any defense that these rich folks are protesting.  It’s time for the government to get in the scene. But everything that those affected are saying is just plain silly to us.  Even Feinberg has reviewed their concerns and has made a solution: “…Feinberg did say exceptions were made “where necessary to retain talent and protect taxpayer interests.” Base salaries above $1 million were approved for the new CEO of AIG, and for two employees of Chrysler Financial.  Under a package approved by Feinberg over the summer, AIG CEO Robert Benmosche will get a pay package of about $10.5 million.” Still, BofA and the rest of the banks are fearing an impending brain drain among top managers.  Other private companies and most likely foreign enterprises who can offer higher pays to attract these people will surely raise their demand.  But haven’t they thought of the following? We’d get rid of the same people who started the real estate slump. We’d lose executives who offered hybrid loans to most unsuspecting and uninformed borrowers. We’d dismiss any chance of having mortgage officers goad clients into loans that they won’t qualify but still have the possibility to avail. So would the public trade this for the feared brain drain among executives? Hasn’t it occurred that no matter how they regard themselves as the best among the crop of managers, they can still be replaced by top tier talents in the workforce who can practice business ethics?  That’s unless BofA and the rest, still prefer to defy mortgage standards. Even Warren Buffet agrees when he recently said, “I don’t look at Wall Street as ‘evil’. “I look at Wall Street as given to huge excess sometimes. I don’t want to get rid of it. We need something to allocate capital and distribute securities and all of that throughout the system. We have got a big capitalist system and we have to have a big capital market—but there is plenty of room for improvement.” Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-10T16:56:00-05:00 http://www.realty.com/blog/compensation-experts-therell-be-brain-drain/#When:16:56:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/hokSXWFC9uU/ http://www.realty.com/blog/consumer-protection-getting-ready/#When:17:50:00Z Congress is pursuing the plan seriously. Everyone’s eager to see if the House Financial Services Committee’s passing of a legislation that will create the Consumer Financial Protection Agency will turn out to be in line with Obama’s plan of regulating mortgages, credit cards and other forms of consumer credit.  As the plan slowly makes it way to becoming a law after a 39-29 vote in the committee, President Obama’s plan is slowly gaining ground. Here are the salient features of the bill from The Associated Press : — The agency would oversee such common financial products as mortgages, credit cards, payday loans and terms on savings accounts. — It would be in charge of implementing a law passed by Congress this spring that protects consumers from sudden interest rate increases on unpaid credit card balances. — Most banks and credit unions, already monitored by other regulators for “safety and soundness,” would be spared from agency examinations. Only banks with more than $10 billion in assets would need to open their books to CFPA officials. — While retailers would be exempt, financial institutions tied to them would not. For example, the bank that offers a store-brand credit card or the institution that provides financing through an auto dealer would still be subject to agency rules. — The bill does not include a mandate proposed by the Obama administration that banks offer standardized, “plain vanilla” products such as a 30-year fixed mortgage, as the administration wanted. — The bill also eliminated an administration proposal to require that banks take reasonable steps to ensure customers understand what they were buying. Democrats said the measure would be too hard to enforce. Take it from this last feature where banks must ensure customers understand what they are buying. How can the government exactly measure such rule is followed? Would you know that your mortgage application is thoroughly explained after you meet with the lender? Definitely not and it would be a hassle on your part if you file a complaint since borrowers can just find other lenders than contend with those who shortchange them. Some more review from our lawmakers, perhaps? Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-09T17:50:00-05:00 http://www.realty.com/blog/consumer-protection-getting-ready/#When:17:50:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/rf9YAdRYbTM/ http://www.realty.com/blog/foreign-buy-out/#When:15:19:00Z Non-Americans are taking advantage of extremely low property prices. So how do real estate demand and supply forces work in a battered economy?  It’s simple – try getting the folks out of the country to bring your existing supply to lower levels.  In other words, let them buy America’s bargain properties. In 2007, Canadians took advantage of the weak U.S. dollar and found out it was a good year to purchase U.S. real estate whether for investment or their own dwelling.  Here’s a clip from real estate expert Ozzie Jurock speaking about the heydays of buying: Of course, this “phenomenon” has occurred again this year when prices are way too low that foreigners can afford multiple investments already.  In fact, real-time real estate research team Altos Research released the latest 10-City Composite Price Index.  It states, “For the month of September, listed property inventory declined in 23 of 26 markets and was up in 3 markets.  Inventory declined by 1.7% across the 10 markets composing the Altos Composite index during September and 4.2% during the third quarter.  Inventory grew by the largest amount in San Diego - up 1.1% - and fell by the largest amounts in San Jose and Atlanta with drops of 5.4% and 4.5% respectively.” And if you think only the Canadians are interested, you must’ve been hiding in a cave.  The East Asians are slowly consuming both commercial and residential real estate that they can purchase.  An April 2009 report states, “…according to the Oriental Horizon program, 7.5 percent of U.S. residential property that was sold to foreign markets was purchased by customers in China, Taiwan or Hong Kong.  We know they can afford it – as of 2008, the Boston consulting Group reported China was home to almost 300,000 millionaires – a 20% increase from 2007, and the world’s fifth largest number.” Sounds too easy for them right? But 2007’s real estate condition is a far cry from what we have now.  It’s much harder time to take a subprime mortgage. David Levine , international tax manager with financial advisory firm Keats, Connelly and Associates, warns his countrymen, “Canadians can come in with cash and not have to worry about trying to raise a mortgage down here, then it’s really the perfect opportunity for them to buy right now.” Levine sounds he can tame down the buying but we’re absolutely losing our property to foreigners.  But who cares? Abu Dhabi now owns 75 percent of the Chrysler Building right? What difference does it make? Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T15:19:00-05:00 http://www.realty.com/blog/foreign-buy-out/#When:15:19:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/23pMMfilYtM/ http://www.realty.com/blog/billionaire-roth-buys-madoff-mansion/#When:15:00:01Z …and a thousand other news sites. The 1.2 acre, 3,000-sq.ft. beachside four-bedroom home of Bernie Madoff was recently bought by real estate CEO Steve Roth, former chairman of Vornado Realty Trust.  He paid a hefty $9.4 million for the property according to the Wall Street Journal … and a thousand other news sites.  Roth, a 2007 recipient of Institutional Investor magazines’ top CEO in the REIT industry, can buy whatever he wants.  He’s a billionaire by the way. This leads us to think, how come it’s a big deal for everyone?  It’s simple.  People would be so interested in knowing who were, are, and will be affiliated to Bernie Madoff.  And as a real estate businessman, you’ve got to give Roth the credit for risking his name in Madoff’s former assets. Take for example Michael Tadin, who’s controversial acquisition of a $4.5 million property last year sparked outrage from certain groups in Chicago when he won the bidding.  Apparently Tadin is a childhood friend of Mayor Richard Daley.  A year after the controversy, we’ve not heard much about this issue anymore.  So we’re expecting the same thing for Roth. But a few others are contending that this is just a mere publicity stunt of Roth.  He’s the shrewd type who won’t settle for anything less than what he has in mind.  Some however, believe that it was in his best interest to have entered the deal. Good or bad - publicity is still publicity.  In this case, Roth got the house , he got the exposure, and he got America talking about him. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T15:00:01-05:00 http://www.realty.com/blog/billionaire-roth-buys-madoff-mansion/#When:15:00:01Z http://feedproxy.google.com/~r/Realty-Blog/~3/OZw8quL_PeA/ http://www.realty.com/blog/the-truth-about-prepayment-penalties/#When:14:58:01Z Why you’re paying more. A friend of mine once asked why it cost her more than a thousand dollars to pay off her loan early.  She wondered, “…Shouldn’t I be even given a discount for paying way ahead of time?” I thought of one thing right away – prepayment penalties. A prepayment penalty is a fee that lenders collect from borrowers when the loan is paid off early.  My friend may not have been informed that her loan carries such rule in the contract.  In the end, she had no choice but to cover the cost. Keep in mind though that a loan may or may not carry a prepayment penalty.  Subprime loans for example, carry a fee from 1.5 to 3 percent of the loan balance.  Buying the loan out earlier will also increase the interest rate.  For those who can find loans without such fee, it may or may not work for you. Prepayment penalties may hurt you in different cases.  If it’s a soft prepayment fee, you’d only pay it when you refinance.  However, if it’s a hard prepayment penalty, you’d be paying it when you either refinance or sell the house.  But is it all bad? Not entirely.  Borrowers can use the fee to their advantage.  For example, if it would reduce the payment terms by a significant amount of time, it can make a huge difference in their personal savings.  That is, if the prepayment penalty is actually lower than the savings that he can get.  If not, then he’d be thinking twice on completing his mortgage payments. So the problem also lies in the part of most lenders who advertently skip the prepayment penalty explanation.  The result?  You’ll have frustrated borrowers who lose their trust on their lenders.  This is a good source of additional income for these scrupulous thieves who contend that they need the fees to cover the high cost of loan origination. In a report by the Wall Street Journal, “…Some consumer advocates and politicians contend that borrowers aren’t being adequately informed of the prepayment penalties, which critics characterize as a “predatory” lending practice aimed at low-income people who may not fully understand loan terms. ‘Prepayment penalties rip money out of people’s pockets,’ says Lisa Donner, a coordinator with the Association of Community Organizations for Reform Now, or Acorn, a nonprofit and activist group that often targets housing issues. ‘Owning a home goes from being a source of wealth into a constant drain.’” It will take a miracle to turn things in favor of the borrower when prepayment penalties will be banned like in the mid-1908s.  For now, borrowers should be aware that when originating their loans, they need to demand a thorough explanation for each statement that’s written on paper. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T14:58:01-05:00 http://www.realty.com/blog/the-truth-about-prepayment-penalties/#When:14:58:01Z http://feedproxy.google.com/~r/Realty-Blog/~3/I8hTFBK5ksw/ http://www.realty.com/blog/500-with-few-takers/#When:14:45:00Z Detroit’s houses are not doing well in auctions… Guess what’s wrong? A recent property auction in Wayne County had very few takers according to Reuters .  The minimum bid was set at $500 but not everyone was able to own a house, not because they don’t have a little more than $500 to spare but because they were competing against investors. Such was the sentiment of those who didn’t leave the venue – the ballroom of a bankrupt casino, where Ron Wallace “…was quickly outbid.  An unidentified investor at the front of the room who had scooped up several dozen properties took the home Wallace wanted for about $15,000.  ‘Why am I competing against a bank?’ he said later.  ‘It would be common sense to have a separate process for people who want to move back to the city or it’s going to stay empty.’” Well, Mr. Wallace, you’re not alone.  In a city that resembles a ghost town where many parts are inhabited by squatters in abandoned homes, we all want a piece of the pie.  But investors who believe that the market is already starting to rebound can foil your plans for home ownership.  It’s not that they want to deprive you of your right to purchase a bargain home, it’s just how free market works.  And we’ve all been victims of that. But Mr. Wallace should set his sights in other areas not just in Motor Town.  Bargain auctions are plenty in California, Florida and even Nevada.  He can always find an auction where competition is less severe.  Too bad, he’s had to compete for rundown units against big time buyers in Detroit. But what does this tell us? First, there’s an evident resurgence of investors interested in the city already deserted by its long-time residents.  It may be a good sign but as to how much they can put their investments and for how long, it’s still too difficult to gauge. Second, since car companies are struggling and going bust, there’s still no possibility that these houses can be flipped as fast as the years prior to the recession.  In the end, it’s still a big gamble. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T14:45:00-05:00 http://www.realty.com/blog/500-with-few-takers/#When:14:45:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/o3jqQ_-oRQo/ http://www.realty.com/blog/should-home-repair-subsidy-be-continued/#When:03:26:00Z Fannie Mae is considering reviving the HomeStyle Renovation Mortgage program Back in June, Fannie Mae ended its home repair subsidy program that offered $3,000 for the borrower during his first six months in the property.  Now, the office is deciding whether to renew or modify the program as its latest measure to prop up the housing market hasn’t had huge impacts in the economy.  The latest of which is the HomePath.com program that was supposed to sell foreclosed properties with better terms and financing.  But critics chided officials for not looking ahead.  New York for example, has not so many foreclosure listings available for the taking. Now, Fannie Mae is considering reviving the HomeStyle Renovation Mortgage program in the hopes of stimulating the homebuilding industry again.  It allows borrowers to combine the home purchase cost with the costs for renovation or repair.  At closing, all funds for renovation will be escrowed in an interest-bearing account.  After the renovation, any remaining funds in the escrow account will be used to pay down the principal balance of the mortgage. It’s a good program so I think they should bring it back but with some modifications. First, when lenders determine the additional value that the renovation may bring to the property, they must think about the renovation’s suitability to the owner’s current lifestyle.  Borrowers have to justify their plans. Second, Fannie Mae should expand its program scope and features to attract more beneficiaries who also qualify in FHA 203k rehab loans.  The latter has simple application process and Fannie Mae can simply follow that. Finally, they should extend the program’s duration to allow more homeowners to qualify.  Since many haven’t recovered yet from joblessness and the financial slump, it would be wiser to wait for them to get back on track. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T03:26:00-05:00 http://www.realty.com/blog/should-home-repair-subsidy-be-continued/#When:03:26:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/BE7MM_vt10w/ http://www.realty.com/blog/new-restrictions-by-mls/#When:03:13:00Z Is this the next China? The San Francisco Chronicle posted an email by Tracy Taylor regarding a recent promotion of real estate listings in her area.  She writes, “…When a friend of mine was putting her Tahoe vacation home on the market recently, she selected her real-estate broker partly based on the fact that the agent had a well-researched, informative blog.  The site spoke of a professional who was on top of the local market and who was using online media to showcase both her expertise and promote her listings. “However, the Northwest Multiple Listing Service recently instituted new rules which allow home sellers to prevent agents from blogging about their properties.  The rules also block automated valuation models (AVMs) from appearing next to listings.  AVMs, such as those produced by Zillow.com, are intended to reflect the market value of a property but do not always tally with listed prices.” So what’s next?  They’ll ban YouTube?  Then Yahoo?  Have they elected Chinese politicians to regulate their online opportunities? Here’s the point.  While MLS sites earn from their listing contracts, the Northwest Multiple Listing Service should never be threatened by any of its agents showcasing houses in their own sites.  As long as the post is done professionally and would not undermine the property’s marketability, then the agents should be left on their own.  However, they can also impose “friendly” rules to protect their interest like asking agents to provide a link to the MLS for every property that they post in their own websites.  In this way, it still is a win-win solution. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T03:13:00-05:00 http://www.realty.com/blog/new-restrictions-by-mls/#When:03:13:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/dCY95UXvZyA/ http://www.realty.com/blog/wish-i-didnt-buy-this-house/#When:03:06:00Z Helpful tips to overcome remorse For most homebuyers, the regret of buying a home sinks in the moment they feel they have entered in a long-term financial commitment without considering the choices they could have prior to signing the deal.  It may sound absurd for some who wonder why such feelings exist when in fact, home buying should be a worthwhile effort for the hardworking employee. But home buyer remorse actually exists.  Feeling anxious after the purchase is absolutely normal within an acceptable amount of time.  If the homeowner experiences remorse more than this, then he should act on it right away. Remorse can be avoided. Here are some helpful tips: Avoid agents who do not provide you with more property information.  You’re not getting your money’s worth.  A good agent will keep you updated with other sales and new listings in the market. Read your contract carefully.  You may spot a clause that can actually save your from headaches.  If you can’t understand some statements, consult a lawyer. Don’t be too impulsive especially when posed with a tempting offer.  Search for more comps and evaluate your decision carefully. Prepare a comprehensive financial plan.  Seek the help of a professional if you can afford it.  It’s a good measure against wrong choices. Stop comparing your choice with other listings.  Face the fact that you’ve already made a decision.  Look at the good features of your house and work on the minor setbacks. Listen to your relatives’ and friends’ comments but don’t take them seriously.  Some may quip, “You could’ve taken a larger one in the next suburb for the same price.” Remember that these statements are mere expressions, not necessarily sound pieces of advice. Review the property inspector’s findings.  Estimate if you can cover the cost of repair.  Some homebuyers jump into a decision without realizing the high costs of renovation. Yes, home buying is stressful but it can be a wise decision if you act on little things that will turn out to be big problems in the future. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T03:06:00-05:00 http://www.realty.com/blog/wish-i-didnt-buy-this-house/#When:03:06:00Z http://feedproxy.google.com/~r/Realty-Blog/~3/t2c2iOKDqwo/ http://www.realty.com/blog/bank-of-america-sells-luxury-apartment/#When:02:48:00Z So why just now? Bank of America recently sold its $7 million dollar corporate apartment.  According to The New York Observer, “...On Friday, just after Bank of America announced a billion-dollar loss in the third quarter, a deed in city records showed that the massive firm had sold off its corporate apartment in the Time Warner Center for $7.2 million.  On the bright side, it cost $6.35 million to buy three years ago.” “Especially on a dark afternoon like this one, you stare up at the twin-towered, 53-story, 2,800,000-square-foot, sharp-edged, nefariously shiny Time Warner Center and wonder what really goes on in the multimillion-dollar condos.  According to James B. Stewart’s 19,148-word epic on the financial world’s collapse, it was in this Bank of America sprawl--on the north tower’s 57th floor--that chief Ken Lewis met Merrill Lynch’s John Thain on Saturday, Sept. 13, 2008, to talk about a merger.” So we’re thinking two things about this sale. First, this could be another show of assurance to their investors that the bank is serious on restructuring its financial situation after not fairing well in the last quarter or… Second, they want to forget about the location where Mr. Lewis made a very, very bad decision. Maybe then, the real reason could be a combination of the two. Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com. 2009-11-06T02:48:00-05:00 http://www.realty.com/blog/bank-of-america-sells-luxury-apartment/#When:02:48:00Z