How to build trust and rapport quickly

How to build trust and rapport quickly
CHICAGO – Oct. 31, 2011 – Real estate agents can quickly build rapport and trusting relationships with clients by making a good first impression. They should be on time, well prepared, dressed appropriately and displaying an upbeat attitude. They should spell out their credentials, explain why they chose their firm and provide up-to-date professional marketing materials.

Agents also should be active listeners by asking open-ended questions, repeating the prospect’s words to clarify what he or she said and to show that they’re listening.

They should determine the prospect’s temperament style as quickly as possible and adjust their presentation accordingly. This means they should be quick and focus on the bottom line if the prospect is impatient and aggressive, or provide more details if the prospect is analytical.

Finally, they should watch the prospect’s body language and be mindful of their own – uncross arms and legs, smile and nod.

Source: RISMedia (10/26/11) Boe, John


South Florida foreclosures", "Florida foreclosure list", "Florida housing market values", "Miami Distressed Commercial investments", "South Florida real estate deals", "Miami courthouse auctions", "Miami courthouse foreclosures", "Florida spec homes

Has Broward hit bottom in home prices?

you're looking for the bottom of Broward County's housing market, Brad Hunter of the Metrostudy research firm in West Palm Beach suggests paying attention to this figure: $165,100.

That's the county's median price for January, according to the Florida Realtors. While home prices in much of South Florida continue to fall when compared with a year ago, Broward's median hasn't dropped lower than $165,100 in any month in 2011 -- a possible sign of a market bottom, Hunter says.

'Most likely, we're not going to see prices return to that low," he said.

Palm Beach County's median has been more volatile this year, an indication that prices there still have more room to fall. "Prices are moving in a more favorable direction in the Fort Lauderdale market than in the West Palm Beach market," Hunter said.

Hunter has an interesting theory, though he is in the minority. Most analysts expect home prices in South Florida to continue dropping into next year.

The Standard & Poor's Case-Shiller Home Price Index, released this week, showed that prices in Palm Beach, Broward and Miami-Dade counties collectively fell 0.3 in August from July and 4.6 percent from a year ago.

Unlike the Florida Realtors trade group, the index tracks the price of the same home over time, which many real estate observers say is the most accurate way to measure prices.


Broward County Median Prices 2011
$165,100 -- January
$167,000 – February
$175,400 – March
$177,000 -- April
$188,500 -- May
$196,000 -- June
$193,000 -- July
$191,800 -- August
$188,800 -- September
Source: Florida Realtors
Categories: South Florida home prices (77)

Not Every Real Estate Market Is Struggling

Not Every Real Estate Market Is Struggling
In the Obama years, home values lagged throughout the U.S., with a few exceptions
By Venessa Wong

Want to know how bad the real estate market is? Just drive down almost any street in the U.S. and you’re likely to see “for sale” signs lining the road. Come back a month later, it’s a good bet the same signs are still there—and quite possibly a few new ones, too. But while there’s a lot of housing pain, there’s also some good news. That’s because in some markets across the country not only have home values improved, a few have even seen double-digit growth.

So where is this miracle occurring? Believe it or not, the city that has seen the biggest increase in home value is in Florida. That’s right—the state that has seen home values plummet 52.3 percent from 2006 peak levels. Nearly 96,000 loans were modified in Florida through August 2011 under President Obama’s Making Home Affordable program. Joblessness, foreclosures, and high inventory hamper recovery in nearly every corner of the state, with rare exceptions. In this case, the rare exception is Weston, a high-income city of more than 65,000 people near Fort Lauderdale where the median home value has risen 15.1 percent to $280,000 from February 2009 to August 2011.

A survey of the 1,000 largest cities nationwide by online real estate marketplace Zillow for Businessweek.com identified the markets with the biggest gains and losses in home value, ranking Weston the best-performing city since Obama took office. In contrast, the U.S. median home value fell by 9.9 percent over the same period.

What’s behind Weston’s success? Ines Garcia, an agent for EWM Realtors in Weston, describes the city as “Broward County’s cul-de-sac.” “It’s like driving into a gated community: the landscaping, the manicuring all around the city,” she says. “We were very lucky. Weston was one of the last communities to fall and one of the first to recover.”

Other winners: Arlington, Mass., where the median home value increased by 14.8 percent since February 2009; Brookline, Mass., at 13.6 percent; and the D.C. suburbs of Burke, Va., at 13.5 percent, and Vienna, Va., at 12.8 percent, Zillow data indicate.

Of course, the winners are far outnumbered by the losers. The city with the worst-performing market in the survey is only 50 miles from Weston in Homestead, Fla., where the median home value dropped by 48.8 percent since February 2009. Rounding out the bottom worst-performing markets: former manufacturing city Pontiac, Mich., with a 47.4 percent decrease, and New Jersey capital Trenton, at 46 percent.

While those in depressed housing markets hope for solutions from the White House, “I don’t see how any President is responsible for the housing market in a particular area,” says Steven Blitz, director and senior economist at ITG Investment Research in New York. The federal government and national housing policies have a limited impact on a local level.

Obama Accountable?
The Obama Administration, the inheritor of a collapsed housing market and financial crisis, has tried to help the hardest-hit housing markets through refinancing and loan modifications. Yet individual markets are influenced heavily by local conditions, such as jobs, school districts, and population growth. Both the best-performing market, Weston, and the worst, Homestead, are in the Miami-Fort Lauderdale metro area, for instance. As housing trends at their core are hyperlocal, it makes it difficult to even craft regional solutions. Developing a catch-all national policy is even more challenging.

“The foreclosure prevention efforts by the Obama Administration have helped to slow the bleeding when it comes to foreclosures but have done little to help get the housing market off life support,” says Daren Blomquist, a spokesperson for RealtyTrac.

To stimulate buying, the housing industry has called on the federal government and lending institutions to facilitate mortgages to qualified home buyers. Rather than address housing specifically, says Jeffrey Lubell, executive director of the Center for Housing Policy, a research group in Washington, “the single most important thing that needs to be done now is get the economy back on track. Nothing can help housing more than putting people back to work.” The U.S. unemployment rate stood at 9.1 percent in September, according to the U.S. Bureau of Labor Statistics.

Job creation in the D.C. area, for example—driven by the government—helped nine cities in the capital region rise to the list of top 25 housing markets in Zillow’s research. The unemployment rate in the D.C. metro area was 6.2 percent in August, estimates the BLS.

“Housing will rise with jobs and income. Anything that improves confidence in the future trajectory of jobs and income will raise the arc of growth for housing,” says Blitz.

One Metro, Many Markets
Weston, following patterns in the rest of the country, saw the median home value peak in 2006 at $478,000 before plunging. The median value bottomed out in May 2009 at $235,600, according to the Zillow Home Value Index, and has since climbed steadily.

By August 2011, the unemployment rate in Weston was down to 7 percent from a peak of 8.3 percent and the median home value had only recovered to $280,000, well below the peak. Still, among cities it was the best housing rebound in the last two and a half years. The foreclosure rate in September, about 1 in 338 housing units, remains far above the U.S. rate, though it is down 60.7 percent from a year earlier, show RealtyTrac data.

Helping this meticulously landscaped planned community—which offers bike trails, golf courses, scenic lakes, highly ranked schools, a low crime rate, and active homeowner associations—was a rebound in demand from young families, according to Susan Penn, an agent at EWM Realtors. The median household income is $78,030.

Weston also experienced an influx of middle- and upper-class immigrants from Venezuela and other parts of South America. The U.S. Census Bureau estimates the city’s foreign-born population increased to 43.9 percent in 2010 from 37.1 percent in 2006.

As Weston recovered some housing value, Homestead, a city only 50 miles south, was less fortunate. A Miami suburb and agricultural area with an Air Reserve Base, Homestead has struggled since being devastated by Hurricane Andrew in 1992. It has a poverty rate of 29.4 percent and median household income is $36,279 (lower than both the Florida and U.S. medians), according to 2009 Census data.

Lower-income areas and exurbs were generally hit harder by the recession. In Homestead, unemployment skyrocketed to 11.7 percent in August from 6.3 percent in February 2009, estimates the BLS. By August, the foreclosure rate remained high at 1 in 125 housing units and the median home value was 66.7 percent below peak at $76,600.

According to Zillow Senior Economist Svenja Gudell, under current conditions the median U.S. home value will likely fall another 3 percent to 5 percent and not reach trough until 2012 at the earliest. “We need to identify creative solutions,” such as repurposing foreclosed homes as rental housing, refinancing loans, and loosening credit, which involves many players, says Lubell of the Center for Housing Policy.

The Obama years have been bad ones for housing, yet government was not alone in breaking the housing market—and it cannot be alone to fix it.

Click here to see the 25 best- and 25 worst-performing housing markets under the Obama Administration.

Wong is a lifestyle and real estate reporter for Bloomberg Businessweek.

Agents Try ‘Shock and Awe’ Marketing

Luxury Agents Try ‘Shock and Awe’ Marketing
Daily Real Estate News | Friday, October 28, 2011
Marketing multimillion-dollar mansions may require stepping outside-the-box and getting fancy in luring potential buyers, from hosting mini-circuses, raffling off Botox treatments, to having models lining the properties, and more.

"Price is key, but it's the presentation that will sell the property," Lisa Sorrentino, a real estate agent in Calabasas, Calif., told The Los Angeles Times. Sorrentino held a mini-circus in the back yard of her $8 million listing, complete with a juggler, contortionist who floated in the pool in a plastic bubble, and a stilt walker.

“Competition for qualified buyers is fierce, leading to a game of one-upmanship by agents looking for any edge,” a Los Angeles Times article notes. Real estate instructor Paul Habibi with the UCLA Anderson Graduate School of Management even refers to it as “shock and awe” marketing.

"Years ago you simply posted the listing on the Multiple Listing Service or hung a sign out, and pretty soon you'd have it sold," Habibi told The Los Angeles Times. "Now sellers are reverting to other tactics to tap into buyers and get them on the hook."

And open houses are getting fancy. For example, one agent offered horsebacking riding to show off a 6-acre estate of the home he was listing while a Malibu agent lured buyers to an open house by raffling off Botox treatments and Thai foot massages. In listing another luxury home, one agent had models line the front of a new condo project and serve free drinks with the theme “it’s always cocktail hour” at these condos.

More are renting in South Florida as international investors snap up distressed homes
Displaced homeowner makes up increased number of consumers that spur unprecedented demand for rental housing
By Toluse Olorunnipa, Miami Herald




By choice or by force, more people in South Florida's foreclosure-ridden housing market are renting, rather than owning, their homes.

In an ironic twist on economics, that dynamic is actually helping the resale market. According to sales reports released this week, South Florida is on track to set a new sales record this year.

The reason: investors.

The majority of today's homebuyers are not first-time owners or growing families, but opportunistic investors. International buyers and locals with cash are making money in the region's distressed market by buying up foreclosed homes and turning them into rentals.

Homeowners who have been foreclosed upon, and those who either can't or won't buy in this economy, are flooding the rental market with unprecedented demand.

"I talk to a couple investors all over South America and they tell me they buy these condos and it takes them about a week to rent them," said Craig Studnicky, principal of Miami real estate firm RelatedISG. "Each and every month, the rents are going up."

Spurred by investor activity, South Florida homes sales rose again in September, according to new data by the Miami Association of Realtors. Sales were down, however, compared to last month.

All-cash buyers, mostly investors, accounted for 63 percent of all sales. Those investors are gravitating toward distressed properties, which make up about 60 percent of home sales and trade at deep discounts.

More than 100,000 South Florida homeowners have lost their properties to foreclosure since 2007, and many of them ended up as renters. Additionally, a cultural shift towards renting and the difficulty of obtaining financing in this economy have pushed occupancy rates up at apartment complexes and rental homes.

Occupancy rates in South Florida are now above 95 percent, and rent prices have risen between 3 and 7 percent this year, according to research by Texas-based MPF Research.

With at least 160,000 homeowners either in foreclosure or so far behind on payments that an eventual foreclosure appears inevitable, the region's rental market is likely to see growing ranks of new renters for the foreseeable future. As a result, more so-called "vulture investors" will seek hefty profits by buying up distressed property and converting them to rentals.

"We bought a two-bedroom in Kendall in May for $50,000. We invested $10,000 in repairs, and then rented the unit for $1,200 [a month]," said de Varona. "We just closed the sale of the unit for $95,000."

The international investor who purchased the home is making a 7.5 percent return on his investment, de Varona said.

In addition to the rising rental market, international investors are to drawn to South Florida real estate because the U.S. offers greater legal protection for foreign land owners than many other countries, and because some homeownership can make it easier to obtain a U.S. visa.

Growing investor appetite is driving sales for condos and single-family homes back to the boom time levels of 2005 and 2006. In Miami-Dade County, for example, total sales are expected to reach 29,000 this year, more than 2005's total.

Still, some warn that the housing market is undergoing a dangerous shift. In effect, international landlords are taking the place of would-be first-time homeowners and move-up families, said Jack McCabe, CEO of McCabe Research and Consulting in Deerfield Beach.

"Many Americans that previously had the opportunity to build wealth through the forced savings involved in buying a home are not going to have that opportunity," he said. "Prices have come down to where [homes] are affordable again, but many American buyers are not able to take advantage of current prices. They aren't able to qualify for a mortgage, and it's a cash-buyer market."

Despite the recent value declines homeowners have experienced during the recession, homeownership has proved a smart investment over the last several decades, with home values rising about 5.4 percent annually on average. The growing crop of renters is not able to benefit from that investment.

Additionally, the idea of saving money as a renter so that you can put together a down payment in the future is not viable for many cash-strapped South Floridians trapped between high rental rates and low wages.


Copyright © 2011, South Florida Sun-Sentinel




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FEDERAL HOUSING FINANCE AGENCY Announce HARP Changes

NEWS RELEASE


For Immediate Release Contact: Corinne Russell (202) 414-6921
October 24, 2011 Stefanie Johnson (202) 414-6376

FHFA, Fannie Mae and Freddie Mac to Reach More Borrowers

Washington, DC – The Federal Housing Finance Agency, with Fannie Mae and Freddie Mac
(the Enterprises), today announced a series of changes to the Home Affordable Refinance
Program (HARP) in an effort to attract more eligible borrowers who can benefit from
refinancing their home mortgage. The program enhancements were developed at FHFA’s
direction with input from lenders, mortgage insurers and other industry participants.

“We know that there are many homeowners who are eligible to refinance under HARP and
those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco.
“Building on the industry’s experience with HARP over the last two years, we have identified
several changes that will make the program accessible to more borrowers with mortgages
owned or guaranteed by the Enterprises. Our goal in pursuing these changes is to create
refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie
Mac and bringing a measure of stability to housing markets.”

Fannie Mae and Freddie Mac have helped approximately 9 million families refinance into a
lower cost or more sustainable mortgage product, approximately 10 percent of those via HARP.
HARP is unique in that it is the only refinance program that enables borrowers who owe more
than their home is worth to take advantage of low interest rates and other refinancing benefits.
This program will continue to be available to borrowers with loans sold to the Enterprises on or
before May 31, 2009 with current loan-t0-value (LTV) ratios above 80 percent.

The new program enhancements address several other key aspects of HARP including:

x
Eliminating certain risk-based fees for borrowers who refinance into shorter-term
mortgages and lowering fees for other borrowers;
x
Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by
Fannie Mae and Freddie Mac;
x
Waiving certain representations and warranties that lenders commit to in making loans
owned or guaranteed by Fannie Mae and Freddie Mac;
x
Eliminating the need for a new property appraisal where there is a reliable AVM
(automated valuation model) estimate provided by the Enterprises; and
x
Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the
Enterprises on or before May 31, 2009.


An important element of these changes is the encouragement, through elimination of certain
risk-based fees, for borrowers to utilize HARP to refinance into shorter-term mortgages.
Borrowers who owe more on their house than the house is worth will be able to reduce the
balance owed much faster if they take advantage of today’s low interest rates by shortening the
term of their mortgage.

The Enterprises plan to issue guidance with operational details about the HARP changes to
mortgage lenders and servicers by November 15. Since industry participation in HARP is not
mandatory, implementation schedules will vary as individual lenders, mortgage insurers and
other market participants modify their processes.

###

The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks.
These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets
and financial institutions.

(Fact Sheet and Q & A follow)

(


Home Affordable Refinance Program (HARP)
Fact Sheet


Program Overview

The Federal Housing Finance Agency (FHFA) and the Department of the Treasury introduced HARP in early
2009 as part of the Obama Administration’s Making Home Affordable program. HARP provides borrowers,
who may not otherwise qualify for refinancing because of declining home values or reduced access to mortgage
insurance, the ability to refinance their mortgages into a lower interest rate and/or more stable mortgage
product.

Homeowners Helped Since Program Inception

As of August 31, 2011, nearly 894,000 borrowers had refinanced through HARP.

HARP is only one refinancing option

HARP is only one of several refinancing options available to homeowners. Since April 2009 when HARP
began, Fannie Mae and Freddie Mac have helped approximately nine million families refinance into a lower
cost or more sustainable mortgage product. HARP is unique in that it is the only refinance program that
enables borrowers who owe more than their home is worth to take advantage of low interest rates and other
refinancing benefits.



Borrower Eligibility

x
The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to:
http://www.FannieMae.com/loanlookup/ or calling 800-7FANNIE (8 am to 8 pm ET)
https://ww3.FreddieMac.com/corporate/or 800-FREDDIE (8 am to 8 pm ET)

x
The program will continue to be available for loans with LTVs above 80 percent.
x
Borrowers must be current on their mortgage payments with no late payment in the past six months
and no more than one late payment in the past 12 months.
x
Borrowers should contact their existing lender or any other mortgage lender offering HARP refinances.

Other Resources

www.MakingHomeAffordable.gov or call 1-888-995-HOPE (4673)

www.KnowYourOptions.com or www.FannieMae.com/homeowners
www.FreddieMac.com/avoidforeclosure


HARP Phase II Q&A’s


Why are you making these changes to HARP now?

For some time, FHFA, Fannie Mae and Freddie Mac (the Enterprises), lenders, servicers and
private mortgage insurers (MI’s) have been engaged in a coordinated, industry-wide effort to
find ways to increase the number of homeowners who are able to refinance through HARP. With
mortgage interest rates at historic lows, we believe it is an opportune time to put the industry’s
experience with the program to work so more eligible borrowers can refinance Fannie Mae or
Freddie Mac-owned mortgages. Importantly, such refinances bring benefits to borrowers, to
housing markets, and to the Enterprises and taxpayers.

Which borrowers may be eligible for an enhanced HARP?

In general, borrowers must meet the following criteria:

x
The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.

x
The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May

31, 2009.

x
The mortgage cannot have been refinanced under HARP previously unless it is a

Fannie Mae loan that was refinanced under HARP from March-May, 2009.

x
The current loan-to-value (LTV) ratio must be greater than 80%.

x
The borrower must be current on the mortgage at the time of the refinance, with no

late payment in the past six months and no more than one late payment in the past

12 months.

Given the eligibility criteria, can you estimate how many borrowers may refinance
through HARP as a result of these changes?

For many reasons it is very difficult to project the number of mortgages that may be refinanced
under the enhancements to HARP, including the future path of interest rates, borrower
willingness to undertake a refinance transaction and the number of lenders and servicers who
choose to offer the program. Given current market interest rates, our best estimate is that by
the end of 2013 HARP refinances may roughly double or more from their current amount but
such forward-looking projections are inherently uncertain. The more important point is that
material changes have been made to enhance access to the program but HARP, before and with
these changes, is not intended to serve all borrowers, or even all underwater borrowers. It is
targeted just at borrowers with loans owned or guaranteed by the Enterprises that meet the
eligibility requirements set forth above.

What about borrowers whose loans are not owned or guaranteed by Freddie Mac
or Fannie Mae?

Neither FHFA nor the Enterprises have the legal authority to extend HARP to borrowers whose
mortgages are not owned or guaranteed by Fannie Mae or Freddie Mac.

What do borrowers need to do to take advantage of HARP?


The first step is for the borrower to learn if his or her mortgage is owned or guaranteed by
Freddie Mac or Fannie Mae by visiting the Enterprises’ websites. Each Enterprise has a web tool
for that purpose. If the mortgage is owned or guaranteed by Fannie Mae or Freddie Mac, the
borrower should contact his or her existing lender or any other mortgage lender offering HARP
refinances.

Are offers from companies promising to help borrowers get HARP loans
legitimate?

Borrowers do not need to use third party companies that advertise themselves as "mortgage
experts" or "foreclosure specialists" to apply for a HARP loan. Before calling such companies
borrowers should talk first with their mortgage lender.

Is there a maximum loan-to-value (LTV) ratio for HARP?

There is no longer a maximum LTV limit for borrower eligibility. If the borrower refinances
under HARP and their new loan is a fixed rate mortgage, there is no maximum LTV. If the
borrower refinances under HARP and their new loan is an adjustable rate mortgage, their LTV
may not be above 105%.

Is HARP the only refinance program available to borrowers?

Our task the past few months has been to evaluate an existing program – HARP – to assess if it
could be enhanced to better reach its target population of borrowers whose mortgage balances
exceed the values of their homes. HARP is only one of several refinancing options available to
homeowners and is unique in that it is the only refinance program that enables borrowers with
little to no equity in their homes to take advantage of low interest rates and other refinancing
benefits. Indeed, Fannie Mae and Freddie Mac have helped approximately nine million families
refinance into a lower cost or more sustainable mortgage product since April 2009 and we will
continue to work to provide those opportunities in a responsible way.

Are mortgages on condominiums eligible for refinance under HARP?

Condominiums are already eligible under HARP and, under the enhanced program,
condominiums that originally met Enterprise requirements remain eligible.

What are the circumstances under which appraisals are not required?

We are further streamlining the Enterprises’ existing use of AVM (automated valuation model)
estimates of properties. Where there is a reliable AVM estimate of value provided by the
Enterprises, a new appraisal will not be needed. Where there is not a reliable AVM value, a new
appraisal will be required.

When will these enhancements become available?

Timing will vary by mortgage lender. The Enterprises will be sending operational instructions to
lenders by November 15th. Some lenders may be able to accommodate mortgage applications


under some of the enhancements by December 1 while it could take other lenders additional
time to incorporate the expanded program into their systems. In addition, some of the
enhancements such as delivery of loans with LTV greater than 125 should be operational during
the first quarter of 2012.

Are you concerned that eliminating seller and servicer representations and
warrants on HARP loans will force the Enterprises to take on additional risk?

We anticipate that the package of improvements being made to HARP will reduce the
Enterprises credit risk, bring greater stability to mortgage markets and reduce foreclosure risks

– each of which is an important statutory mandate for FHFA.
Nearly all HARP-eligible borrowers have been paying their mortgages for more than three years,
and most of those for four or more years. These are seasoned loans made to borrowers who
have demonstrated a capacity and commitment to make good on their mortgage obligation
through a period of severe economic stress and house price declines.

Reps and warrants protect the Enterprises from losses on defective loans; typically, such defects
show up in the first few years of a mortgage and so the value of the reps and warrants decline
over time. By refinancing into a lower interest rate and/or shorter term mortgage, these
borrowers are recommitting to their mortgage and strengthening their household balance sheet,
thereby reducing the credit risk they already pose to the Enterprises. Therefore, FHFA has
concluded that eliminating the reps and warrants that may have discouraged industry
participants from taking greater advantage of HARP to-date will be good for borrowers, housing
markets, and the Enterprises and taxpayers.

Why are you encouraging borrowers to shorten the terms of their mortgage?

Borrowers who owe more on their mortgages than their homes are worth may be locked into
their homes for years and have fewer financial options until they pay down the loan balance. A
shorter term mortgage enables such borrowers to pay down the amount they owe much faster
than a traditional 30-year mortgage. Furthermore, interest rates on shorter term mortgages
usually are less than on thirty-year mortgages. The lower interest rate may provide borrowers
the opportunity to shorten the term of their mortgages without much change in their monthly
payments, and perhaps even a reduction in that payment. Such an outcome may strengthen the
borrower’s financial condition and lower the credit risk for the Enterprise that owns or
guarantees the loan. A few examples illustrate how this works:

x
Assume a homeowner currently has a mortgage on which he or she owes $200,000 and
has an interest rate of 6.5 percent – a monthly payment of $1264. If the house is worth
$160,000, the homeowner has a current loan-to-value (LTV) ratio of 125 percent.
x
If this borrower refinanced into a 30-year fixed-rate mortgage with an interest rate of 4.5
percent, the monthly payment would decline to $1013. But, by refinancing into a 30year
loan, the borrower’s loan balance will not reach $160,000 for ten full years.
x
If the borrower chose a 20-year loan term at a rate of 4.25 percent (mortgage rates tend
to be less for shorter term mortgages), the monthly payment would be $1238 ($26 less
than the borrower currently pays) and the borrower’s loan balance would reach
$160,000 in five-and-one-half years.


If this same borrower refinanced into a 15 year mortgage, assuming an interest rate of

3.75 percent, the monthly payment would be $1454 ($190 more than the current
payment), but the loan balance would be below $160,000 in a bit more than three-andone-
half years.
These examples are purely illustrative and are not meant to represent interest rates borrowers
should expect to pay. They do show that some HARP-eligible borrowers, depending on their
circumstances and priorities, may benefit from a shorter term mortgage. Since shorter term
mortgages reduce credit risk to the Enterprises because of the faster repayment of principal,
there will be no added fee for borrowers that choose shorter terms.

# # #

Multiple Signs Point to Real Estate Rebound

The past few weeks have showcased numerous signals that the real estate market is on the rise. Recently, we have reported statistics pointing to an industry turn around, including a 15 percent rise [2] in housing starts in September; a surge in builder confidence [3] in October, an increase in mortgage applications [4] and a slew of regional market [5] improvements across the country [6].
A recent Marketwatch story written by Amy Hoak points out that housing markets in the Great Plains, including those in North and South Dakota, Texas, Wyoming, Nebraska, Louisiana and Iowa, are showing the most signs of strength these days, according to a recent report from Veros, a risk management and valuation services firm.

Hoak notes that Bismarck, North Dakota., is expected to be the strongest market in the country in the year ahead, with housing values appreciating at a 5.6% clip, according to Veros. Other markets projected to be among the strongest in the year ahead include Honolulu; Fargo, North Dakota.; Harrisburg/Carlisle, Pennsylvania; and Pittsburgh. Washington, D.C., and Boston remain strong city markets.

Hoak writes that while not many markets are fully rebounding, at least a good number of them likely won’t see values fall at quite as rapid a pace as in recent years, according to the report.

“Overall, the recovery in the housing market is limited to just a few markets and is taking a long time to occur. The encouraging news is that many markets are no longer expected to be rapidly declining,” says Eric Fox, vice president of statistical and economic modeling for Veros.

The weakest U.S. markets are in Nevada, inland areas of California, Washington and Oregon, according to the report. The weakest market in the year ahead: Bakersfield, California, where foreclosures have been a huge problem.

Hoak wraps up the story with words of assurance; While prices aren’t on the upswing in many places, at least they’re not expected to fall that rapidly in the coming year.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com [7].

Have you heard about RISMedia’s Real Estate Information Network® (RREIN)? RREIN is an elite network of leading real estate companies dedicated to providing consumers and their agents with leading real estate information, and committed to the belief that Information Share Equals Market Share. The RREIN network is comprised of 70 leading brokerages, which make up 858 offices, 35,000 agents, over 250,000 closings and represents more than $70 billion in transactions. How can RREIN help your recruiting efforts and differentiate your company today? For more information, email rrein@rismedia.com [8].





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CFK or Cash 4 Keys

WASHINGTON – Oct. 24, 2011 – With distressed properties accounting for 30 percent of existing-home sales, more real estate professionals are finding a growing part of their job is offering struggling homeowners “cash for keys.”

In the “Cash for Keys” program, homeowners who are facing foreclosure are typically offered $500 to $2,500 if they agree to move out within 30 days (and leave the place clean, too). The program frees homeowners from their obligations while getting a little extra money for moving expenses and avoiding a ruined credit profile from a foreclosure. It also allows the lender to not incur the extra costs of an eviction.

The “Cash for Keys” program is expected to become more mainstream for handling short sales too, not just foreclosures. For example, Bank of America is piloting a program in Florida that pays up to $20,000 to short sellers as well as forgive their loan deficiency.

Banks are looking at offering more incentives to short sales since their losses tend to be far less than a foreclosure. For example, foreclosure properties tend to sell for 40 percent below non-comparable non-distressed properties while short sales tend to sell for 20 percent less.

“The more the inventory builds up, the more generous the cash for keys from clients,” Benjamin Barber, a senior sales specialist Green River Capital LC in West Valley, Utah, told MSNBC.com.

Real estate professionals often deliver the “cash for keys” offer to homeowners. And as more real estate professionals continue to find foreclosures and short sales an increasing part of their job description, they’re seeking extra training in how to handle such situations with homeowners and navigate the often-complex transactions.

About 21 percent of National Association of Realtors® members hold special certifications that help agents better handle distressed property – that’s up from 12 percent last year. For example, in one such designation, the Short Sale & Foreclosure Resource (SFR), real estate professionals learn how to aid buyers and sellers through the short sale and foreclosure process.

Source: “Real Estate Agents Learning Fine Art of ‘Cash for Keys,’” MSNBC.com (Oct. 21, 2011)

Obama Expected to Unveil Housing Aid

President Barack Obama is expected to announce Monday new policies to help struggling home owners, including a move that would allow borrowers to refinance their mortgage at current low rates no matter how much their home values have dropped.

The announcements are expected to unveil looser terms to qualify for the Home Affordable Refinance Program (HARP), which helps borrowers up-to-date on their mortgage payments refinance, despite a drop in their home values.

The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, also is expected to end a cap that excluded home owners from HARP who had mortgages that were higher than 125 percent of the home’s value.

Many borrowers who are underwater on their properties have been unable to refinance their mortgage since they do not have enough equity in their properties. The administration’s plan is expected to eliminate “appraisals and extensive underwriting requirements for most borrowers” who are up-to-date on their mortgage and want to refinance at a lower rate, The Wall Street Journal reports.

Obama is also expected to announce a reduction in Fannie Mae and Freddie Mac loan fees and a waiving of fees for borrowers looking to refinance their mortgages into shorter terms. Lenders could start refinancing, following the new policies, as early as Dec. 1. However, mortgages that are more than the current loan-to-value limit may have to wait until early next year, according to media reports.

Housing experts believe that allowing underwater home owners to refinance at the current low rates will allow home owners to shave hundreds from their monthly mortgage bills and possibly help avoid foreclosures and free up more household cash to spur economic recovery in other areas.

Source: “WSJ: Home Lending Revamp Planned,” The Wall Street Journal (Oct. 24, 2011) [log-in required] and “Obama to Unveil Housing Plan on Campaign Swing West,” Reuters News (Oct.

It's Time to Buy That House

U.S. house prices have plunged by nearly a third since 2006, and homeownership rates are falling at the fastest pace since the Great Depression.

The good news? Two key measures now suggest it's an excellent time to buy a house, either to live in for the long term or for investment income (but not for a quick flip). First, the nation's ratio of house prices to yearly rents is nearly restored to its prebubble average. Second, when mortgage rates are taken into consideration, houses are the most affordable they have been in decades.

Two of the silliest mantras during the real-estate bubble were that a house is the best investment you will ever make and that a renter "throws money down the drain." Whether buying is a better deal than renting isn't a stagnant fact but a changing condition that depends on the relationship between prices and rents, the cost of financing and other factors.


But the math is turning in buyers' favor. Stock-oriented folks can think of a house's price/rent ratio as akin to a stock's price/earnings ratio, in that it compares the cost of an asset with the money the asset is capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else equal.

Nationwide, the ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble, according to Moody's Analytics. The average from 1989 to 2003 was about 10, so valuations aren't quite back to normal.

But for most home buyers, mortgage rates are a key determinant of their total costs. Rates are so low now that houses in many markets look like bargains, even if price/rent ratios aren't hitting new lows. The 30-year mortgage rate rose to 4.12% this week from a record low of 3.94% last week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or "points.") The latest rate is still less than half the average since 1971.


As a result, house payments are more affordable than they have been in decades. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near its record high in data going back to 1970. The index's historic average is roughly 120. A reading of 100 would mean that a median-income family with a 20% down payment can afford a mortgage on a median-price home. So today's buyers can afford handsome houses—but prudent ones might opt for moderate houses with skimpy payments.

For example, the median home in the greater Phoenix market, including houses, condos and co-ops, costs $121,700, according to Zillow.com. With a 20% down payment and a 4.12% mortgage rate, a buyer's monthly payment would be about $470. Rent for a comparable house would be more than $1,100 a month, according to data provided by Zillow.com.

Of course, all of this assumes mortgages are available—no given now that lending standards have tightened. But long-term data on down payments and credit scores suggest conditions are more normal than many buyers think, according to Stan Humphries, chief economist at Zillow. "If you have good credit, a job and a down payment, you can get a mortgage," Mr. Humphries says. "There's more paperwork and scrutiny than five years ago, but things are pretty much like they were in the '80s and '90s."

Not all housing markets are bargains. Mr. Humphries says Zillow has developed a new price/rent ratio that uses estimates for each individual property rather than city medians, to better reflect the choices facing typical buyers. A fresh look at the numbers suggests Detroit and Miami are plenty cheap for buyers, with price/rent ratios of 5.6 and 7.7, respectively. New York and San Francisco are more expensive, with ratios of 17.6 and 17.2, respectively. The median ratio for 169 markets is 10.7.

For investors seeking income, one back-of-the-envelope way of seeing how these numbers stack up against yields for other assets is to divide 1 by the price/rent ratio, resulting in a rent "yield." The median market's rent yield is 9.3% and Detroit's is 17.9%.

Investors would then subtract for taxes, insurance, upkeep and other expenses—costs that vary widely. But suppose total costs were 4% of the purchase price. That would still leave a 5.3% rent yield in the typical market. With the 10-year Treasury yield at 2.2% and the Standard & Poor's 500-stock index carrying a dividend yield of 2.1%, rents for residential housing in many markets look attractive.

A few caveats are in order. First, not all transactions are average ones. Even in low-priced markets, buyers should shop carefully. Second, prices could fall further. Celia Chen, a senior director at Moody's Analytics, expects prices to drop 3% before bottoming early next year and rising slowly thereafter. "If the economy slips back into recession, however, we could easily see a 10% drop," Ms. Chen says.

And property "flipping" can be dangerous even when prices are rising. That is because, absent a real-estate boom, house price gains simply aren't that exciting. Research by Yale economist Robert Shiller suggests houses more or less track the rate of inflation over long time periods.

Houses aren't the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.

—Jack Hough is a columnist at SmartMoney.com. Email: jack.hough@dowjones.com

Best day to list real estate for sale

Best day to list real estate for sale: Friday
SEATTLE – Oct. 20, 2011 – After analyzing 1.2 million listings in 16 markets across the country for 21 months, Redfin found that sellers have a better chance of moving their homes off the market if they list them on a Friday.

The brokerage says the study indicates that Friday listings are 12 percent more likely to change hands within 90 days. Additionally, 94.4 percent of properties listed on a Thursday or Friday sold close to the list price; in contrast, only 93.3 percent of those listed on a Sunday or Monday sold close to the list price.

Friday listings were 18.8 percent more likely than Sunday or Monday listings to be toured, with Redfin noting that “homes listed on Fridays are the freshest in buyers’ minds when they’re making their weekend plans.” Buyers also prefer to visit the newest listings first to beat the competition.

The study’s conclusion: “More tours leads to more offers, and more offers leads to a better price and a better chance of selling.”

Source: Inman News (10/18/11)

New agents: Make floor time work

New agents: Make floor time work
CHICAGO – Oct. 20, 2011 – Agents on floor duty when prospective buyers enter the office should make them feel welcome, offer refreshments and invite them to sit down for a casual conversation.

Ask house-hunters what type of property interests them and then listen, asking questions when necessary. Agents should build rapport and trust, rather than interrogate visitors.

The first conversation is a chance for an agent to learn what kind of home is desired, any neighborhood preferences, the preferred price range and timeframe, and any must-haves.

Agents should avoid buyer questionnaires because they tend not to work – buyers generally don’t know yet what they want beyond a few must-haves. Questionnaires could also create unrealistic expectations or lead an agent to overlook a home that the buyer might have liked.

Source: Realty Times (10/20/11) Allan, Jennifer

Court: Owner Never had Legal Ownership of Foreclosure

The Supreme Court in Massachusetts ruled that a home owner who had purchase a home in foreclosure did not have legal ownership of the property because the bank failed to properly process the title when originally foreclosing on it.

“The decision by the Supreme Judicial Court casts a cloud over the legal ownership of any properties in Massachusetts where banks didn't properly convey title when foreclosing,” The Wall Street Journal notes in an article about the case. “The problem has gained attention nationwide because of banks' use of ‘robo-signing’ and other dubious practices that may have broken chains of title on foreclosures.”

The court’s ruling follows on the heels of an earlier court decision that had voided a foreclosure after banks couldn’t prove they owned the mortgage when it started the foreclosure process. The most recent “ruling took that decision one step further by finding that sales of bank-owned properties with clouded title were invalid, even after an unwitting third-party buyer later bought the bank-owned property,” The Wall Street Journal notes.

The case centered on a home purchase by Francis Bevilacquain 2006 of a foreclosure in Haverhill, Mass.

Any home owner who bought a home with a "tainted foreclosure in their chain [of title] is going to have to do something to give clean title" whenever selling or refinancing the home, Jeffrey Loeb, Bevilacqua’s attorney, told The Wall Street Journal. "That's actually what's scary. Most people don't know they have this problem."
Daily Real Estate News | Wednesday, October 19, 2011



Source: “State Rules on Foreclosure,” The Wall Street Journal (Oct. 19, 2011

Experts foresee rising Miami-Dade housing prices

Residential real estate experts foresee a boost in property values due to international buyers growing increasingly interested in South Florida.
Still, with a lack of inventory, financing hurdles and more foreclosures on the horizon, the real estate industry is far from its 2005 market peak.
The state of the residential market was discussed at the fourth annual Residential Real Estate Outlook Luncheon on Friday at the Westin Colonnade in Coral Gables.
The luncheon and panel discussion were hosted by the Coral Gables Chamber of Commerce in partnership with the Miami Association of Realtors and Miami Today. Michael Lewis, Miami Today's publisher, served as moderator.
"You can see that our monthly closings and sales are inching up," said Patrick O'Connell, senior vice president of new business development for EWM and a panelist. "All the numbers are going in the right direction now, and that's what we want to see."
According to a market report by the Miami Association of Realtors, as of August, condominium sales are up 53% from one year ago and single-family home sales are up 49%. Also showing a favorable number is the residential inventory, which is down to 15,405 from last year's 25,679 units on sale. The industry generally considers a six-month supply of residences on the market to be optimal; larger numbers tend to drive down prices.
In Florida, 31% of sales are to international buyers. In South Florida, 60% of buyers are foreign nationals, said Jack Levine, chairman of the board of the Miami Association of Realtors and a panelist. Nearly one in three international transactions in the US is in Florida, and nearly one in three international transactions in Florida is in the Miami and Fort Lauderdale area.
"The buyers are coming in here and they want to buy, and the pricing is great," Mr. Levine said "The main problems I see are in the financing side of it."
However, financing doesn't seem to be a big problem for many international buyers, who tend to pay mostly with cash. Mr. Levine said foreign buyers also tend to buy residences at the higher end of the market.
Panelists agreed that the number of buyers from Brazil is increasing significantly. On average, Brazilian buyers pay about 85% in cash and only need financing for the remaining 15%, with a median purchase of $215,000, according to the market report.
Many of these international buyers are purchasing foreclosed properties as investments to rent them to others, Mr. Levine said.
"The rental market is on fire," he said.
Around 53% of international buyers are from South American countries, including Venezuela, Brazil, Argentina and Colombia. Residents of Canada, France and Italy also represent a large number of international buyers.
Lorenzo Perez Jr., chief executive officer of Premier International Properties Inc., emphasized the need for realtors to reach international buyers through social media. With the majority of social media users not being from the US, he said, the web can be an effective way of reaching potential buyers.
Because of these international buyers, panelists predict that next year property values will rise.
"We do foresee an increase in values in properties," said Mayelin Carbajales, vice president of Mercantil Commercebank's residential lending sales department. "It all depends on the market. Currently, in Dade and Broward and Palm Beach, we are seeing an increase in value because of the foreign national buyers that are buying there."
A major problem currently facing the residential real estate market is having limited inventory.
Mr. Perez said there is a demand for properties, but there hasn't been much inventory placed out there. High numbers of bank-owned real estate properties continues to be a problem that could continue to hurt South Florida's real estate in the upcoming year.
"From a banking perspective, we are going to see an increase in foreclosures," Ms. Carbajales said. "We are also seeing distressed borrowers."
According to Mr. O'Connell, the universal message from his contacts in the banking industry is that a lot of bank real estate owned properties are in the pipeline. He said real estate owned inventory in the market is currently down 50% to 60% from the peak.
In the luxury homes market, he cited a 30% decrease in inventory.
Mr. Levine said he expects the real estate owned inventory to be "gobbled up as soon as it comes back up in the market." The question remains when these properties will be listed again on the market.
Also hurting the real estate industry are banks being more hesitant to lend than in the past.
In coming months, banks are going to require higher down payments and increase credit score requirements, Ms. Carbajales said. Overall, she predicted, standards across the country for borrowers will be raised.
With the number of foreclosures still high, banks are continuing to be concerned about the risks associated with lending, she added.
The panelists said they don't expect foreclosures to slow down in 2012. But on the bright side, they anticipate that interest from international buyers will remain strong, increasing the value of properties.
"We aren't able to predict with crystal balls," Mr. Levine said. "We try to pick up trends, but it's really, really hard, especially because there are so many moving variables."

By Patricia Hoyos

home builder confidence reaches highest level since last spring

Home builder confidence has improved significantly across the board this month, according to the National Association of Home Builders/Wells Fargo Housing Market Index released today, reaching its greatest height since April 2010.

The index, which surveys home builders' confidence on a monthly basis and measures it on a 1 to 100 scale where any number over 50 indicates more builders view conditions as good than as poor, gained 4 points and hit 18. It had been hovering between 13 and 17 since last spring. The index measuring sales conditions also increased 4 points to reach 18, sales expectations rose 7 points to 24 and the index measuring prospective buyer traffic jumped 3 points to 14.

"Builder confidence regained some ground in October due to modest improvements in buyer interest in select markets where economic recovery is starting to take hold and where foreclosure activity has remained comparatively subdued," said NAHB Chairman Bob Nielsen. "That said, confidence remains quite low as builders continue to confront overly restrictive lending policies that are discouraging prospective buyers, problems with new-home appraisals and widespread uncertainty regarding federal support for homeownership."

Regionally, builder confidence was best in the West, where the index gained 9 points, reachING 21. The South's index went up 4 points to reach 19, while the Midwest's jumped 4 points to 15, the same point at which the Northeast's index has remained constant for the last two months. -- Adam Fusfeld

South Florida residential inventory

Bill Gates renting Wellington home

Microsoft's Bill Gates, the wealthiest person in America, will pay $600,000 to rent a house in Wellington this year, according to a report by Gossip Extra. The rental runs from December to May, sources said. The house, which is located at 13808 Fairlane Court, has five acres and is within walking distance of the Palm Beach International Equestrian Center, a winter polo haven. The 7,352-square-foot home is listed for sale at $12.9 million.

Buyers are scrambling to buy single-family

Scramble for under-$300,000 homes chases a shrinking supply

By Marilyn Bowden
Buyers are scrambling to buy single-family homes and condos priced under $300,000, experts say, before shrinking supply puts an end to the buyers' market.
"The inventories of single-family homes and condos for less than $300,000 have dropped dramatically over the past year," said Ron Shuffield, president of Esslinger Wooten Maxwell Realtors, known as EWM. "Two-thirds of sales are still foreclosures and short sales, and that inventory is drying up."
Inventory has decreased more than 65% since August 2008, when sales began rising, and 45% since the beginning of this year, said Jack H. Levine, president of Levine Realty and chairman of the board of Miami Association of Realtors.
"Sales are up and inventory is way down," said Melissa Rubin, broker and vice president at Platinum Properties. "We are bucking the trends for all figures."
Mr. Shuffield said 3,053 single-family homes priced under $300,000 are listed on the multiple listing service, or MLS, for Miami-Dade County. The MLS lists homes for resale.
"For the past quarter, they've been selling at an average of 722 a month," he said. "That's a four-month supply, which is low."
In general, Realtors consider six to nine months of inventory ideal.
Of those 3,053 houses, Mr. Shuffield said, 56% are listed as foreclosures or short sales. A year ago, distressed properties accounted for 53% of the 4,623 homes under $300,000 on the resale market.
"The inventory of all homes available right now for less than $300,000 represents 52% of the inventory," he said, "and 73% of sales."
The under-$300,000 condo market tells a similar tale, Mr. Shuffield said. At the end of August, 5,107 were on the market, selling at an average of 1,108 a month — a five-month supply. That's a steep decline from the 10,488 units for sale a year ago, when the sales rate of 1,061 represented a 10-month supply.
About 54% of the entire resale inventory of condos is priced under $300,000, he said; 81% of all condo resales fell into this price category.
"We're down to about a 30-day supply of foreclosures," Mr. Levine said, "and they are selling almost faster than they can come on the market. One property that came on the market recently had 100 offers. A lot of people are chasing these properties because the prices are so good."
Cash buyers who had been holding out are now coming to the fore, Ms. Rubin said, and fighting to get these properties while they last.
"Many are offering cash sight unseen," she said.
What's keeping prices from escalating more quickly, brokers agree, is uncertainty about the "shadow market," the number of foreclosed properties held by lenders that haven't yet been offered for sale.
"We know there are still a lot of foreclosures lurking out there that haven't come to market yet," Mr. Shuffield said. "Banks have really slowed in sending them to us.
"The foreclosure freeze at the end of last year changed the way banks look at their distressed property. Now they're proactively working with homeowners to short-sell rather than foreclosing on them."
Ms. Rubin called the shadow market the missing link in the equation.
Another major factor, Mr. Levine said, is the question of financing.
"It's very difficult to get through the underwriting and appraisal process," he said, "and so about 60% of sales are to cash buyers.
"We're starting to see seller financing coming back to the marketplace."
International buyers are stepping into the breach. Mr. Shuffield said the international market continues to drive this price range as well as others, accounting for more than 60% of all sales.
"We're on track this year," he said, "to sell more than any other year in our history."

To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.

U.S. real estate cheap

Economists may still be calling U.S. real estate overpriced, but property in the nation's biggest cities is still relatively affordable compared with the rest of the world, a chart compiled by credit management system Credit Sesame shows (see chart above). At an average of $1,068 per square foot, Manhattan homes seems cheap compared to Paris, which costs an average of $3,287 per square foot for a residence, according to Credit Sesame's data. Also more expensive than Manhattan are cities such as Oslo, Luxembourg, London, Hong Kong and Beirut. Living in Houston, Texas is much more affordable than living in Al Kut, Iraq, $54 per square foot compared to $262 per square foot respectively. Miami comes in at $182 per square foot. -- Katherine Clarke

Bank of America "Florida Enhanced Short Sale Relocation Assistance

It appears that Bank of America is finally realizing that a short sale is a viable option for avoiding foreclosure. For a very limited time they are offering "enhanced' relocation assistance to help motivate homeowners to engage in a "pre-offer short sale".

An additional benefit to this program is the deficiency may be waived for the homeowner. It is not entirely clear that it will be waived as the letter is a little ambiguous. While paragraph one states it may be waived, the small print in the final paragraph states, "Even if the homeowner receives relocation assistance, Bank of America, N.A., and their successors and assigns may reserve and retain the right to pursue collection of any deficiency following the completion of the short sale, ..."

The eligibility criteria is as follows:
• Homeowners with property in Florida.
• Short sales initiated without an offer between Sept 26 and Nov. 30, 2011.
• The customer will have to be eligible for one of the without offer programs such as the HAFA program or Bank America's proprietary program (specific investor participation and eligibility criteria do apply to these programs).
• Successful closing of the eligible short sale by Aug. 31, 2012.
• Minimum relocation assistance is $5,000 and maximum is $20,000, with the specific amount calculated based on the unpaid principal balance. (I was told, informally, that is based on 5% of the unpaid principle balance).
The following exclusions apply:
 Ginnie Mae, FHA, VA and USDA loans are ineligible for participation.
 Lot loans are not eligible.
 Properties outside the state of Florida are not eligible.
 Short sales initiated with an offer are not eligible for the enhanced relocation assistance

How to Turn FSBOs into Clients with One Simple Question

Now, like we promised, here is part 2 of a 2-part series by the world-class real estate trainer and coach Grant Dolby.

The best prerequisite for pre-qualifying a FSBO is knowing when they need to or plan to move out. Once you know this information, ask them this very powerful question:

“What are you going to do if your FSBO efforts come up short? And what kind of affect is this going to have on your job transfer, wedding day, etc.?”

This brings their problem to light. They'll start discussing all the terrible things that could happen:

•paying 2 mortgages
•selling a house from out-of-state
•the distress they'll feel having to do this all alone
Quickly they will see the value in using you as their agent and suggest to YOU that you help them. They’ll even think they thought it up themselves...and all you did was ask them a simple question!

If the FSBO is highly motivated, they won’t last long in the market — maybe one to two weeks.

Now, here are a few key requirements when dealing with FSBOs:

2 Lethal Mistakes Realtors Make When Prospecting FSBOs

There may be more than one way to burn a FSBO, but these two rank up there as the deadliest and most common:

1.Emphatically disagree with a FSBO
2.Become visibly angry with a FSBO
Here's what you need to do to avoid burning FSBO leads:

1.Keep your emotions in line (stay calm, slow to anger). Listen, listen, listen.
2.Be agreeable. Say things like, “I can appreciate that, I can tell it’s very important to you.”
This may seem obvious, but it's common sense that some of the brightest minds in real estate seem to miss! If you master these two principles, I don't doubt that in no time your listing inventory will magically grow and you'll be converting more and more FSBOs to listings!

Six Hypnotic Suggestions to Turn FSBOs into Clients

In the next report, you are going to discover 6 ways to get FSBO's behind the 8-ball so that they have no choice BUT to use you as their agent...using information that a lot of coaches and trainers don't even know exists

Cash for keys" aids home borrowers, investors

Jon Daurio, chief executive officer of mortgage investor Kondaur Capital Corp., recently offered a $4,000 check to Barry Culver for the deed to his Bryan, Ohio house.

With the exchange, and a pay-off to a second-lien holder, Culver was freed of $120,000 in crushing mortgage debt on the house, said Daurio, who had bought the right to cut the deal when he purchased the mortgage months earlier. The house, after repairs, is now on the market for $47,500.

"It got me out of a bind," said Culver, a former Kmart employee who has since relocated near his in-laws in Tennessee where job prospects are better. "I got a little cash out of it and was able to pay off other stuff I owed."

Such 'cash-for-keys' offers are common for Orange, California-based Kondaur, one of the largest players in the business of buying and resolving distressed loans for profit. The business is growing more popular, with volumes of loans for sale at their highest since the founding of Kondaur in July 2007, said Daurio, a veteran of the subprime lending industry.

At DebtX, a Boston-based loan exchange, the number of bidders on pools of loans is up 25 percent since last quarter.

DEALS ARE INCREASING

Owners of bad loans are increasingly making deals with borrowers to avoid a foreclosure, which tends to reduce returns for investors and place a black mark on the homeowner's credit. Lawmakers and regulators are becoming more accepting of these solutions even though they mean the borrower loses the home.

The trend comes after more than two years of loan modification programs and foreclosure moratoriums that have produced mixed results, with many homeowners ineligible or defaulting again.

Where a modification isn't feasible, the U.S. Treasury in April will begin paying borrowers who agree to a deed-in-lieu of foreclosure or short sale, where a home is sold for less than outstanding debt. Unlike most modifications, those actions erase excess debt and reset home values, solving the problem of underwater loans that are a top cause of defaults.

U.S. modification efforts to date have been "tragic" in delaying housing and economic recovery, Daurio said.

"All you are doing is delaying depreciation of the houses," Daurio said. "You are not preventing it by keeping people in a house that they can't afford."

More than 11 million properties with mortgages are "underwater," according to First American CoreLogic. Efforts to expand use of principal forgiveness haven't caught on.

DELAYING THE INEVITABLE

Foreclosures have been stalled on more than 1 million bad loans since the U.S. Home Affordable Modification Program was announced a year ago, resulting in higher costs and losses to investors, according Moody's Investors Service.

This is delaying an inevitable clearing of the housing market that is needed for a lasting rebound, analysts said. A pent-up "shadow inventory" from failed modification efforts could destabilize the market in 2010, they worry.

"You are preventing the orderly transfer of a home from those that can't afford it to those that can afford it," said Rod Dubitsky, a global structured finance specialist at Pacific Investment Management Co. in Newport Beach, California.

The ability to customize loan workouts and earn potentially huge profits are enticing investors to the market, where loans are commonly sold at 40 cents to 60 cents per dollar of principal. Discounts give investors more room to work with borrowers than banks working to mitigate their loss, said Kingsley Greenland, chief executive officer at DebtX.

Investors generally look for a quick workout since it costs them to carry the loan or the property, said Jeff Freud, founder of LoanMarket.net, in Irvine, California.

Distressed whole loans are just a slice of the total mortgage market, however. Many loans are tied up in securities, and banks now with adequate reserves are arranging deed-in-lieu and short sale agreements themselves.

Mountains of cash chasing a limited field of loans has buoyed prices, but that is reducing opportunity for funds, said Louis Lucido, a principal at Los Angeles-based DoubleLine. But that could change if the Federal Deposit Insurance Co. more rapidly unwinds the assets of its failed banks, he said.

New entrants to the market tend to be small investors, who hold less than 100 loans at any one time, analysts said.

Among a pool of loans acquired by Dean Engle, a real estate investor in San Francisco who teaches others how to get a start in the business, was a foreclosed home in Greenwood, Missouri. It was still occupied by the former owner, who had no money to find a new place to live.

Engle told Ellen Brewood, a local agent to offer the former owner $5,000 to move out, and avoid a lengthy eviction. The house was vacated within five days. After 15 days on the market, it had offers above the $139,000 asking price.

"He wouldn't believe it, that investors wanted to pay him," Brewood said of the former owner.

Al Yoon - Analysis NEW YORK
Fri Mar 12, 2010

(Reuters) -

(Reporting by Al Yoon; Editing by Kenneth Barry)