Smart Real Estate News & Commentary by Chris McLaughlin, March 31, 2010
Filed under: become a real estate investor, creative real estate investing, flipping real estate, make money real estate, real estate investment, real estate marketing
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The Return of the Short Sale Sensei: Ninja Negotiation at Its Best
She was one them.
She’s dined with them. Had drinks with them. And went over to birthday
parties at their home. If there’s a secret that loss mitigators have, she knows it. She was one of them, after all…for 15 years.
Until now.
Join us for the Return of the Short Sale Sensei and learn how to utilize
her negotiation services Thursday at 3 PM ET, NOON PST:
https://www2.gotomeeting.com/register/167885371
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Mortgage Purchase Applications Increase
The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 26, 2010, increased 1.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1.5 percent compared with the previous week. “Purchase applications have increased over the past month, and are now at their highest level since last October when many homebuyers were rushing to get loans closed before the expected expiration of the homebuyer tax credit,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “We may be seeing a similar pattern now, as the extended version of the tax credit ends next month.”
The Refinance Index decreased 1.3 percent from the previous week and the seasonally adjusted Purchase Index increased 6.8 percent from one week earlier. This is the highest Purchase Index since the week ending October 30, 2009. The unadjusted Purchase Index also increased 6.8 percent compared with the previous week and was 9.3 percent lower than the same week one year ago. While both conventional and government purchase indexes saw increases this week, the government purchase index and the government share of purchase applications are at their highest levels since October 2009. The government share of purchase applications is currently 47.2 percent. The four week moving average for the seasonally adjusted market Index is up 2.2 percent. The four week moving average is up 5.4 percent for the seasonally adjusted Purchase Index, while this average is up 0.9 percent for the Refinance Index. The refinance share of mortgage activity decreased to 63.2 percent of total applications from 65.0 percent the previous week. This is the lowest refinance share recorded in the survey since the week ending October 23, 2009. The adjustable-rate mortgage (ARM) share of activity increased to 5.2 percent from 4.8 percent of total applications from the previous week.
More jobs lost in the private sector
Automatic Data Processing, which processes paychecks for one in every six U.S. employees, said private-sector employers cut payrolls by 23,000 jobs in March, marking the smallest monthly decline since February 2008. The decline surprised many economists. A consensus of economists surveyed by Briefing.com had forecast a gain of 40,000 jobs in the month. The number of job cuts in February was revised to a loss of 24,000 jobs from the previously reported 20,000. The service sector reported an increase of 28,000 jobs in March, marking the second consecutive monthly increase and the highest job growth since March of 2008.
However, that growth was offset by a loss of 51,000 jobs in the goods-producing sector and a drop of 9,000 manufacturing jobs. Large businesses, those with 500 or more workers, saw employment decline by 7,000 jobs, while small-size businesses with fewer than 50 workers had a drop of 12,000 workers. Employment among medium-size businesses, defined as those with between 50 and 499 workers, declined by 4,000. Many economists view the ADP report as a proxy for the government’s monthly jobs report, which comes out Friday. That report is expected to show a gain of 190,000 jobs in March, compared to a loss of 36,000 jobs in February. The unemployment rate is expected to remain unchanged at 9.7%. Some economists may revise their estimates in light of Wednesday’s report.
DSNews.com – CMBS Delinquencies Increase to 6%
The delinquent unpaid balance for commercial mortgage backed securities (CMBS) increased to $47.82 billion in February, soaring $1.87 billion from January, according to the latest Monthly CMBS Delinquency Report released Sunday by investment rating agency Realpoint, LLC. The overall delinquent unpaid balance was up almost 300% from February 2009, when only $11.98 billion of delinquent unpaid balance was reported. In addition, it was more than 21 times the low point of $2.21 billion in March 2007. The distressed 90-plus day, foreclosure, and REO categories grew in aggregate for the 26th straight month—up 9% from January and 420% higher than the same month in 2009. Overall, the total unpaid balance for CMBS pools reviewed by Realpoint for the February 2010 remittance was $797.06 billion, down slightly from $797.3 billion in January. The resultant delinquency ratio for February jumped to 6%, up from 5.76% reported one month prior. This was more than four times the 1.43% reported one year ago and more than 21 times the Realpoint-recorded low point of 0.283% from June 2007.
Auto sales up
All of the top six selling automakers are expected to post sales increases in March from a year earlier except for Chrysler. Automakers report March U.S. sales on Thursday. Most forecasters late in March expected U.S. auto sales of 12 million to 12.5 million vehicles in the seasonally adjusted annualized rate (SAAR) economists use, up from an anemic 9.7 million in March 2009. “I think we could probably surpass a 13 million SAAR for the month,” Autoconomy.com analyst Erich Merkle said.
Merkle said March sales could be supported by Toyota’s incentives, plus pent-up demand from the U.S. recession and snowy weather in the Northeast during February that had hampered sales across the industry. Toyota posted a 16% sales drop in January from the year-earlier month and a 9% drop in February, pressured by production halts, stop-sale orders of some of its best-selling models, congressional hearings and negative news reports regarding the automaker’s quality and safety. Ford’s sales are expected to rise 40% year-on-year, Toyota sales 33%, and GM sales by 31%, IHS Global Insight analyst Chris Hopson said.
Mortgage rates on the rise
Conventional mortgage rates continued to rise in February, according to the Federal Housing Finance Agency’s (FHFA) monthly rate report. The average interest rate entered on a conventional 30-year fixed-rate mortgage (FRM) of $417,000 or less ticked up 3 basis points (bps) in February to 5.13%, from 5.1% in January. The average rate on 15-year FRMs rose 11bps to 4.65% in February, FHFA said. The average contract rate on all loans — fixed- and adjustable-rate mortgages — rose 4bps to 5.03% in February. FHFA calculated these average rates based on purchase-only mortgage loans closed during the February 22-26 period. Because interest rates are typically determined 30-45 days before loan closing, these rates represent market conditions prevailing in mid- to late-January. In a separate report, FHFA said that in January the national average contract mortgage rate for the purchase of previously occupied homes was 5.05%, up 4bps from 5.01% in December. This rate is commonly used to adjust ARM rates and previously was the only index rate that federally chartered savings and loan associations could use as an adjustable-rate mortgage index in the early 1980s, FHFA said.
Now on to our real estate investing education section …
Short Sale Secrets for Buyers Agents
Pssst….want in on the secret other buyers agents are using to secure a short sale property on behalf of their client? It may not be as full of pitfalls and problems as you might think. While many agents avoid short sales at all costs, others have learned to tap into the incredible profit potential provided by short sales. Keep reading to find out how other agents are able to obtain the best deals – and the best client referrals – despite a tough market.
1. Opportunity Not Opposition. The first secret to success is to view short sales as an opportunity rather than voice opposition. Yes, short sales might require a different operating strategy than used in the past but remember, as a buyer’s agent you have a fiduciary obligation to help your client obtain the best property at the right price. short sales, REO’s and foreclosures represent significant savings to those that understand how to tap into this market trend.
2. Pre-Qualify the property & The Person! Most buyers agents realize the need to prequalify the prospective buyer before spending a lot of time and effort with any one individual but how often do you take the time to pre-qualify the property? Make sure the property and the prospective buyer are both in a position to close the deal.
3. Use Contingency Clauses Wisely. Find out which work and which make people walk. Not sure? Join one of our free webinars to find out how to expedite the contract, change the MLS listing so other offers are no longer entertained or simply get the required information to move ahead.
4. Take a Peek at the Pending List. Here is a gem of a quick little tip that reduces the time and effort required to bring in big bucks…perform a search on all the pending and/or contingent short sales in the target area then call the listing agents to determine if they still have a buyer on board. The closing ratio is roughly 1 to 3 so more than half the time, the short sale is in need of a replacement buyer to seal the deal. Focus your efforts on those properties that have just obtained approval or are in the last stage of doing so…in no time at all word will get around that you are an agent able to get results in the short sales arena.
5. Blast from the Past. Take time to research expired or withdrawn records in order to avoid working with listing agents with an excessive number of failures. Instead, focus your efforts on those with a track record of closures.
See you at the top!
Chris McLaughlin
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Copyright Loss Mitigation Institute LLC 2009.
All Rights Reserved.
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About the author:
Chris McLaughlin is widely known as America’s top
real estate Attorney and investment Consultant.
* As the top Florida foreclosure and pre-
foreclosure expert, he oversees more than
100 short sale & REO closings each month
* Long-time authority on real estate investing
and rapid reselling of distressed homes. Owns
portfolio of nearly 100 high-value, high-profit
properties
* Owner of one of Florida’s largest real estate firms,
running 4 different offices, supporting over
400 agents, uniquely positioning him to help
thousands of investors make money in the
biggest market opportunity ever!
* Highly sought-after speaker, consultant, and
seminar leader for current trends and hot topics
in real estate Investing, Entrepreneurship, and
Wealth Building
* Follow me on Twitter: http://twitter.com/mclaughlinchris
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