Rosen Properties Real Estate Blog
Banks vs. Trees
July 16th, 2010I heard a story today about a real estate investor working on a rehab in a state different than where he lived, I’m not sure but I think it was Florida. The state is irrelavant to my story but the law mentioned made me think.
This investor wanted to cut down a tree to improve his curb appeal until he found out that local law required anyone cutting down a tree is then required to plant 3 trees… Wow, stiff but I like it! Needless to say the investor opted to simply trim the existing tree.
I really think that banks, in particular those banks working on foreclosures, short sales and loan modifications, should be required to plant 3 trees for every file worked on and not approved. I’m currently working on 3 loan modifications. I’ve had to refax the same documents multiple times because… maybe the T’s weren’t crossed correctly? Then I call back the following week to follow up only to find out that I have to resubmit UPDATED docs because the first set is now outdated.
These institutions should be held accountable somehow for their wastefull practices and pure neglect for our natural resources not to mention the huge waste of the consumers resources… it is simply idiotic! I have confronted them about this and they reply that they are completly electronic… they obviously don’t realize that the consumers are not typically as electronic as a billion dollar bank… we need to print a hard copy in order to fax it in! And, they won’t except emails you have to fax it in!
They should have to plant 3 trees for every file they start and don’t approve!
Has Your Real Estate Agent Failed To Deliver?
May 24th, 2010When you told your real estate agent that you needed to sell your house, you probably heard great stories about how it would sell in no time, at a great price.
But, that’s NOT how it’s worked out. Instead of hearing great stories, now you’re hearing great excuses for why your realtor hasn’t sold your house: “It needs more bedrooms; you need to come down in price; the school district isn’t the best”, etc.
Contact Us Now! We’ll act quickly to give you a real solution.
We Can Buy Your Home Fast, Your Realtor Can’t
At this point, what you really need is to sell your house now. That’s where we come in: We aren’t interested in listing your house again; we want to buy it! We are professional real estate investors – not real estate agents. We’ve built our reputation over the years for quick action and fair prices. We can often give you even more than one solution to your problem.
You just want an honest, fair way to sell your house, without realtor excuses. That’s exactly what we’ll provide.
Contact Us | Complete the Seller Request Form
Freddie Mac’s New Take On Short Sales
May 6th, 2010Short Sale Flip Fraud – The newest problem in real estate is not yet a law or an official policy, but it is definitely going to create issues in the market. The news from Freddie Mac on short sales could cause serious legal and practical issues for real estate investors.
The organization posted a new educational article on April 16, 2010 titled “Emerging Fraud Trends: Short Payoff Fraud.” Essentially, the article stated that a short payoff or a short sale can be considered fraudulent if the lender agrees to a short sale that already has a third-party buyer in place that is paying a higher amount than the agreed-upon loan payoff amount. This is a serious yellow flag for short sale investors who make their living negotiating good short sale deals with banks, then selling their new properties to other buyers for a profit.
The article described scenarios and red flags for short sale payoff fraud. The scenario revolved around a short sale facilitator who set up a deal with a lender to purchase a home worth 80K for 70K while the lender took a 30K loss. The facilitator does not let the bank know that he already has a buyer ready to pay 95,000 for the property. The second the facilitator puts his profits in his pocket, Freddie Mac considers him guilty of fraud because his negotiations caused Freddie Mac to ultimately take a “larger than necessary” loss on the sale of the property.
The article urges buyers, sellers and lenders to be on the lookout for short payoff fraud red flags. These flags include sudden borrower default, a borrower who is current on other obligations and the buyer of the property being an entity rather than a person. The article also tells readers to keep an eye out for resale options in their purchase agreement.
Everyone involved in a short payoff is encouraged by Freddie Mac to report potential short payoff fraud the second they become aware of a second purchase contract for a higher price. This may not yet be a law, but the signs are not good when Freddie Mac has posted such a direct attack on short sale investors.
Your Most Valuable Asset
April 18th, 2010In business your most valuable asset is your reputation. If people know that they can count on you they are more apt to do business with you. It is the leverage you can use to propel your business. But just like financial leverage, it cuts both ways. As much as a good reputation helps, a poor one hurts.
There is one word that sums it all up: INTEGRITY
The dictionary defines it this way: Integrity – adherence to moral and ethical principles; soundness of moral character; honesty.
Experience comes with time. A track record of success isn’t obtained overnight and wisdom comes by learning from your mistakes. Integrity is the one thing you can have right now. There is no class to take, no test to pass. You can have it when you get out of bed in the morning. However, you must choose to have it.
Real integrity is doing the right thing, knowing that nobody’s going to know whether you did it or not. - Oprah Winfrey
This is a portion of a blog post by Richard Warren
Fed Stopped Buying Mortgages
April 16th, 2010As of March 31, 2010, the Federal Government stopped buying mortgage-backed securities.
Which means…?
Well, the way these mortgages are often bought and sold is by being bundled together into mortgage-backed securities. Institutions such as pension funds, hedge funds, banks and investors then buy these large pools of mortgages. Once the financial crises hit and the sub-primes began collapsing, it became harder and harder to sell these pools.
Compounding the problem, as the market began to slide, these same institutions began racing to sell off their packages which threatened to make the recession even worse.
In an effort to slow the values decline, the federal government began buying up these packages. By early March 2010, the Fed and Treasury together became the largest mortgage-backed security investor in the world. They have purchased more than $1.2 trillion dollars worth even though, as with any home loans, they come with some risks.
So far, their efforts to control the slide have worked. Interest rates dropped for millions of homeowners which, of course, helps our economy. It appears that the government is currently making money on the loans they hold.
So, what happens now that they’ve stopped buying? We’ll soon find out. Predictions are that, to begin with, interest rates will climb.
Many analysts believe that, without this government intervention, the housing market would have “imploded” and we could have actually entered into a financial depression.
Bottom line, should we be grateful for the governments efforts to prop up our housing market?
Opinions?
Selling Your House Because Of Fire Damage?
March 16th, 2010One moment your property is fine, and the next it’s up in flames. Even if everyone got out OK, it’s still a tremendous shock. Your property is ruined, your possessions destroyed.
If that’s not enough, now you have to deal with city officials, insurance adjusters, contractors that never show up.
Contact Us Now! You’ll be pleasantly surprised at the solutions we can present to you for your damaged home.
Help For Your Damaged Home
If you’re seriously considering selling your house, you need someone who can look beyond the fire damage, and see the value that you once had in the property.
We’re professional investors that can do just that. We know how to fix damaged properties for far less money than what contractors will tell you–and we buy houses for more than you thought possible.
Contact Us | Complete the Seller Request Form
Why Short Sales Suck – Smoke and Mirrors
February 15th, 2010I couldn’t agree more with my friend Duncan so I had to re-post.
From Duncan at http://www.duncanwierman.com/blog/
Many real estate information gurus today are touting the benefits of short sale investing. In a short sale, the investor is taught to submit an offer far below its current value. It’s up to the investor to influence the agent doing the BPO through documentation showing why his offer should be accepted. Virtually always, there is an impending foreclosure against the home and it’s alleged that it’s in the lender’s best interests to sell it off asap in order to cut losses. The home owner’s financial hardship and the difficulty with selling off the property without a deeply discounted price are also argued for.
Many gurus are promoting the short sale investing method as a way to create fast cash. Wrong. A short sale deal can take anywhere from 90 to 180 days. This is because of, and the exact time frame is dependent upon, the need for negotiations between the lender and the investor . The quality of the documentation also comes into play, reviewing the HUD , etc. Nevertheless, as already stated, we have been hearing a lot about the beauty of the short sale. It is supposed to be a quick and easy way to make a lot of money even if you have very little skill in real estate selling. But the truth of the matter is a far cry from that often-sold fantasy.
Real estate short sales suck. They suck for many reasons, and those who tout them often know this. There is a whole industry of fraud that has emerged around the real estate short sale. This fraud is used to get a lot of publicity and attention for a real estate agent who needs to find new business. The agent will deliberately list a price so low that the lender, who was not even consulted, will never agree to it, and it is probably inaccurate anyway; and the home will not sell. The listing agent knows the home will not sell for that price, but she gets all kinds of new contacts in the process of people finding that out.
But another reason that real estate short sales suck is because they are made out to be easy when in fact they require specialized knowledge to do right. Only a relative few real estate agents really understand how to do them. If you are trying to break into the real estate flipping industry, you will need the help of area real estate agents. Many of them, hungry for your business, will insist that short sales are pretty easy, that they have good relationships with the lenders and appraisers concerned, that they know exactly what they are doing, and other all-too-typical slick salesman’s lies.
If a real estate agent is not highly experienced in or specially trained in REO properties and short selling, and if they cannot prove it, you want to stay away from them, if you still insist upon getting into short sales. Then there is the fact that many agents will never tell you that most short sales don’t close–for anyone. Agents who know this but who tout short sales as a road to riches often engage in another sly trick. They use short sale listings to start a bidding war.
The initial low price attracts many interested buyers, but there will be a clause in the contract that says either party may pull out of the agreement right up to the minute before closing, for any reason and without any notification. Allegedly, this is to protect the buyer from the lender suddenly changing their mind, an unexpectedly high final appraisal, etc. But a sly agent will use this to his advantage and tell the current buyer and their agent that a “new, better deal” has just been offered and the lender wants to see a new bid from the buyer who thought they were about to close the deal. Wise, honest real estate agents will pull their clients out of the deal entirely and not let them get involved in a bidding war. A short sale bidding war is a fool’s game because not only do you suddenly start spending much more money than you initially thought you would and prepared yourself for, but you also are at the mercy of the lender. In a short sale, it is the lender, not the seller, who has the final word on any deal!
There are, however, some great short sale deals that get closed. What characterizes these deals? First, a specialized agent who knows precisely how to do that documentation and make a convincing argument, based on real evidence, that the lender should short sell the property for such and such a price. This agent will also list a short sale price that the lender has said they will accept beforehand. Furthermore, it’s even better if the property in question is a bank-owned property. If this gets listed, it means the lender really is interested in selling the property.
All in all, getting involved in real estate short sales will require you to go through hundreds of leads to make just a few deals, and those deals might fall through at the last minute. It’s simply not worth the time and effort for most people.
CALL TO ACTION – HUD issues scary rules against owner financing
February 13th, 2010The following information is extremely important!
HUD Issues Problematic Rules Interpreting SAFE Mortgage Licensing ACT
HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator. The proposed HUD Rules interpreting the federal SAFE mortgage act can be viewed at www.regulations.gov Use the search parameter “HUD” and the keyword “safe mortgage”. Please review and comment regarding the impact of this broad interpretation of the law.
“In addition to establishing HUD’s responsibilities under the SAFE Act, through this rule, HUD proposes to clarify or interpret certain statutory provisions that pertain to the scope of the SAFE Act licensing requirements, and other requirements that pertain to the implementation, oversight, and enforcement responsibilities of the States. HUD solicits comment on the proposed clarifications and on the regulations proposed to be codified.”
History:
As you may recall, we lobbied hard in North Carolina last year to maintain the right for individuals to make up to five seller financed transactions per year before being subject to mortgage originator licensing, etc… However, that law was passed subject to the Department of Housing and Urban Development’s (HUD) approval of the law as “compliant” with the intention of the federal law. If any state does not have a compliant law, the SAFE act allows HUD to implement licensing for the state. HUD has since issued proposed rules. In a nutshell, seller financing would no longer be allowed for non-owner occupied homes.
How YOU can help:
We learned about the publishing of the rules very late in the process… and the deadline for comment is upon us on February 16. However, we desperately need for thousands of REIA members across the country to go on record with HUD on this issue. We will be working to try to affect this law in other legislative ways, but cannot hope to gain traction unless our members have clearly communicated that they are opposed to this portion of the rules. This is your chance to be counted on this issue.
PLEASE SUBMIT YOUR COMMENTS TO HUD! We have only four days left to flood this system with comments.
Follow these simple steps:
1. Logon to www.regulations.gov You will see two white boxes for searching
2. On the left box labeled “Document Type”, pull the menu down and select “proposed rules”
3. On the right box labeled “Enter keyword or ID”, enter “safe mortgage”. Then, press search
4. Locate the blue search result “FR-5271-P-01 Safe Mortgage Licensing Act: HUD Responsibilities…”
To read the rules: click on the blue title FR-5271-P-01 You will be taken to another page. You will see “views”. You can click on PDF file or another symbol which will show you the rule document online. If you want to submit a comment after reading the document, use your back button to return to the search results and then move on to #5 below.
5. To submit a comment: On the right of the screen, across from FR-5271-P-01, click on “submit a comment”
6. Complete the form providing required information with blue asterisks and your comments and then submit. (Note: you do not need to fill in the blanks for organization name, government agency type, or government agency)
What do you say?
Say what you feel, but say it politely! The message should include that you would like the definitions in the proposed rules to be changed so that private individuals can originate and service loans on properties they personally own. Some ideas from others:
- The SAFE Mortgage Licensing Act was intended to regulate the mortgage industry, not private individuals. If I own my own properties and want to sell them to someone and let them pay me, I should have the right to do this without being a licensed mortgage broker
- Many properties have special circumstances where full bank financing is not possible. Vacant rsidential lots, investment homes, homes in flood areas, etc. may not be eligible for traditional financing. Individuals who own their own properties have always been able to offer other private parties the option to pay them directly. These rules would prohibit that for all properties which are not owner occupied.
- bank loans are not available on some types of properties
- the tight lending climate has made bank financing “out of reach” for many
- seller financing is an “age old” tradition based on private property rights
- these rules would prohibit even partial seller financing – i.e. a “seller second”
- according to HUD’s “Residential Finance Survey” in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear
- an estimated 6 million Americans own a property other than their own primary residence
- an estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties
- 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing
- approximately 5% of homes in US are for sale or for lease… seller financing may be key to liquidating this inventory
The continued success of our industry as we know it is threatened by these proposed regulatory changes. Please do not hesitate to follow the steps above and make your voice heard.
Has Your Real Estate Agent Failed To Deliver?
February 3rd, 2010When you told your real estate agent that you needed to sell your house, you probably heard great stories about how it would sell in no time, at a great price.
But, that’s NOT how it’s worked out. Instead of hearing great stories, now you’re hearing great excuses for why your realtor hasn’t sold your house: “It needs more bedrooms; you need to come down in price; the school district isn’t the best”, etc.
Contact Us Now! We’ll act quickly to give you a real solution.
We Can Buy Your Home Fast, Your Realtor Can’t
At this point, what you really need is to sell your house now. That’s where we come in: We aren’t interested in listing your house again; we want to buy it! We are professional real estate investors – not real estate agents. We’ve built our reputation over the years for quick action and fair prices. We can often give you even more than one solution to your problem.
You just want an honest, fair way to sell your house, without realtor excuses. That’s exactly what we’ll provide.
Contact Us | Complete the Seller Request Form
Worse Mortgage Crisis Coming
November 30th, 2009The last mortgage crises was led by sub-prime loans. The next mortgage crises is being led by the “higher quality†loans; Alt A loans, interest only that are now converting to interest plus principle loans loans and Option Arm loans that started out with unreasonably low “teaser interest rates†that will now adjust up like the sub-primes did.
