Angus Beal's Blog

T.A.R.P. FINALLY comes to Main Street! About time!!!??!

Angus Beal (United Brokers Group) — Fri, 26 Mar 2010 16:15:13 -0700

Interesting developments in the TARP program and a wrinkle for agent across the country:

RE: Home Affordable Modification Program

The FHA will be offering U.S. banks that are holding mortgages that are underwater (25% or more of existing mortgages--CNN Money.com 2/23), 97.75% of present market value of those mortgage values. This will enable:

1. Banks to use the loss as a lesser "write down", than if the homeowners foreclosed.

2. Offer a lesser payment based on that new value, as a bonus to homeowners to keep their homes.

3. Many unemployed homeowners could receive three to six months of reduced mortgage payments while they look for a job.

4. Results in a more rapid recovery to end this never ending stream of forclosures and glut that we can never seem to get out of.

Keep in mind:

-assuming that the prospective homeowners do NOT have a 2nd lien, HELOC or wotherwise, than the current lender being bought out by FHA WILL RETAIN A SMALL 2nd lien against the property at a level NO MORE THAN 115% of current market value.

-banks have to be willing to participate. The current admisinistration is offering cash incentives at the corporate level to incentivize these banks to get on board.

-this program may not be off the ground until summer.

Here’s how that would work. Say you have a 30-year fixed mortgage with a balance of $250,000, an interest rate of 9 percent and monthly payments of $2,000 a month. Home prices have plunged, however, meaning the house is now worth only $180,000. Under HAMP, your lender will receive financial incentives to reduce the loan balance by roughly $33,000, cutting the monthly payment to $1,300.

There’s no such thing as a free lunch, of course. The government is funding the overhaul with $14 billion in taxpayer funds allocated to bail out banks under TARP. The efforts to plug HAMP also will dent bank earnings, since lenders (and their shareholders) are being asked to swallow larger losses.

My thoughts? Well, with 10-20 miliion foreclosures forecasted to occur within the next 3 years, something HAS to be done to stop this endless bloodshed.

After all, as the saying goes, if you want to live with the classes, you have to sell to the masses. With the middle class having less and less money in their pockets, and less jobs to count on, all agents should be adamant about pushing more programs like this.

FHA Mortgage Insurance raised (slightly)

Angus Beal (United Brokers Group) — Wed, 24 Mar 2010 22:04:57 -0700

Question: OMG! FHA is increasing the upfront mortgage insurance! What does that mean to our clients?

Answer: FHA is increasing the upfront mortgage insurance from 1.75% of the loan amount back to the original 2.25%. On a $200,000 loan amount a difference of……wait for it: five dollars a month. The upfront mortgage insurance was reduced two years ago and HUD is reinstating the premium. No need to get your knickers in a bunch.

The upfront mortgage insurance is refundable, on a sliding scale, if the home is sold; or refinanced out of an FHA loan into a conventional within the first five years. But the home owner is responsible for requesting the refund. FHA will not send it voluntarily.

FHA also has monthly insurance. Today, that rate is .55% of the loan amount divided by 12. That calculates to $91.67 per month on a $200,000 loan amount.

The monthly m.i. is non-negotiable. If your client is putting 20% down, FHA still wants their mortgage insurance. In today’s lending world it may make more sense to place a lower credit score borrower with a hefty down payment in an FHA loan than a conventional. They may not like paying the monthly m.i. but if they want to purchase a home that may be their only choice.

The monthly premium can only be removed if it is paid down. FHA mandates that you are required to have the monthly mortgage insurance for five years. After that time if you have PAID down the loan to less than 80% (78% to be exact) the mortgage insurance can be petitioned to be erased. Appraisals for removal of FHA mortgage insurance are non-existent. It is all about paying the loan down and keeping the mortgage insurance for at least 5 years.

FYI: FHA is fighting to keep the 3.5% down payment requirement. And rumor has it that the monthly mortgage insurance premium may be increased. Stay tuned.

important things to tell your clients about the 2009 Home buyer tax credit extension

Angus Beal (United Brokers Group) — Fri, 19 Mar 2010 11:22:13 -0700

Things your client should know about the tax credit that they aren’t being told:

CPA Shares Little-Known Facts About the 2009 Home Buyer Tax Credit Extension

Like most government legislation, the Nov 6, 2009 homebuyer tax credit extension created more questions than answers. However, according to Doug Geissler, a certified public accountant, the Internal Revenue Service is literally writing the "refund rules" as they go along.

Unbeknown to homebuyers, real estate agents and the mortgage industry, the IRS is giving behind-the-scenes instructions (that are not available to the general public) to CPAs and tax advisors on how to file for the homebuyer tax credit after Nov. 6, 2009. It will be completely different than what you might have advised your clients previously-and your clients are not going to like these changes!

The first shocker? Your clients cannot file a 1040 EZ to claim the tax credit. Nor can they file tax returns electronically if claiming the tax credit.

Why no electronic filing or 1040 EZ forms? It's the first step in stopping fraudulent tax credit refunds. Believe it or not, the IRS never had a way to determine if a person owned a home-no auditing software in place-to determine if they previously claimed a "mortgage interest" deduction within a three-year time period. The IRS is building auditing software now to "catch" previous homeowners who are trying to claim a FTHB tax credit.

Secondly, the IRS now requires that the HUD-1 or closing statement be attached to the 5405 form (and that cannot be attached electronically). Here's the link to the 5405 Revised Form dated December 2009: http://www.irs.gov/pub/irs-pdf/f5405.pdf

And to give them time to audit the document, the IRS is telling tax advisors to expect an average of a 16-week turn around time-which means that it could either be the refund or a request for additional documentation. Mr. Geissler says that one of his clients recently received an IRS notice, requesting a letter from a landlord, a copy of a driver's license and the closing statement on an amended tax return where the client was claiming the FTHB tax credit. Yes, the new law allows them to ask for additional info on amended returns.

News for mortgage rate watchers

Angus Beal (United Brokers Group) — Mon, 15 Mar 2010 12:49:51 -0700

According to the ICSC-Goldman Sachs index, retail sales rose 2.9% for the week ending March 6. It was the biggest weekly gain in nine years. On a year-over-year basis, retailers saw sales increase 3.4%, the best showing in two-and-a-half years.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending March 5 rose 0.5%. Purchase volume increased 5.7%. Refinancing applications fell 1.5%.

The Commerce Department said wholesalers cut their inventories by 0.2% in January following a downward revised 1% drop in December. Meanwhile, sales at the wholesale level rose 1.3% in January, marking the 10th straight monthly gain.

The trade deficit unexpectedly fell 6.6% to $37.3 billion in January from a revised $39.9 billion gap in December. Economists had expected the trade deficit to widen to $41 billion. Exports slipped 0.3% to $142.7 billion. Imports fell 1.7% to $180 billion.

Initial claims for unemployment benefits fell by 6,000 to 462,000 in the week ending March 6. Continuing claims for the week ending February 27 rose by 37,000 to 4.558 million.

Retail sales rose 0.3% in February, following a revised 0.1% increase in January. Economists had anticipated retail sales to decline 0.2% in February. On a year-over-year basis, retail sales increased 3.9%.

The Reuters/University of Michigan consumer sentiment index for March’s preliminary reading fell to 72.5 from February's final reading of 73.6. One year ago, the mid-March reading was 57.3. During the economic expansion that ended in December 2007, the index averaged 88.9.

Upcoming on the economic calendar are reports on the housing market index on March 15, housing starts on March 16 and the index of leading economic indicators on March 18.

Buyers can pick their title companies! (FNMA deals)

Angus Beal (United Brokers Group) — Mon, 15 Mar 2010 12:46:35 -0700

Fannie Mae had made a significant change to their policy concerning closing services. In the past, Fannie chose the Title Company or closing attorney. That has for now, come to an END. Effective earlier this month Fannie Mae is allowing the buyer to pick their title company.

Home Equity Lending That Fueled Spending to Recover

Angus Beal (United Brokers Group) — Thu, 11 Mar 2010 20:07:30 -0800

By Kathleen M. Howley, Prashant Gopal and John Gittelsohn

March 11 (Bloomberg) -- John Hale’s four-bedroom house near Seattle is worth about $2 million and is 90 percent paid for. It still took him nine months to find a bank that would give him a $250,000 home equity line of credit.

Rising home prices and an improving economy will spark a modest rebound this year in U.S. home equity lending, the driver of about 2 percent of consumer spending in the first half of the decade. This time around, lenders and homeowners will be more cautious about converting their equity to cash, muting any boost to the economy after the worst slump since the Great Depression, said Greg McBride, senior financial analyst with Bankrate.com.

“Home equity borrowing won’t be the economic crutch it was a few years ago,” McBride, based in North Palm Beach, Florida, said in an interview. “This is not an economy in which consumers are going to be able to go nuts.”

As borrowers like Hale tap into the value of their properties, lenders will make about $36 billion in new home equity loans in the next 12 months, according to a forecast by Moody’s Economy.com in West Chester, Pennsylvania. That will increase the outstanding balances of the loans by 4.2 percent to $903.5 billion from a two-year low of $867.3 billion this quarter.

About $34 billion of home equity loans were made at the peak, in 2008, according to Moody’s Economy.com. The difference this time around will be how the money is spent, said Frank Nothaft, chief economist of Freddie Mac, the government-run mortgage buyer based in McLean, Virginia. Borrowers are less likely now to use their home’s equity for luxury purchases.

Consumer Spending

Consumers spent about $677.3 billion, or about $113 billion a year, from home equity loans on purchases such as cars or televisions during the 2000 to 2005 real estate boom, according to a 2007 paper by former Federal Reserve Chairman Alan Greenspan and Fed economist James Kennedy. Another $376.2 billion, or about $63 billion a year, went toward home renovations.

“Consumers are better managing their own personal balance sheet as a result of the difficult recession we went through,” Nothaft said in an interview. “Many households had taken on too much debt and were overextended, and now people are focused on paying that off.”

Any growth in equity lending during 2010 will necessarily be limited to homeowners whose properties are worth more than what they owe. More than a fifth of U.S. homes with mortgages had negative equity in the fourth quarter, according to Zillow.com, a Seattle-based real estate data provider.

Bank of America

Bank of America Corp., the largest U.S. lender, holds $43 billion of home equity loans in which the debt exceeds the property’s value, Chief Executive Officer Brian Moynihan said yesterday at a New York investor conference. It is writing off home equity loans at about $1.5 billion to $2 billion a quarter, he said.

“The amount of people who both have equity in their home and feel like they want to borrow it out is a really limited group,” said Moynihan, whose Charlotte, North Carolina-based bank has a $149 billion home-equity loan portfolio.

Chris Lafakis, an analyst at Economy.com, said there likely will be “modest” growth in home equity lending in 2010.

“There is a lot of distress out there, but initial claims for unemployment insurance are coming down, most of the home price declines are behind us, and banks are pretty much done tightening their lending standards,” Lafakis said.

Economic Growth

The jobless rate held at 9.7 percent in February, down from a 26-year peak of 10.1 percent in October, and employers cut fewer jobs than economists estimated in the month, the Labor Department said March 5. The U.S. economy expanded at a 5.9 percent annual rate in the fourth quarter, the biggest gain in more than six years, the Commerce Department said Feb. 26.

Property prices probably will rise this year for the first time since 2006, boosting homeowners’ equity. The median U.S. home price likely will increase to $177,200 in the second quarter from $167,600 in the current period, according to the National Association of Realtors. It will climb 2.8 percent for the year, the Chicago-based trade group said.

“Lenders are always going to be looking for opportunities for home equity lending in areas where they think prices will go up,” said David Berson, chief economist for PMI Group Inc., based in Walnut Creek, California.

Home Price Drop

U.S. home prices fell 13 percent last year to a median of $172,500, the largest annual drop since the 1930s, according to the National Association of Realtors. The decline followed a 9.5 percent drop in 2008, NAR said.

“The people who bought in 2006 and 2007 have seen their equity wiped out because of falling prices, but if you bought in 2003 or 2004, you probably still have enough of a stake” to qualify for a home equity loan, said Economy.com’s Lafakis.

Hale, the homeowner near Seattle, has seen the value of his property double since he bought it in 2000. He said he plans to use the funds from his home equity loan to renovate his living room, kitchen and bathroom. Three lenders turned him down before he was approved last month by US Bancorp of Minneapolis.

“It took far longer than I ever imagined,” said Hale, 65, who owns a business development company called J Link in Issaquah, Washington. “For people in my situation -- with equity -- it should be a no-brainer.”

NAR and DocuSign Unveil Exclusive Realtor® Electronic Signature Edition

Angus Beal (United Brokers Group) — Thu, 11 Mar 2010 19:52:50 -0800

Leanne Jernigan 202/383-1290 ljernigan@realtors.org

NAR and DocuSign Unveil Exclusive Realtor® Electronic Signature Edition

Washington, March 09, 2010

The National Association of Realtors® announced today the release of the DocuSign REALTOR® Edition, an exclusive online eSignature service designed specifically for Realtors®. NAR and DocuSign formed a business alliance late last year through the REALTOR Benefits® Program.

DocuSign, the leading provider of on-demand electronic signature solutions, is the official and exclusive provider of ESIGN services under the REALTOR Benefits® Program. Its REALTOR® Edition allows NAR members to electronically sign agreements with buyers and sellers, saving Realtors® time and providing client convenience.

“DocuSign’s REALTOR® Edition represents the power of partnership within the real estate industry, and more importantly, reinforces how Realtors® benefit from NAR’s REALTOR Benefits® Program,” said Bob Goldberg, senior vice president of Marketing and Business Development, Commercial Services and Business Specialties. “DocuSign has established itself as a market leader in the real estate segment and this new product for Realtors® will continue to revolutionize the industry.”

The REALTOR® Edition builds on DocuSign’s award-winning eSignature offerings and includes new exclusive e-signing features. NAR members have the option to adopt a Realtor® branded e-signature for a more personalized client experience. The product is also designed for mobile functionality with online electronic signing of documents from any type of mobile device. To accelerate the signing process, Realtors® will have the ability to control the recipient signing order and have automated receipt signing reminders and envelope expirations. The eSignature service also works with a variety of real estate form applications, including eForms provider zipLogix, another NAR partner.

“We are extremely excited about the new REALTOR® Edition exclusively designed for NAR members, as well as the opportunity to participate in the REALTOR Benefits® Program,” said Dave Thorpe, director of Business Development at DocuSign. “More than 20,000 real estate professionals have used DocuSign to accelerate their business and increase client satisfaction. As this number increases, we will continue to provide innovative valuable solutions that help real estate professionals be more productive and grow their business.”

NAR members will receive a 20 percent savings on DocuSign Basic and DocuSign Standard editions. DocuSign Basic is a limited edition while DocuSign Standard is an expanded version offering full functionality and a robust feature set. Subscribers must present a valid NRDS member identification to qualify. Pricing and additional product information can be found on the DocuSign Web site for NAR members at www.docusign.com/NAR. Learn more on NAR’S Web site at www.realtor.org/realtor_benefits/benefits_partners/docusign.

Foreclosures drop for 2nd month in February: RealtyTrac

Angus Beal (United Brokers Group) — Thu, 11 Mar 2010 19:50:43 -0800

By Julie Haviv Julie Haviv – Thu Mar 11, 7:20 am ET

NEW YORK (Reuters) – U.S. mortgage foreclosure filings dropped for a second straight month in February, and notched the smallest annual increase in four years as housing-rescue efforts contained activity, a report released on Thursday showed.

Foreclosures are by far one of the biggest threats to the U.S. housing market, which remains highly vulnerable to setbacks and heavily reliant on government intervention. If foreclosures keep dropping, it will be one of the strongest signals yet the market is on the path to recovery.

Foreclosure filings -- including mortgage default notices, house auctions and home repossessions by banks -- were reported on 308,524 properties in February, down 2 percent from January, but still up 6 percent from the year-ago month, real estate data firm RealtyTrac said.

"The 6 percent year-over-year increase we saw in February was the smallest annual increase we've seen since January 2006, when we began calculating year-over-year increases, but it still marked the 50th consecutive month of year-over-year increases in foreclosure activity," said James J. Saccacio, chief executive officer of RealtyTrac, in a statement.

Proclaiming an end to rampant foreclosures, however, is premature. Indeed, many say foreclosure prevention programs have fallen short of addressing the trend's current drivers.

"This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity -- albeit at a historically high level that will likely continue for an extended period," he said.

While February's drop may indicate that efforts to prevent foreclosure are gaining traction, the data has been volatile.

"In addition, severe winter weather appears to have temporarily slowed the processing of foreclosure records in some Northeastern and Mid-Atlantic states," he said.

One in every 418 U.S. housing units received a foreclosure filing in February, Irvine, California-based RealtyTrac said in its February 2010 U.S. Foreclosure Market Report.

Furthermore, more than 300,000 properties received foreclosure filings for a 12th straight month, RealtyTrac said.

REOs, or real estate-owned properties, activity nationwide was down 10 percent from the previous month, but up 6 percent from February 2009; default notices were up 3 percent from the previous month, but down 3 percent from February 2009, and scheduled foreclosure auctions were down 1 percent from the previous month, but still up 16 percent from February 2009, RealtyTrac said.

High unemployment and wage cuts have hurt the ability of many home owners to pay monthly mortgage payments. Unemployment was at 9.7 percent in February, according to the Labor Department.

Many lawmakers, advocacy groups and housing experts say the government's Home Affordable Modification Program, or HAMP, has fallen short because of its failure to adequately address negative equity or "under water" mortgages.

Negative equity has been one of the biggest banes of many home owners' lives, making many unqualified for home loan refinancing and preventing some from selling their homes. Borrowers in negative equity are more prone to defaults and foreclosures.

SUNBELT STILL HURTING

The foreclosure rate in Nevada, once one of the hottest U.S. real estate markets, remained highest among U.S. states for the 38th straight month -- despite a month-over-month drop in foreclosure activity of nearly 7 percent and a year-over-year fall of 30 percent.

One in every 102 Nevada housing units received a foreclosure filing during the month of February -- more than four times the national average.

Arizona and Florida documented nearly identical foreclosure rates, with one in every 163 housing units receiving a foreclosure filing in both states in February.

Despite a nearly 21 percent drop in foreclosure activity from the previous month, Arizona's rate was statistically slightly higher than Florida's rate, and ranked second highest among the states. Foreclosure activity in Florida increased nearly 15 percent in February from January.

The foreclosure rate in California, the most populous U.S. state, ranked fourth highest among the states, with one in every 195 housing units receiving a foreclosure filing during the month.

Michigan's foreclosure rate ranked fifth highest among the states, with one in every 226 housing units receiving a foreclosure filing in February.

Other states with February foreclosure rates among the nation's top 10 were Utah, Idaho, Illinois, Georgia and Maryland, the report showed.

(Reporting by Julie Haviv; Editing by Jan Paschal)

US households deleverage at record rate

Angus Beal (United Brokers Group) — Thu, 11 Mar 2010 19:44:16 -0800

By Alan Rappeport in New York

Published: March 11 2010 18:41 | Last updated: March 11 2010 18:41

Americans deleveraged their balance sheets aggressively in 2009, reducing household debt for the first year on record as they coped with the aftermath of the recession, Federal Reserve figures showed on Thursday.

US household debt contracted by 1.75 per cent in 2009, according to the closely watched “flow of funds” data. It was the first annual decline since the Fed began tracking household borrowing in 1946 and marks a sharp shift from the euphoric borrowing that led up to the recession.

During the last three months of 2009 mortgage debt continued to fall while consumer credit continued to contract. Economists warn, however, that much of this can be attributed to debts being written off rather than repaid.

While consumers and homeowners retrenched, US state governments and the Federal government continued to borrow heavily to support measures to stimulate the economy.

Federal borrowing grew at an annual rate of 22.7 per cent last year, while state and local governments upped borrowing by 4.8 per cent. By comparison, in 2007 when the recession officially began, Federal borrowing rose by just 4.9 per cent.

Borrowing was also off at businesses, falling by 1.8 per cent last year after rising by 5.2 per cent in 2008, as consumer demand remained weak and banks were reluctant to lend. According to the Fed, the 1.75 per cent decline of non-financial business debt last year was the sharpest since the early 1990s.

“It’s the un-holy alliance that banks don’t want to lend and people aren’t interested in borrowing,” said Brian Bethune, an economist at IHS Global Insight. “The only borrowers are our friendly governments.”

On Wednesday, Tim Geithner, US Treasury secretary, said that the US economy and financial system face “substantial” challenges, but that stimulus measures have been effective in addressing the crisis.

Mr Bethune noted that the downturn in debt is not necessarily due to greater discipline. High levels of home foreclosures have translated into weaker credit ratings and lower credit card debt is due to banks cancelling cards and writing off the losses.

Meanwhile, US households continued to get richer in the fourth quarter of last year, with net worth rising by $700bn to $54,200bn. It was the third quarter running that household wealth increased, thanks to rising home prices and the strength of the stockmarket.

For the year, household wealth rose by $2,800bn, making a small dent in the $14,000bn of wealth that was demolished by the recession, when net worth in US households plunged by 26.4 per cent from peak to trough.

Mike Englund, an economist at Action Economics, projects that US households will not return to their previous levels of wealth until mid-2012.

“That could delay some retirement plans,” Mr Englund said.

JPMorgan, Citigroup Helped Cause Lehman’s Collapse

Angus Beal (United Brokers Group) — Thu, 11 Mar 2010 19:36:44 -0800

March 11 (Bloomberg) -- JPMorgan Chase & Co. and Citigroup Inc. helped cause the collapse of Lehman Brothers Holding Inc. by demanding more collateral and changing guarantee agreements, a bankruptcy examiner said today in a report.

“The demands for collateral by Lehman’s lenders had direct impact on Lehman’s liquidity pool,” said Anton Valukas, the U.S. Trustee-appointed examiner, in a 2,200-page report filed in Manhattan federal court. “Lehman’s available liquidity is central to the question of why Lehman failed.”

Former Lehman Chief Executive Officer Richard Fuld, former Chief Financial Officer Erin Callan, former executive vice president Ian Lowitt and former managing director Christopher O’Meara certified misleading statements, the report said. Fuld was “at least grossly negligent,” the report said. Lehman collapsed in September 2008 with $639 billion in assets, the biggest bankruptcy in U.S. history.

Commenting on Barclays Plc’s purchase of Lehman’s North American brokerage, Valukas said a “limited amount of assets” belonging to Lehman were “improperly transferred to Barclays.”

Kerrie Cohen, a Barclays spokeswoman in New York, and JPMorgan spokesman Brian Marchiony declined to comment. Citigroup spokeswoman Danielle Romero-Apsilos didn’t have an immediate comment. Lowitt, who is now at Barclays, didn’t immediately repond to an e-mail seeking comment. Barclays is Britain’s second-biggest bank. Citigroup is the third biggest U.S. bank, and JPMorgan is second.

Fuld Warning

Fuld was warned months before the bankruptcy by Treasury Secretary Henry Paulson that Lehman might fail if it continued to report losses without finding a buyer or putting in place a survival plan, according to the report.

Lehman’s chief was “at least grossly negligent in causing Lehman to file misleading periodic reports” while its risks were rising because of long-term assets financed with short-term debt, Valukas said in the report.

Lehman’s executives engaged in conduct ranging from “non- culpable errors of business judgment” to “actionable balance sheet manipulation,” as they used “accounting gimmicks” to move assets off the balance sheet without disclosing that to the government, rating agencies, investors or Lehman’s board.

Fuld’s lawyer, Patricia Hynes, disputed the examiner’s claim that the Lehman estate has a colorable claim against him relating to transactions called “Repo 105 transactions.”

Didn’t Know

“Mr. Fuld did not know what those transactions were -- he didn’t structure or negotiate them, nor was he aware of their accounting treatment,” Hynes said in a statement. Hynes also said none of Lehman’s senior financial officers, lawyers or outside auditors raised concerns about the transactions with Fuld.

Valukas said in his report that Ernst & Young, Lehman’s auditing firm, failed to question inadequate disclosures by the Lehman executives.

Valukas said that Lehman’s directors are “immunized from personal liability” concerning the way the company handled risk because management hadn’t presented any “red flags” to them.

Valukas, 66, spent a year and $38 million producing the report on whether banks triggered Lehman’s bankruptcy or if Barclays improperly benefitted from it and what role was played by the U.S. Federal Reserve System. Valukas interviewed more than 100 people including U.S. Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke and former Securities and Exchange Commission Chairman Christopher Cox, and scrutinized more than 10 million documents, plus 20 million pages of e-mails from Lehman, according to filings in U.S. Bankruptcy Court in New York.

Colorable Claims

“The Examiner has determined that there are a limited number of colorable claims for avoidance actions against JPMorgan and Citibank,” Valukas said in the report. Valukas defined a colorable claim in the report as sufficient credible evidence to persuade a jury to award damages at trial.

Barclays bought Lehman’s brokerage for $1.54 billion. Lehman has sued Barclays for $5 billion or more, saying it made a “windfall” on the purchase, and Barclays responded that it is owed $3 billion. A bankruptcy-court trial is scheduled for April 26.

JPMorgan and Citigroup were two of New York-based Lehman’s main short-term lenders. On Feb. 24, Lehman said it settled with JPMorgan over the last of $29 billion in claims the bank filed against Lehman.

New Guarantee

Citigroup, which handled currency trades for Lehman, received a new guarantee from Lehman when Lehman was already insolvent and didn’t give enough value in return, the report said.

“The Examiner concludes that a colorable claim exists to avoid the Amended Guaranty as constructively fraudulent,” Valukas’s report says.

Lehman Chief Executive Officer Bryan Marsal said in an e- mail the bankrupt investment bank would “carefully evaluate” Valukas’s report to assess how it might help “ongoing efforts to advance creditor interests.”

The case is In re Lehman Brothers Holdings Inc., 08-13555, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Fight For The CFPA Is 'A Dispute Between Families And Banks,' Says Elizabeth Warren

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 16:28:30 -0800

By Shahien Nasiripour

While members of the Senate Banking Committee debate proposals to fix the nation's broken financial system and ineffective approach to protecting consumers, Elizabeth Warren has one message: Pass a strong bill or nothing at all.

"My first choice is a strong consumer agency," the Harvard Law professor and federal bailout watchdog said in an interview with the Huffington Post. "My second choice is no agency at all and plenty of blood and teeth left on the floor."

There's been a steady leak of Senate proposals to fix the dysfunctional way federal regulators protect consumers from abusive lenders. One was an independent unit housed within the Treasury Department; another was a new entity, housed in the Federal Reserve, with little independence or power.

The Senate shouldn't waste its time, asserts Warren, explaining that current proposals fail to address some of her key priorities such as arming the proposed agency with independent rule-making authority, without interference by bank regulators.

"My 99th choice is some mouthful of mush that doesn't get the job done," Warren said.

The Fed proposal, attributed to Sen. Bob Corker (R-Tenn.), was leaked earlier this week. Corker is working with Banking Committee Chairman Christopher Dodd (D-Conn.) on Dodd's update to his November bill to reform the nation's financial system.

Warren spent Tuesday on the phone with reform groups, members of Congress and administration officials, rallying support for a new independent agency tasked solely with protecting consumers. Many of them were skeptical that Corker is willing to agree to let the entity have real independence, an aide to Warren said.

But "there's a lot of enthusiasm for a strong bill," Warren said. "The senators really get the main point -- either vote on something that's strong or don't do it."

The dispute, after all, is a simple one, Warren said: "It's between families and banks."

"The lobbyists would like nothing better than for the story to be the [proposed] agency has died and everyone has given up," Warren said. "The lobbyists' closest friends in the Senate would like nothing better than passing an agency that has a good name but no real impact so they have something good to say to the voters -- and something even better to say to the lobbyists."

Warren said the new agency should have four simple attributes:

A chief appointed by the president, confirmed by the Senate;
Independent budget authority, so it won't be subject to the whims of Congress or an anti-consumer administration;
Independent rule-making authority, without interference by bank regulators or others who may focus on bank profitability before focusing on consumers;
And independent enforcement powers, so the agency's investigators can go after abusive lenders.

"Those are the basic elements of an independent agency," Warren said. "It's not as if there's some fifth thing that was left off that list -- that is the list."

The House passed a bill in December calling for the creation of such an agency.

"It's a muscular agency, and that's what really matters," Warren said. House Financial Services Committee Chairman Barney Frank (D-Mass.) led the fight.

"It's not perfect -- there's no excuse for excluding used car dealers -- but it's strong," she said. "The agency that passed the House will get the job done."

Dodd, who has been under fire for the level of his commitment to a muscular new agency, reiterated his support during a Tuesday evening interview on "Hardball with Chris Matthews" on MSNBC.

"What`s really important are four points that I have been insisting upon from the very beginning," Dodd said according to a transcript of his remarks. "One, I want a presidentially- appointed director of this operation. I want it confirmed by the Senate. I want a separate funding source. And I want it to have rule-making authority and enforcement authority.

"I'm going to insist upon those four points, wherever this is located," he said.

Warren agreed with those points.

"I read his Hardball transcript and I thought: I could entirely envision Elizabeth Warren sitting there saying the same thing," Warren said.

However, much of the reporting lately has focused on where the proposed agency will be housed -- its "address," as White House spokesman Robert Gibbs put it this week. Warren said the focus is misplaced.

"It's the wrong place to look," Warren said. "The question is functional independence. Where the agency sits on an organization chart is less important than its functional independence."

"The key are the elements Sen. Dodd put his thumb on," Warren said.

Warren hasn't met with Dodd since last July, four months before Dodd publicly released the first version of his financial reform bill.

She does, however, regularly check in with other members of Dodd's committee, including Democratic Senators Jack Reed of Rhode Island and Jeff Merkley of Oregon. Warren spoke with Merkley on Tuesday regarding the Fed proposal, which severely limits the kind of power Warren wants the new agency to have.

After all, Warren said, until a new agency is created, banks are going to continue bullying families into poor loans, mortgages and credit cards.

As Warren put it:

"No cop on the beat works for the biggest bullies in town."

Two Santa Clauses or How The Republican Party Has Conned America for Thirty Years

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 12:59:30 -0800

For a housing recovery to occur in our business, an OVERALL economic recovery must occur. Real estate is just a piece of the puzzle. In order for an OVERALL economic recovery to occur, we need accurate leadership in Washington. For that, we must rethink our philosophy regarding politics in the way it relates to business.

I found this article very telling, and looking backover the past 35 years to where we are now; VERY TELLING. A quick note: I am a registered Republican and Precinct Committeeman here in Pinal County, AZ.

---Angus Beal

Published on Monday, January 26, 2009 by CommonDreams.org

by Thom Hartmann

This weekend, House Republican leader John Boehner played out the role of Jude Wanniski on NBC's "Meet The Press."

Odds are you've never heard of Jude, but without him Reagan never would have become a "successful" president, Republicans never would have taken control of the House or Senate, Bill Clinton never would have been impeached, and neither George Bush would have been president.

When Barry Goldwater went down to ignominious defeat in 1964, most Republicans felt doomed (among them the then-28-year-old Wanniski). Goldwater himself, although uncomfortable with the rising religious right within his own party and the calls for more intrusion in people's bedrooms, was a diehard fan of Herbert Hoover's economic worldview.

In Hoover's world (and virtually all the Republicans since reconstruction with the exception of Teddy Roosevelt), market fundamentalism was a virtual religion. Economists from Ludwig von Mises to Friedrich Hayek to Milton Friedman had preached that government could only make a mess of things economic, and the world of finance should be left to the Big Boys – the Masters of the Universe, as they sometimes called themselves – who ruled Wall Street and international finance.

Hoover enthusiastically followed the advice of his Treasury Secretary, multimillionaire Andrew Mellon, who said in 1931: "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system. High costs of living and high living will come down... enterprising people will pick up the wrecks from less competent people."

Thus, the Republican mantra was: "Lower taxes, reduce the size of government, and balance the budget."

The only problem with this ideology from the Hooverite perspective was that the Democrats always seemed like the bestowers of gifts, while the Republicans were seen by the American people as the stingy Scrooges, bent on making the lives of working people harder all the while making richer the very richest. This, Republican strategists since 1930 knew, was no way to win elections.

Which was why the most successful Republican of the 20th century up to that time, Dwight D. Eisenhower, had been quite happy with a top income tax rate on millionaires of 91 percent. As he wrote to his brother Edgar Eisenhower in a personal letter on November 8, 1954:

"[T]o attain any success it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything--even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon 'moderation' in government.

"Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt [you possibly know his background], a few other Texas oil millionaires, and an occasional politician or business man from other areas. Their number is negligible and they are stupid."

Goldwater, however, rejected the "liberalism" of Eisenhower, Rockefeller, and other "moderates" within his own party. Extremism in defense of liberty was no vice, he famously told the 1964 nominating convention, and moderation was no virtue. And it doomed him and his party.

And so after Goldwater's defeat, the Republicans were again lost in the wilderness just as after Hoover's disastrous presidency. Even four years later when Richard Nixon beat LBJ in 1968, Nixon wasn't willing to embrace the economic conservatism of Goldwater and the economic true believers in the Republican Party. And Jerry Ford wasn't, in their opinions, much better. If Nixon and Ford believed in economic conservatism, they were afraid to practice it for fear of dooming their party to another forty years in the electoral wilderness.

By 1974, Jude Wanniski had had enough. The Democrats got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built giving a healthy union paycheck to construction workers. They kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that made them seem like a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class. Americans loved it. And every time Republicans railed against these programs, they lost elections.

Everybody understood at the time that economies are driven by demand. People with good jobs have money in their pockets, and want to use it to buy things. The job of the business community is to either determine or drive that demand to their particular goods, and when they're successful at meeting the demand then factories get built, more people become employed to make more products, and those newly-employed people have a paycheck that further increases demand.

Wanniski decided to turn the classical world of economics – which had operated on this simple demand-driven equation for seven thousand years – on its head. In 1974 he invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money. The more things there were, the faster the economy would grow.

At the same time, Arthur Laffer was taking that equation a step further. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up!

Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness.

Ronald Reagan was the first national Republican politician to suggest that he could cut taxes on rich people and businesses, that those tax cuts would cause them to take their surplus money and build factories or import large quantities of cheap stuff from low-labor countries, and that the more stuff there was supplying the economy the faster it would grow. George Herbert Walker Bush – like most Republicans of the time – was horrified. Ronald Reagan was suggesting "Voodoo Economics," said Bush in the primary campaign, and Wanniski's supply-side and Laffer's tax-cut theories would throw the nation into such deep debt that we'd ultimately crash into another Republican Great Depression.

But Wanniski had been doing his homework on how to sell supply-side economics. In 1976, he rolled out to the hard-right insiders in the Republican Party his "Two Santa Clauses" theory, which would enable the Republicans to take power in America for the next thirty years.

Democrats, he said, had been able to be "Santa Clauses" by giving people things from the largesse of the federal government. Republicans could do that, too – spending could actually increase. Plus, Republicans could be double Santa Clauses by cutting people's taxes! For working people it would only be a small token – a few hundred dollars a year on average – but would be heavily marketed. And for the rich it would amount to hundreds of billions of dollars in tax cuts. The rich, in turn, would use that money to import or build more stuff to market, thus increasing supply and stimulating the economy. And that growth in the economy would mean that the people still paying taxes would pay more because they were earning more.

There was no way, Wanniski said, that the Democrats could ever win again. They'd have to be anti-Santas by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.

When Reagan rolled out Supply Side Economics in the early 80s, dramatically cutting taxes while exploding (mostly military) spending, there was a moment when it seemed to Wanniski and Laffer that all was lost. The budget deficit exploded and the country fell into a deep recession – the worst since the Great Depression – and Republicans nationwide held their collective breath. But David Stockman came up with a great new theory about what was going on – they were "starving the beast" of government by running up such huge deficits that Democrats would never, ever in the future be able to talk again about national health care or improving Social Security – and this so pleased Alan Greenspan, the Fed Chairman, that he opened the spigots of the Fed, dropping interest rates and buying government bonds, producing a nice, healthy goose to the economy. Greenspan further counseled Reagan to dramatically increase taxes on people earning under $37,800 a year by increasing the Social Security (FICA/payroll) tax, and then let the government borrow those newfound hundreds of billions of dollars off-the-books to make the deficit look better than it was.

Reagan, Greenspan, Winniski, and Laffer took the federal budget deficit from under a trillion dollars in 1980 to almost three trillion by 1988, and back then a dollar could buy far more than it buys today. They and George HW Bush ran up more debt in eight years than every president in history, from George Washington to Jimmy Carter, combined. Surely this would both starve the beast and force the Democrats to make the politically suicidal move of becoming deficit hawks.

And that's just how it turned out. Bill Clinton, who had run on an FDR-like platform of a "new covenant" with the American people that would strengthen the institutions of the New Deal, strengthen labor, and institute a national health care system, found himself in a box. A few weeks before his inauguration, Alan Greenspan and Robert Rubin sat him down and told him the facts of life: he was going to have to raise taxes and cut the size of government. Clinton took their advice to heart, raised taxes, balanced the budget, and cut numerous programs, declaring an "end to welfare as we know it" and, in his second inaugural address, an "end to the era of big government." He was the anti-Santa Claus, and the result was an explosion of Republican wins across the country as Republican politicians campaigned on a platform of supply-side tax cuts and pork-rich spending increases.

Looking at the wreckage of the Democratic Party all around Clinton by 1999, Winniski wrote a gloating memo that said, in part: "We of course should be indebted to Art Laffer for all time for his Curve... But as the primary political theoretician of the supply-side camp, I began arguing for the 'Two Santa Claus Theory' in 1974. If the Democrats are going to play Santa Claus by promoting more spending, the Republicans can never beat them by promoting less spending. They have to promise tax cuts..."

Ed Crane, president of the Libertarian CATO Institute, noted in a memo that year: "When Jack Kemp, Newt Gingich, Vin Weber, Connie Mack and the rest discovered Jude Wanniski and Art Laffer, they thought they'd died and gone to heaven. In supply-side economics they found a philosophy that gave them a free pass out of the debate over the proper role of government. Just cut taxes and grow the economy: government will shrink as a percentage of GDP, even if you don't cut spending. That's why you rarely, if ever, heard Kemp or Gingrich call for spending cuts, much less the elimination of programs and departments."

George W. Bush embraced the Two Santa Claus Theory with gusto, ramming through huge tax cuts – particularly a cut to a maximum 15 percent income tax rate on people like himself who made their principle income from sitting around the pool waiting for their dividend or capital gains checks to arrive in the mail – and blowing out federal spending. Bush even out-spent Reagan, which nobody had ever thought would again be possible.

And it all seemed to be going so well, just as it did in the early 1920s when a series of three consecutive Republican presidents cut income taxes on the uber-rich from over 70 percent to under 30 percent. In 1929, pretty much everybody realized that instead of building factories with all that extra money, the rich had been pouring it into the stock market, inflating a bubble that – like an inexorable law of nature – would have to burst. But the people who remembered that lesson were mostly all dead by 2005, when Jude Wanniski died and George Gilder celebrated the Reagan/Bush supply-side-created bubble economies in a Wall Street Journal eulogy:

"...Jude's charismatic focus on the tax on capital gains redeemed the fiscal policies of four administrations. ... [T]he capital-gains tax has come erratically but inexorably down -- while the market capitalization of U.S. equities has risen from roughly a third of global market cap to close to half. These many trillions in new entrepreneurial wealth are a true warrant of the worth of his impact. Unbound by zero-sum economics, Jude forged the golden gift of a profound and passionate argument that the establishments of the mold must finally give way to the powers of the mind. He audaciously defied all the Buffetteers of the trade gap, the moldy figs of the Phillips Curve, the chic traders in money and principle, even the stultifying pillows of the Nobel Prize."

In reality, his tax cuts did what they have always done over the past 100 years – they initiated a bubble economy that would let the very rich skim the cream off the top just before the ceiling crashed in on working people.

The Republicans got what they wanted from Wanniski's work. They held power for thirty years, made themselves trillions of dollars, cut organized labor's representation in the workplace from around 25 percent when Reagan came into office to around 8 of the non-governmental workforce today, and left such a massive deficit that some misguided "conservative" Democrats are again clamoring to shoot Santa with working-class tax hikes and entitlement program cuts.

And now Boehner, McCain, Brooks, and the whole crowd are again clamoring to be recognized as the ones who will out-Santa Claus the Democrats. You'd think after all the damage they've done that David Gregory would have simply laughed Boehner off the program – much as the American people did to the Republicans in the last election – although Gregory is far too much a gentleman for that. Instead, he merely looked incredulous; it was enough.

The Two Santa Claus theory isn't dead, as we can see from today's Republican rhetoric. Hopefully, though, reality will continue to sink in with the American people and the massive fraud perpetrated by Wanniski, Reagan, Laffer, Graham, Bush(s), and all their "conservative" enablers will be seen for what it was and is. And the Obama administration can get about the business of repairing the damage and recovering the stolen assets of these cheap hustlers.

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program The Thom Hartmann Show. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People: A Call To Take Back America," "What Would Jefferson Do?," "Screwed: The Undeclared War Against the Middle Class and What We Can Do About It," and "Cracking The Code: The Art and Science of Political Persuasion." His newest book is Threshold: T he Crisis of Western Culture.

Germans consider bank rescue for Greece

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:47:54 -0800

By James Wilson in Frankfurt and Dimitris Kontogiannis in Athens

Published: February 26 2010 19:57 | Last updated: February 26 2010 19:57

Germany’s biggest banks are looking at a rescue plan for Greece under which they would buy Greek debt backed by financial guarantees from Berlin, the Financial Times has learnt.

As Josef Ackermann, chief executive of Deutsche Bank, held talks in Athens on Friday with George Papandreou, Greek prime minister, the structure of a possible eurozone bail-out should the country’s debt crisis worsen began to emerge.

One senior German bank official said serious thought was being given to a plan for the German government, working through KfW, its development bank, to issue guarantees to banks that bought Greek debt.

Several such banks, including Hypo Real Estate, Eurohypo and Deutsche Postbank, which hold billions of euros of Greek debt, all said they would not increase their holdings. However, guarantees from Berlin for what could be high-yielding debt might soften their stance.

The official said: “This could be one of the outcomes but it would not be a purely private solution – there has to be government involvement. If it were something on a eurozone level, I don’t think my bank would say: ‘We would not take part.’”

At the end of a week in which a general strike brought much of the country to a standstill, Mr Papandreou prepared the way for more radical measures to cut the spiralling deficit. He urged the rest of Europe to show “solidarity”. “We must do whatever we can now to address the immediate dangers today. Tomorrow it will be too late, and the consequences will be much more dire,” he told parliament.

Mr Papandreou said Greece did not want other countries to pay its public debt but he expected a strong show of support from its European Union partners. Angela Merkel, Germany’s chancellor, is due to meet him next week.

The price of Greek bonds gyrated amid uncertainty over whether Athens would be able to borrow from the capital markets next week. Yields on government bonds rose sharply but slipped back on rising hopes for a deal to help Athens issue a five-year bond next week.

Berlin and German banks would be keen to involve other eurozone countries in such a plan, but officials in Berlin have said each country could find its own way to contribute.

Additional reporting by Gerrit Wiesmann in Frankfurt, Joshua Chaffin in Brussels and David Oakley in London

Call for probe on banks’ role in Greek crisis

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:45:38 -0800

By James Politi in Washington

Published: February 26 2010 21:03 | Last updated: February 26 2010 21:03

Goldman Sachs and other US banks that arranged contentious derivatives trades for Greece could face a congressional hearing into their role.

Carolyn Maloney, the New York Democrat who chairs the joint economic committee in Congress, called on Friday for the House financial services committee to examine US financial firms’ “involvement” in the Greek debt crisis. “I believe a hearing is timely and important for the committee to ensure proper oversight and to investigate whether or not additional actions may be appropriate,” Ms Maloney said in a letter to Barney Frank, the chairman of the committee.

Mounting pressure in Congress on banks that helped Greece massage its public finances follows news that the Federal Reserve is also examining the matter. “We are looking into a number of questions relating to Goldman Sachs and other companies and their derivatives arrangements with Greece,” Ben Bernanke, the Fed chairman, told Senate lawmakers on Thursday.

Mr Bernanke also said that the use of credit default swaps – other derivatives that protect nations against default and whose volatility has contributed to market instability in connection with the Greek debt crisis – could in some cases be “counterproductive”. Goldman has not commented on the Fed probe. The Securities and Exchange Commission has also confirmed it is looking into “potential abuses” related to the use of credit default swaps.

Ms Maloney compared the use of credit default swaps in the Greek situation to the “activities that brought down American International Group”, referring to the US insurer that collapsed and was bailed out in September 2008. “These reports, if true, are a shocking echo of the financial crisis that faced the US in 2008 – whose reverberations are still being felt today, in the worst recession in decades.”

Increased regulatory and political scrutiny of US banks’ roles in the Greek debt crisis comes as the Senate is negotiating a broad financial reform bill. Aides on Capitol Hill said the latest revelations could add impetus to efforts by some lawmakers to tighten regulations on derivatives trading.

U.S. Economy: Pending Sales of Existing Homes Unexpectedly Drop

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:31:14 -0800

By Courtney Schlisserman

March 4 (Bloomberg) -- Fewer Americans than expected signed contracts to purchase previously owned homes in January, indicating the extension of a tax credit is doing little to lure buyers.

The index of purchase agreements, or pending home sales, dropped 7.6 percent after a revised 0.8 percent increase in December, the National Association of Realtors announced in Washington. Other reports today showed factory orders increased and first-time jobless claims declined.

The drop in contract signings adds to evidence the housing market at the center of the worst recession since the 1930s is struggling to rebound after reports last week showed unexpected declines in purchases of new and existing homes. The market may get another blow this month when the Federal Reserve ends planned purchases of mortgage-backed securities.

“When you take away all the support from the housing market, the underlying demand for housing is a lot weaker than we thought,” said Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina. “We clearly pushed some demand forward, and there wasn’t that much demand to pull forward anyway. The housing recovery is going to be very, very slow.”

Builder shares fell after the report, with the Standard & Poor’s Supercomposite Homebuilding Index declining 0.7 percent at 11:52 a.m. in New York. The broader S&P 500 climbed 0.1 percent to 1,119.74.

Factory orders rose 1.7 percent in January, boosted by a surge in commercial aircraft bookings, according to Commerce Department data that also showed less demand for computers and machinery.

Jobless Claims

Reports from the Labor Department today showed initial jobless claims fell from a three-month high, while productivity rose in the fourth quarter. Claims dropped 29,000 last week to 469,000.

Productivity, a measure of employee output per hour, rose at a 6.9 percent annual rate in the final three months of last year. Labor costs dropped 5.9 percent, more than anticipated.

Economists forecast a 1 percent gain in January pending home sales after a previously reported 1 percent rise a month earlier, according to the median of 40 projections in a Bloomberg News survey. Estimates ranged from a drop of 4.2 percent to an increase of 4 percent.

In November, the number of signed contracts dropped a record 14 percent. The Realtors group said February figures may be depressed as well following snowstorms in the Northeast and South.

February Sales

“The abnormally severe and prolonged winter weather, which affected large regions of the U.S., hampered shopping activity in February,” Lawrence Yun, the group’s chief economist, said in a statement. “We will see weak near-term sales followed by a likely surge of existing-home sales in April, May and June.”

The Realtors’ report showed declines in January pending sales in all four regions, led by a 13 percent slump in the West. Contract signings fell 8.9 percent in the Midwest, 8.7 percent in the Northeast and 2.1 percent in the South.

Pending home sales are considered a leading indicator because they track contract signings. The Realtors’ existing- home sales report tallies closings, which typically occur a month or two later. The pending sales data go back to January 2001, and the group began publishing the index in March 2005.

Reports last week showed the housing market may be faltering. Sales of previously owned homes unexpectedly dropped 7.2 percent in January after a record decline a month earlier, according to Realtors group’s report Feb. 26. New-home sales slumped to an all-time low, the Commerce Department said Feb. 24.

Credit Extended

President Barack Obama and Congress extended the first-time buyer credit in early November to cover deals signed by April 30 and closed by June 30, and expanded it to include some current homeowners.

Among other concerns for the housing outlook, the Fed said it plans to end a program later this month to purchase mortgage- backed securities, which helped contain borrowing costs.

The rate on a 30-year fixed mortgage dropped to 4.71 percent in early December, the lowest level since Freddie Mac started keeping weekly records in 1972. The rate has hovered around 5 percent since then.

Foreclosures pose another threat. Foreclosure filings rose 15 percent in January compared with a year earlier and exceeded 300,000 for the 11th straight month, RealtyTrac Inc. said Feb. 11.

The housing market will “follow a similar pattern” to recovery as it did in the late 1980s and early 1990s, which both took “several years,” Toll Brothers Inc. Chief Executive Officer Robert Toll said in a statement Feb. 24.

The company, the largest U.S. luxury-home builder, said its orders almost doubled in the first quarter compared with a year earlier. It projected it will sell between 2,100 and 2,750 homes in fiscal 2010 at an average price of $540,000 to $560,000 each.

Will Baby Boomers Lead Housing Industry Toward Recovery?

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:27:05 -0800

by Steve Brown

RISMEDIA, February 5, 2010—(MCT)—Baby boomer buyers fueled a big run-up in U.S. home construction and sales in the 1970s and 1980s. Now beleaguered homebuilders say they’re hoping aging boomers, who are just entering retirement age, will once again give them robust housing sales.

“We believe this segment of the market is going to lead the housing industry toward recovery as the market turns around,” said Sharon Dworkin Bell, a senior staff vice president of the National Association of Home Builders.

The 55-plus home buyer is being targeted by builders all over the country and was a focus of the industry’s annual conference recently in Las Vegas. The numbers are certainly there. By 2014, a quarter of the U.S. population—more than 85 million people—will be 55 or older. “The number of people in that age group is increasing, and there is a lot of promise out there,” builders’ association economist David Crowe said recently.

While more than 60% of 55-plus homeowners say they want to keep their current homes, the rest say they are interested in alternatives. Builders anticipate that buyers in this age group will account for almost 270,000 house purchases by next year. Even in the down market, some 55-plus buyers move and downsize.

“The good news is they usually have a lot of home equity and can get a mortgage,” Crowe said. “The bad news is they have to sell a house.” That worked out for Hunter and Judy Whitney, who sold their home in Pennsylvania just before the housing market took a downturn. The couple, both in their 60s, moved into a new house in Del Webb’s Frisco Lakes development in Frisco, Texas, two years ago. “When we decided to retire and relocate, we decided on the Dallas area,” Hunter said. “Two of our three kids and six of our eight grandkids live in the area.”

Moving closer to family is one of the top reasons 55-plus buyers move. The Whitney’s were wowed by the age-restricted Frisco development. “We looked at a lot of places—the new construction,” he said. “This is more than buying a house. You end up with a sense of community.” “We are one of the few places in North Texas still selling a ton of homes,” said Mike Sander, divisional sales manager with Del Webb owner Pulte Homes. “We get a lot of out-of-state residents—probably 30-40%. Most of the buyers are in their early 60s, Sander said. “About 30-40% of our residents still work in some fashion,” he said. “But they want to downsize and get into a nice neighborhood.”

Former Plano, Texas, resident Jim Boyd and his wife downsized twice before moving into a 1,505-square-foot Frisco Lakes home in 2006. “It was at the time in our lives we had begun to consider something other than a traditional single-family dwelling,” said Boyd. “We liked the quality and variety of the community.”

More than 75% of 55-plus buyers say they want a home in the suburbs. But that doesn’t mean they want a big house. Surveys show older buyers are more frugal about housing needs. “The 55-plus buyers are not interested in growing their house size,” Crowe said. “They are asking for about a 1,900-square-foot home” on average. “They’re worried about energy costs.” Most older homebuyers surveyed are holding down their cost expectations, industry research shows. “When we asked the consumer, ‘What are you willing to pay?’ they said $190,000,” Crowe said. “And when we asked the builders, ‘What are you building for this market?’ they said $287,000. “Obviously, there’s a real big problem there.”

Indeed, builders say they are in a quandary over what kind of housing to produce for 55-plus buyers. “The baby boomers are absolutely unpredictable,” said Andy White, a South Carolina developer. “There is no model to say what we ought to build. If a consultant comes to you and says they know what to build, they are lying,” said White, whose company has been building developments targeted to older adults since the 1980s.

White said there are many risks for builders who might design the wrong product in the wrong place. “Let’s give it a few years and see what happens when the leading edge of the baby boomers reaches 70 years old, which is in 2016,” he said.

Builders who aim at older buyers agree that it’s a tougher sell with the recessions and housing market crash. “Don’t assume at all that everyone over 55 is looking for a luxury purchase or has unlimited funds to spend,” said Atlanta builder Jim Chapman. “Their existing homes are worth less,” he said. “Some of them are afraid to put their homes on the market.” Many of these buyers are coming from nearby. “They still want to go to the same shopping centers and see their friends,” Chapman said. “The others are moving from out of the area to be near their children.”

Builders who market age-restricted projects to older adults say they’ve seen an increase in demand for speculative houses. “They are kind of flying off the shelf to people who have sold a home and are ready to do business,” said Chris Harrison of Arizona-based Robson Communities. “We are seeing more activity,” Harrison said. “Texas for us did not have the big run-up in home pricing seen in other areas of the country.”

Distributed by McClatchy-Tribune Information Services.

Online Leads are Dead – Traditional Lead Generation Extinct

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:24:31 -0800

RISMEDIA, February 27, 2010—As the Internet continues to infiltrate the real estate industry, prospective buyers are continually turning to the Web to consume information, make decisions and conduct important transactions. With a vast migration to the Web that is only likely to grow, it is crucial for real estate professionals to alter their strategy to take advantage of the Internet in order to receive quality leads. Here, Spencer Rascoff, COO, Zillow, discusses how real estate professionals can generate quality leads in today’s high-tech market.

Spencer Rascoff
COO
Zillow
www.zillow.com

I’ll let you in on a little secret—people don’t want to be leads. People want to be people, not leads. Leads are so 1995. The Internet has changed the way people consume information, the way they make decisions and, most importantly, the way they conduct important transactions.

Companies like Amazon.com, Expedia and Google have trained us to do our research in privacy and solitude, and remain anonymous until we’re good and ready to transact. Imagine if you searched for a hotel room on Expedia and all of the hotel front desks called you; or if when you searched for a television on Amazon, suddenly your phone rang with representatives from Sony and Samsung trying to sell you a TV. No, we’re trained now to expect to be able to access information on our terms, on our own timeline.

This evolution in consumer behavior has effectively made traditional lead generation extinct. Companies whose business models are predicated on the old model—where websites provided as little information as possible in order to entice you to fill out a form so they could sell your personal information to the highest bidder—will perish.

At Zillow.com, we don’t talk about “leads”; we talk about Customer Initiated Contacts (“CIC”). This is a subtle but important difference: customers remain in control when they are able to decide when and how they initiate a contact with a service provider.

As real estate brokerages start to rev back up their marketing machines in 2010, they’re likely not going to have as much of their budgets reverted back toward TV or print advertising. The housing downturn and accompanying advertising recession has accelerated the inevitable migration of advertising budgets towards the Internet.

But will online budgets move toward graphical advertising, search advertising or CIC? It’s accepted among industry leaders that CPM (cost-per-thousand impressions) and SEM (search engine marketing) aren’t the best way for real estate brokerages to market their companies. Why? Because the real estate industry wants “real” contacts, not just clicks or views.

The Customer Initiated Contact model still leaves plenty of room for the professional to communicate with the consumer. But only when the consumer is good and ready.

CIC puts the consumer in control and, ultimately, that’s also better for the professionals in the equation. First, it means that the professionals only have to talk to the consumers who pre-select them, on their own terms. Second, the consumer-first paradigm means that success of the website is much more likely, and that means you’ll be affiliating with and investing your time and money with a sustainable business. CIC is going to shake things up. It’s not your parents’ lead gen anymore.

3 Factors to Take Into Consideration Before Jumping Into Housing Market

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:21:52 -0800

By Jim Gallagher

RISMEDIA, February 6, 2010—(MCT)—If you have a good job and good credit, the next few months might be a good time to go house hunting. Fence-sitters take the risk that Congress may let a rich tax credit expire, and that interest rates may rise. Buyers and sellers should consider the following factors as they consider jumping into the housing market.

-Mortgage rates are blissfully low, and that may not last. The rate on a 30-year mortgage averaged 5% last week, according to Freddie Mac. Rates are low in part because the Federal Reserve has been buying up about $3 trillion in mortgage-backed securities and mortgage agency debt. The aim is to hold down interest rates and keep mortgages available. But the Fed is slowly removing that financial crutch as the economy improves. It has no plans to buy any more past March 30, 2010. The likely result is an uptick in rates. Meanwhile, the recovering economy by itself should raise rates as the year goes on. Economists at the Mortgage Bankers Association expect to see a 6.1% rate by year end. Such a rise would add about $104 to the monthly payment on a $150,000 mortgage

-The home buyer tax credit expires on April 30, 2010 and no one knows if Congress will renew it a second time. Expect a clash between the real estate lobby and fiscal conservatives worried about the $1.35 trillion federal deficit. To qualify for the credit, you must sign a purchase contract by April 30, 2010 and close by July 1, 2010. First-time buyers get up to $8,000. “First-time” is defined as someone who hasn’t owned a home in three years. Move-up buyers get up to $6,500 when they purchase a new primary residence. To get the credit, you have to have lived in the old home for at least five out of the last eight years. The credits start phasing out at $125,000 in adjusted gross income for singles and $225,000 for joint filers.

-There are indications that home prices are near a bottom in some areas and may actually be rising a bit. That statement is dicey, because conditions vary by neighborhood and the data can be tricky.

Things might look different if you’re a seller though. Do you want to put your house on the market near the bottom of a price cycle? Homeowners who have a choice in the matter—those who can still pay their mortgages—are largely saying no. Inventories of homes for sale are down about 10% from this time last year, and 30% from the mid-decade peak of the housing boom, says Kevin Cottrell, chief economist at Kelsey Cottrell Realty Group. On the other hand, if you’re planning to move up to something grander, you might find a bigger bargain when you buy. And that $6,500 tax credit could swing a close decision.

Home sales peaked in some areas October and November, as buyers raced the expiration date of the original first-time home buyer’s credit. Congress later extended and expanded it. That rush satisfied some pent-up demand, but real estate agents are hoping for another rush around April. “People will wait to the very last second,” said Mike Travaglini, a vice president of Coldwell Banker Gundaker’s office in south St. Louis County.

Mortgage lenders have been tightening credit standards, which means fewer eligible buyers, says John Frank, president of Paramount Mortgage in Creve Coeur. Mo. “It’s getting tighter and tighter,” he said.

Lenders are insisting on credit scores of 640 to 660 for loans sold to Fannie Mae, Freddie Mac and 620 for FHA guaranteed loans. Those standards are higher than the federal agencies themselves insist on. FHA—which guarantees loans for people with low down-payments—has been raising its own insurance charges to borrowers and demanding higher premiums from people with poor credit scores.

Making House Calls in the Internet Age

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:20:01 -0800

RISMEDIA, February 6, 2010—In today’s “Internet Age,” it is crucial that real estate professionals stay ahead of the knowledge today’s buyers and sellers possess. Acting as a trusted and definitive source of counsel is a valuable tool in today’s market. Here, Rick Gregoy, VP Operations and Business Development, Better Homes and Gardens Real Estate discusses how real estate professionals can add great value to the real estate process.

Rick Gregory
VP Operations and Business Development
Better Homes and Gardens Real Estate
www.bhgrealestate.com

If you are like my wife and I, you have likely followed the spread of the H1N1 virus with great interest. You probably spent a lot of time on the Internet making sure that your child’s nagging cough was a common cold and not something much worse. And you may have even cross-referenced many sites before visiting a doctor’s office.

Once there, you may have been surprised to learn that your research was good in places and deficient in others, but always lacking the oversight of a professional. In the real estate realm, there are some similarities.

Of course, the home buying and selling process is not as critical as diagnosing illness, but the role of a real estate professional in the “Internet Age”—as a trusted and definitive source of counsel—is comparatively as valuable.

This has caused many real estate professionals I work with to keep their skills especially sharp to stay ahead of the knowledge today’s buyers and sellers possess. Clients and agents have access to similar information through the Web and social media. The consumer is more aware and educated than ever before of the home buying and selling process. But we know that preparation is only part of the story and we need to provide the rest. The interpretation and “diagnosis” is where we in the profession add great value.

Like a good doctor, we need to be fully aware of the myths and facts floating around cyberspace and be quick to provide context and guidance. In fact, we should encourage clients stay engaged during the fact-finding process and take advantage of the tools available that complement the agent’s expertise. But we still need to know more than our clients in order to give them comfort that we are truly the expert and an important partner in their home search or sale. We can lose credibility quickly if we don’t communicate our knowledge of the Internet resources they are using as well as providing content that goes beyond the information they were able to find on their own.

But, beyond technology, good old-fashioned conversation is still the key and agents should be diligent in staying in contact with the buyer/seller. To that end, it is essential to brush up on your “bedside manner,” so to speak, as it helps establish a strong presence in your client’s real estate transaction process.

Clients need to be reminded that we can help in every stage of the process—from familiarizing oneself with a neighborhood to understanding important legalities or federal tax credits to filling out paperwork. Virtual will never replace the verbal experience.

Around the Home – Recycle Your Way to Less Waste

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:17:53 -0800

By Terri Bennett

RISMEDIA, February 6, 2010—(MCT)—The easiest way to do your part and help the environment is to simply recycle. It’s also one of the most effective ways to conserve natural resources, create less pollution and reduce the amount of waste sent to the landfill.

Seventy-five percent of the waste we generate in American homes is recyclable but less than 35% is actually making it to a recycling center. The following steps are simple practices you can put into place to help you do your part and make a habit of recycling.

Make It Easy: Most of us keep our recycling bins outside or in the garage, which isn’t always convenient. Put other containers throughout your home to serve as recycling bins—especially in places where it’s easy to forget to recycle. One of those places is the bathroom. Think of all the empty shampoo bottles, toilet paper rolls, and even those cardboard soap boxes that usually get tossed in the trash. In your home office, have another basket to collect paper for recycling. By spreading out small containers for recycling around the house, the entire family will be more inclined to think twice before throwing something in the garbage.

Know Your Numbers: All plastic containers have a little number inside recycling arrows located on the bottom which identifies the type of plastic used to make the product. Many local curbside recycling programs accept products marked with a No. 1 or No. 2 but some take all seven types of plastic.

It Makes Cents: Throwing aluminum cans in the trash is like throwing money out the window. Recycled aluminum is turned into new cans in less than 90 days and it can be recycled over and over again. It takes 95% less energy to make a can from recycled materials and produces 97% less water pollution. So choose beverages in aluminum and recycle every can.

Speak With Your Wallet: Filling your curbside-recycling bin is just the beginning. Complete the circle by seeking out products made from recycled content—especially post-consumer content. That’s the materials you recycle and not the scraps on factory floors.

Home Sizes Fall as Builders, Buyers Embrace Economic Reality

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:16:17 -0800

By Steve Kerch

RISMEDIA, January 28, 2010—(MCT)—New-home buyers responded to the tough times in 2009 by opting for smaller houses, driving down the average size of a house built in the United States for the first time in 27 years.

Data recently released by the National Association of Home Builders (NAHB) found the average size of a new home that was completed in 2009 fell to 2,480 square feet from 2,520 square feet in 2008. The last time the average completed-home size fell by a statistically significant amount was 1982.

“You’ve heard the mantra ‘downsize me’ and ’small is the new big?’ Well, last year was definitely a downer,” said Carol Lavender, president of Lavender Design Group, a residential design firm in San Antonio, Texas.

Homeowners surveyed by Better Homes and Gardens magazine said downsizing was becoming a bigger priority: 36% said in November 2009 that they expected their next home to be “somewhat smaller” or “much smaller” than their current home versus 32% who said that in 2008. “Not surprisingly, we see a ‘cents and sensibility’ approach when it comes to buying or improving a home, with practicality and price being the top priorities,” said Eliot Nusbaum, the magazine’s executive editor of home design.

While the small-house movement in the United States has been gaining steam for a number of years, the recession has accelerated it and home builders have responded.

“The era of easy money is over. You really have to think before you go out and decide you need that five-bedroom, five-bath home,” said Rose Quint, the NAHB’s assistant vice president for survey research. “Couple that with the energy cost concerns of consumers today and I think we will continue this trend. Houses will not shrink drastically, but they will shrink.”

Although actual square footage of homes didn’t fall until 2009, the percent of homes with four or more bedrooms in them has been falling since 2007, NAHB data show. And in 2009, the number of homes with three or more bathrooms fell for the first time since 1992.

Two other trends in home construction are contributing to the declining square footages: The prominence of first-time buyers in the housing market and the increasing number of households with members 55 and older who are buying homes.

First-time buyers, driven into the market in good part by the availability of an $8,000 tax credit, are more likely to compromise on home size in exchange for a lower price. And the 55-plus crowd tends to purchase single-story homes, which generally are smaller because of the land costs that favor the more-efficient two-story plans.

“Barely over half of new homes today are built with two stories or more,” Quint said. Two-story homes peaked at about 55% of the market in 2006. For 2010, home builders say they will focus on lower-priced models and smaller homes. More than 95% of builders surveyed by NAHB in January said that was the way they saw their business evolving this year.

The penchant for smaller homes will necessitate some design changes. Builders, attempting to respond to those consumer demands as well as hold the line on prices, told the NAHB surveyors that they were most likely to include these features as standard in their houses this year:

-Walk-in closets in the master bedroom.
-Laundry rooms.
-Insulated front doors.
-Great rooms.
-Energy-efficient windows.
-Linen closets.
-Programmable thermostats.
-Energy-efficient appliances and lighting.
-Separate shower and tub in master bathrooms.
-Nine-foot ceilings on the first floor.

Among the things that builders said they were least likely to add to houses in 2010:

-Outdoor kitchens.
-Outdoor fireplaces.
-Sunrooms.
-Butler’s pantries.
-Media rooms.
-Desks in kitchens.
-Two-story foyers.
-Eight foot ceilings on the first floor.
-Multiple shower heads in the master bath.
-Smaller kitchens.

“You can see that builders are concentrating heavily on energy-saving features,” Quint said. “But a lot of the luxury items are on the chopping block or on hold as builders try to lower costs.”

Distributed by McClatchy-Tribune Information Services.

Crawling Out of the Housing Hole: Realtors Agree Housing Market Is Stabilizing, but Still Troubled

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:12:27 -0800

RISMEDIA, February 27, 2010—(MCT)—The good news is, it’s a buyers’ market. The bad news is, it’s a buyers’ market. From the rubble of the housing collapse has arisen a seemingly endless supply of houses from which to choose. Good news if you’re buyer. Challenging news if you’re a seller. Mixed news if you’re a Realtor.

The extension of the home buyers’ credit is expected to spur an increase in sales during the first quarter of 2010, normally the slowest quarter of the year, said Gary Walter, executive vice president of the Southwestern Michigan Association of Realtors Inc.

With competitive prices, low interest rates and a huge tax credit on their side, buyers are jumping off the fence. And if you’ve got a house to sell, there are things you can do to make sure they land on your side, Realtors say.

“If you’re looking around your house and you ask yourself: ‘Should I paint this room?’ you probably should,” said Ryan Arnt, associate president of Meredith and Kamp Realtors of Stevensville.

Another piece of advice from area Realtors—be reasonable about the price. And be flexible. “If you’re going to list your house, it’s going to disrupt your lifestyle pattern for awhile. You’ll need to be willing to show at a moment’s notice, be as agreeable and as flexible as possible, and put a little effort into it. The return will be worth it,” said Sharon Halliburton, broker associate with American Homes of Stevensville. She and other area Realtors say the worst is over. “I’m extremely optimistic. We’ve turned a corner,” Halliburton said.

National picture
After a surge last year from September through November, the original deadline for a $8,000 tax credit, existing home sales nationally fell in December 2009. But prices rose from December 2008 and sales overall improved in 2009, according to the National Association of Realtors.

For all of 2009, there were 5.1 million existing home sales, 4.9% higher than the 4.9 million transactions recorded in 2008, the first annual sales gain since 2005.

On the other hand, in Southwest Michigan, residential sales totaled just over $381.6 million in 2009, down 18% from nearly $465.9 million in 2008. It was the area’s third consecutive year of decline in the real estate market.

The number of single-family homes sold in 2009 was within 1% of the number sold in 2008, but the average selling price, $151,190, was down 18%. The median selling price of $93,550 was down 22% from 2008. Total closed sales, including single-family and multi-family houses, vacant land and commercial property, also dropped 18%, from $516.43 million in 2008 to just over $422.2 million in 2009.

In Southwest Michigan, Walter said prices have been influenced by the percentage of bank-owned homes on the market. He said that between May and November 2009, bank-owned houses accounted for about 35% of the total unit sales. In December that figure climbed to 45%.

Arnt said he’s not quick to steer potential buyers to bank-owned listings. “Most of the banks are willing to negotiate, and that brings down the price. But I typically tell my folks that if somebody couldn’t afford to pay their mortgage, what else haven’t they been able to keep up about the house? There’s more risk. You have to be willing to gamble,” he said.

But Art Atilla, a Realtor working primarily in St. Joseph and Benton Harbor, said there’s a reason the average number of days on the market in Benton Harbor in 2009 was 91, down 11% from 2008 and the quickest turn-around time in Southwest Michigan last year. “There’s a greater number of repossessed homes in Benton Harbor, and those are being sold off quickly because investors can pick them up for $15,000 to $30,000, depending on the location,” he said. “Is it better to have empty houses owned by banks, or have an investor buy it, clean it up and get it going? The best thing would be a for a family to buy it. But these houses need to be bought by somebody.”

Economists say the market is going through swings driven by the tax credit. The extension of the tax credit is expected to spur an increase in sales during the first quarter of 2010, normally the slowest quarter of the year. The extension gives buyers until April 30 to buy and until June 30 to close. The credit, up to $8,000, originally was for first-time buyers only, but has been extended to include homeowners who have lived in their home for five of the last 8 years. These people get up to $6,500. Extension of the tax credit adds more potential buyers to the market.

By early summer, the market should benefit from a more balanced inventory, leading to an overall rise in sales in 2010, economists say.

Jobs, jobs, jobs
But a lot could depend on the job market. Realtors say job creation is the key to a continued recovery in the housing market.

Once the home buyer tax credit ends at the end of April, and if mortgage rates rise after March, will the market be in trouble again? Since most of the fuel to the housing market in 2009 was provided by the government, does the market remain too fragile for the government help to end? Arnt predicts the government will let the tax credit expire, then launch some other incentive down the road. That might be a good thing, he said. “I think they announced too early that they were going to extend it, without letting the original one expire. There were people on the fence who didn’t get off because they heard the credit was going to be extended,” he said.

Arnt is optimistic about the housing market’s future. “Personally, I feel very confident. I think the worst is over. I think we definitely have bottomed out, and things are looking very positive. There’s buyer activity that wasn’t there 30-60 days ago.” Arnt said potential buyers are breathing a sigh of relief, having made it through the holidays with their jobs intact. “I think people are more comfortable and feel that the market has been through the worst and is on the way to recovery,” he said.

Realtors are hoping that a shrinking inventory will help improve the average sales price. The December 2009 inventory dropped 7% from December 2008. In Southwest Michigan, there are 2,803 houses listed, which equates to a 13.3-month supply. That is down from a 16.5-month supply in November 2009 and a 14.1-month supply in December 2009.

National figures for January showed an inventory of 3.29 million existing homes, 11.1% below a year ago and 28.2% below the record of 4.58 million in July 2008. Nationally, the median home price in December 2009 was $178,300, 1.5% higher than in December 2008. Economists said that was due to an increased number of mid- to upper-priced houses in the mix.

Prices stabilizing
Halliburton said, after reviewing the January figures, she’s optimistic. She said that in St. Joseph and Lakeshore, there were 26 homes sold in January, a 73% jump over 15 sold last January.

The average number of days on the market for homes sold in St. Joseph and Lakeshore in January was 99, compared to 147 days a year ago. The average sales price in the same area in January was $153,648, down just $132 from a year ago.

For the entire Southwest Michigan area, she said, the average price was up 27% over a year ago. “I’m excited. These are the best numbers I’ve seen in a long time,” Halliburton said. “I’ve been listing at least one house a week since the first of the year. My spring starts in February, marketing-wise.”

To sell your house, she said, it’s got to look better than everybody else’s on the block. “Work on curb appeal outside. Inside, de-clutter, clean, paint, all the things you’ve been meaning to clean anyway- take a third of the stuff out of every room.”

Atilla recommends “staging” a house before putting it on the market. “You get somebody with a good eye and you can cost-effectively make the home as good as it can be. Paint, rearrange furniture, add color accents, put towels in the bathroom. If you need a new roof or furnace, be honest about that in your price.”

Distributed by McClatchy-Tribune Information Services.

A Golden Opportunity: 203k Program Helps First-Time Buyers Turn Dreams into Reality

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:10:09 -0800

RISMEDIA, February 22, 2010—As a first-time home buyer, Jessica Garcia was excited last April to officially begin her home search. She found a home within her price range, completed the lengthy paperwork and paid for the appraisals, only to later be told after four months that the deal would not close.

Out of luck and out of money, Garcia was frustrated, but not defeated. She went back to her Realtor to start the search again. It was then that she found the home she would later purchase. Upon first glance, Garcia liked the home and saw its potential, but didn’t have the upfront money it would take to rehab the home the way it needed to be done.

After some discussion, Garcia’s lender, Kevin Roy with Wells Fargo, realized that she might be able to take advantage of HUD’s 203k program, specifically designed to rehabilitate and repair single-family homes. The 203k is a single mortgage loan that provides funds to purchase a home and make repairs and improvements.

“The home needed a lot of work,” explains Garcia, of North Port, Florida. “The previous owners had pets that had really torn up the carpeting and destroyed the blinds.”

Indeed, the home needed new flooring, carpets and, most importantly, a water softener for its wellwater system. So, when the opportunity arose to take advantage of the 203k program, Garcia was game.

“In the end, it worked out great,” she says. “The credit goes to Kevin because if he hadn’t told me about the 203k program, I would not have had the money to fix the home. All of the money I had was put into the appraisals and fees for the first home that I couldn’t close on.”

Once the transaction was set in motion, Garcia turned to Lowe’s North Port (Florida) store to help her bring her 203k projects to fruition.

“The people at Lowe’s were really great,” lauds Garcia. “I had dealt with a different home improvement retailer in the past, but never had very good experiences. I went to Lowe’s because the people who work there are always friendly and I had heard good things about working with them. The people there really were great—they provided explanations to all of my questions and made my experience easy.”

From the 203k paperwork to guiding her through the program, Garcia credits the Lowe’s team with a job well done. “The team at my Lowe’s was very helpful,” she says. “A couple of people—including manager Mike Cabana—helped me tremendously.”

Prior to closing, Garcia went to the North Port location and chose her products for the 203k projects. Once closing happened in late September, the Lowe’s team prepared for Garcia’s projects, ordering her new carpeting, wood flooring, a water softener and new dishwasher.

“It was amazing,” says Garcia. “The day I closed, I called them and they immediately started ordering the materials and products. Within a few weeks, everything was done.”

According to Garcia, the timing couldn’t have been better. In addition to the improvements she made with her 203k loan, Garcia also took on a few DIY projects herself—including repainting the entire house.

“I decided to put the 203k money into quality carpeting, flooring and, of course, the water softener. I also really needed a dishwasher—the house didn’t have one,” she explains. “The little bit of time I had between ordering the materials and installation was perfect. It gave me just enough time to get all of the painting finished.”

Despite months of worry, confusion and stress, Garcia is now thrilled with her home—and her experience with Lowe’s.

“I am very happy,” says Garcia. “Everyone involved did such a great job and helped me so much…Lowe’s helped me choose exactly what I wanted for my home. I love this house!

“A lot of money goes into buying a home,” she adds. “The 203k program is a great option. It allowed me to do far more than I would have been able to do on my own. As a first-time home buyer with a limited amount of money, it allowed me to do a lot and get exactly what I wanted. Working with Lowe’s was perfect, too. From their affordable prices to the customer service, it was a great experience overall. I would highly recommend both the 203k program and Lowe’s to anybody.”

For more information on the 203k loan program, visit www.hud.gov or www.re-buildusa.com.

Around the Home – The Comforts of Dining In

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 11:02:44 -0800

RISMEDIA, February 27, 2010—According to a recent survey released by Whole Foods Market, 68% of adults say the economy has affected their cooking and eating habits. More than 50% of consumers say they are eating dinner at home more often to save money. But cutting costs on dining out doesn’t mean giving up on the joys of great company and delicious foods.

The changing economy has many Americans bringing their love of food back into the comfort of their own kitchens. And with a wealth of supermarket coupons and in-store specials available, entertaining at home is easier than ever and more affordable. So even if a fancy meal out with friends isn’t in your budget, you can still enjoy spending quality time together over a delicious meal.

Here are a few budget-friendly tips to make the most out of dining in:

Prepare Foods that Stretch. It’s important to make every dollar count. Soups, pastas and casseroles are not only easy to make, but they’re an economical way to feed a large group. Not sure what to make? Many food websites offer a “budget friendly” category for inspiration.

Make it a Game Night. Invite guests to bring over a few of their favorite games. Pair up into teams and rediscover the joy of a little friendly competition. Whether you’re the reigning card champion or experiencing the latest gaming phenomenon for the first time, you’re sure to enjoy an evening filled with fun and laughter.

Host a Potluck. Forget buying expensive groceries and spending hours in the kitchen. Encourage guests to bring a dish of their own for a tasty potluck. From homemade pasta salads to delicious breads and indulgent desserts, you’ll have a variety of taste-tempting foods that will be the talk of the party. Plus, everyone loves to help out the hostess.

Chocolate Soufflés Made Easy. Cap off the evening with this restaurant-style dessert that’s sure to impress. With only seven ingredients and just a few simple steps, these soufflés really deliver on taste and presentation. And the best part? They can be made in advance, allowing you to spend more time with guests.

Make-Ahead Chocolate Soufflés
(Makes 8 servings)

Ingredients:
-Nonstick cooking spray
-2 cups (12-ounce package) Nestle Toll House Semi-Sweet Chocolate Morsels
-1/2 cup (1 stick) butter
-1/4 cup Nestle Toll House Baking Cocoa
-4 large eggs, separated
-2 teaspoons vanilla extract
-1/3 cup granulated sugar
-1 container (14 ounces) Vanilla Haagen-Dazs Ice Cream (optional)

Directions:
-SPRAY eight 6-ounce ramekins or custard cups with nonstick cooking spray; coat lightly with granulated sugar.
-MICROWAVE morsels, butter and baking cocoa in large, microwave-safe bowl on HIGH (100%) power for 1 minute; stir. Microwave at additional 10-second intervals, stirring until smooth. Stir in egg yolks and vanilla extract.
-BEAT egg whites in large mixer bowl until soft peaks form. Gradually beat in 1/3 cup granulated sugar until stiff peaks form. Stir one-fourth of egg white mixture into chocolate mixture to lighten. Fold in remaining egg white mixture gently but thoroughly. Spoon into prepared ramekins, filling about 3/4 full. Cover soufflés individually with plastic wrap and refrigerate for up to 1 day.
-PREHEAT oven to 400° F. Remove plastic wrap from soufflés. Place soufflés on baking sheet. Bake on center oven rack for 18 to 20 minutes or until puffed and center still moves slightly. Top with scoop of ice cream. Serve immediately.
Cook’s Tip: If you wish to prepare batter and bake immediately, reduce bake time by a couple of minutes.

For more information, visit www.VeryBestBaking.com or www.Meals.com.

7 Tips to Motivate Your Sphere of Influence to Refer to You

Angus Beal (United Brokers Group) — Thu, 04 Mar 2010 10:54:31 -0800

RISMEDIA, February 27, 2010—As a business coach for entrepreneurs, my clients often say to me: “I just can’t pick up the phone and call my sphere of influence.” The responses I get when I ask “Why not?” include:

-“I don’t know what to say.”
-“I can’t ask my friends for business.”
-“I have no reason to call.”
-“I don’t want to bug them.”
-“It’s not okay to call them too often.”

The following tips will enable you to motivate your sphere of influence to refer to you easily and effortlessly.

Tip 1: Have a script so you know what to say
What you decide to say may vary from person to person. For instance, the way you talk to a close friend may be quite different from the way you talk to a distant acquaintance.

There is no one formula of what to say. However, it is very helpful to have something to offer when you call. One idea that many of my clients have found helpful is to call your sphere of influence and offer to be a referral source for them.

In other words, let them know that you have plenty of connections to people who could help them. For example, you know many painters, electricians, plumbers, etc. and your sphere of influence should know that if they need any names and phone numbers, they should call you and you will be happy to provide a referral source for them.

Tip 2: Think of yourself as being “the giver”
Most of us love to be the giver. We know we will be well-received and people will like us. We also know that “giving” leads to more business.

Before you pick up the phone to call your sphere of influence, ask yourself: “what can I give to them?” One way that you could be of service to them is to offer to be a cross referral partner.

If they have their own business, ask them how their business is doing. Ask them how you could help them at their business. Ask them what kind of referrals they would like to receive. Let them know that you will do your best to send referrals to them. At the end of the conversation, you can say something like, “when you hear of anyone who’s interested in buying or selling a home, please call me with their name and number. If it’s okay with them, I will call them and make sure that their real estate needs are being taken care of.”

Tip 3: Send something of value each month
What kind of valuable gift should you send? It used to be that sending newsletters was a hot item. However, most people have gotten too busy to read a newsletter.

The selection that works the best is a colorful postcard that gives the events happening in their area. Their sphere of influence is likely to put that postcard on the refrigerator and refer to it often.

Of course, next to the list of events happening in the area is your photo, your phone number and your tag line such as “relax and let me run the extra mile to fulfill your business needs.”

Not only will you start to enter their stream of consciousness, they start to associate positive ideas with you:
-You are associated with happy events in their area,
-You are associated with brilliant bright, happy colors in the postcard,
-Your face smiles at them every time they go to the refrigerator.

Do you think they are more likely to remember you the next time they have a need for your service?

Tip 4: Don’t be afraid to call them too often
As long as you have a good reason to call, your sphere of influence will be happy to hear from you. Trust your own gut instinct about how often you should call. Many real estate gurus suggest calling people in your sphere of influence about once a month. You may choose to do that with your “A list,” the people most likely to refer to you.

Since you are sending an item of value each month, you can always ask your sphere of influence if they received your postcard. You can then follow that with, “so what event are you going to?”

Tip 5: Assume the positive
Simply assume that your sphere of influence will be happy to hear from you. Why wouldn’t they be? They are receiving a wonderful colorful, informative postcard from you each month, then you are calling and offering them something, and you are conditioning them to want to hear from you.

Assume that you have something valuable to offer- your friendship and your expertise- and people want to hear from you.

Tip 6: Be excited about your business
Remember, “desperation does not sell,” but “excitement” does. No matter what the current condition of your business, always say something like, “I am so excited about my business. I get to meet such wonderful people and I’m really in an expansion phase of my business. If you want to help out, just send people my way, I will be happy to help them.”

Tip 7: Use the Law of Attraction
To successfully use the Law of Attraction, you need to be clear about what you want. What do you want? Do you want your sphere of influence to send you several clients a month? If so, then set your intention, “I am now in the process of attracting several new clients from my sphere of influence each month.”

Do you have any opposing beliefs that you need to clear? The Law of Attraction cannot give you what you want if you have any beliefs that will oppose your desired outcome.

For example, if you want to attract an abundance of prosperity, don’t focus on beliefs such as:
-I don’t deserve to have a lot of money
-It’s selfish to want more than I have
-Money is the root of all evil
-Money can’t buy me happiness
-Rich people are usually not honest.

If you have any of the above beliefs, those are called “opposing beliefs.” Can you see that you could be doing all the right activities with your sphere of influence, but if you had opposing beliefs like these, you would not be attracting the clients and the income you want?

To get the Law of Attraction to work for you, you need to identify these old self limiting beliefs, release them and install empowered beliefs.

Here are some examples of empowered beliefs that will help you create the income you want:

-I do deserve an abundance of prosperity.
-It’s okay for me to be grateful for what I have and still want more.
-Money is neutral and can be used for good or evil.
-Money can’t buy me happiness, but I can create a better life for myself and people around me by being prosperous.
-Some people are honest and some are not. It has no relationship to whether or not they have money.

Practice repeating your empowered beliefs frequently and train your mind to focus on what you “want,” not on what you “don’t want.” If you find yourself dwelling on thoughts of scarcity, like “not enough money,” switch your focus and ask yourself, “so what do I want?” Start to notice yourself becoming more positive and attracting more of what you want.

Dr. Maya Bailey, author of Law of Attraction for Real Estate Professionals, integrates 20 years of experience as a psychologist and 12 years as a business coach with her expertise in the Law of Attraction. Get Bailey’s free report, 7 Simple Strategies For More Clients in 90 Days, by visiting www.90DaystoMoreClients.com.