I appreciate the fact that somebody is bringing this to the forefront! We have been inundated with recent media hype about how good the home sales are doing, when deep down, I feel the opposite. I personally chalked it up to the summer season, epecially when driving through some neighborhoods and seeing a home that appears to be desolate. I think we need to concentrate on the shadow inventories. If the banks would only work with us on a more accord platform to help them in getting rid of their stack of stagnant files!! But as we all know it is difficult to get a repoir going. I don't know if loan modifications are the answer for a homeowner. I just know that the banks are getting $1000 for every loan they convert. Is this truly beneficial for the public, or just another way for the banks to make capital?
This is one of those posts where I wish I didn't have to write it, but felt it was so important to my readers that I would be remiss not to at least talk about it.
Everyone out there probably knows somebody who is behind on their mortgage payments, looking for alternatives and likely also just finding out that their home's value has dipped below what their loan amount is. I know some within my own personal circles. It's a tough situation for me to advise them as a professional because it's such a personal challenge to their pride and self-worth, not to mention their plans and dreams for the family. The question we're asking is "when is this going to stop and where are we heading?"
I'm going to put up a few graphs that show the trends nationally with regards to mortgage delinquincies:
This chart is by quarter - Single-family mortgages set a new record delinquency rate in the second quarter of 2009, according to a quarterly survey by the Mortgage Bankers Association. Those of us in the real estate business see the foreclosure process (just visit the local Sheriff Sale docket to see the current numbers) but the looming delinqency-to-foreclosure issue is far, far larger.
The Wall Street Journal on 8/3/09 reported the following quote: “While subprime mortgages sparked the first round of housing problems two years ago, now "troubles are lurking further up the food chain," says Joshua Shapiro, chief U.S. economist at MFR Inc. White-collar job losses have accelerated while more adjustable-rate loans to prime borrowers are resetting to higher payments. ‘You put all that together, it leads me to believe that the next leg down on home prices is going to come from the top,’ he says.”
The first objection someone may have would be to say "yes, but historically those who are delinqent usually get their act together and come current on the mortgage after a while". That WAS true, but not anymore! We call that the "Cure Rate", that is the rate of delinquencies that go back to current. The Wall Street Journal reported on 8/24/09 about a Fitch analysis that found that the Cure Rate from 2000-2006 was 45% (which means about half of people fix their delinquency). However, as of July 2009 the rate had dropped to just 6.6%! That means that over 90% of delinquent customers are going to foreclosure. Take a look again at the above chart...
The next thing someone will say is "well, that's the 'sand states' and not my area". Here's the chart for all 50 states showing the same breakdown of delinquencies and foreclosures. Guess what - most states have a significant problem, especially compared to historical figures.
Now the next thing someone may say is "aren't those loans going to get 'fixed' by a loan modification?" I know several people right now who are applying for a Lancaster County loan modification but are waiting and waiting. I hope it works out for them...
In reality, loan modifications are hardly making a dent. To me, that's a burning question. Why arent banks being more aggressive in giving customers the option to extend their loan and/or reset to a lower rate? Why are they being SO difficult? The people I know don't want to be foreclosed. They CAN make payments. They just need the terms redrawn to allow them to catch & keep up. Loan modifications are not helping us get this crisis under control.
What are the causes of all these delinquencies? Here's a chart that is enlightening:
Keep in mind, this post is not intended to give us "good news". You may be experiencing good things in your market and that's great. My intent is to get us thinking about the challenges that aren't going away and how we're going to address them as homeowners, agents and professionals. I'd love to hear your ideas!
The Fair Credit Reporting Act (FCRA) is an American federal law (codified at 15 U.S.C.§ 1681 et seq.) that regulates the collection, dissemination, and use of consumer credit information. (Full Statute (PDF).)] Along with the Fair Debt Collection Practices Act (FDCPA), it forms the base of consumer credit rights in the United States. It was originally passed in 1970,[1] and is enforced by the US Federal Trade Commission.
Which companies are regulated by the FCRA?
While putative database companies like Lexis, Westlaw, ChoicePoint, and eFunds (owner of ChexSystems) do not create credit reports, they may gather the same types of information and as a result may subject some of their actions to FCRA.
An entity that meets the definitional requirement for a "consumer reporting agency" (CRA) in Section 603(f) of the FCRA is covered by the law even if the only information it collects, maintains, and disseminates is obtained from "public record" sources.
Section 603(f) defines a "consumer reporting agency" as any person "which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information ... for the purpose of furnishing consumer reports to third parties ...". In turn, Section 603(d) defines a "consumer report" as the communication of "any information" by a CRA that bears on a consumer's "credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living" that is "used or expected to be used or collected in whole or in part" for the purpose of serving as a factor in establishing eligibility for credit or insurance to be used primarily for personal, family, or household purposes, employment purposes, or any other purpose authorized under Section 604.
If the commercial service you describe regularly provides information for the purposes set forth in the definition of consumer report in Section 603(d), the agency is a consumer reporting agency and the information it collects from public record sources and maintains in its computerized files is subject to the FCRA.
• Two new commercials will run in 2009, "Iconic" Houses" and "Scroll". Both commercials incorporate the Portraits but in a very different way. They have a more subtle role in this year's spots and help tell the story as opposed to being the story.
• Both spots will be available for local use FREE OF CHARGE, allowing for a 5-second tag at the end where offices can include their company name, contact information and web address.
• The spots will be accessible on coldwellbankerworks.com beginning the week of March 23rd.
• The commercials will run on premium cable news and entertainment programming beginning the week of March 30th through the end of June. Coldwell Banker anticipates returning with a second flight of cable advertising in September.
• This year, Coldwell Banker® will have an increased, steady presence on category relevant programming on HGTV and our commercials will run on this network from March straight through September.
•As part of Coldwell Bankers multi-screen approach to advertising, commercials will run on hulu.com as pre-roll to replays of some of the most popular programs currently on network television.
• In addition, through Tremor Media, our commercials will be ‘fed' to other premium video content channels.
• In terms of online advertising, display advertising will appear on major portals like msn, Yahoo and AOL. Coldwell Banker says "We'll also continue to use behavioral targeting on these sites to drive qualified traffic by pushing our ads to users who have shown interest in real estate within the last 48 hours."
• Another efficient means of driving traffic has been our direct response effort on msn. Through this effort Coldwell Banker display ads run throughout the entire msn network on a cost per click basis.
Engaging Consumers Online and Offline for Better Results
In 2009, Coldwell Banker is taking a multi-screen approach to our advertising strategy so that we can reach consumers on their terms in the media outlets they go to for news, information and entertainment. Whether they're watching TV, surfing the web, enjoying digital video content or using their Smartphones, Coldwell Banker will have a presence.
Campaign Highlights
Two new commercials will make their debut this year. Both spots incorporate the Portraits, but they are used in an entirely different way.
In addition to running on cable television, the spots will run as pre-roll on Hulu.com, a Web site that offers commercial-supported streaming video of TV shows like Heroes, 24 and The Office. Unlike network TV, which is subject to the use of DVR's, in this environment our commercials cannot be fast forwarded or skipped over.
In a first for the real estate category, Coldwell Banker will run advertising on digital billboards in Times Square and Las Vegas. Passers by will be encouraged to text to see listings in their area of interest and the results will display on the billboard as well as on their phone.
Dear Coldwell Banker® Broker/Owners and Sales Associates:
Earlier today we saw a business writer's blog post get picked up as a "news" report pertaining to the financial condition of a number of companies, including our parent company, Realogy. This coverage generally focused on the long-term debt and viability of these companies.
Although Realogy is currently in a quiet period and we cannot release certain financial information in advance of our fourth quarter 2008 earnings call in March, we certainly could have addressed the fundamentals had this reporter taken the time to attempt to carry out his due diligence by contacting Realogy for the facts.
I want to point out a number of "silver linings" for Realogy that clearly have not been taken into consideration by either the media or the financial ratings agencies:
During the past several years Realogy has moved aggressively to mitigate the impact of the economy on our company. We have successfully reduced our overhead by more than $350 million and continue to focus on maximizing the effectiveness of our cost structure.
As we have focused on costs we have been equally focused on growth. In spite of the woes of the housing market we have made great progress in advancing our company. From franchise sales to the retention of the top-tier sales associates to signing new clients at Cartus and Title Resource Group, we continue to be forward thinking, highly focused on the future of our company and the industry.
In 2009, we expect to benefit from considerably lower interest rates since a significant portion of our bank debt is tied to LIBOR;
None of our corporate debt is due until at least 2013; and
Unlike many companies in today's economy, we have the support and commitment of one of the best financed private equity firms in the country, Apollo Management.
Please also remember that private equity funds managed by Apollo Management and co-investors originally invested $2 billion in our company. Apollo has a substantial ongoing interest in the success of Realogy. Our senior management team is highly confident of Apollo's commitment to Realogy. If there is any question as to Apollo's overall financial strength, one need only look to Apollo's success in raising approximately $15 billion in capital last month for its newest investment fund.
As to the future of the industry, we are encouraged that Congress and the White House appreciate the importance of stimulating housing. We have actively engaged in lobbying the House of Representatives, the Senate and the Treasury Department on this critical aspect of our economy. In due course, we believe the government will act to provide the proper stimulus for our industry.
We look forward to the recovery in housing that we all know is inevitable. Thank you in advance for your hard work, patience and commitment to Coldwell Banker.
Sincerely,
Alex Perriello President & CEO Realogy Franchise Group
The Federal Reserve has responded aggressively to the financial crisis since its emergence in the summer of 2007. The reduction in the target federal funds rate from 5-1/4 percent to effectively zero was an extraordinarily rapid easing in the stance of monetary policy. In addition, the Federal Reserve has implemented a number of programs designed to support the liquidity of financial institutions and foster improved conditions in financial markets. These new programs have led to a significant change to the Federal Reserve's balance sheet.
The first set of tools, which are closely tied to the central bank's traditional role as the lender of last resort, involve the provision of short-term liquidity to banks and other depository institutions and other financial institutions. Because bank funding markets are global in scope, the Federal Reserve has also approved bilateral currency swap agreements with 14 foreign central banks. These swap arrangements assist these central banks in their provision of dollar liquidity to banks in their jurisdictions.
A second set of tools involve the provision of liquidity directly to borrowers and investors in key credit markets. The Commercial Paper Funding Facility, the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, and the Money Market Investor Funding Facility fall into this category. In addition, the Federal Reserve will soon implement the Term Asset-Backed Securities Loan Facility. All of the programs are described in detail elsewhere on this website.
As a third set of instruments, the Federal Reserve has expanded its traditional tool of open market operations to support the functioning of credit markets through the purchase of longer-term securities for the Federal Reserve's portfolio. For example, on November 25, 2008, the Federal Reserve announced plans to purchase up to $100 billion in government-sponsored enterprise (GSE) debt and up to $500 billion in agency mortgage-backed securities.
Emerald Coast Association of REALTORS® MLS Rules have been modified to allow website references in the Agent Notes and to extend Virtual Office Website (VOW) provisions. The changes were approved at the February 19, 2009, meeting of the ECAR Board of Directors.
Section 4.4, Note 2, of the rules was changed to better represent the rule's original intent. The note was added several years ago to restrict references to real estate licensees who did not subscribe to ECAR MLS. For example, if an ECAR member co-listed a property with a Realtor from Tallahassee who did not subscribe to the MLS, the rule prohibited entering information about the Tallahassee agent.
The original wording, however, was broader than necessary and inadvertently prohibited references to any third parties including homeowner associations and builders. The Board of Directors narrowed the wording to specifically reference real estate licensees and their assistants. This allows information and website links for third parties to be placed in Agent Notes. The change does not affect the requirement to record a non-MLS selling agent's name in the Sales Notes.
Virtual Office Websites, or VOWs, are private websites used by brokers to provide services to their customers over the Internet. They are password-protected sites that require visitors to pre-register, essentially making them customers, before accessing services on the site. These services use active and off-market listing information and are similar to those offered face to face.
The National Association of REALTORS®, with help from the U.S. Department of Justice, established policies in December to govern the use of MLS information on Virtual Office Websites. ECAR adopted the mandatory VOW language in January, but only recently determined which of the optional policies it would include in the MLS Rules.
ECAR's Board of Directors determined it would not place a restriction on the statuses used on Virtual Office Websites, but did decide not to allow confidential information to be displayed on these sites. Because that policy required a similar restriction to be placed on all brokers, the Board also approved a rule prohibiting the sharing of Agent reports with any customers other than a listing's seller(s).
Members should check to be sure that automated emails to prospects are sending Customer reports and that they are not using Agent reports for flyers. Customer reports "with Contact Information" provide complete agent information if a listing agent wants to use a report as a listing flyer. Prospect notification emails sent to agents always use the Agent reports which is not against the rules. It is also okay to use Agent report when participating in an MLS Marketing Tour.
BP Capital, L.P. ("BPC") and TBP Investments Management, LLC ("TBP").
BPC is a Commodity Pool Operator and General Partner for the BP Capital Energy Fund, L.P. ("the Energy Fund"). TBP is a Commodity Pool Operator and General Partner of BP Capital Management, L.P., the General Partner of BP Capital Energy Equity Fund II, L.P. ("the Equity Fund"). Collectively, TBP and BPC are refered to as "BP Capital".
Our firms have one objective: "Investing With Energy".
BPC and TBP are private investment firms that focus on investments in energy futures and stocks of public companies in various energy sectors and energy dependent industries. Minimum investment is $5 million. Our team is led by Boone Pickens, who brings more than 50 years of experience in the oil and gas industry. Mr. Pickens is the founder of Mesa Petroleum, one of the largest and most influential independent producers of natural gas and oil.
T. Boone Pickens, founder and chairman, BP Capital Management, is principally responsible for the formulation of the energy futures investment strategy of the BP Capital Commodity Fund and the BP Capital Equity Fund. With more than $4 billion under management, BP Capital manages one of the nation's most successful energy-oriented investment funds. Pickens frequently utilizes his wealth of experience in the oil and gas industry in the evaluation of potential equity investments and energy sector themes. He has not been shy in predicting oil and gas prices and - more often than not - has been uncannily accurate.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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