Here's the most important reading of the week, hands down: "The Fight Over Foreclosure Fees" What's being discussed, in accurate detail, is the very future of our industry.

"No aspect of the U.S. mortgage business will go untouched by this," said one attorney I spoke with, on condition of anonymity. "It won’t be long until we have a federally-regulated foreclosure industry, where Congress sets allowable fees. We might even operate under a single set of federal statutes when all of this is said and done."

Obviously, this is a big deal and worth paying close attention to, so...here's the link again: print this out and pass it along.

Meanwhile...

Shaun Donovan is probably wishing he never said this...

ED HENRY: Is that housing credit now dead? Or does the administration think you should try to revive it to try to prop this industry up?

DONOVAN: Look, Ed, I think it's too early to say after one month of numbers whether the tax credit will be revived or not. All I can tell you is that we are watching very carefully. I talked earlier about new tools that we will be launching in the coming weeks and we are going to be focused like a laser on where the housing market is moving going forward. And we’re going to do everything we can to make sure that this market stabilizes and recovers.

That's from an interview with CNN last week and his slip-up has been headline news ever since. Everyone has been talking about whether or not this was a signal that the Housing Tax Credit might be coming back. Calculated Risk was skeptical about the possibility, and The Wall Street Journal was even more blunt (declaring "Ignore It") and when those two sources agree on something...it's a safe bet. Economist Tom Lawler wrote an angry rant claiming Donovan "may have just made near-term housing sales worse."

It's not easy being a politician -- actually saying nothing is a very difficult trick. I believe that Donovan was attempting to do exactly that: come up with a paragraph of filler on the spot. It's very unlikely that the Housing Tax Credit will be brought back in 2010. (After November, though, that might become a likely forecast for 2011.)

Does the Real Estate market even want the Tax Credit brought back? CNBC did a poll today, and if these results are any indication, perhaps the NAR would be smart to let this one die...

The Yale economist Robert Shiller recently talked to WSJ about the need for "inspirational ideas" for housing policy. From their summary:

He lamented the fact that the policy responses of the Bush and Obama administrations have so far amounted to reactive “patches and bailouts.”

What’s lacking, he said, have been “forward thinking” measures that would be “more inspirational to the market by creating innovation and progress.”

Where are those ideas? Well, journalist/blogger Felix Salmon has been offering a lot of worthy ideas over the past few years, and this week he wrote a short, excellent article about The Rental Alternative. As we reported last week, PIMCO's Bill Gross was calling for even more aggressive nationalization of the Housing Industry...but of course, Bill Gross also stands to make a lot of money from that outcome, too.

Shiller himself had two suggestions: first, indexing mortgage rates to inflation, in order to protect US homeowners from a "Great Depression" scenario...and second, a "preplanned workout" in all future mortgages to make modifications and defaults into a streamlined, automatic process instead of the hostile negotiation it is now.

So far, though, the song remains the same...everyone knows there's a problem, but nobody is taking accountability. Even the Federal Reserve has been trapped in the same argument for months now. Of course, while the experts argue, RealtyInfusion readers are out making money and doing deals every day. The rest of 2010 will be a real-world test of the Free Market's ability to make things right.

Finally, here's a strange find from the always-interesting Seeking Alpha about Google's recent decision to invest $86 million into...low-income housing? Apparently so!! Looks like it's for tax breaks, but Google has been branching out into every other utility...could this be a sign of Things to Come?

Mindy Sylvester is one of our "Superstar" clients!! She's having an amazing year and I wanted to share this latest blog from her, focusing on the LUXURY Short Sale market, something I know many RealtyInfusion readers are involved with...

It's like something out of a movie. There's been a crisis that affects the whole country .. maybe the whole world .. and the President convenes a group of the smartest experts and the most powerful investors he can assemble to advise him. But of course, in the movies, after a long dramatic argument, somebody proves their case...and a course of action is decided upon.

Last week, at the Future of Housing and Finance conference in Washington, DC, there was an incredible cast of characters assembled, but unfortunately, there was no Hollywood ending in sight. The headline from Newsweek says it all, I'm afraid: "No Consensus on the Future of Housing Finance."

The Cast of Characters

The most-quoted voice at the conference was Bill Gross, the manager of the massive investment conglomerate PIMCO. "To suggest that there's a large place for private financing in the future of housing finance is un-realistic," he said. "We need a government balance sheet." He also advocated an ambitious mortgage refinance plan that was making headlines all last week. That's not surprising, though .. "Full Nationalization" makes for one heck of a headline!!

In sharp contrast, Timothy Geithner never broke his role as a moderator. In fact, he was so vague most of the time, it felt like a Saturday Night Live skit: "Some suggest that, as a government, we have provided too much support for housing, while others suggest we provided too little...It's safe to say there is not yet any clear consensus." Thanks, Tim.

HUD Secretary Shaun Donovan wanted to see less government involvement in the future .. much, much less: "To be clear, the government's footprint in the housing market needs to be smaller than it is today - where FHA and the GSEs collectively guarantee over 90 percent of all mortgage loans." His remarks made it clear that everyone in the control tower at Fannie and Freddie is not comfortable under-writing the entire housing market at once.

Here's an important detail: the executives of Fannie and Freddie didn't even make an appearance at this conference. Because of this, a lot of experts have been brushing off the whole event as more political theater. Mortgage analyst Laurie Goodman told Newsweek: "Nothing will happen on reform for years. The conference is a big blah, blah, blah."

What's Your Call?

Do you think this conference was worth all the coverage, or was it just a bunch of noise. In a room full of geniuses...does anything get done?

Here's a fact that woke me up more than the coffee did: "25.5 percent of consumers now have a credit score of 599 or below." Wow...Good morning!!

We're working harder every day because this Short Sale market just keeps building momentum. Thanks to ActiveRain, we've got a lot of new readers in the past few weeks, so today I wanted to recap some "Big Picture" concepts.

So let's review...

Here's the single-sentence summary from yesterday's post: "From the week ended June 5 to the week ended July 10, more than 2.1 million Americans lost their benefits, and another million will join them by July 31." As we've discussed before, the number one indicator for future foreclosures is unemployment, and unfortunately, that's one trend that shows no signs of reversing, or even improving all that much.

This morning, Realty Trac released their report for the first half of 2010, and they're expecting over a million homes will be repossessed this year. As their VP Rick Sharga said, "The underlying conditions haven't improved."

Not only that, but it's looking like conditions might get even more drastic in the second half of the year. HousingWire editor Paul Jackson was the source of my morning wake-up call:

New data released today by FICO Inc. show that a whopping 25.5 percent of consumers now have a credit score of 599 or below. That’s a market of more than 43 million people, and growing every day, too—thanks to unemployment levels that appear set to remain painfully high for the next five years.

This is the definition of growth market, too: historically, only 15 percent of consumers have found themselves with a credit score below 600. Now, a quarter of consumers fit the profile.

To round out today's Big Picture, the Wall Street Journal is reporting on a sharp rise in housing inventory in markets around the country. The best recent estimates from S&P called for three full years before Shadow Inventory is remotely cleared out...expect to see those estimates increase in light of the new numbers!!

Nobody knows just how bad it's going to get. What we can say, with total confidence, is that we're all going to very busy for the rest of the year...and probably several more years to come. If you're not already using our Short Sale Engine, right now would be a great time to check it out. If you're dealing with a lot of Short Sales, we have THE best technology for processing your paperwork, automating your business and empowering your associates. Take a look at what we can do for you...

Realty Infusion Short Sale Processing Engine from Realty Infusion.

Always Winning, Together!!

Our very own Garrett Heaney got interviewed for a recent BankRate.com piece about Short Sales, where columnist Steve McLinden takes on the question Why Do Short Sales Sputter and Fall Apart?

"With every short sale, there are dozens of required documents requiring as many signatures, dates, witnesses, initials and sometimes notaries," says Garrett Heaney, a spokesman for Realty Infusion in Seminole, Fla., a real estate technology firm that sells short-sale processing software.

"Now, try to visualize getting all of these documents collected, organized and submitted through the required channels within any time frame and you'll have a good idea why less than 20 percent of traditional short sales are successful," Heaney says. Thanks to Steve McLinden for reaching out! I guess it's a testament to how well our RealtyInfusion blog has been doing that we're being taken seriously by journalists these last few months. I think it's also an added sense of responsibility, though .. realizing how much our audience has grown, and how much our readers are relying on us to filter out the BS and noise!!

It's been a long, busy and amazing summer .. here's a quick look back at some of our most important articles you might have missed!!

Chinese Money and US Real Estate 101 -- a review of a new trend that's quietly shaping the recovery: billions of US dollars coming into the market from...China?? Worth reading!!

There's No Way to Make the June Numbers Look Good -- I'm not a pessimist, I swear!! I am a realist, though, and I had to take issue with articles and blog posts that tried to "spin" June's disappointing numbers into a good thing...

Would YOU Live in a Shopping Mall? -- looking at one of the more radical uses for neglected commercial Real Estate in 2010 .. converting it into living space, apartments and condos!!

Finally, check out our book recommendations: here's 5 Mind-Blowing Business Books, and 4 More Visionary Business Reads.

Bryant Tutas always does awesome work .. and this post was ESPECIALLY relevant for our readers!!

""People are not in it to flip like back in the old economy. The new economy dictates that you have to have a long time horizon."

--Matt Martinez

I read a really strange article on CNN Money last week. The entire point of the article was about how Real Estate investors are helping neighborhoods and cities around the country recover, getting more involved with their properties long-term, and stepping in where nobody else will to fix what has to be fixed...and yet the title of this article is "The New Vulture Investing." What gives?

It's no surprise to RealtyInfusion readers that a lot of "Flippers" are making the transition to long-term holdings and rental income -- after all, a lot of you are already doing exactly that! What is surprising is that anti-investor bias is still being paraded by the media in 2010 .. even in an article that's about how much good investors are doing!!

America doesn't need a bad guy to point fingers at...America needs solutions. Call me crazy, but I don't think that making investors out to be the villain is a very productive use of time and resources for CNN Money. That's enough sermonizing from me, though. Let's dig into the article itself...

Some Interesting Details

This confirms what a lot of our clients have been telling us in recent months:

Although conditions are very favorable, investors have to be adaptable because the market is evolving rapidly. In Phoenix it's changed in just the past six months. Foreclosure auctions are no longer a fertile hunting ground...

"Amateurs have come in and run up the prices," said Tanya Marchiol of Team Investments. "In 2009 I bought 76 properties at foreclosure auctions, at an average of about 60 cents on the market dollar. This year, I've bought four."

The article also spotlights Glenn Plantone, a Las Vegas investor and a regular contributor to the Bigger Pockets forums. Glenn makes a lot of important points...and he really doesn't sound like much a "vulture," either...

"I tell investors to plan on holding for five years. With cash flow, there's no need to worry about price drops."

Glenn also discusses a surprising (and welcome) trend in 2010 -- major banks are increasingly favoring Short Sales over the usual REO channels. "The banks make better profits with short sales, so they're not foreclosing. They've switched staff to processing short sales and they've gotten faster at processing them."

What's Your Call?

Do you think we'll see the media bias against Real Estate investors finally come to an end in 2010? Or will we still be "vultures" for years to come? (And...does it matter to you?)

There's never been a better time to check out our Short Sale Engine.

That's because we're running a (VERY) limited time offer that's so ridiculous, we've had a lot of people on our email list ask us if this was a prank. It's not. We really are offering the full Pro version of our Short Sale Engine for $1. We're running this special to help celebrate our upcoming end-of-summer Short Sale Party .. more details on that soon!!

I've also put up a video explaining what the Short Sale Engine can do your for business...

All too often, media reporting on the housing industry is too shallow and superficial to be really useful for those of us who are in the business. If you're like me, you want to see original analysis by experts who can connect the dots and explain their logic every step of the way. Seeking Alpha has become a website that I turn to, every day, for information that goes deeper than the headlines.

The best part about the Seeking Alpha approach is that, unlike the Wall Street Journal, New York Times or Forbes Magazine, there's no political bias to their coverage. Seeking Alpha gets contributions from a wide range of voices, and the comments sections are often the most educational part of the articles. Remember, when smart people argue .. the audience wins!!

I wanted to share three very important articles that I've read on Seeking Alpha in the last few days...

1. Evidence of Systemic Credit Breakdown. This might be slow reading if you're not familiar with the market, but for those of you who keep a close eye on the "Big Picture," this will be powerful reading. This is quite possibly the most important story you'll read this year, given how scary the long-term implications are...

2. Fed Dissenter Fears New Bubbles. There's been a lot of rumors and competing explanations for the Federal Reserve's statements on Tuesday!! This article is by Tim Iacono, who is always a standout contributor: level-headed, focused on the numbers instead of the politics, and speaking from decades of experience. His explanation is the single best article I read on this topic all week...

3. One More Futile Attempt to "Stabilize" Housing. This is a (very) opinionated piece about the newest round of homeowner aid from the Obama administration. Like most of the articles I recommend, though, this is so packed with facts and ideas that you'll still learn a lot from it even if you don't agree with the main argument at all! That's good writing...

What Do YOU Read Every Day?

I'm always looking for new sources and new ideas .. return the favor and let me know what sources you trust and rely on in 2010!!

Just last month, I remember talking about "Slow News Days" .. that really hasn't come up at all in August, though!! In fact, there's been almost too much to keep up with. So for this week's roundup, I want to focus on a handful of truly excellent articles that help sort out the big stories...

The Refinance Rumors

The biggest story we've been getting the most questions about is definitely the rumors of government-mandated refinancing and even principal forgiveness. It seems like the story gets more complex every couple hours, doesn't it? There's been a lot written about this .. but not a lot that you can trust.

Fortunately, HousingWire came through with the goods. Linda Lowell gave a great treatment of the whole controversy, titled "The Natural History of a Rumor."

The former Hedge Fund manager turned journalist Bruce Krasting also offered some valuable insights -- if you're still hungry for more perspective, turn to "Rumors of News, and News of Rumors..." (And for a very funny rant about all this drama, check out Paul Jackson's editorial, "Never Underestimate the Stupidity of Politics.")

"If we've learned anything from watching government response to this nation's housing and economic crisis, it's this: the more irrevocably stupid an idea is, the more likely it becomes that our politicians will tend to consider it. It's already been proven true more than once, across two different administrations."

That Whole Unemployment Thing

One of the most challenging and interesting articles I've read in months was "Strip-Mining the US Economy," which argues that US Corporations are destroying our economy by creating profits at the expense of jobs. The author is an active trader on Wall Street, and the case that he makes is full of details and facts. Although I don't quite agree with his argument, it's something I've been thinking about ever since I read it .. and that's exactly the kind of material that leads to new ideas!!

Boy, I wish there was good news to report on the unemployment front. I don't have any to report, but I do have an important article by Andy Grove about "How to Create American Jobs Before It's Too Late." Grove was one of the founders of a company you might have heard of named Intel, and his advice here is full of sobering data...

"Some 250,000 Foxconn employees in southern China produce Apple’s products. Apple, meanwhile, has about 25,000 employees in the U.S. -- that means for every Apple worker in the U.S. there are 10 people in China working on iMacs, iPods and iPhones. The same roughly 10-to-1 relationship holds for Dell, disk-drive maker Seagate Technology, and other U.S. tech companies."

Finally, Newsweek published a solid "Big Picture" version of the unemployment story that's focused on the President: "Has Obama Run Out of Economic Options?"

Just Plain Interesting

We read forecasts from economic experts week after week, but is anyone keeping score? It turns out that economists really don't do very well at forecasting when you measure their performance...

"How do economists fare when it comes to real forecasting, to predicting GDP growth and inflation one year out? About as good as a coin toss, according to esearch. Less than half the economists did better than the “naive” forecast, which is based on no understanding of the economy and merely assumes next year’s outcome will be the same as this year’s. It’s what you’d expect if the results were purely random."

That's just a small part of the eye-opening revelations in the article "For Good Economic Forecasts...Try Flipping a Coin." Highly recommended reading!! Worth printing out and enjoying at a quieter time...

What's Your Call?

Speaking of "making bad calls," in the aftermath of the subprime crisis, there's been a lot of talk about how to deal with the ratings agencies who either got corrupted or just totally failed to do their jobs right: S&P, Moody's and Fitch. Well, former regulator and economic watchdog Bill Black has a simple plan: "Just Get Rid of Them."

Do you think that's too drastic? Or just drastic enough, but not a realistic option? Or .. do you think the ratings agencies still have a valuable role to play in the post-crisis economy? Let us know!!