I want to thank Mike Mueller for showing me how to blog. If you have taken the time to educate yourself and read Mikes Mortgage Minute http://www.patagoniafinance.com/mikesmortgageminute.html or perused his web site http://www.patagoniafinancial.com/ you already know what a great blog style he has. I want to thank you Mike for showing me a way to communicate and have fun while doing it. Your class was both informative and dangerous as I now think about all sorts of information that needs to be given to the public thus causing me to stay awake at night and get up early in the morning to get back to my key board
I am really sitting on the edge of my seat to see what happens next. I have been trying to get several really good clients with really good fico's financed. The going is tough and has created a feeling of being under siege in my office. I am not talking about hard money there is a lot of that compared to Jumbo, Alt A Helocs Stand Alone Seconds, and isn't that all there is in California?
I know all of my fellow lending buddies are talking about what they think is going to happen next, and yes, sometimes I can't help get involved in speculating too. I love to think I might know something about this new real estate and loan market but really I don't, and nothing brings it home to me better than when I hear my wonderful husband who is not in Real Estate at all (he actually spends his days doing noble things for Habitat for Humanity), spouting some thing I said or the news said like he has the inside track...I have to smile because the fact is none of us do. Not the most seasoned real estate agent, mortgage broker, financial planner, bank president or even the President of the United States George W. Bush...none of us.
I personally wish I could go on vacation and have someone come in and fix this ugly mess but it is very unlikely. Here's what is happening in my camp; everyday I get calls from people actually crying about their home and the situation they are in. There are short sales enough to go around and ref's with the best Fico scores I have ever seen sitting waiting on approval. I kid you not - I see so much pain during the day I need to take a hike just to wind down at the end of the day. I feel the pain because I really want to help all of these people in need, and heaven forbid what if I got into big trouble myself, I would want to help me out too. So I search, and I listen, and I do everything legally possible to help them, because I want them to at least have a chance to save their homes and their family lives.
I will be posting short sales and adding links to others short sales in an effort to help those who are in need. If you would like to have your house (Sorry California Only for now) listed as a short sale please send me an email at firstname.lastname@example.org so that I may get your information and get your property in front of as many eyes as possible. Check out our featured listing for today I hope it will help someone who is looking for a little fixer upper starter home with great potential www.erscommercial.com
Looking back - Several months ago my son called me and told me he had heard that Country Wide http://www.countrywide.com/was having some financial problems and that they were on the watch list of those in the know. Whenever I mentioned it to anyone else in the business I got the standard answer "Do you know how big Country Wide is?" " if Country Wide goes under we are all in very deep water and I will be very frightened because that would mean very bad things for a long time to come" It certainly made me wonder what my son (34) was smoking. No one else was singing that tune. I certainly didn't hear anything in the news about it.
Well here it is - CNN www.CNN.com announced the Federal Reserve's early morning move of lowering the discount rate in an effort to let the people know that they (Fed) have a handle on this. LOL!!! Do you think that was in response to Country Wide needing to be bailed out "temporarily" for 11 billion dollars? Why did it take so long for the news to come out? I do't understand how my son could know several months ago and the news stations didn't pick it up - till now. Could it be the impact that devastating news like that, could have on our world markets?
If that isn't enough to think about - today on CNN Money Capitol One has announced it's banking woes stating that it will close it's mortgage unit and cut jobs further the article goes on to say that many commercial banks are teetering too. http://money.cnn.com/2007/08/20/news/companies/capitalone_fortune.fortune/index.htm?postversion=2007082019
In Peter Schiff's article in Orbus Intell dated 8/10/07 he says ..."This week, several of Wall Street's http://www.wallstreetjournal.com/ best foreign customers announced staggering losses on the American mortgaged backed securities they had been sold. The fundamental issue underlying these losses is that Americans borrowed more money than they can afford to repay."
What do you think - just how bad is it? How bad can it get? I like to think that I like to know the situation and try to tackle it HEAD ON. But this....
Well if you ask me it is going to be devastating for those who have not built a strong financial foundation and then it is going to be costly for those who have. The argument for a strong financial foundation is a good one, just how deep does your financial foundation go? Can it withstand the rise of interest rates? How about the rise of interest rates and the loss of your job? For some just the loss of hours on the job is enough. In fact just a cut in hours or pay is often life's deciding factor let alone rising food, fuel, insurance, taxes (to bail out whatever) and all the other things that get thrown in to the mix on any given day. Whole economies are being effected by this pressure. I would recommend that you look over your plan right now before you get paniced. No onemakes great decisions in the midst of panic.
I especially liked the part where Peter says "It will not be long before American borrowers come to a similar realization. When they do they will be faced with the shocking reality that all of their home equity is gone--having disappeared just as quickly as did the paper profits of the Internet stock mania. But this time around the situation is direr" I can't help but gasp - is there really anyone who thinks they have equity left? Or that they are going to catch up by using their credit cards? I mean other than myself of course. I hope I have some equity left...I am going to hold on to what I have till the market gets better...I just hope I can keep paying my mortgage - anyone out there need a loan? Hang on someone's calling.
I just answered the phone to talk to someone about an investment property they want to sell before the loan the owner agreed to carry to "help them get into the property" becomes due early next year. The client tells me that the balloon is in the 6 figure category and the property won't appraise even close to pay off the 1st loan let alone the money the original owner carried. What should they do? How do I begin to tell you of so many people in this situation and more to come.
Peter's article goes on to say "When American homeowners come to grips with their diminished net worth, the excess consumption that has been the rule over much of the past decade will grind to a halt. If any money is left after making higher ARM payments, homeowners may actually decide to save some to repair their personal balance sheets. As consumer spending collapses, the U.S. economy will plunge into a severe recession, compounding the problems in the housing market and exacerbating the whole situation".
Will the last straw be the value of the U.S. dollar. Already teetering on a precipice, a recession will push it over the edge, Schiff goes on to ask. Okay I'll admit it I was afraid to say it earlier but, there could be a reason why no one wanted to tell us Country Wide was in trouble months ago? Nah, that would be like saying there was a conspiracy or something and how tired is that? But wait...Peter beats me to the point (I'll let him say it ...go on Peter) "In Jack Nicholson fashion, since Bernanke feels investors cannot handle the truth he feeds them a lie instead."
I can hear the consensus now.
For a more in-depth analysis of the tenuous position of the American economy and U.S. dollar-denominated investments, download my free research report on the powerful case for investing in foreign equities by clicking here. https://www.europac.net/report/index.asp?s=orbusintel
I tell you I can't wait to see what happens next! I think I am going to go ride my horse Dutch and think about what it might be like to sleep under the stars and ride him for transportation. But then I start to wonder about global warming and how do we fix that?