Nevada Real Estate >> Las Vegas Real Estate Specialist: September 2009

Bet you didn't know that there are no mortgage loan specialists in Las Vegas, NV.  That's right, not a one.  No FHA Specialists, no VA specialists, no first-time buyer specialists, etc.  How can this be you say?  What has happened to the mortgage industry in Nevada?

The MortgageLending Division is what happened.  My sources tell me that they are going to begin cracking down on loan officers who claim they are "specialists" or "experts" in their advertising, newsletters, websites, and blogs.  According to my source, the MLD is going to start penalizing and fining mortgage companies for using either of these terms, and if the practice continues after the warning and fine, then the loan officer's license will be revoked.

Now "Expert" has long been a word ActiveRainers realize can be misused, over-used, or just downright wrong (see Matt's blog on the subject), and that's one most loan officers have shied away from in the print/tv media.  But a specialist is (by using the good old Merriam-Webster definition):

SPECIALIST  "one who concentrates one's efforts in a special activity, field, or practice"

What's wrong with that I ask you?  Don't many of us in the real estate industry prefer to specialize, knowing that often times finding a niche and working it can produce more income than the wide-net appraoch?  I personally concentrate my efforts on divorcing couples and how to deal financially with their mortgage.  I've spent years reading, training, and even presenting information on "Divorce and Your Mortgage" which certainly doesn't make me an "expert" but does, by definition, make me a "specialist."

I've argued this point with the MLD on several fronts for the past few months to no avail.  I had originally wanted to say "Divorce Mortgage Specialist" which they nixed.  I then argued to be able to say "a Mortgage Broker Specializing in Divorce," but that too was shot down.  Apparently the only way to set myself apart on this particular subject is to say "concentrating on" or "focusing on." 

So take heed fellow loan officers in Las Vegas, NV--the MLD Specialists are out to get you!

 

ADVERTISING – Those ads that seem too good to be true.

 

 

I have been in the mortgage business for 17 + years.  I have seen so much advertising when it came to mortgage companies and how many of the ads were misleading or just flat out lies.  Those companies advertising low rates that didn't happen.  This easily went on from 1992 to 2002. I always wondered why this wasn't regulated as strongly as it should have been.  I found out that some of these companies had 100's of complaints, yet they still operated for those 10 years. I think this is misleading and I call it Shark Advertising.  It's dangerously misleading, yet it worked for many companies, at the expense of the borrower.

 

 

 

If anyone has noticed, we haven't see as much advertising from mortgage companies or large banks in the last 18 months or so. I am now seeing a few mortgage companies advertise on the radio and as of lately, a few advertise on TV, especially ESPN. The ads are misleading because they appear to make you believe that it's being backed by the government.  (Miriam Bernstein made this comment below that explains this part..  - Comment # 30 -)Has anyone seen a few ads on tv that look like a news update, a spokesperson telling you about government funded programs or that the government is helping in sponsoring these programs. Yet if you read the fine print, it's a mortgage company, disguising this ad very carefully, spinning it as thought the government is putting this out to the public??

I am even seeing this more and more in such places as Facebook. Below are a few that I am seeing on Facebook now.

 

 

 

 

 

Here are some ads found on facebook and comcast.net. As you can see, these mortgage companies and or companies that are lead generators, make you think that the government is behind this.  Obama hasn't asked homeowners to refinance. The first one on the left, upper left, is from a company called Lower My Bills.  They sell leads to other mortgage companies, after they have gathered your information online. Then you have like 4 to 10 lenders call you, sometimes daily.

 

 

 

 

 

 

 

 

People on Facebook that give basic information – eye catchers to pull you in.

 

Here is a loan officer on Facebook that placed this on his Wall, to capture the attention of others. You just need to be aware of what you read. Sure, this can happen, but there are some unknowns not mentioned. And sometimes the loan officer will raise that unknown, so you can't obtain that great rate and get the next best thing.  Keeping in mind, it's not always about the Best Rate.  How service?  Integrity?  Educating the borrower? And so much more....  Please read : I want the same deal that my friend receivd...  &  Mortgage payment vs Interest Rate

 

 

 

 

Web Sites that are deceiving !!!!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As I explained in this blog post, deceptive web sites, here is a great example above. Doesn't this look like it could come from the USDA themselves?  But it isn't. It acts as a lead catcher, catching your info to call you and or sell you about USDA loans or any other type of mortgage loan. No Cost Obligation is mentioned on the site. - We always love to hear about free things, but are they free overall?

 

 

 

 

 

Here is a FAVORITE of mine !!!

 

 

 

 

 

 

 

 

 

 

 

I am sure many of you have seen this one on tv, FreeCreditReport.com. The commercial announces a free credit report. But at the very end, it says that you need to enroll in their Triple Advantage program.

A free credit report?  They have tons of commercials &  commercials cost money to display on TV. They also have like 3 to 4 different kinds of commercials and.  producing commercials cost money.

 

Well, I feel like an investigative reporter for the news. I filled out my info online, trying to see what I get. It says that it takes 3 to 5 days for me to obtain these credit reports from the 3 credit agencies. (giving my credit card #) And then there is a button that says, to obtain your 3 reports now, click here. Imagine that, it's asking for $24.95 now. See the 2nd paragraph on the left, highlighted in yellow?  It talks about the new Federal Law and I am wondering if that is what they are sending me now, because that is free. But from what I know, you have to go to annual credit report to get the free reports.

All 6 commericals - Free Credit Report.com

 

 

 

Conclusion :   Just be very careful of what you read and what says free, when it might not be free.  I always have said, someone has to pay for it from some where. Is it you?  Is it me who pays for it?

Overall....No matter what, consumers will fall for some of these ads.  It's called false hope.  Especially when desperate, you just want to believe that someone can help you.. or, that it's cheaper with them than the others.  thanks

 

 

• Shopping for mortgages - The Public Image of Advertising that is misleading !!!! - Part 1 of 2

• Shopping for mortgages - The Lending Trees of the World (lead generators) - Part 2 of 2

 

 

Advertisements - Is the grass greener on the other side?

 

 

 

                    

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Experience & Knowledge at its BEST !!!

 

 

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

 

 

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc

Charleston Heights August 2009 Real Estate Resale Market Report:

• Listings (9/15/2009):  98
• Under Contract (9/15/2009):  135
• Sold August 2009:  59
• Month's Inventory:  1.7

Since Last Month:  Listings are DOWN -7, Pendings are DOWN -13, Solds are DOWN -5

Why Las Vegas Pendings Are Not Closing

Last Month's Charleston Heights Real Estate Market Report

For More Las Vegas Communities and Reports Click Here

Welcome Home to SW Las Vegas Communities: Liberty at Warm Springs

Liberty at Warm Springs is a community in Southwest Las Vegas near the corner of Warm Springs & El Capitan. It consists of "patio" style single family detached homes with garages.

Liberty at Warm Springs is within walking distance of many amenities - St Rose San Martin Campus, Red Ridge Community Park, Faiss Middle School, Tenaka Elementary School, Restaurants, Professional Offices, Medical Offices and Local Gaming. 

Catching the southern 215 beltway is a snap from the Durango Exit (leaving great proximity to McCarran Airport, UNLV and the South Strip Employment and Entertainment centers!)

There are exactly 239 Patio homes w/ garages & balconies in Liberty at Warm Springs ranging from 700-1484 square feet. Liberty at Warm Springs was built between 2004-2005 by KB Home.

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The key home loan financier operating on the secondary mortgage market has seen much better days with its immense portfolio. Just like most other lending institutions it, too, has been slowly bleeding as foreclosures keep shaking its once solid foundation. So much so that Washington had to bail it out a while back. Yet, it's still doing what it was mandated to do, invest in mortgage paper.

Fannie Mae, to stem growing losses, is gradually hiking mortgage underwriting criteria, though. In the latest round of updates that'll go in effect November 1, the borrower's FICO has to be 620 or better for every home loan that complies with its Selling Guide. This date applies to manually underwritten and FHA and VA loans. Furthermore, for mortgages routed through Fannie Mae's Desktop Underwriter the start date is December 12, pushed there to get the software configured. Excluded from this FICO upgrade are Fannie Mae's Refi Plus products and manually underwritten loans with non-traditional credit. The minimum score now is 580 for most programs and government loans have none.

Southern Nevada - Las Vegas, Southern Highlands, Summerlin, Henderson, Mountains Edge, Anthem and Green Valley among the communities here - is trying to emerge from a deep real estate slump and these changes naturally will hamper that. The same goes for many other areas in the country, from Arizona and California across to Florida and elsewhere. Not in a major way, but still. The home loan guidelines are already tough enough, so another degree higher will put more squeeze to getting approvals.

On the other hand, as the national housing market continues to plod along unsteadily, Fannie Mae applying more prudent risk management in mortgage lending is understandable. It's already supported by the government. If it makes more risky loans and they increasingly default, it needs more money from Washington to stay in business. In reality, that means the taxpayer who was approved for a mortgage and subsequently goes bust ends up paying for it himself. Stopping the potentially self-defeating cycle at the first step seems to be the right thing to do.

 

Age Restricted (55+) Communities are scattered throughout the valley.  Many offer a variety community amenities for Seniors who enjoy active lifestyles.

Here are real estate market reports for the most popular 5 Age Restricted Communities in the Las Vegas Valley:

Sun City MacDonald Ranch is located in the Green Valley Area of Henderson, NV (zip 89012). There are 893 Homes in Sun City MacDonald Ranch ranging from 1020-2489 Square Feet.  Community Amenities Include:  Clubhouse, Community Golf, Gym, Pool, Spa, Tennis

Sun City Anthem is located in the Anthem Area of Henderson, NV (zip 89052 and 90-44).  There are 7312 Homes in Sun City Anthem ranging from 1080-4567 Square Feet.  Community Amenities Include:  Community Golf, Gym, Pool, Spa, Tennis, Clubhouse and Recroom

Sun City Aliante is located in the Aliante Area of North Las Vegas, NV (zip 89084).  There are 1829 homes in Sun City Aliante ranging from 1157-2104 Square Feet.  Community Amenities Include:  Community Golf, Clubhouse, Gym, Pool, Spa, Tennis, Recroom.

Sun City Summerlin is located in the Summerlin Area of Las Vegas, NV (zip 89134).  There are 3470 homes in Sun City Summerlin ranging from 1021-4051 Square Feet.  Community Amenities Include:  Community Golf, Tennis, Gym, Pool, Spa,  Recroom

Siena (Sun Colony, not a true "Sun City" but appropriate age restricted community for this report) is located in the Summerlin Area of Las Vegas, NV (zip 89135).  There are 2029 Homes in Siena ranging from 1034-3875 Square Feet.  Community Amenities Include:  Guard Gated, Gommunity Golf, Pool, Tennis, Gym, Clubhouse.

Renee Burrows carries the SRES (Senior Real Estate Specialist) Designation and has Probate and Estate experience.  If you need a referral to a Probate or Estate lawyer, please contact me!

Seniors Real Estate Specialists® are REALTORS® qualified to address the needs of home buyers and sellers age 50+. The SRES® Council awards the SRES® Designation to those members who have successfully completed its education program.

By earning the SRES® designation, your REALTOR® has demonstrated necessary knowledge and expertise to counsel clients age 50-plus through major financial and lifestyle transitions involved in relocating, refinancing, or selling the family home. Your REALTOR® has received special training, gets regular updates, and is prepared to offer the options and information needed in making life changing decisions.

For Last Month's Las Vegas - Henderson - North Las Vegas Sun Cities Market Report Please Click Here!

For Most Current Sun Cities Market Report Click Here

To prevent loss of value on their OWN home.

And why should renters care?  Maybe if they are buying or considering buying a home across town or in their own area, they should care if they are going to use financing to purchase their home. 

Here is what is going on:  stuff is getting stolen that prevents financing of a home.  I am not talking refrigerators or little appliances or a ceiling fan here or there.  I am talking about pool pumps and air conditioners and water heaters ~ even entire large above ground spas.

It always seems to me that it happens in the 11th hour of a closing too, which is odd that the property can sit around vacant 5-6 months (or more) and then have something of value disappear.  Is someone trolling the MLS and looking for vacant property?  There also seems to be no eye witnesses to these shenanigans.  Is the someone who is taking this stuff a licensed contractor (with credentials on the side of the vehicle) or a former owner?

Why you could lose value if you are a homeowner? 

• Price reductions to compensate for the loss.  Case in point of the stolen LARGE above ground spa.  Buyer may get a price reduction which will reflect on the value of your home but doesn't hinder financing.
• Transactions are "cash only" to reflect the loss of systems (water heater, pool pump, air conditioner, entire kitchens, etc.)  Many times these transactions are recorded as cash only without detailed information about systems missing so when a bank owned home is listed (or any other home for that manner,) that sold value appears to be a solid value.

Why would you care if you are a renter that is looking to buy?

• Your escrow across town could be subject to theft and that other renter that lives next door looks the other way.  This could affect the financing on your own home or make your escrow extra lengthy.
• Your appraisal can come in low because the appraiser used the cash only comp without knowing it was cash only because of major systems missing.
• You can lose out on a dream home because it is cash only due to missing systems.

With so many vacant homes in the valley we all feel pretty helpless about the situation and I have a feeling that people look the other way when they see or hear shenanigans.  Let me present it this way:  Right now we need to be vigilant and fight back against those shenanigans just to protect the value of our own homes. 

On Thursday I had an escrow that had missing systems (that affect financing) stolen in a 24 hour period (was there just the day before) and now we are scrambling since this an 11th hour situation and we are waiting for a re-inspect from the appraisal so we can have docs delivered.  BOOO!  This is the THIRD time something like this has happened to one of my escrows in less than a 1 year period.

I went to craigslist to find that piece of missing equipment and I was flabbergasted.  I shouldn't be surprised and I am sure many others have seen this before me.  I do suspect that people with credentials on the side of their vehicles (it only costs $30-100 to have credentials put on the side or backs of your vehicles) are taking these systems!

Here is what you can do to combat this!

On a bank owned home many times the list agents will post a "NO TRESPASSING" sign on a window like this:

When you live near one of these vacant homes, please take the time to go write down the numbers.  MANY times they have both the list agent's number AND the servicing company's number.  DON'T WAIT UNTIL IT IS TOO LATE!  Do it as soon as you see it!  Also, not all vacant homes are bank owned so when a sign goes up, write down the name of the list agent's number on the sign.

Many times in REO (Bank owned, foreclosed) property, there is an abundance of activity.  There are rekeys, trash outs, pool maintenance, lawn maintenance, contractors for systems (heating and a/c), etc.

At this point, I would suggest that we all be busy bodies and get descriptions of the vehicles, license plate numbers, and humans going in and out of these properties.  Also, if possible take photos with a digital camera from the comfort of your own home. 

I do not suggest confronting these individuals (although I have been confronted by neighbors when I am entering pre-market REO listings, I am not really threatening at 5'2" and 115 lbs.)  I always have a good conversation with the neighbors who are genuinely concerned about the property.  So I do have faith that there are vigilant people here in Las Vegas.

I would take any information and contact the list agent and servicing company also (whatever info is on that window sign).  Maybe what appears (remember from above, fake credentials are easy and cheap to obtain in the form of magnets on cars) to be a licensed pool or HVAC company just stole some systems.

Ask them, to please let you know who is authorized to be in that home, and let them know that you care because you are a neighbor.

HVAC and pool companies and landscaping companies usually do not work after the sun goes down so please call 911 if you are seeing shenanigans in the middle of the night, and do not forget to get descriptions of vehicles and people that are in the vicinity.

My three escrows that ended up with missing systems has happened ALL over town so no one should think their area is immune or this is going on in just a certain area of the valley.

Even though this home may belong to the bank (and many people have the "screw banks" mentality) we still need to help them look out for their assets, and PROTECT OUR OWN VALUES IN OUR HOMES!

The U.S. housing industry is very dependent on how the secondary mortgage market is doing. That's where a large share of mortgage-backed bonds generated here are traded. In the recent past the private investor class purchased about 60% of the home loan paper for sale, the rest mostly being gobbled up by Fannie Mae and Freddie Mac. Now, after the angry tsunami swooped in a few years ago to decisively maul the real estate market, the private sector has all but disappeared from the scene. It's licking its wounds while trying to deal with the losses the devastation left behind.

The mortgage regime would have been severely handicapped had the Fed not moved in to fill the void. It's presently providing the liquidity that the limping housing sector sorely needs to function as well as can be expected under the circumstances. But the Fed can't be the solution for ever. The private investor has to return and again make a meaningful mark there.

The American Securitization Forum, or ASF, is doing something that will help convince them to look at mortgage paper again. ASF is a trade group for investors, issuers and servicers in the securitization business. It has created LINC, or Loan Identification Number Code, a 16-digit number that'll identify the mortgage loan type, its origination date and country of origin.

The purpose of LINC obviously is to provide more transparency to a skeptical investor about a particular mortgage product he might be interested in. As the home loan crisis unfolded the investor class quickly learned that what disclosures they were given didn't often match the reality. They were badly burned and prefer not to be sorry victims again.  

Only time will tell how effective LINC will be in winning over the potential mortgage securities buyer. It'll at least be a step forward in the effort to draw him back in. The U.S. taxpayer should keep an eye on this because the Fed is really using his money to replace, hopefully temporarily, the no-show private mortgage player.

I have had a good number of astute real estate professionals recently ask me "why aren't your pendings closing?" on my market reports!

Here is just a peek at some market reports for one specific area (June, July and August Respectively):

What you are seeing here is that the Pendings (red) has been gaining ground and the Sales have been slowing down (green).  This doesn't make sense with rising pendings, you should see rising closings.

There several very good reasons and I am here to explain why this is going on.

When I got my license here in 2005 our 30 pending to close ratio was a good 60%.  Now (with market conditions) you have to use 60 day pending to close ratio (even with cash, HOA demands can clog up the system!)  Our current 60 day pending to close ratio is a dismal 27%!

Here are the challenges:

Short Sales:  Our system is bottlenecked with short sales.  The "short" part of a short sale doesn't mean it is a short escrow.  It means that the seller is seeking lienholder 3rd party approval to possibly forgive part of the loan or make it a "short payoff" upon successful contract and close.  These things can take a LONG LONG time for approval.  I would say 3-6 months is the "norm" depending on the lienholder.  Sometimes the approval process is shorter, sometimes longer!  Short sales have a pretty dismal list to sale history (although I feel this is changing at this VERY moment!)  You can view my last short sale market report here and I make clickable links to the last short sale market reports.  You can go back years and see that the closes have always been dismal.  You can also view the graph to the right of this paragraph and note the green (solds).  Very small sliver that never really changes from month to month.

Inventory Reduction:  As our "sellable" inventory (mostly REO) plummeted at the beginning of the year, (due to high buyer interest, low interest rates, moratoriums, etc), more buyers entered into short sales so we started seeing this curve:

As you can see I circled when the dispairity began to take shape between pendings (red line) and closings (green line).

Financing Issues:  We are constantly subject to new underwriting guidelines and changes.  Buyers are now asked to clarify more and more issues that have to do with their financials, et al.  If you ever see anyone that can close an FHA loan in less than a week, they are probably a liar (not saying it can't be done but it is highly unlikely.)  More government backed loans are being used these days and RISK FACTORS are taken into account with underwriting due to the high amount of foreclosures. 

Title Issues:  Distressed properties may have fines attached to the title from the HOA or city or county.  These need to be cleared and can sometimes take a while.

Property Stolen at the 11th Hour:  Yep, property is getting stolen in the 11th hour which can hinder the house's financing status.  Yesterday this just happened at one of my escrows that was due for it's final appraisal reinspection and ready for docs around the end of the month.  This is the third time it has happened to me in the last year and I am not a "big time" agent.  I will have another post about this coming out later today or tomorrow.

That's just a small synopsis on what is going on!  If you are considering buying a home in our market you may want to interview your Realtor closely to make sure they have been working in this market and can effectively deal with the challenges that you will face.  There is NOTHING "NORMAL" about a transaction these days!  Here is an ongoing series I am building to give buyers an idea of what is going on with the different types of transactions and the challenges each type presents in this current market!

Southern Highlands August 2009 Real Estate Resale Market Report (Homes For Sale/Pending/Sold):

• Listings (9/15/2009):  192
• Under Contract (9/15/2009):  220
• Sold August 2009:  42
• Month's Inventory:  3.7

Since Last Month:  Listings are UP + 42, Pendings are UP +18, Sold Units DOWN -13

Last Month's Report

For More Las Vegas Communities and Reports Click Here

The devil's in the details?  I don't know, the devil might be better at keeping track of his assets.

An article was in the news today about TARP's efforts at helping homeowners stay in a home and avoid foreclosure but getting derailed by inefficiencies.

Not that we are all that shocked. We know long waits over the phone abound for homeowners trying to tackle TARP. And processing times are delayed as we expect.

But my all-time favorite remains faxing the same document 7 times because the first 6 went where? 

Oh well, it just had the homeowner's social security number and birth date on it.

When the B-I-G banks were asked to rate their performance which they claim is improving, one biggie rated itself with a B. However community groups also asked to grade the same bank plunked down a D.

Too bad they are not held to the same standard as the consumer because I'm guessing there are quite a few homeowners right now wanting to say, "If you can't find my mortgage, well then, maybe I can't find my payment."

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The secondary mortgage market is the life blood of the massive housing industry. If it catches any kind of ailment, the consequences can be rather dire. A serious virus invaded it not so long ago - it can also be called the great escape of the private investor - and threatened to bring the besieged real estate market to its knees. Or worse.

The Fed had to step in to fill the void and started buying Fannie Mae, Freddie Mac and Ginnie Mae mortgage-backed securities, or MBS, to maintain liquidity. To give the housing industry a chance to work itself out of this mind-boggling jam. The Fed had plans to do this through the end of this year, having determined that that's when things ought to be improved enough to draw the private investor back in. That hasn't happened, though, in the numbers they had expected.

The Fed has just this week extended its mortgage paper buying program until March of 2010. It really had no choice. With that, the home loan sector can breath a little easier at least for the time being. And the overall economy is in a better position to climb out of the gutter one of these days. The current plan calls for a gradual slowing down of the purchase process to make the eventual transition smooth, signaling that it is dead serious about exiting the scene in March.

The private mortgage investor needs to see that the housing segment is indeed worth putting money into, where it can expect a decent return. Otherwise it'll look elsewhere. Right now it just might be a bit of wishful thinking that things will pick up sufficiently by March. True, there are a few indicators that point toward a slow turnaround.

Las Vegas valley - including Henderson, Summerlin, Anthem, Green Valley Ranch, Sunrise Manor and Boulder City - for instance is seeing reasonable sales action in the lower third of the market, offering some optimism. On the other hand, high unemployment is a burden for months to come, as are the future mortgage foreclosure projections. And this appears to be the outlook in many other areas of the country as well.   

It could well be that the Fed has to do another extension. The best would of course be that the Fed's calculations work out. But plan B is always good to have handy.  

From mini skirts to raising skirts, home buyers have learned mortgage affordability should focus on more than getting a good deal. Indeed this message of mortgage affordability offers lasting hope to homeowners.

The prior decade resembled a game of musical chairs for home buyers. Investors greedy to make a buck, strike while the iron is hot or however you like to say it, took advantage of the booming US housing market to lure home buyers into products investors were not willing to support when homeowners eventually needed assistance the most.

Thus the last players left standing lost homes in a way-too-serious-game of musical chairs.

That is why it is up to mortgage and real estate professionals, those of us on the front lines, to make a difference now! What if consumers had cried foul on the 2 year products with prepayment penalties? What a difference we would see today in foreclosure statistics.

Would a "just say no" policy to bad mortgage products in itself charted a different course for the American housing industry? Maybe, maybe not... But the real point is how can we learn from the past to improve our future.

Two words! Mini skirts.

What does mortgage affordability have to do with mini skirts and for that matter, raising skirts? You can find out here at Mini Skirts And Mortgage Affordability - Part Two

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Coronado Ranch August 2009 Real Estate Resale Market Report (Homes For Sale/Pending/Sold):

• Listings (9/15/2009):  17
• Under Contract (9/15/2009):  83
• Sold August 2009:  14
• Month's Inventory:  1.2

Since Last Month:  Listings are DOWN -7, Pendings are UP +11, Solds are UP +2

Last Month's Coronado Ranch Market Update

To View Other Las Vegas Communities Click Here!

Silverado Ranch August 2009 Real Estate Resale Market Report (Homes For Sale, Pending, Sold):

• Listings (9/16/2009):  127
• Under Contract (9/16/2009):  282
• Sold August 2009:  68
• Month's Inventory:  1.9

Since last month:  Listings are DOWN -36, Pendings are UP +51, Sales are DOWN -6

Read Last Month's Report Here

Hello Banks, Noteholders, Servicing Companies, et al, etc, so on and so forth!

Today I want to let you know what is going on in the Las Vegas Area REO market.  I am sure to get big REO listers very upset with me by writing an argument on WHY you should make the process easier to submit offers ONLINE for buyer's agents. 

I get that our inventory situation is tight here in the valley.  I get you have your hands tied with mediation, short sales, tenants w/ new tenant law and I get that you are releasing them as quick as you can.  I get buyer interest is at an all time high and lots and lots of offers are being received.  I AM NOT GETTING PROOF THAT MY OFFERS ARE GETTING SUBMITTED.

I want to clarify that NOT ALL REO agents are bad.  I want to clarify that I DO NOT want their job.  I get it.  What I DON'T GET is that sometimes they make up extra rules and loop holes to get offers submitted.  I even asked a PAS lister to show me proof (per PAS) that my THREE offers were submitted to them.  Since July for one property (that keeps falling out of escrow.)

Let me tell you that little story:  Submitted late July, went through all the hoops, wrote 10K over list (and clean, which means no seller paid concessions), waived appraisal, submitted with our Wells PA letter.  Fell out of escrow late August (when my buyers would have been closing aka "PERFORMING") and getting a non-performing asset off of their books.  Resubmitted the offer and was sent an email that another contract was accepted on September 3rd.  Well the very next day there was a price reduction on this property by $10K.  I call PAS FURIOUS.  Our offer was now $20K higher!  (if you want percentages over list price we are at 20% now) They told me to request screen shots of submission.  I asked and resubmitted the offer immediately.  Never got the screen shots that they submitted it but another big fat rejection letter.

I am fine with that, I really am, because this is what I (and other beyond frustrated buyer's agents in this market) are up against.

Let's get back to hoop jumping.  List agents create their own rules for submitting offers.  In many instances we have to jump through extra hoops to get our offer submitted because extra rules were made up by the list agents.  Check out this (as of right now) very public post about extra hoop jumping written by an REO lister..

Now as an REO asset manager, where does that leave you when you are trying to solicit the highest and best offer when someone has to deliver an EMD check to be cashed JUST to submit an offer?  You don't even have an offer accepted as of yet.

List agents lose our offers regularly and don't even acknowledge them in many instances.  This has turned into an "us vs them" proposition.  There are some buyer's agents who have one deal going on and will call and email constantly.  Annoying, I apologize for them in advance, I am not them.  My procedure is to fax and then scan and email and here is what I say in my email: 

 "I faxed over this offer this morning but always scan and follow up with an email as I understand all REO agents are swamped these days!  I do this for back-up in case the fax transmission is bad.  Please let me know that you are in receipt (email is fine, no phone call back necessary) and if you need anything else we will do our best to get it to you ASAP.    Buyers Wells PQ does expire today.  She is fully qualified through two directs (BOA and Wells) plus ING.  She can go FHA or Conventional and she is going Conventional on this one with 25% down plus waiving the appraisal contingency.  I have also attached a proof of funds for this to show they can pay over and above contracted price for a low appraisal.  If you need an updated proof of funds just let me know!   Have a great day!"

I have a hard time getting someone to press "reply" to that email and say "we are in receipt".  So I repeat in 24 hours.  Wash, rinse and repeat.

Some agents have lots of listings.  Like hundreds and maybe even the big players get close to 1000 in any given phase from pre-market to almost closing.  I am not jealous, I do respect them and revert back to paragraph 3 if you think I am jealous of all those listings.  This is just an open letter on HOW we can make this easier for everyone involved:

We live in 2009, let's change the process and add some more transparency to the process!  HELLO?!?! While Ocwen is not my favorite servicer, they are at LEAST in this century and they allow us, the buyer's agents, to submit our offers online.  Allow a place for all of your required documents (EMD copy, Proof of Funds, Bank Specific Pre-Approval letter, Offer, Net Calculations) and shoot us an automatic email saying you are in receipt.  This will definitely free up some time for those overworked REO list agents and their gatekeepers assistants.  Buyers are also allowed to submit their offers directly online without agent representation with Ocwen.  Yes, I make less money by allowing buyers to submit directly but many will still hire agents because they don't understand offer writing and submission guidelines.  This will also allow the companies to net more by avoiding commission payments to agents.  When the mandatory marketing period ends for the listing, pick the top 3-5 highest netting offers for the list agents to eyeball and then make a decision from there.  At least we (and our clients) will know our offers are submitted directly the asset management company.. we avoid the extra hoops that the list agents make up..and you can get more offers and net more for your asset!

In uber hard hit areas like mine, Las Vegas Area, large servicers NEED to hire ONE OR TWO persons to manage utilities and repairs and maintence/upkeep.  Get this out of the list agents hands!  When we get an REO escrow, we have to go back and make sure utilities are on (I show so dang many that I usually can't remember if they are on or not.)  50% of the time they will not be on and they need to be on for appraisal (if a financed buyer) or inspections.  This effects your bottom line in HOLDING COSTS.  We are ready to roll with due diligence when we get an acceptance but, once again, we are set up with failure because one or more of the utilities are off.  We cannot proceed with inspections and appraisal until they are on.  Also, appraisals are ridiculous and having a couple of preferred contractors/handymen in your market will make the process quicker.  I get it, the buyers are conveying an as-is property.  Sometimes the appraiser will come up with a bunch of silly little repairs that are necessary to close.  Sometimes these repairs will cost you very minimal amounts.  Having your own systems ready also gets you to close quicker.

Send out surveys. PLEASE.  Survey the crap out of us.  Survey the list agent, buyer's agent, lender involved, title company, etc!  Ask us what it was like to submit that offer to the list agent, ask us if we ever even got to talk to the list agent, ask us what response times were, ask us about the title company YOU chose.  You may be shocked.  I know, some buyer's agents are just annoyed with the process (like me) and may be unfair.  If you survey us constantly and those of us that can write fair assessments of the escrow and way we were treated, you will find some consistent responses to what we are dealing with.

Grade the buyer's agents.  When you create that website PLEASE grade us.  Make us create our user names by our license numbers - not by emails - that way no one can "game" the grading system.  Grade us by strength of offer, list price vs offer price, amount of contingencies, amount of concessions requested, close ratio, etc.  Maybe some of us can have an edge over the fishers in the system.

It's broke, kids, and it needs to be fixed.  I am requesting all buyer's agents who are FED UP AND SICK OF THE SYSTEM to REBLOG this post, print it and mail it to their favorite servicing companies and their representatives in congress OR write your own IN THE NEXT WEEK!!!  We are mad as hell and we have no choice but to play the games & take it!  (after all they control our inventory).  We want TRANSPARENCY!

Thanks and have a great day!

PS here are some resources:

Indymac Quick Response Guarantee (FYI, they are not requiring PAs with Prospect Mtg Anymore)  If you don't have a response from Indy within 72 hours call:  877-885-1624

Bank of America

Aurora Loan Servicing

PAS REO (Wells)

America's Servicing Company (Wells)

Fannie Mae

Freddie Mac

Contact Your Elected OFFICIALS!

TWEET Your Elected Officials!

Las Vegas Area September 15, 2009 Active Listings by Type

• REO:  2379 (22%)
• Short Sale:  4718 (43%)
• All Other:  3921 (35%)

August 2009 Sales by Type:

• REO:  2874 (72%)
• Short Sale:  491 (12%)
• Other:  627 (16%)

This is just a guide for consumers to see what types of properties are closing vs what is listed.  Currently we have the most closes in the REO sector and the least inventory in the REO sector and it is an extreme seller's market.

Click here to see last month's Listing and Sales Type Report

Click here to view the most recent stats (scroll to bottom)

Moody's Economy.com analyst believes housing values will take a long while to regain the levels they reached around 2006, the peak year of this recent ultra expansion. Prices went up at a rather steep curve and then hit the breaks and plunged at a breath-taking velocity. With that a lot of other economic fundamentals were thrown out the window, too, and there apparently are the seeds to the sluggish real estate recovery.

Housing values will take 20 years to reach the earlier high point in California and Florida, the Moody's Economy.com forecast says. That's possible knowing what those states have gone through. Arizona and Nevada are conspicuously absent in it, although they are generally considered among the four most bubbling ones and then later the most tormented ones, sporting as severe mortgage foreclosure figures and stagnant housing market conditions as the other two.

Southern Nevada - Las Vegas, Henderson, Summerlin, Green Valley, Nevada Trails, Eldorado Highlands and Mesquite - then should look forward to getting the prices back sometime under 20 years. Provided that this report proves somewhat accurate. 10 years is a long time, 15 even longer. It could easily take double digits. To achieve that, let's say 15 years, depends on several key market fundamentals that are currently out of balance.  

Mortgage interest rates today are very reasonable and home prices in Southern Nevada at ten-year lows that together would at first glance signal robust demand and possibly a nice-looking recovery on the near horizon. There are some noteworthy obstacles, however, that keep a lid on that for now. Home loan underwriting requirements are still strict, unemployment in Las Vegas is over 13%, down payment money is scarce and the move-up market is stagnant due to the severe upside down factor. Lot of parts that need fixing.

Las Vegas real estate sector should be on its way to a decent recovery once the employment in the valley and the entire nation, for that matter, improves. The sooner that happens, the better. The average median income that lagged way behind the rapid price appreciation and the spread eventually led to the head-first crash is pretty much covered, as values have plummeted. It's the other fundamentals that need help now.

Welcome Home to SW Las Vegas Communities: Morgyn Ridge Condos 

Morgyn Ridge Condominiums is a gated community in Southwest Las Vegas near the corner of Durango & Russell. 

While it appears to not be close to much of anything but desert on the map, Russell Road is now connected and residents can access Rainbow Rd - Spring Valley Hospital, Restaurants, United States Post Office, Professional Offices, Medical Offices and Local Gaming. 

Catching the southern 215 beltway is a snap from either the Durango Exit (leaving great proximity to McCarran Airport, UNLV and the South Strip Employment and Entertainment centers!) OR Russell Rd which gets you to Summerlin and all the great amenities of Summerlin!

Amenities include a Clubhouse & Pool. There are exactly 158 condo homes w/ garages & balconies (or patios) in this neighborhood ranging from 697-1410 square feet. Morgyn Ridge Condos were built between 1999-2001 so short sale and REO bargains are hard to find!

View Larger Map

 

HUD released a new mortgagee letter on September 18th, 2009, mortgagee letter 2009-28, that is titled Appraiser Independence. HUD wanted to clarify a few things in regards to FHA loans and adopt some of the guidelines from the HVCC guidelines for conventional loans. HVCC - Home Valuation Code of Conduct

 

FYI – I read a blog from Friday that was title, FHA is adopting HVCC as of January 1^st.

 

This is misleading and I wanted to clarify this. HUD is adopting some of the rules & guidelines set within the HVCC. In the new FHA mortgagee letter, it specifically stated this :

"FHA does not require the use of AMCs or other third party organizations for appraisal ordering, but recognizes that some lenders use AMCs and/or other third party organizations to help ensure appraiser independence."  

This came directly from page 2 of mortgagee letter 2009-28.

 

 

 

What are some of the key changes or things to keep in mind from the mortgagee letters mentioned? -

• Mortgage Brokers & commissioned lender staff - Hence the mortgagee letter, Appraiser Independence, "FHA approved lenders are now prohibited from accepting appraisals prepared by FHA roster appraisals who are selected, retained or compensated in any manner by a mortgage broker or any member of a lender's staff who is compensated on a commission basis tied to the successful completion of a loan." - directly from mortgagee letter 2009-28 - My opinion, many lenders will just order FHA appraisals through AMC companies. (appraisal management companies) - This will ensure any confusion and or finger pointing.
  

• Appraiser Engagement - An appraiser should or must have knowledge of the area or type of properties that they are appraising. The lender should not assume such knowledge and it's also the lenders responsibility to ensure accuracy and quality, along with that FHA appraiser. This is on page 4.

• Prevention of Improper Influences on Appraisers - This has been addressed in mortgagee letter 1996-26. HUD wanted to reaffirm that no member of the lender's staff or anyone commissioned that oversees the completion of that loan, be allowed to have such communications that would have any impact of the valuation, to include having the ability to order or manage the appraisal assignment.  The DE underwriter is allowed to request clarifications and discuss with the appraiser components of that appraisal that influence its quality. Bottom of page 2.  

• Appraisal Portability - FHA appraisals were always allowed to be transferred to another lender, when the FHA case number was assigned.. This new mortgagee letter, mortgagee letter 2009-29, is clarifying that it is allowed, but adding some new rules if the first lender is delaying the transfer of the original appraisal. It just says that a second appraisal can be ordered under certain circumstances, which is listed on page 1 of mortgagee letter 2009-29.

• Appraisal Validity Periods - Mentioned in mortgagee letter 2009-30, it states that the appraisal is only valid for 4 months from the date of the appraisal, no matter if it is an existing property, proposed property, and even under construction.
  

 

 

 

 

My opinion : I know how many realtors are in an uproar about the HVCC issues and how they are affecting the conventional loans. Even though it's not mandatory that FHA loans are done the same way, HUD is just implementing safe guards. I think many of the HVCC issues stem from brokers that have to rely on the banking institution that they are passing the loan to and those larger banks that are just so busy, that they just pass it to a management company that might not be organized. As a mid-sized banker, I have not seen any problems from neither side, even if I have ordered my appraisals through the AMC company. Yes, we started to implement this already on the FHA loans, in fear of some issues. But it has not slowed down the process of my loans one bit. Just food for thought.

On another note, most things mentioned in mortgagee letter 2009-28, are just repeated from prior mortgagee letters from over 12-14 years ago. If any new changes, it was the appraisal validity period and the appraisal portablity, which were mentioned in 2 new mortgagee letters, mortgagee letters 2009-29 & 2009-30.

 

All guidelines/rules go into effect for all FHA case numbers assigned on or after January 01, 2010.

 

 

 

DISCLOSURE :  I am not a certified appraiser.  The information that I obtained came directly from HUD's new mortgagee letter. Being the first out there with any new changes, is not always the best, especially when it's misleading or not correct.

 

 

 

                    

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For more information on FHA loans, please go to this link. The FHA Expert

For more information about the 2009 Tax Credit for First Time Homebuyers : 2009 Tax Credit

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!

Copyright © 2009 by Jeff Belonger of Infinity Home Mortgage Company, Inc