Blog Entries

The Nationwide Mortgage Licensing System

csheets_admin@thepei.com — Mon, 31 Aug 2009 06:00:00 +0100

The New York Times reported last week that a program called the Nationwide Mortgage Licensing System has been initiated. The system acts as a repository where state regulators keep information on all mortgage originators, and also creates a standard for education, testing and licensing of loan officers.

During the housing boom, some dishonest mortgage originators steered consumers into subprime loans, or conducted other fraudulent activities. If the originator got caught in one state [...]

Mortgage Surplus Money---Really?

csheets_admin@thepei.com — Fri, 28 Aug 2009 06:00:00 +0100

One of my staff members in our Illinois office recently sent me this article from the Chicago Tribune about unclaimed funds---mostly from the 1990s and pre- 2007 housing boom--- that are “sitting” in a mortgage surplus account.

Now, keep in mind when you read the Tribune’s article that the $18 million surplus isn’t a statewide surplus. The millions of dollars from unclaimed profits on foreclosures are just for Cook County, Illinois … home to [...]

What Are Your Thoughts on the New “Code of Conduct” Rules for Appraisals?

csheets_admin@thepei.com — Mon, 24 Aug 2009 06:00:00 +0100

There has been much debate in the real estate community about how the Home Valuation Code of Conduct for appraisals that took effect May 1 is affecting the housing market.

The role of appraisers in the subprime mortgage debacle has been closely analyzed ... especially the fact that some appraisers allegedly felt pressured to bump the price of homes upward by providing faulty valuations and to overlook defects on thousands of homes to "pacify" mortgage brokers (and borrower [...]

Flipping Successfully---Even In Today’s Market!

csheets_admin@thepei.com — Fri, 21 Aug 2009 06:00:00 +0100

Many investors turn to flipping properties for relatively quick profits during the real estate market's boom years. However, savvy investors realize that even as times change and markets fluctuate, there are always opportunities in every market to make money flipping properties.

In the case of first-time homebuyers, purchasing a home can be a little overwhelming---especially since many of the foreclosures on the market today require more in-depth repairs before t [...]

Tax Foreclosures Create Opportunities for Investors

csheets_admin@thepei.com — Wed, 19 Aug 2009 06:00:00 +0100

It looks like more homeowners are falling behind on paying their property taxes in these tough economic times, and many are suffering the consequences---foreclosure.

The homeowners whose property taxes are escrowed by the mortgage servicer and included each month with their monthly mortgage payment don't have to worry about paying their taxes---as long as they are able to make their mortgage payments on time.

However, if the mortgage servicer doesn't provide an escr [...]

The Right to Rent Plan---Similar to Sale-Leaseback Technique?

csheets_admin@thepei.com — Fri, 14 Aug 2009 06:00:00 +0100

In an effort to deal with the growing number of foreclosures on the market, yet another program has been proposed. The Right to Rent Plan would actually allow distressed homeowners to stay in their homes after the foreclosure sale ... by paying a fair-market monthly rent to the "landlord" (the lender who foreclosed on the former homeowner). (Don't get this program confused with an earlier one that offers qualified tenants a lease that allows them to remain in a foreclosed ren [...]

Condo Owners Get Creative

csheets_admin@thepei.com — Tue, 11 Aug 2009 06:00:00 +0100

One of my staff members recently sent me an article about a group of condo owners in Chicago who are taking a stand on the eight or so neighboring condo units that are in various stages of foreclosure. Members of the condo association are knocking on doors in an attempt to pass a referendum that would allow the association to purchase the "distressed" units and then rent them out until the housing market stabilizes.

This would address two major concerns: (1) Thei [...]

New Restrictions Possible on Seller-Financed Notes

csheets_admin@thepei.com — Fri, 07 Aug 2009 06:00:00 +0100

As I've mentioned before, seller financing---a great win-win situation for both sellers and buyers---is making a comeback in the current real estate market. However, I've recently read about legislation that will restrict seller financing and possibly hurt consumers, investors, and small businesses.

The bill in question is HR 1728, and its aim is to curb the predatory lending practices of the early 2000s and the resulting subprime mortgage "meltdown" by imposing str [...]

Finding a Profitable Niche---Depending on Area and Demand for Housing

csheets_admin@thepei.com — Tue, 04 Aug 2009 06:00:00 +0100

I've been reading articles about homeowners who rent out their homes in certain circumstances. And, apparently, there are several motives ... some homeowners who purchase another home or have a job-related-move and haven't been able to sell their original home make the decision to turn it into a rental. And sometimes those who can't afford to pay their mortgage and don't want to declare bankruptcy find less expensive housing and then rent out their home. However, renting a property with a lar [...]

The Foreclosure “Shadow Inventory” Theory

csheets_admin@thepei.com — Tue, 28 Jul 2009 06:00:00 +0100

Someone recently asked me my opinion on the so-called "shadow inventory" of foreclosures ... the bank-owned (REOs) foreclosures that aren't on the market yet. If you've read this Wall Street Journal article, you might come to the conclusion that it's a conspiracy by banks to "under-inflate" their inventory of REOs.

Have banks been holding onto the properties because they don't want to oversaturate the already-flooded foreclosure market? Perhaps that is on [...]

Government Offers Foreclosure Program to Help Blighted Neighborhoods

csheets_admin@thepei.com — Thu, 23 Jul 2009 06:00:00 +0100

As I mentioned in one of my previous blogs, there are many new, revised, updated, and extended government programs aimed at alleviating the foreclosure crisis ... so many that I am a little confused at times. Will the latest program replace one that didn't work as planned? Or why does the government think one program will work better than the rest?

I recently read an interesting piece of news concerning another new government program. The Neighborhood Stabilization Program (N [...]

Apartment Vacancies Continue to Rise

csheets_admin@thepei.com — Mon, 13 Jul 2009 06:00:00 +0100

A recent report on CNNMoney.com about apartment vacancies reaching historic levels reminded me of one of my blogs I wrote last October, Where Are All the Renters?, and another one, Bringing Families Closer Together, that I posted in February of this year.

The CNN article talks about how the rising unemployment rate has hurt apartment rentals. One demographic hit hard---the 18-25 year olds which is the largest tenant group---have been unable to find a job o [...]

The Right Coach Can Make ALL the DIfference!

csheets_admin@thepei.com — Thu, 09 Jul 2009 06:00:00 +0100

Ever since I can remember, I've always noticed how people around me interact with others. For example, when I was a young professional in the workplace, I often watched how my co-workers would deal with different situations to reach successful conclusions. I studied their tone of voice, facial expressions, and actions and tried to emulate them when I was faced with a somewhat similar situation.

I also figured out what made them successful in meeting and solving seemingly insurmountab [...]

Have You Ever Heard of a “Strategic Default”?

csheets_admin@thepei.com — Mon, 06 Jul 2009 06:00:00 +0100

As an entrepreneur and self-employed businessperson for over 30 years, I realize that business decisions are not always "moral" decisions. I don't mean that most of these decisions are unethical or dishonest, but that they sometimes cause hardships and stress for others. It has always saddened me to hear when companies are forced to lay off employees---especially valued employees who've worked there for several years. But as a businessperson, I know that it's not a personal ch [...]

More Mortgage Refi Modifications for “Underwater” Borrowers

csheets_admin@thepei.com — Thu, 02 Jul 2009 06:00:00 +0100

A recent article published by CNNMoney.com reports that the Obama administration has revised its initial mortgage refinancing program to help more borrowers---including those whose homes are valued below their loan amount---qualify for refinancing. The revisions also include stipulations that enable eligible borrowers who are either in default or at risk of defaulting on their loan to lower their payments.

Previously, only those borrowers whose loans were up to 105% of thei [...]

Foreclosure “Woes” Continue to Unfold!

csheets_admin@thepei.com — Tue, 09 Jun 2009 06:00:00 +0100

An article I just read in USA TODAY reported that the foreclosure rate will probably continue to move upward for a while. The culprit? And, no, it's not subprime mortgages this time ... it's the unemployment rate that's beginning to include borrowers who have good credit---and higher-end homes.

News like this undermines the cautious optimism some saw in the housing market recovery and suggests that the economy might travel a little more "down" than "up&q [...]

Will First-Time Homebuyers Use the $8,000 Tax Credit? Or Wait for …

csheets_admin@thepei.com — Wed, 03 Jun 2009 06:00:00 +0100

First, there was last year's $7,500 credit to first-time homebuyers ... the problem was that it really wasn't a credit at all. It was considered a loan and had to be paid back.

This year's "up to $8,000 tax credit" to first-time homebuyers seemed to be an improvement on last year's credit because it didn't have to be paid back. The catch was that some potential homebuyers were excluded because they didn't have enough of a down payment---and couldn't use their tax credit [...]

Commercial Loans Versus Residential Loans

csheets_admin@thepei.com — Tue, 26 May 2009 06:00:00 +0100

I'm sure you've been reading more and more about how the commercial real estate market is following in the footsteps of the residential real estate market. And perhaps you've been wondering how these markets are different. Well, let me explain.

First of all, both markets suffer as bad mortgages, the credit crunch, and plummeting values affect homeowners and residential and commercial investors.

The dividing line between the two markets is determined by units ... residenti [...]

Whatever It’s Called … Reverse Offers/Buyer’s Incentives Help Sell Properties

csheets_admin@thepei.com — Fri, 22 May 2009 06:00:00 +0100

Once again, I have to thank my staff who brought a selling technique to my attention that I haven't heard about in years.

A technique that was commonly referred to as a "reverse offer" is in the news again. This is an aggressive technique used when sellers present buyers with an offer to purchase the sellers' property---instead of vice versa. And although it's more common for builders to use this technique to sell their inventory, some homeowners are trying [...]

Market Often Dictates Buying Versus Renting

csheets_admin@thepei.com — Mon, 18 May 2009 06:00:00 +0100

When I was reading Forbes magazine the other day, I found an article that compared renting to buying a home in this market. The article stressed that every market is different, and that your local real estate market may dictate if buying or renting is the smartest for your investment dollars.

I've always been an advocate of responsible homeownership, and I also encourage investors to practice responsibility when adding to their portfolios ... my personal insight is that somet [...]