KEYS TO YOUR FICO SCORES

While I don't rely on Yahoo for much in the way of financial information, the article below is spot on.

FICO Questions Answered: Fair, Isaac CEO Reveals 3 Keys to Improve Your Score
Posted Jan 11, 2011 03:59pm EST by Daniel Gross Updated from 3:59 p.m. EST

Many people have questions about the credit scores generated by Fair, Isaac & Co. Today on Tech Ticker, Aaron Task and I figured we'd take our questions straight to the source: Mark Greene, chief executive of Fair, Isaac & Co., creator and proprietor of the FICO score.

"The FICO score is a measure of a consumer's financial health and creditworthiness," Greene says. It's simply a number, ranging from 300 to 850 -- the higher the better. The average FICO score in the U.S. is about 700, and pretty much every bank in the country uses a FICO score when making lending decisions. But while the scores are important, they're not the be all and end all.

"Scores are meant to be one of several things bankers use in doing what we call sound underwriting," Greene says. Lenders should also be taking into account borrowers' background references, their capacity to repay loans, and collateral.

FICO creates the score simply by feeding numbers into its formula: "It's based on pure, statistical evidence, with no judgment or evaluation or emotion." The main factors Fair, Isaac takes into consideration are:

• How much total indebtedness a consumer has
• How long they've had the debt. "Newer relationships are riskier than things you've been paying over a long period of time," Greene says.

• How much available credit is being used: "If you're close to the edge on your credit cards, that's a danger signal."

• The mix of an applicant's credit portfolio -- is it all credit cards (bad) or a mixture of credit cards, a mortgage, and a car loan (better)?

Greene outlines three key ways through which people can improve their scores. First, pay your bills on time. Second, don't get close to the edge: "Don't use more credit than you really need." And third, don't apply for new credit unless you absolutely have to.

It may sound obvious, but the easiest way to avoid a sharp downgrade in your FICO score is to stay current on your mortgage and stay solvent. "One thing people should know is that a foreclosed home or personal bankruptcy is the most severe harm that you can do to your credit score," Greene says. FICO scores can fall by as much as 150 points when borrowers walk away from mortgages or declare bankruptcy; it can take up to seven years to rehabilitate the rating.

Greene helps clear up what may be some misconceptions about the way credit scores are calculated. For example, is it true that every time you apply for a loan it hurts your score?

"It depends on the kind of product you're shopping for," says Greene. With car loans, for example, Fair, Isaac understands that people shop for rates. "If you apply for five different car loans within a couple of days, we understand that you're looking to buy one car at the best rate. And there's no adverse impact on your credit score."

On the other hand, when people apply for five different credit cards in the space of a week, they're usually seeking to open multiple accounts simultaneously. "In those situations we will take a few points off someone's FICO score because we're worried they're sending a signal that they need too much credit."

Is it true that people who have little or no debt may find themselves with lower credit scores? That can be the case. "Warren Buffett used to say that he didn't have a particularly high credit score," says Greene.

Greene also points to a just-launched website, scoreinfo.org, that helps people understand how credit scores factor in this new era of financial regulation. As of January 2011, you have the right to receive your score any time a lender makes certain kinds of decisions -- e.g., if you're denied credit or given credit on less than the most favorable terms a lender offers

In the U.S. economy today, people may frequently find that a credit score is being used by companies to make decisions that have nothing to do with credit. Credit scores have become part of the application process for jobs, car insurance, and health insurance. Greene notes that the credit score can be useful in non-lending contexts: "People who are good with their finances frequently turn out to be good drivers." But he reiterates that they were designed for a purely financial use.

Daniel Gross is economics editor and columnist at Yahoo! Finance

Pat Palmer-Realtor/Broker
Real Estate The Right Way
Visit Our Website Here

IT'S NOT GOOD BBQ IF YOUR FINGERS DON'T STINK

Yesterday, while in Rancho Cucamonga, I broke two of my own Cardinal Rules (do Cardinals..or cardinals..actually eat BBQ) when it come to BBQ.

Rule #1: Always eat at a Mom & Pop Establishment that has years of actual smoke build up inside and out.
Rule #2: Said establishment should have one of the following in its name...Mama's, Auntie or Tiny's. A sub-rule is that Mama, Aunite or Tiny should actually be in the kitchen.

In a moment of temporary Memphis weakness, Tony (Forefront Real Estate's office manager) and I found ourselves at Dickey's BBQ yesterday.It's important to note that Dickey's is a chain joint, and Dickey was no where to be found.While the service was very good, the prices and the food weren't.

I had the chopped beef,Big BBQ Sandwich. Apparently the term "Big" has different meanings in different parts of the country. Typically, if the entire inside of the bun can be covered by two pickle slices, "Big" isn't the first thing that comes to mind. Luckily, the meat was dry and pretty close to tasteless. The added bonus was that the BBQ sauce was basically colored vinegar. How do I know, you ask? Because it kept coming back all afternoon. 'Sorry you asked, huh?

Tony had a beef plate combination. His comment when he was done was ' For $9, I should be more full". The entire bill was about $23 bucks. When we were done eating, we both noted the absence of need for two very crucial parts of any good BBQ...toothpicks or extra napkins. In fact,the only think I needed was some trail mix to satisfy my remaining hunger.

I'm off to find Mama or Tiny.

THE NON-REAL ESTATE POST

Every now and again, a post has nothing whatsoever to do with real estate. This is one of them.

After a wonderful Thanksgiving weekend, I've confirmed a long held belief.College football is the the greatest sport in America, and here's why:
Games are played at The Big House and at The Horseshoe. They are played on The Farm, in The Swap and in The Bayou After Dark. They gather at Happy Valley, Death Valley and Between The Hedges. One stadium has a BLUE field.

Some rivalries are from the late '80's....the 1880's. They were/are coached by guys named Bear & Bo, The Ole' Ball Coach & The Mad Hatter..Joe Pa' and Woody. Some of them have coached at the same school for generations.

While the players don't play for money(save the snickering), they play their hearts out for things like The Oaken Bucket, The Apple Cup, Paul Bunion's Axe, The Iron Bowl, The Fremont Cannon,The Milk Can and The Bedlam Bell.Some of the biggest college football cities are Ann Arbor, Tuscaloosa, Boise, Baton Rouge and Knoxville.There's Austin, Lincoln and Auburn. I don't know about you, but I couldn't find most of them without a football map.

And then there are the mascots..You have a Nittany Lion and a Georgia Bulldog, there's the LSU Tiger ,Traveler the white Trojan horse and Bevo The Bull. Mind you ,those are all REAL animals. Toss in a push up crazy Duck, an ugly Stanford Tree that has no real meaning, and an Orange Syracuse looking tennis ball thingy and you have mascot craziness.So there you have it. All the reasons college football is the greatest sport in America...well, right up to March. Because that's when March Madness kicks in. But right now, I think I'll make a turkey sandwich.

I DON'T THINK I WANT THIS LISTING

Do you think this listing agent may have a disclosure issue?

So in today's California real estate market, the listing agent has some 20+ pages worth of disclosure related forms to go over with their seller. There are questions relating to "release of illegal substances (meth labs)" to " pets on the property", to...and I swear this is real..."the likelihood of being hit by a golf ball".But, how does a listing agent disclose to the other agent & buyer that their dream home is actually...A BOMB MAKING FACILITY!!!

Have a look at this link:
How To Fall Out Of Escrow In One Easy Lesson

I don't know about you, but I think the seller should have at touched up the white picket fence just a bit.

TOP 6 THINGS NOT TO BUY FROM POLES

I have a theory in life. There are only two things that you should ever "buy" from a telephone pole.One is anything you find at the yard sale being advertised on it. The other is the puppy or kitten (often free) that an exacerbated parent it sleeplessly trying to get rid of. Other than that nothing good is going to come from your drive-by, bargain hunting experience.

Does the term " Phen Phen " still ring a bell? If not, it was a weight loss drug that cornered the pole advertising technique many years ago. It was great until people started dropping dead from cardio-hypertension. Pole advertising is the equivalent of Walmart putting razors and breath mints near the check out counter. Do you really need the Mach III blades that bad? Why on earth would you be inclined to buy your new kitchen re-model while going 45 miles an hour?

Maybe my expectations are too high, but I kind of prefer a business card and references when I'm shopping for something that has at least one comma in the price. I'm not very inclined to seek the services of Dr. or Esquire Phone Pole.

So, here is my list of services you should NEVER, EVER,EVER,EVER buy from a pole:

6. Hair Replacement Surgery (This is always a touchy subject with a man of my hairline)
5. Home Re-Modeling Contractors
4. Loan Modification Companies(It doesn't even read right, huh?)
3. Any Attorney Service( God forbid I need a divorce, bankruptcy or bail! But that's not the place I want to learn about my representation)
2. Mortgage Loan (Is it really a stretch to think the "Rates as low as 2%" sign might be a lie?)
1. Realtor(Begrudgingly, I'll give you bus bench, shopping cart handle advertising. But seriously now? Do you really want to list or buy your home from someone tacked to the Haven offramp directional sign?)

BANKS CAN BE A PAIN IN THE ASS OCIATION

Raise your hand if you live in a condo, town home, or any complex that has a home owners association dues (HOA). OK, now put your hand down because your office mate will think there's something wrong with you. Then again, if you belong to an HOA, there may actually be something wrong.

In the latest twist of " Why BofA, Wells and Citi Should No Longer Be On Your Christmas Card List", it seems that our banking buddies have largely decided to ignore the HOA dues that continue to occur after they have taken a property back. HOA dues are similar to a utility bill in that they need to be paid every month... even after the bank has foreclosed.

They differ in one HUGE respect. If BofA doesn't pay the light bill on a unit they now own, the electric company just turns off the power. But if BofA doesn't pay the HOA bill, that cost mounts up against the HOA. Now since the Big 3 own hundreds of thousands of dwellings with unpaid HOA dues, guess what happens?Well, the HOA raises your dues to make up the difference, little things like maintenance go unattended, and if the HOA isn't healthy, future buyers can't buy that run down, beat up foreclosure that BofA won't pay dues on...because the buyer's lender is worried that HOA isn't healthy. I think I made myself dizzy just then.

Like so many other oversights the banks have managed to,well, overlook, the only way to get their attention is for states to sue them. What a party THAT must be! Bank attorneys arguing with state Attorneys General.Nothing but fun there. Below is a link to an article that outlines the State of Florida's attempt to force banks to pay the HOA dues they are reluctant to pony up on now:
Click Here To Take BofA Off Your Christmas Card List

A WASTE OF MONEY & ANDREW CUOMO

Sometimes,throwing your money out the window may be a good idea. As a parent, that almost kills me to say. As a real estate and mortgage broker, it almost kills me to tell you why. If, for any reason, you've had an appraisal done on your home in the last 11 months, you may have noticed a few things:

The appraisal costs a lot moreThe guy/woman doing the appraisal has no idea that Foothill, Grand, Garey, Magnolia or Sierra are the major streets in your town

The same guy/woman makes reference to the fact they have been licensed since Thursday

When you finally get your appraisal, the value is low. Upon further inspection, you realize the appraiser has compared your home to a) The year old repo up the street., b) The crack house 5 miles away., c) a home that looks nothing like yours.

What could have caused all of this mess? In the name of "financial reform" it's part of what the government has done to protect you, the consumer. Feeling better yet? Below is an excerpt from an article in today's Los Angeles Times that will go into greater detail:

By Kenneth R. Harney
October 31, 2010
Reporting from Washington —

...In all likelihood, the money you pay (for an appraisal) isn't just going to the person who does the appraisal. It gets split up, and sometimes your lender is getting a sizable chunk of the action. An estimated two-thirds of home appraisals are produced by appraisal management companies, some of them owned in whole or part by big banks.
Many of those companies have slashed appraiser fees from traditional norms — $400 or $500 to the appraiser — and now hire only appraisers who agree to work for $175 to $200. They also require fast turnarounds — complete appraisals delivered within 24 to 36 hours of the assignment.
Since experienced appraisers generally refuse to work for such low compensation and rushed delivery demands, many appraisals are assigned to newcomers to the field. In some cases, critics charge, the jobs go to inexperienced appraisers who are willing to travel far beyond their home markets to get the assignment.
Gregoire and Turner say they routinely hear complaints from realty agents about low-ball valuations turned in by out-of-area appraisers who have minimal knowledge about local market trends and don't distinguish distressed sales from ordinary sales. Sometimes the bad appraisals undervalue houses by tens of thousands of dollars and kill sales or refinancing, leaving buyers, sellers and their realty agents sputtering.
Brian Coester, chief executive of Coester Appraisal Group, an independent management company with a network of 3,000 appraisers in 50 states, agrees that low fees to appraisers "produce low-quality appraisals."
"At $180 to $200," he said, "you're not going to get good work." Pay the appraiser more — say $250 to $350 — "and now you're going to get a quality product." His firm averages $275 to $300, Coester said in an interview, but is constrained by the demands of mortgage lenders, some of whom will pay only $300 for the appraisal but later charge consumers $450 at closing.
kenharney@earthlink.net.

So as election nears, keep in mind those that may have allowed this entire mess to propagate, and those that have "helped" you out since. If you happen to live in New York, think Andrew Cuomo.

CHICKENS ARE STUPID

Do you know why Chicken Little was stupid? Because he was a chicken. In spite of an otherwise very nice day, young Mr. Little insisted the sky was falling. The same can be said for those who write about our housing market.

Below is an excerpt from a report in today's MarketWatch.com. Now I happen to enjoy MarketWatch a lot. And I don't mean to insinuate that Mr. Goldstein is, in any way, related to common barnyard fowl. His article is merely an example of falling skies, and bad news selling. Let's start off with the "nice day" portion of the story, shall we:

By Steve Goldstein, MarketWatch

WASHINGTON (MarketWatch) — Sales of new homes climbed 6.6% in September, figures released by the federal government on Wednesday showed, representing the second straight month of gains, but still well below the pace when a tax credit existed.
Sales of new single-family homes rose 6.6% to a seasonally-adjusted annualized rate of 307,000, which is stronger than the 300,000 that economists expected in a MarketWatch-compiled poll.
On Monday, a report showed sales of existing homes also were stronger than expected, rising 10%, and the two reports lend support to some economists who believe housing demand hit a bottom in late summer.....

This is very good news! Gosh if we had more of this kind of news, maybe it would build on itself. The birds are chirping, it's a beautiful day, and the sky is blue.BUT WAIT!!! SOMETHING JUST HIT HIM ON THE HEAD!! WHAT COULD IT BE???

....Still, the pace of new-home sales is 21.5% below the same level of last year.
The pace of new-home sales also is considerably below the 414,000 rate in April, when the market was buoyed for a credit for first-time home buyers that has since expired....
Steve Goldstein is MarketWatch's Washington bureau chief.

Dohhhhhh!!!! THE SKY IS FALLING!! THE SKY IS FALLING!!! Now, if we just take a minute here, we would see that that last part is nothing more than a silly pine cone. Of course everything is lower than last year. And yes, sales are off since the tax credit expired. The former is because we hit bottom, and the latter was expected before the credit ever went into place. The current, hard news is that sales are up 6.6%-new homes and 10%-existing homes!!! I think I'm going to go out and enjoy a nice, sunny, improving day. I hope you do too.

Q: HOW DO YOU KNOW WHEN AN ATTORNEY IS LYIING?

A: When he helps the banks foreclose on you.

If you're weird and enjoy feeling sick to your stomach, or you want to see what blind greed,arrogance and profiteering look like, have a look at this video:
Click Here For Nausea Inducement

DOES YOUR AGENT SUCK

Would you buy a property from this agent? She only works nights, and is a giant pain in the neck.

While at a friend's anniversary luau last weekend, I heard a horrific tale about our demonic little listing agent.It seems that my friend's cousin and her husband were out driving around, looking at houses, and called the agent listed on the rickety sign in a front yard. I believe it was Cobb Webb Realty, Morticia Sharptooth-Agent. "Luckily" enough, Morticia happened to be in her lair, I mean office, and answered the phone. The next day, our unsuspecting donors...darn, I mean clients, were out looking with Morticia.

Here's where the story gets ghostly.Over the next several days, Ms. Sharptooth showed several properties to the young buyers. In what surely must have been a coincidence, she only showed the buyers her own listings. You see,by doing so on purpose would be a huge breech of her mandated,ethical responsibilities. Do vampires have ethics?...Anyway, in a matter of days, the "lucky" buyers were in escrow on a home.

But (there's always a but in a vampire story,isn't there?) once the buyers looked at what they had signed, here's what they found:

1. Morticia had only shown the buyers her own listings
2. The buyers had agreed to pay the seller's short sale negotiator on top of the purchase price. What is a short sale negotiator,you ask? When a listing agent is too lazy, too stupid, or flat dishonest, on behalf of the seller, they hire a negotiator to handle the transaction. Think sleazy car salesman that you never see. Ohh,and the buyers paid THOUSANDS to this ahemmm...negotiator. As an added benefit, the negotiator was owned by the same broker.
3. When the buyers questioned our pasty agent about the negotiator, she actually pulled other listings that featured these creatures from the dark, and presented them as a normal part of buying a home.
4. Our garlic fearing friend then had the buyers pay off part of the seller's existing second mortgage.Guess how much...yeppppp...THOUSANDS. Let us not forget that Morticia has the listing on this property.
5. When escrow was then hurriedly opened, guess who owned the escrow company? Once again,Morti's own broker. It's smelling a bit musty about now.
6. For the buyer's convenience, Morticia was even nice enough to refer them to a mortgage ghoul(I mean,guy) that she knows. One can only imagine the bloodletting in THAT loan.

The moral of the story is that if you are being pushed by your agent, or something just doesn't feel quite right, IT'S NOT!!! Ask around, call us, carry a wooden stake...just don't go along with an agent because they have glowing red eyes.

I'M A TWO TIMER

Since it's Friday and the weekend is upon us, what's wrong with a little two-timing? Now hold on a second. Don't run out and call Gloria Allred. She's too busy grubbing headlines with Meg Whitman's ex-housekeeper anyway. The two timing I am talking about is two different, but very telling stories that broke today. And below are both of them: _______________________________________________________________________________

ONE TIMING

The first of our two tales from Realtor Magazine has to do with the distinct possibility that mortgage servicers may very well have to to the two thing they hate to do most. They also happen to be what most people think would expedite the housing mess. One of those is principle forgiveness. The other is realistic, workable, wholesale loan modifications. As we discussed in a recent post, your mortgage servicer is in a whole heap of trouble right now for how they have .. ahemmm...professionally handled their foreclosures. They have been ohhhh so quick to ignore little things like government mandates, best practices, and a pesky thing like forgery laws. But they've been a tad careless in how they processed homes through foreclosure. Just ask the homeowner in Florida who had his home foreclosed on. He'd never been late...BECAUSE HE PAID CASH!!! OOOPSSSSS!!! Because servicers are all now under a HUGE microscope, suddenly things like principle forgiveness and a willingness to modify are all the rage. Those silly kids. They are all caught up in being cool!

States Plan to Investigate Mortgage Servicers A coalition of attorneys general from as many as 40 states is expected to announce Wednesday the launch of a joint investigation of the mortgage-servicing industry.The attorneys general say they intend to first determine the scale of the problem and correct the issues. Several of them also have said that they believe one of the results of the investigation could be an agreement that forces lenders and servicers to make mass loan modifications or adopt principal forgiveness plans.Ohio Attorney General Richard Cordray says, "I think the mortgage-servicing firms need to understand that they face real exposure now, and they would be well advised to take this very seriously, to clean this up by doing loan workouts to keep people in their homes, which up till now they've just paid lip-service to.”Source: The Wall Street Journal, Robbie Whelan and Ruth Simon (10/11/2010)_______________________________________________________________________________YOU LOUSY TWO TIMER

It was sheer coincidence that this article ended up under this heading. I swear.

So on to our freakishly tanned, and inhumanly leathered buddy, Angelo Mozilo. You remember "Moz". He's the guy that ran Countrywide into the ground, and sold most of his stock just before the crash hit. He's such a kidder!
So today, Angelo decides it might be a much better thing to settle with the SEC than to go to trial. Seems that perhaps mortgage servicers (even ex- ones that look like they are giving the Vulcan salute) may be re-thinking their heretofore blindly arrogant positions.

LOS ANGELES Fri Oct 15, 2010 3:00pm EDT
LOS ANGELES(Reuters) - Former Countrywide Financial Corp Chief Executive Angelo Mozilo has agreed to settle a lawsuit with securities regulators, ending one of the highest profile enforcement actions to come from the financial collapse.
Mozilo, along with former Countrywide President David Sambol and former Chief Financial Officer Eric Sieracki, did not appear in the Los Angeles federal court on Friday morning where the settlement between the U.S. Securities and Exchange Commission and all three executives was announced.
Mozilo will pay a $22.5 million civil penalty, plus $45 million in disgorgement, according to U.S. District Court Judge John Walter.
All three defendants settled without admitting or denying any wrongdoing.
(Reporting by Alex Dobuzinskis; Writing by Dan Levine; Editing by Phil Berlowitz)

BofA's BIG PICKLE

In this episode of As Bank of America Turns, we look in on how this All American, flag logo'ed institution got themselves all tied up in the sudden foreclosure OOOOPPPSSSSSS!!! they find themselves in. In all fairness to this bastion of arrogance and bad service, the recent foreclosure moratorium isn't just BofA's issue. Almost all the banks find themselves in a similar pickle.

The short version of what's happened is that once upon a time,and in order to more readily transfer your loan from one lender to the other, the large mortgage servicing banks created a company called MERS . MERS' job was to handle all the title transfers between lenders and other boring stuff you never know about when your loan is sold from one bank to the next. There was one tiiinnnyyyyyy problem with all of this. MERS never had the authority to "assume" any beneficial right to the title of your home. This created a "break" in the chain of title. By doing so, BofA and their banking brethren have violated parts of the very agreement they had you sign.

The reality is that none of this probably would have come to light except for one inherent oversight by the Big Boy Banks... blind arrogance. If you are a seller, buyer or agent, and have tried to get anything done..even the complicated stuff like having your call answered(much less returned)..with one of these banks, you know the attitude/disorganization/disdain with which you must go through. The days turn to weeks, which turn to months and in some cases YEARS. By in large, the banks have thumbed their noses at their distressed clients and anyone trying to purchase a home. Funny thing, at some point the public has enough.

Sooooo, after 4+ years of this type of service, people (read: attorneys) started to look into the banks. Guess what they found? Not only did they find the obvious lack of service, but wholesale,systemic and fraudulent problems with the way the banks are handling foreclosures. OOOPPPPSSSSSS!!! Oh, and there's one other ill timed little gem. All this happened square in the middle of an election cycle. Imagine how many headlines a politician can get by stepping into this fray.

Now do I think the banks are entitled to foreclose if a person can't pay? Yes, I do. Unfortunately, a house is no different than a car.If you don't pay, they take it. Do I hope the banks are run out of business for all of this? NO AT ALL. For better or worse, we need a healthy banking system.
But, what we also need is a system designed to be fair in how they conduct themselves.

For a short video on this situation:
CLICK HERE

LOCAL CLAREMONT BUSINESS SUPPORTS CHS STUDENTS

Casa De Salsa-415 W. Foothill Blvd #321, Claremont,CA

I'd like to thank Casa De Salsa Restaurant for opening their doors to some of the Claremont H.S. Spanish student. I mean they literally opened their doors..before they even opened. A group (including my beautiful daughter) of Spanish students needed to film a video in Spanish. Casa De Salsa is within walking distance of Claremont H.S. The owners opened their doors yesterday a half hour before opening just so the kids could do their filming in the kitchen. They also allowed the kids to stay and re-shoot their video until 12:30.

Usually an effort like this would go largely unnoticed and under appreciated. This is one way to draw attention,and hopefully business, to a local business supporting their youth.

Thank you very much.

BAD COLOGNE & GREAT INFO..THE SACRAFICES ONE MUST MAKE

I'm back from two rain soaked days at the C.A.R. Expo. While the cologne & perfume were a bit much, there were some VERY educational seminars. Yesterday was spent in seminars on the short sale/ REO market. These weren't rah-rah speeches and self-congratulatory forums by any stretch. Almost across the board, from lenders, to REO/short sale agents, to Ray Mathoda, one of the brightest banker/entrepreneurs I've heard, the overriding opinion is that short sales are now, and will be, the foremost sale transaction in the real estate industry. And the single biggest factor in short sales will be H.A.F.A.

Now if you're asking yourself, "What the hell is HAFA?", I would strongly suggest calling me and pulling up Google. To get you started, below is a link to Real Estate Magazine. When you open it up, go to Page 20. You'll find a very informative overview of HAFA.
http://www.onlinedigitalpubs.com/publication/?i=46004

As a homeowner or Realtor, if you've been through the HAFA hell so far, you probably don't believe a word of this. However, HAFA is now in it's 6th month of existence. As this process becomes more streamlined, so too should short sales One of the astounding figures that was given yesterday is the fact that there are/will be some 12 MILLION short sales in the coming years. HAFA may very well be the real estate version of a standard loan application.

But why short sales ? Why now?

Well there's a couple of reasons why:

Reason#1- The rocket scientists that brought us all "Pick-A-Payment Loans" finally figured out that they tend to loose their a$$ in REO's. Nothing hurts a banking conglomerate quite like loosing money.

But the single biggest reason is:
Reason#2- Because of the banks' disorganization, bad tracking, blind arrogance, and unwillingness to negotiate, people and states started to get attorneys to sue lenders for improper actions during the foreclosure process:
Click Here To Read The Washington Post Article On Foreclosure Problems

So given this very recent development, lenders may very well be more willing to do complicated things like...answer the phone.

YOU WANT ME TO DO ...WHAT?

ANAHEIM CONVENTION CENTER-800 W. KATELLA, ANAHEIM,CA

Day 1 of the C.A.R. Expo was "technically amazing". Tech Tuesday leads off every California Assoc. of Realtors yearly expo,and this is the first I've seen. For those of us over the age of 30 (and how painfully reminded of that fact I was), real estate is a "hands on","kick the tires" kind of industry.

That way of thinking is no mas for the buyers/sellers of today, and certainly, the future. From company specific phone apps, to documents you can sign from that phone using just your finger tip, real estate is virtual, it's mobile, and it's amazing! As a buyer or seller, more information is available under your signing finger than was available to those of us in the industry not five years ago. Not only that, but you can choose what information you want, how you want to be notified its waiting for you, if you prefer it delivered to your computer, your phone, with a phone call or a text. Pretty soon I'm sure they'll be able to beam me down to you and personally deliver your news. I wonder how well freckles "beam".

For those of you reading this that, like me, may be Realtors, the price of admission paid for itself in the first lecture. If you are also like me and don't particularly like spending your day in a seminars, go anyway. The amount of information available to you is invaluable.

Talk to you all soon..or maybe you prefer an email...or a text...perhaps a Facebook update is more to your liking. I can do that! If I can't, my 15 year old daughter can show me how.

BANK OF AMERICA'S BAD AIM

"He Who Forecloses From A Glass House, Should Be Careful With The Stones He Throws"

OK, so I'm not as artful as some when it comes to proverbs. Below is another article about BofA's mismanagement of their short sale and REO properties. My last blog entry dealt with a very similar aspect regrading GMAC, so I won't bore you with repeating the details. Please have a look at that as well. Being in the industry that I am, I deal with all of these fine & upstanding institutions on a daily basis. I think it's safe to say that almost to a person, those of us trying to work with BofA's REO and short sale departments find it to be the most intolerable, mis-managed, perhaps less than forthcoming company out there.

Below is an article from today's Los Angeles Times that politely sheds a little light on what arrogance can do to a company:

By E. Scott Reckard, Los Angeles Times
October 2, 2010

Bank of America freezes evictions in 23 states
The bank cites concerns over whether its foreclosure paperwork was handled properly.
By E. Scott Reckard, Los Angeles Times

Citing concerns over whether its foreclosure paperwork was handled properly, Bank of America Corp. on Friday put evictions on hold in 23 states — joining two rivals that have taken similar steps.

The freeze is taking place in states where courts have jurisdiction over foreclosures, Bank of America said. It will not apply to California and 26 other states where foreclosures usually take place without a court order, but the action could put added pressure on banks to ease back on foreclosures more broadly amid high unemployment and continued turmoil in the housing market.

State Assemblyman Ted Lieu, a Torrance Democrat who has written a series of mortgage-related bills, said a moratorium on foreclosures might be appropriate even though California doesn't require court orders before homes are seized.

"I've been thinking perhaps we should start calling for [a moratorium] in California," said Lieu, co-author of SB 1137, the 2008 law requiring lenders to attempt to contact borrowers and to document that they tried before foreclosing. "My suspicion is that the same folks who are doing false signings in other states are likely doing the same thing here with regard to SB 1137's requirements," he said.

Detroit-based Ally Financial Inc. halted evictions in the 23 states last month after the head of Ally's document processing team acknowledged in a deposition that he signed thousands of affidavits certifying that foreclosure paperwork was correct even though he hadn't read the documents.

JPMorgan Chase & Co., the giant New York bank, suspended its evictions this week after problems surfaced with signatures on some of its affidavits.

Charlotte, N.C.-based Bank of America — which became the largest mortgage customer-service provider when it acquired Countrywide Financial Corp. in 2008 — followed suit Friday.

"To be certain affidavits have followed the correct procedures, Bank of America will delay the process in order to amend all affidavits in foreclosure cases that have not yet gone to judgment in the 23 states where courts have jurisdiction over foreclosures," the bank said in a statement.

The affidavits are required to be filed in court when banks make motions for summary judgment to obtain foreclosure orders from judges.

The bank didn't disclose how many borrowers were affected by the eviction freeze.

Also on Friday, California Atty. Gen. Jerry Brown said he would require Chase to prove that it is complying with California foreclosure laws, included a requirement that loan servicers meet with homeowners to explore loan modification options before seizing houses. He previously demanded the same of Ally.

The banks have said they believe the information in the affidavits — such as how much is owed and when the mortgages went into default — is accurate even if the affidavit signers didn't take the time to read them thoroughly because of the glut of foreclosures.

Ally, formerly known as GMAC, includes Ally Bank and Residential Capital. It is the fourth-largest originator of mortgages and the fifth-largest mortgage servicer. Chase is third in both categories.

The largest California-based bank, Wells Fargo & Co. in San Francisco, is the No. 1 mortgage originator and the second-largest servicer, after Bank of America.

Wells Fargo issued a statement saying it was satisfied that "the affidavits we sign are accurate," but it stopped short of certifying that they were all properly signed.

"We audit, monitor and review our affidavits under controlled standards on a daily basis. We will stand by our affidavits and, if we find an error, we will take the appropriate corrective action," Wells said.

scott.reckard@latimes.com
Copyright © 2010, Los Angeles Times

DO YOU KNOW YOUR BANKS DIRTY LITTLE SECRET?

At the end of this post is an article just released by Realtor Magazine, one that is overdue in coming. What so many people don't realize is the unconscionable job that GMAC, BofA, and Chase are doing in facilitating their short sales and loan modification under the government's Making Homes Affordable program. In short, lenders make far more money by foreclosing on homes than modifying or short selling them. If that doesn't make sense, you're not alone.

But, if you're BofA... (Well if you were, first of all, you'd never answer your phone or return a call. With a great sense of indignity, you'd loose entire files full of paperwork many times over and wonder why people were upset with you, and so you'd have no friends)...you can allow a short sale and take far less than you lent , pay real estate commissions, deal with junior mortgages and tax liens and make little money. ORRRRRR, you can delay & stall by employing a massively inexperienced,underpaid, under trained and overworked staff to make a mockery out of the premise you are trying to help your clients.By taking this road, the homeowners you are trying to "help" eventually give up and walk away.

Why would you go to all this trouble and deception? Well, because once you foreclose, ALLLLL those junior mortgages, liens and bothersome homeowners go away. Yep! You now have a free & clear asset. Ohhhhh, and here's the BEST part for you. If you are BofA, you can then take that free & clear asset, and borrower 3 TIMES it's value for your own purposes. You're pretty darned smart for a bank. 'Not so great for helping your clients, but you'll be RICH!!!!

See, they don't tell you all that when they are misplacing all fifteen years worth of financials they ask you to send in. So at long last, the arrogance that has taken hold is starting to come back in a haunting way. If our Legislative & Executive branches of The Federal Government can't seem to bring these practices in line, perhaps a huge class action will.

Daily Real Estate News September 30, 2010

Second Big Lender Stops Foreclosures A second major mortgage lender, JPMorgan Chase, has stopped foreclosures so it can review loan documents for errors."It will probably slow things down for a couple of months while these documents are reviewed," said Rick Sharga, senior vice president at foreclosure listing service RealtyTrac Inc. "It won't stop things."But if Sharga is wrong and more problems surface, they are likely to slow the foreclosure crisis still more, making it drag on for several more years, other analysts say.In any case, an increased number of lawsuits are likely. Christopher Immel, a Florida lawyer who represents foreclosed home owners, says many former home owners could sue their lenders, alleging errors in documents.GMAC Mortgage was the first big lender to pause foreclosures while it reviews past files.

Source: Associated Press, Janna Herron and Alan Zibel (09/29/2010)

THE BEST RESTAURANT YOU'LL NEVER FIND

VIVA MADRID-225 YALE AVE,CLAREMONT

If you are looking for a wonderful evening in a great restaurant...keep looking. Don't get me wrong, this is the place you want to go. You just need to FIND it. The first thing that will strike you about this tapas restaurant is that you can't see it from the street. It's kind of like a treasure hunt, with the meal being the treasure. So that you don't roam aimlessly around Downtown Claremont (unless you want to because it's a great place) here's a map and a hint:(Look for a walkway just south of Rhino Records)

When you find the walkway, just look for the line of people waiting to get in. If you arrive more that 30 minutes after opening, the line will surely be there. Viva Madrid is a small, funky place where the chairs don't match, and there's not a spot on the wall without something adorning it.So what is everyone waiting for...tapas!

What are tapas? These are tapas. Tapas are part of a meal made of of wonderful hor d'oeuvers. There are well over 50 on the menu, and one is as good as the next.Half the fun is trying things you have never heard of. If you really don't like it, it will only set you back a few bucks anyway.Personally, I love the seared dates wrapped in bacon, and the squid with chorizo. Then again, the paella is ridiculous, as is the shrimp in wine/garlic sauce. I'm not a drinker, but the sangria seems to flow freely as well.If you're married, take your spouse. If you're not, be careful.It's part of an evening where you may end up that way. A great meal and then a stroll through Downtown Claremont is a great way to start your weekend.

PLEASE FLIP ME OFF

Because the blame game can be so easily re-written to suit a politicians needs, "flippers" are now the scourge of the earth. While I'd like to thank them for taking my place in that line as a real estate/mortgage broker, the fact that these folks are now being blamed for the ills of the market crash, and the terrible idea that they may bring prices back up now (the nerve of them sustaining a market), are mis-informed at best. And if your first name has the abbreviation Sen. or Rep. or Attny.Gen. ahead of it, wake up *Editor's note* If your name is Sen. Bob Dutton, thank you for being a visionary and not a reactionary. Keep up the good work.

"Flippers" are the folks, generally mom-n-pop contracting businesses, that use their own money to purchase the nastiest of the nasty repo'ed homes and fix them up. Let me take a moment to dispel a rumor here:

Rumor: When you bid on a repo, you probably won't get it because the evil flippers are going to outbit you and pay cash. WRONG. Generally flippers aren't interested in the home you want to move into. They are interested in the home you can't move into. If you've been out house hunting and walked into a home that looks like the "after" photo of a nuclear test site and smells like a sewage treatment plant, you couldn't get a loan on that home if you wanted. Your lender is extremely leery of what they deem as Health and Safety Standards. BUT, a flipper is paying cash...his own cash...in full... to buy this lil' gem, put thousands more into it to make it habitable, and then put it back on the market.

If you live in a neighborhood near a house that looks like it belongs in an Appalachian hollow more than Suburbia,USA, you should HOPE a flipper buys that house. In fact, you should take him a plate of cookies and coffee to keep him full and caffeinated. There are tens, if not hundreds of thousands of these uninhabitable homes on the market right now. And over the next few years, there's many more to come. Some how the idea that a person is willing to risk their own money (amounts that have a comma and at LEAST two digits to the left of it), fix up a home while lessening blight has become a bad thing. And it's bad because heaven forbid, that person wants to make a profit on it. The gall of a person wanting to be a capitalist! Wherever did that idea come from?

So next time you walk into a house that smells freshly painted, has new carpet, a shiny air conditioning unit in the back, a freshly sodded yard, and/or an electric panel that won't shoot an arc through the entire house when you flip a switch, thank a flipper.

SOUTHERN CALIFORNIA HOME PRICES HIGHER AGAIN IN OCTOBER -- latimes.com

As our market continues to calm, Southern California is seeing the beginning of home appreciation again. Are things all better now? Of course not. And there are those who will say it's only a temporary spike. Or others that will some how blame The First Time Buyer Tax Credit Extension for skewing the numbers. Personally, I am glad to find and share good news. We have forgotten that a large part of any market's decline or rise is based on emotion and confidence. Headlines have a way of building on themselves either way. So please take a moment and click the link below:

Southern California home prices edge upward again in October -- latimes.com