VanEd Newslog

Finance Friday: Don't wait for the 4.0% rate

People waiting for the expected 4.0% mortgage rate that has been talked about in both the press and by some public officials most likely will be disappointed. The demand for money will rise as the cost of the bailout, the stimulus package that was just passed, and the proposed new budget reaches record levels. The yield on the 10 year treasury index topped 3.0% today, and mortgage rates have increased to 5.0% with one point for high credit score (above 720) borrowers amid some of the worst economic news in recent history.

New weekly jobless claims rose to 667,000 and the total number of unemployed workers reached 5 million. The final fourth quarter GDP showed a drop of 6.2%, down from the initial estimate of 3.8%. Consumer spending dropped by 4.3% in the fourth quarter which is worse than the 3.8% drop in the third quarter. This is the first time that consumer spending has dropped by more than three percent in two consecutive quarters in the 62 year history of this index.

Home prices dropped an average of 18.5% from December 08 to December 07. Since 2006 they are down 27.6%. Fannie Mae expects home prices for 2009 to drop another 12% to 18%, which means prices will drop between 33% and 46% from the peak. Existing home sales fell 5.3% to an annual pace of 4.49 million units. Fannie Mae posted a $25.2 billion loss in the fourth quarter, bringing the annual loss to $58.7 billion.

In other news, the government took the first step toward nationalization of some banks with the government acquiring a 36% stake in Citigroup. Is Bank of America far behind?

A silver lining in all this economic turmoil is the price of real estate will probably stabilize by the end of the year. Even with the decline in values, real estate is still the best place to park money.  Most people would be ecstatic if the value of their 401K had only dropped by 33%.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial  Services. He can be reached on-line at http://www.boulderwest.com/.

Lawrence Yun and Larry Kendall slated to speak at REALTOR® Rally in Denver

Registration is now open for the 2009 REALTOR® Rally to be held in Denver at the Colorado Convention Center on April 9th. More than 225 exhibitors and 3,000 real estate professionals attend the rally, and this year the rally features two keynote speakers; Larry Kendall and Lawrence Yun, NAR Chief Economist.

The day will also feature ongoing education sessions and a chance for real estate professionals to learn about new products and services, network with other industry professionals and to gain timely knowledge that will help practitioners immediately in the field.

This years rally is scheduled from 7:30am - 3:30pm April 9th, 2009. Registration is $25 in advance. Register online today by Clicking Here! And don't forget to stop by the VanEd booth to register to win free online Continuing Education courses and learn what's new in education.

VanEd Presents: Nebraska GRI 104: Finance course ~ now available online

The new Nebraska GRI 104: Finance course has been approved in Nebraska for 12 hours of Continuing Education Credit and is being offered online to Nebraska REALTORS^® for GRI, Graduate REALTOR^® Institute credit. This course covers all aspects of Real Estate Finance, including The Monetary System, Sources of Money, the Lending Process and Insurance. The course also contains a downloadable glossary of Finance Terminology.

Students will receive both CE and GRI credit for completing VanEd's newest online Continuing Education course in Nebraska. For details, visit the Nebraska Graduate REALTOR Institute program online by clicking here.

Attention Appraisers - 1004MC Form is REQUIRED beginning April 1, 2009!

Market Conditions Addendum Course  

The new Fannie Mae 1004MC Form is REQUIRED beginning April 1, 2009!

Be prepared and stay ahead of the curve: Every Fannie or Freddie appraisal will REQUIRE the Fannie Mae Form #1004MC / Freddie Mac Form #71 form as of April 1st, 2009.

VanEd's 100% online course is all it takes to understand what Fannie/Freddie want, and learn exactly how to give it to them.

CLICK TO LEARN MORE

Online Course Features

• Low Price: $69.95 - click here and sign up by March 31^st and receive an additional $20 off!

• step-by-step guide through the 1004 MC form
• examples for every field, and model comments for each narrative field
• interactive case study - complete and verify an example form online
• complete coverage of new and updated Fannie Mae policies
• there is NO continuing education credit associated with this course
• Developed by Henry S. Harrison, MAI, SRPA, ASA, IFAS, DREI

Q&A with Jennifer Allan ~ Best system for sending out greeting cards?

We asked author Jennifer Allan to answer questions based on her teaching and experience in the real estate industry. Jennifer is also regular contributor to Realty Times and RE/MAX Times.

Question: "What’s the best system for automatically sending out birthday and anniversary cards to my sphere of influence?"

JA: I love this question! We real estate agents love our systems, don’t we? Anything to make our stay-in-touch efforts more efficient!

 

Well, here’s the thing. “Efficient” doesn’t always equal “effective.” You can efficiently market to thousands of people at once, but that doesn’t mean that you’ve effectively marketed to anyone. This is nowhere more true than when you’re staying in touch with your sphere of influence.

 

Never, ever use your systems to DO the actual staying-in-touch with the people you know. It’s just fine if you rely on your systems to REMIND you to stay in touch, but always DO it yourself. Go to Wal-Mart, pick out a nice birthday or anniversary card, write a personal note and sign it. Hand-write the address, slap on a cute return address label and a nice stamp and put it in the mail with your very own hands. MUCH more effective!

Have a question you would like Jennifer to answer? Email it to info@vaned.com!

A Special invite from Jennifer: "Join me on Saturday, March 7^th at 8:30 am (Pacific) / 11:30 am (Eastern) for a FREE teleconference panel discussion on the topic of the dreaded short salewith Janie Coffey & Shelly Montalvo. REGISTER FOR "SELLING AND CLOSING SHORT SALES"

Guest Author Jennifer Allan has authored five books and multiple courses designed to teach agents her Sell with Soul philosophy that centers on four interrelated principles: Respect, Competence, Confidence and Enthusiasm. The latest release of her book Sell with Soul is available in the VanEd bookstore. You can also visit her online at www.sellwithsoul.com.  

 

We asked author Jennifer Allan to answer questions based on her teaching and experience in the real estate industry. Jennifer is also regular contributor to Realty Times and RE/MAX Times.

Question: "What’s the best system for automatically sending out birthday and anniversary cards to my sphere of influence?"

JA: I love this question! We real estate agents love our systems, don’t we? Anything to make our stay-in-touch efforts more efficient!

 

Well, here’s the thing. “Efficient” doesn’t always equal “effective.” You can efficiently market to thousands of people at once, but that doesn’t mean that you’ve effectively marketed to anyone. This is nowhere more true than when you’re staying in touch with your sphere of influence.

 

Never, ever use your systems to DO the actual staying-in-touch with the people you know. It’s just fine if you rely on your systems to REMIND you to stay in touch, but always DO it yourself. Go to Wal-Mart, pick out a nice birthday or anniversary card, write a personal note and sign it. Hand-write the address, slap on a cute return address label and a nice stamp and put it in the mail with your very own hands. MUCH more effective!

 

Finance Friday: The Santelli Shuffle

By now most people have seen Rick Santelli's tirade from Thursday about Obama's housing recovery plan. It certainly shows how out of touch he is with the real world. The housing crisis was not caused by stupid borrowers alone. Bankers, lenders, mortgage brokers, appraisers, and just about everyone else had some hand in the problem. Instead of assessing blame, we need to figure out how to fix the problem. When a home goes into foreclosure, the homeowner suffers, the bank looses, the neighborhood looses, the city looses, and the country looses. This plan is an attempt to stem the tide of new foreclosures. The free market can't solve the problem (we are into year three now there are even less mortgage options than they were six months ago).

There are three parts to the problem. First, we have properties have fallen in value and the mortgages exceed the current market value. Second, we have a lack of income, borrowers who can no longer make the payments. Third, we have predatory loans that may be impossible for even good borrowers to pay.

We can't solve the income problem, so anyone without a job or source of income will not be able to save their house. It doesn't matter if the rates are cut to zero. These homes will go into foreclosure, and the numbers will mount as the massive layoffs and job losses continue.

We can solve the predatory loan problem by offering lower interest rates and reasonable terms to borrowers who have the income to pay a regular payment on a standard loan. The housing rescue plan addresses this.

The third issue is the drop in home values. This is the biggest issue because many borrowers could qualify for a reasonable loan based on credit and income if they had enough equity in the home to support a reasonable mortgage. However, both Fannie Mae and Freddie Mac are scrutinizing appraisals carefully, and are refusing to grant loans at high loan to values.  FHA figured this out a long time ago with their "streamline refinance". FHA's attitude is if the borrower is already on the hook for a certain loan amount and a certain payment, they could improve their position by offering a lower interest rate (and therefore a lower payment). They don't require the borrower to re-qualify from an income standpoint and they don't need a new appraisal. Unfortunately, most conventional loans have been securitized meaning that no one person or company has the ability to change the loan terms. As foreclosures mount, prices ratchet down and create more foreclosures. As the home values drop, many newly unemployed people who would normally sell their homes to avoid foreclosure are unable to, and they join the ranks.

This plan is an attempt to stop this downward spiral. Lenders have the option to participate, to accept less than the current loan amount and re-write the mortgage to an amount and a payment that the borrower can afford. Most lenders would be wise to do this. They will probably receive less when the home actually goes into foreclosure. Until we stop the downward price spiral, we will not be able to stop the increase in foreclosures. Many homes were never really worth what they sold for three years ago, but most of them are inherently worth more than they are selling for at the current foreclosure and auction sales. Stabilizing the housing market will be a start toward stabilizing the economy.

Interest rates dropped slightly this week as the economic numbers just keep getting worse. We are back to 4.75% with one point for high credit score borrowers.

Guest Author Randy Kelly is a Mortgage Banker and Finance Author with Boulder West Financial  Services. He can be reached on-line at http://www.boulderwest.com/.

White House releases information on Housing Plan

Documents were released by the White House regarding the new Homeowner Affordability and Stability Plan that was unveiled by President Obama earlier this week.

The first document is a detailed summary of the provisions outlined by the administration, the second document describes how the plan will help those facing foreclosure. The final document is an FAQ on the plan. We encourage you to take a moment and review these documents so that you may be able to better answer questions posed by your customers. We also suggest that you forward these documents, or the link to this post, to any clients or customers who may be interested in learning more.
 
Homeowner Affordability and Stability Plan Executive Summary

Housing Fact Sheet

Housing Examples
 
FAQ's

Don’t become a victim

The information age is fraught with both wisdom and peril. Keeping your money and information safe should be a top priority for every internet user as more and more scams are uncovered all the time. Two common scams:

1. Lottery Scam – A fraudulent foreign lottery that requests the winner to send money to pay taxes before receiving winnings. This scam costs consumers around the world an estimated $24 million each year - half of which are U.S.citizens.
2. Internet Sales Fraud – A buyer sends a fraudulent cashier’s check for over the amount of an internet purchase. Before the seller can determine that the check is fraudulent, the buyer asks the seller to wire back the extra funds.

What can you do to lessen your risk of becoming a victim?  Here are a few tips from the FBI website on avoiding investment fraud:

Avoiding Investment Fraud

• Don't invest in anything based on appearances. Just because an individual or company has a flashy web site doesn't mean it is legitimate. Web sites can be created in just a few days. After a short period of taking money, a site can vanish without a trace.
• Don’t invest in anything you are not absolutely sure about. Do your homework on the investment to ensure that it is legitimate.
• For more tips click here to visit the FBI website. 

Entrust would like to add to that list: be in control of your own money. With a self-directed IRA, you are in control of your assets. As a retirement plan administrator, Entrust New Direction does not own or control any of your investments - you and your retirement plan do. Entrust simply provides administration for your plan.  As such, the prosperity of our company does not effect your investments for better or worse. In fact, even in a worst case scenario, if our company went out of business, it would not affect the value of your retirement portfolio.  If this happened, your account (and its assets) would simply be transferred to another administrator.

In the past, Entrust New Direction has assumed administration for many accounts transferred from other self-directed IRA companies that decided to get out of the business.  In these cases the clients’ assets are simply transferred ‘in kind’ and re-titled in the name of their Entrust New Direction IRA.  Furthermore, the un-invested cash that we hold for our clients is all FDIC insured to the full amount. Are you ready to take control? Visit www.NewDirectionIRA.com or take the MRE, Master of Real Estate designation course Real Estate and Related Investments in IRAs and 401(k)s, available online at www.VanEd.com.

Guest Authors Bill Humphrey and Catherine Wynne are Principals with Entrust New Direction IRA. Reach them online at www.newdirectionira.com.

Q&A With Jennifer Allan ~ Listing Exclusions

We asked author Jennifer Allan to answer questions based on her teaching and experience in the real estate industry. Jennifer is a regular contributor to Realty Times and RE/MAX Times. This week she answers the question of whether or not to agree to a "listing exclusion."

Question: "What if the seller asks for a 'listing exclusion?'"

JA: For those who haven’t encountered a “listing exclusion” yet, it’s simply a request from a seller that if a certain person or persons buy the home after it goes on the market, your listing commission won’t apply. For example, perhaps the seller knows a guy at work who says he’d be interested in purchasing the house, but he’s still thinking about it. Your seller doesn’t want to wait for him to make up his mind to go on the market, but neither does he want to pay you if the guy actually ponies up. So, the seller asks you to “exclude” this particular person from your listing agreement.

Should you do it?

My advice? Sure. Don’t argue, don’t explain, and don’t make a big deal out of it. Write in the exclusion and get on with putting the house on the market. The chances that this guy is actually going to purchase the house are slim, but if he does, the seller will probably need your assistance to get the contract written and to closing. For which you most certainly may charge a reasonable fee.

No reason to go to battle over this. Save your energy for bigger things!

A Special invite from Jennifer: "Join me on Saturday, March 7^th at 8:30 am (Pacific) / 11:30 am (Eastern) for a FREE teleconference panel discussion on the topic of the dreaded short salewith Janie Coffey & Shelly Montalvo. REGISTER FOR "SELLING AND CLOSING SHORT SALES"

Guest Author Jennifer Allan has authored five books and multiple courses designed to teach agents her Sell with Soul philosophy that centers on four interrelated principles: Respect, Competence, Confidence and Enthusiasm.  The latest release of her book Sell with Soul is available in the VanEd bookstore. You can also visit her online at www.sellwithsoul.com.

VanEd wishes you a Happy Presidents' Day!

Van Education Center offices will be closed on Presidents' Day, February 16th. We wish you and yours a happy and safe holiday. Students may still register for and complete mortgage, real estate and appraisal courses online.

Our offices will re-open on Tuesday, February 17th to serve our students and members. We wish you the best this holiday weekend!

Interested in learning more about the history of Presidents' Day? We found an interesting short history online at http://www.theholidayzone.com/president/history.html.