VanEd Newslog

Finance Friday: GDP Reports Weaker Inflation & Housing Starts Strongest in 8 years

Today the 10 year treasury got the bump it needed to stop the trend of higher interest rates. They rallied today (meaning bond prices were up and yields were down) because the Gross Domestic Product  (GDP) numbers , according to the government, shrank at a 1.0 percent annualized rate in the second quarter, less severe than the 1.5 percent decline analysts had predicted in a Reuters poll.

What does this mean? Today’s data makes treasuries, which are less risky, more appealing than stocks. Why? Because stocks are riskier with the potential for a higher return than treasuries but are harder to achieve without rapid recovery. Treasuries closed in today’s session @ 3.5010% for the 10-Year and 4.30% on the 30-Year.

As I have been discussing for the past couple of weeks housing was looking to be stronger and low and behold New Housing Starts posted their largest gain last month in over Eight Years! Yes….New home sales were up 11% in June and have now risen for 3 consecutive months. As prices have continued to decline in most parts of the country and these numbers are still significantly below the peak of 2005, but inventory is starting to shrink. We can only hope that the worst of this housing recession is behind us.

As Suze Orman said, “Owning a home is a keystone of wealth…both financial affluence and emotional security” With historically low interest rates, what a better time than now? 

 

Guest author Dave Lilja is a mortgage broker and a course reviewer. He is with Metrolink Mortgage and can be reached online at www.frontrangefinancing.com

IRS issues warning of fraud relating to first-time homebuyer credit

The IRS today issued a warning that they will "...vigorously pursue anyone who falsely tries to claim..." the first time home-buyer credit. The warning was issued after a Florida tab preparer pled guilty to falsely claiming the credit on a client's federal tax return. The IRS also states that they have 24 open criminal investigations of instances involving potential fraudulent claims for the first time home-buyer credit.

The credit, modified in 2009, provides up to $8,000 for a first-time homebuyer if they qualify. In order to qualify for the credit, the taxpayer must not have owned a primary residence in the past three years. If married, then this requirement also applies to the spouse. The credit may be claimed only after the taxpayer closes and has purchased the property, and the closing must take place prior to December 1st, 2009. Homes bought in 2008 also have different rules. Click Here to read the IRS notice.

Click Hereto review the IRS information regarding the first-time home-buyer credit.

Oregon Real Estate Agency issues Fraud alert

The Oregon Real Estate Agency has issued the following fraud alert;

The Agency is receiving calls from licensees asking if their fingerprint cards have expired. The licensees explain that someone stating to be from the Agency has called them and informed them that their fingerprints are going to expire. The caller is asking for credit card and social security numbers.

Fingerprint cards and criminal background checks do not expire with the Agency. Also the Agency does not accept any personal or confidential information over the phone. If you receive one of these calls, do not give your information out.

VanEd reminds you not to give out any personal information to anyone calling and claiming to be from any regulatory agency. Regulatory officials do NOT accept personal information over the phone in any state that VanEd operates in. All students and members should take care to guard personal information and if someone claiming to be from a regulatory agency does contact you, report that to your local regulatory licensing agency.

Q&A with Jennifer Allan ~ Convince your seller to sell!

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 and is the creator of the Savvy Prospector program, endorsed by Dave Liniger.

Question: "How do I convince a seller that he should sell now instead of waiting to see what the market is going to do?"

JA: I don't believe it's appropriate to convince a seller to sell if he's not truly motivated to do so. First, as we all know, an unmotivated seller is tough to work with, so it may not even be a listing you want. Second, the seller is probably expecting you to argue with him, so if you don't, you'll win big brownie points for supporting his position (instead of arguing with it).

Here's how I respond to this objection: "Okay. I'll be happy to keep you updated on the status of the market and let you know when it appears to be turning around."

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

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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.

Finance Friday: Good news for markets

This has been an action packed week of financial news and company earnings. The DOW closed above 9,000 for the 1^st time since November of 2008 and has had an extraordinary move up 40% (fastest since 1972).  As everyone is trying to get a gauge on the economy most large company earnings have been better than most analysts expected and existing home sales notched its 3^rd monthly rise as national average prices hit their highest levels since October 2008. Mortgage rates in the U.S. rose for the first time in four weeks with the average 30 year rate increasing to 5.2% from 5.14% according mortgage buyer Freddie Mac.

So now the real question is what does the future hold for the financial markets and housing markets? Many experts are saying the housing market is definitely showing signs of a bottom, but keep in mind if you really look at these numbers it is mostly driven by lower priced homes. With the 1^st time home buyer tax credit and historically low interest rates there has been no time like the present for some to make that 1^st time purchase.

“Changes are not only possible and predictable, but to deny them is to be an accomplice to one’s own unnecessary vegetation.” Gail Sheely

Guest author Dave Lilja is a mortgage broker and a course reviewer. He is with Metrolink Mortgage and can be reached online at www.frontrangefinancing.com

CREC approves forms changes

On July 22nd, 2009 the Colorado Real Estate Commission held an emergency rule making hearing to approve the forms committees’ Colorado Foreclosure Protection Act contract.  The Commission did approve the new contract and forms and hopes to have them available on their website shortly.  In addition, the Commission also passed a motion to permit brokers to delete the second to last sentence of paragraph #10.5 of the listing contract (LC50-5-09) which originally prohibited listing brokers from preparing contracts if the Colorado Foreclosure Protection Act is implicated. 

While the Commission’s rulings yesterday are a step in the right direction, the Colorado Foreclosure Act is still a problem for real estate brokers given the substantial penalties for a violation.  I believe the only true fix will require legislature intervention at the next legislative session.

Click Here to read Rule F-7, which includes the recently approved forms

Damian Cox, Esq. is an attorney with the law office of Richard M. Chanzit and represents realestate brokers and brokerage firms. He is also a member of the CAR Faculty, and is an approved VanEd instructor teaching Foreclosure and Short Sales in the MRE, Master of Real Estate Program.

Colorado Division of Real Estate issues position on Independent licensing

Yesterday the Director of the Colorado Division of Real Estate issued a one paragraph position statement on licensing requirements for independent contractor loan processors and underwriters. The statement came out of questions the DRE was answering regarding Title V of the S.A.F.E. Act that defined minimum national licensing standards for mortgage loan originators.

The Act requires states to adopt provisions that at least comply with those set for at the National level, including the requirement that all independent contractor processors or underwriters are to be licensed as state-licensed loan originators. In Colorado the General Assembly passed HB 1085 in May that defined the requirement for licensure but did not specify a timeline for those independent contractors to be licensed. Position Statement MB 1.6 defines that timeline.

The Position Statement clarifies that independent contractor loan processors and underwriters shall be licensed as state-licensed loan originators by July 31st, 2010. Beginning August 1st, 2010, any independent contractor loan processor or underwriter shall not engage in residential mortgage loan origination activities as a processor or underwriter unless they are licensed by the state.

Due to upcoming changes in national education and testing, VanEd is recommending that independent processors and underwriters consider completing the education and testing requirements in 2009, which will be prior to any changes that will occur in 2010. After January 1st, 2010 it may be more difficult to complete the education and testing requirement prior to the July 31st, 2010 drop dead date.

Click Hereto view VanEd's online Mortgage Broker Education Packages

Click Here to read Position Statement - MB 1.6 - Independent Contractor Loan Processors and Underwriters

Are you subject to the Red Flag Rule?

The Red Flags Rule was developed pursuant to the Fair and Accurate Credit Transactions (FACT) Act of 2003. Under the Rule, financial institutions and creditors with covered accounts must have identity theft prevention programs to identify, detect, and respond to patterns, practices, or specific activities that could indicate identity theft.

The Rule applies to creditors and financial institutions. Federal law defines a creditor to be: any entity that regularly extends, renews, or continues credit; any entity that regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who is involved in the decision to extend, renew, or continue credit.

But how can you determine if you fit the definition and are required to comply? The FTC has published a How-To Guide for Business. This 17-page document will help you understand who is required to comply. The FTC also launched the Red Flags website where you can complete an online 4-step process to help create your own program in order to help your business comply with the rule.

The Red Flag compliance deadline is fast approaching on August 1, 2009. Penalties for non-compliance can range up to $1,000 per day per customer. Don't delay! The links below will help to guide you through this process.

Visit the Red Flags website by clicking here

Read the How-To Guide for Business by clicking here

And if you determine you need help to ensure that your compliance is in accordance with the law, VanEd has enlisted IDBusiness to assist our students and members with compliance. Click on the logo below for more information.

NAR Research Division opens social media outlets for members

After surveying its members, the National Association of Realtors® found out about their use of technology like websites and blogs. Now, The Research Division has its very own Facebook group, Active Rain and RealTown presences, as well as a presence on Twitter and LinkedIn. Research's social media pages are not only a place for members to receive insight into our latest surveys, commentaries and reports, but also creates a place for Realtors® to get in touch with the division. There may be certain special trends in the marketplace that Research may be unaware of - such as a significant rise in foot traffic at open houses or continuing long delays in getting short sales to close. Research will be using the social media platforms as an open forum for discussion.

On many of these networks you will also be able to follow up to the minute and daily information postings created by the NAR Research Division.

Find Research on Facebook >
Find Research on Active Rain >
Find Research on RealTown >
Find Research on Twitter >
Find Research on LinkedIn >

The Confident Rookie Series - SECRET #10 - What to Say When You Don't Know the Answer

A few weeks ago, a new agent came into my office all flustered. He'd been out with his buyers over the weekend and felt that he'd made a fool of himself by not being able to intelligently answer his buyers' questions. It almost sounded as if he was ready to throw in the towel - at least until he knew more about what he was doing!

Calm down, I told him. First, trust that it will happen to you thru-out your career. Don't panic. Don't make stuff up, but don't panic.

I asked him what the questions were that he couldn't answer. And guess what? Most of the questions were really good ones - that is - chances are that even a more experienced agent wouldn't have known the answers either! But the problem with being new is that you don't know what you SHOULD know and so you figure you should know it all.

This is where not panicking comes in.

Take a deep breath and really think about the question. Is this something you should or could know?

For example, let's say you're showing lofts downtown and the buyer asks: "What are the pet restrictions in this building?" Well, unless you live in the building yourself or unless you make a habit of memorizing condo rules & regulations, you couldn't possibly know the answer. Or how about if a buyer asks you where the property lines are on a rural property? If you aren't the listing agent, this is probably not something you can accurately answer.

This doesn't mean it's not your job to get the answer - it is. But if you don't know the answer off the top of your head, it's okay!

So, how do you respond?

First, DO NOT use that tired old line "I don't know the answer, but I can certainly find out for you!" in that prissy, almost defensive voice. You know what I'm talking about don't you? That cheerful, oh-so-helpful voice that clearly tells your client that you don't have a clue, but wish you did?

Instead, try this. Relax, and VERY casually say "Hmmmm, I don't know. Lemme find out." Write down the question, and move on.

Or, how about this? "Wow - I've never gotten that question before. I'm looking forward to finding out the answer!" Write it down, and move on.

Or, in the above scenarios when you're working with a buyer and he has questions about the property you're looking at, take control and call the listing agent immediately.  That will make a great impression on the buyer.

Of course, sometimes you'll be asked a question you should know the answer to and you don't. This is happening to me more often lately as I venture deeper into the world of foreclosures & short sales. My stock answer has become "Y'know, I should know the answer to that, but I don't. I'll find out for you." This somewhat self-deprecating approach seems to be working - at least - no one's fired me yet for saying it!

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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.