BloodhoundBlog

There’s always something to howl about.

Month: January 2008 (page 2 of 6)

January 28, 2008

Which Candidate “gets” Subprime?

by

Realtor, Real Estate Ethicist

Author website

Bailout. Stimulus programs. Health care. Subprime. There are lots of problems, or as one of my mentors would say, lots of “opportunities.”

Which Presidential candidate “gets” the subprime fix in which we find ourselves? Great minds must think alike, as Jay wrote about the subprime issue yesterday.

We need a leader who will have the integrity and boldness to do nothing – let the markets sort themselves out. Artificially delaying the inevitable? Great idea.

60 Minutes did quite the story this evening on the subprime problem, summed up with this quote:

“An invitation to fraud … they are being paid not by the veracity of the information but by the consummation of the deal.” … “It would never end; except that it did.”

The economy, not just the American economy, but the economy – the worlds’ economy, is broken.

Excluding all other issues – military, social, international – and focusing on economics and the subprime problem specifically, which of the candidates in the never-ending saga known as the race for the Presidency?

Might it be this one?

“If you believe in free enterprise and capitalism,” (he) said, “you should have the market forces determining interest rates.”

It’s the distortion of interest rates by manipulating the money supply that causes bubbles, like the one in housing, to form, he said, and rarely does the Fed take responsibility when these bubbles burst. “They’re not held accountable,” even after the “total chaos” of the past year.

What do you think? Which one do you trust the most; which one do you mistrust the least?

Where do we go from here?

January 27, 2008

The Odysseus Medal competition — Voting for the People’s Choice Award is open

by

Suburban Phoenix Real Estate Broker

Author website

There are 18 entries on the short list this week, out of a long list of 78 posts. A lot of news, so a longer short-list. Upside: A boatload of fascinating reading.

Vote for the People’s Choice Award here. You can use the voting interface to see each nominated post, so comparison is easy.

Ahem: Please don’t spam all your friends to come and vote for you. First, what we’re interested in is what is popular among people who would have been voting anyway. And second, I’ll eliminate you for cheating. Don’t say you weren’t warned.

Voting runs through to 12 Noon MST Monday. I’ll announce the winners of this week’s awards soon thereafter.

Here is this week’s short-list of Odysseus Medal nominees:

< ?PHP $AltEntries = array ( "Ben Martin -- Realtors And Their Associations Realtors And Their Associations Share A Common Problem. What We Have Here Is Failure To Communicate.”,
“Brian Brady — Erin Brockovich Watch Out! Here Comes Erin Brockovich!“,
“Brian Brady — Guerilla Warfare Needed Housevalues.com Invades Activerain.com: Guerilla Warfare Needed“,
“Brian Brady — Ultimate Irony Activerain.com and HouseValues.com- The Ultimate Irony“,
“Brian Brady — Brokers/Lenders The Danger of Real Estate Brokers as Loan Advisors“,
“Charles Feldman — Litigious Clients Real Estate Agents: Are Litigious Clients Out to Get YOU?“,
“Dan Green — Mortgage Rates and the Fed Why Mortgage Rates Didn’t Fall More When The Fed Made A Surprise 0.750% Rate Cut“,
“Doug Quance — Self-Fufilling Prophecy And Now We Shall Witness The Economic Self-Fufilling Prophecy“,
“Dustin Luther — Roost.com Who gave Roost complete MLS listings?“,
“Galen Ward — Benefit versus Features Descriptive text as benefit, not feature“,
“Glenn Kelman — Absolute Perserverance “114 Pounds of Absolute Perserverance”“,
“Jay Thompson — Buyer suing realtor On Buyers Suing Agents“,
“Jay Thompson — Roost.com Roost.com: A New Player in Real Estate Search“,
“Jim Cronin — Slow-Loading 3 Reasons Your Real Estate Blog Loads So Darn Slow, and the Solutions“,
“Joel Burslem — Roost.com Roost.com Kicks over the RE Search Cart“,
“Kris Berg — The Fast Lane Real Estate in the Fast Lane“,
“Michael Wurzer — Branded or Unbranded Media Branded or Unbranded Media, A Video Conundrum“,
“Mike Price — Who Rules The Roost? Who Rules The Roost?“,
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    Deadline for next week’s competition Read more

    • January 27, 2008

    Selling your home in a declining market? The race is to the swift

    by

    Suburban Phoenix Real Estate Broker

    Author website

    This is my column for this week from the Arizona Republic (permanent link):

     
    Selling your home in a declining market? The race is to the swift

    If you’re chasing the market down, chances are you’ll never catch it. The trick to pricing a home for sale is to race the market down.

    How’s that again? We’re in a declining market, that’s understood. It won’t be this way forever, but prices could continue their slow leak for quite a while longer.

    What that means is that, whatever price you might get for your home today, you will probably get still less a month from now or three months from now.

    Hence, you need to make a difficult decision.

    If you don’t actually need to sell right now, you might do better putting your move off for two or three years.

    But suppose instead that you do need to sell your house right now. You have a job offer out of town. You have a big deposit on a new home. You’re expecting triplets. What now?

    Even in the best of markets, sellers can have an inflated idea of the value of their homes. This has certainly been the case in the two years since the market turned. We’ve had a glut of inventory, but much of that has been overpriced inventory.

    Typically, the seller starts out with the price too high, then tries to chase the market down with a series of price reductions — usually too little and too late.

    If your house is not showing, it cannot sell. But if it isn’t showing, this almost always means it is overpriced. The trick to getting it sold now is to price it under the competitive listings.

    The natural impetus, in the face of advice like this, is to say, “I don’t want to give my house away!”

    Who can blame you for feeling that way? But the important question is, “Would you rather hang onto it for a few more months, and then sell it for even less — if you are able to sell it at all?”

    Racing the market down can be a painful decision. But the pain is likely to be Read more

    January 26, 2008

    Watch Out! Here Comes Erin Brockovich!

    by

    Commercial Real Estate Finance Expert
    Structured Debt and Equity
    Licensed Real Estate Broker in AL, CA, and FL

    Author website

    Hypothetical TV advertisement (aired at 2:00 AM):

    Did you overpay for your home? Did your real estate agent give you bad advice?

    You may be entitled to damages under a class-action lawsuit if you bought your home between the dates of June 1, 2005 and September 30, 2007. The real estate agent, who received compensation to aggressively represent your interests, may have withheld material information about relevant market data, not limited to but including comparable sales, and current listings, in your neighborhood.

    If the value of your home rapidly decreased soon after you bought it, The Coyote Law Firm may help you recover your loss. The Coyote Law Firm has a 27-year history of representing average people, just like you, who were tricked into buying a home by unscrupulous agents. Nefarious schemes, such as your real estate agent securing financing and withholding appraisal reports, may have been the cause for your loss.

    Contact 1-811-THE-COYOTE to see if you are entitled to damages.

    You had to see this coming. Of course, where else would it start but San Diego?

    NB: This is a satirical article. The author knows of no law firm called “The Coyote Law Firm”. Any similarities to any person, law firm or legal business is purely coincidental. The intent of this article is to highlight the complicated nature of real estate advisory and provoke discussion from industry professionals. The opinion is solely of the author (Brian Brady) and not necessarily that of any other author, real estate or mortgage professional, or real estate brokerage, affiliated with this weblog or website.

    January 25, 2008

    Now If We Could Get General Motors To Build One…

    by

    Associate Broker

    Author website

    Doubling Our Collective Fuel Mileage Could Help Drive Oil Prices Down

    Our country has been enduring high oil prices for the last few years – but that transfer of funds out of the country has had a detrimental effect on the economy. And any bad effect on the economy will be felt in the housing sector.

    One of the problems is that Americans like their big cars. Less than 10% of our gasoline is consumed by vehicles that get more than 30 miles per gallon. We just don’t find smaller, more efficient cars all that exciting.

    Well in another year or so, we’ll witness a new breed of car on the road

    And that car will be the Carver… the Cornering Genius.

    I haven’t looked forward to the introduction of a vehicle with this much pregnant anticipation in years. A cool vehicle like this could save an enormous amount of our precious fossil fuels – while reducing emissions. And since 90% of all commuters drive to work – alone – a vehicle like this makes good sense.

    Now if we could just get General Motors to build one…

    January 24, 2008

    So Mr. Buffet Gets Into Insuring Bonds…Then Mr. Ross Gallops In…Coincidence?

    by

    Real Estate Investments Broker

    Author website

    Recent events brought to mind an article published last week by one of my all time favorite Wall Street guys, Max Whitmore. In it Mr. Whitmore spoke of what’s been called the PPT, or Plunge Protection Team. The short version says after the October 19, 1987 stock market crash, this team was put together.

    It’s existence cannot be proved. (Who cares anyway?) I don’t put any credence in any governmental economic ‘Black Ops Team’. I do however acknowledge documented empirical evidence of something happening. This is especially true when it happens more than once — the exact same way — with the exact same timing.

    We can discuss if there really is a ‘who’ behind it over a beer some time.

    Anyway, as Mr. Whitmore documents with historical and empirical evidence, there’s been a pattern a few times now, in which stock market moves cannot be explained. They happened. The way they happened are clone-like in their sameness. Clone-like? How ’bout down to a minute or two in real time? Each time they were bottom line effective. The market turned around.

    He’s seeing it again. And again he cannot explain it — except for the fact it’s there.

    Max Whitmore isn’t just another ‘stock guy’ trying to get publicity. He couldn’t care less. For Heaven’s sakes the last time I checked, the man now works mostly from his home in the midwest. He’s a former S & P trader of the year if memory serves. He’s one of the most revered and respected ‘chartists’ in his industry. In other words, he’s credible in the old school sense of the word.

    Masterful segue to Mr. Buffet and Mr. Ross.

    Keeping the above in mind, why aren’t we seeing more people reporting on what I’m seeing? Here is another, and here.

    The end of 2007 has Buffet getting into the Bond Insurance business. Less than a month later we’re all talking about how to save the bond insurers. Come on now, this isn’t me trying to convince anyone of a new twist on the grassy knoll. This is happening in real time for all to Read more

    January 24, 2008

    Conforming Loan Limit of $650,000, FHA Loan Limit of $729,000

    by

    Commercial Real Estate Finance Expert
    Structured Debt and Equity
    Licensed Real Estate Broker in AL, CA, and FL

    Author website

    A conforming loan limit of $650,000 and an FHA loan limit of $729,000 are being telegraphed as part of the Economic Stimulus Package of 2008.

    Inman News reports that Congress backed a temporary loan limit increase to $625,000:

    The government-sponsored enterprises, or GSEs, may soon be allowed to back loans up to $625,000 nationwide and $700,000 or more in high-cost areas, according to published reports on the negotiations.

    The Bush administration had previously tied any increase to the conforming loan limit to tighter regulatory oversight of Fannie and Freddie, where accounting scandals led both companies to fire top managers and restate several years of earnings.

    Of course, that’s only the first step; the proposal has to work its way through the Senate and be signed by the President. While the common knowledge has been that President Bush won’t allow a GSE loan limit increase without greater regulatory oversight, mortgage insiders believe that he backed off that condition today.

    The word inside the Beltway is that the deal has been fast-tracked for approval (by The Senate and President) under the following terms:

    1- GSE (conforming) loan limits will be temporarily increased to $650,000 and remain in place until 12/31/2008. That means that states like California, Illinois, New York, Massachusetts, and New Jersey will get some much needed relief.

    2- FHA loan limits, currently locked at $362,790, will be recalculated to 125% of the county’s median price, with a limit of $729,000. This is useful for states like California where the conforming loans are subject to LTV decreases due to declining market conditions. FHA loans aren’t subject to those blanket LTV guidelines. This loan limit hike is expected to be permanent, unlike the temporary GSE hike.

    Nothing is rock-solid; it’s all rumor at this point. The Senate will play with the numbers but the Beltway Crowd says that President Bush has signaled the loan limits he will support, today. Expect this to be a reality sometime between Valentine’s Day and St. Patrick’s Day.

    Why the sudden reversal from Bush?

    It’s the economy, stupid.

    January 23, 2008

    Speaking in tongues: A universal contact form for real estate weblogs…

    by

    Suburban Phoenix Real Estate Broker

    Author website

    Nota bene: Slightly amended. Reread carefully.

    I landed on Jeff Kempe’s weblog yesterday. In the way of the web, I don’t remember how I got there or why I came. But I spent a little while looking around, without quite realizing what I was looking for.

    And then it hit me: There’s no contact information. No phone number. No “email me!” link. No contact form. You can find Jeff’s phone number on the About page, but that’s about it.

    Maybe he wants it that way. Maybe it’s none of my business. And maybe I’m not so religious about this stuff that I can go out look for motes — or even beams. But Brian Brady is dead-on when he talks about asking for the business, so I decided to do something for Jeff, whether he likes it or not.

    And: You can play, too.

    What I came up with is a sort of universal contact form for real estate webloggers.

    You can see how it looks on DistinctivePhoenix.com in the image to the right. It’s built to adopt the look-and-feel imposed by your weblog’s theme’s CSS file, so it should look just right when you deploy it. I deliberately made it narrow because sidebars can be pretty tight places.

    The code itself is pretty simple, so if you feel comfortable editing PHP, you can go in and modify it to your heart’s content.

    But if the thought of editing software makes your brain ache, you can deploy this form by editing only five lines of code, all very simple.

    First, you have to email me to get me to send you the form. For the life of me, I can’t figure out how to get a PHP file to download from our server without executing. I can email you a zip file, but our anonymous FTP is so anonymous I can’t figure out its true name.

    Anyway, when you get the PHP file, you’re going to do this — in a text editor, not in Microsoft Word: Edit the second through the fifth lines. They’ll start out looking like this:

    $myName = "Firstname Lastname";
$myCompany = "The Almagamated ClusterFunk Team";
$myEmailAddress = "MyEmailAddress@MyFileServer.com";
$myWeblogAddress = Read more
    January 23, 2008

    Is Roost.com roosting on the brass ring? Start-up Realty.bot comes to market with two firsts: MLS listings and a business plan

    by

    Suburban Phoenix Real Estate Broker

    Author website

    What if somebody built a Realty.bot that seemed to make sense from Day 1? What kind of goof-ball strategy is that in the wacky world of Web 2.0?

    I don’t know if Roost.com really has a business to bank on. The search.bot horizons are starting to look a little crowded. But unlike past entrants, the company is entering the field with two unprecedented features: They’re working from real MLS listings, via member-brokers’ IDX feeds, and they actually have a strategy for monetizing their efforts.

    Yawn! YAMBS again? That’s Yet-Another-Map-Based-Search, a transition in the course of two years from the cool to the commonplace. I haven’t been able to play with Roost.com yet, but my guess would be that they’re behind the curve on cool-factors. The search tools seem to be more than adequate, but Roost is all about search, with none of the social-theater-of-the-mind games the older Realty.bots have been rolling out.

    This is nothing but residential real estate search, with 13 major markets being served at today’s roll-out. Since the listings come from IDX feeds, Roost.com needs at least one broker relationship for every MLS system it wants to service.

    There’s more. Roost.com plans to make money by delivering prospects back to member brokers on a Cost-Per-Click basis. In one scenario, as in the screen-shot above, the broker can have his own private-label Roost.com IDX system hosted on a third-level-domain — e.g., tarbell.roost.com. Every click originating on that site would go back to Tarbell.

    Alternatively, brokers can participate directly on the Roost.com system, with the end-user click-throughs being distributed in a manner similar to Google’s Adwords program: Participating brokers would be selected at random based on their desired spending goals.

    I’m eager to play with the system, because what I’ve seen of it so far seems cool. As an example, the image below shows a windolet of photos. You can have more than one of these open at one time, so you can compare photos from multiple properties.

    Roost.com is essentially a free IDX system for brokers that they would only have to pay for when they are receiving benefits from it — this in the form Read more

    January 22, 2008

    Housevalues.com Invades Activerain.com: Guerilla Warfare Needed

    by

    Commercial Real Estate Finance Expert
    Structured Debt and Equity
    Licensed Real Estate Broker in AL, CA, and FL

    Author website

    Housevalues.com invested close to $3 million in Activerain.com. I chuckled about the irony of a lead company paying for leads, yesterday. I also reported that the Active Rain community was politely swallowing this shocking news. You see, for 18 months, the little purple pill has always been, “If you blog it, they will come” (‘they’ meaning customers).

    Jon Washburn’s community press release generated comments like this one, posted by Ann Cummings:

    Congratulations on the funding. Like others, I’m no fan at all of any lead generation companies. And I’m glad to read Mike Nelson’s comment above about this not being that kind of opportunity for them nor an advertising opportunity for them. That was a concern of mine when I saw this announcement over on BloodHound earlier. Thanks for the clarification, Mike.

    I hope this funding allows you to bring all kinds of great positive things to AR and Localism – that would be terrific indeed!!

    Ann

    No surprise there. Ann’s a nice lady and adopted the cautiously optimistic attitude I would expect from her. She’s hoping for the best but ready for the worst (if it happens).

    Later, demons were exorcised by some (understandably) jaded members who felt that Housevalues “took” their money by promising a product that failed to deliver. On cue, the Housevalues advocates expressed their opinions. Greg Nino from Houston said:

    House Values or any other lead generation company is the current future. In case anyone needs to be reminded, the Internet is where prospects turn into dollars and sense. A lead that comes from your computer or how it gets in you contact management system is a mute point. What does matter is that House Values has been instrumental in launching careers for some and sadly not able to spoil others.

    I have concern for anyone outside my market who claims Internet leads are either a waste of time or a waste of money. Effort being left out because that is what usually is for the typical naysayer. If your in my market carry on with your thoughts. I Read more

    January 22, 2008

    Amaze Your Friends : Why The “Surprise” Fed Funds Rate Drop Isn’t Impacting Mortgage Rates

    by

    Mortgage Planner

    Author website

    Advanced Fiscal Literacy For Real Estate Professionals

    • The Fed Funds Rate is a fair proxy for economic health. 
    • When the economy is growing, the FFR rises to fight inflation.
    • When the economy is slowing, the FFR falls to fight “the absence of inflation” (i.e recession).
    • If inflation is the enemy of mortgage rates, the absence of inflation is a friend.

    Mortgage rates have fallen since November because the economy is showing few signs of inflation.

    Prior to this morning, markets expectations for the Fed’s next action were as follows:

    • 42% expected a 0.500% drop (moderate weakness)
    • 38% expected a 0.750% point drop (strong weakness)
    • 18% expected a 1.000% drop (extra-strong weakness)

    This morning, the Federal Reserve lowered the Fed Funds Rate by 0.750%.  Mortgage rates are only down slightly.

    Here’s why:

    • 42% of people had to fix their bets lower on the economy because they didn’t expect weakness like this
    • 38% of people already expected this and priced it into mortgage rates
    • 18% of people had to fix their bets higher on the economy because they didn’t expect strength like this

    The slight movement is mortgage rates is the result of the (42 percent) and the (18 percent) shuffling their positions in mortgage bonds.

    January 22, 2008

    UNZIPPED?

    by

    Mega-Producing Realtor

    Author website

    Because this thread on Bloodhoundblog has served as a sort of clearinghouse for ex and present ZIP Realty agents, I am passing this along. Additional data can also be found here.

    Unzipped

    Subject: IMPORTANT LEGAL NOTICE RE: CLASS ACTION SETTLEMENT – Please read as this affects your rights.

    This email provides you with a complete copy of the Notice of Proposed Class Action Settlement that was mailed to you with a personalized claim form (“Notice Packet”) on January 15, 2008 to your address that is on record with ZipRealty. If you do not receive the mailed Notice Packet within five days of receipt of this email and would like to request another personalized copy be mailed to you, please call 1-800-918-4296 or visit www.lubockiclassaction.com.

    NOTICE OF PROPOSED CLASS ACTION SETTLEMENT

    TO: ALL INDIVIDUALS (A) WHO ARE CURRENT OR FORMER REAL ESTATE SALES AGENTS WORKING FOR ZIPREALTY OUTSIDE OF THE STATE OF CALIFORNIA AND FROM WHOM ZIPREALTY DEDUCTED A CUSTOMER ACQUISITION OFFSET (“CAO”) FROM MAY 4, 2003 THROUGH SEPTEMBER 30, 2005; AND (B) WHO ARE FORMER ZIPREALTY REAL ESTATE SALES AGENTS WHOSE EMPLOYMENT TERMINATED IN THE PERIOD BETWEEN MAY 4, 2003 AND AUGUST 31, 2007 AND WHO HAD A PENDING TRANSACTION AT THE TIME THEIR EMPLOYMENT TERMINATED THAT SUBSEQUENTLY CLOSED, BUT WHO WERE NOT PAID THE SAME COMMISSION ON THAT PENDING TRANSACTION AS THEY WOULD HAVE RECEIVED HAD THEY REMAINED EMPLOYED AT THE TIME THE PENDING TRANSACTION CLOSED.

    PLEASE READ THIS NOTICE CAREFULLY, AS IT MAY AFFECT YOUR RIGHTS.

    YOU ARE NOT BEING SUED.

    This Notice is to inform you of a proposed settlement of a class action lawsuit brought by four former real estate sales agents against ZipRealty, Inc (“ZipRealty”). This Notice is being sent to you because ZipRealty’s records indicate that you are a member of the class (“Class Member”) affected by this lawsuit.

    THIS NOTICE SUMMARIZES THE PROPOSED SETTLEMENT AND ADVISES YOU OF:

    1. A DESCRIPTION OF THE LAWSUIT;

    2. THE BENEFITS YOU ARE ENTITLED TO UNDER THE SETTLEMENT AND YOUR RIGHT TO FILE A CLAIM FORM IN ORDER TO PARTICIPATE IN THE SETTLEMENT;

    3. YOUR RIGHT TO OPT OUT OF THE SETTLEMENT; AND

    4. YOUR RIGHT TO FILE AN OBJECTION TO Read more

    January 21, 2008

    And Now We Shall Witness The Economic Self-Fufilling Prophecy

    by

    Associate Broker

    Author website

    How Government Leaders Do More To Harm The Economy Than Help It

    Just in case you haven’t heard – this is an election year. And as is all too common, we hear about how this is the worst economy is the last [fill in the blank] years.

    It’s becoming a mantra you can almost set your clock by.

    Well John Q. Public – who, by and large, is relatively secure in his job and career – is always concerned about “the other guy”. And when the media repeats the “bad economy mantra” like an annoying parrot – John Q. will often slow down his discretionary spending.

    So now we see the Presidential candidates tripping over themselves in an effort to put forth an economic plan that is supposed to save us from a recession that none of them can prove exists nor prove is forthcoming.

    What we do know is that a big chunk of our collective change went overseas to pay for oil – and for many Americans, that cut deep into their discretionary funds. At $60 a tankful, the cost of gas is putting the hurt on many of us.

    The increased cost of transporting goods has inflated prices, as well. And yes, there is a housing crunch that is hurting the hell out of everyone I know – and one of the Presidential candidates is now calling for a 90-day moratorium on foreclosures.

    Does that automatically mean we’re heading for a recession?

    No, it doesn’t.

    Hey, I’m not saying we don’t have economic problems that need to be addressed…

    Meanwhile, the world watches us as our political “leaders” squabble over this apparent impending doom that is upon us… and since we’re the biggest market on the planet – they are getting freaked out.

    After all, it was only a few weeks ago that the Iraq war was our biggest issue of concern. Since things are going better in Iraq – it’s now the economy.

    And when investors get spooked – they tend to grab their money and run.

    That is what is happening right now.

    The foreign markets all tanked today. Down about 5 – 7% across the board.

    On Tuesday Read more

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