Archive for the ‘Business’ Category

Following a sharp drop in the months immediately after the expiration of the home buyer tax credit, pending home sales have modestly risen, according to the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator, rose 5.2% to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, but remains 19.1% below July 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”

Yun added, “Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodative monetary policy. The loan underwriting standards are tighter, but home buyers can improve their chances of getting a loan by staying well within their budget.”

The PHSI in the Northeast rose 6.3% to 62.5 in July but is 21.1% below a year ago. In the Midwest the index increased 4.1% to 66.7 but remains 25.7% below July 2009. Pending home sales in the South rose 1.2% to an index of 86.3, but are 15.6% lower than a year ago. In the West the index jumped 11.6% to 95.0 but is 17.6% below July 2009.

The national index had fallen 29.9% in May and another 2.8% in June.

For more information, visit www.realtor.org. From RIS Media

Connect with Valerie…

Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

From Ann Brenoff on WalletPop

There was a collective gasp when the news broke Tuesday that existing home sales had fallen off by a whopping 27%. Economists stammered and teared up over the deterioration of the housing market. And we’re sure that more than a few real estate agents — the ones who managed to take their heads out of the oven — went straight to call Mom and see if their old bedrooms were still available.

Time to take a deep breath. Here’s what the news really means to you: Likely nothing.

Do you have a house you need to sell? No? Then put your crying towel away, or loan it to someone who really needs it.

There are 75.1 million owner-occupied housing units in America and only 4 million of them are on the market today, according to the National Association of Realtors. The rest of you should just go quietly away. Yes, your home is worth less on paper than it was a year ago or even five years ago. But that was paper money, just like what you play Monopoly with. You don’t have to sell, you likely can’t anyway, so why drive yourself nuts over it?

Now that those people have left the post, let’s work on those who really do need to sell. I may have some encouraging news for you. While that 27% free-fall is no doubt accurate, it may not be where you live. Now, more than ever before, the real estate market is hyper-localized. That means the depth to which you are impacted by the housing market crash depends not just on which city you live in or even which neighborhood of that city, but actually on which streets within that neighborhood.

Ernie Carswell, a top-producing agent with Teles Properties in Beverly Hills, offers a neat micro market report each month for Los Angeles. Looking at the one he sent me yesterday, you get a totally different feel for what’s going on in the housing market.

Here’s but one example: Comparing July 2009 with July 2010, in the high-end community of Bel-Air, Calif., the median price of sold homes went up 1.4%. Yes, up. In July 2009, there were 213 properties on the market for an average of 96 days; the inventory moving at the snail’s pace of 19.6 months. Yet in July 2010, there were 178 properties on the market for just 48 days and the inventory was expected to last 6.2 months. Higher sales prices, fewer homes to compete with, things moving faster.

Those numbers would suggest a different real estate story than what the national figures tell. Location really does matter. And before you dismiss me as out of hand and think prices are only holding in the high-end market, let me assure you they are not. Again, it’s pockets. If you are in a hot pocket, you may not be as bad off as the broader numbers suggest.

I’m not saying don’t panic, just don’t panic yet. One thing is really does underscore is the need to hire an agent who seriously knows your street. This isn’t a job for the sister-in-law who just got her license or someone who assures you that they “can sell anywhere.”

Carswell says, “As the economy and the real estate markets continue to change, the nuances between different areas and different neighborhoods are becoming increasingly magnified. One neighborhood may show a sales increase, while another neighborhood just blocks away may be experiencing a dramatic drop in sales from the previous year. While the media publishes its statistics based on national, state and county trends, this distorts the public’s perception of what could actually be happening in their own neighborhood.”

Listen to the man. He speaks the truth. Bloggers love to post items about how far the rich and famous have fallen or tell you which celebrities had to drop their asking prices by millions. But there is only one address you should be concerned with: Yours.

Connect with Valerie…

Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

New data suggests that mortgage fraud—which got tougher to pull off after the collapse of the U.S. real estate market—is returning in a big way.

Data prepared for The Wall Street Journal by research firm CoreLogic, examining about seven million home loans made by hundreds of lenders, show that losses from mortgage fraud—ranging from falsified credit reports to identity theft—rose 17% last year after declining 57% in the two years after its 2006 peak.

In 2009, $14 billion in loans, or about 0.7% of all mortgage loans made in the U.S., were originated with fraudulent application data.

The figures are a fraction of the mortgage market, but the increase is sharp.

CoreLogic, which tracks fraud only by mortgage value, examines about 7 million loans each year using a proprietary computer program that detects discrepancies in loan documents and predicts the likelihood of fraud. The real losses to banks won’t be known for several years when banks are forced to write off the value of the loans’ value.

New data suggest losses from mortgage fraud nationwide rose 17% last year. Above, a view of Las Vegas, where home prices have fallen.

Some of CoreLogic’s profits come from selling market research to lenders aiming to cut losses from mortgage fraud.

Investigators and lenders say they are seeing a similar upswing in fraud.

The Federal Bureau of Investigation in June indicted a Phoenix man for mail and wire fraud among other alleged crimes when the agency says he tried to steal a house from his landlord. Also in June, federal prosecutors in New Jersey charged 29 defendants—including 12 real-estate agents, four mortgage consultants, an appraiser, a bank employee and a mortgage broker—with wire fraud in an alleged scheme involving 17 properties in the state and losses of $5.5 million.

“Even though we have certain compliance measures in place, people will adapt whatever scheme,” said Sharon Ormsby, the FBI’s section chief for financial crimes. “It doesn’t matter if the market is going up or down.”

The kinds of fraud that contributed to the mortgage crisis and the collapse of the housing market were relatively simple. Crooks took advantage of the size of mortgage loans and the lax rules governing who qualified for them.

In one common con, they would recruit as accomplices “straw buyers” with good credit to apply for “no-doc” loans, which required no documentation or proof of income, to buy their house. Good credit was required because lenders generally did check a borrower’s credit score, even if they didn’t require pay stubs or bank statements.

When the bank sent funds, typically to make a down payment or for a home-equity loan, the schemers and the fake buyer would split the profits and walk away, leaving the house to fall into foreclosure and the bank stuck with the loss.

Since the mortgage crisis, banks and the government-sponsored entities that underwrite or insure mortgages, including Fannie Mae, Freddie Mac and the Federal Housing Administration, have tightened lending standards and closely scrutinize mortgage applications.

No-doc loans are a thing of the past, and many lenders now require borrowers to furnish proof of employment, tax forms, credit reports, bank statements and other documents.

Fraudsters have adapted to the new restrictions. With banks less apt to lend to borrowers with shaky finances, criminals rely more on falsifying documents, recruiting loan officers and other bank insiders to work for them, and stealing identities to get loans, federal investigators and mortgage industry research reports.

In the Phoenix case, prosecutors allege, Jose Victor Buencamino did all three. Some people who knew Mr. Buencamino describe him as a large, friendly man devoted to his children, the life of many a party and a passionate golfer. Gary Weaver, who rented a home to Mr. Buencamino last year, has a different impression. He said the Arizona businessman tried to snare him in an elaborate mortgage scheme.

According to a federal indictment unsealed in June, while Mr. Buencamino was renting Mr. Weaver’s house on the golf course at Moon Valley Country Club, he intercepted mail intended for Mr. Weaver and obtained his social security number, then applied for a driver’s license in Mr. Weaver’s name.

Then, the indictment alleges, with the help of a friend who worked as a loan officer at a local branch of Compass Bank, a unit of Spanish bank Banco Bilbao Vizcaya Argentaria SA, Mr. Buencamino obtained a $245,000 cash-out mortgage on the property. A homeowner using a cash-out mortgage refinances the home loan for more than the mortgage is currently worth and pockets the difference in cash.

A Compass Bank spokesman didn’t respond to requests for comment. Mr. Buencamino, who couldn’t be located for comment, has not responded to the charges.

A federal agent said he had been tracked to Vancouver, where the agent said he is applying for Canadian residency. Prosecutors involved in the case said he didn’t have an attorney on whom they could serve court papers. U.S. authorities said they were seeking his extradition.

“Fraud continues to be a pervasive issue, growing and escalating in complexity,” said an April report from LexisNexis’s Mortgage Asset Research Institute, which cited as reasons easy access to records via the Internet and, in many cases, though not Mr. Weaver’s, the vulnerability of cash-strapped homeowners.

MARI’s breakdown of the numbers reflects the shift in technique. Fraud related to falsified credit reports has declined each year since the boom years, MARI reports, while the share of mortgage fraud involving false appraisals jumped 50% between 2008 and 2009.

Application fraud—in which borrowers lie about their names, where they live, how much money they earn, their employment, their debt or their assets—remains high, accounting for 59% of all mortgage fraud.

One of the defendants in the New Jersey dragnet, a mortgage consultant with Newark-based Invest & Investors LLC named Viviane Bernardim, allegedly paid accomplices $15,000 apiece to steal the identities of several New Jersey residents who earned $90,000 or more and had good credit ratings. She used those identities to obtain second mortgages on a number of homes in the Newark area, according to U.S. Attorney Paul J. Fishman, head of the office prosecuting the case.

But since good credit ratings are no longer enough to get a mortgage, Ms. Bernardim also needed friends who worked for the lenders to pull off the caper.

“Having players at every level of a conspiracy makes it easier to carry out fraud,” said Mr. Fishman. “But each bad actor and criminal act is also another chance for law enforcement to find a way in.”

Maria Delgaizo Noto, an attorney for Ms. Bernardim, said that she had no comment until an indictment was unsealed, but that her client “maintains her innocence of any criminal activity.”

Beth Phillips, left, a U.S. Attorney in Missouri, announces a pair of indictments Aug. 4 in Kansas City in a $2.7 million mortgage-fraud case.

In Phoenix, Mr. Buencamino’s alleged fraud was assisted by an insider, but also by easy access to public documents on the Internet. After intercepting mail intended for Mr. Weaver and obtaining his Social Security number, Mr. Buencamino applied online for an Arizona driver’s license in Mr. Weaver’s name, according to the criminal complaint and law enforcement agents involved in the case.

When he received the permit, he submitted mortgage application documents by mail to Compass Bank and, with the help of co-conspirator William Baxaveneous, the Compass loan officer, obtained a second mortgage on Mr. Weaver’s home—which had no mortgage—without ever having to meet any bank officials face to face, Mr. Weaver said. He said he learned this from the federal agents investigating the case.

Mr. Baxaveneous’s attorney said he was trying to settle the case and declined to comment further.

From Wall Street Journal

Connect with Valerie…

Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

In today’s real estate market, buyer’s still carry the upper hand when it comes to negotiation. And as their Realtor, it’s your job to passionately and intelligently guide and educate your clients through the sales process from start to finish.

It’s time to add the ‘social media talk’ to your list.

Have the conversation with your clients
With online connectivity virtually blanketing the entire world and the expansion of the savvy buyer, it’s important you have a conversation with your clients about disclosure of information regarding their listing on social media sites and communities, like Facebook and Twitter.

First, take their social media temperature. Ask them a few questions to gauge their social media engagement and overall understanding of the medium. There are several camps of the types of people, as well as mind sets who engage in social media. Those who participate all the time, those who keep their feet wet and those who don’t while holding up a large closed sign with big locks on their door.

Don’t disclose the sales or escrow process online
Make sure your clients keep the marketing and pending sale information of their home close to their chest. Be sure they don’t discuss pending offers, the inspection process, or escrow particulars in the social media communities in which they belong.

Many of your clients may find this activity harmless and just friendly chat amongst their friends and family, but in some instances, it could derail a sale. For example, if your client’s Facebook pages are set to share with everyone, the information they post is ‘open’ for the world to read. Twitter is also open for everyone to read—even if your client has protected tweets, individuals within their community have access to their posts.

Savvy buyers can find your clients in social media communities
Potential buyers can find out the names of property owners through county assessor website information and run a search through various social media tools to locate a property’s owner. Any information your clients post in open social media communities can disclose the type of people the owners are, and potentially, the progress of the property’s advancement through the sales process, pending offers and the home inspection.

Remember to add the ‘social media talk’ to your new client presentations or have the discussion with your current clients. In the end, it may save the deal.

From RISMedia

Connect with Valerie…

Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

International home buyers are increasingly attracted to property in the U.S., according to the National Association of Realtors’ 2010 Profile of International Home Buying Activity. Several factors, including the strength of the dollar, the value and desirability of U.S. real estate, and the emerging economic recovery, continue to drive international interest in owning a home in this country.

“While all real estate in the U.S. is local, the same is not true for property owners,” said NAR President Vicki Cox Golder. “The U.S. continues to be a top destination for international buyers from all over the world. Foreign buyers understand the value of owning a home in this country and can rely on Realtors to help guide them through the complex process of buying property in the U.S. With expertise, knowledge and experience, Realtors have a global perspective.”

The survey covers the period between April 1, 2009 and March 31, 2010. During that time, foreign buyers, including those with residency outside the U.S. as well as recent immigrants and temporary visa holders, are estimated to have purchased $66 billion of U.S. residential property, or 7% of the residential market.

Slightly more than a quarter of Realtors, 28%, reported working with at least one international client in the past year. This is a significant increase from the 2009 report, when 23% of Realtors worked with foreign clients. Eighteen percent of all Realtors were estimated to have completed at least one sale, compared to 12% last year.
“Several factors have contributed to an increase in international buyer interest in the U.S.,” said Golder. “A large majority of Realtors report the changes in value to the U.S. dollar have had a strong impact on the international real estate business. In addition, perceptions abroad about trends in the U.S. real estate market have led many international clients to believe purchasing a home in the U.S. is more affordable than in their country and holds more value.

International buyers came from 53 different countries around the world. The top four countries were Canada, Mexico, the U.K. and China/Hong Kong. With 23% of international buyers coming from Canada, the country has remained the largest buying group in the past three years. Foreign buyers from Mexico have been steadily increasing. In 2010, Mexico replaced the U.K. as the second largest buying group with 10% of buyers. Buyers from the U.K. decreased from 10.5% in 2009 to 9% in 2010. Eight percent of recent buyers came from China/Hong Kong.

Two factors important to international clients when purchasing property in the U.S. are proximity to their home country and the convenience of air transportation. Florida typically attracts European, Canadian and South American buyers while the East Coast draws Europeans. The West Coast brings Asian buyers and the Southwest attracts Mexicans.

International buyers were reported in 39 states in 2010, but a slight majority of the total buyers are concentrated in Florida, California, Arizona and Texas. These four states account for 53% of purchases and have remained the top destinations for the past three years, with Florida and California remaining the top two destinations.
The median price paid by international buyers for a home in the U.S. was $219,400, a decrease from 2009’s median price of $247,100. However, the median price paid by foreign buyers was significantly higher than the overall median market price, which was $172,500 in 2009. On average, foreign buyers tend to purchase closer to the upper end of the market; 16% of the total international purchases were for homes priced at more than $500,000. According to Realtors, this was because international buyers are typically looking for a second home.

A majority of international buyers, 66%, purchased single-family detached homes. However, more international buyers purchased a condo than did their U.S. counterparts, at 23% and 7%, respectively. Only 44% of international buyers used a mortgage to pay for their home, compared to 92% of domestic buyers. Fifty-five percent of foreign buyers paid all cash. Realtors reported that a majority of international buyers use all cash because of the difficulty in establishing international credit in the U.S. Over one-third, 34% of potential foreign buyers were unable to complete transactions because of financing problems in the U.S.

From RIS Media

Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings