The HBH Group Real Estate News

                                * * * *   HARD CORE REAL ESTATE TALK * * * *

Thanks to the Mortgage Pro Week in Revew: 6/30/2008 throught 07/06/2008  by Alan 'AJ' Nisen, I found some very good reading material by ActiveRain members from the mortgage loan industry.   

NOTE:  ADD this link to the content in this post.  It's very interesting. 

One of the featured articles includes real estate agents in the group responsible for the mortgage mess.  Including real estate agents in the blame game for the mortgage mess appears to be a knee jerk reaction.  However, the writer doesn't say how the real estate agents were responsible for the mortgage mess.  We know how mortgage loan officers can be responsible for approving loans for unqualified buyers.  I have yet to hear how a real estate agent can be responsible for a loan officer approving an unqualified prospective borrower. 

"Get pre-approved before selecting a real estate agent" is the advice from mortgage loan officers and HUD.  If mortgage loan officers can pre-qualify a prospective home buyer before the consumer has selected a real estate agent, how does the real estate agent become responsible for the actions of the loan officers approving loans for consumers once the consumer has an agent???  

The mortgage loan officer is not responsible for the institutional creation of the Alt-A, the Neg. Am, etc. loan instruments.  Those loans were created at a much higher level than the mortgage loan officer.  In fact, Fannie Mae and Freddie Mac guidelines approved many loans that were doomed to failure.  Surely, the mortgage companies that employ loan officers have Policies and Procedures for their employees.

• On Tuesday, Fannie Mae (nyse: FNM - news - people ) executives told analysts that 43.0%, or $946 million, of the $2.2 billion in losses incurred during the first quarter involved Alt-A loans. They also said that the company's "Alt-A book will continue to drive an outsize portion of our overall credit losses." Fannie also reported $344.6 billion current Alt-A exposure and a limited strategy for stemming future losses.  Forbes, May 6, 2008.
   
  

REAL ESTATE AGENTS ARE AT THE BOTTOM OF THE FOOD CHAIN.   I've read the license law in both states in which I practice real estate brokerage.  Neither have any duty on the part of the broker or agent to advise or have any knowledge of mortgage lending, rates, terms or conditions.  How can real estate agents be held responsible to police the actions of mortgage loan officers??  Not only are they not trained in the intricacies of mortgage loans, they have no authority to police the application and approval process or criteria for mortgage loan approval. 

Why does everyone try to suck the agents into this mortgage mess?  Agents have their job and loan officers have their job. 

• Does the agent blame the mortgage loan officer when the agent fails to provide required disclosures? 
• Does the agent blame the loan officer when a buyer closes on a home without the HOA docs?
• Does the agent blame the loan officer when the agent practices undisclosed dual agency? 
• Does the agent blame the loan officer when the agent provides an inaccurate CMA?

Real estate agents and brokers do have many duties for which they bear responsibility.  Mortgage loan approval is not a duty of the real estate agent.  There are many levels of knowledge and exprience of real estate agents.  However, mortgage lending is not a required competency for real estate agents.  I have always been of the opinion that it takes about 100 transactions before a real estate agent really has an understanding of real estate brokerage.  If agents are responsible for mortgage loan failures, you'll have to add a few years experience for competency.  Few agents even attend or participate in mortgage loan applications.  If we are responsible, we would have to have been involved in the approval process.  Real estate brokerages have published Policies and Procedures for their real estate agents.  Those guidelines do not include mortgage loan approval authority. 

Loan officers often say that they wouldn't approve bad loans for buyers if the agent didn't "pressure" them to do so.  This statement astounds me.  Pressure from an agent is hardly an excuse for failing to follow the law or guidelines for a mortgage loan. 

All the mortgage loan officer has to do is "SAY NO"!

The blame game has to stop when one sector of the real estate industry tries to suck everyone into the mess and refuses to police themselves and accept responsibility for the causes.  

If the mortgage loan industry is not going to accept the responsibility for making mortgage loans to consumers who didn't meet the guidelines, the persons making those loans will continue to perpetuate this problem and the consumer will continue to be badly served. 

Consumers do not understand mortgage loans even when they shake their heads up and down and say that they understand. 

Many real estate agents do not understand mortgage loans, even when they shake their heads and say that they understand. 

Mortgage loan officers DO understand mortgage loans and if they approve a loan for an known unqualified home buyer, they may bear responsibility for their actions.  FHA and VA have "charge back" features that go a long way to prevent unqualified buyers being approved.  Loan officers know when a buyers is qualified and when they are not. 

In all the years I've been selling real estate, I've never known a loan officer who couldn't say "NO".

                            

                            "Good news!  I can qualify you for a loan with a 1.5% start rate."

===============================================================

THIS MAIL HAS GENERATED SOMETHING I HAVEN'T GOTTEN IN QUITE A WHILE

I'M GETTING FLAMED!!! 

Note, that the whiners don't have the guts to publish their views.  They primarily flame me with e-mail exhibiting a considerable level of commission envy. 

I never quite understand why loan officers complain about the "6 or 7%" that real estate agents collect at the end of a sale.  Fact is, they all have the freedom to do the same thing we do.

Take the real estate course
Pass the real estate exam
Get hired by a broker
Invest in promotion and farming for customers
Work your butt off to meet qualified buyers and/or sellers
Work your butt off to get some buyers and/or sellers to settlement
Collect the commission

It's a free country and I suspect that anyone who can get a job as a loan officer
could get a real estate license and strive for those easy commissions.

It's a free country.

=====================================

Wednesday 7/26, 2008

Well folks.  This has been an exciting read.  I'm not quite caught up yet and may not ever be. 

I just returned from a meeting with a loan officer and his underwriter getting caught up on their processes for approval, etc.  I like to meet with new mortgage company folks to look them in the eye. 

For one thing, it gets my calls answered or returned quickly and my folks get good care.  That's important because I refer 2-3 buyers to mortgage companies every day. 

I've already sent this loan officer about 25 buyers (about 6 have been rejected) and thought it was time we met.  It was a very productive meeting.  But, I won't be doing his job and he won't be trying to qualify folks who don't meet their the guidelines.  I'm not taking those buyers anywhere else. 

My agent and broker partners to whom I refer buyers will benefit from the meeting and communication will be better than if we had not had the meeting. 

The point of this comment is that real estate agents and mortgage loan officers can have a good mutually beneficial relationship working together.  Agents can't hide their heads in the sand and try to make square pegs fit into round holes.  A buyer is either qualified or they are not. 

However, our competencies are quite different.  I do my job and the mortgage company does theirs. 

It'works very well. 

     ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Thursday, July 17, 2008

As the pusillanimous "google" points out above, below, thinking he found something incriminating in one of my past posts, I did say "I don't have a problem with 100% loans.".  In didn't when I wrote that post and I don't now.

And for the record, I don't have a problem with Alt-A, negative am, pay option, etc. loans.  Exotic?  Sure.  However, used responsibility by loan officers, they open the doors to home financing that would otherwise be closed to many responsible home buyer such as self employed persons, persons who are on an upward mobility track in a professional field like medicine.

However, I do know that the consumer should be provided with an amoritization table so they have actually seen how their payments and mortgage balances will move.  Disclosure and information would have saved a lot of consumer the anguish of foreclosure if they had simply known.  In the past 10 years or so, I have had one, just one, loan officer provide a 10 year amortization table to my buyers.  So I do it.  Am I stepping on the toes of the loan officer?  No.  I'm just letting my buyer who wants to buy a home at the limit of their qualifying range know what to expect. 

We also through the house (along with a wonderful home inspector who agrees to perform this extra service for my buyers) and let them know what to expect in the way of home maintenance and upgrade costs for the next 5-10 years.  If a buyer spends his last dime to buy a home and the air conditioner, while working new, is at the end of it's useful life, that buyer is at risk if he has to pay $5,000 for a air conditioner and only has sufficient income to meet his mortgage payment. 

So, there is nothing wrong with 100% financing if it gets a family into a home they want and need as long as it can be established at the outset that they are prepared financially to make the mortgage payments. 

It's very difficult for families (even a family of one) to save cash these days.  However, everyone has to have shelter and if buying a home with 100% financing is an alternative to renting, I'll help them all I can.  However, I don't expect loan officers to put my buyers in loans that put that buyer at risk of foreclosure. 

If, on paper, the buyer works two jobs and earns $25,000 W-2 earnings and they are approved for a $500,000 house with a 100% mortgage, that's not one of my buyers. 

=================  FLAME RECEIVED IN MY E-MAIL =====================

Lenn,

While I appreciate your comments on active rain I have to disagree and this is why:

• Most Real Estate Agents only care about their commissions
• Most Real Estate Agents couldn't figure out a payment
• Most Real Estate Agents are stupid

When you point the finger you are enforcing my last point.  You all have driven up the price of homes and filled the balloon with hot air.  Not the balloon had popped and you want to blame us? 

Step back and look at your industry and the ethics and professionalism there.........lacking to say the least...............You are the theives who charge 7% not us.............A home has to increase in price in order to be sold to pay your sorry ass.

Thanks for listening.

Gustav now up to a strong Category 4 Hurricane. It looks like it will hit far enoug to the West of New Orleans to spare devastation, but a jog East could prove disastrous. Mandatory evacuations by Sunday AM. Everyone from Houston to Mobile is watching...

MIAMI, Florida (CNN) -- Gustav's winds increased to near 145 mph Saturday as it threatened the western tip of Cuba as a Category 4 hurricane.Saturday morning Gustav was about 255 miles east-southeast of the western tip of Cuba.

"This makes Gustav an extremely dangerous Category 4 hurricane on the Saffir-Simpson hurricane scale," the National Hurricane Center said.

Gustav's hurricane force winds extend outward up to 60 miles as it barrels toward the U.S. Gulf Coast for a landfall late Monday or Tuesday.

Read the entire article here http://www.cnn.com/2008/WORLD/weather/08/30/gustav/index.html

 

The perfect home simply doesn't exist. Why? Well, in a brand new home, the contractor often is not aware of everything his subcontractors do, and government building and code inspectors do not have the time or the budget to inspect everything in every home, so they usually just do a spot-check of newly constructed homes. A home that has been lived in usually has damage that occurred from simply living in it, or additions or remodeling that weren't permitted. That's why Buyers need a professional property inspection.

The purpose of a property inspection is to document the overall condition of the property at the time of the inspection and to ensure that its major systems and components (electrical, plumbing, water heater, heating and cooling, etc.) are installed correctly and working properly. The property inspection is not a warranty since the property inspector is only there for a couple of hours and never saw the home or its systems being built, so he has no idea about any quality control processes. While some items identified during a property inspection might seem like minor items individually, collectively they could add up to major headaches involving both time and money. If Sellers know what to look for, they can resolve many minor items before the Buyer's property inspector ever arrives.

A pre-listing inspection can be shorter than a Buyer's inspection because descriptions of the house might be omitted, and noting things like a hole in a screen window, or a loose door hinge, are not major items, all things considered. Collectively, though, they could cause a prospective Buyer to say, "No, thanks. Too many problems."

Doing as much as possible before the Buyer's property inspection helps ensure that escrow goes more smoothly. Following is my "checklist" of items often found during the course of a property inspection that a Seller could do or could easily hire a general handyperson to do.

OUTSIDE

• Check that doorbells work.
• Check for missing roof shingles.
• Check for loose/damaged/clogged gutters/downspouts.
• Check attic ventilation and condition of vent screens.
• Check to see if there is standing water, especially near the foundation, after irrigation or rainfall.
• Check for cracks in foundation walls.
• Check structure (including attic and foundation crawl space) for pests (termites, wasps, spiders, nests, etc.).
• Check exterior weatherproofing (stain, paint, etc.).
• Check for any wood in direct contact with soil, including fences and gates.
• Check for loose wiring (electric, cable, phone) and poor wire terminations.
• Check for holes and damage to siding, doors, windows, and trim so that structure is weatherproof.
• Check condition of fences or gates (leaning, damaged).
• Check that any exterior outlets are weatherproofed and not in permanent use for any landscape lighting.
• Check condition of landscape components (retaining walls, landscaper timbers, etc.).
• Check for overgrown vegetation, especially in walkways; growing on siding, roof, chimney, fences, or in gutters; or too close to utility lines.
• Check for trip hazards in walkways, driveways, and stairways (deterioration, vegetation, etc.)
• Check for loose, missing, or rusted guardrails and handrails at stairways, decks, balconies, and porches.
• Check that landscape lighting/irrigation systems work, and that sprinklers don't spray on fences or buildings.
• Check condition of pool and spa, and related equipment and utilities.
• Check that ponds, fountains, and waterfalls, and related utilities, work properly and are protected from children.

PLUMBING

• Check that seismic straps are on the water heater.
• Check that stoppers work in bathtubs and sinks.
• Check for clogged drains.
• Check that toilet seat bolts and screws are tight.
• Check that faucets don't drip or leak around the base.
• Check stop action on faucet handles.
• Check condition of caulk/grout in bathtubs/showers.
• Check insulation on water pipes in foundation crawl space and attic.
• Check for safe and easy access to water shutoff valves (street curb, water heater, sinks, toilets, etc.).
• Check for safe and easy access to any gas shutoff valves (meter, furnace, water heater, etc.).
• Check for loose toilets and loose toilet tanks.

ELECTRICAL

• Check for safe and easy access to electric panels and main circuit breaker.
• Check that ceiling fans work on all speeds.
• Check for burned out lights, including ceiling fans.
• Check for damaged or loose outlets and light switches, including covers for outlets and switches.
• Check for unplugged appliances, and unplug anything that is unnecessary to facilitate outlet testing by the Buyer's property inspector.
• Remove extension cords and outlet multipliers.
• Check that outlets work.
• Check for outdated two-prong outlets and upgrade them to three-prong outlets.
• Check for properly working GFCI outlets in kitchen, bathrooms, garage, and exterior.
• Check that exhaust fans work in kitchen, bathrooms, and laundry area.
• Check that any electrical junction boxes have covers.

INSIDE

• Check condition of towel holders and tissue holders.
• Check condition of bathtubs, showers, and shower doors, and replace old shower curtains.
• Check that safety seal shows on floor-to-ceiling windows and glass doors.
• Check that carbon monoxide alarms work.
• Check that smoke alarms work, and that they are present on each floor of multi-story houses.
• Check for loose kitchen and bathroom countertops.
• Check ease of operation for doors (including closet doors and cabinet doors), drawers, and windows, including windows nailed or painted shut.
• Check for missing, loose, or damaged hardware on doors (including closet doors and cabinet doors), drawers (stops and guides), and windows.
• Check for loose glass panes in windows and doors, as well as glass with holes or cracks in them.
• Check that latches/locks work on doors (including closet doors and cabinet doors), drawers, and windows.
• Check for damage to screen windows.
• Remove excessive storage (closets, attic, garage).
• Check for damage to walls and ceilings that need to be patched and painted.
• Check for moisture stains on ceilings and walls; around doors and windows; near sinks, toilets, bathtubs, and showers; and near the dishwasher.
• Check for loose, missing, or damaged guardrails and handrails in stairways.
• Check for loose, broken or missing baseboards and door and window moldings.
• Check for cracked tiles or deteriorated grouting in kitchen and bathrooms.
• Check that kitchen appliances work.
• Check that an anti-tip device is installed on the range.

MISCELLANEOUS

• Let dogs and cats vacation for a few hours with a family member, friend, or at a pet spa. Check that other pets (birds, snakes, rodents, etc.) are caged.
• Certain items should be inspected annually due to their inherently dangerous nature. These include gas-using appliances, pool/spa equipment, roof, and the fireplace and chimney. If they have not been inspected within the last 12 months, having it done now can make escrow go more smoothly.
• Check that filters are in place and clean (kitchen range hood, heating/cooling, bathroom fans, etc.)
• Check for soot, cobwebs, and wildlife in the fireplace and lower areas of the chimney.
• The Chimney Safety Institute of America (CSIA) recommends that the fireplace and chimney undergo a Level II inspection any time real estate ownership is transferred, and I recommend having that done prior to the Buyer's inspection.
• Check that the fireplace damper opens/closes easily.
• Check for manufacturer installation guides, operating instructions, or user guides that you can provide to the buyer, especially for kitchen appliances; heating and cooling system; water heater; security, irrigation, fire suppression, central cleaning, and water modification systems; water well; and septic system.
• Many property inspectors exclude inspection and testing of some specialized systems, such as security and irrigation systems. Once you get the Buyer's inspection report, note what the Inspector did and did not do or could and could not do. Offer to meet with the Buyer to demonstrate how those systems are operated and maintained, and provide the contact information for any companies that regularly service the systems.
• Check for receipts and warranty papers for any work done on the property, particularly for inspections and work done to prepare the property for sale.

Why should the elimination of Downpayment Assistance Programs with the signing of the Housing and Economic Recovery Act concern YOU?? READ THIS, BECAUSE THEIR IS STILL HOPE AFTER OCTOBER 1ST!

I think we could agree that the housing industry is currently in a national... shall we say, "slump", right? And why is that? Because we have more sellers than buyers. So where can we find more buyers? hmmmm... renters maybe?? Yet 30% of all renters aren't buyers due to lack of down payment.

And here's how that affects EVERYONE whether they own real estate now or might want to in the future:
1. Renters can't buy starter homes because they don't have a down payment.
2. Move up buyers can't buy bigger because they can't sell their starter home.
3. And luxury home buyers can't enter that market because they can't sell their homes either!

There should be other reasons we want first time homeowners to have the ability to own homes besides our own desire to sell ours, though. Please read the summary of the report done by John Hopkins University covering The Effects of Home Ownership on Families. This report covers everything from the educational and income impact to teenage pregnancies!

BUT there could be a light at the end of the tunnel that you need to know about: HR6694 is the bill that was introduced to the House trying to bring back DPA, the very next day after President Bush eliminated all seller assisted down payment assistance programs with the signing of HERA.

Believe it or not, we are still debating whether the down payment assistance program is really going to be GOOD for the housing industry?? To see what other opinions on the subject are, go to WashingtonWatch. This site also allows YOU to cast YOUR vote on the subject. It also contains links to the bill, and links to your representative.

And if you're still not convinced whether or not to take action, go to: www.rallyforhomeownership.com to get the facts on the issue. (By the way, some of those in congress believes that DPA was the cause of 28% of the FHA foreclosures. HOWEVER, did you know that FHA didn't even track the source of down payment beyond "gift" until recently? Hello?)

YOU need to get involved NOW. Please call your Congressman and plead with them to support HR 6694. OH! And tell your friends and family to do so, too!

(NOTE: they reconvene on September 9th and the target adjournment date is September 26th. That means there is only 18 days for them to pass this bill before the Housing and Economic Reform Act kicks in on October 1st eliminating the program.)

I read this earlier this morning (http://activerain.com/blogsview/661557/Real-Estate-One-Liners):

 The dream of the older generation was to pay off a mortgage. The dream of today's young families is to get one. 

Is that funny?

"Major" Garage Sale

Saturday, August 9th, 2008 8am - 4 pm
3102 Ash Glenn
Round Rock, Texas 78681

 Join us for a ‘Major' Garage Sale in honor of Major Key. Major is a 2 year old Vista Oaks resident who Is recovering from a successful kidney transplant All proceeds will go towards Majors medical expenses. We are accepting donations of any kind that are good saleable merchandise and welcoming volunteers. Whether you are participating in the garage sale or visiting us on August 9^th, we look forward to seeing you!

DONATIONS:  We are accepting clothes for adults and children, toys, working kitchen and household gadgets and appliances and other large items such as sports tables, exercise equipment and ail kinds of furniture, All items need to be dropped off at 3102 Ash Glenn in Round Rock, Texas 78681 on Thursday, August 7th.

VOLUNTEERS:  We need volunteers who can assist with the garage sale on August 9th. We could also use a few more tables to hold merchandise.

This is also a great opportunity for children to help Major. We have an area where children can set up a lemonade stand, snow cone stand, cookie sales, etc. along the sidewalk with all proceeds going to Major s fund. 

If you would like to help or schedule a drop off please contact Mary Lewis at Mary.E.Lewis@gmail.com.   

GIVING HOPE... MAKING MIRACLES

Children's Organ Transplant Associations (COTA) for Major Key

Major Key was born two months premature on January 19. 2006. Major was diagnosed with End Stage Renal Disease due to an obstruction called Posterior Urethral Valves.  Requiring peritoneal dialysis to live, he spent the first 125 days of his life at Dell Children's Medical Center of Central Texas, formerly Children's Hospital of Austin. He fought a daily battle to survive.

Major has been cared for by one of the best health care teams in Central Texas.  For more than two years, He received 11 hours of nightly dialysis as he grew bigger and stronger.  This summer of 2008, he received a kidney from his father.  Since pediatric transplants are not available in Austin, the Key family decided to search for the best place for Major to receive his life-saving kidney transplant.  They selected the world-renowned Lucile Packard Children's Hospital at Stanford in Palo Alto, California, which is located 1800 miles from his home.  On July 7, 2008, Major underwent a life-changing kidney transplant.  Now an estimated $50.000 is being raised by volunteers from Round Rock, Austin, and across the nation to help Major Key and his family with the transplant-related expenses.

With the cost of a transplant often exceeding $500,000, many transplant patients are unable to shoulder the financial burden of such a procedure. The Children's Organ Transplant Association (COTA) is a national charity dedicated to organizing and guiding communities in raising funds for transplant-needy patients. On a daily basis, volunteers are raising funds for transplant patients like local miracle child, Major Key.

To find out more about COTA, Major, his family and how they are doing please visit his website for regularly updated status of their well being. upcoming local events and how well we are reaching our goal of $50,000 go to:  http://www.cotaformajork.com/.

2501 West Cota Drive, Bloomington, Indiana 47403
Phone: 800-366-2682 FAX:  812-336-8885 Email: cota@cota.org  Web: www.cota.org

 

 

The HBH Group is an expert real estate team with extensive experience in Internet marketing, staging and creative financing.  Call us today for a no obligation visit to see how we can help you sell your home in this more difficult market!

Our real estate team is connected to:

1. Buyers and sellers of commercial and residential real estate.
2. Investors in both the above classes of real estate.
3. Property acquisution, leasing and management services for investors of commercial and residential real estate.
4. Business brokerage to help you find and acquire a local business.

We would love to assist you as you invest in Texas and the greater Austin area.  Call us to find all we can offer you and to ask for a FREE information package!

This information is brought to you as a public service of the The HBH Group Realty Team with Keller Williams Realty. You can learn more about us at our websites located at: http://www.TheHBHGroup.com/ and http://www.TheHBHGroup.biz/ or contact our offices at (512) 439-3772 or toll-free at (877) 268-1877.

We teach a monthly real estate investment seminar in the Greater Austin area and YOU ARE INVITED to this FREE event. Simply call our offices to reserve you seats! Also ask about the investors club that we are forming in the North Austin markets currently - We would love to have you participate!

Here are some other Buyer's Resources from Our Website: Seven steps to buying your home
Deciding how much house you can afford Making your home wish list Opting for new home construction
How can a real estate agent help me? 10 things you should ask a real estate agent
Location, Location, Location Mortgage Calculator Contact us about buying your home

And some seller's resources as well:Eight steps to selling your home
How can a real estate agent help me sell my home Practicing good seller's etiquette
How to price to sell and still make a profit Understanding the buyer Increasing your home's appeal
Mortgage Calculator Contact us about selling a property

The HBH Group/HBH Property Management
101 E. Old Settlers Blvd., Suite 190
Roundrock, TX 78664

To contact us:
Phone: 512-439-3772
Toll-Free: 877-268-1877
Fax: 512-579-4248
E-mail: info@TheHBHGroup.com
Websites: http://www.TheHBHGroup.com/
http://www.TheHBHGroup.biz/
Blogs: http://RoundRockRealEstateBlog.info/
http://www.RoundRockRealEstateBlog.com/