One thing that has never been an issue in my business and that is closing deals that are under contract.  In this real estate environment, even that which used to be so routine seems to be changing.

Let me explain.  Last month, out of the seven escrows (here in California we use an escrow based closing, not attorney based) that were open; five had problems within 3-5 days of closing.  Most of the issues were lender based, and not the usual buyer and seller last minute negotiations. 

One in particular has me on edge.  Let me layout the deal for you to see how the players (buyer and seller) were affected by this "lender" issue:

The buyers, a mid 30's couple with decent credit scores (the wife is in the 800's and the husband in the high 700's), who own…

To sum up where the real estate finance markets are today, Kieran Quinn, chairman and CEO of Column Financial, Credit Suisse's Atlanta-based mortgage lending subsidiary for commercial properties, relied on a poetic quote from an associate: "Things will be fine in 2009."

"We are in an intractable market," said Quinn. "As good as things looked this time last year, that's how bad it looks now."

As an example, he referred to the spreads (difference between securities' yield and those on interest-rate swaps) on commercial mortgage-backed securities (CMBC). BBB-rated CMBS that sold for 85 basis points over [swaps], now sell for something like 1,200 basis points over. There is "no confidence" in the paper, he added.

Quinn, speaking at the Risk, Reward… Read Full Post

SACRAMENTO, Calif. -- The nation's largest mortgage lender announced a new plan Monday intended to reduce home foreclosures by helping those who have fallen behind on their home subprime mortgages.The Countrywide Financial Corp. program, developed in partnership with the Association of Community Organizations for Reform Now, comes in addition to another deal announced last week between mortgage companies and the Bush administration.The first deal focused just on certain kinds of adjustable-rate mortgages and on those who were still up to date on their payments.

That plan only covered a small number of homeowners.In the new plan, Countrywide is looking to reach out to those already behind in paying. The company will let some of those people refinance to a…

How To Do Short Sales

There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale."

When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose; moreover, not all sellers nor all properties qualify for short sales.

NOTE: If you are considering buying a short sale, there…

It has created such a mess, so many people have been or will be damaged... Our economy may never recover from this fiasco.  What am I referring to ... Real Estate fraud. This was found on the IRS web site.

In recent years, the booming real estate market has helped increase mortgage fraud and other phony real estate related schemes. The perpetrators of these schemes range from mortgage brokers looking to make a fast buck to drug dealers laundering their ill-gotten gains. Every year, these fraudulent schemes victimize individuals and businesses from many walks of life, including struggling low-income families lured into home loans they can’t afford, legitimate lenders saddled with over-inflated mortgages and honest real estate investors fleeced out of…

When you think of California's economy today one of the first thoughts to come to mind is the collapsing housing market. California was one of the biggest participants in the housing boom and is now seeing the backside of that.
Home sales are plummeting and prices are falling in many metro areas. The broader economy is assumed to be following the same route. Fortunately, it is not. Overall job growth is holding up relatively well and the Golden States Gross Domestic Product is still expanding. We estimate that California's real GDP grew at a 2.8 percent annual rate during the third quarter and rose 3.7 percent over the past year.

Not only has overall growth held up relatively well to date but we expect the economy to continue to post solid gains over… Read Full Post

Foreclosures: Several buyers have been asking me about the foreclosed (REO) homes and condominium opportunities in the marketplace. It seems that the more REO properties we have in the marketplace, the less attractive these opportunities are.

The logic seems crazy, I know. If it were only based on the simple economic fact that the more homes in the marketplace for sale... the more downward the price pressure on the existing inventory and therefore the pricing ...except in the case that most of these Foreclosure REO properties in the market are owned by many corporate institutions and secured with security instruments called "asset backed securities" or "mortgage backed securities".

In finance, a mortgage-backed security (MBS) is an asset-backed… Read Full Post