Everyone knows REO properties can be purchased at discounted rates and that they are great investments. What not many know is that high end homes are even better bargains and in most cases can be purchased at even bigger discounts than your typical REO property. It is not uncommon, in our market, to purchase a property valued at $2million for $1 million. Here are some of the reasons why that market offers great deals:1. Fewer buyers in this market.2. Misconception jumbo financing is not readily available.3. Most buyers focus on properties which can be purchased with conforming loans.4. Misconceptions there is no REO inventory in the high end market.We just found out there is a major financial institution offering jumbo loans for buyers with 720+ FICO scores with 20% down and excellent interest rates. Furthermore, as more foreing investors enter the US distressed markets the high end inventory will probably be their primary investment choice. This would be a great time to invest in a second home, move up or simply invest an excellent tangible asset.
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Posted by Lily Sibrian on March 30, 2009 at 12:33pm
Hello everyone,Bulk REOs seem to be an untapped market to most realtors because either many don't know hot to tap into it or don't know the process. However, even though it can be a tedious transaction, it can be very profitable as well. If anyone has investors who are looking into purchasing bulk REOs, but you don't know where to find them, feel free to contact me. My partner and I work directly with compilers at major banks and hedge-funds that are unloading big blocks of REOs. Banks need to to move the bulk units to maintain regulatory and liquidity requirements. Portfolios are being offered at incredible discounts. The larger the sale the greater the discount. Right now, we have tapes starting at $3.5 million and up. We have nationwide products and can also customize packages for the investors provided they have the pre-requisites prepared. Feel free to contact me if you would like further information. Please, serious inquiries only.(P.S. We highly discourage "Daisy Chains" and prefer to work directly with buyer mandates or buyers themselves...thank you)Lily
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Posted by Nick Miller on March 30, 2009 at 10:39am
If you have ever read the book Getting To Yes by Roger Fisher and William Ury, or a number of other books on negotiations, you would know that BATNA stands for Best Alternative to a Negotiated Agreement. Developing your BATNA, or knowing your BATNA, before going into negotiations will greatly increase you chance of achieving favorable terms in a negotiation. So, what is your BATNA?Whether you know it or not you have a BATNA. Your BATNA may not be that attractive. It could be as little as going back to the way life was prior to you receiving an offer or starting negotiations. Again, not very attractive, but it is an alternative. On the other hand, your BATNA could be very attractive, such as multiple offers with similar terms. In this situation you feel confident that if the offer you are negotiating does not work out you at least have another one that may.Consider this example:You are a home seller and your house is listed for $165,000. After spending 100 days on the market a buyer decides to do you a favor and make an offer of $135,000. Now clearly there is a price difference there that may not be conducive to a "Meeting of the Minds." The buyer, assuming your desperation do the the number of days on the market, feels that this is a reasonable offer. You, on the other hand, may feel differently. But what is your alternative?Lets say you owe $135,000 on the home so, if the buyer is unwilling to come up on his offer and you accept, that would leave you at break even, minus the closing cost you may have to pay which might put you in the negative a bit. That doesn't sound like a very good deal to me. So what are your options?Lets say these are options that you have already considered:1. Rent to your sister for a year for $1000/mo, which basically covers the PITI, in hopes that the market will be more favorable to you after that year.2. Keep it on the market in hopes of a better offer.3. Let the home go into foreclosure and walk away.Obviously numbers 1 & 2 are better than #3, but these are all alternatives. And these alternatives my be what influences your opinion of how good the offer of $135,000 is on you home.You can see how these alternatives to the above example may put power in the buyers driver seat. But lets say we have a fourth option, which is, you stay in the house and take it off the market. You decide that you really don't have to move, you were only wanting to sell if you got the full asking price. Now we have just shifted all of the negotiating power to you. Feels good doesn't it.You can see how having a good BATNA can help increase your chances of getting what you want in a negotiation. But be aware that the buyer will have a BATNA as well. You should always prepare before going into negotiations. Knowing what you want as well as your options if an agreement is not reached will greatly strengthen your position and help you reach favorable terms.“Or suppose a king is about to go to war against another king. Will he not first sit down and consider whether he is able with ten thousand men to oppose the one coming against him with twenty thousand?" Luke 14:31-32Visit and join my real estate community, RealBuzz, at www.realestateforum.ning.com.
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Many factors go into answering this question and the truth is, I don’t have the time to explain each one so, let me give you my top 3.
1. REO Experience = REO Listings; I know for many of you, this fact is frustrating but, it’s a fact none the less. Why is this the case, you may ask? It boils down to what “Experience” really represents. In other words, if you have REO Experience then you have a direct knowledge through direct exposure to REO and, therefore you have the “know how” or “procedural knowledge” it takes to get the job done. Keep in mind that the rule isn’t REO Training = REO Listings, it is REO Experience = REO Listings.
2. A Proven Track Record of Sales: It may be hard to believe, because your calls never get returned by that power house REO listing agent but, a REO Agent with a large number of listings has a proven track record of sales. This proven track record establishes confidence on behalf of the lender providing the listings and as long as the sales are occurring with little to no problems, that agent will continue to be given the opportunity to do so.
3. The Asset Managers are Graded as Well: Just like a REO Agent has a performance evaluation, so do the Asset Managers. If an Asset Manager is performing poorly because they have a poor Realtor in the field, it’s the Asset Manager who is held liable and risking their job. The banks consider the Asset Managers ability to choose high quality, high performing Realtors as a part of their job and if they can’t do that, they don’t keep that job for long. This is why points 1 and 2 are critical and most Asset Managers will not budge off them.
I hope this has given you a different prospective, if you have questions, comments or concerns I would be happy to help out.
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Agents often ask me what it takes to be a successful real estate agent and I have come up with a list of what helped me become #1 in listings, sales and AGC in my former office. Here is what is crucial to having a successful career:1) Close On Time-Close of Escrow means it has to be funded and recorded by that date. It is not a target date!2) Easy To Work With-Be accessible to your clients and make them feel comfortable enough to contact you with any questions or concerns. It is better to answer too many questions than to lose their business and family/friends business to someone else who doesn't mind taking the time to help them!3) Keep Your Promises-Don't promise something you can't deliver. I.E. set an appointment and be late or don't show up without calling parties concerned; say you're going to call at a certain time or day and don't call at the accorded time or date. If you don't do what you say your clients/business partners will lose their trust in you and go somewhere else!4) Communicate Well-Make sure the client understands everything and tell them what to expect so there won't be any surprises. I.E. PITI monthly payment, interest rate, type of loan, how much money they need for their closing costs and/or down payment, explain different options and what/why it's best for their current situation, when they can expect to move into their new home, when they need to vacate the home they're selling, when they should hook up their utilities, when they can expect to receive funds of a sale, when they have to provide funds for the down payment and/or closing costs. Stay in contact for future business and referrals!5) Meet Deadlines-Make sure any inspections, walk-thru, appraisal, recording and funding is done per contract or on a timely basis to close on time. It's better to be prepared and organized then to make excuses!6) Enjoyed Working Together-When the transaction is done the client needs to know, without a doubt, they had the best team (Realtor, loan officer, inspector, appraiser and escrow officer, financial planner, etc.), working for them. Leave a lasting impression so they will tell everyone they know!7) Stay In Touch-Set up a follow up plan to stay in touch to help with anything that comes up and for future referrals. A satisfied client is the best and most inexpensive form of marketing and/or advertising!7) Be Loyal- Send referrals to your business partners and highly recommend them to clients. Divided we fall together we stand! Now you know and knowing is half the battle. Tojours Pret!!!!
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I KNOW MANY AGENTS IN YOUR AREA ARE NOT WILLING TO TELL YOU WHERE YOU CAN GET REO LISTINGS BECAUSE THEY THINK THAT YOU ARE GOING TO STEAL THEIR CLIENTS, ANY WAY I AM WILLING TO PAY REFERRAL FEE FOR ANY ONE HELPING ME OR GIVING ME THE CONTACTS TO GET DEALS IN UTAH.reo4utah@innovarealtyinc.com
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This question is for the asset managers if they visit this site. When you usually assign REO properties do you give 300 to one agent? Or do you assign to a certain real estate office and they should distribute among their agents who do REOs? I would like to hear others on this site if they heard of one agent getting so many. The reason I am asking I had a recent incident where I could not reach the agent to find out how we can get into the garage on the property. He never called me back and my client was getting livid. I tried calming my client. We had questions about putting an offer in etc. I had to end up calling the manager. I do not like to do that, but my client was not stopping, and I wanted to see if there was a logical reason like sick etc. The manager said I had to realize he had over 300 REO properties and cannot answer everyone. I said then maybe he should re-evaluate taking on so many and ticking agents off for not getting back to them. I further stated that he is doing the asset managers a disservice by not taking care of the listing by losing offers. In the end after talking to the manager and the agent directly on the issue it all worked out. I heard other agents mentioning the name on the same issue. Why in the world would asset managers assign so many listings to one agent? There are enough of good, reliable and conscious agents that love to get at least one listing. I have had REO listings and every agent I worked with were very complimentary. If you keep in touch with the agents and just inform them where you are with the process everyone is happy and wins. If you have a listing that seems to take long to get to close, and you keep in touch with everyone even if you do not have further news the deal will happen. Am I missing something here? Am I viewing this differently? Would appreciate other opinions.
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AIG, Larry Summers and the Politics of DeflectionFinally the US authorities have gotten ‘tough' with the predator financial institutions. The world has been waiting for such decisive intervention since an unending series of Government bailouts of financial institutions began early in 2008 amounting to now trillions of taxpayer dollars. Now, with the world's largest insurance giant, AIG, the White House Economic Council chairman, Larry Summers has expressed ‘outrage.' President Obama himself has entered the fray to promise ‘justice.' US Senators have threatened a law to change the injustice. The only problem is they are all exercising ‘politics of deflection,' taking attention away from the real problem, the fraudulent bailout.The issue is over AIG announcing it was obligated to pay its traders in its high-risk London unit a sales bonus totaling $165 million for the year. Obama Treasury Secretary, Tim Geithner has announced a novel strategy for ‘justice.' AIG will ‘reimburse' the taxpayers up to $165 million for bonuses the company is giving employees. AIG will pay the Treasury an amount equal to the bonuses, and the Treasury will deduct that amount from the $30 billion in government (taxpayer) assistance that will soon go to the company. But he said that the Obama administration hasn't given up on efforts to recoup the money from the employees who got the bonuses. Good luck.Larry Summers is the man directly responsible for the mess. As Clinton Treasury Secretary from 1999-January 2001 he shaped and pushed the financial deregulation that unleashed the present crisis. He was Treasury Secretary after July 1999 when his boss, Robert Rubin left to become Vice Chairman of Citigroup, where Rubin went on to advance the colossal agenda of deregulated finance directly.As Treasury Secretary in 1999, Summers played a decisive role in pushing through the repeal of the Glass Steagall Act of 1933 that was instituted to guard against just the kind of banking abuses taxpayers now are having to bail out. Not only Glass-Steagall repeal. In 2000 Summers backed the Commodity Futures Modernization Act that incredibly mandated that financial derivatives, including in energy, could be traded between financial institutions completely without government oversight, ‘Over-the-Counter' as in where the taxpayer is now being dragged. Credit default Swaps, at the center of the current storm, would not have been possible without Larry Summers and the Commodity Modernization Act of 2000. He is now the White House Economic Council chairman, mandated to find a solution to the crisis he helped make along with Tim Geithner, his friend who is Treasury chief. Foxes should never be asked to guard the henhouse.Theatre of the absurd or deflection?This all makes great food for tabloid headlines and popular outrage. They can write that elected politicians are finally acting in taxpayer interests. Until we look a bit more closely. Paying $165 million in employee bonuses or any amount for a company that is in the middle of a multi-trillion dollar fraud that is bringing the world economy down with it is ‘outrageous.'The problem is the tax bailout haemmorrhage will go on. The reason is the Obama Administration like its predecessor refuses to take consequent action with AIG, despite the fact today the US Government owns at least 80% of AIG stock, bought for $180 billion of, yes, taxpayer dollars. To demand AIG ‘pay back the government' is absurd as the government is in effect demanding it pay itself back with its own money. The latest claim that the Treasury will subtract the $165 million bonus money from the next $30 billion tranche it will give AIG says it all.Preserving the CDS bubbleThe political ‘outrage' expressed by the Obama Administration is an example of ‘perception management.' The population is being slylyduped into believing their officials are working in their interest. In reality the officials are channeling growing popular outrage over endless bank bailouts away from the real problem to an entirely tertiary one. The US Government has injected $180 billion since September 2008 to keep the ‘brain dead' AIG in business and honoring its Credit Default Swap obligations. In effect, they are propping up the casino to continue endless gambling with taxpayer dollars.The rise of a market in derivatives or ‘swaps' contracts supposedly to ‘insure' against a company going into default and not being able to honor its debts, the Credit Default Swaps market, is at the heart of the global financial catastrophe. The market was ‘invented' by a young economist at JP MorganChase, interestingly enough one of the few big banks recording profit today.As noted, CDS trading was created free from US Government regulation by President Clinton when he signed the Commodity Futures Modernization Act of 2000 that mandated that financial derivatives not be under government regulation scrutiny. Enron crony and UBS bank adviser, Texas good ‘ol boy Senator Phil Gramm helped pass the laws at a time his wife, Wendy headed the putative regulator, the Commodity Futures Trading Corporation (CFTC). That gave the green light to a derivatives market nominally worth more than $62 trillion in 2008. No one knows the exact size because this is a ‘phantom banking market' completely private and between banks, so-called OTC for Over-The-Counter, ‘just between us.'Michael Greenberger who headed the CFTC Division of Trading and Markets in the late 1990's at the time of the financial deregulation acts, says that banks and hedge funds"were betting the subprimes would pay off and they would not need the capital to support their bets." The unregulated Credit Default Swaps, he says, have been at "the heart of the subprime meltdown. In 1998 Greenberger proposed regulating the growing derivatives market. At the prospect, he says, "all hell broke loose. The lobbyists for major commercial banks and investment banks and hedge funds went wild. They all wanted to be trading without the government looking over their shoulder."The confidence between banks, the ‘just between us,' collapsed after the ill-conceived decision by the US Government on September 15 2008 not to save the world's fourth largest investment bank, Lehman Brothers. By then, there was no alternative but to nationalize and then sort out the mess. Bankruptcy, as the world now realizes, was not an option. But neither was the Henry Paulson TARP ‘casino rescue plan' and Geithner's continuation any option.At the point the Government let Lehman Bros go down only months after saving the far smaller Bear Stearns and also AIG, not even a bank, there was no clear idea who would be saved and who not. No bank could afford to trust any other bank not to be holding just as risky loans as they. The crisis became a global systemic crisis. Notably, the man who participated in the decision to let Lehman Bros fail ‘to teach a lesson' was then President of the New York Federal Reserve, US Treasury Secretary Tim Geithner.The US Government has stated that AIG cannot be allowed to fail, that, to use the jargon, AIG is ‘too big to fail.' The reason the Government says it can't let AIG fail is that if the company defaulted, hundreds of billions of dollars' worth of Credit-Default Swaps (CDS) would ‘blow up,' and US and European banks whose toxic assets are supposedly insured by AIG would suddenly be sitting on immense losses. Quite the contrary, AIG is ‘too big to save' under current rules of the game that have been written by Wall Street and the privately-owned Federal Reserve, Treasury Secretary Geithner's former employer.The CDS fraudCredit Default Swaps purported, in theory, to let banks remove loan risk from their balance sheet onto others such as AIG, an insurer. It was based on a colossal fraud using flawed mathematical risk models.AIG went big into the selling Credit Default Swaps with banks around the world, from its London ‘Financial Practices' unit. AIG in effect issued pseudo ‘insurance' for the hundreds of billions of dollars in new Asset Backed Securities (ABS) that Wall Street firms and banks like Citigroup, Goldman Sachs, Deutsche Bank, Barclays were issuing, including Sub-prime Mortgage Backed Securities.It was a huge Ponzi scheme built by AIG that depended on the fact the world's largest insurance company held a rare AAA credit rating from Moody's and S&P rating agencies. That meant AIG could borrow more cheaply than other companies with lower ratingsAIG issuing of CDS contracts acted as a form of insurance for the various exotic Asset Backed Securities (ABS) securities being issued by Wall Street and London banks. AIG was saying ‘if, by some remote chance' those mortgage-backed securities suffered losses, AIG would pay the loss, not the banks.Then it got really wild. Because credit-default swaps were not regulated, not even classed as a traditional insurance product, AIG didn't have to set aside loss reserves! And it didn't. So when housing prices started falling, and losses started piling up, it had no way to pay off.AIG then issued of hundreds of billions of dollars worth of CDS instruments to allow banks to make their balance sheets look safer than they really were. Banks were able to get their loan risk low not by owning safer assets. They simply bought AIG's credit-default swaps. The swaps meant that the risk of loss was transferred to AIG, making the bank portfolios look absolutely risk-free. That gave banks the legal illusion of BIS minimum capital requirements, so they could increase their leverage and buy yet more ‘risk-free' assets.How could that be allowed? The level of venal corruption in the Clinton and then Bush Administration rivals that of the last days of Rome before its fall from the internal rot of corruption. Banks invested billions in lobbying Washington politicians to get their way.What can be done?Fortunately there is a simple way out of the AIG debacle. The US Government can step in and fully nationalize AIG, 100%, kick out responsible management, declare AIG's CDS contracts null and void and let holders sue the US government to regain value for what were in reality lottery gambles not loans to the real economy. They own 80% so the step is small to 100%. Doing that would end the global market in CDS and open the door for countless legal challenges. But AIG's counterparties, as we begin to learn, were exactly the big Wall Street players like Goldman Sachs, Citigroup, even Deutsche Bank. They have gotten enough taxpayer bailouts to cover their risk in CDS. Let them recognize risk is the heart of banking, not the opposite.Myron Scholes, the ‘father' of financial derivatives, who won a Nobel Prize in economics in 1997 for inventing the stock options model that led to financial derivatives back in the 1970's, has declared that derivatives and Credit Default Swaps have gotten so dangerously out of hand that authorities must ‘blow up' the market.Scholes says derivatives traded over the counter should be shut down completely. Speaking at York University Stern School of Business recently, he said the "solution is really to blow up or burn" the over-the-counter market and start over. He included derivatives on stocks, interest rate swaps and credit default swaps that should be then moved into regulated markets.The idea is simple and not that radical. A US law banning OTC derivatives and moving them to regulated exchanges would end a colossal ‘shadow banking' fraud. Banks would not lose much more than already, but the world financial system would get back to ‘normal.' OTC derivatives are unregulated precisely to hide risk and enable fraud by the banks. It is past time to end that. There is where the US Treasury and other Governments must focus, not on meaningless ‘transparency' calls or trading bonus ‘justice.'By F. William EngdahlRead more…
On the March 15 CBS show "60 Minutes", Federal Reserve Chairman Ben Bernanke used a false analogy already popularized by President Obama in his quasi-State of the Union Speech. He likened the financial sector to a house burning down – fair enough, as it is destroying property values, leading to foreclosures, abandonments, stripping (for copper wire and anything else recoverable) and certainly a devastation of value. The problem with this analogy was just where this building was situated, and its relationship to "other houses" (e.g., the rest of the economy).Mr. Bernanke asked what people should do if an irresponsible smoker let his bed catch fire so that the house burned down. Should the neighbor say, "it's his fault, let the house burn"? That would threaten the whole neighborhood with fire, Mr. Bernanke explained. The implication, he spelled out, was that economic recovery required a strong banking and financial system. And this is just what he said: The economy cannot recover without yet more credit and debt. And that in turn requires trillions and trillions of dollars given by "the neighbors" to the bad irresponsible man who burned down his own house. This is where the analogy goes seriously off track.But watching "60 Minutes," my wife said to me, "That's just what Mr. Obama said the other night. What do they do – have a meeting and agree on what metaphor to popularize?" They seem to have an image that will lock Americans into supporting a policy even though they don't like it and many feel like letting the financial house (A.I.G., Citibank, and Bank of America/Countrywide) burn down.What's false about this analogy? For starters, banking houses are not in the same neighborhood where most people live. They're the castle on the hill, lording it over the town below. They can burn down and leave the hilltop revert "back to nature" rather than having the whole down gaze up at a temple of money that keeps them in debt.More to the point is the false analogy with U.S. policy. In effect, the Treasury and Fed are not "putting out a fire." They're taking over houses that have not burned down, throwing out their homeowners and occupants, and turning the property over to the culprits who "burned down their own house." The government is not playing the role of fireman. "Putting out the fire" would be writing off the debts of the economy – the debts that are "burning it down."To Mr. Bernanke the "solution" to the debt problem is to get the banks lending again. He's spreading the debt-fire. The government is to lend the "threatened neighbors" enough money so that credit customers of the financial "house on the hill" can to pay it the stipulated interest charges they owe. It is not burning down at all; the neighborhood's money (in this case, tax money) is being burned up.Mr. Bernanke explained to the Sunday evening audience that his policy aimed at helping the economy return to "normalcy." Fully in line with what Mr. Paulson was saying last summer, "normalcy" is defined as a new exponential growth in the volume of debt. He talked about "sustainable" recovery. But "the magic of compound interest" is not sustainable. It's all a false metaphor.Mr. Bernanke then left the realm of metaphor altogether to give an outright false explanation of the balance of payments and the upcoming Gang of 20 meetings in Europe. On Friday, China's premier expressed worry over the health of the American economy, in which China had recycled nearly $2 trillion of its dollar inflows in order to prevent the yuan from rising in price against the dollar. The fear is that despite this heavy recycling of dollars by foreign central banks, the U.S. exchange rate will still weaken as the trade balance continues unabated and, just as seriously, U.S. military spending keeps on pumping dollars into the world economy as war spreads eastward from Iraq to Afghanistan and Pakistan.The way Federal Reserve Chairman Bernanke explained the problem on CBS, America had to keep its markets attractive to "Chinese savers." The image being conjured up again and again is that there is a world "savings surplus." That is supposed to be what flooded the large U.S. banks and Wall Street with so much money that they were obliged to move it into riskier and riskier investments. "They made us do it" was the message not quite spelled out.One would think that Mr. Bernanke knows nothing at all about the balance of payments or how the global monetary system works. Here's what really has been happening. The U.S. economy itself pumps "savings" into foreign central banks by spending abroad on military bases. (60 Minutes showed robot fork-lift machines moving around $40-million loads of U.S. currency through the New York Federal Reserve Bank the way that similar machines have been doing in Iraq to buy off local supporters and political groups.) U.S. consumers likewise buy more than the country is exporting. When these surplus dollars are turned over to foreign banks for domestic currency, the banks turn them over to the central bank – which has a problem.Remember when an earlier U.S. Secretary, John Connolly, said "It's our deficit, but their problem"? He meant that the U.S. was spending funds (at that time mainly in Southeast Asia) that ended up in foreign central banks, which faced a dilemma: If they let "the market" handle these dollars, their own currency would rise. That would threaten to price their exports out of world markets, and hence would cause domestic unemployment. So foreign governments chose to recycle their dollar inflows by keeping them in dollars – mainly in U.S. Treasury bills and then, when the supply began to run out, in federal agency securities such as Fannie Mae and Freddie Mac.So the "fire" in the international sphere was the U.S. military-spending deficit and trade deficit. This doesn't have much to do with Chinese consumers saving too much. Central banks were doing the quasi-saving, by being stuck with surplus U.S. dollars like a hot potato. But one rarely hears public officials mention the nation's military deficit. It is as if foreign saving comes first, then a "market-based" decision to place these in the U.S. economy, "the engine of world growth." What actually comes first is the U.S. balance-of-payments deficit, pumping surplus dollars into the economy – which foreign central banks find themselves obliged to recycle within the dollar sphere. (This is the phenomenon I discuss in Super Imperialism: The Economic Strategy of American Empire, and Global Fracture.)As for the surplus credit that Wall Street lent out, it is created out of thin air. At least Mr. Bernanke was clear about this, when he explained that the Fed "creates deposits" for its member banks just as these banks "create deposits" for their own customers at a stroke of the computer keyboard.The bottom line is that the American public is being fed a carefully crafted mythology (no doubt "market tested" on "response groups" to see which images fly best) to mislead the American public into misunderstanding the nature of today's financial problem – to mislead it in such a way that today's policies will make sense and gain voter support.But this mythology is based on false analogies, not economic reality. It is designed to make Wall Street appear as a savior, not an arsonist – and to depict the Fed and Treasury as protecting the welfare of American citizens by shoveling billions of dollars at the banks whose gambles have caused the crisis.While Mr. Bernanke's "60 Minutes" interview was being broadcast, the government was releasing the counterparties on the winning side of the Wall Street casino in bets that A.I.G. lost. To deflect the widespread voter disapproval of giving $160 billion to A.I.G., the Treasury finally released the names of the "counterparties" who ended up with the funds A.I.G. paid out to winning betters. Confirming rumors that had been circulating for the past few months, Mr. Paulson's own company, Goldman Sachs, headed the list at $13 billion! Followed by Merrill Lynch ($7 billion), Bank of America ($5 billion), Citigroup ($23 billion and the much-loathed junk-mortgage lender Wachovia ($1.5 billion). So as Treasury Secretary, Mr. Paulson turns out to have represented not the U.S. interest but that of his own firm and its Wall Street neighbors.These neighbors were given U.S. Treasury bonds in "cash for trash" transactions. The rest of the economy will be paying interest on this debt for a century to come. This is what causes "debt deflation." Revenue is diverted from spending on goods and services to pay interest and taxes. So the Treasury is spreading the fire, not putting it out.By Prof. Michael Hudson URL of this article: www.globalresearch.ca/index.php?context=va&aid=12735Read more…
It may seem odd, but the public outrage against $135 million in AIG bonuses is a godsend to Wall Street, AIG scoundrels included. How can the media be so preoccupied with the discovery that there is self-serving greed to be found in the financial sector? Every TV channel and every newspaper in the country, from right to left, have made these bonuses the lead story over the past two days.What is wrong with this picture? Is there not something over-inflated about the outrage led most vociferously by Senator Charles Schumer and Rep. Barney Frank, the two leading shills for the bank giveaways over the past year? And does Pres. Obama perhaps find it convenient that finally, at long last, he has been able to criticize something that he believes Wall Street has done wrong? Even the Wall Street Journal has gotten into the act. The government's takeover of AIG, it pointed out, "uses the firm as a conduit to bail out other institutions." So much more greed is involved than just that of AIG employees. The firm owed much more to other players – abroad as well as on Wall Street – than the assets it had. That is what drove it to insolvency. And popular opposition has been rising to how Mr. Obama and Mr. McCain could have banded together to support the bailout that, in retrospect, amounts to trillions and trillions of dollars thrown "down the drain." Not really down the drain at all, of course – but given to financial speculators on the winning "smart" side of AIG's bad financial gambles. "The Washington crowd wants to focus on bonuses because it aims public anger on private actors," it accused in a March 17 editorial. But instead of explaining that the shift is away from Wall Street grabbers of a thousand times the amount of bonuses being contested, it blames its usual all-purpose bete noire: Congress. Where the right and left differ is just whom the public should be directing its anger at!Here's the problem with all the hoopla over the $135 million in AIG bonuses: This sum is only less than 0.1% – one thousandth – of the $183 BILLION that the U.S. Treasury gave to AIG as a "pass-through" to its counterparties. This sum, over a thousand times the magnitude of the bonuses on which public attention is conveniently being focused by Wall Street promoters, did not stay with AIG. For over six months, the public media and Congressmen have been trying to find out just where this money DID go. Bloomberg brought a lawsuit to find out. Only to be met with a wall of silence.Until finally, on Sunday night, March 15, the government finally released the details. They were indeed highly embarrassing. The largest recipient turned out to be just what earlier financial reporters had said was rumored: Mr. Paulson's own firm, Goldman Sachs, headed the list. It was owed $13 billion in counterparty claims. So here's the picture that's emerging. Last September, Treasury Secretary Paulson, from Goldman Sachs, drew up a terse 3-page memo outlining his bailout proposal. The plan specified that whatever he and other Treasury officials did (thus including his subordinates, also from Goldman Sachs), could not be challenged legally or undone, much less prosecuted. This condition enraged Congress, which rejected the bailout in its first incarnation.It now looks as if Mr. Paulson had good reason to put in a fatal legal clause blocking any clawback of funds given by the Treasury to AIG's counterparties. This is where public outrage should be focused.Instead, the leading Congressional shepherds of the bailout legislation – along with Mr. Obama, who came out in his final, Friday night presidential debate with Sen. McCain strongly in favor of the bailout in Mr. Paulson's awful "short" version – have been posing as conspicuously as possible for the media to cover a deflected target – the AIG executives receiving bonuses, not the company's counterparties.There are two questions that one always must ask when a political operation is being launched. First, qui bono? Who benefits? And second, why now? In my experience, timing almost always is the key to figuring out the dynamics at work.Regarding qui bono, what does Sen. Schumer, Rep. Frank, Pres. Obama and other Wall Street sponsors gain from this public outcry? For starters, it depicts them as hard taskmasters of the banking and financial sector, not its lobbyists carrying water for one giveaway after another. So the AIG kafuffle has muddied the water about where their political loyalties really lie. It enables them to strike a misleading pose – and hence to pose as "honest brokers" next time they dishonestly give away the next few trillion dollars to their major sponsors and campaign contributors.Regarding the timing, I think I have answered that above. Talking about AIG bonuses has effectively distracted attention from the AIG counterparties who received the $183 billion in Treasury giveaways. The "final" sum to be given to its counterparties has been rumored to be $250 billion, do Sen. Schumer, Rep. Frank and Pres. Obama still have a lot more work to do for Wall Street in the coming year or so.To succeed in this work – while mitigating the public outrage already rising against the bad bailouts – they need to strike precisely the pose that they're striking now. It is an exercise in deception.The moral should be: The wetter the crocodile tears shed over giving bonuses to AIG individuals (who seem to be largely on the healthy, bona fide insurance side of AIG's business, not its hedge-fund Ponzi-scheme racket), the more they will distract public attention from the $180 billion giveaway, and the better they can position themselves to give away yet more government money (Treasury bonds and Federal Reserve deposits) to their favorite financial charities.By Prof. Michael Hudson URL of this article: www.globalresearch.ca/index.php?context=va&aid=12784 Global Research
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I've now recieved over 4 calls since this past Sunday from this company called Foreclosure Point. I finally called back and spoke to somone named Kathie Cornett who says they find REO Listing Agents. She also said they are in the process of connecting with Asset Manager's who will be using this site to hire new REO Agents. I'm not sure if I believe this. I've checked their site out a bit and the nice thing is that it's free to consumer's but there is a Annual fee of $599 for Listing Agent's which allows you to post 5 REO Listings. Has anyone joined this site and gotten Buyer referrals??? What do you think?
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We are still getting REO assignments from the smaller banks that are not participating in the moratorium and Re assignments. Waiting for moratorium to be lifted. I must say that they need to get the backlog of properties on the market and sold so we can get to a more normal supply and demand situation. Until that happens, prices will continue to drop which is not a good thing.
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My blog is simple . . . What?? Why?? Someone please explain this to me. Everyone is worried about the preservation of contract law. Does anyone realize that if we didn't bail them out, they would have been in bankruptcy and there wouldn't have been any bonuses??? I don't get it.
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It's been a while since my last blog post - too long! It's not because I'm lazy, it's because of my crushing workload. My team has been expanding to keep up with it all, but even so, I find myself at least as busy as ever, and possibly even more so.I wanted to share with you all my view of where we are headed for the rest of the year. There's a lot of talk about bail-outs and hitting the bottom and market rebounds, and there's also a lot of talk about falling off the economic cliff, outright economic depression, etc. I want to chime in with my own $0.02 - and that's probably about all its worth, but this community is about sharing, so here goes.I do think that the bail-outs are going to help stabilize the credit markets. To be honest, I have not seen a lot of qualified buyers having problems with their loans. People who have good credit scores, good incomes, and good debt-to-income ratios have been getting loans this whole time. People with dicey credit and iffy income have had a much harder time of it - which actually makes sense. A lot of these people maybe should not be buying real estate - unfortunately, that's a big chunk of the adult population, and there's a lot of real estate that needs to get bought, so it's understandable that the powers that be would want to put the credit into their hands to buy these properties.As for Obama's Homeowner Rescue Plan - in my market (northern California), there are precious few people who are going to qualify for this plan. Even nationally, where many more people will be able to take advantage of it, many people simply won't - I believe this epidemic of rational default (or ruthless default as some would say) will continue un-abated. I do think that the Homeowner Rescue Plan will in fact save some homes - and in large part, probably only those of the "most worthy" - that is, the people who are least likely to be back in default shortly after rescue.I think it's a good thing that the government get actively involved in trying to put Humpty Dumpty back together again. I am sure they're bungling the job and that somehow, it could be done much better and cheaper - but I think a large part of the problem is lack of confidence in the system - and if the government shows confidence that it can take steps to fix the system, that will go a long way towards restoring stability and calm.Having said that, I'll say this: I think the bottom is a ways off yet. For my business, 2008 was an extremely busy year - and I expect that 2009 will be busier. I expect there will be more foreclosures in 2009 than there were in 2008, despite the government's valiant efforts. And that is as it should be. There are simply too many homes in the houses of people who cannot afford them. Much better in the long run to move these properties from weak ownership to strong ownership.I also foresee the foreclosures moving up the economic ladder - increasingly, more and more middle, upper-middle, and executive/luxury homes are going to be foreclosed on. You see, in a normal economic cycle, first you have a recession, then you have increasing mortgage delinquencies, defaults, and foreclosures, accompanied by a drop in real estate values.This time around, we had a drop in real estate values, brought on by a "credit crisis" (or, the end of ultra-lax lending practices), followed by an increase in delinquencies - and then, recession. In a normal cycle, we would just now be at the beginning of a surge in foreclosures, not nearing the end of of one. Think we've hit the bottom? Think again.You do see, hear, and read news stories about positive signs that we may be approaching a bottom. I'm pretty sure, though, that I've been hearing those stories for quite some time now, at least a year - and the bottom seems no closer today than it was a year ago. And let's not forget the shadow inventory - it's real, it's big, and it's out there, waiting. I am getting listings that have been secured and vacant for months, never listed, never assigned to an agent - they've been sitting, for months, just rotting and dropping in value with the market around them.In short, I expect it will be another banner year for those of us in the REO Brokerage business. I'd be curious to hear how 2009 is shaping up in your market.
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Are virtual tour services worth what you pay for them? Answer: Yes. Especially if you use the same virtual tour service I use because it is FREE. What service do I use, YouTube.That's right. I use YouTube to post virtual tours of my property listings. It's free and it is easy. No expensive service required. I take my camera, film as I walk through the house (I typically do a video of the front and then one walking through the house), upload to my computer and then upload to YouTube. It's that simple. Now if you see my virtual tours, you may think that you get what you pay for. True, it is not the best quality, but I think it gets the job done, and besides, something is better than nothing. People get to see the layout of the house and the surrounding area.As I mentioned, the good thing about YouTube is it is free to create an account and upload videos. Also, when you film, you can give commentary about the property such as amenities, rooms that you are filming, surrounding areas, etc. Most digital cameras these days allow you to record your voice while filming. But the best thing about YouTube as a virtual tour tool is that you can see how many people have viewed your virtual tour. I don't know if paid for services allow you to do this (I have never used them), but this is my absolute favorite thing about using YouTube. You actually know if your properties are being viewed. The only downside is that it does not tell you where your traffic is coming from, for instance, from your web-site or the MLS, but at least you know you are getting traffic. I started doing this about 2 weeks ago and, out of the 17 videos I have uploaded, I have had at the time of this post 359 views. That is a lot of exposure for free.However, I guess if you wanted to check the effectiveness of your advertising, you could selectively copy/paste the YouTube URL to only the advertising site you want to check and see if you get activity from that. For instance, you have a website and want to see if it is drawing traffic, for a trial period, only advertise the YouTube link to your virtual tour on that site and see if you get any hits off of it. If you do, than you know that you are getting traffic to your website, if not, than you know you need to step up your promotion efforts of your website, or post the URL in other locations to make sure your client is getting their money's worth out of you.So, how do you advertise or let people know they can view a virtual tour on YouTube? I simply copy the URL off of YouTube and paste it to my property marketing sites. Some websites have a virtual tour link that allows you to paste the URL in that, when clicked on by viewer, it takes them straight to the tour. If not, than you can just copy/paste it into the comments/description section of the property directing people to the site.I hope that you can use the information in this post. I encourage and invite your feedback as well as any tips you would like to share.
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As many of you know Credit Repair Companies are a dime a dozen. Most of the credit repair companies I have come in contact with charge around $500 or some sort of monthly fee. From the feedback I have received, most of them are not very good.In an effort to find a VERY GOOD credit repair company I started researching them and met with several. 1 or 2 seemed to be very good but charged an arm and a leg. I finally found one that was not only superb but were also reasonable in their pricing. In addition, they have a money back GUARANTEE. I have already referred them to many Real Estate Brokers and Mortgage companies with phenomenal results.One of the reasons this company is so good is that the President of the company was a former high level executive with Experian.I would love to share more information on this company with you. If you are interested, please email me at jason.donn@yahoo.com or call me @ 954-892-6244.
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Isn't it funny, how the masses are so fearful to make a move,yet prices are very low,interest rates are very low,incentives are high,and availability is plentiful.When it was just the opposite everyone wanted to buy a Home.Now that it actually makes sense to do so, everyone is fearful.By the time you realize the opportunity available to you right now,it will become the opportunity that you should have taken advantage of.Can Prices still fluctuate downward?Yes they can, but if so, by a much smaller percentage (of original highs) than we have already experienced.Should you buy now?Are you ready to buy now?Or will you be ready to buy in a year?What do you see Real Estate Doing?Please, Respond with your True Feelings about your own Dreams, Hopes, and Goals.Will you be able to reach them, and/or will Real Estate help you or hinder you in getting there?What, You think and feel is what creates a buyers market, a sellers market, or an average market.My interest is in your thoughts and feelings because they effect the direction of Real Estate.Someone will always profit from Real Estate in up and down markets...Will that someone be you?
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