Crowdsourcing Neighborhood Information with Google Map Maker Debuts in the U.S.

Posted by realpropertycheck.com in Apps

Google announced it is letting users update Google Maps and Google Earth information in the U.S. through Google Map Maker, the crowdsourced mapping tool for publicizing neighborhood information. Google, however, won’t take input from other community map sources, such as Open Street Map or Waze.

Google’s map editing features will allow the addition of commercial data such as businesses locations and more specific street information such as temporary closures due to construction projects. You can add places as well as draw lines and shapes depicting railroads, back alleys or parking lots.

Users’ updates undergo a vetting process coordinated by previously accredited users. Moderators can approve or reject edits or send them back for a revision. Users’ participation earns them karma which counts towards acquiring the status of a moderator.

So far, Google Maps offers no support for mapping locations such as stores or businesses which are layered on top of one another. 3D features are clearly something Google cannot postpone indefinitely.

For now, Google has added street-level perspective with embedded images from Street View.

Google Map Maker is a tool real estate professionals in this country should keep a watchful eye on. You can check it out for yourself right here.

Google Quits Real Estate: Listings on Google Maps Discontinued, Google Places Lives On

Posted by realpropertycheck.com in Buying Real Property, Selling Real Property

Wednesday, January 26, Google decided to can real estate listings on Google Maps. Beginning February 10, 2011 you will no longer be able to use the feature as reported by the search engine giant in a memo here.
You can still add your real estate business to Google Places.

Record Jump in Shadow Inventory Pushes Total Unsold Inventory to 6.3 Million Units

Posted by realpropertycheck.com in Buying Real Property, It's The Economy Stupid, Selling Real Property

In today’s report released by CoreLogic shows shadow inventory of residential property at 2.1 million homes as of August 2010, or eight months worth of supply, a jump of over 10% from last year (a five months’ supply). Shadow inventory (sometimes called “pending supply”) includes homes seriously delinquent (90 days or more), currently in foreclosure, or REOs (real estate owned, or bank owned). ”Visible” inventory, currently at last year’s level of 4.2 million units of unsold supply, includes inventory of new and existing homes which were on the market in August.

The total supply can be thus estimated at 6.3 million units, a level comparable to the worst levels registered at height of the crisis back in 2008. These numbers don’t even include October’s foreclosure hiccups related to the Robo Gate which may have significantly increased visible inventory as a result of buyers’ reluctance to close due to difficulties in obtaining both financing and title insurance.

What If You Bought A Property Foreclosed Upon By Robo-Signers? Read this.

You can download today’s (2010-11-22) full CoreLogic report right here.

Did you know you can read a Kindle book on a PC or an iPhone? You can download Amazon’s free Kindle app for your PC right here to get access to valuable books instantly. Below you can view an excerpt from “Cashing in on Pre-foreclosures and Short Sales: A Real Estate Investor’s Guide to Making a Fortune Even in a Down Market” by Chip Cummings.

HAMP and New Revelations about Securities Fraud With Consequences

Posted by realpropertycheck.com in Investing

As of October 2010, HAMP (the Treasury Department’s Home Affordable Modification Program) had generated about 520,000 active permanent loan modifications, far below its stated goal of modifying three million mortgages and helping to staunch the housing crisis. The program has been mired by bureaucratic delays and chaotic foreclosures triggered by trial payments (see: “HAMP (…ered) Recovery and the Flood of Foreclosures: Why Banks Can’t Lose”).

Double Standard In Loan Modification

HAMP is famous for sinking homeowners under piles upon piles of paperwork. Banks, on the other hand, receive as much as $1500 per HAMP loan modification in subsidies from the federal government without having to produce any proof that they actually own the mortgage in question.

HAMP participation does not require banks to provide any physical proof of a note underlying a property. Zip. Nada. Do the banks even own the mortgages they participate in modifying? Who knows.

Many lenders pooled and securitized their loans, then sold the securities to investors. Some of these lenders could still produce physical proof of a mortgage even though they had sold it to investors. How is that even possible? An excellent question.

It is really quite simple but could have messy consequences.

Who Owns What

Some lenders simply failed to deposit the notes in the mortgage pool and no one noticed. They got the money but forgot to hand over the goods. What would you call that in the real world?

According to court testimony of an executive at Bank of America, Countrywide (now owned by Bank of America) sold what it claimed were mortgage-backed securities but kept the notes underlying the loans. It did so not by oversight but as a policy.

In a lawsuit brought up in the United States Bankruptcy Court in Camden, N.J., an executive at Bank of America said that Countrywide’s practice was

to maintain possession of the original note and related loan documents.

Investors in mortgage backed securities can sue lenders for failing to fulfill their contractual obligations and force them to buy back the loans they failed to hand over.

There is a possibility that this could actually happen at a larger scale. There are many cases in which proper procedures for setting up mortgage securities trusts were not followed. Now there will be mortgage modifications based on missing documentation or false premises. How can a bank modify a loan if it does not own it?

The Congressional Oversight Panel concludes in its report:

Claimants will contend that the securitization trusts created securities that were based on mortgages which they did not own(…) Since the nation’s largest banks often created these securitization trusts or originated the mortgages in the pool, in a worst-case scenario it is possible that these institutions would be forced to repurchase the M.B.S. [mortgage-backed securities] the trusts issued, often at a significant loss.

This would also mean that HAMP subsidies already paid out by the government would have to change hands.

But there is a larger issue at stake. If these lenders had followed proper procedures, they would not be able to legally receive government subsidies for modifying loans they no longer own.

Should courts force these banks to buy back the securities they had improperly (or fraudulently) set up, not only some weaker banks but even the nation’s biggest financial institutions could be shaken.

It is not yet clear whether this is going to affect borrowers who have successfully received their HAMP loan modification, but should lawsuits materialize at a larger scale, it could bring the program to a screeching halt.

You can read the full report by the Congressional Oversight Panel right here.

Robo-Signing Settlement in The Works: No Foreclosure Until Loan Modification Fails?

Posted by realpropertycheck.com in Homeowners' Club, It's The Economy Stupid

UPDATE: H.R. 3808 INTERSTATE RECOGNITION OF NOTARIZATION ACT OF 2010, seen by many as an attempt at legalizing robo-signing, was averted by a Presidential Veto which was sustained when the veto override procedure failed in the House of Representatives on Nov. 17th 2010. H.R. 3808 would have required “each federal and state court to recognize any lawful notarization (…) by a notary public” in another state while legalizing the use of digital signatures and digital-only document storage (see also -> MERS). It does not take a rocket scientist to figure out how this would have both legalized and streamlined the robo-signing of foreclosure documents. Luckily, the President’s Veto stands and the measure cannot be reconsidered by the House or the Senate. This does not resolve any of the current problems caused by robo-signers, however.

50-state attorney general investigation into robo-signing foreclosure practices is reportedly nearing a settlement.

As reported by CNBC’s Diana Olick, Bank of America and JPMorganChase appear to be agreeing to the same framework of a settlement.

1. Banks would pay into a fund administered by attorneys general which could be used to compensate borrowers who can prove valid claims to having been wrongfully foreclosed upon (in exchange , those borrowers would presumably have to agree to forgo ever seeking legal recourse elsewhere).

2. There are talks of some kind of third-party mediation for review of eligibility as per the first point above.

3. Banks would have to eliminate dual track of modifications and foreclosures, which have often resulted in homeowners in negotiation of a loan modification being foreclosed upon by another arm of the lender. Only after all options of modification are exhausted will a bank be able to begin foreclosure proceedings (what looks good on paper can be still subject to interpretation, so don’t celebrate just yet).

The final agreement could still look a lot different from this framework.

Principal write downs as part of the settlement have been on the table as well.

Banks are apparently in no mood to lavish money at a compensation fund if they can dodge the bullet.

In an interview last week, Iowa Attorney General Tom Miller hinted at the possibility that

maybe instead of paying huge fines, they [the banks] adequately fund the modification process

What sounds so laudable comes down to this: The arrangement mentioned by AG Tom Miller would keep the money and the leverage in banks’ hands. It is difficult not to wonder whether past victims of the robo gate who had been wrongfully foreclosed upon as a result of a clerical mistake and/or fraud are going to get shortchanged again.

We will keep you posted.

In the meantime, if you happen to be a victim of robo-signing, your property was a subject of a regular foreclosure or a short sale or you cut a loan modification deal with your lender, you could be liable for taxes on phantom income unless you preempt the IRS. Read how you can legally dodge the bullet in: “Negative Equity and How You Can Avoid Tax On Phantom Income From Relinquished Property.”

You can also find out how to get out of trouble with your lender in: “How To Stop A Foreclosure (And Walk Away With Money In Your Pocket).”

Gary Shilling Predicts Home Prices Will Fall Another 20%

Posted by realpropertycheck.com in Books, Buying Real Property, Investing, It's The Economy Stupid

A. Gary Shilling, who predicted the U.S. housing collapse and the Greek crisis of 2010, says house prices will fall another 20% before the market hits bottom. With excess inventory of unsold homes in the millions he sees no other way for house prices but down.

Massive Deleveraging

Shilling, who is president of the investment research firm A. Gary Shilling & Co. in Springfield, New Jersey, believes the Fed’s efforts in stimulating the economy will fail. He says that this recession is unlike the others: This time around, massive deleveraging is under way.

Savings rates will keep climbing as consumers realize they have not retained enough resources to retire on. Home equity withdrawals have already ceased as a result of falling house prices.

A Stock Market Sell Off Will Decimate Retirement Savings

Shilling also thinks the stock market is overvalued and we are in for a “significant” sell off within a year as the Federal Reserve fails in its efforts to stimulate economic growth. This will further decimate many Americans’ retirement savings.

No matter how hard the Fed tries, Shilling believes overall borrowing will continue to decrease.

Given his recent track record, you can’t dismiss him out of hand. He predicted the housing collapse. He foresaw the Greek crisis of 2010 and called for investors to short the euro only days before its spectacular collapse in early May.

Shilling sees this trend continue for at least another decade. He lays out his outlook in his new book, “The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation.”

Shilling’s predictions are in line with the outlook in the most recent research report by Zillow (we have a summary for you right here).

If the purchasing power of Americans keeps sinking and with it the rents, some seemingly cash-flowing real estate deals may turn out not to be such great investments. Prepare for the worst.

Please comment below.

How to Give Your Property Listings More Exposure And Find Buyers/Deals Quickly

Posted by realpropertycheck.com in Selling Real Property

At a time when selling real estate is an increasingly demanding business, finding a buyer who is able to close has become an art form. Luckily, agents who can think out of the box will find some promising new opportunities to give their listings new exposure.

The search giant Google keeps expanding its online services to offer real estate agents (and sellers who are not yet represented by one) the opportunity to upload listings to Google Maps.

How It Works

Prospective buyers who research a neighborhood on Google Maps can activate the display of properties listed for sale there. These listings then appear in the left column and are marked with a red dot on the map of the area. Google also offers an optimized search interface with rather limited options such as “Listing type” (For rent, For sale or Foreclosure), price range and area. Almost all listings are accompanied by photos of the property and a link to the website of the listing agent.

Many of the listings are outdated or inaccurate, but that’s not the point here. The point is to get a buyer in the door by keeping your accurate and up-to-date.

What to Do About Google Base

The search giant began putting up property listings on its Maps service quite some time ago without asking any agent’s permission and is unapologetic about it. It is not going to stop.

While crawling the web, Google’s spiders (indexing algorithms) recognize real property listings posted on your and other websites and include them in Google’s offering. While you have every reason to be upset that you haven’t been notified, ignoring Google Base is not going to help your business.

Also, you should be aware that someone else could upload your listings and point to their website.

You have two options: You can either embrace it as a welcome addition to your other promotional efforts, or you could demand that Google take down your listings.

In either case, you don’t really have much choice but to keep an eye on Google.

Feeding Your Database Into Google Base

Google wants you to export your database, format it into a feed (how to do this depends on your location) and then submit to Google Base. Depending on how often you need to post an update this could mean a lot of work. If you happen to be using a content management system such as WordPress, it will create a data feed of the listings you publish automatically (we recently wrote about WordPress right here) so this could be a good starting point. Alternatively, you could also conform an Excel file to Google’s specifications and then export it.

Per Google’s Terms of Service you must hold all rights to a listing to upload or modify it, thus some agents will have to obtain their broker’s permission before they can make changes to existing listings or put up new ones. But this also means that you can request that Google takes down or corrects your listings if they were placed by someone else or if they point to someone else’s website.

You can find out more about it in Google’s FAQ for real estate professionals.

Looking for Unbelievable Home Deals in the Dallas Area? Check this Out

Posted by realpropertycheck.com in Buying Real Property, Homeowners' Club, Investing

If you happen to be looking for unbelievable deals in the Dallas area, check out Today’s Home Deals.

The Today’s Home Deals service is tracking 43 neighborhoods across 17 cities in the Dallas area to find the best home deals for your money. Their website shows lowest price-per-foot homes by area and calculates the below-area-norm discount.

You can request free coverage of an yet un-listed neighborhood right here.

Zillow Research Reports: An Unprecedented Double-Dip Turning Into A Freefall

Posted by realpropertycheck.com in Investing, It's The Economy Stupid

In its most recent housing report dated November 9th, 2010, Zillow paints a bleak picture of a housing market in free fall.
In the report, Zillow economist Stan Humphries says that the real estate market has yet to hit rock bottom. Humphries not only sees no signs of a stabilization but predicts that the unprecedented double-dip in the real estate market is turning into a free fall.

A Bleak 4th Quarter 2010 and a Disastrous 2011 Ahead

The home value depreciation began to accelerate in September 2010 due to two main contributing factors: lower transaction volumes and an ever growing level of inventories. As we pointed out earlier, the stubborn persistence of the housing market slump has some good reasons.

Stan Humphries goes on to say that home values dropped 0.4% from August to September and 4.3% from September 2009. How dire the situation in the real estate market really is shows the fact that home values are 25% below their peak. For a total of 51 (fifty-one) straight months, prices have been in steady decline. Given how this trend is shaping up for the months ahead, we are going to quickly match the spectacular length and severe depth of the declines the country had experienced during the Great Depression and not yet since.

In order to put today’s numbers in perspective suffice it to say that from 1928 to the end of 1933 (60 months), nominal home values dropped off the cliff by a whopping 25.9% . We are not there yet but getting closer by the minute.
According to Zillow, prices are not going to to stabilize at least until the summer of 2011.

Nationally, we now don’t expect home values to hit bottom until first half of 2011 at the earliest due to continuing increases in foreclosure volumes.

In the meantime, new economic realities will be taking shape. With the Republicans wielding decisive power over the budget (Markets Expect Political Gridlock And Why It Could Actually Be A Good Thing) about the only form of stimulus we are going to see will be of Bernanke’s making (The Fed Is Buying Up Long-Term Debt Of The U.S. Government (On Credit!)).

Unless something unforeseable happens, we will beat Depression-era price declines hands down.

Read the full report here: Zillow Real Estate Market Report.

Pending Home Sales Slide: The Fallout from The Robo Gate and the Aftershocks of Frank-Dodd

Posted by realpropertycheck.com in Buying Real Property, Financing, Homeowners' Club, It's The Economy Stupid

Now it’s official: according to Realtor, the Pending Home Sales Index fell 1.8 percent in September 2010 after it had slowly began to crawl back up from a major drop-off of sales in July. What kept the index artificially high during the last five months was the effect of the tax credit wearing off rather slowly. The index is based on signed contracts, not on actual closings, so it can be seen as a preview of what’s coming down the road.

Media’s Obsession With The “Robo Gate”

The media have been obsessing about the impact of the “robo gate” on home sales and it would be hard to deny that it has caused widespread uncertainty as well as disrupted lenders’ efforts to unload foreclosure inventory. The tragic human dimension of the “robo gate” makes for easy media fodder, but the underlying mechanics of the decline in sales is more complicated. It also doesn’t lend itself to random sound bites.

The Persistence Of The Housing Market Slump Has Some Good Reasons

Sales of existing homes are about even with 2000′s levels, even though the U.S. population has grown by 30 million since then.

Several forces have aligned in putting downward pressure on sales numbers. The expiration of Obama’s tax credit for first-time home buyers overlapped with the onset of the “robo gate” in a general climate of economic malaise and growing frustration with the direction of Washington. But there is more to the sales numbers than meets the eye. NAR chief economist Lawrence Yun writes:

“Tight credit and appraisals coming in below a negotiated price continue to constrain the market”.

The key word is “tight credit”. The FHA has become the largest originator of home loans since the economic downturn began. Nearly one in three buyers pay in cash.

On top of this, the “The Wall Street Reform and Consumer Protection Act of 2009” a.k.a. the Frank-Dodd bill instead of expanding consumer choices has further curtailed seller financing by putting new restrictions in place.

Hidden in the 848 pages long document (view full text here) is this:

H. R. 4173—764
§ 129B. Residential mortgage loan origination
STANDARD.—Subject to regulations prescribed under
this subsection, each mortgage originator shall, in addition
to the duties imposed by otherwise applicable provisions of
State or Federal law—
(A) be qualified and, when required, registered and
licensed as a mortgage originator in accordance with
applicable State or Federal law (…)

It does sound all pretty nice. Unfortunately, it amounts to regulatory overkill.

The law puts in place restrictions where they are clearly not needed. It would be hard to argue that seller financing contributed in any meaningful way to the growth of the subprime bubble. What those restrictions do is the opposite of what was intended: even though the bill has somewhat bolstered bank oversight, Frank-Dodd gives large banks even more leeway with consumers by eliminating buyer’s choices.

The law has been created by career politicians and voted on with an eye on its marketability in the midterm elections 2010 (another miscalculation). It was ostensibly meant to fix predatory lending and reign in Wall Street excesses. It does neither one very well.

The midterms turned out to be rather disastrous for the Democrats. The GOP managed to ride the tidal wave of discontent and re-captured the House with 239 seats (that’s 21 seats more than required for the majority). Only with some sheer luck did the Democrats manage to hold on to their now rather slim majority in the Senate. The The Wall Street Reform and Consumer Protection Act of 2009 is at the center of the ensuing Foreclosure-Gate. According to the law to be a “qualified and, when required, registered and licensed as a mortgage originator in accordance with applicable State or Federal law” means that three residential properties are the upper limit per year.

The provisions of the law are disconnected from reality.

Hidden in the Fine Print: Residential Mortgage Loan Origination

Real estate investors who are in the business of rehabbing foreclosures and REOs will no longer be able to engage in any meaningful number of deals if they also intend to provide seller financing, at least not without some additional effort. Unless they obtain a mortgage originator’s license, the law limits sellers who provide financing to three such deals on residential units at any given point in time, and puts some additional restrictions in place (on the upside, the Frank-Dodd bill has also lifted FHA’s own limit from one to three).

Sellers can still provide financing but need a man-in-the-middle who can act as a licensed mortgage originator if they want to engage in more such deals than three. This requirement will drive closing costs up by creating more red tape. And not only that. Adding insult to injury, the law will cut some consumers off from the access to financing and here is why.

In order for the seller to be able to qualify for the three properties exception, the deals must fulfill some fairly unrealistic criteria. One of  them: the seller must “verify” the buyer’s ability to pay. In the light of the recent financial crisis this provision does sound reasonable, but only on paper.

Seller financing has been an alternative for buyers who could not obtain bank financing because either they do not fit into banks’ criteria or because banks are in no mood to lend to anyone (usually at a time of crisis like now). Buyers who are too young to have any meaningful credit history or who do not have a steady source of income because they work as independent contractors or freelancer (an increasingly common type of occupation given the current job market conditions) have a hard time convincing a banker and there is a reason they should: bankers are stewards of other people’s money. But a seller who has his or her own capital at stake should have the freedom to put their gut instincts ahead of formal criteria. Restricting this freedom does not do anyone any good. The law limits sellers’ ability to take reasonable risks for no good reason.

You can go to a casino and blow all your money in a matter of minutes but you cannot take a gamble by financing a sale of your real estate to anyone you please? What kind of logic is that? (Unless sellers can execute judicious judgment as to the buyer’s ability to repay a loan they don’t stay in the business for long anyway.)

“Existing-home sales have shown some improvement but the foreclosure moratorium [a.k.a. the robo gate moratorium] is likely to cause some disruption and contribute to an uneven sales performance in the months ahead,” writes NAR chief economist Lawrence Yun in the release.

In the long run, the robo gate will be an irrelevant blip in a drawn-out and painful recovery.

So long as government agencies dominate the landscape and big institutional lenders play it safe, housing market conditions are not going to change in any significant way in the foreseeable future (all other things being equal). Banks don’t lend because they are in the business of clearing foreclosure inventory right now and in the meantime they can make good money with lower-risk high-yielding investments such as tax liens (read how Banks Gobble Up Tax Liens Hoping to Put More Homeowners Through Foreclosure).

What the Frank-Dodd Wall Street reform act really means is that larger institutions have actually gained leverage from the restrictions of the seller financing provisions of the law. No wonder lobbyists are paid so much money.

There is no point in restricting seller financing other than to help banks wield even more power with consumers. It is hard to see how tighter regulations on remote control from Washington are going to give consumers more choice.

Hopefully, the new Congress will gather enough political will to rein in the FHA and put a stop to Freddie’s and Fannie’s gamble with taxpayers’ money. Now is the time to write our representatives in the Congress what really needs to be done about the housing market.

Whether a meaningful reform has any chance of happening, we will know soon enough.