Wednesday, December 20, 2006

Realtors Association Concerned over Rising Rate of Defaults and Foreclosures

In a press release the National Association of Realtors (NAR) "is concerned over the rising rate of defaults and foreclosures occurring in many areas around the country, and many Realtors believe that some families don't understand the risks of taking out "exotic" mortgages." A big hattip to Calculated Risk on this story.

The foreclosure rate is rapidly increasing in much of the country as housing markets decline and toxic mortgages adjust. DataQuick reports:


Residential foreclosure activity in California surged to its highest level in more than four years last quarter, the result of slower home sales and flattening prices, a real estate information service reported. Lending institutions sent 26,705 default notices to homeowners in the state during the three-month period ending in September. That was up 28.3 percent from 20,812 for the prior quarter, and up 111.8 percent from 12,606 for 2005's third quarter, according to DataQuick Information Systems.

In response to the rapidly increasing default and foreclosure rate the NAR said in their press release that:


NAR President Pat Vredevoogd Combs urged consumers to make sure they understand the risks and rewards ofall types of mortgages before they make a decision on a loan. She also advised consumers to consult with a Realtor and to participate in mortgage education programs sponsored by Realtors before they buy ahome

We are committed to helping people buy -- and keep -- the home of their dreams, and an educated consumer really can make the best decision,"said Combs, of Grand Rapids, Mich., and vice president of ColdwellBanker-AJS- Schmidt. "Realtors(R) help Americans achieve the dream of homeownership. We work to ensure that homebuyers have access to the proper information so they can fulfill their homeownership goals.

These Realtors are partly to blame for the unacceptable foreclosure rate. A large percentage of Realtors have been promoting exotic (read toxic) mortgages as an affordable method to buy now (or forever be priced out (BS)). For example real estate agent Joe O'Hara was pushing toxic mortgages when he sold a property in Washington, DC.

Or we have David 'Paid Shill' Lereah, NAR's cheif economist who promoted perpetual mortgage debt. He said during the peak of the housing bubble:

"If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years," said David Lereah, chief economist of the National Association of Realtors and author of "Are You Missing the Real Estate Boom?" "It's as if you had 500,000 dollar bills stuffed in your mattress.

"He called it "very unsophisticated." (Los Angeles Times Aug 28th, 2005)
The Realtors are partly responsible for the fiasco that is the rapidly rising and high mortgage default and foreclosure rate. Their behavior has been despicable as they cheered on homeownership at almost any cost. Wait, it will get worse going into 2007 as more toxic mortgages reset, housing sales and prices continue to decline and the economy takes a turn for the worse.

48 comments:

  1. NAR concerned????

    About putting families in a precarious position NOW?

    ABSOLUTELY DISGRACEFUL!

    ReplyDelete
  2. boycott realtors!

    GO DIRECT.

    Only the Internet Blogs hold this group accountable.

    Good work David.

    ReplyDelete
  3. As a long-time realtor, I would like to point out that you have a limited understanding of realtors' influence. Not one time in my many years of selling real estate have I urged people to take out an exotic mortgage--and, guess what, they wouldn't listen to me if I told them to! Here's how it actually works most of the time: when I, or another agent, first meet with potential clients we tell them to first talk to a mortgage broker (or two or three) and learn what they can comfortably afford, if they haven't done so already. Then, and only then, do the majority of realtors choose to work with a client. We want proof of their price range, so to speak. The client, along with the mortgage broker, determine this number. You are simply wrong to think that the majority of realtors have any sway in directing a client to a home that they cannot afford. Most people don't even discuss such financial matters with their realtor, as they are reluctant to share such private information with others. They must, however, share it with their mortgage broker--who then advises them on their top-price bracket, but usually encourages them to spend less---just like I do.

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  4. HSBC Sours on American Loans

    HSBC Holdings PLC is learning that the U.S. lending business may not be so easy.

    The London bank is facing rising problems with its U.S. consumer-loans portfolio nearly four years after its acquisition of Household International Inc., a U.S. lender that specialized in subprime loans, or loans to people with spotty credit records. The acquisition has been well-received because it raised HSBC’s U.S. profit, complementing its huge Europe and Asia businesses.

    Last month, the U.S. unit said a portfolio of consumer loans it acquired recently had quickly soured. This month, HSBC underscored the loan situation was worsening. That has led to an unexpected rise in delinquency rates in mortgage-related debt. These loans are secured with collateral, so the bank’s ultimate losses may be pared. Still, it could portend further losses in unsecured credit-card loans. The problems have arisen despite HSBC’s having one of banking’s best computerized systems for analyzing consumer risk.

    “Our concern is that next year, the worsening is going to spread beyond the secured-loan book and actually going to start impacting the unsecured book,” said Antony Broadbent, a bank analyst at Sanford C. Bernstein in London. “And economically, that is a far bigger deal because of the amount of unsecured lending that HSBC has and, frankly, because the loss rates on that business are much higher.”

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  5. The realtor above may be honest, but many of his bretheren aren't. My husband and I were looking around and we met this realtor guy who said he worked with a mortgage person and got loans for people for properties that we're selling for over $1 million, even though the people didn't make much more than $30 or $40 K in salary. "It's no problem" he said.

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  6. Anon 7:40 said:
    "You are simply wrong to think that the majority of realtors have any sway in directing a client to a home that they cannot afford."

    Good and accurate post. Unfortunately, you and your profession have found yourselves in the cross-hairs of peoples' reactions to being either really priced-out of the markets they want to be in or at least thinking they are priced out because they over-estimate the true bottom line costs. They need a bad guy to vent their frustration on ... and as the face of real estate, you AND the lenders, and -- believe it or not --- even us existing home owners are their "bad guys." It's almost as if they believe anyone group of people (or groups of people) could really effect market prices to the degree that they have changed (i.e., increased) over the last 10 years. So, rather than try to understand the underlying global economic changes that are driving these prices increases, they find it easier to blame the very people that can actually help them work out the best outcomes for them. They call the Realtors and the lenders ther REIC (Real Estate Industrial Complex) and us homeowners either "greedy" or "duped" depending on the point they are trying to make. The only honest, good people in their storylines, are of course themselves ...

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  7. Yeah you realtors....You have to buy now or be priced out forever!
    BS you did not impact these people.

    Now you should be saying lower your price and sell now or watch your equity (if you have any) go poooofff.

    ReplyDelete
  8. “In recent years, high appreciation in many areas has masked problems in the subprime market. CRL projects that the cooling housing market, will cause failure rates to rise sharply in many major markets. California, Arizona, Nevada, and greater Washington, D.C. will be especially hard hit.”

    ReplyDelete
  9. Excellent post David. Today's Post article says DC is in the top 10 cities for expected foreclosures. One in five sub-prime loans are expected to default here. Stunning.

    I agree that realtors are partially to blame for this. They encouraged reckless buying, told people they had to get in or be "priced out forever," and now they are concerned about foreclosure risks? Looks like a CYA move now that the S*** is about to hit the proverbial fan.

    Great post. You nailed it.

    ReplyDelete
  10. "Unfortunately, you and your profession have found yourselves in the cross-hairs of peoples' reactions to being either really priced-out of the markets..."

    Typo, Lance? You meant, "we" and "ourselves," didn't you? Nice try.

    "So, rather than try to understand the underlying global economic changes that are driving these prices increases..."

    Agreed, Lance. A global liquidity (credit) bubble is not an easy thing to grasp. All you need to grasp, though, is that all bubbles pop.

    The real estate bubble is popping, Lance. Long live the bubble!

    ReplyDelete
  11. The funny thing is that lance will never admit he is wrong.
    Lance "dc wont drop, its different"

    after a 13% drop in dc proper....

    Lance "well the 20009 zip code wont drop"

    And the new defense..

    Lance, "I bought to live in my house you bh's just don't understand that concept"

    His retoric is stale and revealing. It reveals that he is truly concerned about the tanking market. I personally don't blame real estate people, I blame the banks for giving out loans to people who can't afford them. I blame the greedy nature of people trying to make a quick buck off of what has been a traditional piggy bank.


    Once again lance, I hope you have the balls to admit you were wrong when prices tank another 10-20%. If prices don't tank and start going up I will be first in line to admit I was wrong.

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  12. As I noted in another post. Realtors are getting 0.9% on GNP in commission right now. Normally bubbles top at 0.6% of GNP going toward realtor (tm) commisions.

    The normal bottom is 0.3% of GNP. I'm betting on an undershoot of prior trends. Anyone else? ;)

    " Looks like a CYA move now that the S*** is about to hit the proverbial fan. "
    Yep... The worst I saw is while touring an open house a realtor (tm) was pushing hard for me and my fiancee to fianance through his associated loan company. Whisky Tango Foxtrot?!? It didn't work. Both me and my fiancee' have very high credit scores. We'll buy with a very sensible mortgage, probably from my credit union or another trusted source.


    Neil

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  13. How many loans are sub-prime loans, does anyone know? Is it something like 5% of all loans? 3%? less than 1%? I can't imagine it can be all that many with all the "loose" credit out there I've been hearing about on this blog. Just so we have our terminology correct, aren't sub-prime loans those loans made at a very high interest rate to people who are considered a very bad risk? i.e., these aren't intended (or used) by the typical borrower ... What is going to be the default rate for regular (i.e. "prime") loans?

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  14. You are simply wrong to think that the majority of realtors have any sway in directing a client to a home that they cannot afford.

    I can accept that. However, Vredevoogd Combs, "advised consumers to consult with a Realtor." Is she implying that consumers should discuss the condition of loan with a realtor?

    What if I did discuss this with a realor? In most cases the realtor who takes you around to see houses is not employed by the buyer (buyer's realtor) but is instead employed by the seller. Could they even tell you they don't think you should get the loan for a house or would that go against their responsibility toward the seller?

    This is where I have a BIG problem. NAR implies over and over again that that realtor is acting in your behalf when, in most cases, their responsibility is toward the seller. At best this is misleading.....

    ReplyDelete
  15. As someone in the business, I must disagree with the realtor above. Most realtors have a broker/loan officer that they will "recommend" to a client. Many times you will see the realtor showing houses to the clients that they know are out of the price range the clients have asked to be shown, but encourage them to look at the home anyway because "It's such a good deal." Then they tell the client that they are sure that the lender can make the monthly payment work for them. In the end, the buyer gets talked into a house they can't afford and the realtor and LO make more money.

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  16. Bob,

    I've ALWAYS said I was talking longterm. If ten years from last summer (when we discussed this), prices aren't higher than they were then, I will admit I was wrong since I concur that for some people a 10 year period is longterm (i.e., the elderly, infirm, etc who MUST move within that short a period.) If prices really fall 50%, 60%. 70% from the highs in 2006 at ANY time, then I will admit I was wrong as I have always said that is simply an opportunist's pipedream. Current prices are in line with where I said they'd be now. I always said, on average they might fall up to 15% ... more for condos, less for houses ... in DC and the inner suburbs. The truth is that we aren't even THERE yet. So, keep dreaming ...

    ReplyDelete
  17. Lance said...
    “How many loans are sub-prime loans, does anyone know? Is it something like 5% of all loans?”

    I don’t know Lance, how many? I do know that approximately 2.2 million of those will likely face foreclosure.

    ReplyDelete
  18. "You are simply wrong to think that the majority of realtors have any sway in directing a client to a home that they cannot afford"

    Does anyone else smell something?

    I sincerely wish that we had a way to put realtors out of business. They represent alot of what I dislike about our culture (greed, instant gratification, selling your ethics for a buck, distortion of the facts (aka, lying), playing the blame game).

    ReplyDelete
  19. 1228 Walter St. SE

    It looks like Joe O'Hara never sold this property.

    ReplyDelete
  20. Another person who pushed adjustable rate mortgages is Alan Greenspan (read his Humphrey Hawkins testimony from July a couple of years ago). He encouraged households to take advantage of the new innovations in mortgage finance. Now the economy will reap the benefits of his encouragement of risk taking behavior (read bubble blowing).

    ReplyDelete
  21. robert said...
    "Lance said...
    “How many loans are sub-prime loans, does anyone know? Is it something like 5% of all loans?”

    I don’t know Lance, how many? I do know that approximately 2.2 million of those will likely face foreclosure."

    Okay ... so we are talking about something like 1% (i.e., 2M/200M mortgaged properties) going belly up ... Yes, this will be catastrophic for the economy and will bring prices crashing! (I.e., keep hoping and dreaming!)

    ReplyDelete
  22. "How many loans are sub-prime loans, does anyone know? Is it something like 5% of all loans? 3%? less than 1%?"

    Try 23%. See Figure 1 on page 8 in the link below.

    http://tinyurl.com/y4ujmo

    ReplyDelete
  23. Lance said...
    “Okay ... so we are talking about something like 1% (i.e., 2M/200M mortgaged properties) going belly up ... Yes, this will be catastrophic for the economy and will bring prices crashing! (I.e., keep hoping and dreaming!)”

    Who said anything about this being “catastrophic for the economy”? I’m just pointing out that that’s potentially 2.2 million more homes on the market.

    ReplyDelete
  24. chris g said...
    "Try 23%. See Figure 1 on page 8 in the link below.

    http://tinyurl.com/y4ujmo "

    Plug away Lance.

    ReplyDelete
  25. from bens blog...perhaps a dose of reality:

    "Comment by ric
    2006-12-21 17:46:44
    Laguna Niguel $710,000.00 $469,500.00 51.2%

    Buy I tell you, buy buy buy! Real estate only goes up. You will be priced out forever. They are not making any more land. 15% is in the bag. Hurry hurry hurry. LAY said so, David L said so, Gary Watts said so. The NAR said so. Alan Greenspan said we were at the bottom and here is the proof! They were all right. It’s your last chance. You jealous bitter renters are going to be paupers and serfs forever beholden to the landed gentry. Blog all you want you idiots, but the figures don’t lie.

    Don’t ya just love statistics?"

    Your move Lance!

    ReplyDelete
  26. chris g said...
    ""How many loans are sub-prime loans, does anyone know? Is it something like 5% of all loans? 3%? less than 1%?"

    Try 23%. See Figure 1 on page 8 in the link below."

    Chris, try reading again what you quoted. 23% is of "total mortgage orignations" ... NOT total mortgages outstanding. And since the rate escalated so quickly (it was 10% in 1998), we are talking about a single-digit number at best. I.e., Since mortgage go for 30 years, and there were far far few of these loans made as recently as 1998, the total number outstanding as a percentage of all outstanding mortgage HAS to in the single digits ... 3%? 5%? I'm starting to see a pattern among bubbleheads ... namely that which occurs on the margins suddenly gets portrayed to be occuring everywhere. For example, "I can't afford to buy at today's prices" becomes "NOBODY can afford to buy at today's prices" ... which of course is why we've just finished up one of the biggest and fastest pace real estate markets ever witnessed in this country. No, no one can afford to buy at these prices ... I cannot afford to buy ... so I must be normal.

    ReplyDelete
  27. Yes, this will be catastrophic for the economy and will bring prices crashing! (I.e., keep hoping and dreaming!)

    Hey, I'm dreaming of buying... prices were just announced down 20% per sq ft YOY for homes that actually closed. :) Ok, not DC... But as noted before, you can save money while renting, not while owning the same house.

    And sub-prime mortgages tend to be in concentrated areas. Google "mortgage map of misery" and you'll see the areas. DC had 5% to 10% of the mortgages Option ARMs. A pretty low percentage. So 1% to 2%. Not huge... but significant. My area of California? 27.5% of the mortgages. Yikes! I'll wait... That's a huge block of homes entering the market.

    DC is just going to have the flood of condos to contend with as well as the large surplus of NoVa housing. That will have its impact.

    Neil

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  28. Lance said...
    “How many loans are sub-prime loans, does anyone know? Is it something like 5% of all loans?”

    http://www.responsiblelending.org/pdfs/FC-paper-12-19-new-cover-1.pdf

    As shown in Figure 1 below, in a short period of time subprime mortgages have grown from a small niche market to a major component of home financing. From 1994 to 2005, the subprime home loan market grew from $35 billion to $665 billion, and is on pace to match 2005’s record level in 2006. From 1998 to 2006, the subprime share of total mortgage originations climbed from 10 percent to 23 percent Over most of this period, the majority of subprime loans have been refinances rather than purchase mortgages to buy homes.7 Subprime loans are also characterized by higher interest rates and fees than prime loans, and are more likely to include prepayment penalties and
    broker kickbacks.

    ReplyDelete
  29. Fantastic Blog one of the best holding the shills accountable!

    ReplyDelete
  30. "Rents Rise as Apartment Market Is Squeezed"

    http://www.washingtonpost.com/wp-dyn/content/article/2006/07/04/AR2006070400969.html?nav=rss_rentals

    "Rents are already rising rapidly, and the completion of luxury towers and new shopping centers will put pressure on landowners to hike rents further or convert buildings to condos."

    http://www.connectionnewspapers.com/article.asp?article=74557&paper=60&cat=104

    "In trendy Adams Morgan, in the midst of a protracted eviction battle this fall, came the broken windows, cut electrical lines, a death threat from strangers pounding on doors and a brazen arson that caused a fleeing tenant to fall from the second story and break her leg."

    "Tenants have accused management of orchestrating a campaign of fear and violence to get them to give up their rent-controlled apartments to make way for extensive renovations that ultimately would generate higher rents from new tenants."


    http://www.washingtonpost.com/wp-dyn/content/article/2006/12/09/AR2006120900838.html

    "Inflation fell or rose at a slower rate for most categories of goods and services. Housing was the exception, with prices up 0.4% on hefty gains in hotel fares, rents, and owners' equivalent rent. The CPI excluding shelter fell 0.2%."

    http://www.smartmoney.com/bn/ON/index.cfm?story=ON-20061215-001008-1209


    Denial ain't just a river in Egypt, Bob.

    ReplyDelete
  31. "Chris, try reading again what you quoted. 23% is of "total mortgage orignations" ... NOT total mortgages outstanding."

    Well, Lance, you said:
    "How many loans are sub-prime loans, does anyone know? Is it something like 5% of all loans? 3%? less than 1%?"

    So maybe you should have put the word "outstanding" in your post. Then maybe I wouldn't interpret it differently. Personally, I believe that the current distribution (prime vs. subprime) of loans being issued recently is much more important than the

    "Since mortgage go for 30 years, and there were far far few of these loans made as recently as 1998, the total number outstanding as a percentage of all outstanding mortgage HAS to in the single digits..."

    That is not true.

    The average mortgage gets paid off after about 7 years, usually due to the sale of a property. The average refinancing of a mortgage takes place after only 4 years. Mortgages that stay in place for 30 years are extremely rare. To graph the mortgage term before payoff, you would have a distribution that is highly skewed to the left.

    Also, the Mortgage Bankers Association recently conducted a survey to find out the percentage of delinquent loans. The survey looked at 42.6 million loans, 13.6% of which were in the subprime category. I can only assume that because the MBA is trying to conduct a survey that is representative of the market, the 13.6% figure is probably appropriate, and that figure has to be trending up since subprime loans are now being issued at a rate of 23%.

    The market has already priced in what has already been seen. The key is the change in the mortgage distribution going forward. That it what has many people worried, including myself.

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  32. Buyers, though, could care less about the outlook for interest rates: They smell blood.”

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  33. http://realestate.msn.com/buying/Articlebankrate.aspx?cp-documentid=195238

    Many economic experts are predicting that mortgage delinquencies will rise up to 15% in 2006 among homeowners with higher-cost or "subprime" loans. About 19% of all U.S. home loans are now subprime, in contrast to just 5% 10 years ago, according to the folks at Fitch Ratings, an investment-analysis firm. A lot of those homeowners with adjustable-rate subprime loans will see their loans reset at higher interest rates in the coming months, and that will spell trouble.

    ReplyDelete
  34. Lance,
    This video say's it all.

    http://www.youtube.com/watch?v=beCqrEOjXss

    ReplyDelete
  35. 19-Dec-06

    TOLL BRUCE E
    Director
    500,000 Indirect Sale at $31.62 per share.

    $15,810,000

    ReplyDelete
  36. Whats this can it be Casey has a Padawan
    http://foreclosureboy18.blogspot.com

    ReplyDelete
  37. Development in DC continues apace:

    From the Friday, 12/22/2006, Washington Business Journal:

    The DC Zoning Commission has approved MRP Realty’s plans for a $350 million office, hotel and residential project at the intersection of New York and Florida Avenues NE.

    The 1 million-square-foot development, known as Washington Gateway, will be at the north end of the North of Massachusetts Avenue area, or NoMa.

    It will be one of many large NoMa development projects expected to create a neighborhood ambience in what is now mostly abandoned, former industrial land north of Union Station.

    The MRP proposal calls for two office towers and a T-shaped structure with one half developed as a 250-unit residential section and other side set up for 165 hotel suites.

    The site, originally intended for office space, evolved into a multi-use project after the DC Office of Planning asked developers to design it with the NoMa grand scheme in mind. In exchange, the developers could get increased density on the site.

    MPR also got to add another floor to the office tower in return for setting aside 8% affordable housing in its apartment complex.

    Construction is expected to start late next year, and the building should be ready in the 1st quarter of 2010. Meanwhile, MRP will begin work on getting design and construction approvals.

    The project’s architects are already on board. Gensler is the architect for the two office towers, SKI is doing the residential and hotel tower and Occulus is doing the landscape and streetscape.

    To help finance the project, MRP is talking to possible partners, preferably life insurance companies.

    “We are looking to bring in a new money partner,” says Frederick Rothmeijer, principal of MRP Realty. “It is not because we don’t like our current partner, the Rockpoint Group, but we want another partner to buy into the venture.”

    MRP already has held several rounds of initial discussions with prospects.

    The developer hasn’t signed on a leasing agent yet and expects to build the office part on a speculative basis.

    The office tower near the north side of the development will likely be marketed to federal agencies, while the other building would be for associations and nonprofits.

    The latter tower also would be open to sale as office condominium units, Rothmeijer says.

    ReplyDelete
  38. To All HMIC Business Partners,

    It is with deep regret that we announce Harbourton Mortgage Investment Corporation will cease operations effective the close of business today, December 20th, 2006.
    We are extremely proud to have had the opportunity to serve our Brokers, Investors and Business Partners and wish everyone much success in the future. Provided below are areas of contact:

    HMIC

    ReplyDelete
  39. RE: Phx metro:

    Seems like the old adage, "location, location, location" is ringing somewhat true again.

    I've also seen a bump in resale activity over the last 2 weeks as well. Inventory is trending downward. I think the next few months will be much more stable than the previous.

    Inventory peaked: 55,000 early Nov.
    Today: 50,970

    ReplyDelete
  40. I have seen a new buying scheme. The buyer pays $10 for the house, then apparently refinances the rest of the "sale" price or assumes the mortgage. It seems shakey, anyone have experience with this?

    John

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  41. This is very irresponsible of the people who post blaming realtors for their troubles. There is a huge lack of knowledge in how real estate works. First of all if a potential buyer approaches a realtor in the hopes of buying property, the first thing a realtor will do is to encourage the buyer to speak with a mortgage person to determine what a buyer can spend. If the buyer does not already have a mortgage person the realtor may suggest one. Lending institutions will determine what a buyer can spend buy submitting what is known as a pre -approval letter based on that buyer’s credit rating, down payment and assets. The letter will state what the mortgage amount, interest rate and what the monthly payments will be. That buyer should be aware of what they can ACTUALLY spend monthly. In terms of so called "exotic mortgages" the buyer should be asking the questions of what are the risks down the road, and that is something the buyer should be working out with the lender NOT the realtor. Realtor DO NOT APPROVE MORTGAGES. The problem is during the real estate frenzy people were willing to do whatever they could to get in on the real estate craze, they really didn't need much encouragement from realtors. If I'm buying a home for my family, I'm going to look at several factors before I decide, such as what are my actual costs, mortgage, insurance, taxes, utilities etc. How secure am I at my job. What are the up and down sides of different mortgage products. These are big decisions that I myself will not leave to a total stranger no matter how credible they seem.

    See here is the situation, there was so much hype about how fast the real estate market was going, and people being people being people wanted to get in the game for the fast gains (GREED). Some people got in with the idea that if they take out an interest only loan for example they could make out on the resale before they have to pay the piper. Common sense says that what goes up must come down. Now they are stuck and want someone to blame for their stupidity.

    I as a realtor don't really care which way the market turns, because I make money transferring property between buyer and seller. If I have a qualified buyer and a willing seller and I negotiate the terms I have a deal. I always encourage people to seek advice before making big decisions like this. You’re not buying something from a late night infomercial. Historically realtors have never had a trustworthy reputation with the public, along with lawyers and cops, but now all of a sudden the real estate market goes crazy for a couple of years and now our word is GOD? Come on.

    The market is the market; I don't determine which way the market goes. I make money in down as well as up markets. I pride myself on working with people that have common sense and I maintain long term relationships with my clientele.

    It sounds like to me that there will always be people out there who’ll look for someone to blame for their poor choices in life, other than themselves.

    BW

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  42. David -

    Your choice of words ("pushing") is disappointing and insults the integrity of my real estate practice. Every few months I check out your blog, which does have some valid points. However, your tone and endless desire to lump all realtors and lenders into one pot is unfortunate and disrespectful to those of us providing sound advice and high quality services.

    Joe O'Hara, Realtor

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  43. anon 11:39,

    A lot of what you say in your post can be placed in the file cabinet marked "Hear No Evil, Speak No Evil, See No Evil". In other words, you are washing your hands of responsibility because you don't lend the money.

    If a buyer approaches you on a property, and you are the listing broker or salesperson, you are placing your reputation on the line when you refer that person to the lender. I don't care if that person was your client or not. You have an ethical, moral, if not legal responsibility to refer buyers to a lender that you know will treat potential borrowers fairly. If that buyer is actually your client (i.e. you are the buyers agent), then you have a fiduciary responsibility to protect that client in what is perhaps the biggest purchasing decision of their lives. Would it kill you guys to hand a "Top 10 Questions to Ask Your Lender" sheet to potential buyers?

    If you were a bartender and you saw one of your patrons stagger out of the bar with keys in hand, are you telling me you would just sit there and do nothing? It's not your problem, right? Or is that different because you served the drinks?

    Yes, there were some people who had dollar signs in their eyes as they thought they could flip their house in a couple years and make some money. Of course, there's that other category of buyers, the ones who had fear in their eyes as their realtors told them they needed to buy ASAP or they were going to miss the boat. ("Hurry up or the USS Capital Appreciation will leave without you!")

    It's also a little difficult to ask questions about a mortgage if you are not the least bit financially savvy. The phrase "I don't even know what I don't know" should ring a bell.

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  44. Anonymous said...
    “Your choice of words ("pushing") is disappointing and insults the integrity of my real estate practice. Every few months I check out your blog, which does have some valid points. However, your tone and endless desire to lump all realtors and lenders into one pot is unfortunate and disrespectful to those of us providing sound advice and high quality services.

    Joe O'Hara, Realtor”


    Mr. O'Hara,

    When checking up on the blog, please post information as to what type of schemes members of the REI are pushing and what consumers should look out for. This blog (and others) are a great sounding board to the public of such practices, and I would suspect that you’ve had ample opportunity in the past “every few months” to sound off.

    As we have yet to hear from you on this blog (or others) about these unethical practices, I have to conclude either:

    A)You don’t think they exist
    B)You’re part of the problem

    If I’m wrong, I apologize and please, post away.

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  45. The property that Joe O'Hara had for sale, which you said was overpriced, sold for $517,000 on Feb. 2006 (73 days on market), with no seller subsidy. It was listed at $529,000. Yeah it sold for less than list, but I'm sure the previous owners are happy with what they got. $12K less than list - some housing bubble. If you were to read some of the postings on your original article, some commenters said that they would only pay $180K. Are you freaking kidding me? I agree there has been a slowdown, and prices have dropped. But I feel that some of your readers are going to be very disappointed when everything plays itself out and that dream house of theirs doesn't drop as much as they would have liked.

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  46. While I still expect pressure on housing prices, I agree that the $180K was a stupid comment. It was completely based on a pipe dream that has no basis in reality, and does not the buy vs. rent equation into account. I also agree that the location of that property is a fairly desirable one.

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  47. anon 11:08 said:
    "But I feel that some of your readers are going to be very disappointed when everything plays itself out and that dream house of theirs doesn't drop as much as they would have liked."

    Oh so true ... And I feel for those setting themselves up. Of course, I have far less pity for those who have never bought and never will buy ... and just use this blog to validate a lifetime of "sitting it out waiting for the perfect time to buy."

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