Tuesday, June 27, 2006

Hulkamania's selling real estate

As a now recovered 1980s pro wrestling fan I post here Hulk Hogan's real estate listing from down in the Tampa, FL area. If you have $25,000,000, it looks like a nice place.

Buyers and builder's lender

Knock on wood, I've never personally observed a problem regarding the above but just saw a blurb in Sunday's Trib. and thought I'd post something.

The gist of the scenario is these builders try to control the whole real estate transaction from building to title company to mortgage company. And obviously if you're under contract, you've chosen to buy their property and in IL Seller does typically choose title company.

The third area, though, mortgage, is where the article mentioned problems with consumers feeling compelled to use a builder's hand-picked mortgage company. But RESPA clearly requires that any incentives related to such deals be legitimate and not built into the price of the house or the cost of the loan. In other words, builders can't tempt you with illusory benefits, alleged discounts that you're actually paying for somewhere else. Just beware!!

The article mentioned a couple of horrer stories where a builder threatened to retain earnest money when buyers tried to change lenders to a lender not the builders. Also mentioned was a buyer well into a deal with a builder who then was told that her credit history only qualified for a high-cost interest-rate package. If you smell a rat, get the feds, either HUD or FTC involved ASAP!

Saturday, June 24, 2006

50 year mortgage anyone??

With borrowing costs rising and home prices near records, lenders need new ways to keep the public buying. The latest tool is the supersize loan term, which reduces payments but is more expensive in the long run.

While 40-year mortgages have been around for some time, 50-year loans were introduced this year in California. It seems these are partially in response to regulators increasing crack-down on the various interest only and option type loans.

A 50-year loan might be the only way I could afford my dream house in San Francisco.

Mortgage rates at 4-year high

The average rate on a 30-year fixed-rate mortgage in the U.S. rose to 6.71% this week, the highest since May 2002. This compares to 5.57% a year earlier.

How much higher do you think we're going??

Thursday, June 22, 2006

Real estate "cartel"

The Consumer Federation of American came out with a new report here (press release...I think you have to buy the report). It's not too much new...Realtors are another self-interest group like us lawyers fighting against the illegal practice of law by non-lawyers. It includes some good tips however:

1. Always ask for a 1% rebate from your broker and 2% if the broker is "double-dipping." I.e. same office has both Seller and Buyer.

2. Ask potential broker about conflicts of interest such as pushing own listings or those of their home firm.

3. Ask for written disclosures of whom broker represents, if anyone.

Realize what huge amounts of $$ are at stake...6% of $400,000 is $24,000. Do you spend 15 minutes when you're paying that much for a car? If you have a personal lawyer, involve them in negotiations with the listing agent. This is an important and expensive negotiation!

WSJ had a piece in last weekend's paper entitled, "Real-Estate War Traps Consumers in the Middle." That has some very telling stuff in it....get it for a read. It talks about a couple disputes that BuySide Realty and Redfin have had with traditional brokers failing to pay their commissions and not letting buyers get their "rebates." Also, it discussed traditional brokers offering payoffs to buyers to drop their discount brokers.

Wednesday, June 21, 2006

Avoid partition lawsuits!

As I finish with day 3 of ???? of a real estate partition suit, reminder, please form an entity (LLC or Corp.), trust or partnership before doing your real estate investing. Because if you don't, we may meet in "Partition Land" too (aka trial court).

Monday, June 12, 2006

Traditional broker decline?

WSJ reported on a survey put out by Real Trends that found that 70% of homeowners used traditional brokers to sell their home last year versus 74% in 2002. Interestingly, the study also found that FSBO sellers also dropped. It appears the main increase is in the flat-fee/fee-for-service/flat-fee MLS category.

Illinois punishing bad brokers

Saw a little blurb in the news that the State of IL's Dept. of Financial and Professional Regulation has levied $190,750 in fines...primarily against loan originators not registered with the state who process mortgage applications.

Look at www.obrelookupclear.state.il.us to be sure your loan originator is registered.

Non-traditional mortgages attract vulnerable borrowers

Here's a new report from the Consumer Federation of America regarding the various interest-only and "payment-option" plans that cut monthly payments sharply in the early years of a loan.

No suprise (I suppose unless you buy the mortgage industry's line of bull) that the study found that home buyers who take out payment-option loans tend to have below-average credit scores. Nearly 54% of payment-option users in the sample had FICO scores below 700.

Saturday, June 03, 2006

Threat of foreclosure real estate niche

There was a front page piece in the May 30, 2006 Wall Street Journal (sorry I can't link to it...WSJ is paid site) regarding the cottage industry of real estate investors purchasing homes from people close to being foreclosed and the related scrutiny this type of alleged predatory investing has been recieving from regulators and legistors.

The other interesting aspect of the piece is the huge number of training businesses that exist that instruct persons how to purchase foreclosure properties. It discusses Foreclosures.com and HomeVestors in the piece.

And for those of you in IL, here's the press release from the Governor's office regarding Illinois' new law regarding foreclosure investing.

Here's a short blurb from the press release so who knows how biased the language is:

The legislation:

· Limits the amount a mortgage rescuer can make if the homeowner is successful in buying back the home to 125% of the total debt on the home paid by the rescuer.

· Requires that all mortgage rescue companies provide disclosures and give homeowners the right to cancel contracts, and increases penalties for violations.

· Requires that the mortgage rescuer provide the homeowner with at least 82% of the value of their home if the homeowner is eventually unable to buy back the home from the mortgage rescuer.

Upscale home prices in Houston booming

Well, at least Houston's upper-level real estate market is booming according to a piece I saw this past week in the Sun-Times.

As housing prices slow in much of the U.S., homes in the Houston neighborhood of River Oaks are selling faster, in large numbers and at higher prices than a year ago.

Growing demand at the top end reflects strength throughout the Houston market, which is getting a lift from soaring oil prices. The fourth-largest U.S. city is known as the world's energy capital...Some mansions sit on three-acre lots, and the median selling price was $1.2 million early this year, up from $940,000 the year before.