Media and Government on Guard

This is really soon for another post but a show on CNN really excited me. It was a show designed to warn and protect the consumer and everything was delivered with a breathless sense of urgency and importance. They talked about the "mortgage meltdown" and fraudulent car repairs, etc. The mortgage part is my interest, but for others it might have been the warning not to be duped into paying for an unnecessary replacement of the air in your tires, or something equally important. The "mortgage meltdown" segment led to an "interview" with a Democratic senator named Frank, Barney I believe is his first name. When asked by the airhead doing the segment why the congress hadn't done anything to stop or head off the incredible foreclosure rate, he said it was because the Republicans had been in the majority. Now of course everything is going to be OK. When asked how, the senator said that they were going to introduce legislation making it unlawful to loan more money to someone than they could afford to repay. They didn't want to discourage making loans to home buyers generally, he was quick to point out, only those who couldn't afford to pay them back. The second prong in this two pronged legislation would take the form of not allowing people to borrow more on a home than the home was worth. Whew! and Golly! You can almost hear the sigh of relief from the financial markets. A solution that had entirely escaped their notice is about to be provided, no, enforced, by a wise and benevolent government. Don't loan money to people who aren't going to pay it back. Until you see it written down you can't believe it's so simple. The interviewer was so dazzled by the brilliance of the senator's speech and financial wisdom she neglected to ask him if he were at all involved in other governmental financial matters, such as Social Security, Medicare, general budget shortfalls, etc.
Without doubt there is an increase in foreclosures, brought about by many different forces, some market driven, some driven by the greed of real estate and mortgage practitioners, some from the actions of the government. Probably some corrective action is necessary, but certainly not from the likes of our Congress. Consumer education is foremost, enforcing the existing laws covering loan and bank fraud would be nice, and finally, perhaps reducing the high fees involved in the sale and financing of real property, although market forces (competition) should take care of the latter if education is adequately provided.
I'm going to keep watching CNN for more good solutions from our elected officials. With gas prices on the rise again maybe they can legislate something like only driving our cars to work, and thus reduce our consumption by 50%.
As usual. Thanks for visiting.

Web site down

My apologies to all attempting to view our listed properties Saturday morning. The first time our site has been out of service since inception, and I brought it on myself trying to enhance the value of that page. Instead I made it disappear for several hours.
This blog is going to be about mortgages, so if that's not your interest you need not read on. We are busily trying to reach the many people who have Adjustable Rate Mortgages, or fixed rate that are about to morph into variable rate, by any means possible; direct mail, print media, word of mouth, etc., because the market is still favorable for refinancing into a good fixed rate mortgage. While we are trying to do this we notice ads on craigslist, TV, and in print advertising trying to attract people to finance at 1%, 1.25% etc. attempting to lure people into the very situations we want to rescue them from. (I know that's a preposition but that's where the sentence ended). It should be illegal to use terms like 1%, rate, interest, and mortgage in the same sentence in advertising mortgages. The NOTE rate which is what you sign up for is hovering around the 6% level. That's the actual rate you're obligated to pay and which you are being charged. The 1% rate (or similar low figure) is what you are paying, and that teaser rate usually only applies to the first month in any case and then starts to increase. Any payment you make which is less than the actual amount owed, let's say 6%, is simply added to your principal balance, so each and every month your balance increases, and the interest you are obliged to pay is calculated on that increasing balance amount. These loans are called neg-ams (negative amortizing) and you can increase your debt at an alarming rate. At a time when real estate values have flattened it is a very simple matter to see your equity disappear and owe more than the sale value of your home. This has happened to many people, and is still happening to many more. We can generally find a way to help if we can only find a way to locate the people in trouble. If selling is the only way out of trouble our flat fee commission is a sure fire way to preserve as much of the equity as possible. Either way we get to feel good about helping and do some business besides. Financing we can do pretty much anywhere in California. Listing and selling we're not effective beyond Butte, Glenn and Tehama counties.
Apologies again for the web interruption, and as usual, thanks for visiting.

THROUGH THE LOOKING GLASS

"The time has come the Walrus said, to talk of many things". If Lewis Carroll or his heirs don't sue for copyright infringement that's a dandy heading for a blog. As promised we'll address gold fish bowls, initials on cards and validation. Many years ago I noticed someone looking at fish in an aquarium, leaning in and tapping on the side of the glass to get the attention of the fish, and while I didn't say anything I thought, "wow!", needing to be noticed by a fish is pretty far down the self-esteem ladder. Does personal validation take place if the fish looks at the person and rejection if it simply swims away? We all need validation, but there are mature ways to achieve it. Real estate sales persons, (this gender equality is really silly), more so than most salespeople seem to need validation and seek it by putting pictures on their cards and appending a string of letters after their name. The letters are supposed to indicate a superior ability to show people a house because of satisfactory completion of some course or other, offered by someone anxious to relieve them of money in exchange for a certificate authorizing the use of the letters on business cards. We're sales people for heaven's sake, and if we're any good at it, it will show, and if not, letters on a card won't help. We even have letters now to show that we are sympathetic to "green" causes. What next? Best miles per gallon while showing property? Real estate salespeople have too much extra money, too much free time, and way too much need to validate themselves at some level above that of "salesperson".
Enough fun with that, but remember next time you're looking at the goldfish to keep your hands behind you. Someone may be watching.
Now some serious real estate stuff. Obviously we are a maverick business model, doing business at a modest flat fee and providing full service with no gimmicks and we are enjoying some success. The percentage people are hanging in there, one because it's hugely profitable and there are still a lot of uniformed people to prey on, and two, because the winds of change have not yet come to their attention. I'm not egocentric enough to mean us as the winds of change. We're simply a step along the way to wherever this business is going. Major national real estate sites are offering to allow homeowners free listing of their properties on those sites, and there is starting to be some direct activity from seller to buyer without the intervention or assistance of a real estate agent. This is good for the sites at the moment, it allows them to charge advertisers more for space, and seems to be allowing a service to consumers. For the future, I think I see the free service morphing into a fee for listing the homes. Still a good deal for consumers and a great deal, because of volume, for the sites. I note that some of the heaviest advertisers on real estate sites are mortgage lenders, probably positioning themselves to take care of the growing number of people who are not relying on the guidance of real estate agents in the sales transaction. Real estate agents are traditionally the best referral source for mortgage people, and if real estate agents aren't involved in a transaction what will be the mechanism for finding a suitable mortgage? I have talked before about our position in this business and how important I think we are to the process. Not very if you don't need us to find your buyer. We are a marketing engine and a sales force. If the growing influence of the internet reduces the need for those elements of the transaction then our importance shrinks commensurately. We have on our site a link to Nolo for those who want to go it alone, and if people are comfortable doing so they should. I think, speaking as a mortgage broker, that except for a very few people, almost everyone benefits from a face to face meeting for a mortgage loan. The programs are vast in number and no algorithm is going to insure that the match is a good one.
As a final note for this blog. Our contemporaries are valiantly resisting change to hold on as long as possible to the exorbitant fees they've become accustomed to receiving, meanwhile seeming to embrace changing technology. We are excited by change and are ramping up our internet exposure and involvement, gathering statistics like crazy to make sure our program is exposed to as many of you as possible, because one, we know it's the best deal out there, and two, we can probably find ways to improve it.
AS usual. Thanks for visiting.

The good news continues

We're busier and getting busier and isn't this great? Some interesting statistics are starting to reveal themselves in the numbers provided by some of our web partner sites relating to the unique views of our property listings. Our Orland area properties in the $300,000 to $350,000 are seeing pretty good activity while the properties that include 1 through 10 acres are seeing great activity, even in slightly higher price ranges. In Chico, lot size doesn't seem to be a factor, and to contrast with the Orland area the $300,000 to high $300's are getting five times the views, over 500 unique views on these properties. We've only been able to track this stuff since January 24th and I'm impressed. We have some really nice homes listed in Orland in this $300,000 range and traffic has been modest. There are several developers building homes in Orland in this range, and were it me I'd be somewhat anxious. Chico on the other hand is seeing a lot of traffic, at least in our office and I believe we're in for a great year. Orland traffic is also very heavy, just not in single family homes in town in the $300,000 price range.
Enough with the numbers. Remember the expression "what's in a name"? We had a call about listing a home from a woman who saw us on TV and she wondered about the "meaning" of New Age Realty. Seems she is a born-again Christian and she felt we might be wearing beads or engaging in some strange rituals. Despite our efforts to convince her that New Age Realty represented our view of a new age in real estate marketing and of our absolute neutrality in matters of faith or politics she took her business to a more expensive and presumably more favorably named competitor. On yet another strange behaviour note, strange in my mind anyway, I recently had a meeting with a city employee, in a very small city, who had the letters PhD following his name on his business card. Why? It had nothing to do with his job. Do we have to call such a person Doctor if he puts it on his card? Our meeting didn't go particularly well and I wonder now in retrospect if it was because I asked if I could call him by his first name. That was before I saw his business card of course. This may not seem to have anything to do with real estate, but with any luck at all I'm going to tie initials on business cards; need for validation; and gold fish bowls all together. And it will have something to do with real estate. But not in this blog, it's gone on long enough.
Thanks for visiting.