Note Buyers & Investors Convention November 10-12 in San Diego

The NoteWorthy convention for note brokers and investors will be held in San Diego November 10-12.

This is an opportunity to learn about the note business at the industry convention. There will be workshops to learn from and an opportunity to meet the "MONEY"!

If you're interested in attending I have a very special rate of only $99 for locals that want to attend (others pay $388)! Go to http://www.noteworthyconvention.com and put "tan2009" into the "Enter Discount Code" part of the Ticket Information section after you have put how many will attend. See you there!

Government Insured Share of mortgage applications Tops 36%, New Record

MBA Reports Government Insured Share of mortgage applications Highest since 1990, Now at 36 percent

Washington, D.C.
July 09, 2009

The government-insured (FHA and VA loans) share of mortgage applications was 35.9 percent in June 2009, the highest level since November 1990, according to the Mortgage Bankers Association.

Based on data from MBA's Weekly Mortgage Applications Survey, the government-insured share jumped from 25.7 percent a month earlier and 27.0 percent in June 2008. Since the MBA survey's inception in January 1990, the lowest recorded share was 5.8 percent in August 2005.

The government-insured share of purchase applications in June was 38.6 percent, up from 27.8 percent one year ago. The government-insured share of purchase applications has averaged 36.6 percent to date in 2009, compared to an average of 21.8 percent during the same period in 2008. The low point was in August 2005 when it was 6.8 percent.

"A primary reason government-insured loans have retained a high share of the purchase market is that these loans typically require lower down payments than conventional loans," said Orawin Velz, MBA's Associate Vice President of Economic Forecasting. "In addition, lending standards tend to be tighter for conventional loans, especially for loans that require private mortgage insurance."

"While the government-insured share of purchase applications has remained elevated, the government-insured share of refinance applications has been volatile. The share hit a record high of 38.4 percent in October 2008. As mortgage rates fell sharply between mid-November through early May, refinance activity surged for conventional loans. This surge in conventional refinance applications dominated the market, causing the share of FHA refinance applications to fall below 20 percent for most of this year. Recent increases in mortgage rates have caused conventional refinance activity to drop much more sharply than government-insured refinance activity due to a combination of credit and LTV requirements. As a result, the government-insured share of refinance applications climbed to 33.6 percent in June," Velz said.

So now government insured mortgages are the sub-prime mortgage lending... That means a greater number of future defaults/foreclosures will be from FHA mortgages. Our opportunities are to take over these properties "subject to" the existing 30 year financing.

Reggie Lal speaking Wednesday October 21st

Wealth Building Strategies in the Current CA Market

If you missed Reggie Lal speaking at the SDCIA in August; you really should take the opportunity to catch him at the InvestClub for Women meeting this Wednesday evening. Here's the link for more information:

http://womensinvestclub.com/ReggieLal.aspx

Topics Reggie's Going To Cover:

• Successful Deal Structuring
• Creating Cashflow in this Market
• Where To Invest
• How to Pre-Screen and Evaluate Deals
• Creative Methods of Financing Properties
• CA Market Update
•  Raising Private Money - How to Fund your Deals
• Common Mistakes Investors Are Making and How to Avoid

Reggie is a straight-talking guy who will tell you exactly what he does, how he does it & how you can to. He bought fifty-one (51) houses last year, one at a time.

Reggie's someone you can really learn from because he's not trying to get into your wallet or purse.

He will share that he's putting on a one-day class November 21st locally titled:

"Finding Money in Today’s Market & IRA Investing
(The Best Kept Secret in America Today !)

Build your own war chest of funds and take advantage of the greatest buying opportunity of our time !

http://www.bethesmartinvestor.com/Public/Events/index.cfm?semID=180&view=1&requestTimeOut=100

BTW, he will have a very handsome colleague teaching a section on creative financing... 

Jack Miller

I'm sorry to report sad news. Jack Miller, one of my mentors, passed at 8:33 am on Friday, October 9. Jack was diagnosed with cancer in June and fought valiantly to beat it. We all believed he would overcome it but he lost the fight. He will be missed by all.

Here is a final message from Jack:

To my Friends, Students and Subscribers,

"I have concluded that the treatment for my illness will not be successful. However, I am thankful that I have had the friendship and support of many of you. It has been rewarding for me to see you grow and prosper and I hope I was of some help in that process. It is my hope that you will continue your efforts in the most ethical, enjoyable and profitable manner. Best of luck to you all."

Per Jack's wishes, there will be no funeral.

Many people want to express their sympathy and respect directly to the Miller Family, but they just need time and space for now. Please do not call at this time or send flowers. You may send your condolences to the email above at GoodbyeJackBaby@gmail.com .

The Miller family would like to thank you for all the years of support and friendship. 

I remind everyone that my favorite mentors: John Schaub, Peter Fortunato & Jimmy Napier have cut back on their teaching schedules. No one knows how much longer they will continue to teach and you should do yourself a favor to take their classes. John Schaub just taught a class last weekend. It's the first one I've missed in years and only because of illness. You'll be real estate sick if you don't take at least one of the classes from the masters!

FDIC says bank failures to cost around $100B

FDIC seeks a $45-billion advance from banks to rebuild reserves.

http://www.latimes.com/business/la-fi-fdic30-2009sep30,0,3324879.story

"A billion here, a billion there, pretty soon you're talking about real money."
     _ Everett Dirksen (1896-1969), Illinois Republican Senator

Subprime Uncle Sam - FHA makes Countrywide Financial look prudent

Great editorial from the Wall Street Journal today on the FHA risk.

http://online.wsj.com/article/SB10001424052970204488304574428970233151130.html

This makes sense since the FHA is now the new "no money down" lender.

16 Loan Modification Attorneys Under Investigation by State Bar Assn.

The State Bar of California, alarmed by the number of lawyers preying on vulnerable homeowners, today identified 16 attorneys who are under investigation for misconduct related to loan modification.

In my 21 years in attorney discipline, I have not seen a crisis of this magnitude. It is truly unprecedented,” said Interim Chief Trial Counsel Russell Weiner, who is waiving investigation confidentiality in favor of public protection...

http://calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10144&n=96395

Uncle Sam Bets the House on Mortgages

More than half of U.S. residential mortgages are being made by just three large banks: Wells Fargo, Bank of America and J.P. Morgan Chase.

I believe this is bad. We need more lenders to compete for our business. Lenders that are innovative & customer friendly!

New FHA rules for refis & appraisals

The FHA also will impose a maximum loan value of 125 percent of the current estimated home value on refinanced loans, in line with Fannie Mae and Freddie Mac.


Why did they ever loan more than a house was worth in the first place?

Appraisals will be valid for no more than four months, a decrease from the previous six to 12 months validation period. The FHA also plans to implement appraisal changes adopted earlier this year by Fannie and Freddie. Mortgage brokers or bank employees paid on commission won’t be allowed to order appraisers.

Appraisals should never be valid for more than a couple of months (exceptions are in areas that didn't rise in value for 50 years... GO zone???) unless it's for income properties which are valued differently than residential. And they should listen to Papa Joe's thoughts (those who attended "I Survived RE 2009 know who I'm talking about or you can view the video at: http://www.thenorrisgroup.com/blog/video-blog/i-survived-real-estate-2009/) on appraisals & appraisers. The only disagreement I had with Papa Joe is that we should "Kill Bill 1728"; he's only looking at the part that affected appraisals and not the financing ramifications.

Be sure to contact your state Senators & tell them to "Kill Bill 1728". It's probably going to be tabled this year but look for them to try & sneak it through.
My two cents worth in blue.

Ten Big Companies Headed Toward Bankruptcy

I found this interesting.

http://finance.yahoo.com/tech-ticker/article/336235/Ten-Big-Companies-That-Are-Veering-Toward-Bankruptcy?tickers=AMD,LVS,S,M,GT,MYL,HTZ

Have a great day!

B of A or the government is BAD in math

Here's an article in the Monday September 21, 2009, San Diego Union-Tribune:
http://www3.signonsandiego.com/stories/2009/sep/21/us-bank-america-government-092109/?business&zIndex=169774

I was most interested in the last paragraphs of the article.

"Bank of America has received a total of $45 billion from the Treasury's $700 billion financial bailout pot, which is financed by taxpayers.

The company says it wants to repay $20 billion of that money, which would remove the company from a list of firms that have received "exceptional" assistance from the government.

Such companies are subject to greater government scrutiny, including having to provide plans outlining compensation packages for their highest-paid employees. The Obama administration's pay czar, Kenneth Feinberg, has the power to veto them."

So B of A RECEIVES $45B in taxpayers money then after a while gives back $20B to get out from having to provide how B of A will compensate its highest-paid employees. That's $25 BILLION less than they received & now they don't have to justify compensating the employees that put them in a position to need taxpayer assistance? That's not right! They get to keep more than half (56%) of the bailout funds and not disclose how they are paying their executives.
 
Isn't this one of the reasons the bailout was necessary? Didn't the officers of financial institutions pay themselves (& the officers of the companies they acquired) large salaries & bonuses? They don't seem grateful for the bailout. It appears as if they're trying to get back to business as usual & screw the taxpayers. Or do they believe we won't notice or care?