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?

Bruce Norris is the Master Prognosticator!

Bruce Norris told us (check out Bruce's presentation at the May 2009 SDCIA presentation: http://www.sdcia.com/previous-meeting-topics/31-six-proven-steps-to-become-a-real-estate-multi-millionaire.html) that homeowners would begin to "strategically default" on their mortgages soon.

Homeowners who 'strategically default' on loans a growing problem -- latimes.com

Source: www.latimes.com

Reporting from Washington - Who is more likely to walk away from a house and a mortgage -- a person with super-prime credit scores or someone with lower scores?Research using a massive sample of 24 million ...

Secrets of a Professional Negotiator

I found this article on Yahoo & wanted to share it with you. Negotiating is the highest paid skill you can acquire. Yes, I said acquire. As in learn. So make the effort to educate yourself on the negotiating skills you need & then practice them. The best places I know to practice (except EVERYWHERE) are at garage sales and swap meets. And remember to make it fun!

Secrets of a Professional Negotiator

A Day in the Life of a Dealmaker

By Philip Reed, Senior Consumer Advice Editor

The energy is electric in the offices of Authority Auto in Sherman Oaks, California. That's because Authority's president, Oren Weintraub, is doing what he loves: negotiating car deals and saving money for his clients.

"I love the art of negotiating," Weintraub said. "It's kind of like a dance — you have to know what to say and when to say it. You have to be strategic. And above all else you have to know how to create leverage."

The flip side? "When I'm making a deal and I don't get what I want, it drives me crazy," said Weintraub, a former general sales manager at a top Ford dealer in the Los Angeles area. He started his concierge car- buying service after discovering that he would rather work for car buyers than be a dealer trying to maximize their profits. Now, Weintraub gets his fee from his clients, which he says is offset for the client by the low prices at which he can buy cars. He believes that the car broker's practice of getting a commission from the dealer is a conflict of interest.

To see the rest of the article (it's worth it!) click on this link:
http://autos.yahoo.com/articles/autos_content_landing_pages/1056/secrets-of-a-professional-negotiator/

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