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I must admit that my heart finds for some strange affections.  I love dingbats!   Now..I better explain myself as MLW (My Lovely Wife) is a member of Active Rain.  I'm not referring to an "intellectually disinclined" woman.  I'm talking about the multi-family building so prevalent to Southern California.

FROM WIKIPEDIA:

A dingbat (also called a stucco box or a shoebox), is a type of architecturally undistinguished apartment building that flourished in the Sun Belt region of the United States in the 1950s and 1960s. Dingbats are boxy, two- or three-story apartment houses with overhangs sheltering street-front parking.  

Particularly popular in southern California, but also found in Arizona, Florida, Hawaii and Nevada, they are known for their downmarket status and inexpensive rents. They are currently experiencing a minor sentimental renaissance thanks to the mid-century modern design return to vogue. In spite of their serviceability as functional, affordable housing, and the niche appeal of their trappings and trim, dingbats are widely reviled as socially alienating visual blights; California historian Leonard Pitt said of them, "The dingbat typifies Los Angeles apartment architecture at its worst".

Why do I love dingbats? 

N.B.- This post is an excellent starting point but gets better as the reader scrolls through the comments.  I was fortunate enough to draw the attention of my friend  Bill Archambault , long-time lender and Realtor.  He clarifies a few fine points and offers an opinion about negotiating short sales.  

PMI is known as the acronym for private mortgage insurance.  Private Mortgage Insurance is used when a borrower has less than 20% for a downpayment. Private mortgage insurance protects mortgage lenders against potential losses in the event of borrower default.  The insurance company, collects a monthly premium from the borrower (based on risk analysis) and agrees to pay the lender a certain amount of money if the loan defaults (usually 20% of the loan amount).  It's model was based on FHA loans and their mortgage insurance premium (called MIP, probably to confuse you).  FHA and VA offer guarantees to the lender equal to as much as 25% of the mortgage balance.

If a borrower defaults on his conventional mortgage (goes 90 days late on a payment), the lender files the state-specific foreclosure notice and sends in a claim to the insurance company to recover as much as 20% of the mortgage balance.  This, in turn, gives the lender a smaller risk when the lender sells the property to recover their losses.

Let's assume we have a $300,000 loan for a property that was purchased last year for $317,000.  Could that property have dropped in value since October of 2005 ?  Well, if it was a condo in my hometown, San Diego, it may be selling for as little as $260,000 today. Assume it costs about 8% to sell the property.   You, the Realtor, should know two things:

How much will the lender receive from the insurance company if the borrower defaults? 

$300,000 times .20= $60,000

What price must the lender sell for to not have a loss?  

Well, the lender's exposure has been limited to $240,000 now that they received $60,000 from the mortgage insurance company.  We take $240,000 divided by 92% (remember that it costs 8% to sell so the 92% represents the net proceeeds).       $240,000/.92= $260,900.

Why is this so important to you, the professional Realtor?  When negotiating an offer for a property that would result in a short payoff to a lender, you need to remember this fact:  PMI claims will mitigate some of that loss.  If you know that a seller has PMI on their mortgage, you have that much more wiggle room when negotiating a short sale with the lender.  Lenders have been known to attack Realtors' commissions as much as 50% when a short sale exists.

Knowing your numbers and how PMI affects a lender will help you defend your commission. If you understand the net effect the sale will have on a lender, your short sales will go much more smoothly.  

Affinity marketing is a term coined by MBNA Bank some 20 something years ago.  The then division of Maryland National Bank and now division of Bank of America coined the strategy with this slogan:  "Get the Right Customers and Keep Them".  They started their strategy by marketing credit cards to alumni associations with a portion of the fees earned being donated to the alumni association.  Their first partnership was with the prestigious Princeton University Alumni Association and expanded to over 1400 organizations today.

I started a division for a mortgage company that focused on affinity marketing by selling discounted real estate related services as an employee benefit to HR managers.  It worked out pretty well.  In 1999, our first year in business, we partnered with the Peoria (AZ) Unified School District and Peoria (AZ) Police Department to offer the program to its employees.  We assigned a Realtor to each "account" and mined the employees for business.  By the end of the first year, each Realtor was generating one transaction each month and we were closing a purchase loan and refinance loan each month.  We added employee groups like The Boulders Resort and, oddly enough, Bank of America (in AZ).  I say that BofA was odd because they bought the leader of affinity marketing (MBNA) earlier this year.  By the time I sold the little company in 2003, it was generating 5-6 real estate transactions monthly and over fifteen loans each month.  I abandoned that idea with my move to San Diego but restarted the idea earlier this year with the unveiling of http://sandiegobenefits.com/

Here are ten hints to establishing an affinity marketing program for your real estate practice:

Why do these "Super Brokers" morph into a form of direct lender?  The answer is quite simple.  

READ MORE 

I am a private mortgage lender which means I make real estate loans (non-bank loans) to individuals who can't qualify for bank financing.  In California, this is sometimes referred to as Trust Deed Investing because the security instrument (how you secure the collateral) we use is called a Deed of Trust.  The loans can be risky of default and subsequent foreclosure.  This is why we don't make loans for more than 70% of the value of the property.  The returns, however, are very attractive.  It is not uncommon to earn 11-15% interest on trust deeds.  I think they are relatively safe because they are secured by Southern California real estate.

I'd like to wish all of the serving and former Marines a Happy Birthday today.  On the Active Rain Real Estate Network, let's recognize my cyberfriend and former "Beach" Marine, Bill Archambault.  I invite all Marines on the Active Rain Real Estate Network to report in and tell us about your service.  We all thank you for your service to our country. 

From the Tun Tavern website:

On November 10, 1775, Robert Mullan, the proprietor of the Tun Tavern in Philadelphia , was commissioned by an act of Congress to raise the first two battalions of Marines, under the leadership of Samuel Nicholas, the first appointed Commandant of the Continental Marines.

Tun Tavern is acknowledged as the birthplace of the United States Marine Corps. There are an estimated three million active and retired U.S. Marines worldwide who have been exposed in their military training to the historical significance of Tun Tavern. Each year on November 10th, around the world Marines toast the Marine's birthplace on the most significant date in the history of the Corps.

The text of General Lejeune's Birthday Message is here. 

Happy Birthday Devil Dogs...Semper Fi ! 

Veteran's Day was originally called Armistice Day after the final day of World War One.  It is traditionally celebrated on November 11 although the federal holiday was today.  You can read about the history of Veterans Day in America here.

In my hometown, Solana Beach, CA, we will be celebrating tomorrow at 11AM with a ceremony at La Colonia Park.  I have made it a practice to bring my daughter to this ceremony for the past three years (she is five years old).  Rumor has it that Congressman Brian Bilbray wil be speaking tomorrow at the Solana Beach ceremony.

A full listing of Veterans Day events in San Diego (taken from the San Diego Union Tribune):

Following is a list of some of the events planned in San Diego County in observance of Veterans Day:

SAN DIEGO

Veterans Day parade in San Diego: “Honoring Women Veterans, Our Secret Weapon” will be the theme for the 2006 San Diego Veterans Day Parade set for 11 a.m. tomorrow. The event will begin at Pacific Highway and Grape Street and end on Pacific Highway between Broadway and Harbor Drive. The parade will feature all branches of the military, veterans, civic groups and high school ROTC groups and bands.

Ceremony at Mount Soledad: The Mount Soledad Veterans Memorial will hold a ceremony, “If You Love Freedom, Thank a Veteran,” to recognize the military's contributions. The event will take place from 2 to 3:30 p.m. tomorrow. The keynote speaker will be former San Diego mayor, U.S. senator and California Gov. Pete Wilson. Congressman Duncan Hunter, R-Alpine, and San Diego Mayor Jerry Sanders will also make presentations. Information: www.soledadmemorial.com.

SeaWorld San Diego will offer service members and up to three of their direct dependents a free, single-day admission through this year. Information: (619) 226-3901 or www.seaworld.com.

The Distinguished Flying Cross Society will unveil a commemorative painting by American Master Artist Ruth Mayer at an event from 6:30 to 9:30 p.m. tomorrow at the San Diego Air & Space Museum, 2001 Pan American Plaza, San Diego. The organization honors veterans recognized for their accomplishments during aerial maneuvers. Information: http://dfcsociety.org.

Book event at library: Jay Kopelman, author of “From Baghdad, With Love: A Marine, the War and a Dog Named Lava,” will headline a Veterans Day commemoration at 10 a.m. tomorrow at the San Diego Public Library's La Jolla/Riford Branch, 7555 Draper Ave., San Diego. Information: (858) 552-1657.

EAST COUNTY

Observance in El Cajon: A speaker will address sacrifices made by war veterans at 11 a.m. tomorrow at Veterans Civic Memorial Halls, 136 Chambers St., El Cajon. Hamburgers, hot dogs and side dishes will be served. Information: (619) 447-0356.

NORTH COUNTY

Moonlight Beach: Veterans for Peace of San Diego and the Encinitas Coast Progressives will present “Arlington West” from noon to 7 p.m. tomorrow at Moonlight Beach, 400 B St., Encinitas. More than 2,300 crosses will be placed in the sand to symbolize military personnel who have died in Iraq. The crosses will be illuminated by candlelight after dark. Taps will be played and the names of the fallen will be read. Volunteers are welcome to participate in assembling and taking down the tribute. Information: (760) 207-9139.

American Legion Post 149: The group will hold a Veterans Day flag ceremony at 11 a.m. tomorrow at Grape Day Park, 130 Woodward Ave., Escondido. Food and refreshments will be served. Information: www.calegionpost149.org or (760) 745-1159.

Veterans Day parade in Fallbrook: Veterans, Boy Scouts, Miss Fallbrook 1937, Miss Fallbrook 2006 and Honorary Mayor Rhonda Reinke will be among those participating in a Veterans Day parade in downtown Fallbrook tomorrow. The event will begin at 10:30 a.m. at the Major Market parking lot at Main Avenue and Fallbrook Street. A ceremony will follow at 11 a.m. at the Village Square at Main Avenue and Alvarado Street. There will be lunch and music at 12:30 p.m. at the Veterans of Foreign Wars Post, 1175 Old Stage Road, Fallbrook. Information: (760) 728-8784.

Creekside Plaza: Veterans of Foreign Wars Post No. 7907, American Legion Post 479 and Fleet Reserve Association Branch 70 will hold a combined flag ceremony and Veterans Day observance at 11 a.m. tomorrow. The event will be in Fenton Court at Creekside Plaza, 13495 Poway Road, Poway. Free lunch will follow at the VFW Hall, 12342 Old Pomerado Road, Poway. Information: (858) 748-7907.

Poppy Days: Members of Veterans of Foreign Wars Post No. 3783 will be at various stores and banks in Ramona and San Diego Country Estates from 9 a.m. to 3 p.m. today through Sunday to accept donations for Buddy Poppy, a national program that helps disabled and other needy veterans. Information: (760) 789-1452.

Webb Park: Navy Rear Adm. John Terrence Blake will be the principal speaker at 11 a.m. tomorrow at Webb Park, 11666 Avena Place, off Bernardo Center Drive in Rancho Bernardo. The event's invocation and benediction will be done by Navy Chaplain Lt. P. Aaron Bellar. The St. Michael's Church Choir will perform from 10:40 to 11 a.m. Information: (858) 674-1711.

La Colonia Community Center: The Solana Beach Veterans of Foreign Wars Post 5431 and the city of Solana Beach will hold a Veterans Day ceremony. Members of the Santa Fe Christian School Performing Band will play a collection of patriotic songs. The presentation of colors will precede an address by past post commander Randy Treadway. The ceremony will begin at 11 a.m. tomorrow at La Colonia Community Center, 715 Valley Ave., Solana Beach. After the ceremony, the Veterans Memorial wall at the community center will be available for viewing. Information: (858) 720-2400.

Wal-Mart: American Legion Post 365, Veterans of Foreign Wars Post 7041 and Wal-Mart will hold a Veterans Day event at 10 a.m. tomorrow at the store's Vista location, 1800 University Drive. The ceremony will include the presentation of colors, the national anthem sung by Sharon Mack and an invocation by Pastor Matthew Stoehr. “Amazing Grace” will be played by the North San Diego County Firefighters Pipes and Drums, a group of firefighters from Vista and Oceanside. Information: (760) 945-7995 ext. 183.

A program to honor veterans will take place at 10 a.m. tomorrow at the Elks Lodge, 444 Country Club Lane, Oceanside. The program will include a posting of the colors by veterans and fraternal organizations, essay contest winners from schools in North County, and a performance by the chamber choir of El Camino High School. Information: (760) 727-9027.

The Allied Veterans Council will host a Veterans Day ceremony at 11 a.m. tomorrow at Grape Day Park, 130 Woodward Ave., Escondido. Harvey Benne will present “The Tattered Old Flag,” a history of the Stars and Stripes from when George Washington crossed the Delaware River to the Iraq War. Lunch will follow the ceremony at the Veterans Memorial Building, 230 Park Ave. Information: (760) 741-1701.

A Veterans Day observance will be held from 11 a.m. to noon tomorrow at the Valley Center Cemetery, 28953 Miller Road, Valley Center. Information: (760) 749-1186.

SOUTH COUNTY

Chula Vista American Legion Post 434, Fleet Reserve Association Branch 61 and Veterans of Foreign Wars Post 2111 will sponsor a Veterans Day celebration from 9 a.m. to 12:30 p.m. tomorrow at the Chula Vista Memorial Bowl, 385 Park Way.

Real estate is a local business driven by local market conditions and bought and sold (mostly) by local people.

How about a market that is fueled by an industry that has experienced steady wage/earnings growth since 2003 and is about to have its best year in ten years?   That would be the securities industry and that industry is headquartered in New York City.

This article, published today in the Wall Street Journal, highlights that investment bankers, traders, and brokers have experienced a boom this year.  They're about to be rewarded in early 2007 with HUGE bonuses!  Where do you think those bonuses will go?  Art?  Maybe.  Fancy Cars? Well, maybe but parking is so tough it seems almost silly to buy a Bentley in NYC.  Exotic Travel?  Maybe, but it's hard to believe that the investment bankers will spend a month or two in Fiji when the market is heating up.  You gotta make hay when the sun shines.

I think you're going to see those huge Wall Street bonuses funnel into Manhattan real estate. 

This article, in the New York Times, outlines the compensation structure for various securities industry positions.  Most notable was the fact that although the securities industry accounted for only 4% of the labor force in NYC, their compensation accounted for 20% of the aggregate compensation.  And it's going up!  The average Managing Director is getting a bump from $1.2 million to $1.5 million.  First year B-school grads are getting close to $300K on Wall Street. 

New York real estate has sagged a bit this past year like the rest of the country.  These bankers and traders are professional opportunity seekers.  Give an opportunity seeker some extra cash and a soft market and you have the makings of a pretty nice seller's market. 

I read a funny article about a few of my colleagues here in San Diego and the success they've had marketing to the MySpace generation.  It was in the Voice of San Diego and this article featured an agent named Seth O'Byrne.  I have communicated with Seth a few times and can tell you that this is a young man that has his pulse on the 20 something market.

Nicolette Fontaine was featured in this article about her marketing on Myspace. Active Rain was also mentioned in this article by Jessica Diaz.

Business Week writes about how the MySpace Generation is used to receiving information instantaneously.  It's obvious that technology and speed will be quick to capture these teens and twenty-somethings when they start buying homes in 3-10 years. 

READ ON

The California Association of Mortgage Brokers, the same organization that sponsored the trade show that featured completely irresponsible lending practices,  has drawn a line in the sand with this statement that all loan originators need to be licensed. 

"We believe there should be a barrier to entry besides being able to fill out a job application form," said Michael Faust, CAMB's government affairs chairman.

Sounds pretty good, doesn't it?

Not to be outdone, the California Mortgage Bankers Association, fired a shot across the bow of the brokers' association with this statement refuting their demand today.

Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said his group objects to the licensing measure, saying that Department of Corporation licenses have better consumer protections."Employees", he said, "must receive training before they can set up loans for homeowners, and their employers undergo regular audits and must meet minimum capital requirements."

The bankers make a pretty good case, also.  They are held to higher regulatory audits than DRE licensed brokers. 

What about the federally-chartered banks?  Federally chartered banks are exempt from state licensing and these guys are conspicuously absent in their comments.  The banks will never encourage their employees to get originator's licenses because it makes their originators marketable.  Why should they?  The federal banks don't play by the same rules as the rest of the originators anyway !

Are there close to 1 million people originating loans in California as the mortgage brokers suggest?  I think not.  That would be one originator for every 38 people in the state or one originator for every ten familes.  I think this is just another protectionist ploy by an organization with declining membership.  The press release also calls for new disclosures for "exotic mortgages".  Remember this is the same organization who encouraged lenders who offer  100%, stated-income, negative amortization loans, to exhibit at their San Diego trade show.

I think this is CAMB's last straw to show its declining membership that it has value.