America's #1 Mortgage Broker

Canadian investors are looking at California real estate, as a good long-term investment, because of the devaluation of the US dollar.  Simply put, the falling California real estate market, combined with a weakened and leveraged US economy, is giving Canadian investors a double whammy of a chance to own prime, California properties, cheap.  This series will attempt to educate Canadians, looking to buy California properties. 

How does the exchange rate work?

In January of 2007, a Canadian investor, buying a $300,000 (US)  property in Long Beach, CA, , would have to pay $352,600 (Canadian).  That was based on an exchange rate of $1.17553 Canadian to $1.00000 (US).  Today, the exchange rate has dropped to $.98188 Canadian for one US dollar.  That means that the same property in Long Beach, would costs $294,300.  

Irish investors have flocked to American real estate for it's potential and relative low cost.  Ireland has experienced an economic revolution over the past 15 years.  The transformation from agrarian to industrial to information-based economy has catapaulted the Irish to the second highest per capita income in the European Union (second to Luxemborg). 

The property inflation in the Republic of Ireland has been equally as astounding.  The growth in the construction industry and estate broking affects some 1 in 5 Irish workers.  Today, the Irish property markets are experiencing a similar fate as their American cousins:  easy credit policies combined with privitisation of State-controlled properties drove property prices to an almost unaffordable level.

Wise Irish property investors recognised an opportunity in American real estate with the steady decline of the dollar compared to the Euro.  Seeking to diversify their property holdings, Irish investors have been steady buyers in the "Aer Lingus Cities" CONTINUE

The problem? Lenders made loans to San Diegans, in 2005, based on guidelines that were meant for Houstonians. San Diego appreciated some 100% or more in the period of 2000-2005; far above the expected appreciation rate. Reversion to the mean theory dictates that underperformance is in the cards for San Diego for 2006-2010 while out performance is expected for Houston. The national data hid the fact that the riskier loan product was made, an a very risky asset in San Diego, in 2005.

Money is ammoral and naturally flows to higher returns. Residents of industrial cities, like Philadelphia, took advantage of the easy credit revolution and migrated to Cape Coral, FL. It was rational, in the Philadelphian’s mind, to bid up the price of Southwestern Florida real estate because the borrowing terms were so inexpensive. The Philadelphian’s perspective of value was 175% higher than a Floridian’s. The problem is that the underlying economic base didn’t support the appreciated price in the boom town; this removed the ability to service the new debt. That combined with the now risky collateral, made for the lending disaster we face today.

The real reason for the sub prime mortgage market collapse?

CONTINUE 

A Millionaire Real Estate Lender is a mortgage advisor who knows how to help Millionaire Real Estate Investors build their net worth.  Recommending appropriate loan solutions, for aggressive investors in the wealth acquisition stage of their life, has been a strength of mine since I started my lending career.  I draw upon my background as a securities broker, apply suitability principles, and integrate the loan into a financial plan.  This series will deal with the principles taught in Gary Keller's book, The Millionaire Real Estate Investor. 

The Chapter about MythUnderstanding will be broken into two parts:  Personal Myths and Investing Myths.  The author created the word "mythunderstanding" because these fallacies are part myth and part misunderstanding. 

The Three MythUnderstandings About the Way People View Themselves as Potential Investors:

GET THEM BY CONTINUING HERE 

A Millionaire Real Estate Lender is a mortgage advisor who knows how to help Millionaire Real Estate Investors build their net worth.  Recommending appropriate loan solutions, for aggressive investors in the wealth acquisition stage of their life, has been a strength of mine since I started my lending career.  I draw upon my background as a securities broker, apply suitability principles, and integrate the loan into a financial plan.  This series will deal with the principles taught in Gary Keller's book, The Millionaire Real Estate Investor. 

The Overview chapter introduces the reader to Mr. Keller's philosophy towards succes as a property investor.  He opens up by explaining the importance of modeling.  Bill Thomason, NLP Trainer, defines behavior modeling: 

Behavior Modeling is a primary way that humans learn.  Children "model" or copy the behaviors of the people in their world.  School children, for example, emulate their heroes.  As adults, people tend to identify with people at their own economic level or the one just above them.  In business, you may look for mentors or coaches to guide your career path.  You model behaviors from people whom you perceive as possessing the qualities and abilities you want to emulate. 

CONTINUED on www.MortgageRatesReport.com

Recommendation Change:       It's time to start floating those loans!  We should be watching mortgage rates drop lower these next 3-7 days. 

Do not lock in your mortgage rate at application; lower rates may be here next week. 

Two big numbers came out today:

1- Core CPI- That's the inflation number without the oil and food prices figured in, was lower than expected.  This means that prices of goods and services are feeling the pinch of higher oil and food prices

FULL REPORT 

Broker-controlled blogging was a hot topic this weekend. I tried to raise some eyebrows (and awareness) with my speculation about the internet land grab the employing brokers and banks might try.

I think a few things might have gotten lost in the translation. While I said that the brokers and banks will claim that it is a compliance issue, I believe that the REAL reason will be that they want to control the marketing channel to the consumer. Here’s what I said, over on Active Rain:

That will put pressure on the large companies to provide higher compensation to the more effective sales agents. That, will be the problem. Large real estate brokers and banks will severely curb the weblogging efforts of the individual sales agents in the name of “compliance”. In short, the behemoths will say that they can not adequately protect the consumer from the unsupervised local messages being offered by its sales agents. That, will be bunk.

The end-game play, the brokerage firms and banks will make, will always be about the money. Control of the customer has always been a competitive advantage for a large broker or bank. If that competitive advantage is lost, the value proposition of a large firm is lost. They won’t tolerate that loss.

What I’m saying is “The Compliance Argument is Crap- They Just Want Your Money“. I’m telling you this so that you are prepared when the NAR comes at you with the “Internet Compliance Memorandum” from their convention next month. I have no inside information, it’s pure conjecture on my part. This is, as Greg Swann would say, “evil dressed up in a Brooks Brothers suit”. My opinion isn’t biased against big brokerage firms, it will be even worse for the mortgage originators. Our evil is dressed up in custom made suits with Italian loafers- there is no way the big bank Presidents will allow their “salespeople” to live better than they do.

Look at the follow up articles on Active Rain:

continue 

The real estate weblogging phenomenon is catching fire like desert timber in the summer.  The Active Rain Real Estate Network, the little engine that could, has grown from less than 5000 members to over 50,000 members in a short period of time.  The attraction?  Talking about the future around the virtual water cooler. 

Long Beach Realtor, Laurie Manny, said, "The beauty of real estate blogging is that it gives agents access, now.  Access to people whom we never would have dreamed of meeting a year ago."  Ms. Manny was talking about the quick but meaningful connections she made through her participation on the RE.net.  Her weblog, Long Beach Real Estate Home, has risen to to the tops of the search engines.  Her notoriety on Trulia Voices has given her access to executives at many of the RE.net companies.

The debate about "successful blogging" is underway although the trend is still in its infancy. Should a Realtor or loan originator pursue search engine optimization or build a community?  Should they own the technology or use proprietary platforms?  How much time should spent on real estate weblogging?  Will it generate leads or be used as a "newsletter' to stay in touch with old customers?  

As the trend grows, large real estate brokerage firms and lenders are watching their salespeople build their own brand through weblogging.  Traditional real estate brokerage firms and banks rely upon the economies of scale to advertise heavily to the consumer.  If the sales agents are developing independent marketing communications platforms, the value proposition of a large broker or bank is diminished.  As the consumer eschews traditional media for real estate information for the online medium, the sales agents of the large companies are actually more effective than company itself.  The efficacy of this "new medium" surpasses the ancient practices of the larger and slower companies.

That will put pressure on the large companies to provide higher compensation to the more effective sales agents.  That, will be the problem.  Large real estate brokers and banks will severely curb the weblogging efforts of the individual sales agents in the name of "compliance".  In short, the behemoths will say that they can not adequately protect the consumer from the unsupervised local messages being offered by its sales agents. That, will be bunk.

The end-game play, the brokerage firms and banks will make, will always be about the money.  Control of the customer has always been a competitive advantage for a large broker or bank.  If that competitive advantage is lost, the value proposition of a large firm is lost.  They won't tolerate that loss.

Many weblogging agents and originators will be faced with a hard decision in 2008; maintain an independent blog or continue to work for the company.

Oh...they won't come at you with an economic value proposition, they'll just say it's illegal or "difficult to supervise".

What will you do? 

I'm often asked how I come up with my advice to lock or float the mortgage rate when home buyers read the Mortgage Rates Report.  Well, I read a lot, that's for sure.  I read Bloomberg.com and the Mortgage Market Guide research which gives me access to real-time quotes of mortgage-backed securities.  The charts I review, of mortgage-backed securities prices, give me an idea of what the short-term trend looks like.

Let's look at today's chart:

This chart show the prices of highly-traded mortgage-backed securities.  I show it with permission from the Mortgage Market Guide.

Two things are worrying me now..continued on www.MortgageRatesReport.com