Business Week had an interesting article, though mostly speculative but with enough of a good point to chill your back.

According to Dean Foust in this article, many subprime agents haver jumped the train of reverse mortgage which is believe to be a hot thing in the long run.

OK, reverse mortgage makes a lot of sense for retired couple wanting to enjoy the equity their homes have brought. Scary to think those same people who gave loans to clients who couldn’t handle them, will now turn to reverse mortgages.

It’s an interesting idea and maybe sounding the alarm now will help thwart future problems? Let’s hope.

Another thing is, we are such victims of fashion and trends. After years of Realtor having the worse reputation, now the focus turns to lenders. It’s sad ultimately for people like me and the agents I work with who are actually honest to have to fight an image that isn’t ours.

I found the reason why none of my posts came up. Yikes, I lost a lot of readership.

Wow, it seems the last fews days’ posts didn’t show up. Hum, looks like more work to figure out what hapened.

In the meantime, we jst got back from Miami. I will write about it, architecture and how our cities are so very different.

Check back.

Thanks,

Nick

Not too many lending company can say that: zero losses due to bad debt.

When I saw this article on Seeking Alpha, I was intrigued.

What I read made sense. Northstar appears to be a lending company that played its cards well and is surrounded with level headed lenders. Sounds easy, but why haven’t others done the same thing?

As the sub-prime residential lending slowed down the housing industry, any experts thought commercial lending would face a similar fate.

Why is Northstar’s management so different? They believe their business model allows to take advantage of widening credit spreads and market volatility. They actively manage their diverse portfolios, which allows them to make adjustments as the market changes and manage risk better. This flexibility and responsiveness gives them an edge over the competition.

Their competitive advantage comes from their management team, as every member of their executive board has twenty years or more of experience in the market and many of them have individually managed balance sheets significantly larger than Northstar’s. Even though it seems like a no-brainer to have a well qualified, experience and level headed team, as we have seem and still see daily, it isn’t the case with every company.

I feel the same way for work. Why would anyone go elsewhere but with us? But that’s the beauty of life. There are so many things out there for everyone, good and bad.

Thanks Seeking Alpha.

It is a refresher but according to Robert Bruss, who, may I remind you has not been the nicest friend agents have had in the past, believes buyers have 5 important questions to ask.

It is true, many, many buyers do not ask the right questions.

Robert’s top five questions are:

1- Why are you selling?
2- How much did the seller pay for this home?
3- What defects are there and when was the last time it was inspected?
4- What problems have you had with this home?
5- What s the quality of public schools?

Let’s see now, why are you selling? It looks like a given but only half of the people that walk through my open house ask that question. Obviously, I feel they are serious. It is a very important question.

How much did the seller pay for it? That one, you should ask only if the people bought it less than two years. My thinking is that an old couple who bought their home in the early 60s for $20,000 and sells now at $800,000 has very little to do on today’s price. Plus why do you want to torment yourself with yesterday’s prices?

Always ask about defects are there and what professional services they used to repair what. You might not get a straight answer but your inspector will.

What problems have you ad with this house is part of the above question I feel.

Now schools is important but not for everyone, yet t should. A couple without children will not care much about the local school system, however, a good school system usually is found in a good neighborhood.

I would scind 3 and 4 and ask this other question. Something to the effect of how they determined the price, or if they stayed longer, what would they “redo” in the home.

And more predictions. I’ve always wanted to build a strong spreadsheet and follow what all the “experts” have to say while tracking their reliability. But, other’s have beat me to it and concluded a 50% chance to hit it right for experts.

Now, NAR lowered its 2007 housing forecast:

“Existing home sales should fall 2.9% to 6.29 million units and then rise to 6.49 million in 2008.
New homes sales will now decline 18%, not 14%, but rise to 936,000 in 2008.
Housing starts will fall 20% then rise to 1.52 million in 2008.

Blaming tighter lending standards, NAR believes national median home prices would decline for the first time in 29 years. “

OK, I’m lost here. In 30 years we have never seen a decline? And didn’t I just write about how, since we have been recording prices and fluctuations, homes appreciated on an average 3% to 5?

“Existing home prices will slide 1% with a 1.4% pickup in 2008.
New home prices will stay flat at $246,400, rising 2.2% in 2008.
Cities that sat out the boom suffer less from the bust.”

A good read and a lot of information but again, speculations, speculations…