Monthly Archives: October 2007

Denver

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I’m still in Denver and finally finding some time to catch.

Denver is a nice city, as far as I’ve seen. High altitude, sunny skies and FRESH SNOW!!! It’s actually hard to be stuck in a building all day thinking about that snow and the slopes I could hit. None the less, I am very happy with the seminar. I have learned a lot. So much, I can barely imagine all direction I can apply this.

Coaching is definitely an interesting calling. It’s something that can be used in so many areas of your life. It will come in handy for real estate, for cars and also for coaching. I’ve toyed around with the idea long enough and have finally finished my business plan.

I’ll be back on Sunday.

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Back at Seeking Alpha, Felix Salmon picked up a great article on Secretary Henry Paulson who decries there needs to be more transparency in loan documents.

“Recent surveys have shown that as many as 50 percent of the borrowers who have gone into foreclosure never had a prior discussion with a mortgage counselor or their servicer. That must change.” I hear you.

“We need simple, clear, and understandable mortgage disclosure. We must identify what information is most critical for borrowers to have so that they can make informed decisions. At closing, homebuyers get writer’s cramp from initialing pages and pages of unintelligible and mostly unread boilerplate that appears to be designed to insulate the originator or lender from liability rather than to provide useful information to the borrower. ” It’s refreshing to hear someone finally putting it out there: “It’s too convoluted, how can Joe Schmoe understand it all?”. Well, you get it.

“The most critical facts, including potential future monthly payments, should be on a single page in clear, easy-to-understand language, to be signed by the borrower and the lender. ” This is by far the best part of the presentation. Yes, one single page that recaps everything. That’s all people need.

I beleive ultimately the lending industry will change radically the next few months. Let’s hope things become less convoluted.

Belmont Shore and Ocean Avenue Marathon Woes in Long Beach

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A week and a half ago we had the Long Beach Marathon.

It was strange being woken up at 7 A.M. on a Sunday morning by cheers and screams. I thought the kids a block and a half away were having either an early party or a late one. I was annoyed. Apparently, I wasn’t the only one. I like having a Marathon in our city despite the parking problems being amplified in the Shore and the Heights. I like the cause and the people but I didn’t care being woken up at 7 the only day Virginia and I can sleep.

As I saw neighbors during the day, they expressed the same frustration. Why do they have to scream at 7 A.M. under our windows? Good questions, people don’t always think beyond their box often enough. It happens to everyone.

Later on we went to Gypsy’s. Have you ever been there? It’s one of those places we have continuously been going to since its opening. The owners are wonderful people and the food is excellent. It’s like a local best kept secret. And no alcohol, so bring your own bottle of wine.

It turns out neither were the owner thrilled about the Marathon. Well, it wasn’t the Marathon per se but the fact the city closed both sides of Ocean. After all, the runners only took up one side, why not leave the East bound open to traffic.

As I perused the Grunion I found another article that made mention of Belmont Shores owners who were also less than thrilled about the foot traffic and no stop and eat traffic.

It was very clear no one was unhappy with the fact our city has the Marathon, on the contrary. However it seems it could be better planned to allow business traffic. Imagine how nice it would be if cars could still access half of Ocean and the Shore’s Second Street. People could sit have coffees and lunch while cheer. And as a personal wish, please tell them not to cheer at the top of their lungs at 7 A.M. on a Sunday morning under people’s windows. It just seems like common sense.

The New Lending Age, Long Beach

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It had to happen the lending industry was heading for some serious redesigning.

Case in point:

“We’re going back to lending the way it was in the 1950s and 60s. Mortgages will be made mostly by bankers and their employees, and compensation will be based on who’s making good loans and who’s not.”

Yes younger folks, that’s how it used to be done before. Face to face, serious talks and knowing the borrowers real history. Away the nonsense of past years of taking the words of optimistic stated incomes (when people said how much they earned without proving it). Back to good old lending.

It actually makes sense. Too many people milked the system too long. Banks like Bank of America have been buying out smaller lenders and are casting their strategies to become the lenders of tomorrow.

Thanks Calculated Risk.

Breaking The Californian Diesel Wall, Long Beach

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One thing that always amazes me is how popular diesel engines are in Europe and how little market share they gained here.

I’ve driven small car with Turbo diesels that really thrilled me; VolksWagen Golf, Peugeot 205. These cars were fast, had an incredible amount of torque and you didn’t need to shift nearly as much, for good or bad. It’s too bad they never made it here. One advantage diesel has in Europe that we don’t have is that it’s cheaper at the pump. Diesel is more expensive here, strangely enough for petroleum less refined than gasoline.

It seems Mercedes is out to woo us Californians into diesel. California has stringent emission codes that have influenced neighboring states. The German, and mostly BMW have made great strides in improving diesel engines. Less pollution, more power, Audi’s win at Le Mans with a diesel engine, etc.

With Mercedes’ MB E320 BLUETEC, the company wants to make us think twice about diesel. This could start a new trend here.

DataQuick Numbers Down Again, Long Beach

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Nothing really new with the September numbers from DataQuick, it was abysmal.

Here are a few numbers that struck me:

5,014 new and resale houses and condos sold in the nine-county Bay Area for September. It’s down 31.3 percent from 7,299 in August, down 40.1 percent from 8,374 for September 2006. The strongest September was in 2004 when sales totaled 12,868.

Last month was the slowest September in DataQuick’s statistics, which go back to 1988.

To go back to my post of a few days ago saying how many lenders are telling us to go out there and get it:

“”A lot of escrows just didn’t close in September because the buyers couldn’t get financing. Some of those sales might close this month or next, but many of the deals are going to be put on hold or die on the vine. Jumbo financing has become more available the last few weeks, but lenders are being more cautious than before, and the loans cost more,” said Marshall Prentice, DataQuick president.”

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying was $2,973 last month, down from $3,171 the previous month. It was up from a year ago, however.

Well, there you go folks. How about making sure those homes are priced to sale? And even then, how about finding serious lenders that will back you up until the last day of escrow? I still like this period. It’s a redefining moment.

Thanks DataQuick.

Apple, Blackberry, Crackberry and Lack of Customer Service, Long Beach

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So what do all of these have in common above? Nothing much, much to my dismay.

11 months ago, I did away with my trusted and faithful Motorola i2000. A brick in todays’ standards but it worked, never failed me and never broke down on me.

I knew I was going to face some problems getting the Blackberry device communicating with my Apple laptop. Blackberry is notoriously a Windows company and treats its clients accordingly. I am used to Apple’s stellar customer service. When I got in touch with Blackberry to help me figure out the crashes and quirks of their recommended third party synchronization software, I got the usual ping pong affect, got referred back and forth between both companies. After giving Blackberry all my logs, all my information, all they asked me, last I heard of them three months after initiating a trouble ticket was they were still working on it. Yeah, I already spent my money, so I can kiss my customer help goobye.

4 months after my spanking brand new Pearl Blackberry, it became a CrackBerry. Repairing the screen of this $350 gizmo was a $150 deal. Seriously? Are you guys alright?

Now I’m usually pretty hands on and technically savvy. Some people have had minimal problems integrating their Pearls and Apples (puns intended), I was one of the vast majority that learned the hard way, not all companies treat their clients well like Apple.

In the end, will I ever buy a Blackberry? Most very likely never. Would I buy an Apple product? Why not, the experience has been very good.

It’s too bad companies like Blackberry, as many others just don’t get the importance of good customer care. Treating your clients well, going the extra mile is what wins people over in the end. It’s just so simple but when you focus mainly on your bottom line, you miss the nuances that pay out better in the long run.

Oh, and 8 months after I bought my Blackberry, Apple came out with the iPhone!!! Still, I wouldn’t have gone over to Cingular or AT&T.

The World According To Bernanke, Long Beach

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It is always great to hear from powerful people in times of trouble than after words with hindsight books.

In a recent article in the Federal Reserve website, Chairman Bernanke gives insight as to how he sees the situation.

“… despite a few encouraging signs, conditions in mortgage markets remain difficult.” OK, OK, I know, we know, let’s skip to the beef.

“The markets for securitized nonprime (subprime and alt-A) loans are showing little activity, securitizations of prime jumbo mortgages reportedly have increased only slightly from low levels, …” OK, we also know this, but what else?

“These continued problems suggest that investors will need more time to gather information and reevaluate risks before they are willing to reenter these markets.” Ah, right on the spot according to what I was saying, who wants to lend money in a market where prices are going down? In other words, why would a lender get stuck with a home that is worth less in six months than at the time of the loan? Answer: People who will move in for a long time. I know, it’s hard to predict.

“The further contraction in housing is likely to be a significant drag on growth in the current quarter and through early next year.” They are finally admitting real estate is a big part of our economy. As a reminder, when Alan Greenspan was Chairman, he didn’t believe that was the case.

The rest of the article goes on about how the Fed will “watch” for market and “keep a close eye” on what is happening. As usual, the Fed don’t say much and are playing a cat and mouse game. They probably want exports to pick, even if it means a weakened dollar. When the threshold is crossed, interest rates will go up and so will the value of our currency. Until then, they will just watch. Interesting read.

Off For A Week

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I will be out next week so I will only have a post a day, done in advance.

I will be in Denver for a seminar training conference. It will be interesting. I will write more on it when I get back. Plus, I’ve only driven through that city.

Thanks,

Nick

Lenders Heal Thyself! Long Beach

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OK lenders, hear me out, take care of your business and stop telling me how to run mine!

Ever since the August sinking of the joy ride lending businesses have been on these last few years, a fair amount of them are all the sudden courting us again. Lenders are an interesting bunch. They wine and dance us hoping for referrals, then when all is well, you won’t hear much from them. However, when the market slows down, as it did back in August, they show up in your offices telling us what we need to do to be successful. Huh, come again?

This is a semi-rant really. I know a lot of good, honest and ethical lenders. The relationships are forged over time with a flawless way of conducting business. But as of late, we have a seen many lenders coming to our offices trying to rally our spirits. Well, my spirits are fine. I am hopeful despite the negative news and this market is readjusting to normal levels. My view is purely pragmatic and realistic. Frankly what really irks me is someone outside my profession telling me how to run my business. These professionals give us pep talks, motivational speeches and cheerleading to get us out there and sale, sale, sale. Hum, yes BUT…

If I hear any one telling again this is a great market, there are homes to sale, foreclosures and short sales are not that bad after all (yes, I agree) and all we need to do is get off our bums and change our mentality, I am going to retort one very simple and effective thing. Why don’t YOU go out and sale for a while. Then in 6 months or so, tell me how well you’ve done. Then and only then, we may talk about different marketing tactics and all. Until then, I am not here to feed you an endless stream of potential buyers.

I am in the business of helping buyers find and buy their dream home. I am in the business of helping sellers sell their homes in the best possible way. I am not in the business of being told by salespeople how to run my business, nor go out and find clients for anyone, nor feed into some optimistic frenzy about how great this market really is if I change my mind set. I am a people person and I love people interaction.

Truth of the matter is that my mind set is realistic. I see buyers and sellers on a daily basis. Many sellers are still emotionally attached to returns on investments based on unsustainable price extrapolations calculated with yesterday’s figures. Well, today is today. And I see almost all buyers saying they prefer to wait and see how long it will last and how low the numbers will drop. This is, at the best case a stall mate. If sellers insist on high prices and buyers insist on waiting, well, it takes no rocket scientist to see that nothing happen. In fact, it is always a good time to buy and sell, it depends on what you are doing with it. If you plan on living in your new home for a few years, then it is a good time to buy. If you plan on flipping it, then I suggest investing elsewhere. Until people stop seeing homes as investment in California, we will have problems. A last thing to think about, with current rates so low, remember that cheaper homes prices tomorrow usually come with higher interest rates. At least that is what history has always shown. So buy high now and pay relatively little or buy low but pay more interest? You decide.

The real questions is getting people to place themselves in other’s shows. How would you feel as a buyer? How would you feel as a seller? What can you do to make it better and work?

Until then, lenders, please abstain from telling me how to run my calling. Please abstain from treating me like a money crazed drooling rat trying to get richer than rich. I am not. Please refrain from trying to rally me up when the money is harder to get from you and the real problem is in the psyche of buyers and sellers. I am not a marketing spin doctor. I help sell and buy homes because my passion lies with people finding the place of their lives and if I can help the transaction go smoother, I will give it all of my professional knowledge to avoid contract pitfalls. Period. I am not a cowboy, I don’t gather cattle.

Now may I suggest something for all lenders trying to pep us up? Heal thyself first! Learn when to say stop, when not to bother people, when not to push when people clearly cannot do it. Don’t come to me for business until you refer people to me. And last I checked, I have fiduciary duty to my clients. That means that by law, I have to look out for my client’s best financial interest. You don’t. I will continue to work with the lenders I trust in the meantime. Hope this blows over soon because it is frankly annoying and distracts from the work at hand.