I Survived Real Estate 2008 Part Seven (Full Bio)

Part seven of “I Survived Real Estate 2008” picks up with the panel interview from the last session where Bruce talks about how Wall Street keeps calling to find out when bottom is so they can profit even though they are part of the reason we’re in this current situation.

Rick talks about large pools of money purchasing these loans at deep discounts and then fixing the principles of the people in the homes.

Bruce then responds by talking about HR3221 about how HUD can buy first trust deeds at a discount and how the new structure would allow them to alter the loan of the person in the property. Bruce worries about the ramifications of this program. It is limited in who can apply since it applies to adjustable mortgages only. The people who really get burned are those next door who qualified for a fixed loan and are making the payments. They did everything correctly but they don’t apply for the principle reduction. With California being a non recourse state, Bruce worries the dominos that might fall. Bruce then asks Philip Tirone if bailing from mortgages is becoming more acceptable.

Philip says clients don’t care about the moral issue of walking away; they are more concerned about the credit ramification. Philip talks about the raised loan limits and how everyone thought it would make a difference. They think things are going to help but when you get into the legislation, it doesn’t.

Bruce agrees with Christopher in that the median price has to become more reasonable. Christopher thinks another 6 months and everyone will qualify.

Tommy Williams brings up the very important point of moral hazard in letting something like a bailouts occur. Not holding consumers accountable sets up a larger problem for the future.

Bruce asks Christopher about Merrill Lynch taking .22 cents on the dollar for a $30 billion package of CDOs . He says they actually got 5% in cash and carried back a note and guaranteed the pile. Bruce asks whose money was actually lost. Christopher says it was the consumer investing in their company. Christopher says this buyout is another instrument and accounting mechanism. The financial system, Christopher says, is an absolute mess. All banks are having a difficult time. We’re having an issue with cash because of it.

Bruce asks Christopher about how FDIC can handle writing these sort of checks and if the government will just keep writing checks. Christopher says that they’ll have to be bailed out as well. Bruce asks if stagflation will be a problem. Christopher says he doesn’t think it will be an issue.

Bruce asks Rick Sharga about the difference between a bank owning a loan and the individual owner. Rick explains how the process works. Banks can accept the losses but the private investors can’t as easily take the hit. These loans are not as flexible as the securitized loans. Bruce talks about HR3221 and how the second must be wiped out first.

About 10% of the foreclosures list in Riverside being non-owner occupied but 70% out of the 90% that are owner occupied have simultaneous first and second at the time of purchase. Almost 100% of these properties are 100% financed.

Joel Singer brings up refinancing. The number of first payment defaults is huge because of bad credit and no skin in the game. The good news, he says, 2 out of 3 will stay in their home most likely. However, he is much more concerned about price drops then the mortgage resets. He thinks more people will walk if the prices get too low.

Bruce also brings up unemployment and how it will continue to go up. He says out migration will then probably force more to leave.

Bruce asks Annemaria if loan tightening happens during every cycle. Annemaria talk about how there’s a cycle and she thinks that this will never happen on this scale again. Lenders are in sheer panic because of what’s gone on and all the legislation now being presented. It’s a little late to implement since everyone has already got in. Bruce feels once we get into a safe market, the next person will dream up the next special mortgage.

Christopher says financial investors are always slipping in risk and hiding it. Incentives from Wall Street are bazaar and we need to not trust them so this doesn’t happen.

Bruce sees the foreclosures coming as being a huge problem and much worse then the 90s. In the 90s we had two times as many sales as we had foreclosures. This year, we’ll have two times as many foreclosures to sales.

Joel Singer says the 90s downturn was caused by unemployment. There were 7 years where prices were flat. Joel is curious to see if the market will clear faster because of the steep price drop. He thinks we have to make the market clear and he feels that it really already has. Joel is stunned at how many sales are currently being made and he doesn’t think it’s investor purchases. It’s cheaper to buy then rent in some places. Builders are having a hard time competing because homes are being bought below replacement costs.

Bruce talks about his Grand Junction, Colorado experience buying all of HUD’s condos. Bruce set all the costs at $8,000 a condo but no one would buy because the market was too scary. Emotions definitely play a role.

Rick says he talked to a man who handled the REO assets at a credit union and the man was wondering if RealtyTrac could supply him a list of who owned the first. Rick was surprised since he thought that would have been information that was gathered. The man said they did not have the information as little information was gathered on the first mortgage and little was taken on the homebuyer. More next week or see YouTube or Google video for the entire program. Next week is the final week of the audio.

The following partners and sponsors without whom the event would not have been possible:

Platinum Sponsors:

The San Diego Creative Investors Association (SDCIA): sdcia.com

Investors Workshops: investorsworkshops.com

Frye Wiles: fryewiles.com

Proxibid: proxibid.com

White House Catering: whcatering.com

MVT Productions: mvtpro.com

Pechanga Resort and Casino: pechanga.com

The Denver Nuggets: nba.com nuggets

The Chicago Bulls: nba.com bulls

The Cleveland Cavaliers: nba.com cavaliers

Gold Sponsors:

7 Steps to a 720 Credit Score and Philip X. Tirone – 7stepsto720.com

Chicago Title – ctic.com

Elite Auctions – sellwithauction.com

Foreclosure Trackers – foreclosuretrackers.com

Investors Resource Center of America LA and Steve and Robyn Love – irca-losangeles.com

Las Brisas Escrow – lasbrisasescrow.com

National Club of Real Estate Investors and Sam Saddat – ncrei.com

Northern California Real Estate Investors Association (Norcalreia) and David Granzella – norcalreia.com

North San Diego Real Estate Investors and Linda Wessels – nsdrei.org

RealtyTrac – realtytrac.com

RE Ventures and Michael Pines – reventuresrealty.com

Real Estate Investors Club of Los Angeles and Phyllis Rockower – realestateclubla.com

Real Wealth Investor and Scott Whaley – realwealthinvestor.com

Saddleback Valley Communities – svc4.com

Silverstar Finance and Janet French – silverstarfinance.com

Sunset Hills Memorial Park and Mortuary – sunsethills.cc

The Mission Inn – missioninn.com

The Mortgage Equity Group – http: themeg.net

The Naked Real Estate Investor Club – Rosie Nieto – nakedrealestateinvestorsclub.com

The Short Sale Processor and Nick Manfredi – theshortsaleprocessor.com

Virtual Real Estate Tour and Layla Tusko – 1wealthcreation.com

Wholesale Capital Corporation – wccmtg.com

Bruce Norris President of The Norris Group (Full Bio)

This week we shake things up as Carl Angeloff, a radio celebrity in his own right, interviews Bruce Norris (President and CEO of The Norris Group) in preparation for “I Survived Real Estate 2008” where Bruce will act as investor representative and moderator.

Bruce and Carl discuss how Bruce got started in the business, Bruce’s first foreclosure experience, Bruce’s “California Crash” report written in January 2006, why Bruce wrote the report, Bruce’s mid-90s report called “The California Comeback” predicting the boom, HR3221 and his view of the solutions it presents, what the potential consequences are from HR3221, California being a non recourse state, when Bruce thinks this downturn will end, what things he looks for when predicting a boom, Bruce’s prediction for the remainder of 2008-2009, the percent increase in foreclosure numbers, what 2010 will hold, why this downturn happen so quickly, this downturn compared the 90s downturn, why the inexperienced got surprised, what The Norris Group does today, purchasing California REO properties, the bank taking 31% of what they were owed, what skills are needed, who the typical buyer is in this California market, the good points of HR3221, what kind of house The Norris Group likes in a downturn, why inventory preferences changes depending on the California real estate market, how The Norris Group fixes the houses, why condition and price are important, why cities need inventors to fix properties, what inventory Bruce dislikes, why Bruce doesn’t like corner houses, what we can do now to help solve the problems, the thought behind I Survived Real Estate 2008, isurvived2008.com.

Bruce Norris is an active investor, hard money lender, and real estate educator with over 25 years experience. Bruce has been involved in over 2,000 real estate transactions as a buyer, seller and money partner. Renowned for his ability to forecast long-term real estate market trends and timing, the release of The California Comeback in 1997 gained him much notoriety and its accuracy of the extensive report led many California investors to financial freedom. His January 2006 release, The California Crash, is an in-depth look into the California market correction and the statistics behind Bruce’s predictions.

Bruce speaks and debates throughout California and has been a guest speaker at the California Builders Industry Association, Appraisal Institute, Learning Annex, Real Wealth Expo, Foreclosures.com, several local and national investment clubs, and Realtor associations.

Bruce has contributed articles to many real estate magazines and newsletters including RealtyTrac’s Foreclosure Newsletter, Creative Real Estate Magazine, AOA Magazine, and the Daily Commerce. He has also been featured in The Wall Street Journal, The New York Times, Fortune, Mortgage Banker Magazine, Money Magazine, The Orange County Register, and numerous others.

Bruce is now host of his own radio show on KTIE 590am where he interviews real estate industry leaders. Guests have included Frank Nothaft with Freddie Mac, Peter Schiff of Euro Pacific Capital, Leslie Appleton-Young with C.A.R., Alan Nevin with the CBIA, RealtyTrac, PIMCO, PMI Group, REDC, HUD, National Auctioneers Association, and the Center for Responsible Lending to name a few.

Bruce is currently on the Board of Advisors at Chapman University’s Roger C. Hobbs Institute for Real Estate, Law and Environmental Studies.

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Richard Lambros CEO of the Builders Industry Association of Southern California (Full Bio)

Bruce Norris is joined this week by CEO of the Builders Industry Association of Southern California and panelist for I Survived Real Estate 2008, Richard Lambros. Richard and Bruce discuss the current market, when the slow down was anticipated, how much worse it’s been than expected, percentage off in building permits in Southern California, how this downturn differs from the past downturns, the speed of deceleration, the leading factors causing the problem, the credit market getting tight really causing problems, light at the end of the tunnel, HR3221 and how it will change and help the market, stabilizing credit markets, helping the foreclosure issue, how HR3221 will help builders directly, FHA and the new loan limits, why it’s so important that limits have changed, median home prices, supply shortage of housing, homeownership levels and how California compares to other states, affordability, misconceptions that builders make huge returns on projects, cities adding fees during a boom, cities focusing on product that produce taxes and creating fees for product that does not, how some cities are actually helping by differing fees in this down market, if a big budget deficit is a concern for the building industry, some cities actually putting together incentive packages to stimulate building but a deficit causing a decline, Prop 13 and concerns, the Builders Industry Association and legislation and how the BIA is involved, how builders are highly regulated, green building and zero net energy homes, the BIA’s stance on green, how California already builds some of the most energy efficient homes in the nation, construction loans in the current market and lenders willingness to lend for building, land prices in the current market, how builders took bad outlooks in a booming market, the statistics builders watch that will suggest a comeback, biasc.org.

Richard Lambros is the Chief Executive Officer of the Building Industry Association of Southern California (BIA/SC), a non-profit trade association representing over 2,200 member companies involved in all aspects of the building industry in the six-county Los Angeles metropolitan area. The 38,000-square-mile region is home to over 16-million residents.

Richard is responsible for the day-to-day management of the sixth largest local homebuilding trade association in the nation and the largest local association in the state. He works with BIA/SC’s Board of Directors, six chapters and twelve councils to craft and implement strategies that will grow the size and strength of the association, provide valuable member services, advance industry causes and create a pro-housing climate that is conducive to sustained housing growth in Southern California. At BIA/SC, Richard has utilized his wealth of political, business and association management experience to help the association reestablish itself as the leading regional voice for the homebuilding industry. His efforts and skills were recognized nationally in 2004 when he won the National Association of Home Builders’ (NAHB) “Executive Officer of the Year Award.”

After nearly winning an election in 1996 to represent California’s 56th Assembly District, Richard served a two-year term as Executive Director for the California Republican Party, where he managed the administrative and political activities for the largest state Republican Party in the nation.

Prior to his political post, Richard spent over 10 years representing the interests and efforts of the housing industry. He served as the Vice President and Director of Public Affairs for the Apartment Association of Orange County (AAOC) and as Director of Governmental Relations for the Rancho Los Cerritos Association of REALTORS©. His years of service and contributions to the housing industry earned him special recognition in 1996 as the Alliance of Real Estate Associations’ “Legislative Advocate of the Year.”

A second-generation California native, Richard was born in Los Angeles and raised in Downey, California. He attended the University of Southern California, where he earned a Bachelor of Arts degree in Political Science. Richard is married and lives with his wife, Colleen, and four children in Fullerton.

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Annamaria Allen CEO and President of The Compliance Group (Full Bio)

Bruce Norris is joined this week by President and CEO of The Compliance Group and panelist for I Survived Real Estate 2008, Annemaria Allen. Bruce and Annemaria discuss if the current mortgage meltdown was caused by relaxed guidelines or cause by lenders not following guidelines, if compliance issues are federal or state in nature, what state auditors look for when doing audits, what auditors are trained to do, where fraud was most prevalent, example of loan fraud, stated income example, what makes a loan more marketable, the important of compliance and quality control in loans, things lenders might do that makes it unlikely they will sell a loan, appraisal issues in the current market, declining values and lenders not understanding markets, the current market for refinancing, the psychology of the consumer when the market is going up, the difference between mortgage broker and a mortgage banker, who decides what the rules are for the mortgage industries, how new ideas and rules are suggested to decision makers, lobbying for change, the loan compliance guide, if passage of HR3221 will change things, how quickly new rules are implemented, non-owner occupied financing currently available, how the industry sees non-owner occupied financing, thecompliancegroup.com, mymortgagelicense.com.

Annemaria is President and CEO of The Compliance Group as well as the Founder of the company (2001). Annemaria has an extensive 20-year background in the mortgage lending industry and has worked for several large financial institutions as Compliance Manager and in mortgage banking. She is an ABA Compliance Graduate from the University of Oklahoma, and has received training in MBA, ABA, and FNMA and Freddie Mac requirements. She is a member of the MBA, CMBA and has Chaired the Sub-Compliance Committee of the Mortgage Quality Assurance and Compliance Committee. She is much in demand as a public speaker, is a published author and seminar participant, and has attended both the University of Oklahoma and Palomar College.

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