The Norris Group Blog

California Real Estate Headline Roundup

Posts Tagged ‘short sales’

« Older Entries

264-TNG Radio – Mike Novak-Smith and Ted Boeker 2-11-12

Friday, February 10th, 2012

Mike Novak-Smith

Mike Novak-Smith

REO agent

RE/Max

(Full Bio)

Ted-Boeker

Ted Boeker

Owner and Broker

RE/Max

(Full Bio)

 streamitunesdownloadrss

This week Bruce Norris is joined once again by Mike Novak-Smith and Ted Boeker. Mike Novak-Smith is not only one of the largest REO agents in the Inland Empire, but the nation. Mike is in the top 1% of all real estate agents nationwide and is experienced in REO, short sales, bankruptcies, asset management, and negotiating. Mike specializes in REOs in Riverside, Moreno Valley, San Bernardino, Perris, Rialto, Colton, and Corona. Ted Boeker is the owner of the company that Mike is at and has brokered for RE/Max Results in Moreno Valley. Having started the company in 1989, Ted has vast experience in real estate and has been able to train and lead 35 of Southern California’s highest producing real estate brokers and agents to close deals quickly and efficiently for a variety of clients in commercial, residential, multifamily, and office real estate. Nationwide Home Loans Inc. and RE/Max Results escrow division are associated companies. Before that, Ted practiced law.

With short sales gaining momentum, the process has become simpler and quicker. There is definitely an improvement as the banks have geared up because of either direction from the government or the realization that this is the only way they are going to survive the process. They have shifted a lot of people into the short sale divisions and have shortened the timeframes. There is still a lot of work to do, but there are still a few very good negotiators and asset managers. What is needed is probably ten times this many to be able to handle the number of short sales that are coming. Bruce wondered if Mike and Ted have looked at the losses when they compare a house going the REO route as opposed to the short sale route. Mike said often times a short sale can be more effective, but it depends on the timeframes. One thing with the REOs is the REO seller does control the process of using agents who are very effective and can speed them through the process. Mike has watched short sales where they closed the REO in two months, from start to finish, and fourteen months later they’re still on the market and still in escrow with the short sales. If it is done right, the short sale would be a quicker way to do it, but you have to have control of the process or it will run late. Ted agreed with the exception that the banks are improving their timeframes. In fairness to the banks today and the companies that they are shoving the properties off to are doing a good job of getting up to speed.

Bruce said it has to be pretty detrimental to the agent. For example, a first-time buyer could want to make an offer, but not confirm the offer for another five months. You have to think you are never going to do this a second time even if you hung in there for the five months. You will never make another offer for the second short sale because you have to make the decision to go live somewhere. This is a real issue. Bruce said, being a lender, that if someone asked him if he wanted to take a short sale, it would take about 30 seconds to do the math and say yes. So he wondered why it would take months and what is so involved that the problem cannot be solved more quickly. Ted said with his experience today with short sales, they are doing a lot for one particular company. They have found properties that have seconds that nobody knew about and second loans that have been sold in the secondary market, in some cases days prior. The person selling did not know there was a second, was getting ready to close, and found out about the second after they had already sold the property. Now they have to start all over with the company, and the deal falls through.
Ted said the best one they have so far is first holder made a first. The owner came in, took out a second, and somebody in the process forgot to subordinate the second to the first. There is now a $160,000 second that is now in front of a $150,000 first. The very likelihood is the owner of the home is going to end up with a $60,000 first on his house, and the second will be out with 0. Bruce said a situation like this is not very entertaining when you buy one of these in a trustee sale.

On a side note, when you have 80% of sales going either REO or short sale, the assumption is all of those people become renters. However, Ted said he assumes that about half would become renters, while the rest would move in with someone else, rather their parents or move to Nevada where they can get into something free or inexpensive. So in reality, they become non-households. This is a very big impact when you are talking about potential buyers: they are credit incapable and don’t have the money to live with the extra burden of debt. Not only can they not get a new loan, but they can’t afford a household cost. Therefore, for the time being they are downsizing. This is not going to be okay for either party, both the person who owns the house and are living in the back room or the people in the back room. They would like to emerge some day and be able to leave to live in their own place. If you can pick the timeframe, then you will have excess demand. Theoretically, this should happen two to three years from now assuming credit repair happens in two or three years. Having visited Washington, Bruce said a lot of what is happening is very political rather than common sense. If they wanted common sense suggestions, they would probably find it pretty easy to get. Trying to mix it with political acceptance is a whole different story.

In the ‘90s, there was a niche that emerged that Ted and Mike became very familiar with and that investors did a lot of in the ‘80s. When Bruce became an investor, one of the niches was you would have a 7% mortgage existing on loans prior to 1975, and in 1981 or 1982 interest rates were 17%. If you could move that financing forward to another buyer, you could wrap it as it was allowed. There was something called a simple assumption, which cost Bruce $45, so he would his name and tell people to pick his name instead of the other people. Bruce had new liability, so it was like the loan could only be paid back by the residents, and that was its sole responsibility. They changed this being acceptable, but there were hybrids that emerged in the 90s, something of which Ted and Mike were very familiar. They used a specific vehicle to sell somebody a home who probably would not necessarily qualify for bank financing but to get them to be the owner of a home.

For Ted, he preferred a land sale contractor or land contract. He said many people favor an all-inclusive trust deed; but his whole point about favoring land contract was that it did not create a grant deed, which in those days would tip off a lender that a sale had occurred. The recorded document was a contract between the two parties which memorialized the fact that one party would pay the other party a certain amount of money in five years. In today’s world, Ted does not believe one is necessarily better over the other. A lot of times it is the mood of the lender because the only thing to be concerned about is a due on sale clause being aggressively pursued by a lender. Bruce cannot imagine someone’s desk who decides to foreclose on a current loan because there was a breech on a due on sale clause in 2012. He would be fired quickly.

Mike said he has had many lenders tell him they did an AITD or a land contract who did not care as long as they received their money. Bruce said he once sat across from FHA in a meeting, and he said it would be helpful if they could take over subject to the existing loans, and they said they did not care. With a contract of sale, people would most likely relate to it more if you used it like a car sale. A car sale usually has a lien holder who actually has title. They almost hold the pink slip until the deal is made, whatever the deal is. In a car sense, it is usually paid off; but in a land contract it could be a meeting of certain agreed upon prior demands. It could be a demand for someone to pay them for three years, make every payment on time, and then they receive a grant. Somebody is always in distress, whether it is the seller or the buyer who does not have the credit to get a new loan. In the hard money loan side, there are investors buying properties that cash flow, and they have investors who put money in 9.9% trust deed investments. Smart money is on both sides of this table, and in this particular timeframe you could have smart people on both sides of those decisions. It could even be in a property that is almost a break-even.

Bruce bought a house in Moreno Valley two years ago, so the price really had not damaged; but he just had a job shift. He owed $140 on a $135 house and is $5 grand upside down. If he listed with someone and went through the normal cost, he would have to write a $20 grand check to escape. He had someone on one side, who was renting the same house in Moreno Valley for $1300, and he could make a deal to where he puts up a certain amount of money for a security deposit or pay a commission, and he could walk into a payment that is probably $900 with a chance of owning it. This makes more sense to Bruce, and this is why he believes it has a future pretty quickly. Ted said in this case the interest rate in the loan is becoming more valuable. In the old days, the equity was more valuable; and now the loan is valuable.

When Bruce first got into the business in 1981, he refinanced his house at 17 ½% interest, so to have an interest rate sub 4% is completely ridiculous. Bruce said he could certainly envision an 8% mortgage rate five years from now. Bragging rights would be somebody asking you your interest rate, and you tell them a number that is worth money. Lenders will be very sensitive to this at some point, but he cannot imagine for the next few years this standing in the way of asking if the person wants to foreclose or if they should find a buyer who still makes it current. It also speeds up the healing process in that they want stability from going from owner to vacancy. There are already a lot of damaged people, so when you’re talking about 80% of your business being credit incapable of buying a new home, they are payment capable of owning one in this type of circumstance. Realtors can then make a living not having to count on a group of buyers that won’t emerge for three years. It can absorb the next two or three years of people who are still waiting. Financially, we have two underserved groups: the group that just lost their property and the group of investors that could buy and hold rentals. If we would think this out and think about how we did it in the past, we could solve the problem without a lot of damage. If you had a lot of REOs where it was earmarked for owner-occupants and eventually there is a little pile of them that go to investors, there is five or ten of them at a time, and the mandate is to not sell them for five years, then it would not make sense to give these people financing. This would be game over as you would have more business than you would know what to do.

Ted said investors will save the day eventually, even if they are not allowed to because they are creative. Bruce once sold a property to a lady on Polk Street in Riverside, and it was in a land trust with an AITD on top. She received the property, but then she talked to her team later, and the tax person said when she writes her check she will not be able to deduct the interest as it was not in her name. All of a sudden, the lady called Bruce saying she could not understand that she owned the house, and Bruce could not make her team understand that she owned the house. Finally, he asked her if he could just buy the house back from her, and she said yes. He then asked her if she knew how she was going to have to give him the house. She was going to have to grant deed it to him because she owed him.

Bruce wondered if it was a difficult concept for people to understand the difference between a grant deed and a land contract or even an AITD. He also wondered if it was necessary for an escrow to be experienced with it. Ted answered yes to both questions. People do have a difficulty understanding, and it is a little funny because if you lay it out correctly and simply for a person, they do understand it. It is no different than buying anything else and promising to pay an amount and receive a grant deed or pink slip in return five years from now when the person has made their payments on time. Many real estate offices, certainly in the past, have simply refused to do any creative financing. This could include seller-carried financing, AITDs, or land contracts. One of the things Ted has insisted on is he will not do one of those transactions unless he can control the escrow because he needs to know that the escrow people will know how to do it and can explain it to the people whenever they have questions. Having been an investor for 30 years, Bruce has had experience and said there are some escrows that are worth their weight in gold and others where he is simply stunned by the questions people ask.

Bruce wondered if Ted has talked to people who asked to speak to people experienced with escrow, as this is something that would be valuable. Ted said he has never heard this asked, but he said by the time they finish explaining it they are fairly comfortable with the idea. Bruce said if Ted had worked with land contracts in the early 90s, there was not equity progression for quite some time. Ted said he did about 1300 land contracts, three of which actually went into distress and Ted and his employees were threatened with lawsuits. Out of about 1300, they had three that really did not get resolved and went bad. Ted’s feeling is it is a slam dunk, and the key to it is the people have to understand what they are doing upfront. Ted said he had a number of people who came in three or four years, and in those days the length of time was critical. Three years was too short a time; five years was really better. They had a number of people who came in five years and said they simply could not do it as they had either messed up their credit or had another type of distress. They would resolve the issue through either a reconveyance or a deed back. Everybody walked away relatively happy. As long as people understand what they are doing, they can solve a lot of problems creatively, which is what this market needs.

Bruce wondered if people are gun shy in buying right now, to which Mike said pretty much all the news on housing nowadays is negative. If you go to work and tell your coworkers you bought a house, you get chewed out for it, and then it becomes harder to follow through with it. There is not a lot of support for buying a house today other than the cheap interest rates. Mike said he does not really have the deals fall out once they are in escrow, but for many people today just going out into the market takes a lot of courage. Fear is the biggest factor they are dealing with, and this is why Bruce really spends time looking at his charts as these take him away from emotional decision-making, both on the high side and the ridiculously low side.

If you are in escrow for the first time in your life, you wonder if every situation is the same way. All of a sudden you are not tuning into news you probably heard but really did not hear. Now, all of a sudden, you are questioning every decision, even if you are locking in a 4% 30-year mortgage. Bruce cannot imagine this being replicated in our lifetime. Once we leave this cycle, we are going to see a chart that goes the other way for a considerable period of time. Young buyers today do not have any comparison, so they do not think something is a great deal and are not drawn by the 4%. Mike said there were people who walked when 4 ½% deals went up to 5%. He tried to tell them when he first bought a house it was at 13 ½%, and he was happy to get it. That payment emerges from a discounted price, and it is astonishing.

Bruce wondered what basic changes are going to come about because of this downturn in the future of financing for real estate and down payments. He wondered if there will be permanent changes or if we are only going through the emotions politically to make everybody happy. Mike said he believes there will be permanent changes. The problem today is it has become so hard if you are loaning money to buy a house to enforce your contract and get your collateral back if you make a mistake. If you compare it to car sales, they are way up from three years ago because they can enforce their contracts. If you do not pay for your car, they can come take it. With houses, it is almost impossible to enforce your contract now, so the financing is very tough. It will most likely get easier some day at some point, but it will most likely never again be what it once was. It should not be what it was from 2003 to 2008 because that was crazy, but there will probably be a little bit more of a push for a 5% minimum down payment versus 3% with a Fannie or Freddie type of purchase. As Bruce has pointed out very accurately, the VA program has a very low failure rate, and it is 0% down. There is a way to do it, but it is called underwriting and qualifying somebody. The hard money loan business just puts you in the seat of making common sense decisions. What it boils down to is are we likely to get paid monthly and get paid back? The VA is most likely in this same decision process where the whole world is driven by a FICA score, and yet they can make common sense decisions that look like they are going to be paid back and it makes successful loans.

Bruce wondered if interest rate deductions ever bite the dust, but Mike is not as convinced that this will make as big a difference. Most people’s perceptions of their interest rate deductions are much greater than the actual event. They think they are going to save a lot of taxes, but the truth is it is not really a big deal. At 4%, you have a bit of money to pass whatever the basic deduction is. They will probably have to owe $300 grand or more before it is even relevant, but this is not a real factor. There was another document drawn up where there was two sides of a panel where the Democrats and Republicans both had input about what to do about the budget. To Bruce, real estate seems like a piece of low-hanging fruit. We have had a lot of goodies for a while, and Bruce said if he was on the real estate side, like CAR or NAR, he would find a sacrificial lamb to take something back. One of them would be the $500 grand freebie, which occurs every two years. Bruce said he was surprised the people came up with this even though Bruce happened to own properties that would be affected. You have to wonder what percentage of people nationally could ever take advantage of that. If in fact they are going to take some of our things away, Proposition 13 should not be one of them. Ted said he does not know if he would be willing to give this up as it could be pretty damaging. This would allow taxes to go up 2 or 3 times and affect people who own things free and clear. Bruce said he interviewed a well-known economist who said this is why they have reverse loans.

For more information on their escrow company, American Independent Escrow, Inc., you can contact the company itself.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: , , , , , , , , , , , , , , , , , , ,
Posted in Radio | No Comments »

263-TNG Radio – Mike Novak-Smith and Ted Boeker 2-04-12

Friday, February 3rd, 2012

Mike Novak-Smith

Mike Novak-Smith

REO agent

RE/Max

(Full Bio)

Ted-Boeker

Ted Boeker

Owner and Broker

RE/Max

(Full Bio)

 streamitunesdownloadrss

This week Bruce Norris is joined by Mike Novak-Smith and Ted Boeker. Mike Novak-Smith is not only one of the largest REO agents in the Inland Empire, but the nation. Mike is in the top 1% of all real estate agents nationwide and is experienced in REO, short sales, bankruptcies, asset management, and negotiating. Mike specializes in REOs in Riverside, Moreno Valley, San Bernardino, Perris, Rialto, Colton, and Corona. Ted Boeker is the owner of the company that Mike is at and has brokered for RE/Max Results in Moreno Valley. Having started the company in 1989, Ted has vast experience in real estate and has been able to train and lead 35 of Southern California’s highest producing real estate brokers and agents to close deals quickly and efficiently for a variety of clients in commercial, residential, multifamily, and office real estate. Nationwide Home Loans Inc. and RE/Max Results escrow division are associated companies. Before that, Ted practiced law.

Ted opened a business in 1989, which was a peak year. Things changed radically after this, and Bruce wondered if this was something that as a part of his business model he saw changing very quickly or if it surprised him. Ted said he would love to say he foresaw a lot of things, but he really did not see much coming. He had come out of commercial real estate, which died after the 1986 Tax Reform Act; and he said there was nothing in commercial to do so he should look at residential. It looked attractive at the time, but he never dreamed they would see the ups and downs that they have. Ted said it was probably good to start when he did because it did steal him through some of the early tough times. The flexibility of a business model all of a sudden became absolute. You could not do farming and be surviving in the ‘90s, and you could not do it after 2006 either.

Bruce went to a meeting at Ted’s company where he talked, and remembered prior to the meeting when they were talking about volume of sales. They were talking about the number of closings that Mike had and the other people who were ahead. Bruce also envisioned a meeting he was not at in 2006 where everybody is doing pretty well, and he wondered how you tell somebody that is doing well that their model is about to radically change and they have to do it before it actually happens. Ted said it is not easy as real estate agents are a wide variety of people, some well educated and others not so much. The biggest example is 3 years ago Ted started harping on short sales, being able to hopefully foresee what was coming. However, agents two years ago said Ted was crazy and they were not going to do what he was talking about. Ted said today about 40% of his sales are short sales. The agents who refused it are probably gone, and the ones who embraced it are doing relatively well to the marketplace. There are not a lot of easy commission checks anywhere.

Mike has been involved in the REO listing side for 21 years. The first REO ever listed was in January 1991. He worked at a Century 21 Office where they could not give away the REO. It basically paid 5% commission instead of 6%. He made a referral, but he was number 9 one the list; so when they finally got to him he knew the economy was declining. The Persian Gulf War had started, and things were tough. He thought if he could do the deal at 2% he could still make the house and car payments and could eat another month. This was why he carried out the deal. Anybody that declined the deal at the time is no longer in the business. Prior to doing the REOs, Mike’s business model was to show up at a Century 21 office and try to live off the floor time and advertise, which he did well. People would just walk in and say they wanted to buy or sell a house and you wrote up the deal. It was easy. Mike also started in 1989 at the very peak year and then quickly transitioned into unknown territory. The 90s was not replicated and it was not the normal downturn. In the ‘80s we had the radical interest rate change, but we did not have a price decline because we were able to borrow the cheap financing and move it forward to other buyers. In the 90s we took a 5% gradual decline every year for a while, and this was news to everyone who owned California real estate.

Bruce wondered how the 2006-2011 downturns differed from what Ted experienced in the 90s as a business owner. Ted said he did not remember the 90s as well because they never really got up to speed. It took them ten years to get up to a critical mass of agents and holding on through the tough times. The early 2000s were good, and then the falloff was a real shock. When they saw the change in 2008, it was the big change for them. In 2008 and 2009 they had a lot of REOs, and then nothing for two years. This is the biggest challenge he has ever had. They have really been able to tighten up and cut out expenses, but that is the key.

As far as the cycles went, Mike said in the 90s he could predict better what was going to happen. He could see the start and the end game. Now it just seems like it is never going to end. It was easier back then to predict your business than compared to now. You get a lot of curve balls today that you did not get then. As far as quantity of listings in this current cycle, Mike said the peak year for him and for everybody in general was 2008. We did not have the government intrusion that we had in the last 3 years, and this is a big frustration.

Bruce wondered what the following years as far as percentages went after 2008 if that year was a 100% year. Mike said in 2008 it went down about 20% for him and 60% in ’10. In ’11, it picked up a little bit but still went down about 50%. Bruce also wondered if anybody on the lender side is saying to either Mike or Ted that they will not be releasing so many or if they are always telling them to step up. What he heard for a long time was to maintain the staff and not cut anybody back, and this was kind of a mistake. He carried too much overhead through a lot of 2010, and he finally decided he was going to have to cut it back. He is okay with not making any money sometimes, but he hates having to feed it. Now he has the right amount of staff, and if they pay attention and operate well, they can make money. When you talk to asset management, the general opinion of people is they do not want to sit there and say they are not going to have a job. They believe it is going to pick up and they are going to have REOs to sell so they will have a job. He believes this is what a lot of it comes down to overall, and he does not believe anybody can predict what is going to happen. They are probably not at the policy decision level. With someone in Mike’s position, one of the nation’s largest, he would probably feel that he has access to somebody inside actually telling him the real scoop. However, this does not happen. Mike said he does know some people way up the food chain from various REO organizations, and even they cannot tell you what is going to happen.

Mike’s REO business peaked in 2008 when we had about a 3.4% delinquency rate, and we went up to 11.2%. Mike’s peak of foreclosures resulted from a 3.2% delinquency, and then we tripled. The amount of REOs he probably should have been handling should have been some gigantic percentage above the peak and its decline. The shadow inventory term is real, but it is not where people think it is. Mike’s opinion of what shadow inventory is the process that is not being finished. There are a lot of defaults going on, but the timeframe between when somebody misses the first payment to the time they foreclose is probably in many cases 18 months to 2 years. He asks a lot of people how long since they made their payment and this is the answer he usually gets. He rarely gets anybody less than a year; but he thinks the whole process has just slowed down, and this is your shadow inventory. It is not like the banks are sitting on millions of houses they own; they just don’t finish the foreclosure. Bruce wondered if there is a valid reason why they don’t do this, and Mike said part of the reason is if they just foreclosed every which way they could, they would not have the capability to handle the property. He hears of agents telling him they are in a really bad situation and don’t even want to foreclose because they do not want the house back. They don’t want to be responsible for the code liens and the taxes.

Bruce said what is interesting to him is somebody always tells him that the lenders are too smart in regards to carrying out foreclosures, but in 2008 they did exactly what they should not have done. They foreclosed on properties aggressively, and we ended up with something like 17 months of inventory and a price decline of about 3 or 4% a month. Once you are there on that low level of price and everybody is upside down; it is much easier to make a decision to walk when you have negative 50% equity. When the civil Code 1169 came into effect in California, you could be fined $1,000 a day if you are the lender owning the property or a trustee sale buyer owning a property. They have someone come out and visit your place, and you have a week or two to fix whatever they are going to see.

When Mike resells REOs, Bruce wondered if there was a big problem with liens that had been placed on the property. Mike said they have a lot of problems with liens. He has a full-time employee whose job is dealing with liens, code violations, and HOA problems. Part of the problem with a lot of the banks is they do not have the internal staff anymore to handle these problems. It used to be they had attorneys on staff that would fix a lot of the code violations and a lot of the liens, and now a lot of that is not done. We do not figure it out until we start marketing the property and they come up. He said he fronts a lot of money to pay code violations and liens because typically the agents expect you to pay them and then be reimbursed. They are on it full-time, checking properties every day as he does not want any code violations and does not want to front the money for it. It is a lot bigger problem than it once was.

Bruce wondered what percentages of his listings were occupied by somebody at the end of the foreclosure process, which Mike said was about 75%. The attitude of the person behind the door is usually bewilderment as they wonder how something like this could happen, and most of these people are tenants of the former borrower. They did not know they were about to be asked to go.

On the topic of Cash for Keys, once this type of thing happens it becomes a street lore and urban legend. You can go ahead and ask for cash for keys, plus with some of the clients they are told how much cash for keys is going to be. A large problem Mike has is a lot of clients are very generous with cash for keys and some are not. Many of them ask why they only receive $1500 when their friend received $8,000. Bruce said if the Learning Annex was still in business, he could be almost certain there was a class held at night. The Cash for Keys is a big deal, but the offers vary a lot, and this can cause some problems. Bruce wondered if it has to do with the size of the loan or just the motivation of the lender, to which Mike said it is the latter. The more well known you are today as a lender, the more you want to pay.

Bruce wondered how big of a problem MERS robo-signing presented to California lenders. Mike said he has not seen much of it where it was a problem. He does believe with a lot of their deals a lot of the loans are in pools and portfolios, and sometimes they get slowed down because someone is going to check the whole portfolio, whether most of the loans are in Chicago or Florida. Sometimes this will slow them down. Something that was originally going to close, for example, in January will not close until March. However, the bigger issue is they are in a mix of properties.

On the myth of bulk sales and bulk REO listings, Bruce said he has only fallen victim to this one time as he went around an looked at 100 houses in two days to get his piece of the dream. However, there have been people who spent a year and ruined themselves by following something that seemed imminent that they were going to cash in on 100 houses. Mike does deal with a lot of REOs, and Bruce wondered if he has dealt with successful bulk deals in California only. He said Fannie Mae and several others do pool sales and advertise for it, but it is usually beyond the capability of the small investors. It does happen, but where he gets the calls is from some person who wants to buy ten houses in bulk, and the problem with that is with many of the lenders there are ten different investors on the deals. It is not the same real seller when you get down to the bottom line. Bruce wondered if he feels there are sufficient properties going that route that it affects the volume that they see, but Mike said this was not the case.

Another topic is bulk note sales, where you have big companies buy thousands of loans at a shot. Bruce wondered if this is significant in its impact in the REO listings. Mike said he is not sure he has seen them, even if it is possible they are going on. You do not see them in California has much as you see them in other places. In Orange County, there is a company in Irvine that buys very large pools, but the majority of the loans are not in California yet. Even if the purchaser received 60% off of the face, it would be hard to say that there would be a lot of room.

Bruce was a moderator of a panel on bulk buying that HousingWire.com had a couple years ago. He was very fascinated with the concept and thought it could really happen to somebody. Of the three, one of the companies that was on the panel was capable of buying 1,000 homes in a very short notice was Williams and Williams Auction Company. Bruce knew Tommy Williams personally, so he talked to him, the person he thought would really know. Having auctioneers all over the country, their infrastructure is such that they literally could get a 1,000 property listing within two or three days, legitimately see every one of them, and come to a number. They had not bought a property in a year, so they had the capacity, but there was not any inventory that was going that route in that kind of volume. Bruce just heard of another scenario yesterday about a bulk sale from one particular lender, so it is such a great theory. However, Ted said somebody actually has to go out and look at the properties to make sure they are even there. Ted said they have had REOs they have gone out to look at that are not even there and had burned down about a year earlier.

It seems one of the things RE/Max would really have a grasp on is how much infrastructure there is as far as capacity to move inventory already in place. They do not have to invent a thing. Bruce wondered how many more listings they could have, if they could have a multiple of 300-400% alone. This is replicated everywhere. Someone could drop a lot of properties into the United States REOs, and it would get absorbed by current staff. Another option is trained staff is added, and this would make more sense more than selling thousands of homes to a hedge fund. There were couple of things in a report Bruce read, and one of the things was doing a big bulk deal. A couple days later he saw a headline for a $650 million pool by one of the well known big companies that they were going to buy REOs and retain them as rentals. This sounds significant until you look at the numbers of how much debt there is in excess. You basically have a $3 trillion problem when you start throwing $50 million at it and see how it is such an insignificant thing. In short of saying they are going to forgive everybody, whoever owes more than their house is worth, we are probably in for a long haul. There is really no end in sight and no end game. Neither is there a change in the aggression of lenders saying they should cut to the chase and take all the REOs back. If a lot of the houses were sold to hedge funds, they would be a lot more aggressive because they would not care about their name being drug through the mud. They do not have a public name or a retail presence, and this is most likely part of the reason why things are slow in some cases.

One of the suggestions in the white report was getting a deed in lieu of foreclosure and giving the people right to buy the property back some years later. Bruce wondered what their thoughts were on the same owner returning as owner at a later time. However, Ted said this is silly. Once a person has given up on the property as we have seen and stopped making payments a year or two earlier, when you go to that person see them start making payments again, that person just laughs at the agents in charge. Bruce does not know how you rationalize this with the person next door making payments on the same loan. You start asking yourself if you can get the deal too. Mike and Ted said one of their clients offered the ability for the occupants to lease the property for a year. Mike and Ted said they have started a few of these, but they have yet to see anybody finish before they failed and ended up being evicted. For them, not paying is a good deal and they want it to continue.

Bruce read another news article where they were talking to a family that had not made a payment in a couple years, and it was a very positive experience for them as far as what it did for them financially. If you think about it, they have an expectation that this is okay, and there is an expectation that it is almost sad when it ends. Of the people who have not made a payment in two years, the ones who have saved all the payments is 0%. There is a statistic that 4,100,000 people that are 90 days late or beyond, including REOs, there is only a 1% chance that they will willingly write a check to make it current. 99% of the pile is going to go the route of a lowered opening bid at a trustee sale, a short sale, or an REO.

In RE/Max’s business model, the short sales have really aggressively gained momentum. Bruce wondered if they are ahead of REOs as far as closings. However, Ted and Mike believe they are even. Last year, roughly, they had about 20% normal sales and about evenly divided between short sales and REOs. Bruce has looked at charts for years, and he said he has not come up with a real meaning with what was just said regarding REOs and short sales until recently. When you close 100 sales, only 20 buyers emerge. This really hit Bruce that in the Inland Empire 80% of the closings are either going to be vacant or bought by someone new migrating here or someone in credit damage or investor for cash. This is not a lot of people. Unfortunately, it is many of the people who walked from their homes three years ago and now have repaired their credit and are able to buy again. There are very few of those, but it is shocking in today’s world that the person who did the wrong thing three years ago seems to be saving the system. Had we foreclosed on somebody instead of waiting, the people who are behind by 2 ½ years have not had one day of new credit.

Tune in next week as Bruce continues his interview with Mike Novak-Smith and Ted Boeker. For more information on RE/Max, visit www.remax-results-ca.com/.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: , , , , , , , , , , , , , , , , , , ,
Posted in News, Radio | No Comments »

The Norris Group Real Estate News Roundup 10/31/11

Monday, October 31st, 2011

Today’s News Synopsis:

According to the Realty Times, the FHA is planning to make changes to the HARP program, including allowing more borrowers to be eligible for mortgage refinancing.  The U.S. is seeing more short sales in several different cities, Los Angeles having the highest number.  CNN Money reported home prices are expected to fall another 3.6% next year before hitting their lowest levels.

In The News:

Housing Wire - “Credit unions, community banks face ‘creeping complexity’ of regulation” (10-31-11)

“The leaders of community banks and credit unions warned the House Financial Services Committee Monday that aggressive federal regulations are hindering the institutions’ ability to lend moneytgage.”

DS News - “Economist: ARMs Not as Risky as Some Think” (10-31-11)

“Long-term, fixed-rate mortgages are often seen as a “safe” mortgage product, but one Federal Reserve economist says adjustable-rate mortgages (ARMs) are not as risky as some perceive them to be and did not play a major role in the recent housing crisis.”

Realty Times - “Real Estate Outlook: Changes to HARP” (10-31-11)

“The National Association of Home Builder’s Bob Nielsen weighed in on the recent announcement by the FHA to make some new changes to the Home Affordable Refinance Program (HARP).”

Housing Wire - “CoreLogic expects HARP 2.0 to help hardest-hit housing markets” (10-31-11)

“The government’s revamped mortgage refinance program may be somewhat of a boon to the hardest-hit housing markets because they have the largest share of borrowers in negative equity, but the plan isn’t a panacea for all that ails the
housing market, CoreLogic (CLGX: 12.17 -3.95%) said Monday.”

DS News – “Short Sales Offer Significant Discounts in Several Major Cities” (10-31-11)

“Short sales are growing throughout the nation as distressed homeowners and servicers continue to seek alternatives to foreclosure and home buyers increasingly opt for the significant discounts that come with short sales.”

CNN Money - “Home prices heading for triple-dip” (10-31-11)

“The besieged housing market has even further to fall before home prices really hit rock bottom.  According to Fiserv (FISV), a financial analytics company, home values are expected to fall another 3.6% by next June, pushing them to a new low of 35% below the peak reached in early 2006 and marking a triple dip in prices.”

Realtor Magazine - “Fed Leaders Divided on Future Plans” (10-31-11)

“The Federal Reserve’s policymaking committee is meeting Nov. 1 and 2, and five of the 10 voting members will be coming to the table in open disagreement with Chairman Ben Bernanke about future monetary policy. However, it is still Bernanke who determines whether the Fed will expand its campaign to stimulate growth for the third time since August.”

Housing Wire - “Freddie Mac calls for $100 billion in annual multifamily investment” (10-31-11)

“The head of Freddie Mac’s multifamily division projects that the asset class needs $1 trillion in capital over the next decade.  That is $100 billion every year earmarked to build 10 million additional
apartment units over the next 10 years.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor event calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: , , , , , , , , , , , , , , , , , , ,
Posted in News | No Comments »

The Norris Group Real Estate News Roundup 8/18/11

Thursday, August 18th, 2011

Today’s News Synopsis:

Top news: mortgage rates in the United States are at a new record low, the lowest they have been in 50 years.  The sale of existing homes in the U.S. dropped in July, but one thing that did decrease were jobless claims.  Standard & Poor’s is under investigation by the U.S. Justice Department regarding mortgage-backed securites that they allegedly overrated.

In The News:

Bloomberg - “U.S. Mortgage Rates Hit 50-Year Low” (8-18-11)

“U.S. mortgage rates fell to the lowest in more than half a century as concern that the global economic recovery is faltering spurred demand for bonds that guide home loans, according to Freddie Mac.“

Inman - “Realtor.com, Yahoo Real Estate trading places in Web rankings” (8-18-11)

“Realtor.com — the official listing portal of the National Association of Realtors — has been battling with Yahoo Real Estate for the top position in monthly real estate website rankings by Web metrics firm Experian Hitwise, trading places seven times in the  last year.”

Housing Wire - “More mortgage servicers bypass foreclosure delays with short sales” (8-18-11)

“Mortgage servicers contending with attorney general investigations and extended foreclosure delays turned more to short sales in the past year.”

San Francisco Chronicle - “Leading indicators rise 0.5 percent in July” (8-18-11)

“A private research group forecast that the economy will grow slowly in the  second half of the year because of the support it’s gotten from the Federal  Reserve.  The Conference Board said its index of leading economic indicators rose 0.5  percent in July. The index had risen 0.3 percent in June.”

CNN Money - “S&P faces U.S. probe on mortgages” (8-18-11)

“Ratings agency Standard & Poor’s is being investigated by the U.S. Justice Department for allegedly overrating mortgage-backed securities, whose meltdown led to the 2008 financial crisis, according to two sources with
knowledge of the investigation.”

The Wall Street Journal - “Skipping the Mortgage to Pay Your Credit Card” (8-18-11)

“Fewer consumers are up to their eyeballs in credit card debt these days — but for some, a lower credit card balance is coming at the expense of the mortgage.”

Housing Wire – “Jobless claims up to 408,000 last week” (8-18-11)

“Initial jobless claims increased 2.2% last week, climbing back over 400,000.  The Labor Department said the seasonally adjusted figure of actual initial claims for the week ended Aug. 13 rose by 9,000 to 408,000 from 399,000 the previous week, which was revised upward 4,000.”

Reality Times - “Homeowners More Dissatisfied With Mortgage Servicers” (8-18-11)

“Consumers, especially those who purchased homes during the peak of the housing boom, are growing more dissatisfied with mortgage servicers.”

NAHB - “Housing Affordability Hovers Near Record Level as Some Markets Begin to Stabilize” (8-18-11)

“Nationwide housing affordability during the second quarter of 2011 hovered for the 10th consecutive quarter near its highest level in the more than 20 years it has been measured, according to National
Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI)
data released today.”

Bloomberg - “Existing Home Sales in U.S. Fell in July” (8-18-11)

“Sales of U.S. previously owned homes unexpectedly dropped in July, reflecting an increase in contract cancellations due to strict lending rules and low appraisals.”

DS News - “Housing Inventory Declines but Slow Sales Pace Adds Staying Power” (8-18-11)

“There were 3.65 million existing-homes available for sale at the end of July, according to the National Association of Realtors (NAR).”

Looking Back:

HAMP’s permanent loan modifications increased 5.9% by the Bank of America, while the number of applications for mortgages increased 13%.  On the same note, according to the Mortgage Bankers Association the numbers for refinancings for mortgages increased 17.1% in the previous week in 2010, while the amount of people filing for bankruptcy increased 20%.  Fannie Mae and Freddie Mac began searching for any bad loans or dishonest loan applications, while in other news Barney Frank believed Fannie Mae and Freddie Mac should no longer be allowed to operate.  However, there were no current plans for this to happen as the White House was trying to fix the problems.  Also, as the demand on homes decreased, the merging and aquisition of homebuilders was expected rise.  In other news, Blue Horizon Capital bougth Veri-tax.  The Fed’s came up with a plan to prepare for an increasing decline in the economy by using money made from securities to buy Treasuries.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: , , , , , , , , , , , , , , , ,
Posted in News | No Comments »

The Norris Group Real Estate News Roundup 8/1/11

Monday, August 1st, 2011

Today’s News Synopsis:

DS News reported home ownership rates are at the lowest they have been in 13 years.  NAHB Chairman Bob Nielsen released his statement today regarding an agreement on the debt ceiling.  Housing Wire reported the Senate Banking Committee will be meeting tomorrow to discuss changes to mortgage servicing standards. 

In The News:

Housing Wire – “Senate steps toward new mortgage servicing standard”  (8-1-11)

“The Senate Banking Committee will hold a hearing Tuesday to develop a new national mortgage servicing standard.  In January, federal regulators announced a new initiative to develop a set of servicing standards following weaknesses in the process that arose last year.”

NAHB - “Statement from NAHB Chairman Bob Nielsen on Debt Ceiling Agreement” (8-1-11)

“‘The National Association of Home Builders appreciates the hard work by the White House and Republican and Democratic congressional leaders to craft a bipartisan compromise to resolve the debt ceiling crisis. We urge Congress to move quickly to pass this agreement. It will help to put our nation’s fiscal house in order and provide greater certainty to the business community so they can start hiring again and get our economy on firmer footing.’“

DS News - “Survey Finds REOs and Short Sales Are Major Causes of Legal Disputes” (8-1-11)

“Short-sale disputes were designated as the most significant legal issue facing real estate professionals, according to the recent National Association of Realtors’ 2011 Legal Scan: Legal Issues Facing Real-Estate Professionals. REO-related issues also ranked high on NAR’s Scan.”

Inman - “Tight supply drives up real estate prices in Toronto area” (8-1-11)

“Greater Toronto area home prices accelerated during the second quarter as buyers grappled with a tight supply of residential properties for sale. The heightened competition between buyers has created a seller’s market, leading to multiple offers and pushing the median sales price up 10 percent, to $405,000 (about $424,000 in U.S. dollars), in June.”

Realty Times - “Real Estate Outlook: Mixed Bag” (8-1-11)

“This week’s housing news is again mixed amid reports of declining housing starts and positive monthly home price movement.”

Housing Wire - “Fannie Mae unwind slows down” (8-1-11)

“Mortgage securitization business at Fannie Mae got a little smaller in June, according to the monthly survey from the government-sponsored enterprise, but the rate at which Fannie Mae business contracts is slowing down.”

DS News - “Homeownership Rate Drops to 13-Year Low” (8-1-11)

“The nation’s housing crisis has forced unprecedented numbers of homeowners out of their homes, made for a difficult homebuying environment, and tainted many Americans’ ideal of owning a home. These factors are taking their toll on homeownership in this country.”

Realtor Magazine – “Neighbors, Agents Team Up to Boost Home Values” (8-1-11)

“In the metro Atlanta area, home values have dropped by about one-third in five years. To prevent values from dropping any further, home owners are teaming up to hold neighborhood clean-ups and working with real estate professionals to promote open houses.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: , , , , , , , , , , , , , ,
Posted in News | No Comments »

233-TNG Radio – John Burns 7-09-11

Friday, July 8th, 2011

 

John-Burns

John Burns

President, John Burns Real Estate Consulting


(Full Bio)

 streamitunesdownloadrss

This week Bruce is joined once again by John Burns. John is president of John Burns Real Estate Consulting Inc, which helps real estate industry executives by analyzing and summarizing the information they need to make decisions with more confidence. Mr. Burns is on retainer with a number of companies, both in the housing industry and Wall Street to monitor housing conditions and help them refine their strategies in an ever-changing environment.

In today’s topic, Bruce started by asking what the common theme has been for a builder to survive between 2007 and now. In response, John states that first, regarding the privately held ones, the ones that were managing their balance sheets very carefully, trying to not become too overextended in debt, diversified into other businesses, and sold land at the top of the market were the ones who made it through. Some of the public builders, even after the market corrected, carried out some large bulk land sales, some being almost $.34 on the dollar while others were $.16 on the dollar. Not only did this get them some cash in the bank, but they were able to recognize some tax losses and get back millions of dollars that they had paid the IRS in prior years. The other thing that happened to the public builders was that the debt markets were wide open the last couple of years, so they have gone out to the debt markets and stuck out their debt maturities until 2016 or later. They have not had to make principle payments. So the two things previously mentioned have really helped them significantly.

As Bruce says, from a lender’s perspective this is a straight note. In 2016, they have a lot of bonds due, and at the time that they come due they either have to write another check or obtain another bond. They don’t have one big bond due in 2016; they have little chunks due in various years, which was really smart. However, at some point you will have to either refinance or pay off the debt. Most likely nothing spectacular will happen before 2016, but the bondholders who buy that are managing Bruce’s and John’s retirement funds, and right now a 10-year treasury is 3% while a lot of the debt trade is anywhere from 6-11%. Therefore, there is an appetite for the high-yield portion of the funds where they will take some risk. If things get really bad, they may have to refinance from an 8% interest rate into a 10 or 11% rate, but the person who owns 8% rate still gets paid off that way. The real risk is if the bondholder can’t refinance because someone thinks the bonds are not going to make it.

If you’re a public builder, the biggest advantage is the access to the capital markets. If you’re a private builder, you don’t have this kind of access, and all the debt is non-recourse. The public builder CEOs sleep better than private builders because they don’t have recourse debt. The ones with the best balance sheets have bought quite a bit of land, some of it with a really long-term perspective because none of them are worried about any cash crunch. Most of the builders have been buying enough land to assure that they have good revenue in 2012 and 2013. Much of the land they own is in tough areas where they can’t make money, so they’re trying to buy land in better locations. They will come back to the tougher land some day in the future when it makes sense again, usually in about 6-8 years. In the meantime, the twelve largest publicly trade builders are sitting on $13 billion in cash. So what do you do with that cash? Most of redeploying it into their own business, but also, if you look at their income you see that they’re breaking even and covering their overhead to stay alive for another day. Some of the more creative ones are now thinking about new businesses to get into. Toll Brothers is buying nonperforming loans from the FDIC and starting a golf course management business. Lennar is buying nonperforming loans, and Beazer is buying REO in Phoenix and renting it out. There have been local builders that have been involved in the trust deed sale business to buy, resell, and have houses to fix. Bruce does not think they’re used to the margins, and how big the margins are is usually a common misconception. For example, in the business The Norris Group does the margins shrunk. Beazer, for example, is hoping to make a 6-8% return on their REO purchases and are not looking for anything bigger than that. They’re keeping them as rentals and not reselling it until some point in the future. If you’re buying and reselling it the return is quite a bit better, but it’s also risky.

They went on to discuss shadow inventory. John’s definition of shadow inventory is a distressed sale that is not yet on the market. If somebody is 90 days delinquent or more, research has shown that very few of those delinquencies become current and the borrower gets saved. There are about 4.5 million of these in the country today, and our best estimate is about 1-2 million of them are on the market. Therefore, there is about 3.5 million shadow inventory with more coming. The report Bruce saw had 91,000 resolutions in the month the report came out, so being in the buying and selling business, The Norris Group is feeling pretty comfortable right now. In Riverside when you look at what’s for sale, you have a few REOs, some in disrepair, and a lot of short sales. However, this is not too exciting if you are an owner-occupant buyer because it may take 4 months to get a yes or a no answer. You don’t really have a lot of real inventory to sell against, but if you look at what is behind you at the churning shadow inventory, a lot of times the thought that lenders have already taken back the property and are not presenting it on the market just shows that what John Burns believes about shadow inventory is true. Shadow inventory is the properties they refuse foreclose on, and this is one of the things they talked about when they met with Fannie and Freddie. About 30% of all the foreclosures are over two years behind. Bruce wonders if next year they will be three years behind. At some point, we need to cut to the chase.

There is a website called housingwire.com, which was founded by a man from the mortgage servicing business who is very well connected to the industry. They had a conference in North Carolina two weeks ago that John attended along with all the top foreclosure attorneys and the CEOs of Fannie and Freddie. Here, John became very convinced that virtually every judge in America hates the banks, does not trust them, and is going to make it very difficult for them to move and act and foreclose the way they want to. The Norris Group had interviewed the president of MERS right after he had testified in Congress, and simultaneously almost the same week Bruce interviewed the president of the Title Insurance industry. Bruce’s concern was that they’re buying REOs trying to resell them, and all of a sudden in the industry people are getting sued because somebody said they were foreclosed on wrongfully. The idea that you’re being hung out to dry is one of the reasons Bruce interviewed the president from title insurance. He’s asking himself, “Do we have title insurance?”, which is true if you have an REO. But if he buys at trustee sales, it’s not necessarily true. You’re stepping into lender liability issues and a whole bunch of other things. Sometimes he gets title insurance the day he wins the bid, and another time they were sued because there was not a reason to foreclose. Recently, there have been courts that have upheld that, when a commitment has been made verbally to a client that the lender is in fact going to pursue a loan modification and they foreclose on them anyway, the client does have recourse and rights to sue.

Another interesting twist with how the lenders conduct the sales is that the only way there is a deal, in Riverside for example, is if the lender lowers the bid. If they are owed $500 and start opening bids at $200, then Bruce said he will be interested at that point and will pursue checking out title and who is in the house. What he does not understand is when lenders let Bruce know at 8 a.m. about a 10 a.m. sale. He does have the infrastructure to be able to cope with this and get to a knowledgeable answer very quickly, so he might end up with some deals that he wouldn’t normally have. However, from a lender’s side it is absolutely ridiculous because you end up with far less qualified people being able to bid up the price. It’s rare that The Norris Group would do much interviewing of the person at the door because a lot of times they’re either not there or don’t answer or they will tell you stories. So it’s hard, but this is the business model. In the courts and politics there is definitely a leaning away from housing, and this is going to be so different than the 30 years we have just experienced for most of our careers.

Bruce stated that as we see the prices of homes go down in Riverside to where they are below replacement cost, then it’s a safe bet that we’re going to build a another house in Riverside. From the peak of housing construction to today, building costs are down about 30-35%. However, a portion of this reduced cost is that builders are putting fewer bells and whistles in the house. They have cut down on the amenities, and most of the savings have come from labor as well as all the materials. There are some cost increases with the commodity increases, but none on the labor side. They preferred not to go into depth on inflation and deflation; but Bruce said he reads everything he can on it and the practical side of him looks at the ability for labor to ask for more per hour, which he does not see happening anytime soon. Normally, printing more money causes inflation, but for some reason Japan has printed a lot of money and they don’t have inflation, so deflation and inflation are kind of a confusing situation. However, it does at the same time make it difficult as an investor to go forward and make the correct decisions, so you really have to be conservative, which most of the companies who have survived have done. As an interesting twist on costs, John has been receiving some early feedback from clients who think the cost of entitling lots is going to get more expensive. There are going to be environmental regulations along with storm water mitigation efforts moving about that could significantly increase the cost of new construction. The army corp. of engineers is making some changes. After Hurricane Katrina, they changed the definition of what a 100-year plane flood was and made an entire area of Sacramento that was under development just stop development in the middle because the workers had to go fix the levies in New Orleans before they could build any more. The environmental movement that is now taking a foot in the country is going to make construction more expensive. On the same note, when you’re fixing properties there are areas even in California where you now have to have a permit for every rental that you have. They will also most likely mandate more energy efficient homes, which will also be more expensive to build. There is one city that mandates repairs of the property to specific standards. It’s pretty scary. There is financing available for this type of work, and somehow it is equal to a tax lean, a superior lean to the first. So you can buy a property, borrow money to do the green rehab, and it becomes superior to the first trust deed in the case of a foreclosure and non-payment. On a related matter regarding CFD bonds and mello roos bonds, a lot of John’s construction lending clients suddenly woke up and realized that they didn’t make the first loan, but instead the second one. The mello roos one was superior, and now they’re the equity in the project instead of the debt.

In general, the construction business is down as well as commercial real estate. It’s unknown what the percentage of employment or GDP this represents, but it is possible that we are in the early stages of seeing a lot of apartment construction. This will be good for the economy, but only time will tell whether the apartment market will be overbuilt. If in the future the housing declines then about 4.5 million people won’t live in the apartments anymore, but at the same time it will create 4.5 million vacant residences. There could be a case for them building apartments that are more attractive if they have the amenities that people want, something about which builders ask a lot. They would not build an apartment complex that is bare bones, but instead they would build ones where people would rather be in the apartment than a house. They also would not build it in the Inland Empire, but rather San Diego, Orange County, and L.A in areas where people would traditionally rent anyway. The thought is that as we come out of this and create millions of jobs, for all the reasons discussed in this radio show people are going to be forced to rent. If you look at all the pro-government policies toward home ownership over the last twenty years reversing themselves, it’s going to create an opportunity to build some apartment complexes, even though there have not been a lot built over the last twenty years. Probably more importantly than anything else is that it’s not the fundamentals that matter, it’s the demand and supply of capital. The money is flowing in to build apartments.

When asked whether California’s employment situation has even been solved without construction being a major contributor, John responded that he has not sure it’s ever been solved. One interesting statistic is that there are 350,000 fewer documented employees in L.A. today than 1990. In Japan, it took them till about the year 2000 to get back to their 1990 levels of employment, while we have fallen since then.

The Pure Affordability Index, which looks at housing costs in relation to income on John’s website, holds an A+ right now. However, when you look at some of the other factors that John and his company group into the Affordability Index, things are horrible. This is why affordability holds a D+ on his scale even though it’s at the highest it has been. If you’re a renter, today is the most affordable time to get into the market. If you’re a homeowner, it’s an F. This is because you lack equity. The strongest F is the loan to value on existing loans, which holds an 85%, which is a lot higher than it was earlier. They also look at income growth, which is also not very strong right now. Also, the debt-to-equity ratio does not include properties that are free and clear, but only the ones that have debt.

In regards to California’s commercial market, it is a lot like what the residential market was like 4-5 years ago where people are staring at a lot of maturities coming due. The interesting conundrum here is if interest rates stay low, you are most likely going to see a lot of extend and pretend. This is because the loan to values won’t come in, but the properties can cash flow given the interest rate being so low. If interest rates go up, then there is no hope of extending and pretending and therefore you will see a lot of distress including the properties that have a lot of vacancy.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: , , , , , , , , , , , , , , , , , , , ,
Posted in Radio | No Comments »

The Norris Group Real Estate News Roundup 1/10/11

Monday, January 10th, 2011

Today’s News Synopsis:

According to the Federal Reserve Board, the amount of net income reserve banks took in was 34% higher than the previous year.  The Federal Reserve Board, in turn, made a profit of $78.4 last year, the largest profit it has made in several years.  The recent ruling by the Massachusetts Supreme Court is not expected to change foreclosure practices drastically but rather opens the door to allow trustees to hold mortgages.

In The News:

Housing Wire - “Massachusetts Ibanez ruling sets stage for mortgage ownership remedy” (1-10-11)

“Banking analysts said the Massachusetts Supreme Court ruling last week will not significantly impact foreclosure practices but instead clears a path to establish securitization trustees as holder of a mortgage.”

Inman - “Short-sale incentives revamped again” (1-10-11)

“Loan servicers participating in the Obama administration’s short-sale incentive program are being given more freedom to pay off second-lien holders, but will be held to stricter timelines for approving or rejecting short sales and forbidden from deducting vendor expenses from commissions paid to real estate brokers.”

Realty Times - “Real Estate Outlook: Federal Reserve Promoting Recovery” (1-10-11)

“Deflation fears are gradually receding. Last year’s Federal Reserve action to buy $600 billion worth of Treasury Bonds was an attempt to spur recovery and keep long-term interest rates low.
It appears that board members are now mildly optimistic about 2011.”

The Orange County Register - “O.C. homes for sale at 8-month low” (1-10-11)

“Orange County property owners continue to pull homes off the market. Whether it’s seasonal — or a reaction to sluggish homebuying — remains to be seen!”

Housing Wire - “GSE mortgage securities boost record Federal Reserve payment to Treasury” (1-10-11)

“The Federal Reserve Board reported that the Reserve Banks took in $80.9 billion in net income during 2010, up 34% from the year before because of larger returns on government-sponsored entity securities.”

The Wall Street Journal - “Market for Vacation Homes Is on the Rise” (1-10-11)

“Sales in many vacation communities across the U.S. soared last year to levels not seen since boom times, driven by deep discounts, cash purchases and buyers’ rising stock portfolios.”

Los Angeles Times - “Federal Reserve posted record profit of $78.4 billion last year” (1-10-11)

“The Federal Reserve announced Monday it made a record $78.4 billion profit in 2010 as the central bank’s unprecedented intervention into the financial system continued
to produce a side benefit to the federal government.”

Housing Wire - “Capital Markets Cooperative and Bank of Internet form strategic alliance” (1-10-11)

“Capital Markets Cooperative and Bank of Internet entered into a strategic alliance to offer CMC clients specialized jumbo loan products.”

Inman - “Keller Williams Rolling out New Platform for all its agents” (1-10-11)

“Keller Williams Realty will provide its agents with what the real estate franchisor says will be the first system capable of handling lead management, contact management, marketing and transaction management on a single, integrated platform.”

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: , , , , , , , , , , , , , , , , ,
Posted in News | No Comments »

200-TNG Radio – Alvarez, Cantu, & Solis 11-13-10

Friday, November 12th, 2010

Tony Alvarez

Veteran Investor

(Full Bio)

Mike Cantu

Veteran Investor

(Full Bio)

Rick  Solis

Veteran Investor, Appraiser

 streamitunesdownload

rss

This week Bruce is joined by Mike Cantu, Rick Solis and Tony Alvarez. Mike Cantu has been an investor in the Inland Empire for over 25 years. He has been a builder, rehabber and property manager. Rick Solis appraises all of The Norris Group’s loans, and he is also an investor. Tony Alvarez has been an appraiser, residential and commercial property buyer and author. This is The Norris Group’s 200th radio show.

Bruce begins by asking Mike about what he learned from the 90s that helped in the most recent down turn. All things come full circle. A good market will eventually become a bad market. The down turn took longer this time, but it hit much harder. Sales dropped off the cliff, but fortunately, Mike began preparing for the down turn in 2004. Tony agrees with Mike.

During the evening of Obama’s election, a newsletter was put out, which was titled “Obama Administration Sings New Tune on Foreclosures”. The article is laughable. The media went from saying “no foreclosures” to “foreclosures are the answer to this problem”.

Rick began investing in 1989. He was not very active in the 90s. The main thing he learned from the 90s was that you can miss many opportunities when you ignore the market. A lot of people are afraid of the market right now, but Rick won’t let that fear control his investing plans.

Bruce believes that fear certainly is affecting the market now. People are afraid to buy properties despite the fact that prices have dropped 50% and interest rates are historically low. Its hard to believe that not buying could be perceived as a rational decision. Rick Solis has never seen a better time to buy houses since he began investing. Bruce definitely believes that it is the best time to buy and hold.

Tony just bought a completely rehabbed duplex. In 2007, it sold for $175,000, but he bought it for $35,000. The saddest part is that the duplex sold with multiple offers. The reason why so many people are afraid of buying is because they are paying too much attention to the media’s opinion.

Mike knows many investors, but only a small number of them are still investing. The number one problem that caused them to fall out of investing is their overly expensive life style. A lot of people learned how to make money in real estate, but not many people learned how to keep it. The investor pool has shrunken significantly. Many people would like to invest in real estate right now, but they made bad decisions at the top of the market, which handicapped them from buying. Mike agreed with Rick and Tony when they said that now is the time to buy.

Mike is a fairly frugal person. Bruce laughed when he saw Mike’s 1998 Toyota truck. It has 441,000 miles, but it runs like a champ. When a dog gets old, you don’t get rid of it, you just take better care of it. Mike has a hard time spending money on a vehicle when you can get a rental house for the cost of a new car. Every time Mike sets money aside for a new truck he ends up spending it to buy a new house, and he realizes that his truck is just fine.

Mike’s daughter recently began investing in real estate. Mike helped her develop a 5 year plan for buying cash flow houses in good neighborhoods. Their goal is to help her get $3,500 of cash flow per month, and they are half way there.

If Tony could have done anything differently throughout his career, he would have focused harder on one segment of the market place. He wishes he had been more aware of the value of his time. Tony spent a lot of time driving to deals that didn’t have much potential.

Tony prefers to buy and sell, but he currently owns 40 rentals. Before the peak, he had 100 homes. He wanted to get out before the peak, but Bruce encouraged him to not sell for another 3 years. Bruce’s advice helped Tony gain an extra $3 million in profit. Tony is now buying some of the same houses that he sold near the peak. In the past, Tony would buy almost any property he could. Some of the properties he bought and sold were in such a terrible condition that they have now been destroyed. He doesn’t buy properties that are that terrible any more, but he is still willing to buy wood structure homes and other properties that people tend to stray away from.

If Rick could have done anything differently in his career, he would have sold all his properties by 2006. Rick has accumulated quite a few properties, and he is glad to have them, but he is not looking forward to managing them.

Mike chose not to sell his properties despite the fact that values were sinking, and he does not regret that decision at all. Mike got into real estate for the cash flow, so that all his expenses would be taken care of. He knows people who are struggling right now and have to make a deal every month to keep food on the table. The value of his rental properties is immaterial to him. He has not had to reduce rents by any more than $50, and he has had no difficulty in keeping them occupied.

Mike was the person who introduced Tony to the concept of exchanged junky homes for quality rental homes. Exchanging for quality rental properties allows you to keep rentals in competitive areas, and it helps reduce the amount of time spent on property management.

Bruce has learned a lot from observing the business models of other people. When Mike told Bruce that he wanted to obtain 10 rental properties, Bruce decided to try and do the same. Having free and clear properties gives you sanity when making investment decisions. If you are playing catch up on equity, or if you are relying on today’s deals to pay tomorrow’s meals, you tend to make riskier decisions. Bruce and Mike don’t have to make potentially risky decisions because they both have enough cash flow to get by.

One of the big differences that Tony has noticed between 2010 and 2009 is that many investors have left his market. Also, approximately 80% of his purchases went from being new listings from agent calls to pending deals. Fifty percent of the deals occurring in Tony’s area fall out of escrow 1 to 3 times. This has caused Tony to become more cautious when buying. He has dropped his rents by 20% in the last 12 months. He has also lost some of his tenants.

Rick noticed that when the stimulus program was going on, entry level properties experienced up to a 10% increase in value. Moreno Valley and Corona had a big increase in activity. That 10% increase has now disappeared. Rick will not buy a house right now unless the deal can work as a rental. Many investors have recently bought homes they thought would easily resell, and they are now stuck with them. Bruce will not buy a home on leased land.

From the beginning of 2009 to the end, we went from a period of market uncertainty to confidence. In 2008, Mike decided not to do a retail deals unless he could keep those houses as rentals. Mike does not use any July comps any more; comps must be within the months of August, September and October. There is a 5 to 20% difference between homes being sold now and homes sold in July.

Mike believes there are still a lot of people who will not accept the fact that their home values have significantly decreased. A lot of the private market is still in denial.

Rick invests primarily in Rialto, Hesperia and Victorville. Rick and his business partner work with rehab properties. He rents his properties slightly below market value and they are in good shape, so he has a lot of demand. Many times he has a security deposit and a tenant lined up before he closes escrow. He does not have any trouble with rents dropping. His typical house is a 3 bedroom, 2 bath. He loves it when he can squeeze a 4th bedroom into the house by cutting the living room in half. He usually rents the 3 bedroom houses for $1,000, and the 4 bedroom houses for $1,100.

For more information about The Norris Group’s California hard money loans or our California Trust Deed investments, visit the website or call our office at 951-780-5856 for more information. For upcoming California real estate investor training and events, visit The Norris Group website and our California investor calendar. You’ll also find our award-winning real estate radio show on KTIE 590am at 6pm on Saturdays or you can listen to over 170 podcasts in our free investor radio archive.

Tags: , , , , , , , , , , , , , , , , , , , ,
Posted in Radio | No Comments »

167-TNG Radio – City of Riverside 3-27-10

Friday, March 26th, 2010

Deanna Lorsen

Deanna Lorsen, Development Director with The City of Riverside

(Full Bio)

Scott Barber

Scott Barber, Code Enforcement
Director with The City of Riverside

(Full Bio)

 stream

itunes

download

rss

This week Bruce is joined once again by Deanna Lorson and Scott Barber. Deanna is the Development Director for the city of Riverside. Her job includes redevelopment, economic development, marketing, housing and neighborhoods, arts and culture, and capital projects. Deanna previously worked for the County of Riverside as the managing director of the Development Agency. Scott Barber is the Community Development Director for the city of Riverside. His job involves building safety and code enforcement. Scott has been involved in the creation of new, innovative programs for financial systems.

You may be calling on a case file that is out in the field with the officer. During that sort of situation, Scott won’t be able to answer your questions. If a lender calls for his bill, Scott will give you the bill and suspend daily penalties for 10 days. The buyer will have to pay for the fines already there, but the city will work with the buyer on getting the house rehabilitated. As long as you are making an effort to rehabilitate the property, you won’t have trouble.

The investor’s goal is to get something fixed as quickly and as well as possible, so that he or she can sell it for a profit. The city and the investor have the same goal. The problem comes in from perception, because the investor perceives property inspection as threatening. The city must make it clear that defying the rules will not be tolerated. Recently, some people in the financial industry challenged the city’s constitutional right to fine unkempt properties, but the city won. Scott lives in Riverside, and he cares about it, so he will not allow it to deteriorate.

Riverside recently rebuilt the Fox Theatre in downtown. The city used multiple funding sources to pay for its redevelopment. The performing center itself was not paid through redevelopment funds; It was paid for by a bond issuance. Redevelopment funds must be made in redevelopment project areas for specific reasons outlined in state law. The city financial officer was responsible for the bond issuance. This issuance was done before Deanna began working for the city. This bond involved a long term, fixed rate loan for the city’s capital improvement. You could compare it to having a trust deed against the future progress of the city. The decision to take on these loans is approved by the City Council.

Riverside city has a down payment assistance program. Five years ago, there was little activity in this program because prices were so high, but now that prices have declined, this program has played a significant role in encouraging long term home ownership in Riverside. This program is funded with redevelopment funds and some Federal funds. Rental assistance is primarily given from the county. However, Riverside city did receive one Federal grant for preventing homelessness. The name of the Federal program for down payment assistance is named The Home Investment Partnership. This assistance comes in the form of a “silent second”. This means the homeowner gets the maximum fixed rate mortgage that they can afford, and then the city helps pay for the gap between their mortgage amount and the home price.

There are projects that Scott handles which get his attention more quickly, and get dealt with more quickly as well. If you are involved in a project which provides a large number of jobs to the city, or if you are in danger of causing a large loss in jobs, then you can receive a discount for your utility expenses. If your project is a new development, then you get “fast track” authorization. This gives you priority treatment through planning, building and safety, and through inspections.

Riverside is one of the leaders in the Green movement for energy conservation. The city is providing a program for investors who make certain environmentally friendly changes to their investments, and Bruce thinks that investors will respond to this. Riverside is the first city to be labeled an “Emerald City” in California.

The fact that Riverside has its own resources saves it from a lot of expenses. There are many Inland Empire areas who are serviced by Edison for energy, and MWD for water. The forefathers in Riverside secured water rights for Riverside that are unmatched. The public utility programs in Riverside make energy use much cheaper for its citizens. Riverside has had a planning committee since 1915. This city has always been fortunate to have people in charge who were thoughtful of the future.

Riverside’s community surveys show that we are still having some population growth, but Scott is uncertain how accurate that information is. However, a census should be taken soon, and that will be more informative.

In 2007, the city of Riverside took a 20-year planning ahead mentality towards growth.

The city is divided into 7 equally populated wards, which are basically districts. Each ward elects a member of city council, and those wards represent the city’s governing body. The wards that receive the most redevelopment attention are those that have the most economically damaging problems.

There was a set of apartment units in Riverside which were in bad condition, but those units got fixed and eventually won an award. If someone has damaged property, they can come to the city to receive funds for repairs. The city is required to spend 20 percent of redevelopment funds on affordable housing, and part of that money goes towards new construction. However, there are very strict rules regarding what kind of projects are eligible for funding. These projects must be for long-term affordable housing.

There are 3 significant building projects in Riverside which had to be stopped after they had already begun. One of them was near Lowes. It was a condominium program, but the FDIC completely tore it down. They are currently marketing that property for development. The problem was that it sat in a raw lumber state for too long, which caused problems for the wood structure. There are two in the west side of the city, which involves a large home development. This project will not be dealt with for a while because there are 4 different banks involved in it. This is actually fairly contained damage, but the County of Riverside probably has more trouble than the city.

Thank you Deanna Lorson and Scott Barber for being a part of the TNG Radio Show.

California’s budget problem has affected Riverside’s spending. The state has decided to use some of the city’s redevelopment budget to help with the budget gap. Riverside is currently expected to pay $17 million, by May 10th of this year, to help California’s budget. Riverside’s total redevelopment budget is about $50 million, so that $17 million is a significant portion.

One year ago, a court case determined that the state could not use redevelopment funds to fix the state’s budget. Right now, the state has attorneys looking for a way to challenge that decision.

The entire budget for redevelopment comes from tax collection. Property taxes have declined in Riverside. Because Riverside is an older city, it did not experience a dramatic decline in redevelopment funds. Overall, the city has experienced a 10 percent decline in property tax revenue.

On vacant properties, it can be typical for power meters to be gone. The city might have it removed if it presents a safety standard, or it might be stolen. Some people regularly look for abandoned properties to steal from. Early in the code enforcement process, Scott’s staff will record a notice of pendency. This allows investors to have records of these homes. The city’s goal is to get homes rehabilitated and reoccupied, so the city will work with investors. The city may even do on-site inspections with you, if you truly need it.

Tags: , , , , , , , , , , , , , , , , , , , ,
Posted in Radio | No Comments »

166-TNG Radio – City of Riverside 3-20-10

Friday, March 19th, 2010

Deanna Lorsen

Deanna Lorsen, Development Director with The City of Riverside

(Full Bio)

Scott Barber

Scott Barber, Code Enforcement
Director with The City of Riverside

(Full Bio)

 stream

itunes

download

rss

Bruce Norris is joined this week by the Development Director for the City of Riverside, Deanna Lorsen, and the Code Enforcement Director for the City of Riverside, Scott Barber. Bruce, Deanna, and Scott discuss what their jobs look like on a daily basis, their core job functions, the state of the Neighborhood Stabilization Program (NSP), how Riverside has been dealing with the funds, how Riverside works with a private trust, the type of inventory Riverside is focusing on, and much more.

California has undergone a huge shift from a massive construction boom to becoming a foreclosure heaven. This transition has been difficult for Scott. He had to reduce his work force by 34 percent. He has moved some of his valuable employees to code enforcement from planning and building safety. These people are dealing with problems related to foreclosures and abandoned properties. His work used to be evenly spread between the areas of planning, building, and code enforcement, but now his work is mostly focused on code enforcement, and building has become a very minor part of his work schedule.

When the focus of Scott’s work shifted, he had to train many of his employees for different types of work. There are certain aspects of being a code enforcement officer, which you need to be prepared for, especially when you are inspecting abandoned properties. When you are a building inspector, you are accustomed to going to a job site where someone is waiting for you with plans and instructions, but when you got to an abandoned house, there might be someone waiting for you, but they won’t be waiting with a set of plans.

The process on foreclosed properties is very paper intensive. These jobs include a lot lender communication and follow up notices. Because of all the paper records that go into these jobs, Scott’s team never loses in court.

In 2008, the National Stabilization Program was created. Riverside city received $6.6 million and Riverside County received over $45 million. This money was used very differently between the county and the city. The city focused on existing single family foreclosures. Riverside city worked on getting these foreclosed homes rehabbed and sold. The county is more focused on partnering with large developers making track homes. The county covers 7,200 square miles, so they have a much larger focus. Riverside city has the ability to pay attention to individual neighborhoods.

Riverside’s $6.6 million was allowed to be leveraged. Riverside leveraged its money by adding in another $5 million from the redevelopment funds. Then, Riverside gained a letter of credit from a bank for $20 million.

Riverside’s focus is on houses that the market will not take care, such as homes that need substantial rehabilitation. The city of Riverside also tries to focus on areas of high foreclosure density. Scott is responsible for determining which places should receive the most attention. When neighborhoods look bad, they encourage other problems to occur, so Scott’s work makes a strong impact on neighborhoods.

Even through prices have decreased, it is still hard for Riverside to buy homes. It is not easy to find out who owns a “for sale” property, and it is not easy to get a deal from the owner. Deanna has had a lot of success when working with the National Community Stabilization Trust, which is a nonprofit group who works with banks to gain inventory. This company was made specifically to deal with foreclosed properties. The banks allow this company to know where the inventory is, and then the Trust gives the city a list of eligible properties. Some weeks Deanna might receive a dozen offers, and other weeks she may not receive any.

Not all the homes that Riverside city is offered will meet the city’s standards for purchasing. Riverside focuses on buying homes that will most likely not be bought by investors or anyone else.

Once the buying process starts on a home, an inspector goes to the home and makes plans for getting the house rehabbed. The inspector then works with the contractors on doing the inspections. Scott thinks that Riverside’s staff collaboration gives the staff a huge advantage over other jurisdictions.

The city of Riverside is not allowed to make a profit on the homes it sells. This restriction limits the city’s ability to buy certain homes, because it is not good for the city to sell a home at a value lower than the average asking price of the neighborhood. If the city sells for 15 percent lower than everyone else, then other appraisals will be affected by that sale.

25 percent of Riverside’s funds produce affordable homes for families with low income. For these people, Riverside targets small unit properties, and then works with a non profit company to make the housing affordable over the long term.

The city also looks into homes that need to be demolished. Once the land is made empty, Riverside partners with a nonprofit organization to build an affordable home there. Riverside partners with the private sector at every stage of home development. The city partners with private rehabilitators and brokers, which helps to produce jobs.

There is always money that comes out of sales. When this happens, the money is reused to buy new homes. However, after five years, any money the city has received from these home sales will go back to the Federal Government.

The money Riverside received for buying homes has provided the city with many opportunities. For one, it has provided jobs to Scott and his staff. Also, there are some properties that Deanna would never have been able to take care of without extra financing. The ability to repair severely damaged homes helps not only its buyer, but also its neighborhood’s value.

There is a domino effect for neighborhoods that see improvement or damage. A large number of foreclosures in a neighborhood will cause devaluation and more foreclosures. On the other hand, increasing a homes value does the opposite.

Riverside’s Municipal Code Section 611 states that when a house becomes vacant, you must maintain it and offer it for sale or rent. If this rule is not obeyed, daily fines will be accrued. These fines encourage banks to take care of the properties.

Bruce asks Scott how he notifies a lender about a property that has become a problem. When Section 611 became active, Scott received so many complaints about unmaintained properties that his staff was not been able to keep up with them. A regular case load for an officer is 100 to 120 active cases. When this program first started, the officers were carrying over 300 cases. All they could do is respond to the calls they received.

Scott has seen so many foreclosed homes that he can now spot a foreclosed home just by driving through a neighborhood. Foreclosed homes often have brown lawns, stuff on the front porch, and evidence of a break in. This look of foreclosure is the problem that Riverside wants to address.

The fines for unkempt properties apply to all parties involved in the foreclosure. This means that owner occupants, the investor intending to buy the property, and the bank that may eventually own the property can be fined for an unkempt home. Some of the calls Scott receives about unkempt properties come from neighbors to those properties, and some from departments of other cities.

Pools on unoccupied lands are a major concern for Scott. When someone calls Scott about their concerns for a pool on a foreclosed home, he has someone get to that home that day. Scott is concerned about someone drowning in an unoccupied pool. Unfortunately, Riverside has received a lot of rain, so Scott has been very busy with getting pools re-pumped.

Lenders can be hard to get in contact with, but Scott’s staff is typically very good at finding them. However, while the party responsible for the home is being found, Scott hires someone to board-up unkempt homes. After 180 days, the city can declare an unkempt property a public nuisance, and then the city has more options available for getting rid of such problems.

Scott has never had a case in which he could not find someone with some sort of financial involvement in a property. However, loan securitization has made it more difficult. Scott’s staff uses an online tax and title service to search for people involved in unkempt homes.

Tags: , , , , , , , , , , , , , , , , ,
Posted in Radio | No Comments »

« Older Entries