Mortgage Fraud Still Happens

Unfortunately, mortgage fraud is not a thing of the past. It still occurs, although ethical lenders are going to great pains to make sure they’re not participating in the problem.

Inman News, a Real Estate industry news source, today reported the top 20 Metro areas for Mortgage Fraud activity. There was a 31% increase in reported cases during the first quarter of 2011 as compared to the same period in 2010, although the release did specify that many reports were on loans originated years ago.

It also states that 6 of the 10 top metro areas identified are in California, and that the majority of reports revolve around loans from 2006 and 2007. Many of the cases involved misrepresentation of purchaser income and instances of property ‘flopping’. Flopping is the practice of selling a home (usually a short sale property) at less than market price (most often to a ‘friendly’ party), who then re-sells it at the actual market value for profits that have ranged from 15%-300%.

Lenders and the Financial Crimes Enforcement Network (FinCEN-a division of the U.S. Department of Treasury) are conducting reviews on poorly performing loans. A listing of the top 20 areas for mortgage fraud in the report are listed below:

Top 20 metros for mortgage fraud

1. San Jose-Sunnyvale-Santa Clara, Calif.

2. San Francisco-Oakland-Fremont, Calif.

3. Lost Angeles-Long Beach-Santa Ana, Calif.

4. Riverside-San Bernardino-Ontario, Calif.

5. Sacramento-Arden-Arcade-Roseville, Calif.

6. Miami-Fort Lauderdale-Pompano Beach, Fla.

7. San Diego-Carlsbad-San Marcos, Calif.

8. Las Vegas-Paradise, Nev.

9. Atlanta-Sandy Springs-Marietta, Ga.

10. Salt Lake City, Utah

11. Chicago-Naperville-Joliet, Ill.

12. Washington, D.C.-Arlington-Alexandria, Va.-Md.-W.Va.

13. Tampa-St. Petersburg-Clearwater, Fla.

14. New York-Northern N.J.-Long Island, N.Y.-N.J.-Pa.

15. Orlando-Kissimmee, Fla.

16. St. Louis, Mo.-Ill.

17. Seattle-Tacoma-Bellevue, Wash.

18. Phoenix-Mesa-Scottsdale, Ariz.

19. Richmond, Va.

20. Denver-Aurora-Broomfield, Colo.

Lower Priced Homes Predicted To Drop Value Faster

A new study says that lower priced homes will have steeper price drops than their higher priced counterparts, according to a report by DSNews.com.

Already discounted heavily, many of these lower end properties are ‘distressed’. Before the housing market tanked, this market was robust due to the proliferation of subprime and ‘teaser’ mortgages and lower down payments. With the tightening of credit conditions and lending requirements, this market has been hit harder than the higher priced homes that are generally dominated by repeat buyers.

But the higher priced homes face valuation drops, too. The analysis was prepared by Capital Economics, a macro economics consultant that provides international and property research. Their methodology used existing Standard & Poors Case-Schiller data that was weighted for 16 major cities and then created a national housing model. Their reports are available only on a subscription basis.

Feel free to call or email me if you have questions about the local Real Estate market. Get quick updates on my new blog postings by visiting and 'liking' my facebook page.

Ranch Homes For Sale in Howell



 Some home buyers have very specific requirements. Perhaps it’s a large kitchen, or a finished basement. Sometimes it’s acreage with a pole barn, occasionally it must have an in-ground swimming pool. One of the most often heard requirements is for architecture type, and it seems that ranch style is at the top of the list.


Of the 270 of homes for sale in the Howell School District right now, there are 90 ranches and only 12 are bank-owned (foreclosures). They range from a 1969-built manufactured home on deeded land (in Woodland Lake Estates) listed at $9,000 to a $1.8 million home on 204 acres in Cohoctah Township.

The low end home is bank-owned, on a small lot, has two bedrooms and two full baths and is 552 sq ft in size. It is not mentioned in the listing, but this subdivision has two Woodland Lake access parks for the residents. Woodland Lake is a large, all-sports lake and also has a Public DNR launch off Hilton Rd.

The high end house was built in 1940, is three bedroom, two bath and 1770 sq ft. The 204 acre parcel has a 5 acre private lake, and there has been engineering done to develop the land if the buyer wishes to pursue that avenue. It’s currently a farm with “excellent hunting” as an MLS (multi-list service) remark. It is also available for financing, land contract or cash terms.

There are 88 other ranch homes available in the Howell School District. If you, or somebody you know is looking for one, give me a call.

Brighton Michigan – 35 Homes For $100 Thousand or Less



Affordable Homes Available

 Right now, there are twenty three detached single family homes and twelve condos for sale in this price range. This search is for the Brighton School District, so while some properties fall within city limits, many are in the surrounding townships. Ten of the thirty five units are bank-owned (foreclosures) and another eleven are short sales (selling for less than what is owed and the bank will need to approve the sale).


Five of the units are in a senior (55+ years old) co-op. The co-op units are small (950-1005 sq ft) two bedroom, one and a half bath each and three of the four are priced at $23,900-$42,900.

Four of the thirty five are price reductions and two are expired listings just returned to the market. There are seven new listings in this group, and three of them are condo units in the 1400-1600 sq ft size range, built in 2004. It appears they were purchased by an investor in 2007 and are now offered under short sale terms. These are at the high end of the list at $99,900. When built, these units were going for $160,000 to $190,000.

If you know somebody that is looking for a home on a budget, have them contact me. Brighton is only one of the market areas in which I have experience and expertise. There are still affordable housing programs available and interest rates remain very attractive. There may never be a better time to buy in any price range.

(data source-Realcomp II, Ltd. MLS)

Michigan Challenge Balloon Fest-Howell

There's still time to get in on the fun!  The Michigan Challenge is happening today and tomorrow at the Howell High School complex, 1200 W. Grand River, Howell, MI 48843.  Balloon launches, arts festival, a carnival and a lot of family fun.  Please check the web site for best parking options. This is a Howell Area Chamber of Commerce event.

Local News Sources in Livingston County

It amazes me how many people don't read the newspaper, or who don't seem to care. I guess we're so used to talk radio and sound bites on the networks and from the big media outlets that it's just 'too easy' to forget about other sources.

We are fortunate in our area to have a great local paper, The Livingston County Daily Press & Argus. Published every day except Saturday, they have wonderful local coverage. They're a Gannett Paper, so if you also subscribe to the Detroit Free Press, you'll occasionally see a duplicated Editorial or top Detroit area news story. I like reading the local City and Township Meeting minutes or synopses to keep up what's happening - often before it makes the big 'news'. They also have a very robust online edition at http://www.livingstondaily.com/, although the reader comments often strike me as either immature or 'having an axe to grind'. Such is life in a Democracy, however, and it's good to have such venues available.

A strictly online news source is the newer LivingstonTalk.com. Started by two long-time County journalists laid off from the Press & Argus, this outlet is gaining traction. Geared more towards features and local events, they do have a news feed from the local radio station (WHMI-FM) as well as from CNN, but they emphasize community news. Their tagline is "100% Locally Owned & Independent" and I've become an avid reader/visitor of the site. If you haven't visited them, yet, do so. I think you'll be pleasantly surprised.

And speaking of radio, WHMI 93.5 FM is a locally owned and operated station-not part of a large syndicate. The music programming is largely what you'd call 'hits' and classic rock, but they do a great job with local news reports, too. Weekend programming is a bit more varied. Their web site is really quite extensive in regards to local, Michigan and national news reports and they have a fantastic community events calendar, too. Their front page is pretty much a snapshot of anything you'd want to know about in Livingston County or for topical news.

And don't forget about your local City or Township web sites. Some are quite elaborate and contain past meeting agendas and minutes, agendas for upcoming meetings, etc. The City of Brighton website, for example, has meetings of all municipal Boards, including the DDA, Arts and Culture, Zoning Board of Appeals, and more. I know that few of us have the time to regularly attend such meetings and local Cable doesn't do a great job of coverage, but you can read the reports published in your paper or on the government web sites.

The Yin and Yang of Livingston County Home Sales

Through the end of May 2011, there have been 2,150 sales in Livingston County. The median sale price is $133,200 and the average sales price is $151,277, as reported by our Multi List System (MLS), Realcomp II, Ltd.

The highest price sale (reported as of today) in the MLS is a 2006-built 4138 sq ft waterfront home in the Hidden Lake Estates community of Green Oak Township. Four bedrooms, four and a half baths, in home theatre, and of course a private dock all come as part of the package. This home was listed at $899,900 and sold for $850,000 with a conventional mortgage on March 31, 2011 after just 39 days on the market. That’s 94.5% of listing price, not bad at all.

The lowest price home sale (excluding a couple of manufactured homes on deeded land and one home that sold for $6,000 and listed as “value in the land”) was listed for $14,900 and sold for $12,200 in 98 days. It was a 1940-built 639 sq ft, 2 bedroom, 1 bath bank-owned home with access to Whitmore Lake. It sold for cash on February 24, 2011 at 81.9% of listing price.

When I look back to 2005, the highest home sale list-sale price ratio was still 94.5%, although the list and sale prices were definitely higher. And there were more of them. In the $500,000 and up range for all of Livingston County through the end of May, we had 36 sales in 2005 compared to the 9 sales in that same price range this year.

Wikipedia says that, “Yin yang are complementary opposites that interact within a greater whole, as part of a dynamic system.” It is also a dominant concept of Feng Shui, something at least familiar to most Real Estate industry workers. It’s really about balance, not ‘left’ or ‘right’, or ‘right’ or ‘wrong’. Regardless of the housing market being up or down, we certainly have opposites within a larger, dynamic system. Personally, I’d love a little more balance.

Livingston County Market Stats – Through May 2011

Using data from our Multiple Listing Service (MLS), Realcomp II, Ltd., we are seeing a continuation of the existing trend of lower inventory and shorter time on the market.

Through May, and comparing years 2009, 2010 and 2011, inventory has gone from a year to date (YTD) figure of 2840 in 2009 to 2455 in 2010 and the current 2150 for 2011. That’s a drop of just over 24% in the last two years.

Both the total number of residential sales and the total sales volume (price of all sales combined) is lower in 2011 vs. 2010, almost 9% lower for number of sales and 6.5% lower in sales volume, but the average sales price is up about 2% for 2011 and the median sales price is just slightly up over 2010 as well. That's likely an indication of higher overall prices on a per sales basis.

Days on the market continue their decline, too. In 2009 it was taking an average of 135.2 days to sell homes. That dropped to 125.6 days in 2010 and this year it’s at 119.2 days. That represents a home selling about two weeks faster than just two years ago.

For buyers seeking a home for $100,000 or less, the news is not good at all. In 2010 (through the end of May), there had been 330 homes sold in this price range. In 2011, there had been 284, an almost 14% drop. Part of this is due to lower inventory, but some of it is also due to the fact that lower priced homes tend to get multiple offers and may be bid up and over that $100,000 price mark. That’s another reason for buyers to be ready to move quickly when they find the right house.

If you're going to be looking for a house soon, work with somebody that understands the dynamics of today's market and can help you create a winning plan.  My success rate with buyers is very good.

Our Real Estate Market Summary-June 2011

Locally, there is still a lower inventory, especially in homes under $180,000. The best homes (best condition at the best prices) go very fast. TIP: Get daily listings from your agent, drive by interesting properties quickly, and have your agent get you inside as soon as possible. If you like it, write an offer immediately or risk ending up in multiple offer situations or losing it before you have a chance to bid.


Interest rates remain attractive, but some lender programs are being modified to require either a larger down payment or larger ‘up front’ fees to go with 100% financing programs. Appraisals are also uncovering more issues with homes for sale and once a loan goes to the final underwriting process, it is not uncommon for even more issues to be raised. Lower income buyers in Livingston County gravitate towards the USDA Rural Development loans if they qualify, based on income. TIP: Work with a good lender to determine the very best loan instrument for you, provide them with everything they need to give you a firm pre-approval. This will prevent unpleasant surprises once you find that perfect house.

You can see that this advice is heavy on both the time and service issues. Do EVERYTHING that you can do to position yourself to move quickly in this market. I have no magical crystal ball, but while prices seem to be still trickling downwards, many are saying that the glass is half full – and getting fuller by the week. If that’s true, this is the time to buy. TIP: Work with industry professionals that are responsive to your needs and those that will have time for you. Part of that is being committed enough to the process to warrant their time commitment to you. Select one Real Estate agent to work with, and one lender, too. Get them the info they need to do the best job for YOU.

Brighton Optimist Golf Outing

The Brighton Optimist Club will have its annual Charity Golf Outing on Saturday, July 16, 2011 at the Jackal Golf Club in Brighton, MI at 11am.

The Brighton Optimists have given tens of thousands of dollars in scholarships to local students over their 34 years, and have spearheaded such large community projects as Brighton’s Imagination Station playground and what is now called the Meijer SELCRA skate park. At this year’s Free Fishing Derby for Kids (Brighton Millpond, June 11th) they are donating a youth-oriented piece of artwork to the City of Brighton, which will be on year-round display.

Golf fees are $85/golfer and include all course fees, a lunch, steak dinner and door prizes. There will be raffles, a chance to win a car at the hole in one station, a Vegas Hole, Beat The Pro driving contest and more. Foursomes that register and pay together online get a discount.

There are opportunities to donate raffle prizes, and hole sponsorships are available for $110 each. Executive Hole sponsorships are available for $380 and include the holes sponsorship and golf for four. What a great deal!

Details and registration are available at:

http://www.golfdigestplanner.com/18882-optimists/index.html

Best Methods To Get The House You Want

Here is a quick outline that will help you become a successful home buyer. There may be other things that would help and other agents may have different strategies. These work well in my experience and specifically in today’s market.

Be Pre-approved. Not pre-qualified. Get your credit score pulled by a lender, supply them with all of the documentation they request and get a firm pre-approval. Talk to them about refreshing it if you don’t find a house within 45-60 days and how these subsequent pulls may or may not affect your credit rating, too. It’s alright (even preferred) to interview a few lenders before you sign on the dotted line. Like the commercial says, “Just Do It!” if you’re serious about buying a home. Note: If you’re primarily interested in foreclosures and the property will be your principal home, talk to the lender about rehab loans. Many foreclosures are not financeable in their current condition and will require either a cash offer or a rehabilitation loan.

 Commit to a Realtor. Again, interview a few. Realize that not many will invest a lot of time into you if you’re not pre-approved and serious. Once you commit, stick with them and be open if there are things you don’t like. Sometimes it will be their way of doing business, other times it will be the market dynamics and you’d experience with any agent.

 Get daily listing reports. New listings, listings that have dropped into your price range, houses back on the market. The good ones are going fast and you need to be ready to roll.

 Drive by the interesting ones within 24 hours. Don’t wait or you may get shut out or put yourself in a multiple offer situation. Be sure your agent will have time to get you into homes within 24 hours of your request.

 Don’t be afraid to pull the trigger. Once you see a home you’re interested in, write the offer. If you’re in the lower price ranges (under $200,000), you will possibly be only one of multiple offers. Being pre-approved gives you a step up over casual buyers. Write that offer fast.

 Don’t lowball. If it’s a total dump, that’s one thing, but if it’s habitable, write a realistic offer. After you’ve seen a number of properties you’ll have an idea of a fair price for the house and its condition. Lowball it and you’ll open the door for a competing offer.

 Be prepared to get pre-approved by a lender chosen by a bank if it’s a foreclosure. That’s not uncommon. You don’t have to use them for the loan, but they want to make sure you’re able to perform financially. This can take from a few hours to a couple of days.

 Have an inspector chosen. One way to make your offer more appealing is to stipulate a shorter inspection period, say 5 days from date of seller acceptance. Ten to fourteen days sounds a lot more like you’re playing games to a seller –especially if it’s a bank-owned property. Discuss with your agent the typical inspections for the area. Home, sure. Well and septic, maybe. Radon, perhaps. There could be others.

 Make a ‘real’ earnest money deposit. Don’t do the $500 gambit. Put down a minimum of $1,000. I recommend that you put down 2-3% of the offer price. If the offer doesn’t fly, you’ll get it back. If the inspection is bad, you’ll get it back. If all is well, that money is applied to your down payment and closing costs.

 

The key is to fill in as many blanks as possible before you even look at the first house. Put yourself in position to move quickly and definitively. It will reduce stress and let you focus more on making good decisions. If you’re looking for homes in my market areas, feel free to contact me for a no obligation discussion.