This $25 billion settlement with banks has stirred quite a bit of controversy. (Read more on this in my past blog Bank Accounting Change Provides Investor Opportunities). Especially that $35,000 bribe offered to upside owners delinquent homeowners to short sell their house. (More on this below.)

Banks slowed the pace of foreclosures to negotiate this settlement for more than a year. New foreclosures fell 46% in December from October 2010, when the investigation into the robo-signing of mortgage documentation began. Now with this new agreement, banks are more likely to resume foreclosures, and that built up inventory will soon hit the market.

The agreement will direct $17 billion to writing down debt to buffer some homeowners from foreclosure. About 11 million U.S. homeowners owe more on their mortgages than their homes are worth. That has limited their ability to sell or refinance and reduced the incentive to keep paying.

Homeowners have been screaming for principal reductions, not just payment and interest rate modifications, to keep them from strategically default (walking away from an upside house and renting).   Currently homeowners have $750 billion in negative equity. Addressing 2% ($17 billion) of the problem is definitely not enough to fix it.

The agreement includes loan servicers refinancing $3 billion to lower homeowners’ interest rates and pay about $1.5 billion to homeowners harmed by botched foreclosures. Again…. this is pennies on a $750 billion dollar problem.

The part of the settlement that is stirring a lot of controversy are the incentives to homeowners who owe more on their home than it is worth and are seriously delinquent on their payments – to sell their homes in a short sale — and receive as much as $35,000 in their pocket for their effort. Wow. Sounds great… but it is definitely not what it seems.

Not everyone will see such a great offer.  Remember, not a lot of money was set aside for this. Whether sellers can expect incentives from their banks depends on multiple factors, including where they live. Read more here: Banks pay delinquent borrowers $35,000 to sell their homes

At first glance it seems the housing market is stabilizing. After a six-year slide in home prices, demand is showing signs of strengthening, with a jobless rate that fell to 8.3% last month. The number of Americans who signed contracts to buy previously owned homes in December held near a 19-month high, indicating that stabilization in the market that began in late 2011 may continue this year.

However, we expect to see a surge of home foreclosures hit our fragile market shortly. Although the number of new foreclosure filings fell 34% last year, we have been building up a backlog of homes that now will flood the market with low-cost properties.

There remains a danger that “a wave of foreclosures” may destabilize the housing market, said Susan Wachter, professor of real estate and finance at the University of Pennsylvania’s Wharton School. “The logjam has to be unleashed and it has been — this will do that,” she said. “That’s a good thing. But then there needs to be methodical loan-by-loan determination of the best resolution.”

I would not imagine banks will dump all their properties at the same time, as that would be disastrous. They will most likely release them in a slow and measured fashion, so the market can absorb them. The question is, when will they come and how fast. I expect it to be hit a lot sooner than many are prepared for.

There is one thing that I know how to do and I do it very well… and that’s making money and lots of it in real estate.  Right now, more than at any other time if you were to make money with REO’s this would be the time.

What can you do?

There are 5 key strategies, that if you follow will help you get your REO offers accepted almost every time.  What are these 5 Strategies?  Well… that’s for you find out tonight at 6pm Pacific.  Are you already signed up? Check here.

We’ll begin promptly tonight at 6pm pacific, but remember to login or else you’ll be locked out (we’re limited by our conference provider to 100 attendees only) and have to wait for the replay.  The cost is $19 well worth that with a few zeros behind it… if you know what I mean.

See you on the live training tonight! Alexis

Now Is Not The Time To Try and Do This Yourself. Opportunities Like This Only Come Around Once in A Lifetime.

You’re gonna want to do more than just swim when this dam breaks and floods the market with foreclosure inventory.  You’re gonna want to hop on your jet ski and zip a long picking up deal after deal while everyone is scrambling trying to figure out what the heck just happened.

Whether you’ve done several REO transactions or can’t get off first base, I’ve got a few tricks up my sleeve that I’ve only revealed to my inner circle of clients.  And recently I’ve modified them to work for you right now, in the current market.  However, to learn them you have to attend tomorrow’s webinar.

Here’s the link to register.  This is time sensitive information and I’m limiting the number of participants to 100.  As a foreclosures.com client I want to make sure that you’re on the training so I’ve given you an extra discount.  Regularly $29. For you it’s only $19.  But only while we have spots remaining.

I would really like to see you on the call this Wednesday, so I can personally coach you.

PS. Make sure you register asap here and then join the call early to make sure you get on. Once we hit 100 attendees the call will be closed. There will be a replay video available for all registrants the following day. Feel free to call if you have any questions. 800-310-7730

There’s been lots of discussion lately on the $25 Billion Mortgage Settlement that settled claims of improper foreclosure practices by five big banks. The settlement has been signed by 49 states, and the feds are inking a separate deal with Oklahoma. The deal could also help the housing market; about 1 million homeowners could get mortgage aid from the settlement, with $17 billion going directly to borrowers.

Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and Ally Financial are all involved in the deal, which is the biggest government-industry settlement since the big tobacco settlement.

Critics have claimed the settlement lets the banks off easy and precluded a full accounting of improper and possibly illegal foreclosures. President Obama announced in his State of the Union address that he would appoint a fraud unit to investigate mortgage origination and securitization abuses, which may have assuaged the critics’ concerns. We’ll keep you up to date on this one as it unfolds.

However, there is another lingering problem with the banks right now, that the press is not picking up on…

The US Financial Accounting Standards Board and the International Accounting Standards Board agreed on a proposal that would supersede banks’ incurred loan loss approach with a speedier “expected loss” one. Under the model, banks will be required to book projected losses spanning the next 12 months instead of recording losses after they have actually occurred. I blogged about this in “Accounting Change = REO/Auction Buying Bonanza.”

Wondering what affect this rule change will have on the market?

As I see it, the banks are going to be accelerating their losses and write downs now… and in order to meet capital requirements they will have to raise cash 2:1 to balance their non-performing losses. How will they raise cash? It would be nice if they could just get deposits… but at 1-2% CD rates I don’t see that happening. What’s left is to sell assets to raise cash… and those assets will be their already foreclosed properties (REOs).

Bottom line… as much as the settlement will provide relief to some homeowners… the banks will need their own relief and will be selling REOs to cover their reserve requirements. Who will buy them? YOU I hope!

Join me this Wednesday in my Strategy Session Live Webinar “5 Over Looked Ways to Master REOs in the New Economy” at 6pm Pacific, 9pm Eastern. I have limited the group to 100 attendees only… and we are almost sold out. Please call 800-310-7730 to order by phone or online here. It’s normally $29… but on sale now through Wednesday for only $19.

Talk to you Wednesday!

Some good news for housing… December’s existing-home sales climbed 5% from a month earlier, the third-straight monthly increase. Even better, the inventory of previously owned homes listed for sale sank to 2.38 million, the lowest level since March 2005. For all of last year, 4.26 million homes were sold, up 1.7% from 4.19 million in 2010. The best news was existing supply of homes for sale came in at 6.2 months — just about at the 6 month level considered balanced. Lower supply is, the key to our housing recovery. (Read the full report here.)

While the once bloated supply that hit over 11 months not too long ago has slowly whittled to a manageable level. This will give sellers who took their homes off the market a chance to try again to find a buyer. Plus there are plenty of foreclosures working their way through the system that will add to supply down the road.

But home prices have not recovered. Part of the problem is that foreclosures sold for an average discount of 22% from a standard home. And, savvy investors continue their shopping spree. They purchased 21% of homes in December most likely to flip homes or rent them out. Who would blame them? The opportunities to make significant profits in both short term and long term foreclosure investing has never been greater.

As America downsizes, have you looked for ways to capitalize on the increased demand for rentals? As I’ve been recently blogging never in my lifetime have there been so many people that can’t own a home but who are eager to pay you monthly rent for housing. Who benefits from this influx of renters? You do… if you own the right rental properties. Many of today’s renters will pay top dollar to live in a house (as opposed to an apartment) and will not want to move again for many years. What a great time to own positive cash flow rentals and ride the housing wave through the recovery!

Here’s what other housing industry watchers have to say:

Paul Dales, economist, Capital Economics: “There’s no denying that home sales are still low historically, but after having risen in each of the last three months, including a 5% month-over-month gain in December, it is clear that a housing recovery is now well underway.”

Ian Shepherdson, economist, High Frequency Economics: “With layoffs slowing sharply, hiring rising and consumers’ confidence rebounding, the conditions for a sustained recovery are falling into place. Sales and starts will keep rising; prices will then stabilize.”

Join me Tonight with Foreclosure Investor Expert Daryl White to learn “How You Can Retire Rich from Monthly Foreclosure Rental Cash Flow” at 6pm PDT, 9pm EST. This is a brand new live professional investor webinar that includes a free video replay of the call. You must register first online here or call 800-310-7730. Talk to you tonight!

Housing rents continued to rise in 2011, with Northern California markets including San Francisco, San Jose and Oakland, posting the largest rent hikes, according to a new report.

Nationally, rents rose 4.7% in 2011, according to a report from MPF Research, a division of RealPage. Rents are up 7% since hitting a low point in late 2009. The national occupancy rate ended the year at 94.6%, up from 93.5% a year ago.

“Rental housing is in strong demand. Most of the jobs being formed are going to young adults, who tend to be renters. At the same time, loss of renters to purchase continues to run far below the historical norm” said Greg Willett, MPF Research vice president.

Their projections for 2012: Occupancy will be higher, and rents will rise another 4.5% this year.

What are you doing to capitalize on this opportunity? Are you buying foreclosures 30% below market value, renting them out for substantial monthly mail box money and building hugh equity profits… so in only 5 years you can retire rich on foreclosure rentals? If not, you need to join us tomorrow night, for our Brand New Professional Investor Webinar “How to Retire Rich from Monthly Foreclosure Rental Cash Flow” with Daryl White, expert investor. Register online at: http://www.foreclosures.com/webinars/professional/ or call 800-310-7730 x2. Talk to you then!

This just in from the Wall Street Journal “Navigating a Tight Rental Market“… I’m not the only one noticing what a great time it is to own rental property.

“When Kathleen Marin and her boyfriend first moved to the Baltimore area in 2008, their two-bedroom town house cost them $1,100 a month. But as demand flooded the rental market in their area, the landlord gradually upped their rent to $1,400.”

For those of you counting… that’s 21% in rent increases in just 2 1/2 years.

“The rental market is the tightest it’s been in more than a decade, with only 5.2% of apartments nationwide vacant at the end of 2011, down from a high of 8% in 2009, according to real-estate data firm REIS. Demand is up as the housing crisis and tighter lending standards have left many people unable to or wary of purchasing a home. And higher demand means average rents are rising, too.”

There’s More… from Marcus & Millichap “Rental Market to Hit New Levels in 2012”

“Favorable demographics, the release of pent-up demand as young adults de-bundle from family and roommates and increased renter demand due to changing attitudes towards homeownership – which has become increasingly difficult in this country – drove more people into renting. Although the private sector created 1.8 million jobs last year, even greater job creation will be needed to sustain the white-hot levels absorption recorded after the recession.”

But it’s not just the apartment market that is heating up. There is a serious shortage of single family rentals as well…

“If you are looking to rent a single-family home, that market is even more competitive since there are fewer such properties on the market. In many places, monthly rent for a single-family dwelling runs more than a monthly mortgage payment on a similar property would, says Michael Labout, a residential real-estate broker.”

Bottom line, if you want to capitalize on the surging demand for rental property, the best way to start is to build your single family rental empire earning immediate positive cash flow, while building your wealth for retirement… you won’t want to miss our Brand New Professional Investor Webinar this Wednesday “How to Retire Rich from Foreclosure Rental Monthly Cash Flow” at 6pm PDT, 9pm EST. Details and Register Online Here or call 800-310-7730 x2.

For investors who want to grab some great foreclosure deals, but do not have the cash, a little-publicized national lending program is now offering help to finance investor purchases for flips and rentals. Check this out…

• Minimal down payments: 10 percent for investors on first 4 properties, 25% down more than 4. Most of your down payment can come from documented gifts from others with no direct connection to the transaction.
• No requirement for an appraisal on the property unless you’re applying for additional money to renovate the house. This is crucial because lowball appraisals can be deal killers, especially when the house needs cosmetic or other repairs.
• Generous “seller contribution” limits of up to 2% of the price on investor purchases, effectively reducing the cash you’ll need to pay closing costs.
• No requirement for mortgage insurance coverage, despite the high loan-to-value ratio.
• Bad Credit Okay. Credit score minimum of 660, compared to the 700-plus scores many lenders demand for conventional loans on favorable terms.
• Maximum loan amounts tied to standard conventional loan limits: $729,750 in the highest-cost markets, $625,500 in others, and $417,000 everywhere else.
• Loan Costs: Prices with a higher rate than average 30 year conforming loan, approximately 1-3.75% discount points.
• Underwriting: Same requirements as conforming, but without the property issues (appliances missing – no problem).

Who is offering such an unusual package? Fannie Mae, who is saddled with a portfolio of tens of thousands of foreclosed homes it needs to sell. They are now willing to finance their sales to new owners, and has come up with a new financing program, called “HomePath” to do so. In recent weeks, HomePath loans have been rolled out through mortgage brokers and a network of 50 lenders, so it’s probably available in your area.

The basics: HomePath is restricted to Fannie Mae foreclosure holdings. More on Homepath financing here. Fannie Mae properties can be viewed on Foreclosures.com.

There are two main options with HomePath: mortgage financing to buy the house “as is”; and “renovation” financing, where Fannie loans additional amounts for “light to moderate” fix-ups, such as a roof repair or replacing a heat-and-air system.

Listings eligible for renovation financing generally require some work to be funded through add-on amounts to the mortgage that are held in escrow by the lender after closing and disbursed as repairs are completed during the succeeding six months. Maximum rehab amount is $30,000 or 20 percent of the projected “as completed” value of the house.

Interest rates on both options are slightly higher than prevailing conventional or FHA-insured loan rates. When 30-year fixed rates on owner-occupied home loans dropped to 3.88%, HomePath loans with 10% down payments were available at 4.88%.

Wow, that is the cheapest investor money I have ever seen! And if you want to Retire Rich from Monthly Foreclosure
Rental Cash Flow, you must join us this Wednesday in our Brand New Professional Investor Webinar. Details Here or Call 800-310-7730 x2. Talk to you then!

In talking to my clients and coaches lately, I’ve been hearing and seeing, more and more interest in buying and holding foreclosures for immediate cash flow and wealth building, versus flipping for short term profits. There is a reason for this switch. The housing market we are in right now, is like nothing I have ever seen in my 25+ years of investing. And I am not alone. Here is what, Daryl White, personal investor, instructor and coach here at Foreclosures.com has discovered…

“I’ve personally done quite well with rental houses for the past few years, buying 1-4 unit properties in my local market as they are easy to buy, finance, and manage, and building huge profits when I resell. Not only is the rental market strong, but the lease option market is hotter than ever.

So if you want to build your rental empire, banking money every month with your passive investments and build wealth through equity appreciation over the next 5 years… then NOW is the time for you to jump in too.” Daryl White, Investor, Coach

Join Daryl and I this Wednesday in our Brand New Professional Investor Webinar “Eliminate the Ups and Downs of Real Estate: Launch Your Foreclosure Rental Cash Flow Empire“, Special Live Event: Wednesday, January 25, 2012 6:00pm PST. Details Here or Call 800-310-7730 x2. Talk to you then!

I’ve been doing some research lately on available foreclosure financing and have uncovered some surprising facts. The overwhelming consensus in the news is that the credit markets are so tight, you can’t get a loan. But in digging, I found that statement to be extremely exaggerated. In fact, I found “5 Myths” on real estate financing that are simply not true.

Myth #1: Homes Aren’t Selling

The National Association of Realtors reports that existing home sales have increased 4% to 4.42 million in November and are 12.2% above November 2010. So, homes are selling. And total housing inventory is falling, down 5.8% in November, which represents 7 month supply at the current sales pace. With levels above a 6 month supply (considered a balanced market) we are still in a sellers market, but there is not the “over supply” on the market as many have stated. However, there are ample number of homes not on the market, held by banks, or in some stage of the foreclosure process, which I expect to see hit the market later this year. That is good news… more great deals for us to buy.

Myth #2: Buyers are All Cash

All-cash sales in November accounted for 28% of all purchases, down slightly from 31% in November 2010. Of course investors make up the bulk of cash transactions, but 72% of 4.42m transactions obtained financing. 3,180,000 is a lot of people who somehow found money in today’s mortgage system.

There is no question that mortgage bankers are making loans — and big profits when they do. Profits per mortgage in the second quarter reached $575, up from $346 per loan in the first quarter, according to the Mortgage Bankers Association. Of course, if mortgage bankers don’t make loans they don’t collect that $575 per successful borrower, reason enough to encourage all possible applications.

Myth #3: Qualifying for a Home Loan is Impossible

There’s no doubt that the mortgage application process has changed in the past year. But if we compare today’s underwriting standards with the over exuberant period from 2002 through 2006 then yes, loan applications have gotten harder. However, if we compare today’s process with loan requirements in the 1990s; underwriting standards for Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) loans; or the loan requirements typically set out by community banks, credit unions or small S&Ls then no, lender demands have been fairly consistent. Bottom Line: Lending is back to the good-old-days of fat loan files and lots of verifications.

How our current system works — Wall Street Reform has given lenders a choice. They can originate option ARMs and allow borrowers to apply for financing with a no-doc loan application — but only if they’re willing to set aside 5% of the loan amount in a reserve and expose themselves to the possibility of borrower lawsuits. Or, they can make loans without the reserve requirements or liability if they simply originate mortgages within the safe harbor created by the new rules.

Loans within the safe harbor are called “QRMs” or qualified residential mortgages. QRMs include FHA, VA and conventional financing — in other words, sane and safe mortgages. The “new” loan standards required under Wall Street Reform are hardly impossible:

*The lender must show that the borrower has an ability to repay the loan based on current income.

*The lender must verify borrower income claims with tax returns, W-2s, etc.

*The lender must verify the borrower’s employment.

None of this is new to anyone who has applied for a VA or FHA loan. Or, for that matter, borrowers who have insisted on using a fully documented loan application. You maybe wondering why would anyone want to use a full-docs loan application when you could get a stated-income loan (SIL) with a lot less paperwork and hassle? The answer is money. A stated-income loan today might require an interest rate that’s 4% higher than a fully-documented mortgage application. That’s a huge additional cost over the life of the loan.

Myth #4: Typical Borrowers Can No Longer Qualify for a Conventional Loan

DBRS, a provider of credit rating opinions for financial institutions and other large-scale entities, has produced an interesting chart that compares prime mortgage underwriting standards for 2007 and 2011. Their report shows plainly that credit score requirements have increased, while maximum loan amounts have declined. The basic prime loan credit score has gone from 620 to a range of 680 to 720. But so what — the typical FHA borrower has a 699 credit score and FHA loans are not prime financing.

As to maximum loan amounts, they’ve dropped from $2 million in 2007 to $1 million today. This just doesn’t impact a lot of people. The typical buyer paid $174,800 for an existing home in November.

Not only is financing readily available, there’s a very good reason to finance and refinance today: Money is incredibly cheap.

Freddie Mac reports that loan rates for both fixed and adjustable financing have slipped to levels unseen during the past 50 years. Plus, the Federal Housing Finance Agency — the government body that oversees Fannie Mae and Freddie Mac — says at the end of the second quarter that home prices were 18.8% lower than in April 2007.

Myth #5: Financing is Not Available for Foreclosure Properties

Financing a foreclosure purchase at the trustee sales or sheriff sales is not available. Winning bidders are required to pay the full amount in cash — often on the spot in the form of cashier’s checks – or from a hard money lender on the spot for your purchases. But this is the only example of “all cash” required. When you buy bank-owned properties (REO) or pre-foreclosure properties, you absolutely can finance those purchases. REO’s with conventional financing and pre-foreclosures with taking over the existing loans “subject to”.

Fannie Mae and Freddie Mac may have restricted their investor loans in the past few years, it doesn’t mean financing is not an option for investors.

There is always a challenge in your real estate business. Just a few years ago we were fighting for our discount, in multiple offer situation, driven mostly by loose lending standards. Today you can find significant discounts and profits, but you must prepare your financial house first.

Financing options are still available for all different types of investors: newbies with little cash or credit, average investors with some cash and credit, and seasoned investors looking to expand their portfolio beyond the 10-property limit set by Fannie Mae.

Investors today will need to be a good bit more creative than three years ago. But it is certainly worth it if the end result is significantly greater discounts. Especially in today’s rental market where I am seeing 10-20% cash on cash returns in my first year… not counting equity appreciation as I hold to build wealth.

Find out more about how to find the money and build your rental cash cow empire in our Brand New Professional Investors Webinar “Eliminate the Ups and Downs of Real Estate: Launch Your Foreclosure Rental Cash Flow Empire“, Special Live Event: Wednesday, January 25, 2012 6:00pm PST. More Here or call 800-310-7730 x2.

Last night in my Strategy Session, we covered a lot of ground on how to set your 2012 goals and what to do to hit or exceed those goals. If you missed the session, call my office today (800-310-7730 x2) to invest in the replay… it was a not to be missed session.

To highlight, here is what we (myself and my panelists Phil Goodenough, Grace Doctolero and Andrew Cushman) each shared our personal experiences and answers to the following questions. (The replay will be available later today, call 800-310-7730 x2 to get yours.)

*What’s happening in the housing market and what changes should you make today?
*What are your financial goals for 2012? How many calls will you make, and qualified leads will you generate, to hit your goals?
*Where will you find motivated sellers, who are eager to unload at wholesale prices?
*How will you organize your daily and weekly tasks to better work your leads?
*How much money do you need to raise? How will you find your investors?
*What steps will you take today to assure you reach your 2012 investing goals?

Their answers will both surprise and enlighten you.

What surprised me the most was how each of our panelist clients are keeping a very full personal schedule with their families and charities, while working part time applying my pre-foreclosure and REO business plans. They are making $100-$200,000 a year, working only 20 hours a week and expect this year to double their business. Their New Year has started right, each having a deal or two already going, and expect to hit their deal goals by the end of the first quarter!

What will your first quarter look like? What are your goals for 2012? And how are you going to make them happen? Give us a call… and lets put you on the same path as Phil, Grace and Andrew… 800-310-7730 x2