Crook, inexperienced, or the honest knowledgeable professional?

When someone calls you on the phone, knocks on your door, or better yet referred to you by a family member or friend; how do you know they will put your interest on top of their priority list? How do you know they have any experience in the today's type of market (short sales, foreclosures, etc.)

It seems that no matter how hard our government tries to protect our homeowners, there will always be crooks out there. And no matter how hard our Associations of Realtors try to educate agents, some agents will try to take the short cut in their careers and not read books or study hard to be a knowledgeable agent.

With my recent experiences on helping people in foreclosure, I have ran into too many people that have been taken for an expensive ride.

In my daily field visits I find someone that was brutally abused for their lack of knowledge in the industry.

Yes, people posing as professionals have been stealing from innocent homeowners. I'm not talking about $5,000; I'm talking about $300,000!! And yes...I have been working closely with an attorney referring him these cases.

What is being done about these crooks? Are they going to be caught or are they going to continue living in their mansions enjoying the cash they thought they earned? We all know their little party will end soon.

So keep your eyes and ears wide open. Don't let your neighbor, family members, friends, get taken for a ride. They will still be out there trying to make a killing off of innocent homeowners no matter what the government does. And when you do get proof....report them! Immediately.

But also be very cautious to being quick to judgement. We, as agents and investors, are out there trying to be of service to the community and trying to make a bigger and better difference in today's homeownership reality.

We are only trying to clean up the mess the irresponsible business people left behind.

I recently visited a family who are tenants in a home being foreclosed. The property had over $450,000 in loans and the agent started listing the property at $380,000. However since nobody was making any offers and the time was running out, the agent lowered the price to $270,000. After that there was still no interest.

My investor/partner bought the property through a lease option to buy contract subject to the bank's short sale approval and I was there to collect rents from the tenant. (Yes, it's legal. If you want to how it's too much info to write so call me.)

However on my way to the property I thought to myself, if the investor is going to attempt to buy this property at $150,000; why don't I just ask the tenant a few loan qualification questions and see if he can buy the property. A good samiritan move....wouldn't you say?

I will go ahead and shred my investor's contract. My investor doesn't care anyways, he has been buying hundreds of properties these days.

When I arrived at the house the tenant's brother and sister-in-law were waiting with their arms crossed and looking at me as if I was some kind of crook. I walk in with my smiling face, sat down, and waited for the questions to come flying at me. (keep in mind, I was NOT wearing a suit and tie)

The tenant's brother has bought homes in the past and attempted to debate me and my transaction that my partner and I had already agreed with the seller, but little did they know that I trashed that contract and wanted to give the tenants the opportunity to buy a home at $150,000 that was probably worth $250,000. Unfortunately I can't guarantee the buyer will get this price, but I am there to tell them I am going to put all my efforts towards getting that price for them. The looks on their faces changed quickly.

In my 15 years of helping people buying, refinancing, selling homes, and investing in real estate; that is exactly what I've been doing.....helping people. Putting their interest first way before mine.

Afterwards the tenant's brother explained to me that there has been someone in the neighborhood taking advantage of buyers and sellers. I understood his reasons and we began to chat about the unfortunate mishaps in the industry. He shared stories with me and I shared stories with him. We ended the appointment having laughs and enjoying one another's time. Actually as I was leaving the appointment, the brother slowly approached me as if he was going to tell me a secret and he said in a low voice, "I'm going to want to buy another house soon."

The moral to the story: I passed their test.

If you feel a little uncomfortable with an agent or investor, the best agents and investors will speak in front of you, your father, mother, uncle, aunt, cousins, brothers, sisters, the family lawyer, or the family law enforcer. The best agent or investor is not afraid of anyone. Make them step up and take the test. The best and most honest always pass the test.

The New Loan Conforming Limits and How to Finance in Today's market

We now have the new loan conforming limits. For LA County it will be $710,000 and $729,750 max amount.

What does this mean?

It means those homeowners who had loan amounts between $417,001 and $710,000 will now be considered comforming pricing instead of jumbo pricing. Today the difference has been anywhere from 1% to 1.5% on the interest rates.

Suprisingly the rates have not gone down. Unemployment is low, manufacturing is high, consumer confidence has not gone down, and signs have recently been pointing to inflation.

Tomorrow, Friday, should be a very interesting day. The Labor Department will release February’s Employment report. The best formula for the bond market and mortgage rates would be an increase in the unemployment rate, a large dip in payrolls and little or no increase in earnings. Current forecasts are calling for 0.1% increase in the unemployment rate to 5.0% and approximately 25,000 new jobs added. It will be a big day for mortgage rates tomorrow. If you are currently trying to refinance or purchase, you might want to contact your agent to find out if they can still get you the rate they promised or get you a lower one.

The loan guidelines between conforming and jumbo aren't much different because of the recent mortgage implode we have been experiencing. It is still challenging to get a home loan approved compared to 2 years ago. I still originate loans, but not a lot lately because this market is not demanding loans as much as it did before. Getting loans approved today is like driving a VW bug to Mexico with an elephant sitting shotgun.

This year there will be a lot of creative financing that will not include the lenders. The banks are too busy handling their default departments. Loan origination is still important for them, but they do not want any flexible demanding borrowers.

If you are a seller, have plenty of equity, and would like to sell; your best bet is to sell low or create a lease option to buy.

For those sellers who have a property that is free and clear, it is a great opportunity for you to become the lender by preparing a seller financing contract with your buyer. If the buyer defaults, you will own the property again. Why not make 6 to 9% of interest on your equity during these hard times? Makes all good sense. Remember to always consult with your attorney and CPA about these types of transactions.

Lately I have been learning a lot from a veteran real estate investor....something I've been wanting to do for a while now. I have been gaining great knowledge about getting through this market, and his plans go hand in hand with mine. I am very excited to share this with all my friends. Let's talk about it over a cup of coffee.