Posts Tagged ‘Business’

THE SMART BANK

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There are many suggestions being made as to how best to deal with homeowners in trouble with their mortgage payment. Some are constructive and worth pushing for. Others are not.

One of these is the proposal to allow a bankruptcy judge to force a bank to reduce the Pincipal amount of the mortgage. This is called a “cram down”.

Rather than giving this power of “Cram Down” to bankrupcy courts” (most “distressed” homeowners do not, and will not want to go the bankrupcy path), I’d rather see the Real Estate and Media industries praising and fighting for the Wells Fargo strategy for dealing with their Wachovia inheritance.

They are actively using Principal Reduction “Cram Down” along with Loan Modification strategies, usually  together, to provide long term solutions to many of their defaulting loans.

With a long history of prudent and pragmatic lending policies Wells Fargo are an excellent example of what the banks could and should be doing to make it possible for responsible homeowners to stay in their homes. By lowering the loan amount and interest rate they minimize the larger loss which they would take in a foreclosure or short sale.

 the short sighted strategies being used by the majority of other banks with similar problems are best described as  re-arranging the deckchairs on the Titanic.

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CHOOSING AN AGENT

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There are many different Business Models in the Real Estate Industry. Here’s just a few examples:
 
1. Buyer Only Brokers.
 
2. Buyer Rebate (“Kick Back”) Brokers.
 
3. Virtual Office Brokers. No physical location.
 
4. Reduced Commision Brokers.
 
5. Fixed Price Brokers.
 
6. Transaction Facilitation Brokers.
 
Etc, etc.etc ad infinitum.
 
All of these and many more are proof that we have a lot of competition in our business, and that the Consumer (Buyer or Seller) has lots of choices.
 
I won’t try to explain the pro’s and con’s of any of these options, but will strongly suggest that whichever of them you choose, you consider working with a REALTOR. My reason for this specific advice is as follows:

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1. There are more than Half a Million Licensed Real Estate Agents in California. This is the minimum required qualification for the job.

2. Only 165,000 of them are REALTORS who have voluntarily agreed to subscribe to a strict Code of Ethics, and are paying members of their Local, State, and National Associations of Realtors.

Amongst many other services Realtors provide to the public is the web site Realtor.com. the most popular of all on-line Real Estate sites. Check out http://www.realtor.com/.

Mortgage Tax Deduction

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Here we are at the start of the annual self flagellation period otherwise know as Tax Preperation Time.
Given the amount of bad/wrong advice freely floating around on this topic you might find it helpfull to see what the rules really are as the I.R.S. sees it.
Check out this link: http://www.irs.gov/pub/irs-pdf/p936.pdf

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