Plymouth Title Market Update

The BULL market economy is derived of two basic sectors; investors and employers.  The first side, investors, have seemed to regain some sense of confidence in both the equity markets (S&P, NASDAQ, and DOW JONES) and the overall bond market.  Many municipalities, once thought to be on the verge of bankruptcy, have cut costs and worked out pension and trust fund obligation arrangements with former and current employees to reduce overhead.  The FDIC fund, which funds insolvent banks, that is improperly capitalized banks, has been drained from 58 billion in March of last year to 13 billion now.  Employers on the other hand, fire last and hire last.  Many have seen their smaller workforce grow the efficiency of their output, and now may be reluctant to hire back anytime soon.  Many others have shifted to automation and overseas subcontracting in order to cut benefit costs and labor expenses here.  The question now becomes, what new industries can be created and how can we in-source jobs from other nations that see us as a cheaper, more productive and safer place to open up shop? 

    80% of the sale is made on the fifth sales call.  Only half make a second call after they fail to close on the first, 25% make a third call, and only 11% make three or more.  Hence when you hear 10% of people do 90% of the work, it is the persistence they had that conquered their resistance. Are you a sales person, or a teacher?  Do you work every deal with the idea of closing and financial reward being your main motivation, or do you actually look to educate your consumer on why they need to get out of debt, have a financial game plan, prepare an estate, and limit their tax exposure?
    Lenders have been doing two things in regards to short sales.  The first is this slow process of getting rid of inventory is slowing their lending of new loans back into the community, so as to maintain capital reserve requirements.  The second is while they are working with the buyer and current homeowner to short sale, they are also bidding that property on the open market somewhere else through an appraiser/realtor to see what the current fair market 90 day liquidation value is.  This in turns is what causes the slow response banks give to offers for new buyers, for the initial offers are usually lower than current appraisal they get back
    FHA is tightening up guidelines.  Guess what this is a good sign.  As they tighten up, the government will lean back on the private markets to take higher risk in loaning to consumers and businesses alike.  There needs to be a change in how credit is rated.  Trans-union has not update their reporting system since 1995, when annual revolving credit  was at 350 billion.  It is now well over 1.6 trillion revolving on an annual basis.   to be taken off the mI declining market restriction list. 
    Illinois, which is seen as a distressed market, needs three months of growth in value to be no longer considered a declining market.  Ohio is considered depressed, which means more than 20% drop in values.   More than 30%, which makes up Florida, Nevada, and Arizona, are considered severely depressed and need one year of growth month over month aggregate to be considered stable again.  These issues and the ability to overcome them is what will open up new MI lending to once volatile states.  Cash outs will resume to 90%, Fannie and Freddie will loosen their hit son credit scores under 740, and honoring DU?LP conditions will rule the day again.  Banks that currently sell directly to Fannie and Freddie, and own preferred stock in those companies, will see their investments come back to numbers that accurately reflect a GSE (government sponsored enterprise) stock value, rather than a value of an IPO that sells paperclips out of Rwanda. 
    If you are not one of the Fortune 50 companies listed as "Too big too fail"  then you fall into a different category 'too small to help" , and you are on your own.  Now that you know that, getting your consumers to loosen their wallets and live their lives by their own prism, rather than their neighbor, their media, or their competitors tell them is what speeds recovery and growth. Regardless of the job market, you never have job security, especially if you work for someone else.  No one can guarantee you good health and success, only the opportunity to attain it.  The more you fail, the closer you are to success.  90% of this country still works, 95% still pay their bills on time,  97% still own their homes, and the average credit score in the U.S.  is still 688.  Good luck out there!!!!!
   
 
Ron Granado
Account Executive                                                              
Plymouth Title Guaranty                                        
C) 708-476-3142 
O) 630-300-3900
F)  630-300-3901 
For online ordering, please visit: WWW.PLYMOUTHTITLEINSURANCE.COM

09/18,2009 Posted to General , Illinois Title Insurance , Title Insurance , real estate title insurance

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Mortgage and Economic News

There are signs this economy is hitting it's bottom.  Job openings closings % were down to their lowest level in eight months, which show a stabilization of many sectors.  Consumer confidance has already risen in nations like Australia, Canada, and Japan.   This is the first recession mankind has gone through in a true information accessible age.  Every bit of bad data, even if it is unjustified, send the stock values of otherwise stable companies to penny stocks within minutes.  Rates, on 10 year, 3, 5, and 7 all look to drop for at least the next month as third quarter economic data will loom as the true indicator of if inflation is near or far.  We will see unemployment push past double digits, but right now inflation concerns are steady as the money we are printing is not being put on top of money already inxistance.  Rather the money printed to push current and past policy has replaced the trillions in wealth wiped out from the drop in bond values asscociated in mortgages backed securities.  Inflation, which is a concern, but not in the near future, will remain stagnant so long as the ability to leverage has been taken away.  Credit based economies, which are all in the Western world, have seen a drop in prices since consumers are having to pay for more things out of their own pocket.  As cash becomes king, the cost is lower since the overall cost cannot be spread out through credit card or installment payments.  Inventory remains high in homes, and must come down to a level of 6-9 months.  In many areas they already have, but once you throw condos into the mix, the numbers get somewhat out of whack.  The fact is, the price of goods and services, as with the growth in sectors directly affected by credit may never be the same. We will have growth in the future, but 9-12% may be replaced by half that number, since real assets will be the main source of purchase rather than a borrowed one.  We will see a recovery this year, the real question willl be how good it is, and how long it will last.  Will we become a resource based economy, replacing manufacturing jobs lost forever with other ones based on the need for?  What will America do to new bring jobs here? We spend so much time trying to emulate Europe, when what we should do is follow Texas.  80% of the new jobs in America came out of this state last year.  Five of the top six cities for growth in America are here, their economy grew last year at 4.2%, their foreclosure rate is 34% of the national average, and yet we would rather look like England.  England's unemployment rate is at 17% and growing, one third of their hospitals are bankrupt, and affordability for home purchases is at 6%.  Their credit rating has also recently been downgraded to AA. 
 
    Here are some marketing tips: work with banks.  The smaller local ones have much less red tape to go through, meet with the local bank manager or vice-president and ask them if they have any bank owned.  Here is where you can network with a realtor, and maybe an attorney to help them get rid of inventory.  This also puts your clients in a position to get a big discount, since essentially this will be more of a bulk purchase.  Where do you find the buyers?  Hospitals, credit unions, unions themselves, local municipalities,  anywhere in that area where there are companies based, and jobs available.  The best way to market to a local company and be their "go-to' is to attract people to live near the area where they are going to work.  The closer the proximity people are to their work, the more likely they are to stay and the more efficient they will be.  Companies know this and embrace the idea. 
 
    Are you doing Reverse?  Every day, 10,000 new people qualify for this type of mortgage and here is why it has some potential to assist in eocnomic recovery.  First, 76% of homes owned by people 65 and over are paid off.  The equity they have accumulated is free and clear, earning them no income or interest and sitting there waiting for them to pass, so their kids can fight over it in probate or in the will.  Why not take some of that money out to pay expenses?  Real estate taxes is the number one reaosn why people over the age of 65 lose their homes, coupled with health issues Medicare and Social Sec. cannot cover.  Estate attorneys love this product because it forces elders to address the Will concerns over their estate.  Small estate transfer exclusions expired this year, and now will be taxed like everything else.  Those who look to sell their homes now may be forced to take a big pay cut since they will be competing with the bank owned homes I spoke of earlier.  Take the money out now and buy that second home if you want to. If your kids is your concern, take the money now and give it to them.  Money today is more important than money tomorrow.  If Americans have concerns over Medicare and Social Security, and they should, then home assisted care and supplemental income needs to be looked at as another option for financial and health support.  Americans will have to rely more and more on home care, and SS and medicare wll not cover all the costs. We were taught to pay our homes off, so our pension and social security would take care of us.  What are we going to do if pension plans and social security become non-existent?  Insurance people like this product for it creates cash-flow for annutities, and second-to-die policies which ensure that home balance wll be paid off at the death of the second insured.  This policy is cheap even for older people since it insures two, and only pays when the last one passes. This allows the heirs to get the estate with no balance, and will not be forced to sell or qualify for a mortgage themselves. You should not sell this as a feature up-front, since monthly cash flow concerns must be the primary objectivefor a reverse mortgage candidate.  This is a quesiton asked to them when they do their counseling.  This does however take the objections of the heirs away alot easier.
 
    Now commerical loans are products 95% of brokers stay away from.  That makes so much sense, since RESPA does not come into play, fees are easier to collect, and cash flow is the main objective. If you offered residential to busines owners but failed to do their commerical loans, or business loans, then you may have missed out on 100k a year for the last decade. Is the learning curve a concernfor commercial?  Of course it is.   You have learn about different things like debt service, types of property, special use, types of business, and liquidity of that business and borrower. Should you follow a lead system, with mailers and inbound calls? Sure. Make sure the package is sent out by the same person who will be closing the deal, so the HUD and fees are sold upfront.   Should you also make physical sales calls when necessary?  Many realtor offices and attorneys say they have not seen a broker in six months, and are wondering if brokers are still in the game.  Affordability in many areas has now risen to a level of 70-75%. This means that 75% of the homes in a given region fall within the 3.5 times the median income for that region.  This helps with first time home buyers, which look to be the largest percentage of buyers this year.  If you live and work in an area where transients are coming from out of state, then networking with the businesses bringing them here to work will be your best referral source.  As you work with your current client list, remember that as 85% of your industry is gone, and growth in mortgages is up 42% from last year, there is alot more market share to grab.  Now go get it!  Good luck out there!!
   
Ron Granado
Account Executive                                                              
Plymouth Title Guaranty                                        
C) 708-476-3142 
O) 630-300-3900
F)  630-300-3901 
 
For online ordering, please visit: WWW.PLYMOUTHTITLEINSURANCE.COM

07/29,2009 Posted to General , Illinois Title Insurance , Title Insurance

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Plymouth Title Market Update

As it stands now, inflation is somewhat contained. 2,3, and 5 year notes were sold off in record numbers, which may push ARM rates much lower.  Although the debt this nation has accumulated has far exceeded the natural threshold, the lower demand for goods has kept most prices stable. Americans are becoming what their grandparents were, savers.  Many now look at their check as it if it will be their last, and are saving up for a rainy and a sunny day.  The first rule of self-financial planning is to pay yourself first. Always find a way to stash a few bucks away for you, because you have earned it.  Remember that the time you have on this earth is short, and the time you spend with those you care about is even shorter than that.   Take this tough economic time to learn about what mistakes have been made, and how they can be avoided in the future.  In saying that also take time to see how many high school graduates benefited from a good Real Estate economy, and pat yourself on the back.  The problem arises when making money becomes too easy, we become irresponsible, and forget the time tested values that have pushed civilized society to what it is today.  There is no free lunch, if you can't afford it, you don't deserve it, and you the consumer bear the ultimate responsiblity for the decisions you make. 

    Real Estate purchases are in full swing.  Are you seeing any?  Are you dealing with realtors and or attorneys that have direct access to foreclosures and bank-owned homes?  Are you trained on 203k?  This loan is a pain to close, but it attracts realtors, for it puts first time home buyers, our saving grace, back into the market. This also helps banks make quicker decisions for their as-is homes will be easier to move and be approved for outside financing.  As for baby-boomers, they will buy, for their 401k, IRA, and Pension withdrawals will be in record numbers over the next 7-10 years.  90 million people will reach the age of 65, as reverse mortgages,  whole life, annuities,  second homes, and estate planning will be the services most requested.  Make sure you are networking with the attorneys, accountants, and real estate professionals who still see you as a necessary component to making this industry work.  All these things are different sides of the same coin.  If we are all working against one another and giving clients mixed signals,  then how can we expect to help them grow and retain their business?
    The last thing you need to ask yourself is if you are a hunter or a farmer.  Do you look for the quick sale, or are you willing to plant seeds which will eventually lead to compounded business down the road?  The first type brings in a quicker buck, and usually a larger one.  The second one pays little upfront, but eventually grows to a point where that farmer will not have to go out and call on new business.  One involves sales and self-employment.  The second involves running your business.  I am not saying go out and get your license to run your own shop. I am simply trying to illustrate that everything you do needs to be looked at as your own business.  Your name and reputation is what you sell, not your rates, fees, programs, or name affiliation.  Learn everything and anything about your business so you become indispensable to your clients and this economy.  Do that and no one, not even Lisa Madigan will be able to fire you.  Good luck!!!!
 
Ron Granado
Account Executive                                                              
Plymouth Title Guaranty                                        
C) 708-476-3142 
O) 630-300-3900
F)  630-300-3901 
For online ordering, please visit: WWW.PLYMOUTHTITLEINSURANCE.COM

07/01,2009 Posted to General , Illinois Title Insurance , Title Insurance

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07/01,2009 Posted to General

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