Agsequity's Blog

agsequity — Fri, 09 Apr 2010 21:07:34 +0000

Short Sales are prevalent with residential properties. This is no secrete – just turn on the news or go house hunting. But it is this blogger’s opinion that the commercial market is ripe for short sales and even short pay-offs as cash starved community and regional banks are in dire need of cash because they need to comply with the Federal Reserve’s reserve requirements. So what does this mean to mortgage and Realtor professionals alike?

The following website lists banks that may be experiencing major cash flow issues:

Bank List

Property owners with high LTV mortgages may qualify for a short sale or better yet, a short pay-off refinance. It is my opinion that this process may be significantly easier than getting a loan modification approved as the lender is literally getting the loan off their books in exchange for cash. It may make sense to allocate some of your marketing efforts in this direction.

Please feel free to email me any questions at AGSEquity @gmail.com. Although a prime lender may not offer a refinance loan involving a short-pay, AGS Equity will provided they meet our standard lending requirements. Licensed brokers and agents may access our matrix at Short Pay-Off Lender

Everyone is Talking about Short Sales

agsequity — Tue, 06 Apr 2010 16:10:51 +0000

Our market (Los Angeles metro) has quickly turned from REO’s to short sales seemingly overnight. Everyone is talking about short sales; Realtors claiming that they can get short sales approved faster, third-party negotiators who expect to be paid by the lender, and promises that the acclaimed Wachovia model of five business days short sale approvals is going to be the norm. I am in the wait and see mode myself. In fact, my wife and I have made one offer on a short sale (full price/30% down Fannie 1^st) just to have the listing Realtor tell me that their client accepted another offer (her offer). When I questioned her on why my full price offer wasn’t countered, her response was “They were thrilled with the other offer”. 40 Days later, the property was Back on the Market.

Experience number two, the property became available on a Sunday requiring a full loan approval from a specific agent at B of A (who was out-of-town) and the listing agent was going to present offers Tues. evening. She told me the seller wouldn’t even “look” at any offers without the B of A approval as the 1^st TD was with B of A (and the 2^nd was with Chase). Again the Realtor claimed to be an expert. It has been 16 days since the property was listed and it is still available.

My wife and father, who are not real estate experts, asked a simple question, “Why are we dealing with the seller who has no idea what the lender will accept as a pay-off and not the bank”. I explained that the homeowner still owns the property…so why not require that the seller hand over control of the sale to the “real seller(s)”, the lenders (most commonly the 1^st mortgage lender as most of the 2^nd’s are underwater). There has been a lot of talk about the lenders actually initiating the short sale process by soliciting the would-be sellers and introducing the idea of initiating a short sale.

In conclusion, the same corruptive forces that controled the REO markets, are present in the Short Sale markets. These forces include listing agents “double popping” most of the deals, the same buyers seem to always get their offers accepted by the same listing agents, and people using connections and influence to get things done with the banks. At the end of the day is the same game with a new label affixed on top of the box-the EO market is like Monopoly and the Short-Sale market is like Hollywood Monopoly; looks slightly different but the game is played the same way.

Short Sales and REO’s – Fraud and Material Misrep

agsequity — Wed, 24 Mar 2010 07:15:13 +0000

http://images.magnetmail.net/images/clients/WHOLESALE/attach/Article_ShortSales03_2010.pdf

Short Sales and the DRE-The above link is a memo issued by the DRE regarding the fraud associated with Short Sales; pay close attention to page 6 – Dual Agency. I personally have lost to escrows in Ventura County due to “conflict of interest”. Why do Short Sale listing agents and REO listing agents “double pop” so many deals? How does the Listing agent have a “stand by” buyer in the wings fully approved with the listing agent’s “preferred lender”? It just happened to me. Again.

Realtor Dan Melson: “I would not undertake dual agency myself. If I do find a buyer for one of my listings, I’ll refer them to someone else for negotiations, or at least get them to acknowledge in writing that I am working for the seller only. Everyone in the industry whom I respect agrees with this position. There is always a conflict of interest between buyer and seller. Anybody who tells you otherwise is trying to rationalize money in their pocket”.

Other comments about real estate: http://www.real-estate-blogs.com

Stated Income and Subprime Loans Available – 1sts & 2nds

agsequity — Fri, 12 Mar 2010 23:19:02 +0000

AGS Equity offers financing for almost any property type including residential 1-4 units, apartments, mixed use, industrial, bars/restaurants, auto repair/paint, vacant income properties & single use properties in most of California. AGS Equity also does not discriminate against borrowers who have poor credit including active foreclosures and low credit scores. Traditional income documentation is never required. AGS Equity is one of the few lenders that still offer second mortgages to non-prime borrowers. Unlike Banks and GSE lenders, AGS Equity normally funds most of their loans in ten business days or less.

What the FDIC & Government Doesn’t Want You to Know about Home Loans

agsequity — Fri, 12 Mar 2010 23:05:15 +0000

The US Government has a vested interest in driving business to banks, Fannie, Freddie, and HUD (FHA). Why? Our government lent money to over 70 banks via the TARP program and wants to get paid back. Banks are generating record profits through conventional and conventional-jumbo lending, and the TARP loans are slowly getting paid back. Additionally, Tim Geithner and Henry Paulson are form Goldman Sachs employees and Goldman Sachs Bank was the major beneficiary of the bank bailout.

The IRS and state tax agencies also benefit from the elimination of stated income and alternative income verification programs. Borrowers are forced to declare their income on their tax returns in order to qualify for a conventional loan regardless of their credit worthiness, or be forced to pay cash.
Once again, the tax agencies’ interests prevailed.

Lenders couldn’t even offer non-prime loans to credit worthy borrowers including reduced doc loans (stated income), if they wanted to, and some do. Banks are prohibited by the government and FDIC from originating or buying these types of loans. Other lending entities can not secure enough capital for these loans because of the illiquidity of the Mortgage-backed security (MBS) markets. A MBS is an asset-backed security or debt obligation that represents a claim on the cash flows from mortgage loans, have all but disappeared except for prime loans. There is also an illiquid credit default swap (CDS) market. CDS’s are swap contracts in which the buyer of the CDS makes a series of payments to the seller and, in exchange, receives a payoff if a credit instrument default. Hedge funds and life insurance companies, who do not require these markets to be functioning, have had a limited presence. Private investors who will buy non-prime loans from small lenders only have limited capital. It is unlikely that this situation will change over the next 18 months and borrowers will need to continue to rely on private money lenders.