UPDATE: Found her. She’s the one on the left, of course. Looks like Mommy…except for the tattoos. She is my youngest of 3 daughters and a tattoo artist in Venice Beach, CA
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Way off topic, but my daughter is in this magazine and we can’t find it here on the Eastside. If anyone sees it or knows where we can get it, can you shoot me an email please? The cover should say “Ink n Iron Convention” and she’s in that section. Thanks! I know…WAY off topic 🙂
“This is a time for serious people…and your fifteen minutes are up…We have serious problems to solve, and we need serious people to solve them. And whatever your particular problem is, I promise you, (X) is not the least bit interested in solving it. He(/she) is interested in two things and two things only: making you afraid of it and telling you who’s to blame for it. That, ladies and gentlemen, is how you get elected.”
Whether it be quotes from The American President above, or Jerry Maguire or any number of movies that hold you to a higher standard, there is no mistaking that Hollywood plays its part in elevating one’s ideals. I was once accused of being “The Jerry Maquire of Real Estate Agents”, but in these serious times I am looking to Andrew Sheperd for inspiration. It is not enough in this market to have “heart” or to “care about your clients”. Serious times call for serious leaders, and we are the leaders on the ground in the everyday real estate transaction.
If you are an agent who is attending classes on “how to convince people to buy” in this market, then I say to you “your 15 minutes are up”. These are serious times, and the order of the day is helping both buyers and sellers make good and best choices in these difficult times. If you are watching the news or waiting for a vote to solve your everyday real estate concerns, then maybe it’s time for you to get a job until this rainy day passes.
Time and again over the last few days I see people looking at the various bailout proposals for answers that will help the individual buyers and sellers. The reality is that our leaders are in the awkward position of needing to be elected. The reality is that there is no leader for an agent to turn to for answers, because in the room YOU are the leader. Whether you are helping a buyer make the difficult choice of WHAT to buy and what to pay for it should someone be inclined to buy, or helping a seller decide whether or not to sell…YOU are the leader in that room.
These are serious times and this is a time for serious people.
Watching the Senate testimony and voting on the Bailout Bill via C-Span. I hear that Maria Cantwell and Patty Murray are coming out against the bill from statements posted on their website. Hat tip perfectfire at SB.
Democrat Majority Leader Harry Reid is making a speech pleading for passage.
So far the Ayes are adding up very fast.
Cantwell votes NO.
Murray votes YES.
McCain: YES
Obama: YES
Yes: 74
No: 25
Now the bill will go back to the House.
I recently had a newly preapproved client ask me that question. It’s quite a timely one! Before this market, I would say that a preapproval letter used to be good for about 90 days assuming that none of the information on provided on the loan application has changed. Now-a-days, you have to factor in guideline changes and interest rates. You’re really not approved by the sales price or loan amount, it’s based on the total mortgage payment and funds for closing (down payment, closing costs, prepaids/reserves, etc.) along with any other conditions (such as having a certain amount in your savings account after closing).
Assuming that the loan program you’re preapproved with does not have guideline changes and still exists, before you write an offer on a home, I recommend that you contact your mortgage originator to make sure you’re still approved based on that home’s property taxes and current interest rates. In fact, it wouldn’t hurt to get an updated Good Faith Estimate with current rates and actual property taxes. If you’re asking the seller to pay closing costs, let your mortgage originator know so they can verify the amount will be allowed per guidelines. If you’re offering less than you’re preapproved for, your real estate agent may want to have a preapproval letter that is written specifically for the offer (especially if you’re asking the seller to pay closing costs).
Program changes? Boy, we’ve had a few. There are also changes with private mortgage insurance and various lender guidelines too. I recommend that people who are in the market right now as “preapproved” buyers, check in with their mortgage originator on a weekly basis (if you’re actively looking) and before you present that offer to make sure it meets current guidelines and that you are still qualified based on the present rate.
Don’t be surprised if your mortgage originator requires you to provide your most recent paystubs and copies of your asset accounts (where your down payment is coming from) before providing an updated preapproval letter.
Last note: Be careful when searching blogs for information on mortgage programs and guidelines. If the posts are even a few months old, the information may very well be outdated (if it was correct in the first place).
Note: I have modified this post. I had incorrect data (kind of ironic).
The House votes on Monday and the Senate apparently will vote on Wednesday. Here is the “Draft Proposal on Financial Rescue Legislation”
From Office of Speaker Nancy Pelosi — Sept. 28, 2008
REINVEST, REIMBURSE, REFORM
IMPROVING THE FINANCIAL RESCUE LEGISLATIONSignificant bipartisan work has built consensus around dramatic improvements to the original Bush-Paulson plan to stabilize American financial markets — including cutting in half the Administration’s initial request for $700 billion and requiring Congressional review for any future commitment of taxpayers’ funds. If the government loses money, the financial industry will pay back the taxpayers.
3 Phases of a Financial Rescue with Strong Taxpayer Protections
Reinvest in the troubled financial markets … to stabilize our economy and insulate Main Street from Wall Street
Reimburse the taxpayer … through ownership of shares and appreciation in the value of purchased assets
Reform business-as-usual on Wall Street … strong Congressional oversight and no golden parachutes
CRITICAL IMPROVEMENTS TO THE RESCUE PLAN
Democrats have insisted from day one on substantial changes to make the Bush-Paulson plan acceptable — protecting American taxpayers and Main Street — and these elements will be included in the legislation
Protection for taxpayers, ensuring THEY share IN ANY profits
Cuts the payment of $700 billion in half and conditions future payments on Congressional review
Gives taxpayers an ownership stake and profit-making opportunities with participating companies
Puts taxpayers first in line to recover assets if participating company fails
Guarantees taxpayers are repaid in full — if other protections have not actually produced a profit
Allows the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families
Limits on excessive compensation for CEOs and executives
New restrictions on CEO and executive compensation for participating companies:
No multi-million dollar golden parachutes
Limits CEO compensation that encourages unnecessary risk-taking
Recovers bonuses paid based on promised gains that later turn out to be false or inaccurate
Strong independent oversight and transparency
Four separate independent oversight entities or processes to protect the taxpayer
A strong oversight board appointed by bipartisan leaders of Congress
A GAO presence at Treasury to oversee the program and conduct audits to ensure strong internal controls, and to prevent waste, fraud, and abuse
An independent Inspector General to monitor the Treasury Secretary’s decisions
Transparency — requiring posting of transactions online — to help jumpstart private sector demandMeaningful judicial review of the Treasury Secretary’s actions
Help to prevent home foreclosures crippling the American economy
The government can use its power as the owner of mortgages and mortgage backed securities to facilitate loan modifications (such as, reduced principal or interest rate, lengthened time to pay back the mortgage) to help reduce the 2 million projected foreclosures in the next year
Extends provision (passed earlier in this Congress) to stop tax liability on mortgage foreclosures
Helps save small businesses that need credit by aiding small community banks hurt by the mortgage crisis—allowing these banks to deduct losses from investments in Fannie Mae and Freddie Mac stocks.
Brad DeLong has a better idea: nationalization and “it’s the best way to deal with the moral hazard problem.”
Paul Krugman agrees with Brad DeLong but ponders whether nationalization has broad political support.
Nouriel Roubini says the bailout is a “Disgrace and Rip-Off.”
This way of recapitalizing financial institutions is a total rip-off that will mostly benefit – at a huge expense for the US taxpayer – the common and preferred shareholders and even unsecured creditors of the banks. Even the late addition of some warrants that the government will get in exchange of this massive injection of public money is only a cosmetic fig leaf of dubious value as the form and size of such warrants is totally vague and fuzzy.
Seems like the only people who are happy with the draft proposal are the politicians. Seems like both presidential candidates are supporting it.
“This is something that all of us will swallow hard and go forward with,” Republican John McCain said in an interview with the ABC television network. “The option of doing nothing is simply not an acceptable option.”
Democrat Barack Obama said he was likely to back the package. “My inclination is to support it,” he told CBS television’s “Face the Nation.”
Update: Here is the 108 page PDF of the bill, now called the ‘‘Emergency Economic Stabilization Act of 2008’’.
Several news sources are reporting that a bailout bill agreement has been tentatively reached between congressional leaders and the White House.
Update: the “Summary of the Draft Proposal to Rescue U.S. Financial Markets” has been posted inside the comments.
From the Wall St Journal
“Senate Majority Leader Harry Reid (D., Nev.), in an appearance on the Senate floor Saturday, said there are only a “handful of issues still lingering” for lawmakers to finalize. He said his goal was for the Congress and the Bush administration to at the very least release an outline of the bailout plan before Asian markets open Sunday evening.
Saturday evening, a Senate aide familiar with the talks said a number of specific ideas appeared to be gaining traction, most notably the concept of creating a “financial stability” fund financed by Wall Street…
Also gaining steam was a proposal to eliminate the tax deductions for companies on executive compensation for top officers that is above $400,000….
One issue still to be resolved was how the $700 billion authority to Treasury to buy up toxic assets will be meted out.
Lawmakers want Treasury to receive the authority in tranches, receiving $250 billion immediately and another $100 billion if needed as certified by the president. The remaining $350 billion would be subject to a Congressional vote, giving lawmakers the opportunity to vote to rescind the funds. But a Senate aide familiar with the discussions said Treasury was pushing for a larger initial authority, likely around $500 billion.
Lawmakers appeared to have the advantage on the issue ahead of the evening talks, the Senate aide said, though no part of the deal had been completely finalized.”
From Reuters
WASHINGTON (Reuters) – U.S. congressional leaders on Sunday said they had reached the broad outline of a deal to put in place a $700 billion bank bailout but were awaiting details on paper before declaring it final.
“We’ve made great progress,” House of Representatives Speaker Nancy Pelosi told reporters after a night of marathon talks. “We have to get it committed to paper so we can formally agree.”
Jillayne here. So, they’ve reached an agreement, but they still have some disagreements. To me this sounds like we still don’t have an agreement, but the pressure was on to announce that perhaps they’re closer.
I’d like to know if we the taxpayers are going to be able to read the agreement and give our feedback to our elected representatives BEFORE the House votes.
It’s pretty amazing how in the span of just under 3 weeks that…
I’m just in a state of shock and near disbelief witnessing the carnage unfold on Wall Street so fast.
In this Sunday’s Seattle Times there was an article on “foreclosure rescue scams.” I found the timing interesting given the recent enactment of the Distressed Conveyances law effective in June of this year. This law was specifically enacted to curtail these practices and even provides a rather large “stick” to use in convincing people that they should not lure owners into such transactions (in the form of punitive damages of up to $100,000).
Does anyone have any insight into whether these scams continue unabated? Unfortunately, I have no direct personal insight into the issue. [CAUTION: Plug Ahead.] Although I offer a very affordable consultation that is well-suited for anyone who has been approached by a “rescuer,” I have yet to generate much business. So, I really have no idea whether the new law is having the desired effect. Unless the Seattle Times is behind the curve, it would seem that the new law has yet to achieve the desired impact (i.e., make this practice less common).
Last week when everyone was talking about median price being down in August, it seemed to me that median prices is generally down in August…or at least flat. The graph shows the relationship in median price for 2005 through present from June through year end. It may give you an idea of what to expect to happen to prices for the balance of 2008. I also find the nexus points fascinating and the 2005 vs the three years following to be very interesting. Hope you do as well.
As usual, I calculated these myself. We expect the YOY volume paths to cross eventually. But I doubt that is going to happen this year. The spread will become narrower beginning at the end of September. But there will still be a spread, I think.
For these grapsh I combined condos with SFR because over this 4 year period, tracking what buyers are doing is more important than whether they chose a condo or a single family residence.
During this period we saw many choosing condos vs. SFR because they could not afford SFR. Now we are seeing the reverse with SFR prices getting lower than townhome prices. That is putting pressure on townhomes to be cheaper to compete with the single family home market. During swings from condo to SFR and vice versa, it is best to combine them to see total buyer activity and trends.
Required Disclosre: Data not compiled, posted or verified by NWMLS
Calculated Risk
Paulson Plan: Will it Work?
The primary goal of the Paulson Plan is to get the banks to lend again – or “unclog the system” as Secretary Paulson put it. Secondary goals are to “protect the taxpayer” and hopefully minimize moral hazard.
Will the plan achieve the primary goal? I think the answer is yes. By removing these troubled assets from the balance sheets of the financial institutions, the banks will able to lend again without lingering doubts about their solvency and viability. At first glance, the size of the plan seems sufficient.
It is almost guaranteed that there will be unintended and unanticipated consequences, but the plan will probably achieve the primary goal. And making sure the banks continue to lend will minimize the impact of the credit crisis on the general economy.
Unfortunately the Plan fails to address the secondary goals….
Yves at Naked Capitalism:
Why You Should Hate the Treasury Bailout Propsal
the shockingly short, sweeping text of the proposed legislation has lead to reactions of consternation among the knowledgeable, but whether this translates into enough popular ire fast enough to restrain this freight train remains to be seen.
First, let’s focus on the aspect that should get the proposal dinged (or renegotiated) regardless of any possible merit, namely, that it gives the Treasury imperial power with respect to a simply huge amount of funds. $700 billion is comparable to the hard cost of the Iraq war, bigger than the annual Pentagon budget. And mind you, $700 billion is not the maximum that the Treasury may spend, it’s the ceiling on the outstandings at any one time. It’s a balance sheet number, not an expenditure limit.
But here is the truly offensive section of an overreaching piece of legislation: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.
Dr./Prof. Paul Krugman
Thinking the Bailout Through
…the plan does nothing to address the lack of capital unless the Treasury overpays for assets. And if that’s the real plan, Congress has every right to balk.
So what should be done? Well, let’s think about how, until Paulson hit the panic button, the private sector was supposed to work this out: financial firms were supposed to recapitalize, bringing in outside investors to bulk up their capital base. That is, the private sector was supposed to cut off the problem at stage 2.It now appears that isn’t happening, and public intervention is needed. But in that case, shouldn’t the public intervention also be at stage 2 — that is, shouldn’t it take the form of public injections of capital, in return for a stake in the upside?
Let’s not be railroaded into accepting an enormously expensive plan that doesn’t seem to address the real problem..
Housing Wire
U.S. Taxpayers to Bail Out Foreign Debtholders too?
“Participating financial institutions must have significant operations in the U.S., unless the Secretary makes a determination, in consultation with the Chairman of the Federal Reserve, that broader eligibility is necessary to effectively stabilize financial markets,
