Tag Archives: Legacy-Escrow

Predictions: helpful or counterproductive?

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The dialogue between commenters has been interesting to read on Ardell’s most recent post about predictions.

Is this a helpful or counterproductive prediction?

“So, don’t be swayed by media reports of a ‘disastrous housing economy.’ Take the long-term view and be confident that your home will continue to appreciate in value. And know that if you buy a home today, in seven years it will be worth a lot more.”

– Geoff Wood, CEO Windermere Real Estate
(Quote taken from the Spring Quarter 2008 of ‘Inhabit,’ The best of the Pacific Northwest magazine) Published by the Seattle Times.

I don’t necessarily disagree with Geoff’s sentiment and I understand his overall point within the larger context of the quote**—I just took the last paragraph quote from his ad titled “Gaining Perspective on the Real Estate Market”. Seven years is a long time. But this is one heck of a prediction, no bones about it.

**his use of a “Casino” and “gambling” analogy was terribly ironic, intended or not.

I have no idea if this was solely a local ad or if they ran it or a similar one in other markets Windermere has offices as well.

Agents are resources in so many aspects for their clients. Consumers turn to them for valuable feedback, for information, data, suggestions AND ADVICE, which includes feedback on where the real estate market is trending. In so many ways, they are advocates whom consumers want to trust, but for a variety of reasons find it difficult. Building and gaining trust does not begin with “I don’t know where the market is heading, beats me.”

You have to give Geoff Wood credit. At least you know where he stands.

Salvaging a dead transaction: when a client refuses to sign.

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Never underestimate the power of a cup of coffee

A few months ago I met with a client at their home in the Woodinville area. After introducing ourselves to each other we sat down at the kitchen table and started going over paperwork and loan documents. The gentleman slowly started to go over the loan documents in a methodical manner which is not unusual. Prior to each signing appoinment one of the very first things I mention to our client is that I’m not in a rush and they can take all the time they need. I indicate that there are a few important documents they need to pay particular attention to while the other bulk of the loan package is a series of disclosures, much of which is boilerplate and typical of most lender loan packages.

Probably 15 minutes into the signing it was evident that the demeanor of the client was changing. Not only was the scrutiny of the documents going slowly but question after question started to flow, one after the other. The client decided to stop the appointment and make a phone call to his loan officer. After a brief discussion, the client hung up the phone and informed me that the transaction would be on hold.

Naturally, your mind starts to spin a bit and I sensed that the gentleman wanted to digest the information more carefully, perhaps without the pressure of anyone being present. I informed the client that it was not a problem and I would be in touch to schedule another time to mutually get together and sign the documents.

coffee cup

We’ve been in each other’s company for about an hour by this time and I told him to “not worry about the transaction, at least I met another new friend!” At this point the gentleman offered me a cup of coffee. Hmm. That sounded really good and was my invitation to build trust. We sat down at the table over the coffee. I’ve never had a better brewed latte—this guy really knew what he was doing. Silky smooth and wonderful. We started to discuss absolutely everything: his house, our families, kids, the real estate market, interest rates, etc….

The gentleman was from Turkey and it was another lesson in assisting clients from other cultures and the way in which you build trust. The rest is history. Three and a half hours later I had a happy client, happy customers (loan officer/agent), and signed documents in my hand ready for a funding package to be completed and overnighted to the lender.

Buyer's question at signing

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A recent buyer asked us at signing (a day or two prior to closing):

“I’ve noticed that the fees charged by my loan officer are about $1,600 more than my Good Faith Estimate. I recall only being charged 1% loan origination. Is there any explanation for this?”

What are the re-disclosure laws (both state and/or Federal)? Obviously, this buyer was a bit under pressure and did not want to create waves to delay the purchase.

Life in escrow: When we compete with American Idol.

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There is only so much escrow can do when escrow receives loan docs at 5pm and the borrower must sign because an interest rate lock is about to expire and the rescission period puts their back against the wall, forcing them to sign the very same day (evening). Then the borrower (s), strangely unaware of the urgency, indicates:

1. Can you come to our house between 7:00-7:30 because American Idol is on at 8pm (like tonight, cough-cough) and we can’t miss it. Or, how about after the program is over?

or,

2. I drop Billy off at Basketball at 6:30 and pick him up at 7:30, so I won’t be home until 8:15 pm. Will 8:30 pm work for you? Oh, my spouse needs to sign as well? He does not get off his shift until midnight. Is that a problem?

Will these transactions close on time? If you do what Ardell suggests in Step #2, it is a sure thing..

I’m beginning to muster up the courage to ask management for new business hours: M-F 8-5pm; quick hour break for a run to Panda Express, sprint any last minute disbursed loan Payoff’s to the UPS terminal blocks from our office to make it on an airplane to wherever, do banking before the bank closes at 6pm; hustle back to the office, quickly re-check e-mail for more “last minute” loan docs promised days earlier, and then re-open from 6pm until midnight for signings from Bellingham to Olympia to Ephrata. Sat. and Sun. leave wide open for signings too.

Escrow Signings: your place or ours.

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Escrow Signing

This place, while “very rough”, was not the worst. We’ve been to some very remote and isolated areas. While escrow firms go way out of their way to assist agents and loan officers in closing their transcations for our mutual clients, you can see why courtesy signings outside of normal business hours or far distances are not free.

We’ve signed clients from one extreme to the other: in jail at 9pm at night a couple days before Christmas when no one should be working, to the Columbia Basin dust bowl of Ephrata in eastern Washington; the Columbia Tower Club in downtown Seattle to everyone’s second office, Starbucks!

Pondering the 2008 RMBS Vintage

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Because of increased loss expectations, Fitch Ratings has moved $139 billion subprime RMBS to Watch Negative due to losses from the 2006 and 2007 subprime vintages that are expected to range from 21 to 26 percent. Hat tip to Housing Wire.

Other ratings agencies have also increased their expectation on losses.  Standard & Poor expects losses on 2006 vintage subprime to approach 19%. Moody’s is estimating losses of 14 to 18%.

[photopress:fitch.jpg,thumb,alignleft]All throughout 2007 and now again in 2008 we continue to read stories from the ratings agencies about enhancements made to their default and loss models.   

Read: We should plan on more increases in loss expectations.

What I find interesting in the Housingwire article is that this is the first time a ratings agency is taking into account the fact that homeowners are walking away from their homes.  [emphasis added]

In Fitch’s opinion the contraction in the mortgage markets has contributed to an acceleration and deepening of home price declines, and has eliminated the option to sell or refinance a home to avoid foreclosure for many borrowers. Additionally, the apparent willingness of borrowers to ‘walk away’ from mortgage debt has contributed to extraordinarily high levels of early default, which is particularly noticeable in the 2007 vintage mortgages. As Fitch has described in recent research reports, this behavior appears to be largely attributable to the use of high risk mortgage products such as ‘piggy-back’ second liens and stated-income documentation programs, which in many instances were poorly underwritten and susceptible to borrower/broker fraud.

Fitch said it expected the 2007 classes under review (report due out in February) would be subject to “widespread and significant downgrades

Free Speech? Miami Realtor/Blogger sued by developer for $25Million

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It was reported by the Miami Herald that a local Realtor blogger is being sued by a developer who is not pleased that the blogger, Lucas Lachuga, remarked that the development was “doomed” on a January 10th post.

”Like any other blog out there, it’s a collection of my unbiased opinions and thoughts,” he said. “I have buyers all over the world who go to my blog. They know I’m not going to sugarcoat the market.”

Realtor Lucas Lachuga’s Blog is called Miami Condo Investments.

This is the kind of case attorneys probably would watch very closely.

The Escrow Files: the funny side of escrow

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While in Leavenworth, Wa. recently, Lynlee and I stumbled upon a variety shop in town with a wall of extremely funny quotes on mugs and urns like this. Had to buy it!

The things you hear out in the field can be very funny. Today, while waiting at a real estate office, I overheard probably the funniest conversation yet:

“…..I thought they just paid the water bills and stuff like that?” (referring to escrow)

It reminded me of a comment by my mother-in-law (sorry Lynlee, I do love your mom, but sometimes…) talking about her neighbor who is a retired Firefighter for the City of Seattle:

“oh, I think all he did was just turn the water on.”

Wherever you close your transactions, life is good in the escrow business!

Rhonda Porter, memories?