Project Lifeline consist of six of the ten major mortgage companies giving a 30 day reprieve on foreclosures to homeowners that are 90 days or more delinquent on their home payments. This 30 day grace period is intended to allow homeowners that are in default to secure refinancing. Obviously the planners of this new program have not attempted to seek financing in today’s market let alone try to shop a bad credit loan in 30 days or less. (more…)

According to administrators of PREN and Mr. Carey’s REW Forum Hacking Apology sites someone from REW used a password from a former Client that is now a Forum Moderator at PREN to hack into the system and delete threads that openly discussed many ethic violations and misconduct of Morgan Carey and Real Estate Webmasters. PREN immediately discounted the Carey apology as little more than damage control and called for Morgan Carey to name the employee, dismiss him/her and file a criminal complaint with the Canadian authorities. This has not taken place as of the time of this posting.

It seems as though passwords can be harvested from these public real estate forums and inasmuch as we all tend to reuse the same passwords it leaves us open for identity theft. It is recommended by industry experts to use passwords that are unique to any public forum and to NEVER reuse any password on bank or email accounts.

Although SEO-Guy (Morgan Carey) blames an unnamed employee for the forum break-in and has downplayed the incident law enforcement agencies have now been involved since Federal Statutes have been violated.

The recent fire storm in the real estate forums is an unwelcome distraction for those of us that are already besieged by an industry slump and poor press. This classic “David vs Goliath” reenactment is certain to gain more negative press for the housing industry as Agents from several states have been adversely affected by REW Forum Hacking and deletion of these threads.

According too many experts in the field of “Search Engine Optimization” back-links from these forums aide in search engine rankings for real estate websites. When these aged pages and agent links were deleted it negatively impacted the rankings of the Agents involved and the PREN forum itself. Since most real estate transactions begin on the Internet these prized search engine rankings can be worth a great deal of income to any Agent or company fortunate enough to have them.

I was also informed that Morgan Carey and REW has SEO and link Clients competing from many of the same markets of the Agents that were impacted in PREN. In my humble opinion the action taken by REW gives SEO Guy’s Clients an unfair advantage and is outright Industrial Sabotage.

Please remember to change your passwords if you belong to any of these public forums to protect yourself from identity theft. This is becoming an extremely cut throat industry I am ashamed to say and all precautions need to be taken.

~Rhonda McMillan
Broker

While the wild fires are almost an annual event now do in part to mismanagement of public and private lands as well as urban sprawl, this year was especially devastating with over 1 Million residents evacuating thus far.

Why does a Columbia Missouri real estate Agent pay so much attention to a natural disaster in California you ask? Simple economics for us in Mid-Missouri is the short answer. In my almost 20 years of involvement in the Missouri real estate market I have noted a substantial surge of California property buyers after every major natural disaster and I predict this one will be no different.

Why do California residents choose Missouri? That answer is simple as well. California property owners are some of the savviest home buyers in the nation. They generally do their home work when faced with relocation. Missouri offers more bang for their buck than most competing states and their dollar has considerably more buying power than it did in California. Once a California home owner cashes out they are surprised at just how far their proceeds will go. Funds from the sale or insurance settlement for a modest 2 bedroom ranch style home on 5 acres in southern California can be converted to a ranch consisting of 200-300 acres with a 4+ bedroom modern home with all of the necessary outbuildings. This is an example but I have seen it happen time and time again.

Another major reason that California property owners relocate to Missouri is for the same reason they are in Southern California to begin with. They tend to be lovers of nature. While Missouri does not have the desert landscape and terrain they are accustom to, our hardwoods, forests, pristine rivers and wildlife are enough to please any nature lover.

Southern Californian’s typically are horse lovers. There is an estimated 300,000+ horses in San Diego County alone. Missouri’s hardy pastures and rolling hillsides are well suited to horses, cattle or any other type of livestock.

And as for cattle, Missouri is second only to Texas for cattle production and even leads Texas as the number 1 state in the nation for cattle per acre.

According to one of our biggest referral partners Al Rosson of Cabrillo Mortgage & Realty Services, property owners have begun inquiries in to selling before the fires are even out. Al says that this is not unusual and that even home owners that did not suffer a loss often consider selling due to the fact they are simple tired of all the near misses.

When I asked Al about the future of real estate in San Diego he replied “With the natural beauty of San Diego and weather that is remarkably similar to the Canary Islands San Diego County will continue to have some of the most sought after property in the nation. While many residents will relocated soon after this fire, there are many more that are waiting to move in. We will recover and be stronger than ever. We always do”.

So while our hearts go out to all of the home owners in Southern California that have suffered a loss I can assure them there is a brighter road ahead….the road to Missouri.

~Rhonda McMillan

We will undoubtedly feel the affect of the sub-prime fiasco through 2008. However, the figures of mortgages in default are minute when you look at the number of sub-prime loans and even smaller when you look at the total housing market. The figures simply do NOT justify the “Chicken Little” “the sky is falling” mentality of the liberal press.

The larger problem is the lack of confidence by consumers all of this negative press has brought about. Perception is the key and the perception of the crisis is far worse than the crisis itself.

Even for home owners that find themselves owing more on their home than it is worth can simply sit it out and wait for the market to rebound. And unlike finding yourself with stocks that have been devaluated your home is a usable and necessary asset that provides utility while you await a market correction.

In addition to pending legislation to assist distressed homeowners the suggestion by the Bush Administration that lenders work with troubled borrowers appears to have resonated. If you are in a situation where your ARM (Adjustable Rate Mortgage) has raised to a level that is no longer sustainable simply contact your lender. You will in all likelihood discover they will work with you. This will enable you to keep your home and credit rating which is far more desirable than the alternative.

Just remember that history teaches us that the real estate market will rebound. It always has. And you will once again find yourself with equity in your home. Stop listening to the doomsayers and research the REAL figures for yourself.

While I follow real estate markets nationwide I of course pay special attention to Columbia real estate trends. Just like the rest of the nation, new home starts in Columbia MO are down. This will reduce inventory and cause housing prices to stabilize. Sales of existing and new homes are down slightly but by no means dead. The only viable explanation for the recent downward trend in home sales is the negative press the housing industry is receiving nationally. Once excess inventory is absorbed the local market will get back on track.

With fewer housing starts in recent months in combination with stronger consumer confidence the panic selling should subside and the market stabilize.

But the worst is only over if we ignore an extremely biased main stream media and research the facts for ourselves.

~Rhonda McMillan
Broker

With the drop in both interest rates and the median home price nationally it may be time to purchase as the cost of housing is more affordable now than in recent years.

While the sub-prime lending fiasco made great headlines for the liberal press the reality is that it affected a very small segment of the housing market. Even a smaller portion of the market was affected here in Missouri as the sub-prime loans were never truly embraced by local lenders. Missouri banks and mortgage companies based in Missouri primarily stayed with conventional loans requiring income verification and down payments of 10-20%.

The indirect affect on the local housing market was the shaken confidence of home buyers with all the media attention given to the credit crunch created by sub-prime loans going into default even though it was a national, not a local phenomenon.

While the Dow quickly soared back to over 14000 shortly after the Federal Reserve dropped interest rates by a half of a point, today Wall Street fell 140 points at the time of this article after Citigroup’s dismal earnings numbers and news of a potential $100 billion emergency fund to help out three of the largest U.S. banks hit by the chaos created by sub-prime mortgages.

So is the worst behind us? That depends entirely on consumer confidence really and unfortunately the media can all too easily sway and shaken this confidence. The press has begun irresponsibly throwing about the “recession” word of late. Keep in mind that a recession is defined by two consecutive quarters of negative GDP (Gross Domestic Product) and we have yet to log the first. Is this once again an attempt of the media to create rather than report the news? Given the deep hatred of President Bush by the liberal press it is a distinct possibility.

Before you decide not to buy another home or continue to put off a purchase you should do the research for yourself. This is far too important of a decision to leave up to a clearly biased media. And while researching check out how much new housing starts have declined in the past few months. This will lead to a much lower inventory in months to come and could begin a substantial increase in new home costs. Especially if the Federal Reserve again cuts interest rates soon as has been predicted by many.

~Rhonda McMillan

This will give welcomed relief to many homeowners laboring to pay increasing monthly mortgages created by the sub-prime lending debacle. While the decrease in interest rates may not be enough to save all distressed homeowners the fact that the Fed was willing to intervene was more than enough to spark this year’s highest daily gain in the stock market of 335 points.

In an unrelated press conference today President Bush stated “these are unsettling times in the housing market”. President Bush reiterated that steps are being taken for the government to assist some homeowners refinance and again stated that the tax code was being revised to exclude any debt forgiveness by financial institutions in mortgage refinancing as income to the borrower.

The current tax code views this type of debt reduction as taxable income and would only add to the woes of distressed homeowners.

The President’s proposal of the tax code revision is a positive step for the housing industry and will help curtail the rising tidal wave of foreclosures.

~ Rhonda McMillan
Broker

Most economists are predicting a quarter point cut while some economists are asking for a bolder half point slash.

The current 5.25 percent that banks charge other banks has not been cut in over four years.

It is unclear how much this expected cut will help distressed home owners that were caught up in the sub-prime lending schemes that offered teaser rates going into a mortgage that eventually place monthly home payments at an unsustainable rate that has lead the industry to record foreclosures.

I will keep you posted as we are most defiantly in a very volatile housing market.

Rhonda McMillan
~Broker

These job losses in August reflect the first and largest decline since August 2003 and are attributed to losses primarily in the construction, manufacturing and transportation sectors.

The fact is that all of these sector job losses are a direct result of the housing slump and we have NOT seen bottom yet. Our strong economy throughout the Bush Administration has had a record housing market as its core.

The lack of Consumer confidence created by the latest housing crisis and credit crunch has filtered through to employers that sense a storm on the horizon and have begun to “batten down the hatches”. I tend to agree we have only begun our journey down this slipper slope that sub-prime lenders have placed us on.

We will continue to see the economy adversely affected as this housing crisis plays out through all on next year as some mortgages will as much as double and thousands of homeowners are forced into foreclosure.

~Rhonda McMillan
Broker

The Pending Home Sales Index that is based on contracts executed in July of this year was 16.1 percent lower than July 2006. The 16.1 percent was a National average with the western states taking the biggest hit with existing-home sales down an unprecedented 21.8 percent from last July.

The stock market has also been taking it on the chin with record loses that can be attributed directly to the housing markets downward trend. While the stock market saw modest gains after President Bush’s news conference last week I heard little that gave me any hope for relief.

The President offered a possible plan of assistance for distressed homeowners to receive refinancing assistance from the government IF they had good credit. Since most homeowners adversely affected by the sub-prime mortgages did not have good credit to begin with, it is doubtful that many would qualify for the government assistance. Additionally, anyone facing foreclosure has already had an adverse impact on any credit rating.

The President did state that unscrupulous predatory lenders would be dealt with harshly. This combined with a plea by the President for lenders to work with distressed homeowners to avoid foreclosures should serve as a warning to most lenders that created this sub-prime debacle to work with their borrowers.

With sub-prime mortgages being such a small percentage of home loans currently and with the fact that 85 percent of these borrowers remaining current on their loans, it continues to be perception and lack of confidence by consumers that has driven this market to levels that are clearly not substantiated by the figures. This self fulfilling prophecy of the “Real Estate Bubble” bursting by the liberal media continues to fuel this industry quandary.

~Rhonda McMillan
Broker

While the stock market calmed down after an influx of billions of dollars the problem regretfully has only just begun. Sub-prime lenders put thousands of borrowers in homes they simply could not afford and will be unable to maintain.

Most of these homeowners were maxed out with payments at the onset of the loan and with the rising adjustable mortgage rates increasing monthly mortgage cost the home owners that were already in over their heads are starting to get in real trouble now.

To add fuel to the fire many of these homes were purchased in a frenzied sellers market and paid entirely too much going in an effort to hedge inflation. Now they find themselves in a “Buyers” market with pricing declining to the point they have lost what little equity they had months ago.

Refinancing is not a viable option to these “Stressed Homeowners”. Unfortunately in many former “Hot Markets” like Las Vegas Nevada, Florida and Southern California were appreciation reached unsustainable levels in recent years, homeowners now find themselves in a negative equity position. For example a homeowner in Las Vegas with a $380,000 mortgage now has a home that will be hard pressed to appraise for $300,000. That by itself leaves an $80,000 deficit. Conventional loans once again require 10-20% down. So in order for this “Stressed Homeowner” to refinance his home he must come up with a minimum of $110,000 to $140,000. Now keep in mind that sub-prime loans were created for homeowners with bad or little credit and were maxed out with payments from the onset of the original loan.

All of this combined with the fact that we have still not reached the 5 year mark of this most recent “Boom” of 2002-2003 when the ARMs mature in late 2007 and 2008 makes for a recipe for disaster in the coming year.

This pending train wreck for the real estate industry is almost unavoidable. President Bush correctly dismissed the possibility of a federal bailout bail out last week. It is NOT the responsibility of the federal government to protect consumers from bad choices. Without a doubt we will see record foreclosures unfortunately and we will see price adjustments downward in most markets.

While we have not seen the unsustainable appreciation levels in Missouri as witnessed in these so called “Hot” markets we still have a problem with consumer confidence here in the “Show Me” state. Potential buyers are inundated with all the bad press about the “Real Estate Bubble” busting and are not aware of the fact that Missouri lenders did not participate that much in the sub-prime market nor did the homes in Missouri see double digit appreciation annually. In other words there really is NO “Real Estate Bubble” in Missouri.  Just confused buyers.