Standardizing Mortgage Tactics

WASHINGTON - Seven states on Wednesday launched a standardized and mandatory process to more thoroughly license and track tens of thousands of mortgage brokers.

The effort could be expanded upon by Congressional Democrats, who are expected in 2008 to continue pushing for tighter national standards. Mortgage brokers have come under scrutiny over the past year as home loan defaults grew and housing market troubles worsened. Experts say loose licensing standards made it easy for shady operators — even those with criminal records — to work in the business.

While mortgage regulations vary dramatically from one state to another, the new system creates a uniform application for mortgage brokers and a database that banking regulators, and eventually consumers, can use to track down brokers who try to work in one state after being banned from another. Consumers should have access by next year.

Idaho, Iowa, Kentucky, Massachusetts, Nebraska, New York and Rhode Island are the initial states participating. In total, 42 state agencies — including those in Washington, D.C., and Puerto Rico — have committed to joining by the end of 2009,

The system is mandatory for brokers doing business in those states, and brokers can be penalized for operating without a license.

Lending-reform legislation does face tough odds this year, but mortgage industry consultant Howard Glaser said the consensus emerging from Democrats and Republicans is clear: More oversight of mortgage brokers is necessary.

“To have true uniformity, you would need to have a federal rule,” Glaser said. “It shouldn’t make a difference where you live.”

The state system applies to mortgage brokers and loan officers at state-regulated banks, but not employees at nationally supervised banks. In the works since fall 2004, it was developed by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.

A bill passed by the House in November would require all states to participate in the licensing system and would mandate criminal background checks for everyone involved in selling home loans. The bill would also mandate minimum education standards for brokers and completion of a written test.

Of the 53 state agencies that regulate mortgage lending, 41 require criminal background checks, 32 require continuing education and 17 have require some sort of testing requirement, according to the state banking supervisors group.

John Ryan, executive vice president of the banking supervisors group, said his group can’t force states to strengthen their laws, but many are already doing so. “We’ve focused on where we could get consensus,” he said.

The National Association of Mortgage Brokers fought the banking supervisors’ effort, arguing that bank loan officers should be subject to the same standards.

Mortgage brokers’ share of new mortgages rose from 20 percent in 1987 to more than 60 percent for much of the past decade, according to Wholesale Access, a Columbia, Md. consulting firm. But their market share is likely to slip this year, as the industry returns to more traditional loans backed by government-sponsored mortgage giants Fannie Mae and Freddie Mac. Those loans have typically been the business of mortgage banks, not brokers.

Ready for an upturn??

Well if you ask the media they will tell you that the real estate market is going to hell in a handbasket. If you ask most lenders they will tell you that it is the best time in the world to buy a house and they can give you the best rate in town! As a realtor, I'll tell you something a little bit in the middle. No the market has not gone to hell in a handbasket. And Yes it is a good time to buy a house. But now more than ever you need to become an educated buyer. With more inventory on the market and rates continuing to drop, do your homework. Now is a fantastic time to buy a house......if you know what to look for. With all of the inventory stacked up ( but slowly selling off) it is a good time to do some shopping. You have more time to look at your financials, talk to professionals that care about your investments, and most importantly way your options. There are some great deals to be made in today's real estate market. Especially in new construction. Don't be afraid to ask builders for closing costs, price reductions, and free upgrades. They have inventory and are trying to push their exsisting homes so they can start building new ones. I speak from experience. I am buying a home just outside of Nashville. I was bold yet respectful with my demands. The builder agreed, and now we have a win win situation for all.

So don't listen to the media's talking heads telling you that the sky is falling. It is a great time to invest in real estate, just make sure you are working with a trusted professional that has your personal interest at heart. There are deal out there, you just need to know how to find them. Thanks for stopping in and God Bless.

Nick Woodard
Keller Williams Realty
Franklin, Tennessee
615.566.9839
nick@nickwoodard.com
www.nickwoodard.com

Williamson County Sales November

Williamson County Association of Realtors® Announces November 2007 Home Sales
Williamson County Association of REALTORS® Announces November Housing Numbers

December 10, 2007 (Franklin, TN)-The Williamson County Association of REALTORS® today announces the sale of homes statistics for Williamson County, Tn. for the month of November 2007. There were 278 residential and condominium closings reported for the month of November, according to figures provided by RealTracs Solutions, the multiple listing service used by REALTORS® in the Middle-Tennessee area.

Compared to November of 2006, the single family residential closings decreased 20 percent and the median price decreased by 9 percent. Condominiums closings have increased by 30 percent and the median price increased by 16 percent. The decrease in the median price appears to be tied to a decrease in the number of homes in the over $1 million range closing in November. The average days on the market (DOM) for residential homes have increased by 14 days and condominiums have increased by 17 days. Days on the market have been consistent since the onset of 2007, with the days ranging from 58 - 68 days. Median prices have remained consistent since January 2007, ranging from $365,000 to $391,200. The median is a typical market price where half of the homes sold for more and half sold for less.


November 2007


Closings
Median Price
Average Price
DOM

Residential
247
$ 365,000
$ 427,205
69

Condominium
31
$ 219,990
$ 227,241
40


November 2006


Closings
Median Price
Average Price
DOM

Residential
308
$ 401,700
$ 466,644
55

Condominium
24
$ 189,890
$ 219,234
23


November 2005


Closings
Median Price
Average Price
DOM

Residential
398
$ 296,072
$ 370,150
50

Condominium
52
$ 152,920
$ 167,229
27



"The National subprime mortgage crisis peaked in September when many of the sales closed in November were being negotiated, which may explain some of the market change. Dr. Lawrence Yun, chief economist with the National Association of Realtors recently predicated that high-cost markets with many jumbo loans would show a slow down due to the mortgage crisis. That certainly seems to be the case in Williamson County where the downward distortion of the median and average price seems to be due to a slow-down in the higher-priced market. After the holidays, the pent up demand for homes is expected to break so that sellers should be ready for buyers with sparkling clean, updated homes and appealing prices." said Kathie Moore, 2008 President of the Williamson County Association of REALTORS®.

Rate Cuts???

Wall Street Awaits Fed's Rate Decision
Sunday December 9, 1:38 pm ET
By Madlen Read, AP Business Writer
Wall Street Waits for Federal Reserve's Rate Decision, Eyes Data on Inflation, Retail Sales


NEW YORK (AP) -- After two winning weeks on Wall Street, investors find out Tuesday if their wish for an interest rate cut -- the driver behind the rally -- will be granted.
Federal Reserve officials in recent weeks have indicated a willingness to cut rates further, so it's almost a foregone conclusion that the target federal funds rate is headed lower. The Fed has already dropped rates twice since the credit markets froze up over the summer due to surging mortgage defaults, and the only point of contention in the market seems to be the size of the next cut.


But there are three more weeks left in this rocky year, so investors aren't sighing with relief just yet. Wall Street remains uncertain if the Fed will keep lowering rates into the new year; at the central bank's last meeting on Oct. 31, policy makers said "the upside risks to inflation roughly balance the downside risks to growth."

Fed Chairman Ben Bernanke and others appear to have shifted their stance in light of recent market turbulence, but investors want to see it in writing. Furthermore, many are skeptical that rate cuts are enough to bring demand back into the worrisome areas of the credit markets, which has been seeing securities downgraded on practically a daily basis.

Wall Street has posted robust gains recently as investors grew more confident in the Fed's openness to loosening its policy again. They have also been relieved that some credit-loss estimates for banks have been milder than feared.

"The market has sort of changed its paradigm -- it's expecting the worst. So when it doesn't get the worst, it rallies," said Brandon Thomas, chief investment officer for Envestnet Asset management.

The Dow Jones industrial average has risen more than 640 points over the last two weeks, a rally that has brought the blue-chip index to less than 4 percent below the record close it reached Oct. 9.

Last week, the Dow ended 1.90 percent higher, the Standard & Poor's 500 index finished 1.59 percent, and the Nasdaq composite index ended up 1.70 percent.

Whether the Fed lowers rates in 2008 will depend not only on how the financial and housing industries weather ongoing mortgage problems, but also on inflation. Any higher-than-anticipated readings for November from the Labor Department's producer price index and consumer price index -- scheduled to be released Thursday and Friday, respectively -- could worry investors.

And with two weeks left until Christmas to shop, Wall Street wants to see a fiscally fit consumer raring to spend. The Commerce Department's retail sales report for November will be an important economic snapshot, especially after last week's mixed sales data from individual retailers.

There are not many earnings scheduled for this week, but there are a few that the market will be watching closely. Costco Wholesale Corp.'s quarterly results could give investors a clearer sense of how the average consumer is faring, while Lehman Brothers Holdings Inc.'s report -- the first fourth-quarter report from the investment banking industry -- will offer some insight into how tough the credit markets have been for banks over the last few months.

Analysts are expecting Lehman to post a profit decline and Costco to report a profit rise.

Wall Street will also be monitoring data Monday on pending home sales in October and a Wednesday report on the October trade deficit, which could have implications for the tumbling dollar.

Nick Woodard
Keller Williams Realty Franklin, Tennessee
615.566.9839
www.nickwoodard.com
nick@nickwoodard.com

Keep your nest egg growing

Keep Your Nest Egg Growing and Safe
by Michael Sexton



Does retirement planning scare you?

If so, you’re not alone. As soon as the subject comes up, most people start to sweat. They worry that they haven’t saved enough. Or they blame themselves for waiting too long before thinking about their retirement years.

Put the blame game aside. The good news is, you can change that kind of thinking in a day. You can do it now if you confront the issue of retirement head-on, and take some small steps to get started.

Do the Simple Stuff First

There are lots of complicated things you can do to plan for retirement. You can read reams and reams of complex investors’ information on the Internet. You can meet with an investment advisor and take home a briefcase stuffed with information about stocks, funds and bonds. You can call your friends and relatives and listen to their advice about what you are doing wrong.

But why start by putting more obstacles in your way? To get a quicker start, take a simple look at the things you already have in place. If you work for a company and have a 401(k), for example, set your contributions to the highest possible level - especially if your employer matches the dollars that you put in. If you forgot to increase your 401(k) contribution after your last raise, do it now. Also monitor your Social Security account so you always know how much income you’ll get when you retire.

Keeping your eye on the basics will add more money to your retirement accounts than you can imagine. Best of all, you are doing that by controlling retirement accounts that you already have - not ones that it will take you months to research, set up and fund.

Start Saving and Investing Today, Not Tomorrow

Thanks to the magic of compounding, even late starts can make a difference of tens of thousands of dollars -maybe hundreds of thousands - and a better-funded retirement.

Starting today gives you a psychological edge too. It builds your confidence and momentum.

A good investment advisor can help. To find the right one, get referrals from four or five friends and meet with the advisors they recommend. To keep your selection simple, go with the advisor who takes the most time with you, who shows interest in your objectives and situation - and who shows no frustration about answering all your investment questions.

If one of them makes you feel dumb for asking basic questions - well, that is a dumb advisor.

Get Realistic about Spending

The point of accruing wealth is to live an interesting and rewarding life. Everyone at Trump University is in agreement with that idea.

But there is a difference between living well and throwing money away. And part of the problem is that some of the acquisitions you make today can cost you a lot of money tomorrow. (And for many of us, “tomorrow” translates into “retirement.”)

For example, the residences you buy today will become more expensive to own in the years ahead. You have to think about that. Property taxes, on luxury residences especially, could well increase four or five times in the next 15-20 years. So the point is, ask your financial planner to help you decide when you are reaching the point of being overextended in your real estate holdings. Remember that the expenses you can carry today are not necessarily the expenses you can handle tomorrow, because some of them will grow.

Also get in the habit of buying only things that you know you will use and enjoy. When a new gadget appears that you want, wait for the price to fall before you buy it. It makes financial sense to treat money with respect. And if you have children, you’ll teach them the value of what a dollar can buy.

Talk to Your Investment Advisor about Risks

Investment advisors, you have noticed, like to talk about potential earnings - and rarely like to tell you what can go wrong.

The simplest way to learn about risk is to keep aksing about it. Some good questions to ask are:

“Is my return on this investment guaranteed by any government agency or some other entity?”
“How much money can I lose if this investment fails?”
“Do you have your own money in this investment account or vehicle?” (If the answer is no, find out why!)
Remember, you might not hear about risk unless you ask about it.

Get Smart about Your Insurance Coverage

Don’t spend such a fortune on insurance that you become insurance poor. But do buy enough to make sure that your residence, possessions and autos are covered - and that their full replacement value will be yours in the event of catastrophic loss.

Also review your liability coverage. If a guest becomes injured in your yard or home, for example, will you run the risk of losing everything?

The bottom line . . .

When you retire, you want your nest egg to have grown. But you also need it to be safe and sound, because a lot of money that is at risk does not represent security.

Just remember that it is not beyond you to reach those goals. The key is to get started today.


Nick Woodard
Keller Williams Realty
www.nickwoodard.com
615.566.9839

Foreclosure Training

Investing in Foreclosures? The Fundamentals Still Apply
by Michael Sexton



When you’re buying foreclosed properties, you can throw away all the classic wisdom about real estate investing, right? It’s a whole new world with new rules.

No, wrong. The fundamental rules apply, only moreso. Let’s take a closer look.

Rule One: Foreclosure or not, location is still of prime importance. You still need to look for properties in locales that promise growth and appreciation. So always consider the trends in municipalities where you might buy investment property. A new commuter line, a new hospital or a new school can dramatically increase property values. Even though you will find more foreclosures in dying communities, stay away from them. Location is still king.

Rule Two: There must be a way to increase the value of what you are buying. If there is no potential for growth, why invest? Remember, not all foreclosures are the same. As with all properties, some are standouts and some are duds.

Rule Three: Cash flow is still king. Even if you are applying a prudent“buy and hold” strategy, how will you generate income from your holding? Remember that the “on paper” value of the properties you own is fine, but that negative cash flow can drain the lifeblood from your investments and sink you.

Rule Four: Comparable values are still the yardstick for success. Comps are the yardstick you must use to evaluate the potential of your investment. So do the math. When buying a house to renovate and sell, deduct the cost of your renovations from its fair market value. That’s how much you should pay, not one cent more - whether the property is a foreclosure or not.

Rule Five: You still need expert advice and counsel. Buying a foreclosure does not entitle you to get sloppy and make decisions on the fly. You need a good attorney, a capable home inspector and all the other pros who can help you minimize risks and avoid mistakes.

Rule Six: Take your time. Even with “foreclosure fever” in the air, the first foreclosed property you see is probably not one you should buy. Yes, there might be a limited period of time left to take advantage of the current foreclosure boom. But that doesn’t mean that you should rush to snap up the first property you consider and make unwise mistakes. You need wisdom on your side.

Nick Woodard
Keller Williams Realty
www.nickwoodard.com
615.566.9839

Real Estate Picking back up?

Is the real estate market picking back up in Middle Tennessee? The answer, yes and no. I have been keeping a very close eye on what is going on around me lately. The real answer to the question is, "what area are you talking about?" Because 3 miles can make the difference in a Hot market and a Cool Market. In the neighborhood that I purchased my home in Antioch Tennessee, 3 months ago the new sales agents were selling about 4-5 units per week, a combined 185 units for the previous year. As of 2 months ago, they are selling about 1 every two weeks. But just down the road in a new neighborhood that Kathryn and I just put a contract on a home, I have brought 5 different buyers that are purchasing a home this week. So you see, when someone asks you " is the market slowing down?" the real answer is "yes and no" it just depends on where you want to be. In a market like we are currently in, it is all about finding opportunities.

The government is keeping loans at a very reasonable rate. Jobs are continuing to come available. People are moving. What seems to be the problem? Media. Media. Media. The media is putting a false sense of dispair on buyers and sellers. Yes there are states and cities in this country that are having a terrible reversal of the market. But here in Nashville, we are sitting pretty. There is absolutely no reason to be nervous about buying a home in the Nashville market at the current state. Things look bright for our future here in God's Country.

If you need help with a real estate transaction in Middle Tennessee, give me a call. I would consider it a blessing to be able to help. God Bless

Nick Woodard
Keller Williams Realty
615.566.9839
www.nickwoodard.com