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Skepticism greets new federal plan to help homeowners
Skepticism greets new federal plan to help homeowners – Tampa Bay Times.
So the latest plan to rescue housing is coming out of Washington. Perhaps not coincidentally in an election year. Putting into place a way for underwater homeowners to refinance at lower interest rates and reduce their monthly payments sounds like it might have a positive impact but seems to fall short of addressing the real problem – underwater mortgages. Jack McCabe says in the article “it’s like putting a Band-Aid on skin cancer”.
Assuming this proposal would ever navigate the gridlock of congressional approval in a still recognizable format is highly unlikely. Assuming it did, I’m concerned that it will solve some problems at the expense of prolonging others. For example, while a wave of refinances should put real consumer dollars into the economy, it does nothing to affect the balance sheets of underwater homeowners that still own a loan worth more than the property it represents.
Additionally, while a move like this provides a much needed boost for lenders, mortgage brokers and title companies through transaction fees, it may discourage sellers from pursuing short sales. This could result in further depression of transactions and home prices . Depending on individual circumstances, getting the monthly payment lower may or may not be of benefit to the homeowner long term.
In summary, we see some potential for short term relief and a nice wave of refinance business resulting from a program such as this. But, we see two primary issues that complicate any benefit. The first is unintended consequences to the housing market at large and the second is that the likelihood of approval amid the analysis paralysis of this highly ineffective congress is highly unlikely.
What is your opinion on this and other government attempts to “right” the housing market?
Tags: CornerStone Title, Florida Real Estate, HAMP, HARP, HARP 2.0, housing market, interest rates, ref, refinance, Short Sales
New HUD – Consumer Protection or Real Estate Industry Nightmare?
Fresh off revolutionary changes implemented in 2009, Housing and Urban Development, in partnership with the newly formed Consumer Financial Protection Bureau, will be debuting yet another version of the Settlement Statement and Good Faith Estimate. This time however, we get to vote on one of two forms.
You can review the two choices – code named, “Mimosa” and “Sassafras” (you can’t make this up) by logging into the CFPB “know before you owe” website and using the industry tool. Perhaps better codes names would have been “crack” and “dope” since this seems to be more indicative of the mindset of the bureaucrats that think this is a good idea.
Really? The last attempt at simplifying the process, increasing understanding and protecting the consumer resulted in our current HUD which most agree complicated the process, made costs less transparent and presented an administrative nightmare to real estate professionals. Of course, now that we have another federal government agency involved, surely we’ll see much better results (read with healthy dose of sarcasm).
Here is a novel idea – how about before you sign documents and commit yourself to what is likely the biggest purchase of your life – take the time to understand the terms of your loan, the costs associated with your purchase and if your family can afford the payments. Common sense is rarely dispensed, especially by the feds.
Know Before You Owe > Consumer Financial Protection Bureau.
The Role of the Independent Title Agent
The independent title agent truly represents the real estate transaction in a purely arm’s length manner. This is important because the role of the title agent is to protect the transaction, which in turn protects not only the buyer, seller and lender but the Realtors as well. An independent title agency is a true free market player and has the highest incentive to close the deal in a timely and compliant fashion backed by courteous professional service.
Independents and Arm’s Length – Defined
According to www.investopedia.com, an arm’s length transaction is defined as:
A transaction in which the buyers and sellers of a product act independently and have no relationship to each other. The concept of an arm’s length transaction is to ensure that both parties in the deal are acting in their own self-interest and are not subject to any pressure or duress from the other party.
According to the National Association of Independent Land Title Agents (NAILTA), an independent title agent is defined as:
Any individual or entity authorized and licensed to issue title insurance policies and/or to conduct real estate closings that is not controlled by … or share profits with… , whether directly or indirectly, a title insurance company/underwriter, bank, mortgage company, mortgage broker, real estate firm (including agents and brokers), builders, developers, appraisers, surveyors, any subsidiaries thereof, or by any other referral source.
In-House Title Issues
In many cases, realtors refer business to their respective in-house title providers. Typically, this happens under some type of formal or informal pressure from their broker. Often this is not the best approach for any of the parties involved, except the broker or corporation who has a profit interest in the title company. When business is referred “in-house”, the concept of “arms length” is diminished because the broker has both a stake in earning the real estate commission and influence in clearing title. In some cases, there may be pressure to close the deal even if there are issues that could affect title.
Bank Directed Title Problems
With the huge surge in foreclosures and resulting REO property sales, banks are frequently directing title to an entity in which they have ownership, existing business ties to or have negotiated discounted rates with. While on the surface this may seem acceptable, the issues arise when you consider that the bank has a vested interest in seeing the transaction close and this can potentially lower the standard by which title is cleared.
Service Levels Suffer
Chances are most Realtors have a horror story or two to tell about using an in-house or bank directed title companies. The reason this happens is simple free market economics. An independent title agent knows that it must produce quality work on a consistent basis and earn your referral business one deal at a time. For the independent, regardless of company size, every client counts and in most cases the owner has some level of direct involvement. In short, the focus for successful independents is adding value and service.
For in-house providers, the incentive to provide the best in value and highest quality service is usually not there. As time goes on, this issue seems to inflate. Typically, the focus is on appeasing the ownership by producing the most profit possible. This is often accomplished through cost containment and shows up as under-compensated, under qualified employees and corner cutting.
What has your experience been with independent and in-house or directed title companies?
Boost Website SEO with Free Real Estate Videos
When is the last time you tried to explain title insurance or closing costs to a client? Was it a fun, entertaining and engaging conversation? Probably not for you nor your client. CornerStone Title has a solution and we’re offering it free to any Florida real estate broker, agent, mortgage broker, loan officer or builder. It has been said many times that a picture is worth a thousand words, but sometimes a video, even a simplistic one, can be worth one hundred thousand words.
Check out the Videos!
Check out these two videos that provide a quick, entertaining explanation of both “Title Insurance” and “Closing Costs” and then read on to discover how these videos are going to help you get found and convert more of your website visitors to buyers and sellers.
CornerStone Title: What is Title Insurance?
CornerStone Title: What are Closing Costs?
Video Increases Your Website SEO (search engine optimization)
In addition to being a great resource to your prospects and clients, these videos are killer marketing tools. By embedding these videos on your website, you drastically increase the odds of being “found” by search engines. Websites that include video are 53 times more likely to appear on page one of Google. Even if you have existing video, these videos will further enhance your videos ranking. We have embedded keywords into the video related to Bradenton and Sarasota Real Estate and these will convey SEO points to your site.
Videos Makes Your Website Sticky
Additionally, these videos make your website more “sticky” by keeping visitors on your site longer. The average time spent on your website is a key metric to use to gauge how effective your site is. The longer visitors spend on your site, the better. When they are on your site for an extended period of time, the likelihood they will visit other pages goes up and the chances they are going to bounce off to one of your competitors sites goes down. Translation, you create additional opportunities for your site visitors to contact you, do an MLS search or bookmark your page.
Technical Details
You can include the videos on your site in one of two ways. First, you can simply add a link to the YouTube url and direct your visitors there. Another approach, and the one we recommend, is to embed the YouTube code directly into your site. This provides a much cleaner look and will result in more views. You can see samples of embedded video in this post or on our resources page. Depending on your technical abilities, you may need the assistance of your webmaster to get this done. To get the link or embed code or for technical assistance, drop me a line at tom@cornerstonetitle.biz or call me at 941.744.0492.
What’s the Catch?
Oh, I forgot to mention there is one little catch.. If you are going to use the videos, there is no charge but we do ask that you include a link back to our website at http://www.cornerstonetitle.biz. Please choose one the following link back formats:
Video compliments of CornerStoneTitle - Bradenton/Sarasota Title Company
Video provided by our friends at CornerStone Title, the Title Company of Choice in Sarasota and Manatee
Tags: real estate, real estate social media, real estate technology, realtor education, social media, title insurance
