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Marvin Von Renchler's Blog

By Marvin Von Renchler | Managing Broker in Tigard, OR
  • Major statistics company says prices stable and will rise? I predict

    Posted Under: Market Conditions in Oregon, Home Buying in Oregon, Home Selling in Oregon  |  June 5, 2012 9:51 PM  |  268 views  |  No comments

    Here is what Corelogic just posted. My comments are at end.

    CoreLogic® April Home Price Index Shows Year-Over-Year Increase of Just Over One Percent
    New Pending HPI Forecasts Further Increase in May Driven by Low Home Inventory Levels
    On a month-over-month basis, home prices, including distressed sales, increased by 2.2 percent in April 2012. This marks the second consecutive month-over-month increase this year.
    Excluding distressed sales, prices increased 2.6 percent in April 2012 compared to March 2012, the third month-over-month increase in a row. The CoreLogic HPI also shows that year-over-year prices, excluding distressed sales, rose by 1.9 percent in April 2012 compared to April 2011. Distressed sales include short sales and real estate owned (REO) transactions.
    Highlights as of January 2012
    Including distressed sales, the five states with the highest appreciation were: Arizona (+8.8 percent), District of Columbia (6.4 percent), Florida (+5.5 percent), Montana (+5.4 percent), and Utah (+5.4 percent).
    Including distressed sales, the five states with the greatest depreciation were: Delaware (-11.9 percent), Illinois (-6.8 percent), Alabama (-6.6 percent), Rhode Island (-6.2 percent), and Georgia (-5.6 percent).
    Excluding distressed sales, the five states with the highest appreciation were: Utah (+5.3 percent), Idaho (+5.1 percent), Mississippi (+4.7 percent), Louisiana (+4.6 percent) and Arizona (+4.6 percent).
    Excluding distressed sales, the five states with the greatest depreciation were: Delaware (-10.1 percent), Rhode Island (-6.2 percent), Alabama (-4.4 percent), Vermont (-2.8 percent) and Connecticut (-2.3 percent).

    "We see the consistent month-over-month increases within our HPI and Pending HPI as one sign that the housing market is stabilizing," said Anand Nallathambi, president and chief executive officer of CoreLogic. "Home prices are responding to a restricted supply that will likely exist for some time to come—an optimistic sign for the future of our industry."
    "Excluding distressed sales, home prices in March and April are improving at a rate not seen since late 2006 and appreciating at a faster rate than during the tax-credit boomlet in 2010," said Mark Fleming, chief economist for CoreLogic. "Nationally, the supply of homes in current inventory is down to 6.5 months, a level not seen in more than five years, in part driven by the 'locked in' position of so many homeowners in negative equity."
    *March data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

    Hogwash, is myu comment.There are solid reasons why we have been seeing increases. You must first define the areas which have increased. What types of houses, what type of buyers, etc. As more people have lost their homes, the RENTAL market has  been growing. Monthly rents are skyrocketing and SHORT and REO prices have been going down. As the two cross on a graph, a good ROI is possible. (Return on investment) Now cash buyers come out of the woodwork as many feel we wont see much more of a bottom. Regular buyers have been biding their time but eventually for solid reasons MUST buy---perhaps they were relocated, had more kids and need space, etc. Values have dropped so that some of them can finally buy. This cant go on forever. On the flip side is the continuous supply of REO and SHORTS! We have MILLIONS of properties to be thrown into this process. People who have had ARMS that still have not reached full rate plus margin and/or are due to recast with much larger payments. People who cant find work. (THANKS OBOMBA administration and the banking system) Loan mods that have gone bad again anyway, etc. I dont know about your area but in my county the shorts/reo are holding values at neutral for the present. Lets allow that sales are up. OK--its just SPIN. If we sold 2 units last month and 4 this month, we have a 100% increase. Are we forgetting that we used to sell 2000 units per month? This spotty rental property buying and some regular new purchses will not keep up. I Predict up to 20% more DOWNSIDE to most real estate before we 'bottom out'. Dont want to hear that? Too bad, so sad. Of course thats not in all markets. No patterns hold true for the entire market.

    The only way to have values increase is through appraised values of newly purchased comparables. That has to first come from cash buyers. Few people are qualified now and we dont have LIARS LOANS any more. We dont have stated income products. We have tighter appraisal reviews/policies. Rents can only go so high before Joe and Jane Renter no longer can pay. Thaty will cap income property values. Anyone now who buys and uses future appreciation in their investment analysis is playing with fire.

    Facts and figures, though accurate for what they are, are often very misleading. Your thoughts?

  • How to tell where prices will go in your area.

    Posted Under: Home Buying in Oregon, Home Selling in Oregon, Agent2Agent in Oregon  |  February 8, 2011 12:35 PM  |  273 views  |  No comments

    Remember two things, folks. One: Joe and Jane Averageworker make up the majority of the 'spending' public. Their average earnings can only afford so much. Two: Real estate prices have been highly overvalued because stupid lenders allowed stated income and no income verification loans. Also, we has a falsely inflated economy fueled by the greatest scam humanity has ever seen---the STOCK MARKET by the computer/electronics sector. No way was some semi conductor stock worth $450 a share with no earnings or a few cents worth. People forgot what a stock really is. Its just a business loan that should return some of the profits. All the double income families working in the new computer industry had enough income to squeak by on their $750,000 homes even if they couldnt qualify for them. I remember selling homes to people in San Jose who would use old sheets as window coverings because they were making $4,500 payments. Why? Because they thought their home would be worth a million the next month.

    So we are not LOSING VALUE!! We are adjusting down to where real estate prices WOULD HAVE BEEN had we not gone through the fake electronics industry cycle and the dangerous mortgages requiring no qualifying. Look at Joe and Janes income for your area and you will be able to tell where prices will be going. Here in Portland you can now get some big beautiful homes for 250K that used to be 850K---no kidding, but still they set without selling. We need a base price of mid 150Ks to get things rolling. I also agree with someone above that humanity has just come through a decade of large mistakes and its going to be pure survival mode for some years to come. I used to say 'As long as we keep making babies but not land, land will continue to go up". I dont think so now. Maybe in many decades if we cure disease and stop wars so the population explodes (Or dont do anything about our current immigration rules, which is not a racist statement.) but look at some countries that have many more humans per square mile than we have. Land isnt much more expensive---people just change their living patterns.  What do you think?

    Marvin Von Renchler
  • Is buying a SHORT SALE a bargain? Probably not!

    Posted Under: Home Buying in Oregon, Home Selling in Oregon, Foreclosure in Oregon  |  October 18, 2010 6:01 PM  |  303 views  |  1 comment

    Most consumers have heard of SHORT SALES by now but few realize what they represent.  I receive calls from buyers who want to look for short sales because they think the homes can be purchased for pennies on the dollar of REAL VALUE.

    Not so, my friends. Remember that real estate isnt LOSING VALUE. Its adjusting to where it would have been if we had not had all the no income verification and other dangerous loans that allowed anyone to buy anything.
    A short sale usually means the lender has a loan thats larger than the PRESENT VALUE of the home. The home can be purchased if the lender agrees to sell 'short', or take less money for the debt.

    Does it mean you stole the property? Nope. It usually means you are buying it at TRUE PRESENT VALUE. You are not stealing a property.  Once in a while you can pick up a true FIXER UPPER that the lender doesnt want on their hands but you are probably going to have to use all cash to acquire it.

    For a while lenders would go a little lower but rarely less than 20% of true market. Now I am watching them turn down almost all offers because our government, in all its stupidity, pays them to be able to hold onto properties without having to close down. A lender can make more profit by foreclosing , selling at a loss then receiving government funds.
  • Home didnt sell? Its PRICED TOO HIGH

    Posted Under: Home Buying in Oregon, Home Selling in Oregon  |  October 9, 2010 8:29 PM  |  214 views  |  No comments

    Im a real estate broker and do BPOs (Broker Price Opinions) on the side for banks and mortgage servicers. These are 'ini-appraisals' and they take me daily through the three highest populated counties in Oregon.  After a year of doing these I could be a blind taxi driver without the need for a GPS!

    Having to value properties all day long 6 days a week, I know northern Oregon values! Doing these give me a tremendous advantage over real estate people who dont BPO.

    Why am I telling you this? I see efverything thats listed and sold. I see the time on the market, the price reductions, the homes taken off the market, etc. Except for a few problems such as terrible design, bad location, etc its simply a matter of being LISTED TOO HIGH. The market dictates price. If you list your home and it doesnt sell, shame on whoever came up with the value. Homewrk should have been done. If it turned out that the true value wasnt what you needed, you shoudnt have bothered to list it.

    If youtell me you will list at $300,000 and I determine its value is $260,000---I wont take the listing. Stuck up? no!  Wealthy so I dont have to bother? Heck no!  It harms your chances in the future if everyone sees it going unsold. Some borrowers who may have offered if you were more reasonable probaly wouldnt want to offend you.  You may go out and put an offer on something else contingent upon your home selling and then everyione is haertbroken when it doesnt wotk.

    Bottom line?  If its priced correctly it will sell. If you cant live with what its true value is on a sale, dont put it on the market.
  • Do lenders actually do LOAN MODS? Is your chance good?

    Posted Under: Home Selling in Oregon, Financing in Oregon, Foreclosure in Oregon  |  October 9, 2010 3:48 PM  |  310 views  |  2 comments

    Probably not.  Millions have applied and only a few thousand have been accepted. Funny thing is some of them ended up with higher payments than when they started.

    Why? Long story. In the B.C. years, (Before Crash) lenders didnt want to own properties. They didnt have the resources, time or money to take your home, even if it had a lot of equity.

    Enter YOUR GOVERNMENT who uses YOUR TAX MONEY plus fake money they print. They are subsidizing the lenders. Instead of total failure, the current administration decided to keep the banks propped up with BILLIONS of dollars of your tax money so the lenders could stay open and, hopefully, keep owners in their homes without having to foreclose.  They atarted to hand out BILLIONS but had only a few requirements. I dont believe any of the money went with the stipulation that the lenders HAD to modify loans, but that if the lenders ran borrowers through qualifying programs, they could be eligible for some type of modification. This was especially true of properties that had values dropping below their mortgage amount.

    So---you contact your lender and get a process started. A long, strange, sometimes terrible, frustrating process of having your information lost, misread, destroyed, etc. They tell you its now required to be in a different format. You start over. They cant find some of it. You send it for the 6th time.  They receive it but say now that certain documents such as pay stubs are now out dated so they need new ones. on and on and on until you want to shoot yourself. 

    In the mean time you have not been making payments. In some cases its because the lender told borrowers they couldnt apply unless they were late, forcing them to go into default!

    They run your income and debts through a qualification program and you dont qualify. (Hardly anyone can!) Oops, there is nothing you can do but oh by the way---you owe them $15,000 back payments or they will foreclose.


    Posted Under: Home Buying in Oregon, Home Selling in Oregon, Financing in Oregon  |  October 9, 2010 10:38 AM  |  336 views  |  4 comments
    Read the following news blurb.  Its outrageous and completely false. Brokers MADE the banks. Brokers brought in almost 70% of the borrowers and that profit built Wells Fargo, BofA, Chase, and many others to the size and profits that enabled them to go straight to the borrowers. All they needed was a communication tool---that being the internet.

    The BANKS UNDERWROTE the loans.
    The BANKS ACCEPTED  and APPROVED the programs and borrowers
    The BANKS CHEATED INVESTORS and sold unsafe products to them

    Brokers only passed on the paperwork. Was there actual fraud? Sure but there is fraud in all walks of life. Id bet in some way their is fraud in department store shoe sales!  Broker fraud is only a TINY portion of why the industry collapsed, yet the surviving banks blame us. The president of the Banking Association has tried to undermine and cut out brokers for a number of years.The ex owner of Countrywide has always blamed brokers. Now BofA is stopping wholesale through brokers and they cite BROKER FRAUD as the reason! What a crock of crap. Its just the final nail in brokers coffins as the banks divide and conquer whats left of the retail market. Read below:

    Bank of America Corp., the third- biggest U.S. mortgage lender through independent brokers, plans to stop offering home loans through that channel, focusing on direct lending and acquiring debts from other originators.

    The shift will “further enhance our capabilities in direct-to-consumer channels,” said Barbara Desoer, president of Bank of America Home Loans, in a statement today. The bank said it will phase out the business “following an orderly transition of loans currently in process.”

    Lenders including JPMorgan Chase & Co. have stopped offering mortgages through brokers after lax practices among people signing up borrowers helped create bad loans and fueled losses. Bank of America made $8.2 billion of loans through mortgage brokers during this year’s first half, giving it an 11.8 percent market share, according to Inside Mortgage Finance. That ranks it behind Wells Fargo & Co. and Provident Funding.

    About 1,000 Bank of America employees work in the broker division and the “vast majority” will be able to move to jobs in other units, said Rick Simon, a spokesman for the Charlotte, North Carolina-based lender. The firm ranked second in total home lending and first in loans acquired correspondent companies, according to Inside Mortgage Finance.

    Brokers accounted for 10 percent of U.S. home lending during the first half of this year, down from a peak of 31 percent in 2005, according to the publication.

    “My biggest mistake, probably of my whole career, was not closing down our mortgage-broker business sooner,” JPMorgan Chief Executive Officer Jamie Dimon, 54, said in a March 2009 speech. The New York-based bank quit funding home loans through brokers in January 2009.

    To contact the reporters on this story: David Mildenberg in Charlotte at dmildenberg@bloomberg.net Jody Shenn in New York at jshenn@bloomberg.net.

    To contact the editor responsible for this story: Alec D.B. McCabe in New York at amccabe@bloomberg.net;

  • What really did happen to the Mortgage Industry?

    Posted Under: Financing in Oregon  |  July 3, 2010 3:54 PM  |  309 views  |  7 comments

    This title has been used with reckless abandon but the explanations are rarely correct. Who is responsible? What caused it? Its so very very simple. We caused it. You and I. Anyone connected with real estate from home sales to mortgages. Greed. Lack of common sense.

    Real estate has been a super inflated dream bubble that had to burst those of us in the industry for a long time (Ive 30 years) knew it would happen.

    Here is the nutshell. We went through about 3 and a half refinance booms. Rates hit their all time low this side of WW2 in the 3rd quarter of 2003 when I closed some loans at 4.75 and NO points. We are not back to that but close. We closed millions of loans throughout those years and each time rates dipped, fewer people were high enough to warrant a refi.  The industry slowed down. The industry had a decision to make---shut down now from lack of business or create ways of bringing in new business, let it possibly all go to hell later and then shut down, thus extending profit for a few more years.

    Enter the stated income loans. The 1% start option arms. The 125% purchase combos!!! These loans allowed borrowers to buy anything they wanted without really being qualified. People would pay too mcuch for a property, meaning the props would then comp other proertioes up and prices rose, especially in California, Florida and parts of other states. The people whose 1972 $18,000 home sold for $500,000 took their enormous profits and went elswhere to spread the infection. Californians started to flock to Oregon in the early 90s. A home that was $97,000 here would be overbid. Californians didnt care if they paid 105 for that 97 home because the same home would have been 600,000 back in Santa Barbara! Again, those were comps to drag everything else up.  I saw homes being sold in San Jose to people who couldnt afford to put curtains in the windows but they didnt care because in six months they would make 75K on it from another idiot buyer.  Would mortgage brokers refuse to do the loans? Would ereal estate brokers refuse to sell the homes? Were the loan programs illegal? No  Who made the programs? THE LENDERS not the brokers, yet the lenders now scream that we brokers were/are the villians. They want retail back from us and we are the industry scapegoats.

    This whole thing was just like the totally false stock market fueled by cooked books and day traders with stars in their eyes. Then it blew to hell.

    Had to happen. What is a true property value? Whatever Joe and Jane Average Wage Earner can really afford. We service industry people are parasites. We need people with salaried incomes to be the backbone so we can make money from them. Now we have been knocked back to the late 70s, folks. You must actually qualify for a few safe programs available. Prices are dropping through the floor. Thats what happened and who did it.

    There was very little 'predatory lending'. Borrowers knew what they were getting into.

    Now the banks want all the retail and they want brokers to go away. Yes, right back to 1979 when only a few banks owned the mortgage world. We are there now. Nothing will ever be the same.

    I closed my 30 year mortgage business to go back to full time real estate brokerage. No sense in trying to fight the inevitable---mortgage brokers will soon be gone in my opinion. 

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