THE PACIFIC TRUST REPORT
May 27, 2011
To Our Clients, Colleagues and Friends:
• Harold Camping, the Christian radio host who predicted the rapture will occur on May 21, 2011, has moved his latest end of the world prediction to the date of October 21, 2011. He now says that May 21 was simply the date that God would decide the fate of the world and that the sentencing will be carried out on October 21. So, plan accordingly.
The preacher also added that while so many of his followers donated money - in some cases everything they owned - to his ministry in belief that the world would end last Saturday, they won't get it back.
"Why would we return it?" Camping said, arguing that the world is still going to end in October. Now how do you argue with that logic?
• Did you know that Lender Paid Mortgage Insurance is back? Short Sales and foreclosures are consistently approving a 2-4% credit of the sales price towards closing costs. In most cases, 2 points is enough to buy out the PMI completely for the life of the loan. On a $400,000 loan that could save a buyer as much $316 per month!
If the borrower wanted to save $316 per month in monthly payments, they would have to get the seller to drop their purchase price by over $60,000 on a 4.75% purchase loan. I cannot think of a better way to spend the seller's credit than by using it to pay LPMI fees!
• UPDATE ON HUD $100 DOWN PAYMENT PURCHASE PROGRAM- HUD has changed the way they market their HUD foreclosed homes. They are trying to upgrade their image and they do not want to their foreclosed homes to be lump in with the other "bank foreclosures". HUD recently confirmed they are going to continue to offer the HUD $100 Down Payment Incentive in most parts of the country. But this is a government program and there are, of course, some strings attached.
The $100 Down Payment Program Has the Following Requirements:
1. HUD Foreclosed Homes Only! Lists of HUD properties available under the program are available for each state are available at http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/salesincentives
2. Buyers must place their bid for a HUD foreclosed home online and you still have to use a Realtor.
3. Buyer must use FHA financing. They cannot use conventional financing.
4. This program is for owner-occupants only, not for investors.
5. You still need to have the earnest money of $1,000 for properties listed above $50,000 and $500 for properties listed for less than $50,000. Earnest money will be returned to you at closing as a credit on the closing statement.
6. HUD may pay closing costs up to 3% of purchase price.
• Is dual agency ethical? If a real estate agent has a fiduciary responsibility to a property seller to obtain the highest possible selling price for the property and then they locate a buyer for that property and also act as their agent, does that create a potential conflict of interest that may not be in the best interests of one or both of the parties involved? For example, let's say the buyer and seller agree to a purchase price of $200,000 for a property. Then the appraiser appraises the property for $180,000. Obviously a renegotiation needs to occur, but can the agent represent the best interests of BOTH clients in that renegotiation? What if it is in the buyer's best interest to walk away from that specific property at that point, but the seller is pushing the agent to make the deal happen? Can the agent possibly represent both of their interests equally? What are your thoughts?
• The details of this whole Arnold Schwarzenegger love-child scandal might still be coming out, but what we do know is that the "Governator" fathered a son with a housekeeper about a decade ago. Which is right around the time the former Mr. Universe was living in his recently listed $23.5 million Pacific Palisades spread while the Brentwood mansion was undergoing renovation.
Was this the site of the fateful betrayal? Maybe, but what's more interesting is what the scandal will do for the resale value of this house. Has the seven-bedroom mansion been tainted by adultery or is any celebrity connection a good one?
Friday Funnies:
The latest survey shows that 3 out of 4 people make up 75% of the population.
How much are they asking for your rent now? Oh, about twice a day.
I'm not saying that the customer service in my bank is bad, but when I went in the other day and asked the clerk to check my balance ... she leaned over and pushed me.
A businessman who needed millions of dollars to clinch an important deal went to church to pray for the money. By chance he knelt next to a man who was praying for $100 to pay an urgent debt. The businessman took out his wallet and pressed $100 into the other mans hand. Overjoyed, the man got up and left the church. The businessman then closed his eyes and prayed, "And now, Lord, that I have your undivided attention...
An organization is like a tree full of monkeys... all on different limbs,... at different levels,... some climbing up. The monkeys on the top look down and see a tree full of smiling faces. The monkeys on the bottom look up and see nothing but assholes.