The Real Estate Bloggers

If you thought the scams being run on Craigslist were just on ripping off prospective tenants as we talked about before here, you are missing the other side of the coin. Landlords are in just as much danger.

The new scam involves renters sending fake cashiers checks and money orders. The landlord is thrilled to receive the money, deposits it, and then something happens to blow up the deal. It is not until the landlord has refunded the money do they find out that the cashiers check was fake and they are on the hook to return the money.

The scam artist is long gone before the landlord finds this out.

The ICC continues to receive complaints about potential renters who have written counterfeit checks to cover deposits only to back out of the agreements and ask for refunds, investigators say.

In another common ruse, scammers duplicate legitimate real estate postings, often using the brokers’ real names, but re-post the ads using fake e-mail addresses.

When potential renters or buyers request information via e-mail, the owner asks them to send money. Sometimes, the scammers claim they are doing missionary work and the money is sent to destinations in foreign countries, investigators say.

More at  Mlive.com.

If you are a landlord and have come across one of these scams, put the email in the comments. The previous post for tenants has saved many families thousands of dollars and many headaches by helping each other out.

And if you have been ripped off, file a complaint here with the IC3.

Thanks

If you are working in the real estate business this sentence should scare the hell out of you.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale.

It scares me. This overhang is so big the rounding error is 2 million homes.

Think about it, the Washington Post where I got this quote from can only pinpoint it to an approximation of 2 million homes.

I hope you are saying phrases in the back of your head you would not want your minister to hear.

This is why I and so many others who follow the industry are scared. We have created an environment where the government, the banking industry, and the real estate cartel have all tried to ignore this problem to stabilize the market.

YET THE PROBLEM HAS NOT GONE AWAY.

It has gotten worse. Much worse.

Until the overhang of potential foreclosures is fixed the real estate market will not fully recover.

We are all blowing smoke until then if we tell people that the recovery is right around the corner.

We need to clean up the mess first, not shove it into a closet where we think no one will see it, and then we can invite people in to look at the house.

That will be the day the real estate industry gets it’s credibility back.

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market. via The Washington Post

A sign that the big banks are focusing on core fundamentals and not esoteric investments happened today. Citigroup is selling their Citi Property Investors division to Apollo Management. The reasons for the sale are 2 fold. One, these investments are tanking. They are not performing and are a drag to the company. Better to divest them while the company is underwater and still has government investments in it.

The other reason is that big pappy, the federal government and 27% owner of the company, told them to get rid of assets. And when big pappy speaks, you listen. Of course, this subverts our whole economic system when the political arm directly injects itself into the business of business. But, who cares anymore, right?

All I do know is the timing was right for Apollo to buy. Even if the market still goes down, all the factors in the deal point to a bad deal being made by Citigroup. They were told to sell an asset, they did, and they have cover if the deal is bad.

Such is life in the new America…

The inclusion of Citi Property Investors to Apollo’s portfolio will more than triple the private equity firm’s real estate assets, the agency said. City Property Investors’ portfolio includes 65 investments in 26 countries with a net asset value of $3.5 billion, according to the agency. Apollo signed a letter of intent and the deal may take as long as three months to close, the agency said.

The U.S. government stepped in to prop up Citigroup at the height of the financial crisis in October 2008 when officials at the U.S. Treasury feared the bank’s crumbling financial condition could destabilize financial markets worldwide.

On March 4, Citigroup Chief Executive Vikram Pandit told a congressional panel that he had sold off many proprietary trading businesses, including the Phibro energy trading unit, and was focused on trading services for clients. via Reuters

Do my eyes deceive me? Is America slowly climbing out of the debt cycle that has come close to choking it in recent years. (ed. For everyone but the government it has…) The American consumer is shying away from home equity loans and cash out refinancing on their mortgages and are now bringing money to the table when they are refinancing their mortgages.

The deleveraging of America is happening right before our eyes and for some it is welcome news. Of course, there is a consequence to this, the money that was coming out was keeping our economy humming. Think about it for a second. If money is being saved it is not being spent creating jobs and buy “stuff”.

But the irrational purchasing during the past decade may have kept employment high and businesses humming, it was still an artificial bump. The consumers bringing money to the table to refinancing their mortgages is a great example. They will be able to save on costs like Private Mortgage Insurance and have the opportunity to qualify for lower mortgage rates.

The savings on these cost will provide a more disposable income for families, income that will not be predicated on debt that must be re-payed down the line.

America is wising up…

Now the pendulum in consumer psychology appears to be swinging toward reduction of household debt — whether on credit cards or mortgages.

In Freddie Mac’s latest quarterly survey of refinancings, 33% of homeowners put cash into the deal to lower their mortgage balances, the highest percentage ever. By contrast, only 27% of refinancers took cash out — the lowest percentage on record.

Why shift money from savings into your house? Nothaft says a small percentage of refinancers — including himself and his wife — traditionally have preferred to lower their mortgage balances whenever possible.

There are at least two key rationales for doing so, Nothaft says. No. 1: If interest rates are low and you’re getting minuscule returns on your bank savings or money market funds, paying down your home loan may well provide you a better return on your investment. via the LA Times

If the Oracle of Omaha, Warren Buffet, is correct the residential real estate market will rebound in 2011. Buffet, in his letter to Berkshire Hathaway stockholders, thinks that the demand curve will turn at that state and the residential markets will start to improve.

I am sure this news is not what real estate agents are hoping to hear, I tend to agree. The housing market still has way too much overhang from foreclosures and short sales for buyers to have confidence investing in homes. Add to that a nervous economy, it would be foolish to think that all will be okay this summer.

So real estate agents,  tighten that belt and continue to build your systems this year so you are ready for 2011.

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote Saturday in his annual letter to the shareholders of his Berkshire Hathaway. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t afford to buy an appropriate home a few years ago now find it well within their means.”

Record foreclosures flooded a U.S. real estate market already glutted with unsold property, causing housing starts to fall.

“People thought it was good news a few years back when housing starts — the supply side of the picture — were running about 2 million annually,” wrote Buffett, 79, chairman and CEO of Omaha-based Berkshire. “But household formations — the demand side — only amounted to about 1.2 million.”