Mizzer Foreclosure Newsletter

One more step closer to a 2008 Resolution Trust Corporation (S&L bailout) with Fannie and Freddie in conservatorship, the FDIC dipping deep in their pockets because of troubled banks while another Bear Stearns is on the horizon with Lehman Brothers Barely treading water. Interesting! But wasn't it just several weeks ago when financial industry forecasters were saying the crisis was leveling off? It seems it's always calm before the storm. Lehman's CEO was on CNBC claiming, "No Problem" while David Einhorn, a hedge fund manager, was being quoted in the financial newspapers saying, "They just raised $6 billion of capital they didn't need, to replace losses they said they didn't have." Okay. Here's the skinny!

If you've been listening to the optimists, the bad news is the 2nd quarter report has new construction starts down by 1/3, building permits off 40 percent, and foreclosures up 50 percent. The conservative prognostication, by independent financial analysts is that there might be some light at the end of the tunnel by late 2009 to 2010. But speculation is based on prices falling lower. With the exception of isolated pockets, housing prices are still about 55percent above 1999 price levels, and sales numbers are up mostly because housing price numbers are down. What do I mean by isolated pockets? In Montgomery County, some zip codes are up by $300,000 in price, while some zip codes are priced down by $300,000. This not the norm.

The good news is that lenders are selling more REOs. At this point, however, most of the activity is in quality and lender to lender. But prices being quoted in the financials are 25 cents on the dollar, so when they finally are forced to give it up to us common folk, there still will be a lot of wiggle room- especially if the federal government gets into the act. And the smart money is betting it will. Bill Seidman, former head of the RTC, in a TV interview expressed as much. With housing inventories in the second quarter at 4.6 million, coupled with an 11.2 month back up, and the federal government projecting hundreds of billions of taxpayer dollars to pay off corporate risk, it only seems plausible in an election year that one of our candidates will figure out it's time to become more transparent and fess up on non-producing loans, securitized or not. A member of the Japanese cabinet, in recent discussions with U.S. Treasury officials, blamed a lack of transparency for prolonging their housing crisis.

Now here's a gem for agents licensed in Maryland. Thomas Perez, secretary of labor, licensing, and regulation claims foreclosure events down 20 percent. But he also warned the number was a result of the state's recent moratorium that extended the foreclosure process to 150 days. This isn't a by; it's a hold on a minute. With this in mind, let's crunch some numbers and make some money. The highest number of foreclosures in state still comes from Prince George's County. The highest number of subprime resets in 2008 were projected for Prince George's County in August, September, October and November. Come January, the Hybrid loans (the most toxic with resets and negative amortization) are scheduled to reset. They have all been given an extension under the new law. So you have time to get into the driver's seat.

What else is happening? Since Fannie and Freddie have been forced into conservatorship, the 30 year fixed rate loans have dropped from 6.4 to 5.7 percent. There are other impending events as well. FHA Jumbo loan amounts are coming down in numbers after 2008, and down payments are rising. The $7,500 new tax credit for first-time home buyers closes out by the spring of 2009. There are some doors that will not be open. If you wait. You have been given an extension with the government foreclosure moratorium and a reason to close now as the federal government programs are set to expire. Pre-foreclosure sales should increase, a certain number of buyers should be ready to buy now and take advantage of the government goodies about to expire. How do you sell/buy now?

The kids are back in school. Vacations are over. The fall buyer's season is here. Inventories remain swollen and prices are coming down. Sellers are paying closing costs and throwing in other incentives. And the northern part of the county is offering one of the best lucrative fringe areas in the region. the combination of the Fort Meade base consolidation promising 29,000+ new jobs, and the $3 billion Konterra project along I-95 Laurel sporting 2200 acres of residential and business park, sounds like a buyer's agent dream. Check out our 6 hour hands-on, mentoring foreclosure seminar. We focus on buyer representation, determining true market in a marketplace of overvalued appraisals, how to find foreclsoures ahead of the pack, negotiating 50 cents on the dollar REOs and outreaching investment groups.