Connect with us

Economic News

Beware the Bandwagon!

Published

on

First come the radio spots, then TV commercials, then infomercials – the first indication that a new industry has been born from a changing economy.  The housing crisis and woes faced by a plethora of borrowers about to lose their homes has begat the newest craze – Loan Modification Services.

Opportunity or Opportunistic?

We are now seeing a proliferation of firms that charge fees for what they promise will be quick results to negotiate with lenders to get affordable loan terms.  Unfortunately, some less-than-ethical folks see this crisis as a way to scam desperate homeowners with false promises of modifying loans.  In many cases, the firms take the homeowner’s money but never deliver the services promised.

Considering jumping onboard?

This offers an interesting opportunity for real estate agents to help clients and friends – by providing a referral to a valuable service, and the opportunity to earn some extra income.  

Avoid the charlatans!

After watching a local investigative-type journalist outlining an above-board company, I spoke with Cynthia Mitchell an affiliate for Home Loan Preservation  a nationwide legal network that specializes in Home Loan Modifications.  She offered a few pointers for agents that want to point people toward a legit company, or become an agent and earn some residual income “It’s important to ask the following six questions.  If the company answers ‘no’ to any of them, do not use them”

1. Will a licensed attorney be contacting my lender on my behalf?
2. Are fees guaranteed as fully refundable if the attorney is not successful in modifying my loan?
3. Will I have constant, transparent communication/updates from the attorney to track progress?
4. Is the company registered and compliant with state and federal departments?
5. Will all fees and timelines be disclosed up front?
6. Should I continue to make payments?

Conflict of interest?

I could see it argued both ways.  Mitchell has seen a comfort level among agents in making referrals to homeowners in search of the service “The real estate agents we work with don’t have the sense the homeowner blames them for their issues.  It seems that is typically directed toward the bank.” 

Is a service necessary?

According to William Apgar, a senior adviser to Shaun Donovan, President Obama’s new secretary of housing and urban development “Borrowers don’t need to pay anybody.”  Ironic, that many have made the same argument around realtor’s service.  But I digress …

The rebuttal

“I find Mr. Apgar’s point of view interesting,” Mitchell commented, “we continually hear that the problems homeowners now face are due in large part to homebuyers’ naiveté in the home buying process.  If one has difficulty making a good decision on a purchase transaction, how can we expect them to understand the legal intricacies in the loan modification process?  How can they be sure their interests are being served without a lawyer driving the transaction?  You know the banks have plenty of lawyers guiding them.”  

Time will tell

Unfortunately I know a number of people that have tried and failed to contact their lender directly, or, were told the lender wouldn’t discuss options until the loan was in default.  I’m sure both scenarios will be played to death by the media in the coming months.  

What do you think?

Will you take a page from big companies to “expand your share of wallet” by expanding your service offerings?  Is this something you’ve considered as an extension of your services?  Or do you see it as a conflict?

photo credit

Brandie is an unapologetically candid marketing professional who was recently mentioned on BusinessWeek as a Top Young Female Entrepreneur. She recently co-founded consulting firm MarketingTBD. She's held senior level positions with GE and Fidelity, as well as with entrepreneurial start-ups. Raised by a real estate Broker, Brandie is passionate about real estate and is an avid investor. Follow her on Twitter.

Continue Reading
Advertisement
13 Comments

13 Comments

  1. Mark Eckenrode

    March 26, 2009 at 10:07 am

    i can’t think of a more timely topic for folks. great job, brandie

  2. Mark Eibner

    March 26, 2009 at 2:16 pm

    we’re at it again Beware the Bandwagon!: Get out of your feed reader and comment on this post- .. https://tinyurl.com/dnk9to

  3. Real Estate Feeds

    March 26, 2009 at 2:17 pm

    Beware the Bandwagon!: Get out of your feed reader and comment on this post- we PROMISE that the ShamWow guy won.. https://tinyurl.com/dnk9to

  4. Tommy

    March 26, 2009 at 2:22 pm

    Interesting: Beware the Bandwagon! https://tinyurl.com/dnk9to #journalist reporting

  5. sheilabragg

    March 26, 2009 at 2:25 pm

    Beware the Bandwagon!: Get out of your feed reader and comment on this post- we PROMISE that the ShamWow guy won.. https://tinyurl.com/dnk9to

  6. Walid Muhammad

    March 26, 2009 at 2:35 pm

    Reading: “Beware the Bandwagon!” (https://twitthis.com/met9rn)

  7. Mark Eckenrode

    March 26, 2009 at 4:06 pm

    looking to get your home loan modified? @brandiei has some timely tips on how to avoid the charlatans https://bit.ly/JJtSN

  8. Missy Caulk

    March 26, 2009 at 9:02 pm

    I’ve been helping a few clients with loan modifications that they were unable to get any attention from the home sellers.

    In both cases the homeowners were responsible, intelligent folks who did not buy over their price range.

    Both lost jobs, or one partner did.

    It is a real ordeal dealing with Authorization forms faxed multiple times, waiting a week, then being told they never got it but yet I have the fax confirmation sheet.

    errrrr….

  9. Bob

    March 26, 2009 at 9:47 pm

    After July 1st in California, most of the people doing loan mods today will be breaking state law.

    That said, depending on the lender, there isnt much negotiating that can be done. It’s their call.

  10. Mark Eckenrode

    March 27, 2009 at 12:25 am

    @brandiei you’re welcome. it’s a shame so many will get taken to the cleaners by loan adjustment weasels https://bit.ly/1apnmL

  11. Brandie Young

    April 9, 2009 at 5:23 pm

    Hi Mark – it is timely, and I think a topic we will see a ton of discussion around in coming months…

    Missy – I can’t imagine what a pain that must be! In talking with Cynthia for this article I couldn’t believe the level of detail! Ugh.

    Hi Bob – thanks for chiming in here. Re the legal comment, that’s what I understood from Cynthia Mitchell. Though I didn’t dive too far into it, she stressed the importance of licensed legal professionals. Time will tell how these mods will go.

  12. Ben Nicolas

    April 29, 2009 at 1:40 am

    Re: requiring a licensed attorney to negotiate with the bank: How does hiring an attorney who specializes in say “Environmental Law” or “Personal Injury” benefit a client as opposed to hiring a licensed Mortgage or Real Estate broker that battles with Loss Mitigation & Asset Managers on a daily basis, working short sales/loan mods and has years of experience qualifying homeowners and intimate knowledge of local RE values? In my state, CA, what most attorneys are doing is essentially renting their license to out of work, unlicensed ex sub-prime Loan Officers. I’ve heard that the CA state bar is going to start cracking down on this loophole being exploited by way to many attorneys to enable RE & Mtg brokers to circumvent the CA Foreclosure Consultant laws which prohibit taking up front fees from homeowners with a recorded NOD.

Leave a Reply

Your email address will not be published. Required fields are marked *

Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

Published

on

NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<

#CarsonHUD

Continue Reading

Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.

Published

on

young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

bar
The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.

#JobOpenings

Continue Reading

Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.

Published

on

gas tax

gas-tax

Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.

bar

Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

Continue Reading
Advertisement

Our Great Partners

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Emerging Stories

Get The American Genius
neatly in your inbox

Subscribe to get business and tech updates, breaking stories, and more!