Book Review - Saving The Deal

Title: Saving the Deal

Your buyer found the perfect home. Your seller found the perfect buyer. Yet, as you near closing, all types of title, mortgage, appraisal, and home inspection problems can keep you from closing. Mortgage expert Tracey Rumsey has seen it happen all too often. In her new book, Saving the Deal (AMACOM, 2008), she offers tips on how to avoid these potential deal-killers that jeopardize or delay transactions. Home listing and homebuying checklists in the book offer you questions to ask your clients to make sure these problems don’t surface later on and cost you a sale.

From the Book: 5 Common Deal Killers

Any number of pitfalls can arise during a transaction that prevent the buyer or seller from signing on the dotted line. In her book, Rumsey offers common scenarios she’s seen and how to overcome them. Here are five:

1. Title complications. The title is legal evidence of the ownership of the property and is crucial when trying to help your client buy or sell. But problems can arise when such issues as death, divorce, guardianship, and bankruptcy enter the picture. Review the title carefully — this goes for buyer’s agents too. Troubleshoot any potential title issues early on. Direct sellers to a real estate attorney to resolve any problems. And don’t just take the seller’s word when it comes to the title — look it up yourself. Most title companies offer access to a limited amount of title information through their Web sites.

2. Unrealistic equity expectations. Have a talk upfront about all of the costs of selling a home so that sellers don’t end up backing out at the last minute. Rumsey’s book offers a worksheet that you can walk through with your sellers to paint a realistic look at estimated final numbers on closing day. It takes into account such items as mortgage payoff, any mortgage prepayment penalties, sales commission, title insurance for buyers, closing and recording fees, and property tax pro-ration. But what if you crunch the numbers and then the seller realizes she can’t afford to sell? Better to know now than after the cost of your time and money later.

3. Financing snags. Your buyers find the perfect property, you write up the offer, and then their financing doesn’t go through. It’s not just about having good credit when it comes to getting a loan. Educate yourself about the loan process so that you can help buyers foresee any potential problems. For example, a recent job change, a probationary period when starting a new job, and jobs that rely on commission income can pose problems in getting loans. Also, help prepare first-time homebuyers by learning the guidelines of your state’s housing loan programs, which may offer below-market interest rate loans and down payment assistance.

4. Appraisals. When appraisals come in at a value lower than the contract price, you have a major potential deal killer. So listing agents need to make sure they list the home at the right price from the beginning. To counter a low appraisal, you can provide the lender with the process you used to determine the price of the home and appropriate comps. But don’t call the appraiser, unless you were the one who ordered it. Do not expect a request for a second appraisal to be granted; they rarely are. One solution is to drop the sales price to match the appraised value, if it’s a small difference. Otherwise, you may need to take more drastic action, such as offering a commission reduction to get the seller to move forward. “None of us like dropping our profit margin to save a deal, but sometimes it’s what we have to do to get to the settlement table,” Rumsey writes.

5. Pre-approval letters. These letters issued by a loan officer tell you that after a full review of the buyer’s credit, income, and asset status, she is very likely to meet the requirements of closing on a loan. Not so fast. Before your seller accepts the offer, make sure the buyer really can close. There are varying degrees of competency when it comes to loan officers, just like any other industry. That said, some of these letters issued are after a thorough investigation into the buyer’s finances, while others came from a five-minute conversation. Read each letter carefully. Does the letter state the actual sales price that the home the buyer is approved to purchase? Does it state that the buyer’s credit status, income, and assets have been verified? If these questions aren’t answered, call the loan officer for clarification. If the answers are “yes,” you likely found a solid buyer, Rumsey says.

Sneak Peek
“Deals can be saved by proactive thinking at the beginning of the transaction. Blowups or delays just before settlement, no matter who is at fault, hurt your client and your reputation. Your clients may logically understand that the problem had nothing to do with you, but there may still be negative emotions tied to you that may prevent them from calling in the future when they need an agent.”

About the Author
Tracey Rumsey has more than a decade of experience as a mortgage loan officer. She is the chair of the Utah Mortgage Lenders Association Education Committee and is also a mortgage and real estate continuing education instructor licensed with the Utah Division of Real Estate.

This review comes from REALTOR® Magazine Online. More review of other books are available from NAR's website at http://www.realtor.org/.

The Next Installment of Mr. Blanding's Builds His Dream House

I've posted 2 prior clips from this movie on this blog just for you to enjoy. I hope by now you've seen these video clips of this priceless gem. It is timeless and best yet it has to do with our business - real estate and the American dream! I first discovered this movie many years ago and have enjoyed watching it probably more than a dozen times since. Once again, it is called "Mr. Blandings Builds His Dream House" starring Myrna Loy and Cary Grant.

It is a comedy released in 1948 and directed by H.C. Potter. For you film buffs, it was written and produced by the team of Melvin Frank and Norman Panama and was an adaptation of Eric Hodgins' popular 1946 novel. Upon its release, it was a box office hit, and has remained a popular film via cable television and the home video market. Warner Home Video released the film to DVD with restored and remastered audio and video in 2004. Featuring a plot that can be easily identified with, the film has spawned a number of remakes, including the 1986 movie -The Money Pit starring Tom Hanks, 1993's The Dream House, and 2007's Are We Done Yet?.

Please consider renting or buying the movie. You will thoroughly enjoy it, guaranteed!

Governmental Affairs News - News You Can Use!

At The Capital
Leaders still working toward an on-time budget- Legislative leaders and Gov. David Paterson returned to the Capitol Wednesday and said they planned to make the April 1 budget deadline. Paterson told reporters that he is confident a budget can be put together soon. Senate Majority Leader Joseph Bruno announced that the Senate plans to work throughout the weekend to meet the budget deadline. Assembly Speaker Sheldon Silver said, “We are on target to do a budget on time; that is our goal.” Joint legislative budget committees are expected to meet today to lay out a schedule for subcommittees over the coming days. The legislative leaders and Paterson announced that they have a “framework” of a deal that includes some increased fees and other unspecified funds, but they must hammer-out details. They are working within the framework of roughly $124 billion for the fiscal year that begins next Tuesday.

Action on Real Estate-Related Legislation

The following action on real estate related legislation occurred recently in Albany:

Increased Agriculture Disclosure Requirements (S.7061/A.10169) - NYSAR-opposed legislation to require purchasers of real property with 500 feet of the boundary of an agricultural district to be provided with disclosure of farming activities within such district was reported from the Senate Agriculture committee. NYSAR staff is speaking with lawmakers to express our opposition to the proposal introduced by Senator Winner (R-Elmira) and Assemblyman Koon (D-Perinton). The Legislation remains in the Assembly’s Agriculture committee. Click here to read the bill.

State News - NYRI
NYRI application denied for second timeThe New York State Public Service Commission has denied for the second time New York Regional Interconnect’s application for a nearly 200-mile power line from near Utica to the Hudson Valley. The Public Service Commission cited several deficiencies in the application including a study on how the line would impact the statewide electrical system, lack of information on substation facilities and the failure to mention the study of alternative routes. In addition, the Public Service Commission recommended that NYRI look more closely at the overall visual impacts of the power line. A spokesman for NYRI said the company was still looking over the letter from the PSC. For more information, visit the Public Service Commission site.

This update on government and politics in New York State is a weekly publication from NYSAR’s Government Affairs Department. REALTOR members and staff are urged to share this information as appropriate and reprint it in membership publications.

Dilbert - Have You Ever Felt This Way?

Tax Benefits to Owning A Home - Something Your Buyers Need to Know!

Well, it's tax season and we are all thinking about it. So, why not talk about the tax benefits of homeownership to our first-time homebuyers. Here's a short but informative article from REALTOR® Magazine's Online Daily Real Estate News for 3-7-08 on this very subject.

Tax Benefits of Owning a Home

Before a home owner curses the troubled housing market, he or she should take solace in the U.S. tax code, which makes buying a home a good deal for almost everyone.

Here’s why:

Mortgage interest deductions, including in some cases mortgage insurance premiums, reduce home owners’ tax liability by reducing income. The deduction includes interest paid on both a first and a second home.

Interest on home equity loans is also deductible — whether the borrower uses the money to remodel the kitchen or to take a vacation to Disney World.

Profits from selling a house are potentially a huge windfall. When a home owner sells a primary residence, any profit on the sale of the property is tax free up to $250,000 for single home owners and $500,000 for married home owners filing. Any profit above that is nearly always a long-term capital gain taxed at 15 percent — less if the seller’s tax rate is less than 20 percent.

Home owners can itemize. That opens up opportunities to deduct a host of other items that wouldn’t be deductible if the taxpayer took the standard deduction.

Source: The Boston Globe, Leonard Wiener (03/02/08)

Why Now Is A Smart Time to Buy!

The Following is an Article from REALTOR® Magazine, Daily Real Estate News March 11, 2008 - Now is a great time to buy a home, say the financial gurus at the Wall Street Journal.

The Journal calls it a buyers market and offers these suggestions for first-timers getting their feet wet. While their advice is solid, it’s not revolutionary, but some potential customers might find it reassuring.Remember this is a place to live not a stock market investment, they say. Lenders want buyers to spend no more than 28 percent of their gross monthly income on mortgage payments, real estate taxes, and home insurance. Buyers shouldn’t count on stretching further because lenders won’t approve their loans.

Cash is king. Having enough money in the bank to pay closing costs that are typically an additional 2 percent to 3 percent of the price of the home is necessary.

Location. Location, location. As any good real estate professional knows, homes in good school districts where the crime is low are much more likely to hold or increase their value.

Compare. Besides just looking at the comps, buyers should examine what it would cost to rent a similar house in the same area and they might consider what it would cost to buy land and build a comparable home.

Think long haul. It will probably take at least six or seven years of living in the house to be able to sell and come out ahead.

Source: The Wall Street Journal, Shelly Banjo (03/11/08)

Existing Home Sales on National Level Rise In February

According to a news item on NYSAR's website dated 3/24/08, sales of existing homes in February increased and remain within a fairly stable range according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 2.9 percent to a seasonally adjusted annual rate (1) of 5.03 million units in February from a pace of 4.89 million in January, but remain 23.8 percent below the 6.60 million-unit level in February 2007. The sales pace has been in a fairly narrow range since last September.

Lawrence Yun, NAR chief economist, said the gain is encouraging. “We’re not expecting a notable gain in existing-home sales until the second half of this year, but the improvement is another sign that the market is stabilizing,” he said. “Buyers taking advantage of higher loan limits for both FHA and conventional mortgages will unleash some pent-up demand. As inventories are drawn down, prices in many markets should go positive later this year.”

The national median existing-home price (2) for all housing types was $195,900 in February, down 8.2 percent from a year earlier when the median was $213,500. Because the slowdown in sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively fewer sales in higher priced markets.

Home prices within metropolitan areas are more telling. The most recent data shows roughly half of the metro areas in the U.S. with price increases, with healthy gains in markets such as Oklahoma City and Trenton, N.J. “In other areas such as Sacramento, a rapid price decline has induced buyers to come into the market and sales are now rising,” Yun said. “The relationship between home prices, interest rates and income has improved to the point where buyers are more serious about making offers.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.92% in February from 5.76% in January; the rate was 6.29% in February 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, CA, said that negotiation and knowledge are even more important in the current market. "Consumers need to be aware of local market conditions and comparable sales prices to have a clear picture of a home's value," he said. " Realtors® understanding of local markets, negotiating expertise, and transaction experience are invaluable to both byers and sellers, today as much as ever."

Total housing inventory fell 3.0% at the end of February to 4.03 million existing homes available for sale. Single family homes sales increased 2.8% to a seasonally adjusted annual rate of 4.47 million in February fraom an upwardly revised 4.35 million in January, but are 22.9% below the 5.80 million-unit level a year ago. The median existing single-family home price was $193,900 in February, down 8.7% from February 2007.

In the Northeast, existing-home sales jumped 11.3% to an annual pace of 890,000in February, but are 26.4% below February 2007. The median price in the Northeast was $264,800, up 0.4% from a year ago.

The information above is an abidged article by the same title authored by Walt Molony at NAR. The National Association of Realtors®, "The Voice for Real Estate", is America's largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Quote(s) of the Week

This week I'm providing you with some quotes about generosity. This is an often overlooked virtue and one that is truly instrumental in fostering your own happiness. We were designed to be generous in our love and giving. If you wonder whether this is really true or not, let me ask you this: have you ever met a happy miser?

"What we have done for ourselves alone dies with us; what we have done for others and the world remains and is immortal."
— Albert Pike

"Since you get more joy out of giving joy to others, you should put a good deal of thought into the happiness that you are able to give."
— Eleanor Roosevelt

"No person was ever honored for what he received. Honor has been the reward for what he gave."
— Calvin CoolidgeFormer American President

"You have not lived today until you have done something for someone who can never repay you."
— John Bunyon

Bringing Out the Buyers - Another Great 'Must Read' Article by Economist Lawrence Yun

This article is from Real Estate Insights-The Forecast (A NAR Online Publication)

Bringing Out the Buyers
by Lawrence Yun, NAR Chief Economist

The “second” reading of GDP growth in the 4th quarter of last year was unchanged – a basically flat 0.6 percent growth rate. As we go forward, economic growth in the first half of this year will be essentially non-existent. But there is some light at the end of what many pundits view as a dark tunnel. By the second half of the year, the economy will expand at slightly higher than 2 percent. The 2008 fiscal stimulus package contains over $100 billion in tax rebates. Those checks should be in taxpayers’ mailboxes in early summer. This tax cut is more than twice as high as a similar rebate passed in 2001. Past research suggests that consumers’ propensity to spend out of those tax rebates is about 40 cents to 50 cents on the dollar. That translates into additional consumer spending of $60 to $80 billion in the second half of the year. Make no mistake – this stimulus is the key factor in helping move the economy in the second half of the year.

Other Factors than Housing Involved in Economic Doldrums

Seems like most people blame the housing downturn for our economic doldrums. But there are other factors. This tax rebate is needed to compensate for outrageously high oil prices and from falling stock market values. A $104 dollar per barrel oil price is a major drag on consumer spending – and something that virtually every consumer feels. Europeans are not paying as much because of their stronger currencies. The higher oil price, which is priced in U.S. dollars, is partly driven by the very weak dollar. The weaker dollar is caused in part by a higher inflation rate in the U.S. vis-à-vis the rest of the world’s advanced economies. If a currency is losing its purchasing power, why hold that currency?

Recall, the oil price was under $20 per barrel just 10 years ago. When the price of oil rises, it is essentially a tax placed on consumers with less money available to spend on more enjoyable items and activities. This “oil tax” unfortunately does not even go into the U.S. Treasury. Rather it fills the coffers of the governments of Russia, Venezuela, Saudi Arabia, Nigeria, and Iran. In today’s world, it is a transfer of money from a democratic country to a non-democratic country. The housing market will also get some relief. A higher loan limit – up to $729,000 from $417,000 – in several local areas, including Los Angeles, Orange, and San Francisco counties, will have a big impact in bringing out the buyers. As a result, home sales in the second half of 2008 will no doubt be much stronger than in the first half. Look for existing-home sales to rise to a 5.7 million-unit pace in the second half versus 4.9 million in the first half.

Pent-Up Demand

Rising sales will also bring down inventory and help strengthen home prices. The national median price of an existing home will fall in the first half of the year and then rise in the second half. For the year as a whole, the median price will have fallen by 1 percent – after having fallen 1.4 percent last year. Of course, there will be tremendous local market variations. The Northeast region is likely to be first region to show signs of stabilizing and then strengthening housing market conditions. The West region will likely trail behind.

The West region could, nonetheless, surprise us on the upside. What is unique about the current housing cycle is the pace of price declines in some local markets, which can significantly improve affordability conditions in a short time. Home prices are falling at or near a double-digit pace in California, Nevada, and Arizona. A sudden quick home price adjustment may be just the thing to quickly induce buyers back into these marketplaces. After all, as is the case in many parts of the country, jobs have been created in those Western states over the past two years even against the backdrop of a housing market slump, and hence, there exists significant pent-up demand.

New home sales will take much longer to turn around. That is simply due to the fact that there are far fewer new homes being built. Single-family housing starts have fallen by more than 50 percent in the past two years. Based on housing permits – generally a reliable indicator of upcoming housing starts – new home construction will fall further for the remainder of the year. New home inventory has been trending down but more cutbacks are needed. Therefore, homebuilders need to further bite the bullet and hold back construction.

Loan modifications and other foreclosure mitigation programs are all well intended and good, but the best policy assistance in our current market condition is to unleash the pent-up demand. Any measures that violate the sanctity of private contracts – such as permitting judges to reset interest rates – should be avoided as those can greatly harm home sales by raising the cost of borrowing on new loan originations. There is some discussion of a possible tax credit for first-time home buyers. Such a policy will be a great stabilizer for the housing market and the economy.

This commentary and forecast along with other informative articles can be found on NAR's website at www.realtor.org

Why What Happened on Wall Street This Week Was Important and What's The Concern About Inflation?

As most of us know, commodities prices have rocketed for a quite some time now. Just consider how the price of oil and gold, just to name two commodities, have surged to record high levels in recent history. However, this week, commodity prices dropped drastically. By one account, commodity prices posted the largest decline in in last 50 years. The dollar came back from its lowest level since the early 1970s because of recent actions taken by the Federal Reserve and Treasury.

Based on the actions of late by the Administration,Fed and Treasury, the stock market may be taking a turn for the better and the initiatives by, most notably by the Fed, may already be starting to pay off.

The Federal Reserve has taken a number of measures of late - including lowering the discount and fed funds rates, providing over $400 billion in lending programs, providing a sizeable loan to JP Morgan Chase as it concerned Bear Stearns, providing a new overnight borrowing facility for key lenders, etc. Taken together these moves were bold and already look like they may be effective for stimulating the economy and stabilizing the housing market.

Now, how about inflation? Are the actions taken by the Fed inflationary? The Fed's actions by restoring market liquidity by flooding it with massive amounts of money would seem to suggest that it is inflationary. However, the Fed, while flooding the market with massive amounts of money also sold off Treasury securities. This has the effect of putting a wet blanket on any potentially inflationary actions by the Fed.

Will we see an era, like we did in the 1970s, of stagflation? Stagflation is when the economy is recessed yet inflation rages. Because of the downturn in the economy over the last several months combined with soaring commodities prices, it was looking like stagflation might, in fact, return. Yet, because consumer demand is weak this has the effect of keeping any increase in prices in check. As prices increase, demand will eventually diminish and cause inflationary pressures to subside.

Overall growth in the economy is by far much more inflationary than any increase in commodity prices. Commodity prices are just a small portion of overall production costs. Changes in commodity prices account for a small part of inflation exclusive of the costs of energy and food. Labor costs, which are figured to be about 75% of all costs, represent a far greater inflationary threat. However, we do not have increasing labor costs at this time in the economy.

The housing bubble and now the commodities bubble have burst and the effect is not inflationary. As a matter of fact, it is deflationary. The downward pressure on housing prices certainly is not the stuff that inflation is made of. The credit crunch we are now experiencing is one that could prevent a reviving of the economy.

We now have a situation in which lenders do not want to lend. The danger here is that the Fed is wanting to stimulate the economy while the banks are digging in their heels. This is the situation to watch at this point. It will be interesting to see how this works its way out.

A Well Reasoned Approach to Jump Starting Home Sales

Top-Down Solution
by Lawrence Yun, Chief Economist, NAR Research


The most recent data indicates that, yes, foreclosures rose again in the 4th quarter of 2007. A number of government agencies are trying to help reverse this trend. There are several policies proposed and some already being implemented to address rising foreclosures. But nearly all are attempting to alleviate the problem from the “bottom up,” rather than from the “top down.” The bottom-up approaches involve a work-out plan of current problematic loans. Let’s look at several of them.

· The FHA Secure Program offered through HUD allows borrowers to get out of their high-interest rate, subprime loans into a lower-interest rate FHA loan if they meet certain conditions. Those conditions include having some level of housing equity and having demonstrated timely mortgage payments prior to the time when interest rates reset at a higher level.

· Sheila Bair of FDIC was one of the first to call for voluntary loan remodification. Lenders' profit margins will be lower, but remodification is still better for their bottom line than a foreclosure. Recently, she called for systematic lowering of those resetting rates on 2/28 and 3/27 subprime hybrid loans.

· Henry Paulson, Treasury Secretary, called for essentially the same after bringing key financial institutions together and putting the voluntary loan restructuring into more concrete form. There are a lot of hoops a borrower has to go through to qualify for the relief, however.

· Ben Bernanke, Chairman of the Federal Reserve, has suggested lenders give a break to distressed borrowers by lowering some portion of the loan amount. A lower remaining principal will permit more manageable monthly mortgage payments for borrowers. More importantly, the write-down of the principal changes the homeowner’s position from being under water (negative housing equity) to above water. The idea is that borrowers can still make payments rather than walk away.

· Senator Chris Dodd (D-Connecticut) has proposed legislation that would permit bankruptcy judges to modify the terms of the loans in order to make payments more manageable.

· Martin Feldstein, Harvard University professor, made an intriguing proposal of immediately converting 20 percent of the existing loan balance into very low interest-rate loans. The federal government will provide the exceptionally low rates.

All of these proposals are well-intended and most will help mitigate foreclosure problems for mortgagees. But in addition to some aspects of these programs, what is also needed – and could well be far more effective – is a top-down solution: raising the housing demand. As I have written in this column previously, there exists a significant pent-up demand. What we need now is to get the home sales rolling. Rising home sales will lower housing inventory. Lower inventory will help quickly stabilize home prices. A recent Boston Fed study showed that home price movements – and not interest rate resets – are the primary determinant of foreclosures. If households have less or negative housing equity, then they have more of an incentive to default on mortgages and simply walk away.

The challenge is unleashing this pent-up demand into the marketplace. Consumer pessimism is pervasive. The raising of the loan limit on FHA and Fannie/Freddie backed loans will likely help unleash some of this demand as more households will have access to lower interest rate loans. And while lower home prices can also work to bring buyers to the market, they are no guarantee because lower prices can also add to excessive pessimism and consequently hold off buyers.

So, what do I think we should do? What is critically needed at this important point in the housing cycle is a measure to assuredly and quickly raise home buying activity. This can be accomplished by providing a home buyer tax-credit. A nationwide $5,000 tax credit (the same amount currently in existence for home buyers in Washington, D.C.) would cost the federal government $40 billion. Factoring in rising economic activity and accompanying rising tax revenue, the true cost could be minimal or even positively favorable. A reversal in the weakness in the housing market, which has been subtracting about one percentage point off GDP growth, can add $40 billion to the U.S. Treasury – essentially offsetting the cost of the tax credit. If the initial $40 billion cost is hard to swallow, how about a more targeted tax credit for only first-time home buyers? That would cost the government about $15 billion.

The ongoing subprime loan mess and related foreclosure problems are due to past lending mistakes. Current home buyers fortunately are not exposed to these “errors in judgment.” And these fresh buyers will also help save the day for existing homeowners who are either defaulting or facing foreclosure. Rising demand lifts all boats. There is a wide selection of safe mortgage products for today’s home buyers. Combine those safe mortgages with a home buyer tax-credit and we have the makings of a solid housing market recovery. Because housing nearly always leads the economy, a solid economic recovery will not be far behind.

This is one of a series of commentaries provided by the Research staff of the National Association of REALTORS®. You can find this, as well as other commentaries and articles like it on NAR's website: www.realtor.org

Fannie & Freddie Get a Little Help From Their Uncle Sam

Fannie Mae and Freddie Mac were created by Congress years ago to hold mortgages and mortgage bonds as investments in a effort to boost homeownership. Both are government backed lenders that guarantee and package loans as securities. They own or guarantee at least 40% of the U.S. residential mortgage debt that is outstanding and are the major major sources of money for home loans in the U.S.,.

On March 19th, both Fannie and Freddie agreed to expand their puchases of U.S. mortgages and related securities after President Bush reduced the amount of capital these companies are required to hold as a cushion against lossses (monies held in reserve). Along with this, the government has agreed to provide up to $200 billion in liquidity for the troubled mortgage market, as I mentioned in a previous posted article on this blog. The reason for doing this is to help stabilize the troubled mortgage-backed securities market which is a vital part of the larger investment and securities market that has been threatening the health of the overall economy. Along with some other measures, this allows Frannie Mae and Freddie Mac to buy or gurantee $2 trillion in mortgages this year - a huge shot in the arm for the housing market. The bottom line is that this measure should greatly assist in stabilizing a very shaky housing market.

This measure as potent as it is may not, in and of itself, restart the housing market. While this is very good news, unfortunately, many (if not most) buyers and homeowners are very limited in their ability to obtain mortgage financing or refinancing due tightening standards and regulations being imposed by lenders. Therefore, this measure by itself may not have gone far enough; however, this is up for debate. This means that additional measures and steps may have to be taken by the government (whether it is the administration, treasury, the federal reserve, etc.) to effectively jump-start the housing market. However, with all the measures that have been taken in the last several weeks, we have reason to be optimistic that the economy and housing market will stabilize. While the threat to the housing market, securities market and overall economy has been huge, the response by the government has been almost without precedent. My opinion is that we are now beginning to recover from the worst housing slump since the Great Depression.

If this is true, it is indeed very good news!

Recap of This Week's Economic News - Stepping Back From The Brink?

You Are What You Think - Brian Tracy

Will Fed Rate Cuts Cause Mortgage Rates to Decline?

With the Fed decreasing the lending rates, will the interest rates on mortgages decline as well? This is an important question and one that many people are now asking. The answer unfortunately is that mortgage interest rates typically do not decline as the Fed funds and Fed discount rates are decreased. The Fed funds and Fed discount rates are short term rates and affect other short term rates. Mortgages, on the other hand, are long term instruments, and are therefore less affected by short term rates.

As a matter of fact, history has shown that when the Fed cuts rates (the Fed funds & Discount rates) mortgage rates can go up – not down. Back in 1998, mortgage rates were around 6.5% and the Fed cut rates 3 times. In response to this mortgage rates went up over 2% the following year. In the first part of the year 2000, after 6 rate increases by the Fed, mortgage rates declined from 9% to 6.75% during that year. In 2001, the Fed cut rates 11 times yet mortgages remained higher. Confusing? Well, sort of, let me explain.

While people think the rate increases or decrease by the Fed should move mortgage rates, the stock market and bond market have a greater impact. How come? Well, when the Fed changes rates it may lead to a stock market rally or decline. When this happens, the bond market usually reacts in an opposite direction to the stock market. So, if the stock market rallies because the Fed decreased rates, the bond market will typically decline and vice versa.

It’s helpful to know that as bond prices increase the interest rate on bonds will decline – it is an inverse relationship. So, if the Fed decreases rates and this, in turn, causes a stock market rally, bond prices will decrease and the interest rates on these bonds will increase, having a negative effect upon mortgage rates because mortages are long-term debt instruments just like bonds and act the same way. This is the classical and fundamental relationship and explanation of bond prices and interest rates.

Nevertheless, there can be pressure for mortgage rates to decrease even when the Fed decrease rates, which seems to contradict what I said above. This can happen in times where there is broad-based weakness in the economy and there is very little mortgage lending activity going on. In times like this, to spur mortgage lending, rates can decline. We are currently in such a time, so you may see mortgage rates actually decline - temporarily.

Federal Reserve Slashes Rates - Again!

The Federal Reserve announced today (3/18/08) that it cut the discount rate, from 3.25% to 2.50%. The Fed also cut the Fed funds rate from 3.00% to 2.25% in an attempt to restore confidence to nervous financial markets and boost the ailing economy. The discount rate is the interest rate that an eligible depository institution is charged to borrow short-term funds directly from a Federal Reserve Bank. The Fed funds rate is the interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight.

These actions along with the reduction in rates made on 1/22, 1/30 & 3/16 indicate strong action to restore confidence to the financial markets. The latest interest rate reductions by the Fed made on 3/16 & 3/18 were designed to prevent a financial panic due, in great part, to the financial woes of Bear Stearns (see my previous posts dated 3/15 & 3/16 on this subject).

US Treasury Secretary Henry Paulson stated on Tuesday that the economy was facing a "sharp decline" at the moment, but he also stated that, based upon these actions by the Treasury and Fed, he hopes for a recovery later in the year. It is hoped that these measures will restore the confidence of investors in the stock market as well as prevent further declines in the financial markets.

The basic premise behind these Fed rate reductions is simple – decrease the cost of borrowing and it should result in stimulating the economy as people are induced to borrow and spend. The Fed has made a series of bold rate reductions since August of 2007 when the discount rate was 6.25% to where it is now at 2.50%. During this same period, the Fed funds rate went from 5.25% down to 2.25% - as of today with the latest reduction.

Some economists are concerned that with these rapid rate reductions it may leave the Fed with few options in the future if the economy doesn’t favorably react to these rate cuts. However, many economists are confident that given the aggressive and rapid rate reductions made, it will have the intended effect of stimulating the economy over time and greatly limit any further downside risk.

Lawrence Yun, NAR Chief Economist - Named One of the Top 10 Economic Forecasters By USA Today

For anyone who has been reading this blog, you have become familiar with Lawrence Yun, NAR's Chief Economist, if you weren't familiar with him before. The fact that he has now been named one of the Top 10 Economic Forecasters is very important because it means that what he says is more accurate than the advice given by most other economists - in other word, he is one of the very best! Isn't it great to know that we have one of the very best on our side, giving us advice. This being the case, we should be very careful to listen and take to heart what he says. If we do, it will help us and, in turn, we can help our customers and clients with the advice he gives.

Here's the article from NAR:

NAR Chief Economist Named Among Top Forecasters for Accuracy
WASHINGTON, March 17, 2008 -

The National Association of Realtors® Chief Economist Lawrence Yun has been named among the top 10 economic forecasters by USA Today. Yun is ranked fifth on the list and is responsible for NAR’s real estate statistics and economic forecasting. The annual list recognizes accuracy in forecasting.

“NAR is proud of USA Today’s recognition of Lawrence Yun and his economic forecast accuracy. He is a highly regarded economist, and the housing and real estate industry have come to rely heavily on his economic analyses,” said Dale Stinton, NAR executive vice president and chief executive officer. “This acknowledgement contributes greatly to NAR’s reputation as the leading innovator in housing-related research.”

Yun was named NAR’s chief economist and senior vice president of research in November 2007. He has been with the association since 2000, previously serving as vice president and senior economist. He pioneered the development of the Commercial Leading Index after helping develop the residential Pending Home Sales Index.

“I’m honored to be recognized among some of the best economists in the country,” said Yun. “The economy and housing industry are facing many challenging issues at this time, which makes this an interesting and stimulating position.”

USA Today enlisted the help of the Federal Reserve Bank of Atlanta to determine the most accurate forecasters among the economists surveyed in the newspaper’s quarterly survey on the U.S. economy.

The economists, whose identities were unknown to those gathering the data, received four scores – one for each quarterly survey – and were ranked on the average of those four scores. FRBA used statistical methods to assess the joint accuracy of the predictions rather than assessing the accuracy of each forecast variable separately, as is commonly done.

Before joining NAR, Yun worked as an economic consultant to the U.S. Department of Veterans Affairs and the U.S. Department of Education. As a research associate at the University of Maryland, Yun developed the graduate economics curriculum for and taught free-market economics in the former Soviet Union as that country transitioned from communism to a free-market system.

Yun received his Ph.D. in economics from the University of Maryland in 1995. He received a B.S. degree in mechanical engineering from Purdue University in 1987.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

A Surprise Weekend Announcement by the Federal Reserve

In a move designed to bolster market liquidity and orderly functioning of the financial markets, the Federal Reserve, in an emergency weekend decision, cut the rate on direct loans to commercial banks and opened up borrowing at the rate to primary dealers in government securities. The Fed lowered its discount rate by a quarter of a percentage point from 3.50 to 3.25 percent today. This move was made today in anticipation of the financial markets opening in Asia on Monday. The central bank also approved the financing of JPMorgan Chase & Co.'s purchase of Bear Stearns Cos. and its assets.

Just a few days ago, the central bank agreed to emergency loans to Bear Stearns (see article below). Fed officials also announced a program to swap $200 billion in Treasuries for debt including mortgage-backed securities. This shows that the Fed Chairman, Ben Bernanke, is stepping up efforts to keep financial markets from spiraling further downward. These measures are designed to prevent not only a crisis in the financial markets but also a deeper crisis of confidence investors are already having in the broader markets and economy.

Starting tomorrow (3/17/08), primary commercial banks will be able to borrow at the rate under a new lending facility, to be in place for at least six months, according to the Federal Reserve.

``These steps will provide financial institutions with greater assurance of access to funds,'' Bernanke said during a conference call with reporters today.

The Fed's actions are the latest in a series of unconventional steps to deal with a worsening credit crisis that has caused turmoil on Wall Street. This action comes just two days before the central bank's scheduled meeting on Tuesday (3/18), when another big cut to a key interest rate is expected to be announced. It is speculated that the Fed, at this meeting, will lower its benchmark rate (the discount rate) by as much a full percentage point, lowering the rate to just 2%. If this happens this would exceed the previous reduction of .75% that was announced on 1/22/08.

Bear Stearns - What's Going On & Why is This Important to Know About?

Bear Stearns Cos., on the brink of collapse from a lack of cash, received emergency funding from the Federal Reserve and JPMorgan Chase & Co.

This is the largest government bailout of a U.S. securities firm in history and reveals that the fear of credit turmoil has spread to the core of the U.S. financial system. This follows last week’s move by the Fed when it announced an industry-wide rescue package that would provide as much as $200 billion in loans to banks and investment houses and allow them to put up risky home-loan packages as collateral in an effort to stem a global credit crisis that began last August. As you may recall, last August is when we began to hear about rising mortgage loan defaults for subprime mortgages - loans provided to borrowers with weak credit histories.

Bear Stearns's troubles have been perceived to be part of a larger threat to securities firms as well as the financial markets in general. "It was a strong action by the Fed and they did so because some financial institutions that borrowed money to buy securities in the housing industry must now repair their balance sheets before they can make further loans," President Bush said yesterday (3/14/08). "Today's actions are fasting moving, but the chairman of the Federal Reserve and the Secretary of the Treasury are on top of them and will take the appropriate steps to promote stability in our markets."

The emergency funding will supply to Bear Stearns short-term relief for an initial period of 28 days. The Fed’s arrangement allows JP Morgan Chase to borrow from the Fed and to re-lend it to Bear Stearns while collateral from Bear Stearns would back up the loans. JP Morgan is serving as a conduit for the loans for Bear Stearns; however, the Fed and not JP Morgan will bear the risk if the loans are not repaid according the Federal Reserve officials.

The problems caused by the sub-prime lending crisis have been greater and more complex than anyone might have anticipated; however, how does one ever anticipate something like this, at least to this level? This emergency funding is a difficult decision for the U.S. Tresury and Federal Reserve, as bailouts always are. Why? Because they are usually very expensive, no guarantee of further deterioration of the company or industry involved, and may encourage other companies or industries to engage in risky behavior now or in the future and thus rely upon similar measures by the government. However, weighed against the alternative of not only Bear Stearns going under, but potentially other U.S. securities firms and banks also failing, this was deemed the best choice. Why isn’t this problem simply isolated to Bear Stearns? Because each securities firm is incredibly intertwined with others in a myriad of loans, credit agreements/lines, etc. By letting Bear Sterns go under, the fear would be that the consequences to the overall financial markets and economy might be too great a risk.

Some people tell me that they don’t care what happens on Wall Street or the overall economy because it doesn’t have any real impact or effect upon real estate. Well, not true. As you can see, there are times when Wall Street effects life on your street.

Stay tuned on this issue and others by continuing to read this blog.

Warning: Watch This Video BEFORE You Build Your Next Home

I couldn't resist posting this portion of the movie showing a portion of the on-site construction of a new home.

Home Interior Paint Makeover

Here's a great video (from one of my very favorite movies) offering guidance for painting the interior of a home...





Over time I will post a number of memorable clips from this very wonderful movie.

Mortgage Rates and Inflation: The Real Story By NAR Economist Danielle Hale

When reading news articles on housing and mortgage rates, you'll hear a lot of talk about whether rates are up or down. If you read a well-written article, the writer will also mention inflation, but rarely will the author tie both together in a meaningful way. Unfortunately, what is often ignored is what really matters: real interest rates.

Real interest rates are is the nominal interest rate or the interest rate that is quoted in the market minus the inflation rate. This is the lender's true rate of return on investment after accounting for the loss in purchasing power from rising prices.




In the above figure, we see expected real mortgage rates declined gradually from 2000 until 2004 where they stabilized for a time around 2.5% to 4%. (Four separate inflationary expectation assumptions are applied, but all show similar trends). The real mortgage rates then began to rise from mid-2005 to mid-2007 before they began to fall again. Even as nominal rates have ticked back up in the last few days, real rates, those that incorporate expectations about inflation, are well below the average for the decade.

This is why some economists like Allan Meltzer, with whom I was fortunate to have worked with at a think tank, have criticized the Federal Reserve for responding as it has to those calling for further rate decreases. Cutting rates when real rates are already low puts the economy at risk of inflation and diminishes the Federal Reserve's independence to pursue its long run objective of price stability. As Dr. Meltzer discovered, once an inflation has started, it is difficult to end and even more painful to convince market participants that it is credibly over.

Fortunately, mortgage rates have been relatively low and stable, despite inflation's acceleration to 4.1% over the recent 12 months. Market participants are evidently discounting the current high inflation as a fluke that will soon go away. However, recent inflation rates have been unexpectedly higher than what was forecast. Anytime there is unexpected inflation, borrowers are paying lower real rates and benefiting at the expense of lenders. Lenders do not like this inflation surprise and will begin to tack on additional "inflation risk" to interest rates. Once that happens, long-term interest rates including mortgage rates will rise and begin to choke markets until participants demand an end to the inflation. The only way to kill inflation-once out of the bottle - is for the Fed to sharply raise interest rates. The resulting pain for borrowers and, hence, for the housing market will be the price paid if the Fed's commitment to price stability ends.

The Fed is poised to cut rates in the next FOMC meeting on March 18th possibly by even 75 basis points. The rate cut is partly being justified based upon Fed's projection of decelerating inflation over the next two years. It is, nonetheless, vital for the Fed to communicate clearly that it will immediately tackle inflation and act on that promise irrespective of economic conditions if market participants begin to form notably higher inflationary expectations. Or else … the housing market will suffer the consequences.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS

Quote(s) of the Week - The Importance of Passion

"One person with passion is better than forty people merely interested."

— E. M. Forster

"Chase your passion, not your pension."

— Denis Waitley

"When you set yourself on fire, people love to come and see you burn."

— John Wesley
Evangelist (eighteenth century

FSBO Sellers Decreasing

According to Jessica Lautz, NAR Senior Research Analyst, the percent of FSBO Sellers has steadily decreased in the last 10 years. In 1997, 18 percent of sellers sold their home without using a real estate agent. In 2007, the portion of FSBO sellers decreased to 12 percent. During this time, the percent of sellers who sold their home using an agent or broker has steadily increased. FSBO sellers recognize the benefits of using an agent and that selling a home often needs professional assistance.

More than 40 percent of FSBO sellers sold their home to someone who they knew. For these FSBO sellers, less than five percent were assisted by an agent. However, FSBO sellers who did not sell their home to someone who they knew, nearly one-quarter were assisted by an agent in the sale of their home.



For FSBO sellers, who at first were not assisted by an agent, but later were, their selling price was typically lower and the number of weeks on the market was longer, than those who were assisted by an agent all along. Ironically, FSBO sellers who originally were selling their home solo, but later assisted, were most urgent to sell their home than any other type of home seller.

FSBO sellers know the challenges of selling a home solo, such as understanding and performing paperwork, preparing and fixing up their home for sale, and selling their home within the length of time planned. This group of home sellers needs the help of a professional agent to help them with their home selling needs.


This article is an Economist's Commentary dated 3-12-08 on www.realtor.org

Not All Markets Are Equal - by Lawrence Yun, NAR Chief Economist

Though the national headlines have been pounding out the news of a housing market meltdown, implosion, and collapse, all markets are not equal. In NAR’s latest metro price survey, roughly half of the country experienced a price increase. Upstate New York is one example. While folks in the area have been kicking through the snow, home prices in the final quarter of 2007 rose 9% in Buffalo, 8% in Rochester, and a whopping 15% in Binghamton. The Texas market has been also doing its two-step dance with Corpus Christi, Austin, and San Antonio experiencing price gains of 6%, 6%, 8%, respectively. Not to be outdone, Amarillo home prices soared 11% higher.

And yes, there were some areas that weren’t dancing. Price declines are occurring no doubt, and quite notably in some coastal states and in markets with a high prevalence of subprime loans. Prices fell 13% in Cape Coral, 14% in Detroit, and 19% in Sacramento.

Significant Variations Across Markets

What the data clearly illuminates is that there are significant variations across markets. As real estate practitioners know very well, there are further measurable differences across neighborhoods within a metro market. No doubt there are some people under great financial stress. Subprime products that should never have entered the marketplace have wreaked havoc on many communities around the country. Homeowners unable to meet payments are losing their homes and falling home values have cut the equity of those homeowners who make their mortgage payments on time. Investors taking a walk may not feel the same financial squeeze but they are getting hit on credit scores – that is, many investors using low documentation loans bought multiple properties and are now simply walking away from those properties in declining markets. The calculus was simple – heads I win and tails I don’t lose. Prices rise, get the profit. Prices decline, then walk away – and let the lenders take the loss.

As I travel around the country speaking with many REALTORS®, I hear their side of the state of housing. Now, anecdotal information should always be read with caution. However, what does it mean when several REALTORS® in Columbus, Ohio say they have never seen such an upturn in foot traffic in open houses after the New Year? One of them said he had over 30 visitors in January, when just a few months earlier he had about only one or two onlookers. A similar buzz was in evidence during my recent visits to Maryland, Virginia, and Arizona. What was lacking from the buzz was the actual eagerness to sign contracts. Buyers were looking -- but unwilling to commit. In other words, weakened confidence is evidently holding back buyers.

All markets are unequal in other ways. Consider a Microsoft engineer in Seattle with a great salary and a top-notch credit score. A good-sized home in an upper-middle class neighborhood is priced at about $800,000. A jumbo loan is required. But a jumbo loan in the current environment is very expensive. Fortunately, relief is on the way. Congress and the White House have realized the unequal treatment of loans to some consumers and have now decided to raise the loan limits on FHA and GSE loans (albeit temporarily). As a result, by late spring, home sales on higher-priced homes will pick up.

Skirting Recession

As for the economy, it will be close, but we will skirt recession. Job gains of around one million can be expected for all of 2008, though that would be down from the 2-million annual average gains over the past two years. Affordability will improve as well – NAR’s housing affordability index is expected to rise from 113 in 2007 to 129 in 2008. Job gains and rising affordability conditions are the right combination to induce buyers into the marketplace.

The current market cycle is unique because of significant local market variations. It is also unique because of buyer psychology factors – in spite of pent-up demand and improving affordability conditions. Our forecast is, therefore, more uncertain. Having said that, home sales in the second half of 2008 will be notably higher than in the first half of the year.

Finally, let me paraphrase Warren Buffet’s investment philosophy: when everyone is greedy, be scared; and when everyone is scared, be brave. Now, I am not an investment counselor and I do not encourage people to buy simply based on this logic. Rather, if people have the financial capacity and are looking for a home for the long haul, the fear factor should be put aside. Current situations in many local markets present a golden opportunity in attaining the American Dream with historically low interest rates.

The above article appeared in Real Estate Insights - The Forecast @ www.realtor.org

Perseverance - Why Is It Important? See This...

"History has demonstrated that the most notable winners usually encountered heartbreaking obstacles before they triumphed. They won because they refused to become discouraged by their defeats."

— B.C. Forbes

The Forecast: Economic Pickup in the Second Half of 2008

By Lawrence Yun, NAR Chief Economist

Economic growth in the first half of the year will be essentially non-existent. By the second half, the economy will expand at a rate slightly higher than 2 percent. The 2008 fiscal stimulus package contains over $100 billion in tax rebates and checks should be in the mailbox by early summer. This tax cut is more than twice as high as a similar rebate passed in 2001. Past research suggests that the marginal propensity to spend from a tax rebate to be about 40 cents to 50 cents on the dollar. That translates into additional consumer spending of $60 to $80 billion in the second half of the year. This stimulus is the key factor to help move the economy in the second half of the year.

This tax rebate is needed to compensate for outrageously high oil prices and from falling housing values and stock market values. 104 dollars for oil is a major drag to consumer spending. Europeans are not paying as much because of stronger currency. The higher oil price, which is priced in U.S. dollars, is partly driven by the very weak dollar. The weaker dollar is caused in part by a higher inflation rate in the U.S. vis-à-vis the rest of the advanced economies. If a currency is losing its purchasing power, why hold that currency?

If you recall, oil prices were under $20 per barrel just 10 years ago. When the price of oil rises, it is essentially a tax placed on consumers with less money available to spend on more enjoyable items and activities. This "oil tax" unfortunately does not even go to the U.S. Treasury. Rather it is filling the coffers of governments of the likes of Russia, Venezuela, Saudi Arabia, Nigeria, and Iran. It is a transfer of money from a democratic county to a non-democratic country. (Though the Supreme Court decision in the 2000 election and current super-delegate controversy and non-electoral votes of Michigan and Florida do not make the U.S. a pure beacon of democracy, it is still far superior to those oil-driven rigged elections.)

The housing market will also get some relief. A higher loan limit - up to $729,000 from $417,000 - in several local areas, including Los Angeles, Orange, and San Francisco counties, will have a big impact in bringing out the buyers. Second half home sales will no doubt be much stronger than first half as a result. Existing home sales will rise to a 5.7 million unit pace in the second half versus 4.9 million in the first half. Rising sales will also bring down inventory and help strengthen home prices, generally speaking. The national median price will fall in the first half and then rise in the second half. For the year as a whole, it will have fallen by 1% - after having fallen 1.4% last year. As is always the case, there will be tremendous local market variations. The Northeast region is likely to be first region to show signs of stabilizing and then strengthening housing market conditions, while the West region will likely trail behind.

The West region could, nonetheless, surprise on the upside. What is unique about the current housing cycle is the pace of price declines in some local markets, thereby significantly improving affordability conditions in a short time. Home prices are falling at or near double-digit pace in California, Nevada, and Arizona. A sudden quick home price adjustment may be just the thing to quickly induce buyers back into the marketplace. After all, as with many parts of the country, jobs have been created in those Western states over the past two years of housing market slump, and hence, there exists significant pent-up demand.

New home sales will take much longer to turn around. That is simply due to the fact that there are far fewer new homes being built. Single-family housing starts have fallen by more than 50 percent in the past two years. Based on housing permits - generally a reliable indicator of upcoming housing starts - new home construction will further fall for the remainder of the year. New home inventory has been trending down but more cutbacks are needed. Therefore, homebuilders need to further bite the bullet and hold back construction.

Loan modifications and other foreclosure mitigation programs are all well intended and good, but the best policy assistance in the current market condition is to unleash the pent-up demand. Any measures that violate the sanctity of a private contract such as permitting judges to reset interest rates should be avoided as that will greatly harm home sales by raising the cost of borrowing on new loan originations. There is some discussion of a possible tax credit for first-time homebuyers. Such a policy will be a great stabilizer of the housing market and the economy. My estimate on the cost of about $20 billion is fairly reasonable. A presidential candidate who makes this tax credit as a showcase of his/her economic policy will also be the next president of the United States.

This is one in a series of commentaries by the Research staff of the National Association of REALTORS®. You can find additional articles and commentary by Lawreance Yun at www.realtor.org.

Taking Action - An Important Key to Success

REALTOR® Humor

This comic may seem improbable; however, I once had a listing with a half bath that was almost sort of like this, believe it or not.

Thanks to my good friend Olga for providing this for all of us to enjoy.

Quote(s) of the Week

"Fortune does not change men; it unmasks them."
-Suzanne Necker


"Rudeness is the weak man's imitation of strength."
-Eric Hoffer

Economy - Where Are We At Right Now?

I've been watching and reading literally dozens of news reports and articles over the last 2 weeks concerning the economy. The report below by Reuters, unlike many I've read, is a fair one though the speculation about what will happen the latter part of the year is just that- speculation.

Please don't believe everything you hear and read about the economy. I've read a number of articles saying that the U.S. economy is sliding, not just into a recession, but into a depression. Folk, technically, we aren't even in a recession at this time. A recession is usually defined as two fiscal quarters – six consecutive months of negative growth. While we may soon enter into a recession by this definition, we are far from an apocolyptic landscape regarding the economy.

A lot of measures have been and are being taken such as the economic stimulus package and the aggressive moves by the Federal Reserve in cutting rates (by the way they are meeting again in a little over a week and there is a fair to good chance they will cut rates yet again). While these moves have been decisive and dramatic it will still take time for the impact these measures to take effect - about 4-6 months, actually.

One thing is for sure, much of the media is obsessed with reporting that the U.S. economy is tanking and already in a deep recession. However, not only is this not true but, as has been the case with past recessions, there’s no way to know for sure until well after one has begun. So, much of the talk is just that - talk. Certainly, much of the news has been greatly based on prediction and even(do I dare say it?)emotion and sensation. This doesn't help things and it can even greatly hinder. Negative press can create and feed into negative sentiment which can, in turn, create a negative climate and become a self-fulfilling prophecy - as we all know.

So, watch this video and stay tuned for more information. Thanks.

Paul Potts, Part 3 - The Story Only Gets More Amazing!

Now that you've seen the previous two videos featuring the incredible story of this young man who has an extraordinary talent, you need to see this next video. If you haven't yet seen the first two videos - stop now! and watch those first so you can best appreciate this one.

Paul Potts, Part 2 - Simply Amazing - Watch This!!

If you saw the first video of Paul Potts I have posted on the blog, wait until you see this - Wow! I hope this strenghtens and inspires you.





To your success!...

-Ross