“The Justice Department alleges in its lawsuit that the MLS rules "raise entry barriers for potential competitors by imposing burdensome prerequisites for membership; provide a means of identifying potentially aggressive competitors so they can be excluded from membership; stabilize the price of brokerage services through the prospect of price controls; deter the emergence of Internet-based brokerages; stabilize the price of, and reduce consumer options for, brokerage services by dictating the services that all brokers must provide; and discourage entry of potential competitors who raise funds through public ownership."

We just returned from the 94th Annual Mortgage Bankers Association Meeting in Boston. It was important for HomeSmart Reports to attend to try to gain an understanding of what’s going on in the mortgage lending space. It’s a lot of talk mainly, and no one is really taking the lead in terms of working out a strategy to stem the inertia in the mortgage lending arena.

It’s usually the buyer’s obligation to have a home inspection prior to purchase and hence, they bear the cost of it. It really is to everyone’s advantage that these things are done. Through this process, buyers gain peace of mind and a more complete understanding of any costs they may face as they occupy their new home. There aren’t many things worse than getting into a property you think is move-in ready, only to be shocked by a $5,000 repair bill for unseen conditions. Well, home inspectors catch most, if not all of them through a thorough examination of a home.

It’s time for real estate bloggers to unite and talk about the things they can do to make a difference. What is the difference? Well, it’s a lot of things. It’s saving money on taxes. It’s being sure that your home is properly insured and where you can get the best rates. How about sharing the best and worst things about Neighborhood Watch programs, what works and what doesn’t? I’ve got another good one; Homeowners Associations should share best practices! Why should all the everyday smart practices have to be re-learned and fought over by new associations, and gobble up countless hours of so many people by every new homeowners association? Shouldn’t HOA’s post what they believe to be best practices so that new HOA’s can get a quick start on the everyday business at hand?

Revered economist and recently retired Chairman of the U.S. Federal Reserve Bank, Alan Greenspan, recently spoke in the U.K and here was one of his excerpts about the mortgage plight in the U.S.; “Where we went wrong is in underestimating the market forces involved in how these loans were re-bundled for sale to investors. Ratings agencies overvalued these bundles. Investors scurried to the table, and the resulting lower rates enticed a lot of buyers who probably shouldn't have purchased a home to do so.”

Beware a new type of real estate fraud. The list price on the home is $600,000. The buyer comes in an offers $800,000, subject to the buyer obtaining a 100% financed transaction and also receiving a rebate of $100,000 from the seller at the close of escrow. The buyer, the seller, the appraiser and the broker (if one is involved) all know that something is wrong if this deal closes escrow. Who wins in the short-term? Well, the seller gets more money than they expected. The buyer winds up with more operating capital to cover the payment costs for a short period of time. The broker makes a bigger commission based on the sale value. The appraiser doesn't really gain at all, except sometimes they are forced to bow to the "powers that be" to deliver an $800,000 appraisal "or you won't get any more work from us".

Foreclosures can be a real bad deal! Unless you know BOTH the value of the property, and the local area risks and market conditions, you can “get your financial clock cleaned”! So, you need to do your research.

Well, we all knew that the fallout of nearly four years ungoverned real estate financing and high turn over rates would eventually come home to roost, didn’t we? So, it will be a political hot potato for the next 13 months as the presidential election heats up. Politicians on both sides of the aisle will be calling for reform, legislation will be passed that will take years to implement and longer to enforce. Meanwhile, what are we all going to do about it?

This isn’t a plug for insurance agents…it’s a plug for you. According to insurance industry information companies 58% of the homes in the U.S. are under-insured by an average of 22%. A lot of agents start you out with a low bid to win your business, but you may not be properly covered. The premiums typically get bumped up over time and that may help, but if you have a catastrophic loss you may not have enough insurance to cover your loss and re-build. Imagine being able to only re-build 75-80% of your home!

HomeSmart Reports told you two years ago, by way of the news media, that mortgage and real estate fraud was out there lurking, and that flipping was a risky proposition. We’re only bringing it up to re-emphasize the importance of doing research before you take part in the next big phase…the mop up of all the over zealous lending that occurred during the real estate rush from 2002 to mid-2006, before the money river began to dry up and equity began to erode. The mop up we refer to are the massive number of REO properties that are being carried by lenders that some of you out there are going to buy. Yes, it’s that huge number of non-interest earning assets that lenders need to dump.

Here we go again! The feeding frenzy around foreclosures is heating up to a fever pitch. There’s a general belief that if you buy a foreclosure property, it’s a good deal. Be Careful! It may be the worst thing you could do. Generally, a property goes into foreclosure because the owner was “upside down” in the property.

Look out for Fraud in real estate. The FBI place mortgage fraud at somewhere between $986 Million and $4.2 Billion for 2006. Gee, is there a lender out there who’s not telling the truth? How do you get to that big a range? Let’s be reasonable and split the difference.

There are big bucks out there for aggressive investors in this market but you need to be sure that you do your research so you don't get burned

Simply put, real estate fraud is defined as a material misrepresentation of fact intended to induce you into the transaction and let me tell you, that inducement can really hurt. You could lose all those hard earned dollars if you’re not paying attention so get with it and PAY ATTENTION.

The essence of Collateral Risk Measure (CRM) is that it helps everyone understand the potential downside of real estate investment. Lenders use this type of tool on nearly every loan in their portfolio because they want to understand their exposure if the loan goes bad. That is, they want to know how much money they will lose if the property goes into foreclosure. So, they review area foreclosure activity, property flipping events, appreciation/depreciation trends, property history and other factors that can influence the value of a property and that gives them insight as to their risk potential.

The term property flipping often has a very negative connotation connected to it because of the opportunistic image some property flippers have acquired over the years. It is true that much of the real estate and mortgage fraud that occurs is the result of fraud rings that use multiple people (straw buyers, appraisers, real estate agents etc.) to falsely inflate home prices, sell (flip) the property to a "friend", cash-out refi's are taken at a very high loan-to-value (LTV) ratio and eventually, the buyer walks away with the proceeds and the property goes into foreclosure.

How are reliable are AVM's? Several Real Estate agents I know say appraisers more accurately determine the value of a home than does an AVM.