Bill Roberts - "Baby Boomer" Retirement Planning

The Big Money Mystery of 2008 by Bill Roberts

Everybody has an opinion about the Mortgage Meltdown. Everybody has a suggestion about how to "fix" it or prevent another occurrence.

I have my doubts about all this.

My friend Bill Archambault writes extensively about all aspects of the mortgage industry. If you don't know him or read his blog, you should.

He recently posted about Why Are We Calling Lenders Predatory

This started as a comment on that post.

After "analyzing" the lending process Bill suggests that part of the problem is the federally mandated Truth in Lending disclosure (the TIL).

You can't legislate against stupidity. And disclosures only help the brokers and lenders by limiting their liability. Who can possibly read and understand an inch thick sheaf of contracts, addenda, and disclosures?

The real problem is that all these loans were made with the general thought that the market would continue to go up. Ask anybody if they would have done what they did if they had known that the bottom was about to fall out of the market.

The TIL is a worthless document anyway because the loan terms and costs aren't set until it is ready to fund. The final HUD-1 is the only disclosure that reflects reality and it comes a little too late for most people to make any changes in their plans.

The loan products that were sold were created with the idea that there were unlimited funds available and they (The Wall Street types) wanted/needed to make their product "competitive" in order to sell it.

Why?

So the real question is "why did the market tank?" We need to look at the doings of the Federal Reserve in driving interest rates down and then driving then back up.

Also, was there a conspiracy to "transfer" wealth from other countries (the buyers of the "sliced and diced" mortgage backed securities also known as derivatives (Collateralized Mortgage Obligations (CMO's)) to the good old U.S. of A? Because that IS what happened. A lot of money was lost by European and Middle East investors. Where did it go? And yes, it is a zero sum game. That money ended up in our economy. Interesting.

This "event" will capture the imagination of economists and financial writers for a long time to come. All we can do is live through it.

Not Again! A Real Estate Market Update by Bill Roberts

This morning on the CBS Early Show Mark Zandy, the Chief Economist for Moody's economy.com said that he expects another 10% decline in real estate values over the next twelve months.

Why are they doing this? Haven't they fueled this market decline enough? Since markets are basically driven by psychological factors they are the problem. The mass media provides the information that most people use to make their decisions. If that information is faulty, then their decisions will probably also be faulty.

These so-called experts have a responsibility to all of us to stop spreading these negative opinions. After all, they are only opinions. TV allows them to promulgate these ideas to the general public. The public responds to this kind of "information." Their response makes the pronouncement correct. A self-fulfilling prophesy.

There is a lot of anecdotal evidence that we have reached a bottom, or are very close to it.

It is our duty to counter these TV "experts." We can't let them call the tune.

Watch this:

Spiderwick Chronicles - Not Really A Review by Bill Roberts

Yesterday we went to see Spiderwick Chronicles. It is a Nickelodeon production so I thought it must be "kid friendly." It just goes to show how out-of-touch I am. The special effects were great. It is a combination of "live" actors and animation. I don't know how they do it but it's great. It was kind of like a Harry Potter movie, which is why Irene wanted to see it. It scared her, so I was satisfied.

When all was said and done it turned out to be a CHICK FLICK. It just goes to show you that you can't judge a movie by its poster or trailer.

I would say its worth going to see, but leave the youngest at home. It's too scary for them (I think).

All's well that ends well, I suppose.

Hey Super Agent What Do You Want? by Bill Roberts

Lenn Harley recently posted HOW TO SUCCEED IN REAL ESTATE SALES. GET REINTERMEDIATED . It was "Featured" so you may have read it. If you haven't read it you should.

I read and then commented on her post:

Lenn, As we take back the business, we will probably have to deal with our pricing for our services. Technology allows a "Super Agent" to handle many more clients than the old ways in the old days. Competition should drive the price of services down.

She responded:

Bill Roberts. You wrote:

"Technology allows a "Super Agent" to handle many more clients than the old ways in the old days"

What technology is going to permit agents to handle more clients???

Where can I buy a robot that is licensed to drive buyers around from house to house. What robot will attend the home inspection? What robot is going to review the GFE and HUD-1 for the Super Agent??

Technology permits the Super Agent to communicate with more prospects, but once the agent/buyer/seller relationship exists, it's the "hands on" transaction management that makes for good business.

Technology helps with record keeping but that's about all.

I just had to come back:

Lenn, I hope you are still here because we have unfinished business. I said technology will allow the "Super Agent" to handle a lot more clients. You disputed that.

Well, I too have been around for a while. I remember spending lots of time doing open houses, door knocking, and driving "suspects" around in my car for days on end.

After I finally sold them something (maybe even one of my listings because I did double end deals back then) I had to manually manage the transaction starting with going to the escrow company to open the escrow, calling the title company to order the pre-lim, and everything else I had to do.

I could only handle so many deals.

Now the buyers usually do their homework before they contact an agent. They know the neighborhood they want, the schools involved, the price range, etc. When they contact you, the Super Agent, you will "qualify them" and then show them three houses, write an offer which you will get accepted (maybe with one or two counters) and then hand off the deal to your transaction coordinator who will utilize a Transaction Management System to open escrow, open title, order insurance, order inspections, order disclosures. In short do all the scut work the agent used to have to do.

In the mean time, you (the Super Agent) have moved on to the next client who is ready to buy, having done all their homework.

This Super Agent (you) can handle many more transactions than in the old days doing it the old way.

Bill Roberts

BTW Don't be surprised if this comment turns into a full-blown post. For that I thank you.

If you still haven't read the full post please do so. The comments and inter-play is well worth your time.

So my question is: Hey Super Agent What Do You Want?

How much am I going to have to pay you for your services?

Respectfully submitted,

Bill Roberts

What Do You Do During A Recession? By Bill Roberts

For the most part economic activity slows down during a recession. That is actually the definition of a recession: two successive quarters of decreased economic activity. There are various technical descriptions but this is good enough for our purposes.

Recessions always lead to recoveries, usually about 18 months later.

So what do you do during the recession? Save your money? Get ready to "pounce" once the recovery is announced? Sleep? Or do you take positive action?

Whatever you might want to do once the recovery starts, you would be better off doing it while the recession lurks. During a recession everything is cheaper. Everything!

If you are thinking about starting a business, then you will be able to get a better deal on the premises your business will need. Financing terms will be lower. Supplies and inventories can be had at major discounts. Advertising should cost less. Any construction you need to accomplish can be done for significantly less money than will be the case after the recovery.

If you thinking about investing in real estate, prices, selection, and financing costs are all better during the recession than after the recovery.

And what if you want to build? With nothing selling, building during a recession is just plain crazy, or is it?

If you decided today you wanted to build something and you got started right away to accomplish that then you should finish your project just about the time the recovery begins. You will have reaped all the benefits of the recession. You will have been able to complete your project on time and for lower costs. Most of the construction bottlenecks just aren't present. Supplies are available when you need them. Sub-contractors are anxious to work. Inspectors aren't over burdened with work. Even the local building department is able to get right to your application.

Now your project is complete and here comes the recovery. How sweet it is!