Big investors have turned 200,000 single-family homes into rentals. Is this a good or bad thing?

Read the story here: www.wsj.com, click on “search”, enter “American Homes 4 Rent.”

On July 1, 2017, the big three credit bureaus changed the way credit scores are computed by eliminating important information from credit reports. Under the National Consumer Assistance Plan(NCAP), involuntary liens for unpaid state and federal taxes, outstanding court-ordered monetary damages, past-due child support, foreclosures, evictions, and other unpaid financial obligations will no longer appear in credit files – and no longer be figured into credit scores if minimum personal identifying information requirements aren’t met.

How the NCAP Could Negatively Impact Lenders:

* About 11% of American adults have adverse liens against them as a result of failure to pay money they owe.

* Credit scores for hundreds of thousands of people with adverse liens may go up, giving the impression these individuals are a lower credit risk than they are.

* Business rules and standard processes may not identify these high risk borrowers.

* People with adverse liens tend to avoid lenders. Pent-up demand within this segment could generate a surge in applications.

Source: Black Knight Data & Analytics. ( Black Knight has a program that identifies homeowners with unpaid liens. contact:     dataanalyticsinfo@bkfs.com, 866-964-8343).

Ken Wade, author of Housing Alerts, posted the following on July 20, 2017:

“On a real or inflation-adjusted basis, home prices in 171 out of 403 markets(42.4%) fell compared to the previous quarter.

Here’s the new list of cities: https://www.HousingAlerts.com/blog/market-reports/171-markets-declined-q-o-q.

That’s a pretty serious market reversal; it could spell big trouble on the horizon.

Quarterly data tends to bounce around a bit(compared to Annual), so we’ll see if these early indicators get confirmed next month.

You now need to be far more informed and discerning where and when you invest.”

According to Advanced Seller Data Services, 81% of the new note market in 2016 was made up of sellers creating just one note. Texas, California and Florida led the way with most notes created.

Many of these sellers that make up the 81% do not know they can sell their note for cash. This fact is one of the reasons this Blog and my Newsletter exist.

Also, the options available in selling a note extend way beyond selling the entire note. For example, if a seller has 300 payments remaining,  he can sell a portion of those 300 payments. He can sell 50, 100, 150 or any number of payments left on the note. He can sell a part of each monthly payment and retain the rest. If he has a balloon payment, he may be able to sell the balloon only or a portion of the balloon.

Our business is one of providing options to a seller, and then for the seller to decide if any of these options serve his cash needs.

In my region of the country – Southern California – craziness in the housing market is not something new to us. A recent article in the LA Times proves the point.

A couple moved from the Bay area to the LA area and began writing a “love letter” to sellers describing how much they wanted their home. And then they bid over asking – way over asking.

In one case they bid $900,000 for a $798,000 list price home. The house sold to someone else for $985,000!

The couple bid on 11 homes before they finally purchased a three bedroom home listed at $799,900. They bid $100,000 over asking before an open house was held.

Read the article here: http://www.latimes.com/business/la-fi-spring-market-20170425-hfmistory.html

Just because your Promissory Note was prepared by your attorney or the Title Company, don’t assume that the document was prepared exactly to the wishes of you and your buyer.  Mistakes can be made.

Read every word and make sure all the dates, dollar amounts, etc. are correct. If you and your buyer agreed that payments are due on the 10th of each month – but the note says payments are due the 1st – maybe it’s just a typo, maybe not. Avoid problems down the road.

Check and double check!

Reducing the business tax rate is far more important to entrepreneurs than eliminating the estate tax or other proposed tax-law changes.

Three-quarters of entrepreneurs said cutting the maximum tax rate to 15% for businesses is the most important part of the tax plan recently outlined by the Trump administration.

Source: Vistage Worldwide Inc., May 2017 survey of nearly 750 small business owners.

Credit scores for U.S. consumers reached a record high this spring while the share of Americans deemed to be some of the riskiest borrowers hit a record low – a potential boon for lending and economic activity.

More than six million U.S. adults will have personal bankruptcies disappear over the next five years. The average credit score nationwide hit 700 in April, up one point from last fall. That is the highest since at least 2005, the year Fair Isaac(FICO) began tracking the data.

Meanwhile, the share of consumers deemed to be riskiest, with a score below 600, hit a new low of roughly 40 million, or 20% of U.S. adults who have FICO scores. That is down from the peak of 25% in 2010.

Source: Barclay’s PLC, Fair Isaac Corp, by AnnaMaria Andriotis, Wall Street Journal, May 30, 2017.

Millennials are buying homes, steering builders toward lower price points. First time buyers are rushing to buy homes after a decade on the sidelines, promising to kick a housing market already flush with luxury sales into higher gear.

“They’re crawling out of their parents’ basements, they’re forming households and they’re looking to buy,” said Doug Bauer, Chief Executive of home builder Tri Pointe Group Inc., which operates in eight states.

In a shift, new households are overwhelmingly choosing to buy rather than rent. Some 854,000 new-owner households were formed during the first three months of the year, more than double the 365,000 new-renter households formed during the period, according to Census Bureau data. It was the first time in a decade there were more new buyers than renters, according to an analysis by home-tracker Trulia.

Source: Laura Kusisto and Chris Kirkham, May 11, 2017, Wall Street Journal.

Lawmakers are pressing the Federal Housing Finance Agency, which oversees mortgage financiers Freddie Mac and Fannie Mae, to limit or stop the sale of foreclosed homes to firms that resell them under rent-to-own contracts, or contracts for deed.

In a Senate hearing held May 15 on the future of Fannie Mae and Freddie Mac, FHFA director Melvin Watt promised that his agency would act to limit the sale of nonperforming homes to firms looking to resell through contract for deed.

Some local authorities and regulators are taking legal action against several of these firms, accusing them of engaging in predatory business practices by reselling these often rundown houses “as is” through rent-to-own and other seller-financed transactions, sometimes known as contracts for deed.

Reported May 17, 2017 on www.PaperSourceOnline.com.

Read More: http://www.builderonline.com/money/lawmakers-push-fhfa-to-prevent-sales-of-foreclosed-properties_c.