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Archive for the ‘Jerks’ Category

The Fed’s recent decision to outlaw Yield Spread Premiums (YSP) paid to mortgage brokers by lenders is the latest success by the bank lobby to kill competition and bait and switch the public into thinking the government is actually doing something to reform the industry. It is, in fact, reaffirming a double standard that has existed in the industry far too long, and may be the death knell for mortgage brokers.

Some background: For ages, the more profitable the loan, the higher the commission paid to the originator. In mortgage brokerage, the commission has been Yield Spread Premium (YSP). For bankers and direct lenders, the commission is Service Release Premium (SRP). Even though they go by different names, they operate exactly the same:

Continued at Luck Strikers Blog

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This article in the Sunday Times sparked the typical debate between people who use agents, hate agents, and are agents. A few in particular prompted me to write a 2nd comment (my first can be read here).  Comments may close before it gets posted, so rather than lose it, here you go.

My experience with people who express such vitriol toward brokers is that their bad experiences were preceded by putting more effort into buying their MP-3 than choosing a broker. For them, I have little sympathy.

To Attorney @ #45: Brokers are paid what the market bears, period. Creating commerce (not rubber stamping it, mind you, but making it) and causing vast amounts of money to change hands is not easy or more people would do it. I don’t besmirch the importance of an attorney in a transaction, but lawyers typically can’t sell. Reminding us how high you are on the food chain doesn’t change that fact.

10% of brokers do 90% of the business. List with an agent with a verifiable track record and happy references and you’ll get value for your money. Better yet, to those who think we sip martinis while we do so little work for such a fat cut of the action, go get licensed. Work nights and weekends on straight commission and then tell me how little work we do for so much money.

All the comments are telling. Stories like these bring out the haters, and they have utterly no clue what a good agent can do in the sale of a home.

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Aside from safety and blight, they seem to be attracting orgies…which include Catholic school principals.

A man named “Jim” arranged the backyard group-sex romp that ensnared a former Catholic school principal from Ossining, police say, and he may live near the home where the tryst took place.

“I think we’re going to grab grab ‘Jim’ very soon,” Greenburgh Police Chief John Kapica said yesterday.

Greenburgh police said they found three naked men having sex with one another on Sunday night in the backyard of 70 Abbeyville Lane in the Orchard Hill section of town.

Kapica said the three men met on a Web site called Manhunt.net and arranged to meet on Abbeyville Lane. A neighbor who called 911 that night said he saw two men get out of a car, meet a third man and go behind the vacant house.

The home has been vacant for 2 years.

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US News and World Report lists 6 warning signs. I could list 7-20 for them but the first six should suffice in weeding out plenty of those who hurt the profession. Sign number one is also my pet peeve:

If the communication isn’t there, the relationship won’t work. So if your agent doesn’t return your phone calls in a timely fashion or disappears without warning for weeks at a time, you should probably find someone else. Some real estate agents will block out a single window of time—say, between 4 and 5 p.m.—in which to return all of their phone calls for that day, says Jay Thompson of Thompson’s Realty in Arizona. “I’ve never really understood that,” Thompson says. “That’s not necessarily good if your seller or buyer wants to talk to you at 8 o’clock in the morning—they end up waiting a whole day.”

Sometimes the call later in the day can’t be avoided. That said, I have been waiting days to hear from the other side on deals I have going right now. Days.

The most common excuse I get once we finally catch up is that they don’t have anything new. That don’t hold water. Sometimes the update is there is no update. So you take 30 seconds and say “nothing new. I’ll keep you posted if that changes.” In this age of text messaging, no communication is inexcusable. The great thing about texting is that you do not have to be held hostage in a protracted conversation.

We chose this profession, so, inconvenient as it may be, an 8pm phone call is part of the deal. Not only that, most agents in this market simply do not have the volume of pending business to claim they are too busy. US News was right to put this at the top of the list.

I added my own hypothetical #7 to the list in the comment section:

Very good list. My personal suggestion for a hypothetical number 7 is the carrier pigeon agent. This is a “professional” who shuttles messages between their woefully underadvised client and the other side in negotiations, without ever actually coaching their client as to the absurdity of their demands. They could work for the buyer who thinks that everything should be discounted 30%, or represent the seller whose house (with the harvest yellow, formica-laden 1978 kitchen) is overpriced by $100,000. In either case they display a remarkable lack of backbone in coaching with their own client.

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While I have no political agenda in my commentary I aim to be straight. Paul Krugman has always bugged me. I cannot decide if the heart of the matter is either his love of the Syllogistic Fallacy, his appalling elitism or his galling intellectual dishonesty. Here is my outline of a typical Krugman column:

  • I am Paul Krugman. I have won some awards for my scholarship.
  • I am going to twist data around with impunity, and habitually omit important things which might even contradict my premise, to assert my far left world view.
  • If anything bad happens in the world, it is the fault of conservatives.
  • I am credentialed in economics, therefore I am a credible commentator on the subject of my screed.

That is the gameplan.

For instance, in his column Monday, he refers to the years 2005-2007 as “the peak of the housing bubble.” If the housing bubble peak lasted three years I’d be typing this blogpost on my yacht. This is like saying the stock market peak before FDR was from 1929-1931. Balderdash. The real estate market slowed down severely in 2006 and the 2007 sub prime crisis exacerbated the decline from June 2007 onward. 2005 was the peak. By 2006 it was over and everyone knew it.

Here’s another gem from the column where he laments the ownership gains and losses in the current administration:

While homeownership rose as the housing bubble inflated, temporarily giving Mr. Bush something to boast about, it plunged — especially for African-Americans — when the bubble popped. Today, the percentage of American families owning their own homes is no higher than it was six years ago, and it’s a good bet that by the time Mr. Bush leaves the White House homeownership will be lower than it was when he moved in.

But here’s a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?

People are already praising him for asking this question, but I say it’s only value is novelty, not intellectual merit. How many people should own homes anyway? Who decides? Why should we encourage home ownership? Because it stabilizes the hell out of the economy, Paul. It gives families more economic traction. It is an asset that funds retirement. That’s why. He goes on:

 

Listening to politicians, you’d think that every family should own its home — in fact, that you’re not a real American unless you’re a homeowner. “If you own something,” Mr. Bush once declared, “you have a vital stake in the future of our country.” Presumably, then, citizens who live in rented housing, and therefore lack that “vital stake,” can’t be properly patriotic. Bring back property qualifications for voting!

Sure Paul. Whatever you say. Let’s tether home ownership initiatives to Jim Crow. Yet more pap:

Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn’t let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own.

We should deduct rent from our taxes. Or, we shouldn’t allow for any deduction. The ripple effect of each would be disastrous. Some award-winning economist this guy is.

I commented on this KipEsquire post on the same article which was more charitable.

It should be known that Paul Krugman lives in a 5000 square foot home in Princeton. So he’s really qualified to blather about nanny state nonsense.

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