Hi Everyone,

I am extremely excited to report that I have rented my own private space for my team on Atlantic Blvd.  The reason for the move is two-fold.  First, I needed a larger office space than I had at the Keller Williams office on Pacific Coast Highway, and more importantly, I can now WALK or RIDE MY BIKE to work.  The new office is literally 1 mile from my home.  See picture below.

3970 Atlantic Ave 210, Long Beach, CA

The new office is going to save me driving approximately 10,000 miles per year.  Plus, we are starting an aggressive recycling program and implementing a new paperless transaction system.  Shandrow Group is going GREEN.

Please stop by sometime and check out the new pad.

Best,
Mark Shandrow
Shandrow Group
Keller Williams Realty

One of my great clients, Champion Mortgage formerly Nationstar, distributed this marketing piece with a quote from yours truly.

Click on the thumbnail to view the entire flyer.

Best,
Mark Shandrow
ShandrowGroup

I just got back this week from the 2008 REOMAC Fall Conference in Hollywood, Florida.  The event was attended by approximatley 2,000 industry people including asset managers, portofolio managers, REO brokers, attroneys and service provides.  The event was more than half the size of thhe 5 Star Conference in Dallas last month.  This gave the setting a much more intimate feeling and I was able to have more in depth conversations with attendees.

Some of the asset management companies that i was able to talk with included Old Republic Default Servicing, Lighthouse, Citi, Asset Management Servicing, LLC, Keystone Asset Management, Phoenix Asset Management and US Real Estate Services.

I also networked with many other REO brokers.  One broker, Bob Siegmeth of the Seigmeth Team, really impressed me.  Bob was an Asset Manager for IndyMac for many years and has transitioned into a REO broker.  He has about 15 years of REO experience and really has an incredible understanding of asset management business.  In just six months, he has built an impressive team of agents managing over 70 REOs.

The biggest lesson that I leared from the REOMAC event was that change is inevitable.  Lenders are constantly shuffling assets around from one management company to another.  The business is always going to be in a state of flux and it is extremely important to attend these types of events to stay on top of what is going on in the market and continuing to learn best practices.

Sincerely,
Mark Shandrow
ShandrowGroup

Wow. That is all I can really say about the recent economic meltdown on Wall Street. We all knew it was coming, but didn’t know what “it” was going to look like. The good news is that with every market there are great opportunities. One such opportunity is right on my own street just five houses away from where I raise my family.

This bank foreclosure home just came on the market for $233,000. This home sold for $550,000 just a few years ago. It is a two bedroom, one bath Spanish style home with a half size lot.

Thanks,
Mark Shandrow
Keller Williams Realty

I just got back from the 5 Star Default Servicing Conference and Expo in Dallas, Texas this past week. This was my first REO conference. Wow, what an event!

The organizers did an incredible job putting this program together. There were over 5,000 participants ranging from real estate brokers like myself to asset manager to senior executives of larger lending institutions. I met with people from Nationstar, REOTrans, USRes, Freddie Mac, First Preston, Lighthouse, Keystone, Green River Capital, and Fannie Mae. The event was topped off by a classic rock and roll performance by REO Speedwagon. Oh yeah, Eric Estrada from CHiPs fame was there too. What was even better was that I was able to talk to many of these people one-on-one and get the inside scope on what is going on in the REO market. It was an incredible education for me.

Here are a few highlights that I took away from the event:

1. Banks and Asset Management Companies Need Agents. There is an incredible shortage of highly skilled and professional REO agents in most markets. Obviously, some markets like Southern California are saturated but there are other markets that they are having an incredibly difficult time finding good REO agents. At one seminar, an asset manager was pretty much assigning properties right there to ANYONE in Kentucky. She was desperate for agents.

2. Short Salas Are Going To Be The New Paradigm: Several lenders are starting to roll out large scale short sale programs whereby they have already FULLY APPROVED a short sale before the borrower even knows what is going on. Many of the nations banks, like IndyMac and Washington Mutual, realize that short sales are less costly and more community minded than a foreclosure. So, they are currently testing programs where a borrower will receive a letter that has already approved them for a short sale and assigned a real estate agent to help them with the process. The borrower then just has to list the house at the banks pre-approved price and they can save their credit and dignity. The bank will even pay them to move out. Several of these banks are looking to develop a large scale network of agents to list and sell these approved short sales.

3. Communication, Communication and Communication: I spoke with at least 10 different asset managers and asked them what their biggest problem with real estate agents was–communication. That is it. Simple. Easy. Many REO agents do not communicate with their asset manager. They don’t answer their phone or return email or voice mails in a timely manner. They hide when there are problems. If you want to make an asset manager love you–and give you more business–the biggest key is to constantly be communicating with them. Anytime there is an issue, tell them. Even better, let them know BEFORE problems arise. As long as you keep the communication channels open, you will continue to maintain a strong working relationship with the asset managers. I have been to many real estate events in my career and this was by far the best. I learned so much and made so many great contacts that my to do list on Monday is pages long.

Sincerely,
Mark Shandrow
Keller Williams Realty
Long Beach, CA

Every newspaper seems to be headlining with the Failing Banks!

In case you don’t know what the ‘Watch List’ is..think of it as the list of banks the government thinks will fail. pGuess what, finding the list of banks on the list is nearly impossible. The FDIC doesn’t publish their list! pI read that the FDIC is not releasing the list because they are trying to avoid panic and a ‘rush on the banks’ for people to withdraw their money.

After all, if the bank fails your deposits/ savings are insured to up to $100,000. If the bail out passes that amount will increase to $250,000. From a real estate perspective, I want to know which banks are on the ‘Watch Lists’ for the sake of real estate clients. For example, you certainly wouldn’t want to refer a buyer to a lender for financing if the bank is going to fail. Here is the list. FDIC Bank Watch List (03.08)

Thanks, Tim Harris, for this great post.

Best,

Mark Shandrow

This is a recent article in the Wall Street Journal about the new development downtown Long Beach.  Amazing.

Mark Shandrow
Keller Williams Realty

Condo-Minimum

Developers Turn to Auctions to Shed Units

By JONATHAN KARP
September 10, 2008; Page C15

With the condo glut growing as new towers are finished, and buyers walk away from presale contracts, developers increasingly are resorting to auctions to unload units at steep discounts.

Unlike ubiquitous foreclosed-home auctions, these events seek to establish market prices for untainted, often upscale properties. In an aggressive test of the strategy, 39 luxury coastal condominiums in Long Beach, Calif., went under the hammer in late August at about half their previous asking prices.

“We believe people are sitting on the sidelines looking for an excuse to buy. We gave them that excuse,” said David Parsky, director of Citi Property Investors, a Citigroup Inc. unit that is the controlling owner of the West Ocean Two building in Long Beach.

Thirty-three of the 39 condos sold on auction day, including a three-bedroom, 1,651-square-foot unit that went for $995,000. That was above the minimum acceptable bid of $795,000 but well below the original list price of nearly $1.5 million.

“It’s a massive discount to anything in the market,” Mr. Parsky said. He declined to comment on Citi’s profit outlook for the project and said it is premature to declare the event a success, because auction purchases haven’t yet closed escrow.

Construction of the 114-condo high-rise, which has views of the Long Beach harbor, was completed in the first quarter of this year. Citi opted for an auction after selling just 20 units through conventional marketing. In addition to the 33 auction-day sales, Citi has since sold four units, leaving 57 condos to market.

Jon Gollinger, co-founder of Accelerated Marketing Partners, a consulting firm that conducted the Long Beach auction, said developers are grappling with how to establish prices in this declining, turbulent market. “Why try to catch a falling knife? Let it hit the ground. That’s what an auction does,” he said.

Marty Clouser, senior vice president of the auction group at Kennedy Wilson Inc., a real-estate services and investment company, said that new, developer-owned condos and single-family homes account for the majority of his recent auctions. Last month, Kennedy Wilson sold 31 of 40 condos in the east San Francisco Bay area at sharply reduced prices to close out inventory in a large development.

“Developers are at a point where they feel an auction will yield similar, if not better, results than waiting 18 months to have the inventory absorbed,” Mr. Clouser said.

Still, so-called accelerated sales strategies are being adopted more slowly in the Miami area, where overbuilding has left the city, by some estimates with a 35-year supply of condos. Peter Zalewski of Condo Vultures Realty LLC compiled data showing that only 53% of the 20,000 Miami condos built since 2003 have been sold. Some owners are considering auctions to raise money so they can hold the building until the market improves, he said.

Auctions are by no means sure-fire successes. Recent events in Sarasota and Panama City, Fla., resulted in fewer condo sales and lower prices than developers anticipated. Developers typically set minimum acceptable bids and won’t sell below that price, though some events, known as absolute auctions, have no threshold price.

Some builders have opted for auctions only after their biggest financial risk has passed, such as paying off their construction loan. Wood Partners auctioned off condos in Orlando and Jacksonville, Fla., to reinvigorate stalled projects. Both buildings had sold out when marketed before they were built in the heyday of the real-estate boom. But nearly one-third of the contract holders walked away.

In May, Wood Partners sold all 29 units it put up for auction at its Jacksonville development, for an average of $148 a square foot, compared with $225 a square foot during preconstruction sales, said Charles Barrus, development director for Wood Partners in Orlando. Since the auction, the building has closed 21 more sales, for slightly higher than auction prices.

“In today’s market, selling the traditional way by cutting prices till you get traction is almost counterproductive,” Mr. Barrus said. “An auction is transparent, and if you can live with that pricing, we found there is a big tailwind after the auction.”

Greg Wohl, principal of The InVision Group LLC in Atlanta, agrees. After the credit crunch left his 147-unit Tribute Loft project half-sold, he settled for an auction in June. With careful marketing to emphasize that it wasn’t a foreclosure or bankruptcy fire sale, Mr. Wohl sold 27 of the 33 condos on auction and generated strong publicity.

Seven of those sales fell through, but thanks to increased traffic in the building, he has been able to replace all seven and sell 11 more condos. “When no one is buying anything,” Mr. Wohl said, “18 postauction sales in two months is pretty darn good.”

In this video I talk about one of the secrets to buying a foreclosure.  This is going to be the beginning of a series of videos to help real estate buyers learn about buying foreclosed property.  I am an REO agent.  This means that I work for the banks to help them sell their foreclosed properties.  I am going to give YOU the inside tips on how to buy these properties.

Best,
Mark Shandrow
Your Agent for Foreclosures and Short Sales

This just came in from my real-estate coach Tim Harris at www.timandjulieharris.com.  Great article.

Foreclosures accelerated to the fastest pace in almost three decades during the second quarter as interest rates increased and home values fell, prompting more Americans to walk away from homes they couldn’t refinance or sell.

New foreclosures increased to 1.19 percent, rising above 1 percent for the first time in the survey’s 29 years, the Mortgage Bankers Association said in a report today. The total inventory of homes in foreclosure reached 2.75 percent, almost tripling since the five-year housing boom ended in 2005. The share of loans with one or more payments overdue rose to a seasonally adjusted 6.41 percent of all mortgages, an all-time high, from 6.35 percent in the first quarter.

Tumbling home prices are making it difficult for even the most creditworthy owners with adjustable-rate mortgages to sell or get a new loan as their financing costs rise, said Jay Brinkmann, MBA’s chief economist. Prime ARMs accounted for 23 percent of new foreclosures and subprime ARMs were 36 percent, he said.

“People chose the lowest payment option to get into some of the very expensive housing markets and now that prices are coming way down, they can’t sell and they can’t afford the higher payments,” Brinkmann said in an interview. The unadjusted rate for new foreclosures was 1.08 percent, also a record, he said.

Foreclosures started on prime mortgages rose to 0.67 percent from 0.54 percent and the foreclosure inventory increased to 1.42 percent from 1.22 percent, the report said. The share of seriously delinquent prime mortgages was 2.35 percent, up from 1.99 percent.

Existing home sales fell to a 10-year low in the second quarter and the median price for a single-family house dropped 7.6 percent, according to the National Association of Realtors in Chicago.

Sales of previously owned homes rose 3.1 percent in July to an annualized pace of 5 million, boosted by foreclosures that accounted for about a third of all transactions, the National Association of Realtors said in an Aug. 25 report.

Mark Shandrow

This was a great article from Barrons about Fannie and Freddie.

Shares of Fannie Mae and Freddie Mac have declined by approximately 90 percent from the previous year and both companies are reporting quarter-over-quarter losses, leading some to believe than a government take-over or complete privatization is imminent.

MAKING SENSE OF THE STORY FOR THE CONSUMER

· According to the Barron’s article, which states “should the agencies fail to raise fresh capital, the administration is likely to mount its own recapitalization, with Treasury infusing taxpayer money into the enterprises,” consumers would be led to believe that a government bail out is the only option.  Although a cash infusion may be needed, it is not likely that the Treasury would purchase an equity stake in either Fannie or Freddie.  Additionally, the Treasury Dept. must negotiate an agreement with the GSEs.  Fannie and Freddie continue to raise capital on their own and some reports show that the GSEs are looking for private-equity firms or outside investors to provide the financing, which would help raise capital and reassure Wall Street. 

· The article also states, “In the early 1980s Fannie was effectively insolvent, but the government allowed it to continue operating.” Many consumers are not aware of how the GSEs serve the market or what their roles are.  Unlike banks, which lend directly to consumers, Fannie Mae and Freddie Mac operate in what is known as the “secondary mortgage market.” They purchase or guarantee loans from direct lenders in the “primary mortgage market” and either hold onto them until they mature, or sell the loans in the form of mortgage-backed securities.  By the GSEs guaranteeing or purchasing the loans from banks, Fannie and Freddie are able to fulfill their congressional mission and supply an affordable and stable source of capital to lenders, allowing them to offer more home loans.

· Due to tighter lending standards, it is becoming increasingly more difficult for borrowers to secure home loans. If Fannie Mae and Freddie Mac did not guarantee or purchase primary lenders’ loans, the cost of homeownership would dramatically increase as lenders would experience an even greater capital shortage.

· Many financial institutions in the mortgage business are experiencing losses, and while the GSEs are no exception, their portfolios continue to outperform the majority of lenders in the market.  Additionally, unlike private investors which seem to have abandoned the mortgage market, Fannie Mae and Freddie Mac are fulfilling their congressional mission to provide an affordable and stable flow of capital to home-loan lenders. 

To read the full story, please click here:
http://online.barrons.com/article_print/SB121884860106946277.html

Thanks,
Mark Shandrow
Your Real Estate Agent for REO and Short Sales