Home prices, the study goes, are actually on the rise. Yep, they’re up 0.7% month over month. So that’s it folks, wrap up the books, start paying the bills, and sell sell sell.

Oh wait, one small point: prices only rose if you completely ignore distressed sales, you know those pesky things like short sales and REOs. If you do by accident happen to remember that those exist, well then home prices dropped by 2%.

Okay, so you see why this study is a bit inane. It openly admits that actual gains in value are a long way off. So in a nice theoretical world things are already picking up but back here where we live, you know, Earth, not so much. And this is a really crucial difference for a lot of reasons. But one reason in particular:

LOW PRICES ARE WHERE THE MONEY IS

If you’ve been investing heavily like me, if you’ve been spotting the deals and lining up the buyers, if you’re reading the market right, then ignoring distressed sales is like a death blow to your industry. So don’t be so quick to exclude anything. Look at the big picture, keep an open mind, and stay awake for opportunity to come knocking.

They’re now accepting REO purchase offers online. Wowee!

Yep, you can check out the entire listing of REOs and real estate agents will be able to submit offers on the spot. How exciting!

Alright, I guess you’ve picked up on my sarcasm by now. I don’t really try to hide it too well, do I? But seriously, whenever I see Fannie or Freddie in the news I do my best to look the other way. But occasionally I just can’t resist cluing other people in on the murky world that is mortgage backing.

You should definitely be avoiding Fannie however you can. And if by some unlucky chance you get caught up dealing with them, don’t believe a word they say. Double check everything, get all promises and terms signed in quadruplicate, and then burying some canned goods and batteries in a bomb shelter somewhere.

So consider yourself warned and please share stories of any Fannie Mae dealings you’ve had the good fortune to survive. We all might learn a thing or two.

Basically what I like about the program are two things:

1) It pays extra cash to the selling agent

2) It rewards owner-occupant buyers

Alright, it’s run by Freddie Mac so you can just imagine how dirty the money is that they’re pumping into the system. But I like that they’ve realized who their real target audience is. Get the selling agent involved and motivated to do his job right. Get people in the community who already care about their home to put down roots.

It’s a tricky business, no question about it. And we’ve seen how the system can be taken advantage of so I don’t expect perfection. But the HomeSteps program is now available in 33 states and if it’s successful it could just be headed to your neck of the woods.

Leave a comment and let me know how foolish I am to believe in anything. Or leave a comment and back me up. Either way, just leave a comment.

CoreLogic tracked 355,000 properties that were foreclosed on in 2006 and they came up with some interesting statistics. Only 34% were bid on at auction by an investor. Guess why so little? Everyone else was holding out for a better shot at them.

The other 66% of them went back to the banks as REO properties. Then a huge group of third-party investors (210,000 of them to be precise) were scooped up in a second. And they took an average of 6 months or less to complete. It seems banks know how to be efficient when they want to be.

So if you’re wondering, only 10% of REO properties were still floating around in mid-2010. This means banks are taking bigger hits but that seems to be the only way they learn anything. If they’ve got bad properties weighing them down it’s the only way they seem to actually get anything done (other than foreclosing on homes in the first place).

The final point the study makes is that only 2% of foreclosed homes are foreclosed on again. That might mean that the economy has a little more bounce in it than we might think. Basically there are lots of investors out there with the cash to keep the economy rolling. It’s just private homeowners that have been losing their homes.

What do you think this means? Do you think it shows the cash to make deals happen is still out there? If so, who has it? And are you ready to join me in the thick of it?

Short sales – up 19% in the second quarter (102,407 transactions)

REOs – down in the second quarter to 162,680

Short sales – time to complete is down (245 days or less)

REOs – time to complete is way up! (178 days at least)

Do you see how these two approaches are coming together? It used to be short sales were the black sheep, being “anything but short” and a last resort. And foreclosures were “the easiest thing to do” and probably would close quickly.

But as you can see, short sales are rapidly becoming the preferred choice for distressed homes, are becoming easier to close, and are saving their owners major hassles. (I won’t even go into how short sale prices are way over REOs, to the tune of about 50k on average.)

But you know what, those of us who got in anytime over the last two years (alright, I’ll admit it, you can still get in right now!) have been pushing short sales to hard luck cases and have been beating industry standards like crazy. And finally the numbers are backing us up, but too late for most people to really take advantage of them.

I’m planning on sharing some of my biggest success stories this coming week, but first I want to hear yours. If you’ve got a great short sale success, or just heard about one, let your friends here at Short Sale Fundamentals know. It’ll help me, and them, have a great weekend. Here’s to you!

Fannie Mae
Freddie Mac
Federal Housing Administration

Um, do I need to repeat those names for you? Those groups currently hold 250,000 REO homes and they’ve thrown up their hands and said they have no idea what to do with them. I’m telling you the complete honest truth here. They are finally willing to openly admit that big government does not have the answer and this inventory of foreclosures and troubled mortgages is going to swamp the market.

So they’re appealing to anyone, including myself, to try and help them come up with ideas of what to do with these properties. Their best idea: rentals. They think property managers who might want to pick up whole pools of properties will maintain and upkeep the properties and keep them from rejoining the already swollen market.

I’m flattered that the government has decided to finally listen to our advice and believe me I’ve got plenty on my mind to tell them. I’m happy to let you get in on the secrets I’m going to be sharing with them. And really, you guys out there have the power to be the solution. Let’s keep the discussion going, leave your comments, and I’ll be sure to pass them along when I become an FHA consultant. Ha ha, just kidding, they couldn’t afford my rates, not in this economy anyway.

Keep it real guys and remember, if Washington is beginning to see clearly, you must be miles ahead of them.

Leading by example has always been our legacy. There is no better emissary of freedom and justice than the fact that in our country anything is possible, and the whole world can see that. Any man who has a dream is free to make it happen. Anyone who isn’t happy with his lot in life can change it. Sure, we need to use our guns and our bravery to pave the way for change, but what makes it stick, what brings hope to the down-trodden throughout the world, is how our way of life shines as a beacon.

Through my work as a short sale expert and real estate investing guide, I’ve had the privilege to see the American Dream achieved countless times. Watching a student of mine see success in his work or watching a woman who has lost all hope become financially independent has been extremely rewarding.

Just as one small example from right down the road from me: Mike Mason, resident of Kiefer, OK sent me a video of his success. It’s fantastic to watch how he lays his plan out there for all to see, and backs up his success: $17,000 in less than 1 month.

This guy definitely had the odds stacked against him (just like us way back on our first Independence Day) but numbers and reason don’t make a bit of difference when you’ve got heart. I want you all to check out his page and see his amazing story for yourselves. For his secret, take a look at this:

http://www.reorockstar.com/rfi/go/?a_aid=4d9d9175ef4cf

Then go out back with your family, light up the BBQ, catch the fireworks, and dream big. Because the sky’s the limit. Happy 4th and God Bless the United States of America.

Well, Washington thinks America’s cities are turning barren, with empty homes standing on every block.

And maybe they’re right!

Between bank-owned homes and unoccupied foreclosures (and the depression and crime that come with them) some neighborhoods across the country are watching property values tumble. And lawmakers aren’t even sure what to do about it!

The number of potential buyers out there just can’t keep up with the ridiculously high availability, and banks can’t sell to just anyone since that’s what got us into this mess in the first place.

HUD, the Federal Reserve, and top mortgage lenders all met in Washington this week to try and confront the problem head on. (Kind of refreshing isn’t it?)

The first possible solution is to not open these abandoned properties up for private buyers right away. Instead, they want to give governments and non-profit organizations first crack. This, they’re hoping, will give responsible owners time to renovate or possible even demolish neglected properties and ultimately contribute to improved home values.

I’m not sure that the picture they paint is as rosy as it seems. It’s entirely possible that this will just cause the government to throw more money down the drain of the housing recovery. And who knows where the corruption is going to come in, but someone’s going to find it.

So what do you think? Leave a comment and tell me if you think Washington and the banks are finally headed in the right direction.

But we’ve got to try! These are tremendous opportunities for us to catch borrowers before they go under on their mortgages. Every lost home is a lost commission for one of us.

There are more homes out there than I can get to myself. But even if I could handle them all, I wouldn’t. I’m leaving them for you. This is the best opportunity we’ve seen in years for short sales.

If you’ve got to convince homeowners out there to go with a short sale, here are some points you can use to close the deal:

1) Short sales benefit everyone, borrowers and lenders included.

2) Houses end up being sold in better condition than foreclosed houses.

3) Most importantly, borrowers avoid the bad credit score a foreclosure causes.

One interesting point to notice is that most short sales are bought by first-time homeowners, according to the most recent studies. That should help you focus your marketing efforts. Try to corner the new homeowner market and you’ll hit solid gold.

To successfully carry out a good short sale, you’ve got to balance each party’s interests. But it’s being done all over the country and it’s time you got in on the action.

In the old days (i.e. before yesterday) loan servicers had 15 days to turn over files for review if there were any questions about the home. They were then given a chance to find a better offer for the property.

According to the new rules, when the company had a property which it acquired, the first thing it does is get market value estimates of a repossessed home. It then lists it with a real estate broker.

Then, during the servicing review, Fannie Mae may accept offers to purchase the property even before a final decision has been reached regarding the review. If there’s a difference between the mortgage and the sale price, the lender is required to reimburse Fannie Mae.

In the latest quarterly report, Fannie Mae acquired 98,428 homes from foreclosure and only 89,691 REO properties. They ended the year with a 7% increase in properties over last year. And in their monthly summary, they showed a noticeable growth in delinquent single-family home loans.