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10 Things Open Houses Won;t Tell You

SmartMoney (@SmartMoney)
4/24/12 7:28 AM
Just 11% of homeowners found their purchase from an open house sign, while 40% found their homes online.

Housing Crisis to End in 2012 as Banks Loosen Credit Standards

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.

Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.

However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.

Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.

Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”

In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.

While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.

Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generation actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.



Fannie Mae sees 2012 home sales up 3.5% to 4.74 million

Fannie Mae sees 2012 home sales up 3.5% to 4.74 million.

Emerging Fraud Trends

You Should Know About

The current housing market, while showing modest signs of improving, continues to suffer from high inventories, sluggish sales, and a high foreclosure rate. It remains an attractive environment for mortgage fraud perpetrators who discover methods to circumvent loopholes and gaps in the mortgage lending market whether the market is up or down. Here’s a look at some emerging schemes, according to the Federal Bureau of Investigation.


Economic Stimulus: First Time Home Buyer (FTHB) Tax Credit Fraud

The schemes used to exploit the home buyer credit program include applicants with income that exceeds program requirements, individuals who have owned a home more than five years, and individuals applying for the program before finalizing the purchase of a home. The FBI anticipates that fraud strategies will primarily include the following two deceptions: using people under the age of 18 to claim the tax credit, thereby allowing subsequent transfer of ownership to a family member who qualifies for the credit; and using non-resident aliens or illegal immigrants to apply to the home buyer credit program. 160 schemes related to this economic stimulus tax credit have been uncovered, and it is investigating over 100,000 possible fraudulent filers in Buffalo, New York.

Commercial Real Estate Loan Fraud

Perpetrators, including loan officers, real estate developers, appraisers and apartment management companies, are increasingly submitting fraudulent documents that misrepresent their assets and property values to qualify for loans to buy or retain property. When the loans are funded, the perpetrators often cease payment of their mortgages, resulting in foreclosure. According to open-source reporting, CRE loans are expected to produce more than $100 billion in losses by the end of 2010. Preliminary analysis indicates that the commercial markets exhibiting the most significant signs of distress are in areas where there is also a significant mortgage fraud problem.

Foreclosure Rescue Schemes –

Loan Modification Fraud

The growing number of homeowners needing loss mitigation assistance has overwhelmed mortgage servicers and led to the explosion of third-party loan modification companies claiming to offer assistance to homeowners struggling to avoid foreclosure. Perpetrators of loan modification scans follow the same pattern as predatory lenders by targeting vulnerable homeowners, including minorities, non-English speakers, seniors, and residents of low-income neighborhoods. Perpetrators solicit homeowners with mail flyers offering to help them stop the foreclosure process on their homes. This type of scheme is also conducted in conjunction with the filing of a bankruptcy petition to stall the foreclosure process to garner more advance fees for the perpetrator.

Home Valuation Code of Conduct Fraud

Lenders are circumventing the Home Valuation Code of Conduct (HVCC) by using other non-commission employees to order appraisals. The HVCC agreement between the FHFA and the New York Attorney General’s Office was intended to govern the way appraisals were ordered for all single-family mortgage loans (excluding government-insured loans such as FHA and VA) sold to Fannie Mae and Freddie Mac. In the fashion of a true arms-length transaction, all appraisals are to be ordered through a third-party appraisal management company to eliminate collusion between the appraiser and those who earn an income from loan closings.

Flipping, Short Sales, and Broker Price Options

Perpetrators are conducting short sale property flipping schemes using distressed properties of homeowners who are unemployed or facing foreclosure. The perpetrators collude with appraisers or real estate agents to undervalue the property using an appraisal or a broker price opinion to further manipulate the price down (the flop) to increase their profit margin when they later flip the property. They negotiate a short sale with the bank or lender, purchase the property at the reduced price and flip it to a pre-selected buyer at a much higher price. In closing short sales, agents must read the closing instructions carefully to see if there are limitations in the time period before a house can be transferred after the original sale. While the initial sale could be a legitimate transaction, if the property is resold before meeting a specified time frame by the lender, the agent could face a CPL claim.

Property Theft Targeting Bank Owned Properties

Perpetrators are targeting bank-owned properties by filing a false warranty deed using a false rental/lease agreement and collecting advance fees from an unauthorized tenant. The perpetrator arranges to rent out the bank-owned property to an unsuspecting renter. If the renter is confronted by a realtor or law enforcement, the perpetrator has advised the renter to produce a lease agreement previously provided to them. During the course of this scheme, the perpetrator places “no trespassing” signs on the properties and often changes the locks. With access to the appropriate software and knowledge of required real estate documents, a perpetrator can create fictitious documents such as a deed of trust, have the deed notarized, pay a nominal fee, and present or mail the deed to the recorder. The deed will then be recorded transferring title of all legal rights to the property.

Additional Concerns: FHA 90-Day

Property Flip Waiver

The HUD FHA 90-day property flip rule designed to prevent illegal property flips of FHA-insured properties was waived by HUD through January 31, 2011 for all sellers to move a stagnant real estate market and remove property off the books and records of banks. Regulators and law enforcement officials continue to oppose this waiver as it contributes to an ever-increasing pool of potentially fraudulent property flipping schemes as it does not require the seller to have title to the property for a minimum of 90 days.

12 Ways to Sell Your Home in This Crappy Market

Brookfield Residential Property Services Announces Acquisition of Prudential Real Estate and Relocation Services






To:         All Real Living Agents

From:    Harley E. Rouda, Jr., President, Real Living

Date:     December 6, 2011

RE:        Brookfield Residential Property Services Announces Acquisition of Prudential
Real Estate and Relocation Services

Today is an exciting day for our organization. I am pleased to announce that Brookfield Residential Property Services (“Brookfield RPS”) has successfully acquired Prudential Real Estate and Relocation Services, including Pricoa Relocation, (“PRERS”) from Prudential Financial, Inc. We believe it is a tremendous development for our franchise networks.

This transaction creates a new industry powerhouse and establishes Brookfield RPS as the #3 player in the North American residential real estate brokerage market with almost 80,000 real estate agents and 2,800 locations. The expanded scale of our combined businesses will ensure that we remain at the forefront of the industry and positioned to provide the leading-edge tools and technologies that you need to grow your business.

Today’s announcement does not introduce any immediate changes to existing tools and business processes that impact how you interact with us — it is business as usual.

Prudential Real Estate and Real Living brokers and agents will continue to operate as separate networks in the near term. All Prudential Real Estate affiliates may continue to use the Prudential brand until the expiration of their franchise agreements.

Brookfield RPS will immediately engage in a consultative process to define a brand and value proposition strategy that both Prudential and Real Living networks will find exciting and compelling. It is our commitment to treat you as a partner and to engage you so we understand your needs and what will deliver the greatest benefits to you and your clients. We’re committed to communicating our brand strategy and value proposition for our real estate businesses within 100 days.

For your information, please find below today’s news release. As well, to help you communicate the transaction to your clients, we have put together some Agent Talking Points and a Q&A document. More information can also be found at All materials are also available in the Business Center.

Should you receive external inquiries, including from media, about the transaction, please direct them to Rick Fox at our PR firm, Fleishman-Hillard:

Direct: 312-729-3734
Mobile: 312-286-4983

We are committed to open communication with you and will continue to keep you updated on any new developments as they arise.


Harley E. Rouda Jr.
Real Living



Acquisition creates global residential real estate and employee relocation services leader

(Chicago, IL) December 6, 2011 – Today Brookfield Residential Property Services (“Brookfield”), a Brookfield Asset Management Inc. affiliate, announced that it has purchased Prudential Real Estate and Relocation Services (“PRERS”), a recognized leader in employee relocation and real estate franchising from Prudential Financial, Inc.  Prudential Relocation Services operates as Pricoa Relocation in Asia and Europe.

The addition of PRERS to Brookfield’s existing residential real estate franchising and employee relocation services businesses establishes Brookfield as the world’s second largest employee relocation services provider and the third largest residential real estate franchising business.
Under a licensing agreement, Prudential Real Estate brokerage affiliates will be able to continue to use the Prudential brand based on the terms of their franchise agreements.

“This transaction creates a global employee relocation services and real estate franchising leader,” explained Graham Badun, CEO, Brookfield Residential Property Services. “We have now increased the breadth and depth of our service offering, keeping pace with the evolving needs of our clients around the world.”

A North American & Global Leader

Through its various brands, Brookfield’s residential real estate franchisees are now present in all 50 U.S. states, 10 Canadian provinces, Mexico and Portugal, with a network of approximately 80,000 real estate agents, 2,800 real estate brokerage locations and more than $150 billion in annual residential real estate transactions.

U.S.-based Brookfield Global Relocation Services moves nearly 85,000 families in and out of over 125 countries around the world each year. With the acquisition, more than one-third of Fortune 100 companies are its clients.  In addition, Brookfield is now the largest provider of relocation services to government, with long term relationships with the U.S. and Canadian governments.

The acquisition greatly strengthens Brookfield’s existing U.S. business and results in the expansion of its operations in nine countries, with a rapidly growing presence in China, Brazil and India.

“Today, Prudential’s real estate and relocation services businesses join a global company with a track record of over 100 years of success,” said Earl Lee, President of Prudential Real Estate and Relocation Services. “We’re excited to become part of a company that is focused on and deeply immersed in the real estate sector and is in the business for the long-term.”

Earl Lee will continue to lead the U.S. real estate business, and Rick Schwartz, President, Brookfield Global Relocation Services, will assume responsibility for the combined global relocation services business.

Brookfield’s parent company, Brookfield Asset Management, is a global asset manager with approximately $150 billion in assets under management.  Brookfield is co-listed on the New York and Toronto Stock Exchanges under the symbol BAM and on NYSE Euronext under the symbol BAMA.

About Brookfield Residential Property Services

Brookfield Residential Property Services is a leading global provider of real estate and relocation services, analytics and knowledge.  The company’s portfolio consists of leading brands, including Brookfield Global Relocation Services, the second largest provider of global relocation services, Prudential Real Estate and Relocation Services, Brookfield Real Estate Services, Royal LePage, Real Living, Via Capitale and Centract.  Through its real estate brands, it has nearly 80,000 real estate professionals in more than 2,800 locations, who transact over $150 billion annually.  Its global footprint spans North America, the United Kingdom, France, China, Singapore, India, Brazil and Australia, and includes more than 2,500 employees worldwide.  It is a division of Brookfield Asset Management, a global asset manager with approximately $150 billion of assets under management.


For more information, please contact:

Rick Fox
Direct: 312-729-3734
Mobile: 312-286-4983

Concurrent Closings

What is a Concurrent Closing?

A Concurrent Closing is the term used to define two or more properties dependent on each other to close. For example, the first property funds and records and the proceeds from that transaction are used to fund or partially fund the second transaction and then it can record. Sometimes we have concurrent recordings in which the second transaction is not dependant on funds from the first transaction. In this case the two can record back-to-back without delay, however, if the first transaction is pulled due to technical difficulties, then the concurrent transaction may also be pulled.

Do I have to use the same Title & Escrow Companies on all transactions?

No you don’t, although it can make things easier. The normal procedure on a single transaction is to fund the new loan, record the documents and then send the proceeds via wire or check to the escrow company. When a concurrent closing is involved, time is of the essence. If both transactions use the same title & escrow companies then no money needs to move locations. If different title and escrow companies are used, we just need to communicate with each other. At the close of the first transaction instead of sending the money back to the first escrow company and have them send it to the second escrow company who would then send it to the second title company, we would instead wire the money directly to the second title company saving valuable time. Once the second title company verifies the funds they can go ahead with the second transaction.

What is the key to a successful transaction?

Communication is the key. No matter what you may have heard, all title companies actually work quite well together. Our goal is to help you succeed. By communicating your needs to your escrow and title companies we can work with all parties involved to insure a successful close.

Commonly Used Terms to Assist You With Your Title Transaction & Payoffs

Payoff: The receipt of funds from the buyer and the payment of the obligations of the seller in conjunction with a real estate transaction. The payoff function is performed by the title company.

Sub-escrow (loan payoff) is an extremely important service provided by title companies to facilitate the handling of money in the closing of a real estate transaction. The performance of the payoff function, exclusive of escrow services, is unique to Southern California. This is because the majority of our customers are independent escrow companies and the majority of our title orders require payoff service. The Sub-escrow department does not draw escrow instructions or documents (i.e. Grant Deeds, Trust Deeds, etc.) They do not order demands for payoff, but do make the payoffs at the close of escrow.

Prefigures: Estimated payoff figures calculated and given prior to closing upon request. These figures are only valid through the date given and are based on the information provided at the time.

Good Funds: The title company must be in receipt of “good funds” prior to disbursing on a payoff. Types of good funds include: a) Funds wired into the title company’s Sub-escrow account; b) A cashier’s, teller’s or certified check (provide next-day availability after deposit to comply with AB512); c) Other local checks (provide availability of funds two days after deposit), and d) Out-of-area checks (provide availability of funds five days after deposit).

Demands: Demands must include specific payoff information concerning the particular property and must be signed. It is the responsibility of the escrow officer to order and provide all necessary demands, including any updates or changes on a timely basis.

Taxes: Outstanding property taxes can be paid out of the payoff proceeds.

Refunds: Any overpayment of demands will be refunded to the escrow upon receipt from the lender. Refunds typically take two to six weeks to process.

Shortages: Corinthian Title Company will contact the escrow officer if there is a shortage of the necessary funds to cover the outstanding obligations. The shortages must be received prior to payoff.

Disbursement Checks: Checks are delivered locally to lending institutions by a contracted messenger service. Checks to individuals and out-of-area lenders are typically sent via an overnight delivery company.

Wire Transfers: Funds can be wired into and out of the Corinthian Title Company offices with our bank.

Out-of-County Transactions: Corinthian Title Company offices can receive and disburse payoff funds through any of our offices.

Closing Protection Letter

In today’s uncertain financial climate lenders are often times asking you to provide them with a closing protection letter from your title company. This is nothing to be alarmed about, in fact it is a common request.

Closing protection letters are indemnity agreements that protect a lender from defects to title caused by the fraud or negligence of the settlement agent.

CPLs are important to lenders because they provide vital protection to financial institutions that purchase mortgages in the secondary loan market. Secondary lenders do not have agents at the closing table and do not have an opportunity to oversee the closing process.

The typical CPL promises to reimburse the holder for loss associated with defects in the validity, enforceability, and priority of the title or lien at issue arising from a settlement agent’s theft, fraud, negligence, or failure to comply with closing instructions.

Purchasing a Binder Can Help to Insure Savings on Title Cost

The buyer of a property who anticipates reselling it within 3-4 years can save a significant amount in title charges by purchasing a binder. A binder is a temporary contract in which the title company agrees to issue a specified policy within a certain period of time. The binder must be requested before the property being purchased closes escrow. The fee for a three-year binder is 10% of the basic rate for a full title policy. This is in addition to the applicable fee for an Owner’s Policy (usually paid by the seller). The use of a binder in your transaction can result in a significant savings when the property is resold.

Example: $1,000,000.00 – Initial Sales Price

Buyer plans to sell within three years for $1,200,000.00

In this case, the basic rate is $2,126.00. The binder fee is an additional $212.60, or 10% of the basic rate. The buyer sells the property two years later for $1,200,000.00. The basic rate for a ALTA Homeowners Title Policy at that price would be $2,559.00. The buyer now pays the difference between the two basic rates, i.e., $2,559.00 – $2,126.00 = $433.00.


With Binder

Initial Binder Fee              $212.60

Paid at Time of Resale     $433.00

Total Binder Fees              $645.60


Without Binder

ALTA Homeowners Policy Rate  $2,559.00

(Amount that would be paid for a policy with no available binder credit)


Total Savings

ALTA Homeowners Policy Rate  $2,559.00

Total Binder Fees              – $645.60

Total Savings      $1,913.40


3-Year Binder

Prior to the expiration of the three-year period, a binder may be extended for a fourth year for an additional 10% of the base rate.

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