May 2011

Issue 046 May 2011 TheNicheReport.com

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— Intended 10 Yes Consequenses!

Will they eliminate what is left of our industry?

16 Inflation

FEATURE ARTICLE! Fact or fiction?

You decide.

Bringing Up are Realtors 58 27 What The Rear Demanding in @

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CONTENTS

16

Issue 046

May 2011

Inflation: Fact or Fiction?

Thomas e. jandt

NICHE REPORTS Agency & FHA

pg 49

COMMERCIAL

pg 49

HARD MONEY & Rehab

pg 50

JUMBO

pg 50

REVERSE MORTGAGE

pg 50

Service Providers

pg 51

FOUNDER & PRESIDENT Robert Pegg robert@thenichereport.com CO-FOUNDER & PRESIDENT David Pegg david@thenichereport.com MANAGING EDITOR Stewart Mednick stewart@thenichereport.com

10 24

Yes — Intended Consequenses!

Neill Fendly NAMB Will they eliminate what's left of our industry?

Seizing Control of Your Retirement Bernie Navarro President and founder, Benworth Capital Partners Plan by investing in mortgages: Part V

27

What are Realtors@ Demanding in Today's Market? casey cunningham president, Xinnix Realtors seek those they know, like, and trust and who deliver results.

Association 30 National of Realtors 2010 @

Survey Results karen deis loanofficertraining.com First time home buyers.

6

42

May 2011

The Fed's LO Compensation Rule: Now What? the niche report

DEPARTMENTS

09 34 37

from the editor's desk online lead generation

EDITORIAL / CONTENT MANAGER Kristen Moser kristen@thenichereport.com ACCOUNTING MANAGER Shawna Ingram shawna@thenichereport.com Advertising Director Jessica Grizzle Jessica@thenichereport.com Advertising sales Heather Bopp Heather@thenichereport.com Production Manager Henry Suchman henry@thenichereport.com

man on the hill

Production Assistant Dawn Exner dawn@thenichereport.com

39

APPRAISER sound off

Cartoonist Martin Bradford

44

TIP OF THE MONth

46

What's your mortgage IQ?

54

LENDER & RESOURCE DIRECTORY

58

BRINGING UP THE REAR

COLUMNISTS & Contributing Authors Martin Andelman Casey Cunningham Karen Deis Neill Fendly Thomas E. Jandt Victor Lund Stewart Mednick Bernie Navarro Marc Savitt Dennis Yu

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From the editor's desk

The budget seems to be the hot topic this time of year. “The” can be a reference to national, state, county, municipal, business or household. Budget is budget, and it all is in the red. Origin of the word “budget” stems from a Middle English word bowgett; roughly from 1400 to 1450. This word is a derivative of the Middle French word bougette; bouge meaning bag. The Latin origin is bulga, literally translated as bulge. Back during the 1200s to 1500s when these word roots were derived, money was coin.

Coins were carried in small sacks with strings that secure the opening and these were typically tied to one’s belt or hidden in one’s pocket. Either way, a small bulge was visible. The suffix “ette” is a reference to insignificant; small. Budget is, therefore, literally translated as a small bulge of money. Over the years, the balance and retention of these coins in one’s possession is how budget evolved to be the reference to balancing the “goes into’s” and the “goes out of ’s.” The goal is to retain a “bulge;” less coin, less bulge.

As ownership of the budget’s entity increases in size, the budget increases respectively. A household’s budget is miniscule in comparison to a state budget. The “bulge” on a national level is monumental and beyond, in comparison to when the word was originated six hundred years ago. Today, however, the national level, state level, county level, municipal level and even some household levels of budget is negative; not only no coin in purse, but owing coin! Beholding coin to someone without payment in the Middle Ages, resulted in many gruesome penalties; physical maiming, sexual slavery, servitude, and forced possession acquisition. To live in deficit was unacceptable and frowned upon greatly. Kingdoms, states and lordships in debt would be defeated in battle because money could not fund necessary campaigns or defenses. No such thing as credit.

Fast forward to the twenty-first century and here we are; debt on every level in amounts unfathomable in relative comparison to six hundred years ago. And the punishment? Maiming, servitude and possession acquisition of this country. Our country owes to other countries. We have lost business to other countries. We fund battle campaigns against other countries we can not afford. We provide services to other countries without monetary compensation. We are in debt!

However, we change the rules to keep pushing forward. The treasury simply prints more money, inflating the economy. The government pushes budget cuts over ten or more years so the budget is balanced on paper. Our debt is carried over to the next fiscal year.

The reality is that we have no bulge of coin tied to the belt of our nation. We literally have no budget. We balance debt, not budget, and threaten to shut down the government over what we do not have; coin. And again, we shirk the government shut down by only shutting down the non-critical functions; state parks, research facilities, administrative functions, etc. Law enforcement, emergent care, federal courts, military, social services, disability benefits and others would remain operational. How is this a threat of shut down? Basically, the blue collar working class functions would close, but the higher educated, skilled functions would still operate.

Is this a prelude to repeat the history of over throwing England as King Richard I crusades in the Middle East in the 1100s? Or the beginning of the French Revolution against Louis XVI in 1791? Or the Russian Revolution of 1917? History has many similar anecdotes that parallel the potential situation in which this country is headed.

The bulge of coin is negative; actually a vacuum sucking the essence of livelihood out of our country. The standing of the political party that represents your lobbyist seems to have more clout to law-makers than the homeless veterans, foreclosed homeowner, and struggling mortgage professional. Imagine how well our country would be functioning if politicians, business owners and community leaders all operated under the basic principal of six hundred years ago: having and maintaining a proverbial bulge of coin on their belt as a mandatory requisite to holding a leadership position. We, then, would truly have a budget.

Cheers!

Stewart Mednick Managing Editor

Official

MEMBER

TheNicheReport.com

9

Yes – Intended Consequences!

Will they eliminate what is left of our industry?

by Neill Fendly

A

s we all know the FED rule, after the recent Appellate Court ruling, goes into effect today. I have been significantly involved in this industry, working for NAMB and the Mortgage Broker for over 26 years. I spent many years, along with countless others, to turn back the first HUD proposed rule, be an industry advocate and have some grasp of the DC process.

I have read the initial judge’s opinion which, in my opinion, is atrocious. Every claim made by NAIHP and NAMB was acknowledged and then dismissed in favor of the FED for the greater good. The fact that the Appellate Court upheld the judge’s decision speaks volumes about our industry.

The past mortgage meltdown which devastated the entire financial industry happened on the FED’s watch and they did nothing to stop any of it. NAMB made repeated efforts over the past 2 decades to get someone’s

10

May 2011

attention about the lack of enforcement of the rules and regulations to no avail. I was honored to testify before congress many times on behalf of NAMB and if you look at those transcripts you will find our constant request for enforcement of the existing laws and thus, purging the crooks out of our industry. Obviously NAMB was ignored despite the fact we had nearly 38,000 members at the time and controlled well over 50% of the market.

Nothing was done and instead a number of consumer oriented groups, regulators and members of congress worked on trying to pass even more regulation for the industry. I have no idea of their rational to proceed down that path when the current regulations were not being enforced.

The FED was going to make someone pay and the mortgage brokers were the target. Our industry has been blamed unfairly for the entire mortgage meltdown, has become very small in numbers and has few resources.

In other words, we were a very soft target ready to be skewered.

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