MARKET UPDATE

SEPTEMBER 2011

"Markets will rise and fall, but this is the United States of America. No matter what some rating agency will say, we will always be and always have been a triple-A country." – President Obama

Just because you say it, doesn’t make it so.

COMMONWEALTH PROPERTY GROUP, LLC UPDATE

Short sale fraud

Fraud in real estate? Freddie Mac, with the help of investigation and law enforcement agencies, is trying to crack down on short sale fraud.

Fraud with short sales typically occurs when a real estate agent fails to disclose to the other parties in the transaction all offers made on a particular property. The agent will submit only low bid offers from investors, who have a pre-arranged relationship with the real estate agent (non-arm’s length) forcing the value down. Once the property is sold to the investor, the investor then flips the property to one of the higher offers that were made, but were never disclosed to the seller, or Freddie Mac. This is not only happening to Freddie Mac, but all banks involved with short sales.

Short sale fraud creates multi-million dollar loses to the banking industry. And when referring specifically to Fannie Mae or Freddie Mac, those loses come at the expense of the tax payer.

Goldman sachs ceo blankfein lawyers up

Goldman Sachs CEO, Lloyd Blankfein and other employees hired lawyers as they came under fire for allegedly misleading clients into purchasing subprime mortgages that the firm knew in advance where worthless; and were perhaps even betting against.

On August 23nd, 2011, CIFG filed a lawsuit against Goldman Sachs. CIFG is an insurer selected by Goldman to insure $275 million worth of securities tied to Goldman's securitization of 6,204 residential mortgage loans. This is the second lawsuit this month against Goldman pertaining to toxic mortgage backed securities and misrepresentation. This first was filed by Allstate Insurance earlier this month. (housingwire.com)

Unwind Fannie and Freddie? Back the government out of the mortgage industry, and hand it over to Wall Street? Those in favor may want to rethink that.

New home sales slip in july

New home sales fell 0.7% in July. Although new home sales posted disappointing numbers in July, housing inventory nears lowest level in decades, with a 6.6 month supply. (housingwire.com)

The next big bubble??

Gold prices hit an all-time high August 23, 2011, at a price of $1,917.90 per ounce. Historically gold is a hedge against inflation, which has averaged 2.4% on an annual basis over the last ten years. Gold has been on a 21% per year increase over the same period. (cnnfn.com)

Foreclosures on the decline in phoenix

A report from the W.P. Carey School of Business at Arizona State University shows that foreclosed homes account for less than 30% of the existing home sales. This is the lowest level in over two years.

Existing home sales in Phoenix dropped 13.2% in July. 9,050 homes were sold in the Phoenix market in the month of July. (housingwire.com)

Tax the rich, all 3% of them

The Federal Government has a budget problem. Spending exceeds income. The solution to the problem is simple, increase revenue (taxes), cut spending, or both. That is how every successful business in America operates. Yet, the working class does not want to pay more taxes. Corporations will just keep hiding profits overseas. Spending cuts are going to have a negative impact on someone; likely the poor, elderly, teachers and civil servants. The bottom line is that someone or everyone is going to have to take a little “pain for the cause.” But who?

President Obama and many in the Democratic Party have been proposing an increase of taxes for the wealthy. Now aren’t you glad you not one of those people. Statistically, you likely are not. As defined by the President, the wealthy are those whose income is $200,000 per year or greater.

“According to a recent report from the Internal Revenue Service, that leaves out about 97% of the tax-paying population. The report, which provides a complete breakdown and analysis of returns for the 2009 tax year, found that only a mere 3% of tax returns were filed by people earning a gross adjusted income of $200,000 or more. Americans earning $1 million or more were even more rare, comprising just 0.2% of total tax filers and accounting for a mere 236,883 of the 140 million tax returns received in 2009. The wealthiest taxpayers -- those earning $10 million or more in adjusted gross income -- are even less prevalent. There were only 8,274 people belonging to that elite club, according the IRS. Out of the nearly 4 million "rich" people making more than $200,000 a year, 1,470 didn't pay any income tax whatsoever in 2009. But the people who did pay taxes earned a total of nearly $2 trillion in income -- about 26% of total taxpayer income in 2009.” – cnnfn.com

“President Obama's tax proposals -- which many Republican's call "job-killing" tax hikes -- include getting rid of some corporate tax breaks enjoyed by oil and gas companies and corporate jet buyers, and restoring some Bush-era tax rates for high-income households. If the Bush tax cuts expire as planned in 2012, the top two income tax rates will revert to 39.6% and 36% from 35% and 33%, respectively.” (cnnfn.com)

Hedge fund manager John Paulson made more than $5 billion (yes, with a B), in 2010. Because his income is considered long term capital gains, he was taxed at a rate of 15%; verses 35% average income tax most American workers pay. The moral: Be rich.

RATE WATCH

MORTGAGE TYPE	INTEREST RATE	APR
30 YEAR FIXED	4.000%	4.113%
15 YEAR FIXED	3.250%	3.446%
5/1 ARM	2.375%	2.765%

Interest rates as of 08/25/11. Conforming interest rates. Interest rates and APR based on loan amounts not to exceed $417,000. Loan to values not to exceed 80%. 720+ credit score. Owner occupied only. Purchase and rate in term refinances. Not all applicants will qualify. Call today for your individual scenario rate quote.

Chris Tiller - Realtor The Brett Tanner Team
Keller Williams Realty
4862 E. Baseline Road #103
Mesa, AZ 85206Phone: 602-561-1346
Fax: 1-888-292-0678
christiller@brett-tanner.com
Website: www.phxrealty.com
Blog: http://tillersreupdate.blogspot.com/
Our team is closing 50 deals per month in Phoenix. Ask me how.