The real estate meltdown and life changes -a private note.

Hi everyone. I want to share parts of an article I wrote recently for LatinoWebWatch on online marketing for Latinos. I was reflecting on the current state of real estate and my career as a Broker and an Online Real Estate Marketing:

I work as a real estate broker in San Francisco, but I am hoping that I can make Online Marketing my full time profession(ie. money making job). Online Marketing is my passion and my hobby but until recently I have been so busy with real estate and mortgages. I am still quite busy, however, I see the writing on the wall--the home buying and home financing industry has dramatically changed. And I think that these industry/consumer changes are economical and STRUCTURAL. You see, with the high number of foreclosures, the short sales epidemic, the credit crunch and election year politics the real estate and mortgage industry has changed. New laws are being created that may over regulate, that may eliminate hard working and willing to pay home buyers from buying, and home owners from refinancing.

Oh, I forgot to add that although I am still quite busy, a lot of my work seems more like non-profit counseling trying to help customers either to refinance, renegotiate with their lenders or just try to comfort them and help them move out.

Although I like helping people, and this is one of the reasons I got in real estate [being a member of the communities I serve] I see that it will be very hard to make a living. I think that what has helped me "survive" this long is that all throughout my real estate career I have been very proactive in real estate online marketing.

Coming from an eCommerce background before getting into real estate I knew and still believe that the Internet/eCommerce will completely change the Real Estate & Mortgage business...and it has, see move.com, zillow.com, realtor.com, ziprealty.com, trulia.com, etc.

And this is all happening real time and now.. So I hope to focus more on my passion of Real Estate Online Marketing and Latino-Hispanic Online Marketing, and I hope to make a living out of my dream.

Dumping the First Time Home Buyer at the first signs of trouble

Where have all the lenders and agents gone? 

Has the real estate and loan industry abandoned the Latino
First Time Home Buyer? It seems they have. It was only a few months ago that most major companies and reports where announcing their plans to serve the growing latino home buyer. But that was until this subprime mess exploded.

What about all those first time home buyers that bought with adjustable loans
with a 2 or 3 year period. A lot of these loans are adjusting now and causing
great suffering to these home owners. Many of these borrowers cannot afford the
payment increase and or can no longer refinance, or sell due to current market
conditions. So now what. I recently wrote Senator Feinstein asking her to get
the lenders to waive various onerous conditions especially the Pre Payment
Penalty. This penalty imprisons someone from refinancing due to the high cost of
this penalty.  If borrowers wait until the penalty expires it may be harder
to get a loan.

I recently heard from a real estate agent at PruLatino (Prudential's Hispanic
Full Service real estate office) in northern California. He was complaining
about how Prudential has abandoned their focus on the latino home buyer due to
current subprime problems.

As Realtor Magazine states: "Reaching out to Latino customers in word
and deed.  Several years ago, the California Association of Realtors
release research showing that 20 percent of California home sales involved
buyers or sellers with a Hispanic surname.  Those findings motivated Ed
Krafchow, president of residential brokerage giant Prudential California/Nevada/Texas Realty, to conduct similar research on his company ... In response, Krafchow initiated a Hispanic outreach effort and this year launched  a Spanglish language listings magazine, Palacio." (Realtor Magazine, August 2007)

However, it seems the magazine has not been released, and if my friend at
PruLatino is correct, it seems Prudential was "reaching out for the easy
MONEY only and not in word and deed."

So for all of us involved in the real estate business, let's not forget those
buyers and future buyers who fed us and our families while it was good.

Has the American Dream turned into a nightmare? ¿Se ha vuelto el Sueño Americano una pesadilla?

YES. And in my opinion this has to do primarily due to:
Greed! --buyer's, seller's, agent's, bank's. How can you buy something you cannot afford and with NO money down. I still remember some clients telling me "only in the U.S. can you buy something so expensive with no money down and still get money back." And they said with an incredible but satisfying smile.
Easy Credit! The industry (builders, banks, government) made credit so easy but with one fundamental basic mistake: How can you increase home ownership so fast so much with no increase in real income?

Why Latino Home Buyer? Por Que Latino Home Buyer?

Good question. Real Estate professionals are suppose to be color blind and help their clients achieve the American Dream whether they speak English, Spanish, Chinese, Russian etc. But you do need to help them in a way that they can understand. Therefore, language and culture are important to improve communication and to have a better informed buyer whose first language is not English. Also, many times you are dealing with an extended family who may not all speak English but who want to and will contribute to the buying process.

Lastly from a pure business sense: The demographics show that the biggest group of first time home buyers will be from the immigrant communities whose first language is not English. So it makes good business, relationship and sales sense to be more inclusive.

Credit & Mortgages for Undocument people

Americans for Legal Immigraton(http://www.alipac.us/article1676.html) DOES NOT want
Banks to offer credit cards or mortgage to undocumented U.S. residents. They are fighting banks like Bank of America, Citibank and others working with ACORN
(a housing advocate, www.acornhousing.org) to faciliate borrowers getting home loans using their Tax Payer Id. Number(ITIN).

Also Representative John T. Doolittle R-California has introduced a bill in Congress that would prohibit financial institutions from providing home mortgages to anyone who lacks a Social Security number. The bill (H.R. 480) would amend the Truth in
Lending Act to make ITIN mortgage lending illegal.

As a real estate professional this will hurt our industry especially in the current slow market conditions, it will hurt banks,
and of all will hurt consumers who need credit cards, mortgages in order to participate in modern society. Isn't this hurting all of us?