Bank of America Mortgage Cleanup Unit

Recently Bank of American announced Terry Laughlin would head up a new unit responsible for cleaning up the Bank's mortgage mess.  One has to wonder if this is yet another in a string of impotent moves the large banks are making or if Mr. Laughlin is really going to make headway into the Bank's massive issues.  As one who deals with this on a daily basis, I can only hold out hope.  Last year, they did make some progress on the short sale side by allocating additional personnel to assist in processing them.  In that way, things have improved.  Negotiators are assigned a case and have been fairly timely in getting the files processed.  However, in their zeal to save money by assigning low fee appraisers who do not appear to have knowledge or experience in the markets, they have short circuited what would otherwise would be considered a success.  If you are out there Mr. Laughlin, please start making an effort to use seasoned appraisers who are familiar with the market the assignment is in and start paying them as the professionals they are.  In one example a house was listed on the market for over 90 days and received a cash offer of $750,000....bank came back at $820,000....result buyer walked.  After another 90 days another offer comes in at $728,000 the bank comes back at $740,000....result...buyer found another house they liked better.  While the second one may have been close enough to work out, one has to wonder what the ???

I don't envy anyone who has to take on a portfolio the size of Mr. Laughlin.  Of course, it would not have been near the issue had they not bought Countrywide (what were they thinking? they had time to back out when things were crumbling around them) but that is an issue perhaps for another day.

In closing, I would like to wish Mr. Laughlin luck with his new endeavour because the sooner he and is contemporaries in other banks have success, the sooner we can get through this and recover.

Vacation Home Market on Rise

Amid the rising interest rates, sales in many vacation communities in the U.S. are soaring.  According to the Wall Street Journal, the low prices and a general feeling that the worst is over is catapulting sales to their heights levels in years.  Here in Arizona, we have seen similar results.  Inventory levels of homes in many of the price ranges in Paradise Valley are the lowest in years and not that much new is coming to the market.  I have interviewed architects, builders, and subcontractors and calls are up for all of them.  Now whether that translates into new builds or not remains to be seen.  However, the inventory of newly built speculative homes abundant in the market a few years ago is all but gone. 

What was surprising to many of us was how few new listings came on the market at the first of the year, typically the beginning of our busy selling season.  Here in Paradise Valley, there were several homes built after 1996 priced under $1.6m, but they are almost all gone.  The most recent to go under contract were the ones on busy streets which is always an indication of depleted inventory.

Sales have been very brisk in Silverleaf, an exclusive gated golf community in north Scottsdale but those sales have not translated into greater activity in Desert Mountain yet in far north Scottsdale.  We are just going to have to see, but things started feeling better a year ago October but then died down this summer and have really accelerated since November/December.