Watch Out for Foreclosure Scams!

The above video was creaed by the Federal trade Commission to help people understand that dangers they face when the stress of their situation allows them to fall prey to people who would take advantage of them.

Thanks to Jay Thompson at ThePhoenixRealEstateGuy for the tip!

How to buy Foreclosures

This video was sent to me as I am attending the REOMAC (REO Managers Association of California) meetings in Palm Desert California. Because I have been an REO expert for 20 years, I became a member of REOMAC several years ago.

REOMAC is the leading organization for the mortgage default industry, and its two annual meetings provide its members with a tremendous amount of information on the amount of foreclosures throughout the country, and the best ways to help lenders and consumers work together to reduce the number of foreclosures.

Watch and learn!

Deflation and What it Means -

Business television and newspapers have made deflation a hot topic this week and, since Monday, Google has tracked 13,000 mentions of it.

Deflation is a recurring cycle in which the prices of goods and services fall. Isolated to one industry or sector, falling prices is the natural result of competition.

For example, when DVD players were first introduced, they were tagged at $800.

Today, you can buy them for less than $20.

Across many industries, however, and happening at the same time, falling prices can shut down the economy. Rather than buy things on the cheap, people stop buying anything at all. And why would they? The same items will cost less tomorrow.

And this is the problem with deflation -- it halts consumer spending and consumer spending makes up two-thirds of the U.S. economy. When it stops, the economic result is dwindling corporate revenues which leads to:

1. Layoffs of the workforce, which leads to...
2. Less consumer spending, which leads to...
3. Dwindling corporate revenues, which leads to...

And the spiral continues.

Deflation can be much more insidious that its expansionary counterpart -- inflation. Inflation is when the prices generally rise over time and it's an economic condition through which governments can comfortably navigate. Deflation, on the other hand, is more rare and, therefore, fewer practical control measures exist.

Whether the U.S. economy will slip into deflation is a matter of debate.

The Fed has cut the Fed Funds Rate to promote economic growth and those changes can take up to 12 months to work their way through the economy. Deflationary pressures we're seeing today, in other words, may have already been addressed and corrected by Ben Bernanke's 10 rate cuts in the last 14 months.

Until the market figures it out, though, expect that each mention of deflation will hurt the stock market and help the bond market -- including the mortgage-backed variety. This should help lower mortgage rates and make homes more affordable.

(Image courtesy: The Wall Street Journal)