There’s no shortage of commentary around Facebook as the smoke literally builds around it’s engine while the social media rocket prepares for IPO liftoff. This piece won’t be full of rational analysis but rather gut intuition. Here are a few things to chew on as you think about the global future with or without Facebook. 

Zuckerberg Isn’t Steve Jobs, But He’s Jobs-Like
Mark Zuckerberg gets social like Steve Jobs got design. Furthermore, both share a core foundational value which is irrationally committed to making products and experiences which please their own sensibilities first and the market second. Does this guarantee Facebook’s success? No, but it does guarantee that there will always be a vison and if you look up Facebook’s corporate governance structure, you’ll realize that it’s a company being set up to be purpose and vision led. Bottom line, you’re not betting on or against Facebook, but really Mark Zuckerberg. 

Facebook Is Today’s Telephone, E-mail & Internet For Many
Think about how you use Facebook, how your children use it (if you have them and they are old enough) and how your parents use it. It’s already moving past “social network” status and moving toward something which looks more like a lifeline to the outside world. In conventional wars of the past, communication lines such as telephone would be cut so the enemy could not communicate. If conventional war broke out today—generals would plan to take the Internet out because of platforms like Facebook. Think about that. 

Ecosystems Trump Products
Facebook was never a product from day one—it started as a social network and it’s been steadily building up an ecosystem ever since. It’s on our mobile devices, it connects with our Websites, it offers it’s own line of credit, it has apps and developer communities built around it and it’s spawned hundreds of start ups that employ thousands of people who would not be in their line of work if it were not for Facebook. The company has already gotten to this point with a significant advantage in that it looks more like an octopus than it does a shark gobbling up everything in it’s path. 

Big Business Is Built On Addictive Behaviors
Facebook is extremely addictive and one can find themselves spending a good chunk on their day there either working, playing or doing a combination of the two. Gambling became big business because of this. Drug trafficking, while illegal in most cases is big business and so are food industries built on menus with addictive items. As long as Facebook remains addictive to use, it will find a way to build business around it. 

Global & Local Are The Future
While Facebook is still working on markets like Russia and China—there’s no dispute that it’s well into the process of being a global phenomenon and in addition, it can be especially relevant in local markets. Any local business which is self sustaining or part of a larger company can have a presence and run it with the local knowledge of their own markets. It is this combination which positions Facebook as something of a “virus” with the ability for it to “infect” markets through the people who use it. 

Personally, I would not bet against Facebook. Even GM which announced this week that they were pulling out of Facebook advertising spending concedes that they are committed to other ways of integrating it (via content etc.). GM isn’t betting against Facebook as much as deciding display ads weren’t working for them. Of course, I could be wrong on all of the above—but intuitively my instincts are telling me, “don’t bet against Mark Zuckerberg”. 

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Home prices nationwide continued to decline in the first quarter of 2012, but at a moderate pace, according to the latest Standard & Poor’s/Case-Shiller Home Price Indices. S&P called the drop in prices as hitting “new post-crisis lows.”

The national composite index fell 2% over the fourth quarter in Q1 and 1.9% from the year earlier period, S&P said.

The 10- and 20-city composite indexes had annual returns of -2.8% and -2.6%, respectively, for the month of March.

Meanwhile, average home prices for the 10-city composite fell by 0.1% in March when compared to February, while the 20-city composite index remained unchanged. Still, the composite indices in the latest S&P report are at their lowest levels since the housing crisis began in mid-2006.

Cities that saw home prices hit new lows in the most recent report for March included Atlanta, Chicago, Las Vegas, New York and Portland.

“While there has been improvement in some regions, housing prices have not turned,” said David Blitzer, chairman of the index committee at S&P indices. “This month’s report saw all three composites and five cities hit new lows. However, with last month’s report nine cities hit new lows. Further, about half as many cities, seven, experienced falling prices this month compared to 16 last time.”

 “The national composite fell by 2.0% in the first quarter alone, and is down 35.1% from its second quarter 2006 peak, in addition to recording a new record low. The 10- and 20-city composite mimic these results; also down about 35% from their relative peaks and hit new lows.”

In the advent of the internet and social media, the size, reach and variety of information has intensified  to a level that has made the planet practically borderless. In fact, if I log into my Facebook account right now, I will see a number of marketing- and product-related content packaged in a Facebook-friendly way. And from time to time, I would see that some of these posts have actually generated some “buzz” brought about by a considerable number of views, likes, shares and comments. In a nutshell, this is what many call today as social media marketing.

 

And if I were to market a certain brand or service though Facebook and Twitter, here’s what I would do:

1. Understand Online Marketing Mechanics.

Marketing done online makes a very big difference. I find that in terms of effectiveness, techniques and market base, “online marketing” has more variety and has a bigger potential. I’ve encountered and to some extent, learned some techniques like web site and social media marketing, link building and outsource link building, search engine optimization (SEO) and online advertising.
The definition and procedure of  such terms are easily available online. But before diving into these strategies, the very first step you should take is to create a quality web site or blog that will provide all the necessary information for your brand. If you don’t have one yet, then make one. This main site will be the place on which people can have the awareness, desire or commitment for your product or service.  And with the help of Facebook and Twitter, I believe that more and more people can get lured in and interested with what you are offering.

2. Know the Facebook and Twitter Sensation.

“Facebook”  and “Twitter” are arguably the top  two social media sites today with over a billion registered users combined. The chances that your target market and prospective customers are logged into these sites are very high. So, if you’re hoping to draw prospective customers and funnel them into your product’s main information page, I suggest that  you register in both of these social media giants.   Both of these online portals are social communities wherein users can communicate  and interact in a number of ways (tweeting, liking, sharing, commenting, etc). In  effect, your brand, as a community member, is not a passive receiver and humanized in a way that it can directly build relationships with its prospective customers.

Having my fair share of time in Facebook, I am certain that it will allow you, the marketer, to introduce your brand publicly but on a more personal and less formal level.  These web sites form a vast information network that has the potential to reach an audience that no traditional  marketing scheme ca n. Both offer a variety of functions that allows you to market your brand, thus, increasing the odds of luring users to your brand’s official site or blog. Plus, both media sites are free, simple, user-friendly and linkable to each other.

3. Customize, Customize, Customize.

This is what I consider as one of the most crucial steps in social media marketing. Facebook and Twitter allow you to customize and personalize your account in so many ways, and as a marketer, you must do so in a way that best suits your brand and appeals to its target public. So never stop exploring the sites’ features and functions until you are familiar with all of them.  Then, start  customizing. And if you’re not satisfied, customize some more.

There is no limit in doing this so take advantage of it. A Facebook “wall” or a Twitter page can be customized in terms of content preferences, applications and widgets, appearance, and interactivity, among others. For instance, you can incorporate with these sites your brand’s main page in a way that if one enjoyed the site’s content, he/she can easily share, like, or tweet it to his/her own personal network, allowing this person to market the brand for you.

4. Communicate with a “viral effect” in mind.

What you tell your audience must be so appealing, so helpful, so entertaining,  so unusual, or so hard-to-find, that they would like to share the same message (text, photo, video, or link) with their friends (Facebook) and/or followers (Twitter).  In this way, your brand gains independent and third-party endorsements while attracting more prospective customers in the process. In Facebook, a “message can become viral” if even only user initially “likes,” “shares,” or comments on the content you provided.

Any of these actions will immediately make the message visible to another user’s group of friends who can then share it with more people within their list of friends. In Twitter, this kind of sharing is done through “re-tweeting.” As mentioned in one of Lynda.com’s “webinars”, a study shows that tweets that are more likely to get re-tweeted are those that:

a. are written in headline format
b. give valuable knowledge such as breaking news, tutorials/how-to’s, free stuff and hard-to-find resources
c. call to action such as “Vote for” or “Help out”
d. include “please RT”

5. Interact and engage with your audience.

As an online user who’s been the object of countless marketing spiels and advertisements, I find that my interest or desire for a brand is directly related to the personality and “responsiveness” of the person sharing such promotions.

So, as a site administrator to any of your brand’s page, be as accommodating, as approachable and as interactive as possible. Courteously respond to any customer’s query, comment or suggestion. Show genuine interest as you communicate with them. In most cases, how you deal with them –by what you say and do –affects how they perceive and respond to your brand in general.

6. Upload and Update for smooth and  high-volume transactions.

For me, it’s always beneficial to stumble upon fresh content every know and then, so long as they are of relevance and quality. So keep providing useful information to your social media audience for this indicates your active involvement and sincerity towards them.

Aside from product-related content, your knowledge about Facebook, Twitter and other online marketing trends must be updated as well. This will guide you in adjusting your strategy and execution and thus, help you produce better marketing results.

After all, it won’t hurt that through Facebook and Twitter, more people might know who you are and what you could offer. As writer-poet Oscar Wilde’s saying goes, “The only thing worse than being talked about is not being talked about.”

Last week’s column detailed the following benefits from switching from a system of lender-ordered appraisals to a system of borrower-ordered appraisals:

• Borrowers would obtain appraisals before applying for a mortgage, and when the appraised value turned out to be too low, they would spare themselves and the lender the cost of an aborted application.
• The loan process would be shortened, allowing borrowers to use a shorter and cheaper lock period.
• Borrowers would no longer be dissuaded from shopping alternative lenders by the prospect that each application would require an additional appraisal fee.

But there are other issues connected to such a switch, including the important objective of protecting appraisals from pressure exerted by any of the parties with a vested interest in the outcome. This was the major purpose of the Home Valuation Code of Conduct (HVCC), which became effective May 1, 2009, and which has substantially changed the appraisal landscape.

Assuring appraisal independence: The crux of HVCC was an “appraisal independence requirement,” designed to insulate the appraisal process from influence by any of the parties with an interest in the outcome. Mortgage brokers and Realtors could no longer have any contact with appraisers, and lenders had to obtain appraisals in some manner that prevented them from exercising any control. In order to protect themselves from liability, most lenders today order appraisals through appraisal management companies (AMCs).

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The theory was that lenders influenced appraisals through contact with appraisers, and if the AMC stood between them, the process would be clean. But this overlooks that the lender is positioned to direct a continuing stream of clients to the AMC, and won’t do it if the appraisals that come back don’t meet the lender’s expectations. Similarly, the AMC is positioned to direct business to appraisers. If the lender is unhappy with a particular appraiser’s work, the appraiser may no longer get assignments from the AMC.

Part 1: Let borrowers order their own appraisals

Having borrowers purchase appraisals directly from appraisers is not a good idea because borrowers could shop for the appraiser that would do the borrower’s bidding. But in purchasing appraisals through AMCs, borrowers would have very little leverage — much less than lenders because each borrower transaction would be a one-shot deal.

Quality of appraisals: A much-noted feature of the growth of AMCs as intermediaries in the appraisal process is a decline in the quality of appraisals. While some lenders select AMCs on the basis of price and service, lenders that have affiliated business relationships with AMCs direct their business to them. Affiliated AMCs are chosen because the lender shares its revenues, not because the AMC has well-paid appraisers, or appraisers located in proximity to the subject property.

All the major lenders have affiliated business relationships with AMCs. That is why one hears frequently about appraisals being done by appraisers who are not familiar with the local market.

If borrowers ordered appraisals from AMCs, they would select an AMC with local appraisers on their rosters, because AMCs would emphasize this in marketing to consumers. Some AMCs might also disclose what they are paying appraisers, or what amounts to the same thing, what they are retaining for themselves, as a way of emphasizing the quality of their appraisals.

Appraisal fees: Under existing arrangements, AMCs must compete for the business of lenders who refer borrowers to them. Such competition results in higher marketing costs for AMCs, and in revenue splits of affiliated business entities that are favorable to lenders. The result of this kind of competition is higher appraisal fees paid by borrowers. Appraisers, in turn, must compete for the business of AMCs who retain them to do appraisals. The result of this competition is lower fees for appraisers and poorer-quality appraisals. Nobody competes for the borrowers, who pay higher appraisal fees for poorer-quality appraisals.

If borrowers ordered appraisals from AMCs, lenders would be out of the process, and good riddance. AMCs would then have to compete for the patronage of borrowers, which would reduce appraisal fees.

Implementation: It should be public policy to have appraisals ordered by borrowers and have such appraisals accepted by all mortgage lenders. The key to implementing this policy is acceptance by Fannie Mae, Freddie Mac and FHA of appraisals carrying the borrower’s name rather than the lender’s name.

Borrowers who order their own appraisal and require an FHA mortgage will face two special problems, both of which are solvable. Problem one is that FHA will accept appraisals only from FHA-approved appraisers. This means that a borrower who may need an FHA mortgage must inform the AMC that they need an FHA-approved appraiser.

Problem two is that FHA makes it difficult to use the same appraisal twice. It assigns a case number to every application, which is stamped on the appraisal form. This makes the appraisal non-usable by a second lender unless the first lender attests that the borrower was not rejected! Not surprisingly, lenders who are rejected by borrowers are reluctant to assist their competitors, so this rule has the effect of locking FHA borrowers into dealing with the first lender to whom they apply.

But borrowers ordering their own appraisal could defeat this regulatory inanity in a very simple way. When they shop, they provide the lender with a copy of their appraisal but not the original upon which the case number is attached. They hold on to the original until they are prepared to make a commitment.

Standard and Poor’s Rating Services’ estimates that the time it will take to clear the supply of distressed homes, or the shadow inventory, on the U.S. market is now 46 months. For the city with the greatest estimate of the time it will take to clear its inventory of foreclosures and short sales, New York City, it will take 202 months, or nearly 17 years.

A huge inventory of nonperforming mortgages in the U.S., but the regional variations in the speed at which servicers can clear the loans are primarily due to differences in foreclosure procedures. As of first-quarter 2012, S&P’s months-to-clear estimate in judicial states is almost 2.5 times as long as nonjudicial states.

The volume of these distressed U.S. nonagency residential mortgages (which excludes loans from government sponsored entities, such as Fannie Mae and Freddie Mac) remained extremely high at $354 billion in the first quarter, but it has declined in each quarter since mid-2010. This latest number, which is based on the original balances of the loans in the shadow inventory, represents slightly less than one-third of the outstanding nonagency residential mortgage-backed securities (RMBS) market in the U.S.

New York City’s distressed inventory ranks largest in the nation with the highest months-to-clear, at 202 months. Boston ranks next at 86 months, then Chicago with 72 and Atlanta with 71 months.

Although liquidation rates seem to have leveled off, it’s still taking servicers longer to foreclose, S&P found that recently liquidated loans missed payments for an average of almost two-and-a-half years before being closed.

• S&P estimates it will take 46 months to clear the national shadow inventory. This is down one month from fourth-quarter 2011.
• Differences in liquidation rates between states are creating a large and growing difference in regional estimates of the months-to-clear.
• The U.S. monthly first default rate fell to 0.67 percent in March 2012, the lowest level since May 2007.