I was encouraged today to read that provisions were added to the bill passed this Wednesday by the U.S. House that will require states to deny a license (to sell home loans) for applicants who have committed a felony within the last seven years. This is especially reassuring after a Miami Herald investigation shed startling insight into Florida's lax application screening:

(The quotes below are from The Miami Herald, Matthew Haggman and Jack Dolan, as seen on The Florida Association of Realtors news website)

"The Miami Herald investigation also found that 5,306 people with criminal histories became loan originators between 2000 and 2007...

"...after allowing thousands of criminals to sell home loans in Florida...

"... including the agency's licensing of Anthony Hollis, of Orlando. Despite convictions for car theft and passing bad checks, Hollis was granted a license to own a brokerage in 2003...

"...the case of Donald Smith, who was sentenced to 17 years in prison for strangling his wife and dumping her body in Tampa Bay. Saxon said staff did not "timely review" information submitted by Smith and had to issue the license because an administrative deadline expired."

"In the case of Richard Crowder, who went on to commit $37 million in mortgage fraud, Saxon pointed out that Crowder's grand theft and burglary charges dated back to 1984...

"Among the ex-convicts given access to the mortgage industry was Scott Almeida... Florida regulators asked for a character reference. He gave them a note from his mom... They said he needed a reputable supervisor for his practice: He chose a guy he met in the prisoner visitor room... Almeida spent the next three years arranging nearly $3 million in fraudulent loans for which he was put back behind bars."

Some of the government's new regulations seem bogus to me; just a band-aides to make themselves look good. For example, regulation against prepayment penalties. In the short term that might help some people sell a house in foreclosure. In the long term it forces lenders to use higher interest rates, making it harder for people to buy. HOWEVER - I am definately in favor of adding regulations that encourages trancparency within any transaction that allows borrowers to understand what they are paying for. I remember how shocked I was years ago, when I learned that mortgage brokers were being rewarded by offering me a higher interest rate. I thought they were shopping for ME - trying to get me the lowest rate! I am encouraged to see that this issue has, at least, been recognized by legislators. This should be disclosed to people. Borrowers need to know who is on their side, what choices they have, and where the money is flowing!!! Here is an accompanying article on CNNMoney.com titled, New Fed rules miss one key lending abuse (http://money.cnn.com/2008/07/21/real_estate/mo_ban_on_lending_abuse/index.htm?postversion=2008072309)

Before Zillow.com, I paid nearly $100.00 for access to The First American Corporation's data base of recently sold properties so that I could get an idea of what a property's value was. Of course, I am not a Realtor, so this information was not as readily available to me.

Then came Zillow. This site is awesome for people who are not real estate agents and want to check for recently sold homes in their neighborhood. Some counties have organized their own database, but not here in Gainesville (Alachua County).

I would warn against putting too much faith in the "Zestimate" that Zillow offers for specific properties. Primarily because it cannot consider the condition of the properties or their value based on their exact location. In other words, Zillow will consider the all of the values surrounding your property, even when the neighborhood directly across the street might not be very comparable.

I primarily use Zillow by entering a specific adress and then pulling up 'recently sold' properties surrounding the property. I write down general info such as address, bedrooms, selling price, and square footage. I always drive-by the properties so that I can see which ones are in similar condition and neighborhoods to the property I am comparing. Then I put together my 'Buttstimate". I know, that sounds bad ( just consider my last name).

Here's a recent article about Zillow reported by RISMEDIA.

FORECLOSURE DISCOUNTS: Even with the Feds trying to help homeowners 'keep their homes' (in other words, help banks 'save their shirts'), only a small percentage of people are qualifying for loan modifications. Then, after qualifying, only a small percentage are maintaining their new loan. As a result, many homes sell at discounted prices before auction, at auction, or they sit vacant which increases the supply. Home values decline.

LENDING STANDARDS: When it was easier to borrow money, more people baught homes, which decreased the supply. As we speak, lenders and federal regulators are making it tougher to borrow money, so fewer homes are selling. The federal regulations that were just instituted (such as restricting when a lender can institute a prepayment penalty) will force lenders to raise interest rates to cover their increased risk. Higher interest rates means that homebuyers can't afford higher prices. Home values decline.

MORE BUILDING: Obviously building has decreased and future building will decrease even more. However, there are still some developments that began before the big crash, so more units are still being added to the market. Home values decline.

INFLATION: The dollar is losing value. As the Fed continues to bail out banks, send out stimulous checks, and fund 'defense', then it will inevitably borrow from other countries and print it's own money. As the value of a dollar deceases over time, then it will take more dollars to buy a home of tomorrow then it will to buy a home of today. Home values increase.

So what influences will win out? Will prices increase or decrease? Only time will tell.

I have been distracted by other business, but I have started updating my news site again!

Check it out: CLICK HERE

This site focuses on real estate headlines from almost a dozen different sources. It is a one-stop place on the web for you to stay up-to-date with the news that matters to our industry. I do not just add links about national issues, but also Florida and Gainesville.

My goal is to stay informed and share with you.

This morning I read a USAToday artice titled Fed to curb shady home-lending practices . Once again, it inspired me to question the situation and the response.

I am pro-regulation when it inspires transparency. In other words, I feel as though some brokers hide or manipulate borrower information when submitting apps to lenders and I also feel as though the borrowers often do not receive adequate explanations pertaining to the details of their loan. If this aspect could be improved, then I would support it.

Beyond that, I feel as though every lender has a right to offer any loan and a borrower has the right to take it or not. Both parties should be allowed to measure the risks and make their own decision.

The recent credit crunch and subprime meltdown are mostly a result of investors, lenders, and borrowers taking a risk and losing. That's their prerogative! The availability of credit is necessary for the excelleration of progress.

We're already seeing lenders tighten their own standards - they don't need the government's help!

I think it's cool that TWO authors about 'green living' have chosen Gainesville as their residence! There's no arguing that we have a lot of green. As even more evidence is the recent denial for new development at the Gainesville Golf and Country Club. This is a tough one for me because I am proud that we are stewards for Paines Prairie, but I am also pro-development. I occasionally imagine businesses and residences on the perimeter and overlooking places like Paines Prairie and Newnan's Lake.

For more info check out these links to the Gainesville Sun:

'Green' authors choose Gainesville as home

Jessica Newman writes, "Trish Riley, author of "The Complete Idiot's Guide to Green Living" (Alpha Books, paperback, $16.95), and Diane Gow McDilda, author of "The Everything Green Living Book" (Adams Media Corp., paperback, $14.95), both live in Gainesville and find it a much greener alternative than other cities in Florida."

Condo plan near prairie is rejected

"Increasing the density of the land abutting the prairie will impact the values of the prairie. Most importantly, increasing the density will set a precedent for development on the edge of the prairie not just today, but five years from now and 50 years from now," said Jack Hauptman of the Sierra Club.

Since using "del.icio.us" I have collected links to the majority of real estate news headlines in the Gainesville Sun for April, 2008. For daily doses, check out my Squidoo page.

1. Stunted development

2. Superfund showdown: Any progress at Cabot-Koppers?

3. City hears power plant options

4. Center for girls to get renovation

5. Loans to help storm victims

6. Group helping keep homes in shape

7. Far from home: Gainesville's continuing struggle with homlessness

8. County foreclosure filings up 175%

9. Alachua County's first Wal-Mart Supercenter readies for opening

10. SW 8th Avenue to get makeover

11. Residents: Turn former church into Tower Road community center

12. Mill Creek work draws scrutiny

13. City's homeless site options open

14. $2 million resurface job on SW 8th Avenue to start in May

15. Mill Creek Preserve opening coincides with Earth Day

16. Builder woes hit home

17. Protect our springs

18. Projects await court decision

19. Is bus rapid transit the answer?

20. Ethics panel clears appraiser

21. Airport noise gets more study for development

22. NEW VENDOR: The Buyer Dept.

23. Progress on development but airport noise a sticking point

24. Commission approves Hatchet Creek changes with restrictions

25. 7 recession-proof places to retire

26. County approves Newberry Village

27. Butler Plaza annex gets OK

28. City to discuss land swap

29. West Gainesville road plans on the table

30. Why aren't medians prettier?

31. Potholes and perks - Editorials

32. Displaced gopher tortoises given a new home

33. Artists roll out guidebook to area

34. SW 62nd options must all be studied

35. Plans for urban village unveiled

36. City joins exclusive culture club

37. Officials: Connector not a priority

38. Springs protection bill unlikely from lawmakers

39. County acts to improve economy

40. Homeowners may face fire fee

    
    

Does this sound like a nightmare or what?!?! Imagine you buy a new house and your title agent, or attorney, explains that the only lien against your property will be the expected mortgage. Then a few months later you start to hear rumors in your neighborhood about the builder who didn't pay his contractors, so YOU will be forced to pay because suddenly there is a contractor's lien on your property. This is not a nightmare to some people - it's reality.

Here's a quote from an Elk Grove, CA article titled, "Lien Times Hit Elk Grove": "The unfortunate nature of it here is that the homeowners are on the hook for this because we didn't get paid," said North Hollywood attorney Ken Grossbart, who is representing the landscaper plaintiff, Pacific Parks.

And a quote from a Gainesville, FL article titled, "Builder Woes Hit Home": "...in at least two cases in Weschester, liens have been filed on houses that have already been purchased and moved into. In those cases, according to Florida's Construction Lien Law, if the liens don't get paid the home could be sold against the owner's will to pay for the labor, materials or other services the contractor didn't pay."

In my opinion, every state that upholds this should change their laws. This is a complete injustice! The debt is the responsibility of builder in these cases and if they go bankrupt, then these debts should be included. I'm sure the contractors are feeling ripped off, but they have no right to chase a complete stranger to the transaction. This makes me furious. Tell me I'm not the only one!

I spend part of each day reading the real estate section of several websites and recently discovered the social linking network, "del.icio.us". So, for a few weeks I have been adding links each day as I surf my usual news sites. Today, I am sharing my del.icio.us with you! Since I'm reading these sites anyway, at least I can save you the time of surfing around.

You'll notice that there are many tags on the right side to explore. One in particular that i added is the "vendors" tag group. If you would like me to add a link to your website, then just let me know with an email or comment.

 

I've also created a Squidoo page, which basically mirrors my del.icio.us page. I did it mostly out of curiosity, but maybe someone has a preference. My Squidoo page has a lot more ads with it, including some Ebay properties in Gainesville and random real estate related books selected by Amazon.com.