Selling Southwest California Homes, The Wine Country & Equestrain Estates

Social Control of the Housing Crisis vs. Strategic Default

Mon, 30 Nov 2009 11:34:26 -0600

Brent T. White, an Associate Law Professor at the University of Arizona, has published a 50+ page paper on why he believes homeowners who are upside down in their mortgages should just walk away. It's an interesting piece and, while I don't agree with some of his hypothesis and conclusions, he does have some valid points.

You can read the whole paper here and I would love to hear your comments. I know we are seeing more 'strategic defaults' in our area and there are those that are voicing concern that a new wave of these may derail the fragile recovery we are seeing.

Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis

White essentially boils the argument down to a 'logic vs emotion' basis and posits that the reason people aren't taking the smart alternative and walking away in droves is because we are being socially conditioned or worse - socially controlled - to stay in our homes even when it makes no sense. A vast government/lender/media conspiracy is convincing us it's not the right thing to do morally or ethically and we should just continue to suck it up and pay off our underwater loans.

According to White, our emotions are being played like a fine fiddle by what he calls "the social control of the housing crisis" -- pressures and messages continually sent to consumers by the "social control agents," namely banks, government and the media. The mantra that these agents -- all the way up to President Obama -- pound into owners' heads is that "voluntarily defaulting on a mortgage is immoral."

White says: Banks set the rules during the housing boom, handing out home loans with no down payments, no income checks and inflated appraisals. Now that property values have dropped 20% to 50% in many areas, banks have been slow to modify troubled mortgages and reluctant to reduce principal debts. Only when homeowners cut through the emotional fog and default strategically in large numbers will this inequitable situation be seriously addressed.

How does White's 54 page manifesto go over with mortgage lenders? Predictably, not well. Officials at Fannie Mae and Freddie Mac - investors who fund the bulk of all new mortgages in the country - disputed White's characterization of how quickly after foreclosure a walkaway borrower can obtain a new loan. It's a minimum of five years, not three, absent extenuating circumstances such as medical or employment problems that caused the foreclosure. "Borrowers who walk away from their mortgage obligations face serious consequences," including severely depressed credit scores for extended periods, said Brian Faith of Fannie Mae. In addition, he said, "there's a moral dimension to this as homeowners who simply abandon their homes contribute to the destabilization of their neighborhood and community."

I know we advise homeowners to try loan mod 1st, short sale if that doesn't work and foreclosure as a last resort if all else fails. Are we doing our clients a disservice? According to White, who obviously dwells in the halls of academia and not so much the real world, we are. What do you think

Fannie Mae lanuches 'First Look' Program - Might Actually Help Buyers?

Fri, 27 Nov 2009 14:36:17 -0600

On November 24 Fannie Mae launched their 'First Look' program which, if applied as intended, could prove to be a real value to frustrated homebuyers in many areas. Prospective homebuyers in our area have suffered through much of this year seeing offer after offer go begging as homes are sold to investors with cash. Adding to that frustration, many times the accepted offers net the seller (bank) less than their offer would have but cash has been king.

As encouraging as this program sounds, it will remain to be seen what impact it has on the market. If Fannie operates in good faith, accepts an offer from an individual or public entity during that 15 day window and consummates the transaction, it will be good. If Freddie & the FHA follow suit it will be even better.

However, if they just accept offers for 2 weeks and then throw the door open to investors to see if they get a better offer - then it's pretty much business as usual with no real benefit accruing to the buyers.

For the full text and particulars, click here:

Fannie Mae Supports Neighborhood Stabilization Through "First Look" Initiative

First Look, Other Benefits for Owner Occupants and Buyers Using Public Funds

WASHINGTON, DC — Fannie Mae (FNM/NYSE) today announced that the company has launched several initiatives supporting neighborhood stabilization and promoting home purchases by owner occupants and buyers qualifying for public entity housing programs.

To provide owner occupants and public entities an advantage in purchasing Fannie Mae-owned foreclosed properties, the company has created the First Look initiative. With First Look, only offers from owner occupants and buyers using public funds are considered during the first 15 days a property is on the market. Offers from investors will be considered only after the first 15 days have passed.

Meanwhile the City of El Cajon, CA has had a similar program in place for awhile now and has created a checklist to use to expedite the buying process. To download a PDF of what your buyer needs to know - click here:

Fannie Mae First Look Acquisition Checklist.

CALIFORNIANS ! A true opportunity to make a difference in 'politics as usual'.

Sat, 21 Nov 2009 14:38:50 -0600

CALIFORNIANS ! Are you tired of politics as usual in Our state? Have you had it up the kazoo with the stalemate in Sacramento that has lead us to sky-high taxes, reduced services, massive prisoner releases, water shortages, record unemployment and an education system that ranks among the worst in the nation?

Did you know that through the last several election cycles we changed some faces (due to term-limits) but didn't manage to change any parties lines? Because the politicians drew their own district lines and if there's one thing politicians do well, it's protect their own ASSets.

Well now regular folks like you and me (hopefully more like me) now have a shot at changing the stranglehold imposed on us by these hacks. The Citizens FIRST Act we voted for overwhelmingly in 2008 says we now have the right to draw those district lines in a simple, efficient and straightforward manner that makes sense for US, not THEM.

If you care, please follow the links in the Howard Jarvis Taxpayers Association newsletter and lets get our state moving again. California has always been a leader, lets start leading in a positive direction for a change.

You Can Help Draw the Lines and Make Elections Fair

Before the Voters FIRST Act, California lawmakers were charged with
drawing their own legislative districts. This means the politicians
could select the voters they wanted and virtually guarantee their
reelection.

But no more!

California voters changed all that when they authorized the creation
of the Citizens Redistricting Commission (Commission) in the
November 2008 General Election. Now YOU can apply to serve on an
independent Commission that will draw district boundaries for the
state Senate, Assembly, and Board of Equalization.

The official Web site of California's new Citizens Redistricting
Commission is www.WeDrawTheLines.ca.gov.

At www.WeDrawTheLines.ca.gov you will find:

- Application and selection process details
- News and program updates
- Regulation and public meeting information

WeDrawTheLines.ca.gov is where you can apply for the commission
during the application period: Dec. 15, 2009 - Feb. 12, 2010.

LET'S MAKE SURE TAXPAYERS ARE REPRESENTED
IN THIS IMPORTANT PROCESS!

For more information visit Visit our site at http://www.HJTA.org

HALLELUJAH! Mortgage Fraud Scamsters Finally Arrested (just 5 years too late).

Thu, 19 Nov 2009 21:37:31 -0600

Here's today's update "Seven Accused of Defrauding Investors of Millions"

HALLELUJAH!!!!

If I sound ecstatic it's because the biggest fraudsters in our area have finally been charged! These three, Montecastro, Duncan and McLeod started their mortgage fraud scheme in Murrieta in 2004. Our association and our chief counsel started documenting the problem late that year. We took it to the District Attorney, the FBI, the Dept. of Real Estate, the Attorney General, local law enforcement, lenders, etc. - and nobody NOBODY would give us the time of day.

This scam was the incentive for our Association (SRCAR) to join our neighboring Association (IVAR) in a joint fraud task force with the Giardinelli Law Group. This effort has now expanded to include Ventura County, who had started their own, and Orange and San Diego County associations. We are trying to get our state association to at least give us a forum to educate other Realtors, lenders and the public about real estate fraud.

As Attorney Richard Ackerman puts it - 'earlier intervention would have prevented a lot of damage to both investors and the community.' These people operated unimpeded for at least three years, involving hundreds of homes throughout our valley. This spawned numerous copycats who saw that there was money to be made and no apparent consequences.

Their early scheme involved the over-bidding by $50,000 - $100,000 on homes, bringing in fraudulent appraisals, taking the excess at COE and then sticking the unwary buyers with the result. Often they preyed on the unsophisticated and found a trusting audience in their fellow Filipino community. Many Buyers purchased multiple homes with the understanding the Stonewood would help them make the over-payments until they could refinance in the rising market. Yeah, like that actually happened.

These severely overburdened homes started the collapse in our community in late 2006 yet the fraud continued. As the economy headed south virtually every one of the hundreds of homes they had caused to be purchased went into foreclosure. As they had focused on certain neighborhoods,it was not unusual to see 8 out of 10 homes on a single street vacant and blighted as a result.

5 years later, fraud is still with us and has morphed into other avenues to follow the trail of opportunity. But at long last there may be justice for these early perpetrators who played a large role in the early demise of our market.

Here's to justice finally served. Helooooo Bubba !

For the complete article, please go to: Charges Filed in Major Fraud Case.

Criminal charges have been filed against James B. Duncan, Hendrix Moreno Montecastro and Maurice McLeod, three Riverside County businessmen who allegedly orchestrated a major securities and mortgage fraud that drove many investors to financial ruin in California and Arizona.

The defendants allegedly created a complex network of companies, the chief of which were Pacific Wealth Management (which has no relationship to the company of the same name in San Diego), Stonewood Consulting and Total Return Fund.

He said while the District Attorney’s complaint concentrates on securities fraud, the U.S. Attorney will file a separate criminal complaint accusing the defendants of mortgage fraud.

Richard Ackerman, an attorney representing 85 alleged victims in a civil lawsuit against the defendants, said “It’s about time” the DA and U.S. Attorney made the move.

“What my clients wanted from day one is exactly what’s happening today. They wanted to create enough pressure on law enforcement so these people would be prosecuted and put away for a long time for destroying people’s lives,” Ackerman said.

The defendants allegedly persuaded investors to buy multiple homes and then broke their promise to continue paying the mortgage payments and allowed the properties to go to foreclosure. Ackerman contends that this scenario involved at least 250 houses in southwest Riverside County and contributed t the tremendous loss of home values in the region.

Ackerman said he believes earlier intervention would have prevented a lot of the damage to both investors and the larger community.

At the NAR. No More 2nd Appraisals for FHA! Comm. Stevens Speaks out.

Sat, 14 Nov 2009 18:37:08 -0600

Lots of good events going on at NAR. I'll let you know what we did at the Land Use, Property Rights and Environment Committee yesterday and comment on our Government Affairs Directors meeting this morning as well as the very entertinaing and enlightening Legislative Forum featuring Bill Press and Mike Murphy. But today at noon we spent 'An Hour with the FHA Commissioner'.

It's amazing the difference it makes when you have somebody in a position of authority who actually knows what they're doing as opposed to putting a bunch of bureaucrats and political hacks in charge. Commissioner and Under-Secretary of Housing Dave Stevens is one of us. Just like in the state of California we finally got Jeff Davi in place to help straighten out the Dept. or Real Estate, Realtors should consider ourselves lucky to have Dave Stevens minding the store at HUD.

After hearing the apologists and sycophants discuss HVCC yesterday, it was gratifying to have a discussion with somebody who listens and who, as Pres. McMillan said, 'Gets It.' According to Charlie Mac, the FHA & Stevens has been a 'solid partner'.

Speaking before a packed house, Stevens gave a brief history of the FHA. Created in 1934, the FHA came into existence during circumstances very similar to where we are today. Stevens cited the fact that the FHA had grown kind of unpopular in recent years because they had no 'sexy' products, they insisted on a down payment, they did 30 year fixed loans and they insisted on documentation. As a result, their market share sank to around 2% from 2002 thru 2006. However, last year they wrote about 25% of the loans out there and this years percentage will be even higher. They also wrote over 80% of loans for first time buyers, 51% of loans to Black buyers and 45% of loans to Latino buyers. Fannie & Freddie combined only managed around 25% to that same demographic.

Stevens said that there would be no mortgage market today if FHA hadn't been in place to fill the gap created by the collapse of sub-prime lenders. And that even though FHA's capitol is eroding as a result of the current crisis, they have neither requested nor accepted any TARP or other bail-out funds and their balance sheet is still strong. He stressed that the FHA will not be the next sub-prime or GSE because the FHA focuses on buyers for whom a purchase is shelter, not an investment, not a speculation. The people who buy a house to mark their kids growth on the wall, who plant a garden, who take pride in their home and their neighborhood.

Not that the FHA has a problem with investors - in fact without them the market would not have recovered to the point it has today. He did not elaborate and was not questioned on the possibility of doing away with the 90 day flipping rule or on expanding the number of properties that one investor can own saying only that each buyers credentials must be weighed on it's own merit.

He credited discussion with Charles McMillan with swaying FHA policy regarding HVCC implementation saying they realize the importance of the independent appraiser and are concerned about the proliferation of AMC's, especially those owned by major lenders. He said they intend to apply the principles of HVCC as it was intended, not as it has actually been implemented. Along those lines he also announced that effective Monday there will be NO MORE 2nd appraisal requirements for FHA. That he also credited to Pres. McMillan. That's a major step for FHA and one that should be welcome by our members.

He also gave kudos to his boss, HUD Secretary Shaun Donovan, as being a true 'rock star' and visionary who also 'gets it' about the need to stabilize housing to lead the way in this nascent recovery. He also gave great accolades to the Realtor community for pulling off the homebuyer tax credit not just once but twice this year - once during its initial passage back in March and again just 2 weeks ago. He said that as recently as 2 months ago he would have bet there would be no extension and certainly no expansion - but with the active lobbying efforts of NAR and the massive (550,000+) letters and emails to congress, we pulled off an upset against long odds, against the media and other pundits, and we should be extremely pleased with out efforts. But don't stop there.

It's always nice to have somebody in authority tell you what you want to hear. It's even nicer when they mean it. Stevens says he's not in the government for the long haul - just to help fix a problem and then he'll be back to selling real estate. I hope he means that too. He's too nice a guy to stay in politics long.

At the NAR. Dr. Yun Prognosticates on Housing Recovery.

Sat, 14 Nov 2009 00:48:29 -0600

I always enjoy listening in when our Chief Economist Lawrence Yun prognosticates. Dr Yun has developed a little sense of humor during the past few years, and while not nearly as eloquent or entertaining as David Lareah in his heyday, Yun is able to translate the numbers to his audience much better than 3 or 4 years ago - even though the numbers aren't nearly as entertaining. And he's believable. He was recently named one of the countrys 10 most trusted economists by USA Today. I'll take trust over entertainment any day.

According to Dr. Yun this morning, aided by the home buyer tax credit, the outlook for housing and the economy appears headed for a sustainable recovery. "Things are looking much better". The projections are enhanced by a tax credit expansion to more home buyers through the middle of 2010. “Given the success of the first-time buyer tax credit to date, and the need for qualified buyers to continue to absorb inventory that will include additional foreclosures over the coming year, we are hopeful about the impact of the expanded tax credit because it will stabilize home prices,” he said. “In fact, the credit is working better than first projected – it now looks like we’ll have 2.3 to 2.4 million first-time buyers this year.” He estimates that 350,000 - 400,000 of those would not have purchased right now - would not have gotten off the fence without the tax credit. Overall impact from the tax credit extension & expansion will give a 15% boost to existing home sales.

“We’ve seen a steady downtrend in housing inventory for well over a year and home prices appears to be in the early stages of stabilizing. We've also seen 8 straight months of seasonally adjusted sales increases. With expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5 percent in 2010, but with wide geographic differences,” Yun said.

Yun also talked about the difference between a tax credit and just letting prices drop further. To consumers the $8,000 credit looks the same as an $8,000 price reduction. But to the market, an $8,000 price reduction means a 4% drop in wealth or another $730 billion destruction of housing wealth and further negative economic impact. We've already lost $4 trillion in housing wealth from the peak and all the money the bubble made has been removed - in fact many markets are over-corrected at this point.

We are experiencing a bifurcated recovery - under $500,000 has been very resilient while over $500,000 continues to lag badly.

Yun also questioned whether first time buyers are used up or pent up? In 2000, pre-boom, there were 11 million renters who could qualify to purchase if they wanted to. Today there are 16 million. The demand remains and there are still a lot of people sitting on the fence hoping to buy at the absolute bottom of the market. The move-up and upper end markets also have a lot of room for improvement but that will wait until consumer confidence starts to rise again - it hasn't yet.

The recent increase in velocity stimulates economic stability, helps price stabilization and eliminates that fear factor which will lead to more demand as people realize things are looking better. With unemployment expected tom peak mid-2010 (although remain at around 10% for awhile) we will see a gradual decline in foreclosure activity as home values start to increase. That makes it easier for re-sets to stay in their homes and reduces the trend to strategic defaults. Bank balance sheets will improve and lenders will increase their activity both on mortgages and business loans.

“The size of the U.S. budget deficit is a concern going forward, and carries the risk of higher inflation. At this point, that risk appears to be restrained,” Yun said. The federal deficit has more than tripled this year to $1.4 trillion. The government must start showing they have a plan and the political will to curb that debt and start soon. They must do it judiciously in order not to shut off the recovery but they must act soon or our foreign lenders will start to get nervous, the money supply will contract and there will be a significant rise in interest rates to the 7% - 8% range, which would effectively shut down any recovery. Yun does not believe that will happen and does not see a 'double-dip' recession in the future.

You can download all of Dr. Yun's slides from this mornings presentation right here. Use them at your next office meeting and you too will sound like you have a clue.

Housing Market Trends and Outlook

At the NAR. HVCC Problems? Not according to the Government.

Fri, 13 Nov 2009 23:04:19 -0600

One of the seminars I attended today at NAR was entitled 'Managing the Risks and Opportunities of the New Home Valuation Code of Conduct (HVCC)."

Let me say at the outset, I sat through the whole friggin thing and didn't note any opportunities - unless you count aggravation as an opportunity. No shortage of risks, however.

NAR did a great job staging this - they had a panel in place that included spokesholes from FHFA, FHA, Fannie Mae, Freddie Mac and an AMC. Oh, and they had two Realtors sitting in for balance. In my humble opinion, if I had a load of the bullshit they were peddling today, I would have the healthiest, greenest lawn in Southern California.

Alfred Pollard, General Counsel for the Federal Housing Finance Agency; Jacqueline Doty, Directory of Collateral Policy for Freddie Mac; and Mark Johnson, COO for LSI (and Appraisal Management Co), started the process with brief statements on why the program was started (to combat fraud) and how well it's working. As Mr. Pollard stated - 'we have experience a systemic event for the financial markets, primary and secondary lenders, Realtors, institutional lenders and appraisers - all of those industries are on the table as we determine what comes next.'

It was interesting to note that the one entity that he left out, the one he happens to work for, wasn't included as being on the table - THE GOVERNMENT. The one institution central to the whole fiasco is the only one not up for evaluation and found wanting. In fact, these sanctimonious bastards are now sitting in judgement of the rest of us and determining how they can keep us from running amok again. Ain't that special.

Our Realtor panelists, Steve White, owner of two large Keller-Williams offices in LA; and Penny Triplet, a Realtor and appraiser from Ohio, stated the litany of complaints that you are all familiar with. Delays, incompetence, bad appraisers, out of area appraisers, higher costs to customers, lost transactions, lack of portability - you name it, they brought it up.

The government people claimed to be listening but they were just dancing. Time and again they quoted passages from the 6 page HVCC document - well this is how it's supposed to work; well, this is what it says; well that's another of those myths; well this is how you're supposed to work through that. Basically they acknowledged that 'there might be a few bad actors in the group but this HVCC has solved a lot of problems and is a wonderful thing.'

Oh, and if you thought it was scheduled to expire in June of 2010 - think again, It's in place until next November and there ain't nothing you or (NAR President) Charles MacMillan or anybody else can do about it. Your opportunity is to learn how to work with it because it's here to stay. Even after the current HVCC expires, some form of the bureaucracy that has been set up to administer it will continue because, like any government program, once born it never dies.

As if the moderator knew the Q & A might get testy, she decided that rather than take questions from the floor, she would just take questions submitted in writing. That lasted about 15 minutes until she could no longer ignore the line of Realtors standing quietly at the microphones waiting to ask questions.

Still no straight answers were forthcoming. Realtors were advised to report bad appraisers - that is if you can figure out who they work for or if the AMC or the lender cares enough to return your call (after 18 months, the office for reporting bad appraisers still hasn't quite been set up but it's coming soon). Realtors are allowed to talk to appraisers and even give them comps, of course provided the appraiser even bothers to call you or come out to your city or doesn't report you for applying undue influence by giving them accurate comps. If you get a bad appraiser you can request a do-over, of course it will be done by the same guy whom is now pissed off and never mind that the delay might cost you the deal. If it's so bad your buyer switches to another lender of course the appraisal should be portable (like you'd want to port that crap) unless the new lender doesn't want to accept it or it's from an appraiser that's not accredited by their AMC, in which case your client will get to buy a new one and hope it's better than the old one. You've got an appraiser from 200 miles away? Or even from another state? Jeez, that's not supposed to happen because the HVCC says it's not so it can't be. That's just anecdotal information. The Freddie Mac rep said complaints to her office are waaaay down since HVCC. Complaints from appraisers that is. Turns out they don't take complaints from Realtors unfortunately.

One Realtor summed it up perfectly - 'The government appears to think the problem in under control. Realtors think the problem is out of control. How do we get the two sides together?

If todays panel is any indication, we don't. Hang on kiddies - it's gonna get worse before it gets better. We're from the government and we're here to help you.

Friday Funny - Statutory Rape?

Fri, 13 Nov 2009 22:01:34 -0600

A legal question?

Is this statutory Rape?

Or just a moosedemeanor?

Not So Funny Friday - A Tribute

Fri, 13 Nov 2009 09:53:49 -0600

A Small Town Veterans Day Parade - Murrieta CA

Wed, 11 Nov 2009 19:33:36 -0600

The City of Murrieta held their 2009 Veterans Day Parade and Groundbreaking for their Veterans Memorial today. It was a Chamber of Commerce day, hazy skies keeping the sun from blistering the thousands of people lining Washington Avenue while more than 80 parade entries honored our Veterans. Vintage cars carried vintage Veterans, dignitaries paid tribute, the La Mesa Warbirds swooped overhead, there were motorcycle veterans, submariners from the silent service, marching bands, color guards, Boy Scouts, Cub Scouts and Girl Scouts by the troop.

It was my privilege to be one of the parade announcers this year.

Veterans marched, flew and rode by. Some in wheelchairs, some on crutches & canes, some with as regal bearing as when they marched into battle 65 years ago or more.

Members of the US Submarine Veterans paraded a model of the USS Bonefish. (SS-582), the last conventionally powered submarine in the US Navy. Decommissioned in 1988, this model is 1/10 the size of the 219' Bonefish, which carried a crew of 84.

3 Bands and several marching groups sported color guards and precision flag movements.

Among the marchers today, which included a 9' cow (Chic Fil A), an 11' Lake Monster known as Thunder, twirlers, karate kids and a Clydesdale named Diesel, Realtors from Tarbell Realtors in Murrieta fielded a marching unit which included several veterans who are braving the housing wars today. Always good to see Realtors® in the mix on a day like today.

Is it just me - or do veterans tend to drive vintage & classic automobiles a lot? The Model A Club brought their A game starting with A's from 1928 and a pair from 1930. There were Jeeps from 1943 and 1951, a '51 Dodge 3/4 ton M37, a 1959 black Caddie all chromed and finned just gleaming down the street. There was also a NASCAR tribute car, Emergency response vehicles, convertibles galore and they were all loaded with Veterans.

From the parade, we trekked over to Town Square Park for the goundbreaking ceremony for the Murrieta Veterans Memorial. To reach the event you had to walk past or through the Field of Honor. Erected the past few days by the Murrieta Rotary Club, the Field is 1,200 American Flags across the city park.

Every flag was purchased by an individual in honor or memory of a veteran. The moneys are being used to install the granite wall that will become the Veterans Memorial.

Prior to the groundbreaking, a pantheon of local dignitaries, Mayors, Council members, and guests thanked our veterans for their service. Grand Marshall and WWII Marine Corp Veteran Harold Craig was introduced and over 2 dozen WWII veterans were with him. Among the speakers, Murrieta Council Member and veteran Rick Gibbs gave an eloquent tribute to veterans including many in his family for whom he flew flags in the Field of Honor. Congresswoman Mary Bono-Mack also praised the veterans telling the story of her father, also a veteran who died just last year, who returned to marry his sweetheart against long odds.

In this photo Mary Bono-Mack pays tribute to our armed forces as hundreds of veterans, dignitaries and townspeople gathered against the backdrop of 1,200 American Flags in the Field of Honor.

Overall not a bad day in our little corner of the world. Our hearts went out to the recent casualties at Ft. Hood, great respect was given to those who protect us today, and great tribute was paid to those who have taken up that duty in the past.

Our town is not as small as it used to be - but today the town turned out en mass to celebrate, to honor and to have a few hot dogs and rub elbows with the Mayor. It was almost a Groundhog Day kind of event and everything played out beautifully. The parade started on time, nothing broke down, the horses weren't (that) messy and the speeches were blessedly short.

The flags waved softly in a cool breeze and all was right in Murrieta.

Hope your day was good too.

By the way, there's a few more photos at: Murrieta Celebrates Veterans Day.

See you at NAR tomorrow.

Think our RE markets are bad now? Stand up now, the hour is late! December 2009 the US becomes a puppet regime: Game over.

Tue, 10 Nov 2009 16:53:31 -0600

I'm amazed (well, not really) that more people haven't sounded the alarm on this. The climate change mantra has people lulled into somnambulence and we are gratefully exchanging our freedoms for a government dictated level of subsistence.

Via Mike Michaud (North Texas Help-U-Build):

Yeah, right.

What could the Copenhagen Conference on World Climate Change have to do with our real estate markets? How will this make the US a puppet regime?

I found this very educational and I think everyone needs to look at this critically. See what the world is up to and how our President and Congress are happily drinking the kool-ade.

We lose our autonomy about how we live, where we live, what we live in. This isn't rhetoric, its in the accords. There is no voting, not elections, no representation. It is absolute. I've joked before the presidential elections about this administration issuing breathing permits. And if you don't toe the party line, yours just might be revoked. Come to find out, its getting to be real, on a world-wide scale and its targeted primarily at the US.

I wish I could say that I don't believe that any US citizen would go along with this stuff, but many do without thinking about it. They swallow the by-line, the sound-bite but don't look at what is really involved or behind the push.

There is a battle for individual freedoms and individuals are losing, big time. And like the frog in the pot of water, we're slowing being cooked to death by the warmth of the water, all the while the temperature is being turned up by those on the left.

Screw the individual, we don't count. What counts is that "we" collectively survive, all the while making each and every one of us drones on the "farm". And by farm, I'm referring to Animal Farm.

Read it before its too late.
Mike Michaud,

Builder of zero-energy homes Texas and Oklahoma -

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North Texas Help-U-Build

Real Estate brokerage services for North Texas Residential and Farm, Ranch & Recreational Properties and developments.

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Building Moratorium Defeated by Grassroots Effort (for now). Pray for Rain.

Tue, 10 Nov 2009 15:10:36 -0600

Last evening the people of our community spoke and, for a change, somebody listened. That somebody, Rancho California Water District, had proposed a BUILDING MORATORIUM by eliminating eliminating the issuance of water availability letters and the installation of new water meters. That would have deleteriously impacted residential and commercial development in the City of Temecula, some in the City of Murrieta, the Wine Country and other unincorporated areas including the vineyards and avocado and citrus groves.

The effort brought out am avalanche of community response, hundreds of letters and emails generated by the business and Real Estate community, and a parade of speakers in opposition to the proposal - a true Grassroots effort. City and County leaders, developers, wineries, Realtors, attorneys business owners and 'just plain folks' spoke out against this poorly conceived and ill-timed matter.

The outpouring was so large that RCWD had to bring in workers to direct traffic in their lot and post security. As one Director noted, there were more people assembled last night than they've seen in total in the past ten years.

The dog-and-pony show that preceded public comments included presentations from RCWD General Manager Matt Stone as well as representatives from the Metropolitan Water District and the Eastern and Western Municipal Water Districts. I suspect RCWD brought these folks in thinking they would bolster RCWD's position in playing up the water crisis. Unfortunately these representatives did just the opposite. They spoke of being 'under allocation', the positive effects that conservation measures have provided and the variety of projects underway and planned to address the shortage at the local and state level. Kinda takes the wind out of your sails when the people you get the water from poo-poo your whole rationale. As Eastern's GM told us - the problem is not No water but rather no CHEAP water.

There is no denying that California is experiencing a drought - a combination of natural drought caused by less rainfall and snowpack the past 3 years, and a regulatory drought caused by a federal judge responding to environmentalists concerned about the possible extinction of the Delta Smelt. This last aspect has actually contributed more to the problem than the lack of rainfall, leading to greatly restricted water flowing to 20 million Southern Californians and to the Central Valley.

The Central Valley of our state, often referred to as the foodbasket of the nation, has allowed over 200,000 acres to go fallow from lack of irrigation water, entire groves of fruit and nut trees are dying and unemployment is over 40%. New tiered water rate structures have boosted everybodies bills by 20% - 40% with more coming in spite of the fact that demand from our largest wholesaler - Metropolitan, has declined in each of the last four years.

Our water companies have borrowed a page from the oil company playbook - whenever there's a shortage, whether real or perceived, don't miss that opportunity to jack your rates. But as I told them last night, not even the oil companies are shortsighted enough to propose a moratorium on building automobiles. Our local economy is built around positive growth - shut that down, you shut down the whole revenue stream,the job market and critical city services.

The problem with the Director who proposed the moratorium, Jack Hoagland, is that he is being myopic to a fault. He is looking at the issue as if water is the only player in the game. He has consistently refused to acknowledge that he is surrounded by an entire forest as he focuses on a single tree, that water is but one tile in the mosaic that makes up our economic community.

The efforts of our cities, our EDC, our Chambers has been to support the businesses that are trying to hang on during these challenging times and attract new ones bringing much needed job growth to the area. Currently over 60% of our residents still commute to San Diego, Orange or LA counties to work. A moratorium is a job-killer for our community while chasing those jobs and tax revenue to nearby cities not subject to RCWD. It shuts off the spigot not just for water but for much needed jobs.

Last night five out of seven RCWD Directors got it. Thankfully.

But as they and other pointed out, we need an El Nino this winter, Colorado needs a lot of snow, and we as a state need to pass the recently enacted $11 Billion water bond measure next year to bring some long term relief to our over burdened water infrastructure. Otherwise this moratorium proposal may be revisited and next time we may not prevail.

If the meeting accomplished nothing else, it elevated the discussion to a whole new level and provided a good education to a lot of people who may not otherwise be engaged. RCWD is evaluating other alternatives now and a new dialogue has been opened between them and the community they serve. Let's hope we can all make the most of this reprieve.

Canyon Lake to local Businesses - Tax You!

Sat, 07 Nov 2009 14:12:21 -0600

Irony abounds. On the same day Los Angeles appointed a blue ribbon panel to study ways to reduce taxes and encourage business, the Canyon Lake City Council decided it was time to raise taxes, errr, FEES and singled out 'Professional Employees and Professional Licensees' for an additional tax, errr, FEE. (They went to great pains to point out in their ordinance that this is a FEE and shall not be construed as a TAX.) Whatever - the net result is if you're a professional licensee it'll now cost you more for the privilege of doing business in Canyon Lake.

Exactly why they singled out 'Professional Licensees' to hit up for more taxes, sorry - FEES, is anybodies guess. Maybe the city leaders just figured that's where the money's at since it apparently isn't in the city coffers and they need more. So they determined that in addition to the customary 'Business License Tax' that owners of every business pay every year, they were going to break that down even further to "protect the public health, safety and welfare as well as provide for efficient administration of the program". That's clever - invent an unnecessary program and then tax people to run it. These people may have bright futures in state politics.

Ryan Smith, IVAR GAD, board Counsel John Giardinelli and I have been working with the City to address the madness of this ordinance since July. We have held numerous meetings with city staff and counsel and, as of a month ago, had actually reached what we felt was an equitable compromise. Unfortunately the CL Mayor visited her hairdresser a few days before the most recent council meeting and the current Ordinance 121 revision was the result of that high level conference. (No, I am not lying).

From here on out, any 'Professional Associate or licensee' including, but not limited to, realtors, attorneys,beauticians, barbers, manicurists, dentists, dental hygienists, veterinarians, doctors, podiatrists and chiropractors get to pay extra to operate in Canyon Lake. It applies to 'businesses which have a fixed location within the city as well as those which do not'.

So if you're a Broker, attorney, doctor, etc. with an office in Canyon Lake, you will owe this extra fee for every licensee under you. If you are a Realtor from elsewhere and you list a property in Canyon Lake, they will send you a bill. They are unclear on whether they can bill your Broker for every agent in your office whether or not they do business in Canyon Lake but for sure you'll get a bill because of your sign. If you represent a buyer on a property in CL, they have no way of figuring that out so you can either just pony up the tax, errrr FEE because you are a fool, or you get a free pass.

I'm sure all the agents from San Diego and Los Angeles (& Murrieta and Riverside) listing bank-owned homes in Canyon Lake will just be falling over themselves to send in that extra payment.Their code enforcement person is going to have a full time job tracking down these signs, sending bills, stopping by offices to count noses and ensure compliance etc.

What? You say they don't have and can't afford to devote a full time code enforcement officer to this effort? Jeez, maybe it's gonna be a challenge collecting those payments from Ventura and the OC then. If they're lucky a few businesses in Canyon Lake might comply - everybody else will just give this program the respect it so richly deserves - doo-dah.

The City claims this is necessary for 'disaster preparedness and in the event of an emergency'. So by their logic, if your building is on fire, instead of calling the owner of record they could just call some random Realtor or hairdresser. If your business is being burgled, don't call the manager, just call somebody that does nails in the back stall or a random podiatrist. Yeah, that makes sense.

In summary, under Ordinance 121, the City of Canyon Lake has singled out 'licensed professionals' working in or thinking about working in the City for an additional tax, errr, FEE. They claim they need to do this for 'disaster preparedness and emergency contact', and they're counting, in large degree, on voluntary compliance because they don't have the manpower necessary to enforce it. They have invented an unnecessary program and want to charge you an additional fee to implement it.

At this point you may be wondering what the additional tax, errrr FEE is? $20. That's right, $20. One lonely Andrew Jackson. As a representative from their Chamber asked, why is the City willing to piss off some 300+ business' still hanging on in Canyon Lake over $20? If they're lucky, they might generate a few grand. Probably not. He told them straight out "You aren't listening!". He was right.

If there's any good news to be gleaned from this ludicrosity, they started out demanding $90 a head, they ended up at $20. Of course since the amount of annual increase is unspecified, they could decide to jack it to $90 next year now that it's in place.

Anyway, if you're thinking about dong business in Canyon Lake, you might want to check out the City's record on business friendly ordinances before you jump. Menifee, Lake Elsinore & Wildomar are right next door and they would love to have your business. And it won't cost you an extra $20 a head to do it.

You can read the full text of this ordinance if they every figure out how to post it to their website.

Cash for Clunkers - FAIL. Next up? Healthcare.

Thu, 05 Nov 2009 18:08:33 -0600

Jeez there are times I just hate to be right. Back in May I wrote about the much vaunted 'Cash for Clunkers' program and what the likely outcome might be in my humble opinion. Well, the numbers are in - no, not the governments numbers, the real numbers the government didn't want you to see that had to be obtained through the freedom of information act. It's that whole transparency thing, you know. And it's even worse than I thought. Let's take a look at some of those numbers, shall we?

Here's the fun facts about the recently completed 'cash for clunkers' program, another well conceived and soundly implemented government-run program. A new reportwas released by the AP yesterday using figures obtained under the freedom of information act. If the AP isn't careful with this kind of factual and statistical reporting they'll soon find themselves under siege by the White House ala Fox News. You can read the full report here: Cash for Clunkers - FAIL.

Of the 677,081 clunkers traded under the program it appears that about 15% got less than 20 mpg. 8,200 times, owners of high mileage Ford F150 pickups simply traded them for new F150's making it the most highly traded vehicle, followed by Dodge Rams and Chevy Silverados. Many of these vehicles had over 200,000 miles on them so the owners simply swapped. Yeah, they'll be buying again soon.

Of the estimated $3 Billion spent by the government, $562,000 went for vehicles that got the same or worse mileage than the trade-ins. Most of the trucks traded saw improvements of between 1 and 3 mpg, if at all. A total of almost $1 Billon went for this type of vehicle.

Trades into higher mileage vehicles like Corollas, Camrys, Civics, Prius' and Focus' rounded out the top ten and accounted for about $2 billion of the total. Those vehicles brought the average fuel economy for vehicles sold under the program to 24.9, up from 15.8 on the trade-ins.

So let's do some math.

Using round numbers, if your clunker got 15 mpg and you drove 12,000 miles a year you used 800 gallons of gas. The vehicle you purchased got 25 mpg so that same 12,000 miles only used 480 gallons. Good so far?

So the average clunker traded reduced fuel consumption by 320 gallons a year. That's pretty good, eh?

Assuming they got 700,000 of those rust-buckets off the road (actually 677,081), that saved about 224 million gallons of gas.

It takes about 5 million barrels of oil to produce 224 million gallons of gas.

That's about 1/4 of one days consumption in these United States.

At a price of $75 a barrel (give or take), those 5 million barrels cost $350 million.

So unless I'm wrong here somewhere, the program that this administration lauds as such a great success from an economic and environmental perspective, actually cost us $3 Billion to save $350 Million. That sounds like my wife at a Nordstrom's shoe sale.

Now line up like good like doo-bees because these same people want to sell you a health care program. I can hardy wait.

Of course that's just my opinion... I could be wrong.

Mid-week chuckle - a trip to the vet.

Tue, 03 Nov 2009 19:06:39 -0600

A woman named Judy brings a very limp duck, Cuddles, into her veterinarians office.

Judy lays the duck on the table and Nicki the Vet pulls out her stethoscope and listens to the birds chest for a minute.

Nicki the Vet shakes her head and says "I'm sorry, your duck, Cuddles, has passed away."

Judy was very distressed and wailed "Are you sure?"

"Yes, I'm sure. That duck is dead," replied Nicki the Vet

"How can you be so sure?" Judy protested. "He might just be in a coma or something. You haven't even done any tests for that."

Nicki the Vet rolled her eyes but turned and left the room.

Two minutes later she's back with a huge Black Labrador Retriever.

Judy watches in amazement as the dog stands on his hind legs, puts his front paws on the examining table and sniffs the duck from top to bottom. He looks at Nicki the Vet with sad eyes and solemnly shakes his head. Nicki the Vet pats the dog on the head and took him back out of the room.

When she returns she has a cat with her. The cat jumps down on the table and delicately sniffs the duck from bill to tail, stopping to lick one wing very gently. The cat sits back on its haunches, meows softly, shakes its head and strolls out of the room.

Nicki the Vet looks at Judy and says "I'm truly sorry but this duck is 100% certifiably a dead duck. A late duck. It is no more. It has departed."

Nicki the Vet turns to her computer, taps a few keys and produces the bill for Judy.

Still in shock over the loss of her duck, Cuddles, Judy takes a look at the bill.

"$220.00" she cries. "$220,000 just to tell me my duck is dead?"

Nicki the Vet shrugged and said...

Wait for it.

"My bill to tell you your duck was dead was only $20. The Lab report and Cat scan added $200."

(and that's without the public option)

Riverside County Releases 2009-2010 Annual Plan. Read 'em & weep.

Tue, 03 Nov 2009 17:57:06 -0600

County Assessor/Clerk/Recorder Larry Ward has just released his 2009-2010 Annual Report and it's chock full of all kinds of exciting stuff - and some not so exciting.

I'll just tease you with a few details but for the full scoop you've got to follow the link at the bottom to find the details.

For example, did you know that:

The Riverside County tax roll value (before exemptions) dropped 10.51% last year - from $242.98 Billion to $217.44?
There are 500,292 single family residences in the County worth $120,318,983,044. They represent 57.54% of the tax base with an average value of $240,498?
253,364 of those received a reduction in assessed value last year averaging $144,432 and a total of $36,593,784,694 was lopped off the tax rolls as a result? That's 15.44% of the total.
Indian Wells has 4 of the 5 largest homes in the county at 22,597; 20,499,; 19,188; and 18,404 SqFt. Palm Desert snuck in #2 at 20,667?
The Palm Desert place is assessed at $26,619,674 while the Indian Wells places are $16,611,951; 12,180,881; 11,935,337 and $11,736,743? (He doesn't say if they applied for a reduction in value last year).
There were 36,191 appeals last year, up from 12,330 in 2008 and 2,909 in 2007. Remember those days?
In Murrieta there were 19,113 homes re-assessed under Prop 8. Gross Value Assessment rolls dropped 14.92% from $11,885,525,613 to $10,112,353,803?
In Temecula there were 16,110 homes re-assessed. GVA dropped 11.33% from 13,537,557,997 to $12,003,546,129?
The top business in the County based on Business Personal Property was Abbott Vascular. International Rectifier came in at #14?

Well, there's a ton more great info available - the report runs to 40 pages of numbers, charts & graphs and a terrific summary of each of our cities. . You can find the whole shebang right here: Assessor/Clerk/Recorder 2009-2010 Annual Report.

Southwest Riverside County Young Professionals Network receives NAR Charter today.

Wed, 28 Oct 2009 20:41:30 -0500

The Southwest Riverside County Association of Realtors® Young Professionals Network received their official charter today from the National Association of Realtors®. The Young Professionals Network is a growing group of young career-minded real estate professionals across the country who want to stay abreast of the latest tools, resources and networking opportunities.

Recognizing that the average Realtor® is about 55, the average buyer is under 30, NAR started an aggressive recruiting effort under President Richard Gaylord from Long Beach. The program was officially inaugurated in October, 2007. There are fewer than 20 chartered groups In California with the state association itself just being chartered in September.

Connie Lynch, SRCAR CEO is ecstatic. “Our effort here really got its genesis in 2008 as a pet project undertaken by Chair-elect Wes Ives. Wes has been very supportive of this group and those efforts really paid off.”

“Their first meeting was in May of this year and the energy has just been amazing. Zack Smith, Dane Wunderlich and Luz Acosta just kind of took the ball and ran with it and today our meetings have 20 – 30 young professionals – even more at their mixers. This group constitutes the future leaders of our industry and our community. Our Association is very proud of the work they’ve done to get recognized.”

Chair Wes Ives was equally pleased to see this effort come together. “I think it’s just terrific. At a time when everybody in our industry is down, we’ve got these young people who are charged up and building good solid businesses. The real estate industry is undergoing some major changes today and these kids are going to be on the leading edge of what emerges.”

“Mentoring and networking are big components of what we are about”, according to 2009 YPN Chair Zack Smith. “Dane and I went to Sacramento in June for Legislative Day and while we were there we attended one of the first statewide YPN meetings and found there were hundreds of people just like us looking for this opportunity. The Association has been very supportive and we are really pleased to have reached charter status in just 6 months. We’ve got some great members.”

The S.R.C. Chapter of the Young Professional Network is operated in conjunction with the Hemet/San Jacinto Association of Realtors®. Membership in the group isn’t limited by age, more by mental age and members must be affiliated with the real estate industry – Realtor®, lender, escrow, home warranty, etc.. For more information on meetings and events, please contact SRCAR YPN at 951-894-2571 or visit SRCAR.org.. To find out more about forming chapter in your area visit: http://www.realtor.org/ypn

Gov Arnold to SF Assemblymember - FU?

Wed, 28 Oct 2009 15:18:53 -0500

In a nod to bi-partisanship, Gov. Schwarzenegger has sent a clear message to one his Democratic legislators. Gov. Arnie always includes a note attached to a bill that he signs or doesn't signs letting the bills author know why he is taking the action he did. It's usually a boilerplate note either congratulating them on proposing a bill that serves the people, or telling them to try harder next time.

In addition to his boilerplate note, he attached the following missive to a bill he didn't sign authored by San Francisco Assemblymember Tom Ammiano. It should be noted that Ammiano was a prominent heckler of the Gov when he attended the State Democrats Convention last month at the request of former Speaker Willie Brown. Among other taunts, Ammiano is reported to have called the Gov a 'liar' and shouted that he could 'kiss my Gay ass' as he walked out of the event. So here's the Gov's message:

Now that in itself is hardly newsworthy - except that some sharpie noticed another message embedded in the text. And it's not that hard to find - just one of those simple 'Read Down the Left Margin' kind of things. If you're having trouble seeing it, the message begins with 'F' and the second word is YOU.

When asked about the note, the Gov's office replied:

"My goodness. What a coincidence," said Schwarzenegger spokesman Aaron McLear. "I suppose when you do so many vetoes, something like this is bound to happen."

Silly stuff - and if you want to read what the San Francisco Guardian had to say about the matter (as if you can't imagine what the liberal blogs are saying) just click here: Arnold to SF - FU

Can YOU Handle The Truth?

Sat, 17 Oct 2009 19:30:22 -0500

So yesterday I get an email notifying me that 'The Truth' wants to be friends on MySpace. I was startled, to say the least, because I thought I already knew The Truth.

Maybe not.

It's a Zen kind of thing, knowing The Truth is out there... and on MySpace of all places.

I thought I'd found The Truth on ActiveRain a time or two, but it just turned out to be posts from Lenn Harley or Ken Cook - true enough but not The Truth apparently.

I haven't found The Truth on FaceBook or Twitter, although there's some funny stuff on there and I think some of it's true.

No Truth on YouTube or LinkedIn or Plaxo.

Certainly no Truth in Sacramento or Washington DC.

There are over 124,000,000 Google hits for The Truth, including one that lays claim to The Truth.com, but they're just an anti-smoking website that runs those edgy commercials. True maybe, but not The Truth.

I used to discover what I thought was The Truth with my friend Jack Daniels but I'd always forget it by the next morning - so it may have been an illusory truth, not The Truth after all.

Carlos Castaneda clamed to have found The Truth using mescaline & peyote. I tried that route once and got sicker than a dog and that's The Truth.

Since it was just spelled The Truth I don't know if it's The Cosmic Truth or The Truth and nothing but The Truth (so help me God). I suspect that The Truth would have a bolder signature - THE TRUTH - with trumpets and a drumroll when you click the link. I don't know.

I suppose I should just click over there and find out what the hell's going on with The Truth.

But to be honest - I don't know if I can handle The Truth. I'm a little afraid of The Truth.

Will it be The Honest Truth, The Ugly Truth, The Undisputed Truth, The Naked Truth?

Thank heaven it's the weekend - it gives me time to uncover The Truth, deal with The Truth and see if I can twist The Truth to my own purposes.

I'll let you know...

WATER & POWER. California politics at its depressing best.

Thu, 15 Oct 2009 19:40:28 -0500

When you start your day attending two meetings where the speakers apologize for being depressing, the rest of your day can only improve. That was my day today.

I started with an early morning meeting of the Southwest California Economic Development Corporation where we were treated to remarks by John Rossi, General Manager of Western Municipal Water District. Apologizing for depressing us, John presented a factual summary of where our state is waterwise and how the water districts are dealing with our current situation. Having toured the Northern end of our state water supply system last year from Oroville Dam to LA, and having written about the issue on numerous occasions, I believe that rather than being depressed we should see this as a call to action. As Rossi did when he encouraged us not only to use our resources wisely but to engage our legislators in recognizing the complexity of the issue and dealing with it comprehensively.

With over 70% of SoCal water deriving from the north, another 25% from the Colorado River and about 5% from ground water & desalinization, it's clear where the answer lies. Prayer. But in addition to prayer, the water department is also working legislatively through the current 'special session' to address both conservation and infrastructure issues. Until and if those solutions ever bear fruit, they will also continue to squeeze their customers. Oh, by the way, if those solutions do bear fruit, they will still continue to squeeze their customers. Why? Because they can. And any fix - even the inadequate Democrat proposals, will come with a big price tag that somebody has to pay for.

Here's a fun factoid. During the past year our primary wholesale supplier of water, Metropolitan Water District, has instituted rate increases of nearly 40%. These increases were designed to encourage conservation - a very admirable goal and one that will certainly help us deal with the problem. There's another 20% increase due in a month or two. Why? Because our conservation efforts have been so successful at reducing water consumption that Metropolitan has less revenue coming in to service their bond debt and fixed expenses. So they need to raise rates again because the first rate increases were so successful at changing our consumption habits. Damned if you do, damned if you don't. Is there a win-win in here anywhere?

Think our bills will go down anytime soon? The you should have been to the EWDC luncheon featuring Senator John Benoit and Assemblymembers Brian Nestande and Kevin Jeffries. The operative words here were also 'depressing' and/or 'frustrating' by turns, for the state's economic outlook, any chance for real reform and for the water picture.

Assemblymember Jeffries, who was appointed to the state special commission on water, remains hopeful that some compromise solution will be reached soon, possibly as early as this coming week. He bemoaned the fact that water has become so politicized that true progress remains elusive. While the party in power in Sacramento thinks the problem can be solved by merely conserving more and restoring the Delta, the minority view prefers conservation coupled with additional infrastructure to provide long-term solutions. Capturing and storing rainfall and snowpack for future use, channeling current water resources without adversely impacting the Delta Estuary, new dams, an alternative conveyance AND continued conservation are all part of a comprehensive solution.

Our current drought is caused in equal parts by nature and regulation. Our dams truly are down by 1/2 to 2/3rds as a result of rainfall & snowpack the past few years. It is regulatory by virtue of the fact that judicial decree has determined the rights of the Delta Smelt take precedence over 18 million water users, farmers and food producers throughout the central and southern parts of the state. There are also complex water rights issues with people at the watershed source and with environmental groups concerned about preservation of the Delta. It wouldn't be an easy fix even on a level playing field - given the way our legislature operates it's a wonder anything happens at all.

All panelists agreed that jobs are the answer for our state. "Not bigger government, not more taxes, more jobs", according to Senator Benoit. "Taxes up, jobs down, legislature ineffective", according to Jeffries. '450,000 jobs lost this year at an average $68,000 per, 150,000 jobs created at an average of $52,000 per - not good' according to Nestande.

Jeffries also pointed out that the party in power, regardless of which party, has shown they will do darn near anything to perpetuate that power. There was some disagreement as to whether term limits have been effective at making our state more governable but all agreed that term limits have resulted in shifting power from the people who should be accountable, (our legislators), to people who are not accountable, (staff and lobbyists). The people who make the decisions aren't around long enough to have to deal with the consequences of their actions so what's their motivation to work for the long-term good? (Please keep in mind that all legislators are not altruistic by nature. Some just love the power, some just love the perks, and some just want to have a lobbyist mistress who wears a thong).

Agreeing that reform must occur if California is to turn itself around in any meaningful and sustainable way, they admit that if the legislature is not prepared to reform itself then the public will have to do it for them. When asked about the prospect of that occurring through Constitutional Convention, Jeffries voiced some concern about what could result from opening that can of worms while Nestande opined that any result probably couldn't be much worse than the status quo.

Depressed yet? You shouldn't be. This is California politics at its best. The more you know, the better prepared you are to deal with it. If you're not at the table, you'll surely be on the menu. Sometimes you might be anyway. Of course that's just my opinion, I could be wrong.

Time Magazine vs The Realtor Party.

Wed, 14 Oct 2009 20:22:12 -0500

A recent issue of Time Magazine carried an article by The Curious Capitalist / Justin Fox entitled 'Get Homes Off Welfare" . I'm not sure if Fox really is a capitalist at heart, or if he's just curious about the concept. Either way he makes a semi-literate case against the housing industry in general and the governments support of same. He bemoans the fact that homeowners are 'at the receiving end of a truly staggering array of subsidies and tax breaks', hard to put a price tag on but 'clearly in the hundreds of billions of dollars a year.'

He claims that even with all this aid homeowners aren't doing so well and then trots out the old canards about real estate values falling by $4 trillion the past couple years and the millions of foreclosures and people 'booted from their homes'. Like that's somehow 'housings' fault. He bemoans the fact that 80% of mortgage loans this year are backed by the government and their minions Fannie, Freddie & Ginnie at lower interest rates than private market mortgages. He lumps in the Federal Reserve for good measure blaming them for artificially lowering interest rates by buying up Freddie, Fannie & Ginnie securities. All of this, according to Fox, puts taxpayers on the hook when things go disastrously wrong, as they so spectacularly have the past couple years.

He goes on to slam the $8,000 first-time homebuyer tax credit and then progresses to the mortgage interest deduction, property tax deductions and capital gains tax breaks , which he believes cost the government at least $100 Billion this year and every year. With nary a nod to the economic benefit and the hundreds of billions in revenue & jobs provided by housing, building and ancillary industries, he goes on to complain that the bulk of tax benefits flow to the upper end of the income spectrum and to the coasts.

Let me get this straight - Justin thinks homeowners aren't taxed enough and that too many breaks go to the wealthy and the coastal elitists. Hmmmm, I may have just figured out his position on capitalism after all. That's curious.

Then he posits that subsidies have a side effect that 'push us to buy rather than rent'. These dastardly subsidies not only push us to buy, but force us to buy more home than we can afford & drive prices up and that subsequently our homeownership becomes a 'ball and chain' if workers want to move where jobs are more plentiful. He says that subsidizing housing resulting in appreciating home values is good for sellers but not renters or first time buyers. Maybe he should peddle that claptrap to the 350,000 first-time homebuyers who have recently become homeowners thanks to this subsidy.

In fairness, every point Justin raises is valid. But as with so many in the media today, he appears to be in touch with only 1/2 the picture, the half that supports his agenda. Or maybe he was just on deadline and didn't have time to do an objective article, or he just thought this would be clever or something. Who knows.

He closes his article by stating the obvious - that rising prices are always good news for real estate agents, mortgage lenders and homebuilders. (Jeez, Justin, what might you conclude about our fortunes during the past 3 years of plummeting prices?)

This part I love. "These groups are powers in Washington. The National Association of Realtors gave more money than any other group to candidates in the last election ($4 million). Its 1.1 million members can do a lot of lobbying." Justin, you got that 100% correct right there.

Finally he refers to Dwight Eisenhower's caution against the 'military-industrial complex' by issuing a call-out to the 'real-estate industrial complex'. I love that. Sure maybe it's just little old Justin Fox, the Curious Capitalist, who has recognized that fact, but it's a start.

I don't know about you but when it comes to advocating on behalf of homeowners, or standing up for private property rights and supporting the industry that drives our economy, I'm damn proud to be part of the real-estate industrial complex. Except, Justin, for future reference, we call ourselves 'The Realtor Party'. Try to get it right if they give you any column inches in the future. Of course that's just my opinion... I could be wrong.

How to Buy a Bank Owned Home - Funny Stuff

Tue, 13 Oct 2009 13:10:26 -0500

This would be even funnier if it wasn't so painfully true.

FHA 90 Day Anti-Flipping Rule Under Attack

Mon, 12 Oct 2009 21:13:12 -0500

In addition to the Action Items summarized in the previous article, CAR Legislative Agenda Shapes Up, there was another Action Item that came before the 526th Board of Directors session on October 10, that being a motion from the Real Estate Finance Committee.

By way of background, here's a brief primer on how things happen at our state association level. Any member can bring forward an issue through their local association representatives for consideration at the state level. The matter is brought into the committee structure so that a decision can be made on whether the matter is appropriate, whether the impact is significant and what action should be taken. I mean, face it - Just because you've got a beef about a local lockbox issue or had a problem with some lenders short sale negotiator may not qualify the issue for consideration by a state committee.

If the committee determines the issue is of sufficient import to tackle it, it will be placed on the agenda for discussion along with supporting documentation. The committee will then determine what, if any, action should be taken.

Should they decide to recommend some form of action they will determine whether they will go forward with a request to SPONSOR a bill, SUPPORT a bill that's already in process or just ask CAR to devote some staff time to further research the most appropriate course of action. That recommendation, in the form of a motion or report, will then proceed from the originating committee to a policy committee, generally the Legislative Committee. That committee can decide to approve the committees motion, oppose the motion, or draft an amended version. One or both motions will then proceed to the Executive Committee where they will look at it, approve it for the general session agenda, draft an amended or competing version or, in rare instances, oppose the motion.

One such motion came before the session on Saturday having to do with the current FHA 90 day anti-flipping rule. Originally drafted in 2001, the FHA rule was intended as a consumer protection back in a day when FHA loans, especially in California, were the exception rather than the rule. Due to the FHA's unwillingness to keep pace with escalating prices, again especially in areas like California, the use of FHA mortgages fell to single digits by 2005 contributing to the widespread reliance on sub-prime and other more exotic financing methods.

Today FHA loans are becoming more the standard again with increased loan limits in our area. This is especially true for first time and other low-to-moderate range buyers, currently estimated to account for as much as 40% of todays loans statewide. The anti-flipping rule, originally intended to prohibit investors/intermediaries from acquiring cheap homes and simply 'flipping' them with no value added thereby driving prices up, doesn't really apply in this market. In fact the argument was made that investors play a very significant role in todays market buying abandoned and stripped foreclosures that would not qualify for an FHA loan to begin with. They rehab the home, often within 30 days, and then put a move-in-ready home on the market (at market price, not inflated). But 40% of buyers who might otherwise qualify for that home with an FHA loan cannot because of the anti-flipping rule.

As you might imagine there was substantial debate at every level of advancement for this motion. But when it came to the floor on Saturday it carried an almost unheard of prohibition - a recommendation from the Executive Committee that the motion be defeated. Why? Their stated reason had little to do with the particulars of the rule or the motion but a general caution that in todays political climate of increasing regulation, they simply didn't think this was a winnable fight. HONEST.

After about 45 minutes of spirited back-and-forth on the motion before the general assembly, members delivered a stinging rebuke to Exec. Not only was it determined that C.A.R. in conjunction with NAR 'SUPPORT' the elimination of the anti-flipping rule, an amendment was inserted telling CAR we want them to write a letter to the FHA Commissioner and others appropriate parties advising them of our opposition to the rule. NOW.

It's kind of fun to see the members get riled up sometimes. In an environment that at times resembles a convention of rubber stamp politics as usual, passion can carry the day. Enough of our member/Directors realize the impact this is having on you and your Buyers and decided political correctness and/or lack of balls be damned. This was the right thing to do and we're by God gonna do it.

Will it result in an immediate change? Not likely. But the message is being delivered. As we continue to define what is the new 'normal market', your Association of Realtors will be at the table assisting in that process. It was a proud moment to stand up and be counted.

C.A.R. 2010 Legislative Agenda Shapes Up.

Mon, 12 Oct 2009 17:58:55 -0500

On October 10, The California Association of Realtors in it's 526th session, brought forward a number of 'Action Items' that will result in forward progress and, in some cases, calls on C.A.R. to sponsor and/or support legislative action.

C.A.R.'s legislative agenda contains several ways to address issues. The call to 'SPONSOR' legislation is our highest level of action requiring a significant commitment of time and resources to accomplishing our goal. This generally means drafting a bill, finding a legislator to carry it on our behalf, and involves significant efforts by our lobbyists and members to ensure the success of the resulting bill. After a year where C.A.R. played a very successful defensive game, we are again going on the offensive in 2010 on behalf or Realtors® and our clients.

Additional levels of legislative involvement include 'SUPPORTING' a bill that has been drafted by others, 'OPPOSING' a bill, taking a 'NEUTRAL' stance, taking a 'WATCH' status on a bill, 'SUPPORTING OR OPPOSING PENDING AMENDMENT' or just deciding a bill is not real estate related.

From the Legislative Committee:

AA#1 calls on C.A.R. to 'SPONSOR' legislation to subject Appraisal Management Companies to increased regulatory control by the Office of Real Estate Appraisers (OREA). They currently appear to operate outside of any regulatory control. Further, while the stated goal was to keep appraisers and lenders at arms length (the purported cause of the housing meltdown, according to NY AG Cuomo), in fact most of the largest AMC's are owned by lenders. The HVCC accord between Cuomo and Fannie & Freddie is wreaking havoc on the industry, delaying or canceling sales and increasing costs for homebuyers and has interjected another level of bureaucracy and inefficiency into the process..

AA#2 calls on C.A.R. to 'SPONSOR' legislation to require lenders to accept a 'portable' appraisal at the request of the borrower. If your customer obtains an appraisal from one lender but wants to shop the loan, or want to switch to or from a lender mandated lender, they don't have to keep dropping $450 for another appraisal.

AA#3 calls on C.A.R. to 'SUPPORT' legislation setting up a program to use electronic scanning technology to filter title records for unconstitutional transfer restrictions and redact the illegal covenants in a way that does not destroy the original and does not add prohibitive costs to the process. A bill currently in process ignores the advancement of modern technology, would require all pages to be scanned visually for these covenants, and then would remove the offending passage permanently at some undefined cost to the customer. This is revisionist history applied to the housing market saying, in effect, no those restrictive covenants never existed. Yes they did and we've come a long way toward addressing the issues - let's not forget where we came from and who fought for those changes on homeowners behalf.

AA#4 calls on C.A.R. to 'SPONSOR' legislation to apply the so-called 'poison pill' of business and professional code section 10226.5 to 'loans' from DRE to other special funds. This provision, which has existed for years, triggers an automatic roll-back of DRE fees to 1982 levels if the state 'takes' or 'borrows' money from the DRE reserve. This year the state came up with a new euphemism for this theft calling it simply a 'loan' from one department to another. So we have to come up with a new response to their creative pilferage.

AA#5 calls on C.A.R. to 'SPONSOR' legislation to redraft the existing 'advance fee' statute contained in SB94. While we support SB94, the language defining 'advance fees' could be construed to apply to all manners of receiving or even contracting for payment before a service is performed. Under the current wording, even a listing agreement could be interpreted as running afoul of the law as it contracts for payment in advance of services being performed.

All of these activities come with a cost - your basic cost of political survival. When your dues billing statement comes out next month, please be sure to include your investment of $49 in the Realtor Action Fund. We're either at the table on these issues or we'll be on the menu. A seat at the table costs money.