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4 September 2010

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Lawmakers Ponder Commercial Real Estate Law

Jul 23 at 3:03pm by Clip Finder

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Source:  Wall Street Journal

A lawmaker in the U.S. House of Representatives has presented a proposal aimed at shoring up the troubled commercial real estate industry and members of Congress are interested.

The yet-to-be introduced legislation would authorize the U.S. Treasury to provide as much as $15 billion to $25 billion in guarantees on new loans to the sector.

The temporary program would aim to halt the slide in commercial real estate prices that is battering banks’ balance sheets and making it difficult for property owners to renew their existing financing.

Rep. Walt Minnick (D., Idaho), who plans to introduce the measure by Thursday with co-sponsors from both parties, said three senators are working on companion legislation in the upper chamber.

The plan is likely to face resistance from lawmakers trying to rein in spending. Minnick said he was still finalizing the details of the measure but expects to have the administration’s support.

“We anticipate that they will support our plan based on preliminary discussions we’ve had with [Treasury] staff,” he told reporters at a real estate forum hosted Wednesday by the U.S. Chamber of Commerce.

Under the measure, Treasury would guarantee bonds backed by small-balance loans financing strip malls, office parks and other commercial properties.

In exchange, it would collect fees in the amount of 2% of each underlying loan in the bond.

To qualify for the federal backing, the bond would have to carry an investment-grade rating and each underlying loan in the security would have to be for $10 million or less. The program would phase out after three years.

Commercial real estate financing has been on the skids and sliding for the last few years.  It followed the residential market’s downturn and property management companies and commercial building owners alike are struggling to keep space occupied while financing for renewals remains elusive.  Commercial mortgage loans have been as difficult for smaller companies to get as residential loans for consumers, and with new financial reforms now signed into law, there are many new rules commercial lenders must adhere to which could further narrow options for property owners.

 Minnick said the House Financial Services Committee would hold a hearing on his proposal next Thursday. He said Democratic House leaders had assured him the measure would get a vote in that chamber in September. However, the proposal must first be approved by the Financial Services panel.

The deep recession has sent delinquencies on commercial real estate loans soaring as high vacancies have dried up property owners’ revenue.

Meanwhile, trillions of dollars of commercial real estate debt are coming due over the next few years amid a crash in property values that is making it difficult for owners to sell or refinance. Commercial real estate prices have plummeted by 40% in some markets from the highs seen in 2007.

Large banks such as Wells Fargo (WFC), J.P. Morgan (JPM) and Bank of America (BAC) that aggregate commercial real estate loans into bonds have been unwilling to hold smaller loans, even for a short while, before packaging them for investors, an aide of Minnick said. The federal guarantee would spur them to purchase such loans, injecting liquidity into the market, the aide said. Community banks could use the proceeds to make new loans, helping to buoy prices.

The program would be overseen by a new board housed at Treasury that would set underwriting criteria. The Treasury secretary, the Federal Deposit Insurance Corp. chairman, the Federal Reserve chairman and other federal regulators would sit on the board, along with four industry experts.

Sens. Charles Schumer (D., N.Y.), Mike Crapo (R., Idaho) and Bob Corker (R., Tenn.) will soon introduce a companion measure in the Senate, Minnick said.

 

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My Take:   You’re better off running a small NY quick books services  company than an Eden Prairie MN property management  company right now.  The commercial real estate sector has not bottomed out according to some experts and the worst is yet to come.  You don’t need to look too far to see the evidence: Everywhere across the country commercial buildings and “space for lease” signs are rampant, and meanwhile small business owners, from the New York tax preparation accountants to the mom and pop dry cleaners are struggling to make rent.

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How Old Is Your Home Wiring?

Nov 16 at 8:08pm by Clip Catcher

Cited: Reality Times

House Wiring 1One of the biggest realities of their body must face is aging and we are not the only things that age.  Everything around us ages including our homes.  That means there are things that need replacing to make sure that our homes are safe.  However, sometimes a homeowner would look like to take care of their home and that can set them up for big problem as well as being dangerous.  One thing you do not want to collect is your home’s electrical wiring because it could cause a fire.  Electrical usage has increased since the 1950s by about 400% and if your wiring is that old you could be setting yourself up for a disaster.

If you’re tripping your main safety circuit box that could be a sign that you’re overloading the electrical outlets and an indication that an electrical contractor should examine your wiring. Oftentimes, homes are renovated several times without any electrical wiring updated. Yet, this is a part of the house that can cause huge problems if it isn’t kept up-to-date.

Outdated circuit boxes. When a home hits the 40-year mark the biggest area of electrical concern is the circuit breaker box. Zack Israel, owner of Mike Electric, says that when the circuit box becomes outdated, “it doesn’t do what it’s supposed to do.” He says that as the house ages, the brand of the circuit box becomes obsolete “and today, a new generation of improved boxes is being installed.” Israel cautions homeowners about the danger of not replacing an old and outdated circuit box. “If the breaker doesn’t trip then the wire might melt and cause a fire,” says Israel.

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Kitchen wiring upgrades. An area of an older home that typically needs upgraded wiring is the kitchen. “The kitchen is an area that always needs to be upgraded after 40 years. Several decades ago we didn’t have microwaves and all the appliances that we have today,” says Israel. He says that what can happen if the kitchen wiring isn’t upgraded is that when appliances are used, the circuit breaker trips or, even worse, it doesn’t trip at all. “So the kitchen is an area that you want to upgrade and bring more power to it,” he says.

The electrical code requires two circuits of 20-amps, 120 volts for GFCI (Ground Fault Circuit Interrupter) receptacles for the kitchen/eating area. However, more might be necessary depending on appliances being used.

Heavy-duty appliances need dedicated outlet. A common problem for homeowners occurs when there isn’t proper distribution of the electrical circuits. Israel says homeowners often don’t understand this. “Let’s say for example that [depending on the weather] a homeowner tries to use a portable air conditioning system or heater and plugs it into just any plug—and boom! there’s no power—it trips the circuit. This is common. People don’t know that they need a dedicated circuit for that kind of appliance,” says Israel.

Wire insulation cracks. Another big problem for older homes is that electrical wiring insulation cracks. “Especially in the ceiling lights, the heat from the light rises into the box and causes the wiring insulation to crack,” says Israel.

Homeowners can be overwhelmed when they decide to tackle the task of rewiring their home.  They may feel like it is too expensive and too much trouble to do.  While it is true that rewiring can be a major renovation, it also means that you may need to leave the home for a period time.  The reason being is that the electricity will need to be turned off.  Besides you really do not want the inconvenience of living with workers in your home.  However, the end result is that you will know that your electrical system is working properly and you no longer have a risk of fire.  This alone makes the expense worthwhile even with the temporary hassles.

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My Take: I know this is very true.  Whether you live in a house or a mobile home wiring goes bad!  I live in a mobile home and I purchased it used.  Come to find out within a couple of years, the previous owners had begun rewiring the mobile home.  Unfortunately, they never completed the job before selling it and they never told me about it.

Believe me; I would rather be participating in online casino gaming than trying to rewire my mobile home.  At least with casinos online, I have a chance to make money instead of just spending it and enjoyed it a lot more.

I did have to do it in stages though because I am disabled and I care for my elderly mother as well.  We could not afford to go somewhere else and hire somebody to come in and do the rewiring.  We did it one room at a time.  This also allowed us to spread the cost over several months.  I recommend this process because at least you reduce the danger a little bit each time complete a room.

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Government Educates Homeowners on Loan Rescue Scams

Nov 16 at 8:08pm by Clip Catcher

Cited: Reuters

KY Real Estate 1There is one quarter of Los Angeles as a fertile ground for mortgage rescue scams.  That is Sun Valley.  This sun-baked area of Los Angeles has a high portion of subprime borrowers with a sharp drop in home values as well as many Spanish speakers.  This makes it a prime location for the homeowner education campaign that was launched October 26 by the US government, local agencies and housing advocates to help stop scammers from swindling desperate homeowners nationwide.

Officials do not know how many scams have been perpetrated among millions of American families who have lost their homes or face foreclosure. But they do know that scams exacerbate the foreclosure crisis because borrowers lose precious time and money that could have kept them out of default.

Some of the places with the highest subprime loan and foreclosure rates also have the biggest scamming industries — like Los Angeles, where Mayor Antonio Villaraigosa rolled out the “Loan Modification Scam Alert” campaign with federal agencies like the Federal Trade Commission and the advocacy group NeighborWorks America.  I’m

In coming weeks, the campaign will go to other hard-hit areas like Miami, Florida, and Columbus, Ohio, and it will target those groups most affected — senior citizens, Hispanics, African Americans and Asian Americans.

While tighter regulation and law enforcement are expected to reduce scamming operations, officials say they expect the best results to come from the first line of defense — better educated borrowers.

“If you can stop people from going, then you don’t need to worry about enforcement,” said Eileen Fitzgerald, chief operating officer of NeighborWorks America.

Tom Syta, assistant director of the FTC’s Western Region, believes education makes a bigger dent against scamming than law enforcement “because when law enforcement steps in, the money is gone.”

NO MONEY UP FRONT

One of the most common complaints among rescue scam victims is over attorneys who collected money up front and offered guarantees of modification, only to deliver nothing.

Zulma Navarrete, an immigrant from Guatemala, paid an attorney $3,500 to get help reducing mortgage payments on her Los Angeles home. The attorney never came through, though Navarrete did get her payment cut in half by working with a nonprofit group and her lender.

California law now prohibits up-front money for loan modifications, but many continue to fall prey to the practice, often at the hands of the same brokers who sold them sub-prime loans in the housing boom.

In the new campaign, teams dressed in the colors of caution — yellow and black — fan out across neighborhoods and distribute fliers with the instructions to avoid anyone who asks for a fee in advance, guarantees a loan modification or says to pay them instead of paying the mortgage.

In Los Angeles, campaigners speak English, Spanish, Vietnamese, Chinese and Korean. And they encourage people to call a 24-hour hotline or visit the site www.LoanScamAlert.org for advice and to report scammers.

Martha Jimenez, a community counselor in Sun Valley, welcomes the warning against scams, but says the government and nonprofit groups have to do a much better job in coming to the rescue of borrowers in distress.

“They call us back, very angry, because they get no help,” said Jimenez. “Many have stopped believing in these pieces of paper.”

Jimenez tries to help senior citizens who mostly speak Spanish and whose adjustable mortgage rates reset.  Being reset are monthly house payments of $1500 that go to $4000 a month while their homes drop in value.  She then directs them via fliers to government and nonprofit offices that can help them.

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My Take: In a way, I can understand why someone scams a person who is rich.  I do not think it is right, but I can understand it a little bit.  But I cannot understand someone who cheats people who have barely enough money to survive on.  I do not know if think I ever will understand that.

If a person puts up their hard-earned money for construction estimating software to build their own house, you would think they’d be able to hang on to it.  Yes, I understand that most of the people that are being scammed purchased pre-built homes.  But some of them actually used blueprint software to get an idea of what they wanted in the first place.

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Home Sales on the Rise in LA County

Nov 16 at 8:08pm by Clip Catcher

Cited: Daily News

Home Sales 1In September, home sales increased by 6.4% in Los Angeles County compared with the same.  Only a year ago and they inched 2% above the number as sales for August according to figures that were released at the end of October.

The median price of an existing single-family home in Los Angeles last month was $351,680, up 3.4% from $339,980 the previous month, but down 6.2% from $374,920 in September of last year, according to the California Association of Realtors.

In Orange County, the median price was $496,790 in September, down 0.5% from $499,440 in August but up 0.2% from $496,010 in September 2008. Home sales were up 9.4% in September in Orange County, compared to the same month last year, and up 0.7% from August.

Statewide, home sales increased 2.1% in September, compared with the same period a year ago, and up 0.6% from the previous month, according to CAR.

“The market’s momentum continued in September, as many home buyers took advantage of the federal tax credit for first-time home buyers,” said CAR President James Liptak. “The success of the federal tax credit is clear. Nearly 70% of first-time home buyers report that the tax credit was the most important — or a very important — factor in their decision to buy a home.”

The statewide median price of an existing single-family home was $296,090 last month, up 1.1% from $292,960 in August, but down 7.3% from $319,310 in September of last year, according to CAR.

“A new milestone was reached in September, when five CAR regions reported positive year-to-year increases in the median price, the first such increase since January 2008,” said CAR Vice President and Chief Economist Leslie-Appleton-Young. “September also marked the seventh consecutive month of month-to-month increases in the statewide median price and the first single-digit decline in the year-to-year median price since October 2007, after 22 consecutive months of double-digit decreases.”

Statewide, the cities with the highest median home prices in California during August were:

  • Manhattan Beach, $1,502,000;Home Sales 2
  • Burlingame, $1,401,100;
  • Saratoga, $1,297,500;
  • Los Altos $1,275,000;
  • Palos Verdes Estates, $1,163,500;
  • Calabasas, $1,073,500;
  • Newport Beach, $1,050,000;
  • Los Gatos, $1,050,000;
  • Santa Monica, $1,025,000;
  • Cupertino, $950,000; and
  • Rancho Palos Verdes, $912,500

The cities with the greatest median home price increases in September compared with the same period a year ago were:

  • San Juan Capistrano, 40.2%;
  • San Rafael, 30.5%;
  • Moorpark, 29.8%;
  • Thousand Oaks, 20.7%;
  • Calabasas, 19.3%;
  • Lake Forest, 17.7%;
  • Walnut, 13.6%;
  • El Cajon, 13.5%;
  • Tustin, 13.1%; and
  • Big Bear Lake, 12.1%.

This is another indicator that the real estate market is improving and will continue to improve.  With the tax credit being extended for new homebuyers, the market will improve even more.

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My Take: Well, it seems that if you are interested in buying a home in California at a good price, you better by now!  On the other hand, if you are trying to sell your home in California it just might be a good idea to wait a little bit longer so that you can get a better price.  In fact, you can improve the sale price of your home by putting in new custom wood entry doors.  It is a known fact, that the first impression of a home is its entryway and a beautiful front entry door can make your home value rise.

As far as I know, the same type of increase is happening with Nyack NY real estate as well as homes in Piermont and Palisades.  I have heard that Nyack Riverfront homes are some of the most sought after homes in the area.

Now if you live in Minnesota, you might want to check with one of the suburban St. Paul property management companies to find out about what is available for sale or rent.  You might even check with the Edina MN property management company for more information.  I only mention this because things are different in every part of the country.

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Agent Tortured Due to Foreclosure Crisis

Nov 16 at 1:01am by Clip Catcher

Cited: Reuters/ABC news

Foreclosure Torture 1In Los Angeles, two loan modification agents were tortured because they were suspected of fraud by a couple who had been hit by foreclosure.  This happened as Los Angeles housing advocates were warning of mortgage rescue scams.  On October 26, authorities arrested Daniel Weston and Marianne Parmalee as well as three additional people who are accused of luring their two victims and tying them up in an office where they were held for hours and beaten.

Police were called after one of the victims managed to escape, said the spokeswoman for the Los Angeles county district attorney, Shiara Davila-Morales. The incident occurred on Wednesday in the town of Glendale, just north of Los Angeles.

Weston, Parmelee and the three other defendants each were charged with two counts of torture, two counts of false imprisonment by violence and two counts of second-degree robbery, according to a criminal complaint filed against them.  Weston, 52, and Parmelee, 51, both arrested last week and jailed on $1 million bond, shared a house in the suburb of La Canada-Flintridge that is in foreclosure, authorities said.

“The two allegedly sought loan modification assistance from the victims but believed that nothing was being done and wanted their money back,” a statement from the district attorney’s office said.  Davila-Morales added that the couple, according to investigators, believed they had been swindled.

Weston and another man, who previously served time for assault, are accused of carrying out the beatings in front of their three co-defendants, who prosecutors say had prior business ties with the two victims by having funneled loan-modification referrals to them.

Each count of felony torture, defined as inflicting “great bodily injury” for the purpose of “revenge, extortion, persuasion and for a sadistic purpose,” carries a maximum penalty of life in prison. Defense lawyers were not immediately available for comment.

One of the two men escaped their alleged captors and alerted police on Oct. 20. Both men were taken to the hospital and later released.

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Parmelee, 52, along with Mario Soloman Gonzales, 47, and Marissa Parker, 49, were arraigned at the end of October and face two counts each of torture, false imprisonment by violence and second-degree robbery.  According to authorities those three watched as Weston, 52, and Gustavo Canez, 36, allegedly beat and robbed them.

“Weston and Canez allegedly carried out the attack in the presence of the other defendants. The victims also were allegedly robbed of their loan paperwork and personal Tortured 1belongings,” said Davila-Morales in a statement.  Those men were arraigned October 26 and face the same charges plus additional weapons charges, according to the felony complaint filed in court.

Ironically, this case became public as Los Angeles officials and community groups began a national public awareness campaign to urge homeowners to be aware of bogus loan modification programs and report suspicious activity to authorities.  The campaign was started in Los Angeles because the region ranks among the highest in foreclosure rates nationwide, according to organizers.

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My Take: Desperate people do desperate things!  Some people just cannot handle the stress of losing their home and this is the result.  I feel sorry for those agents.  One thing is for sure, they will be more careful when going out to the people the next time.  Hopefully, agents that handle Houston TX real estate will not have the same problem.

A friend of mine who lives in Texas has told me the Houston foreclosure properties are available everywhere.  In fact, he said that the Houston foreclosures were actually slowing down and that he was actually looking at some of the Houston homes for sale.  This tells me that in some areas for closures may not be as bad as they want us to think.

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