Homes & Loans In The Forefront

Only in L.A. are all the things in this blog title possible to see in one afternoon. Well, sort of. My daughter wanted to see some star™s homes, so yesterday we made a day of it. If you enjoy watching humanity on parade, Grauman™s Chinese Theater is absolutely the place to be.

We started out there by looking at the stars on The Walk of Fame. While a sidewalk marker of Julia Roberts may be eye catching, the real show revolves around the people at eye level. There were wanna™ be™s, might be™s, and those that just want to be seen. You can go a block west, to the Hollywood Wax Museum and see very large candles that look frighteningly like Kobe Bryant, Snoop Dog or a host of other stars.

If shopping is more your thing, The Hollywood & Highland Center is just on the east side of Grauman™s. Personally, I™ll keep an eye on the parade of humanity while my wife and daughter shop. From there, it was off to the Hollywood Hills to the star™s homes. Through Google, we found a semi-reliable list of stars. If you want to drive by Ozzie Osborne™s front gate, you can. Ditto for Madonna. But really, it looked a lot more like a big, giant hedge row to me. Whether most of these people still live in the homes is anyone™s guess. However, if you want to find yourself lost in some beautiful areas of Los Angeles, it™s the way to go. After working up a serious hunger, we drove east to the Fairfax District, and home to Canter™s Deli. Canter™s is a very historic part of L.A. It™s famous for it™s patrons, food and, well, being Canter™s. Always wanting to try ethnic foods, I opted for the pickled tongue sandwich on rye. If you™re not Jewish, this might sound bad. I™m not, and it wasn™t. In fact, it was very good. My wife had pastrami, and my daughter had a lox sandwich.

All were tasty and the bread was bakery fresh. The one negative I would say was the price. Three sandwich lunches with waters and ice tea ran over $50. Given the number of other Jewish delis in L.A., I would probably opt for a different one next time.

Other than being a real estate/mortgage broker, if I had it to do all over again, I™d be a food and travel reporter. That way, I™d get paid to do two things I really enjoy. But since I™m not, I™ll just blog about it instead.

I took my family and some friends to Oak Glen yesterday for a day of apple picking and exploring. If you™re not familiar with Oak Glen, it is located in the lower mountains above Yucaipa. It™s an easy, scenic drive. On they way up, we came to a stop while a group of horse back riders crossed the road. That set the tone for a wonderful day. We started out at Riley Farms. The Rileys own several different apple related businesses on Oak Glen Road.  This stop was a family run, working apple farm. When we arrived, we were given all the apple pickin™ supplies we needed. These consisted of bags and an apple picking basket. From there, we were free to explore the grounds. What I found most interesting is that the Rileys live in a log home on the premises. The family and staff could not have been more friendly or helpful.  Along with various kinds of apples, there are also several blue berry and black berry patches. You may want to bring gardening gloves if you are going to pick these. The only drawbacks we found were the berries had been pretty well picked over, and the apples were still quite small. But given the amount of fun we had, it was all worth it.

From there, we ate at Apple Annie™s in Oak Glen. Like everywhere in Oak Glen this time of year, it pays to get there early. The line starts forming about 11:00. Apple Annie™s is famous for their fried chicken, and it didn™t disappoint. The restaurant is located in Oak Tree Village. There are several shops, vendors, and most importantly¦. the petting zoo. For $2, and an additional $1 for a cup of corn feed, we got to pet baby pigs, feed goats, sheep and emus. Once again, I was reminded what good, family fun is all about.  

 If you make the trip, let me know what you think.

OK, OK relax for a minute. No need to start hoarding water, duct taping your doors & windows shut or fleeing the onslaught of alien Obamas. This isn™t 1938, I™m not Orson Wells, and Obama really isn™t an alien. Although judging by the amount of hysteria over the last year or so, only one of those three disclaimers seems obvious. (Look at my photo and then Orson™s) And don™t worry, this isn™t some political rant all done up in either red or blue. Just for the record, I didn™t vote for Obama, nor do I support the œspend now & we™ll figure it out later school of economics.What this rant is based on is the utter ridiculousness and disrespect being shown for the office of The President. These are just a sampling of the kinds of paranoid propaganda I’ve heard in the last year. And isn’t propaganda is the stuff we always frowned on when used by Tokyo Rose ,Nikita Khrushchev ,or even our own beloved Joe McCarthy ? He even had an “ism” named after him.

Here we go:

1. Obama isn’t a U.S. citizen. Come on now. You mean to tell me the same government that can monitor every one of your individual cell phone calls, read a license plate from space, and fly planes with no pilots can’t substantiate a guy’s birth place before he became president? There were only TWO guys left in the running. Then again, do aliens have birth certificates?
2. Obama is a radical Muslim AND a racist Christian. WOW, that’s a lot of holidays to work into the Presidential calendar. And it’s almost as absurd as…
3. Obama is a Communist/Fascist/Socialist. HUH??? Now I am by no means a poli-sci expert, but I don’t think you can actually be all three of those, especially at the same time.
4. Obama was sworn in on the Koran. Hey Goober, I know you can enlarge that photo of the USC cheerleader, how’s about you do the same for the swearing in. In fact, Obama was sworn in on Lincoln’s Bible.
5. Obama’s health plan will subject you to a death panel. A death panel!! Really?? Someone’s been staying up late at night in Alaska watching the Twilight Zone marathon again.
6. Obama’s speech to school kids will be used to indoctrinate them. Ummmmm, just a thought here. You might have considered taking a moment to actually read that speech before you got your dander all raised. It was the same kind of photo op speech that every president I can ever remember has given to school kids. Anyone remember what George Bush was doing the morning of 9/11?

These examples, coupled with the WWF style shout downs during town hall meetings are what led to this posting. Whether you voted for him or not, whether you like or despise him, Obama holds the office of President of The United States. That office needs to be shown a helluva lot more respect than it is currently. As a people, we showed a lot more respect for it during Watergate, the Iranian hostage era, Iran/Contra, “Read My Lips”, Monica Lewinski and water boarding. It seems to me that we have a host of vastly more serious problems in this country than worrying about a man’s funny sounding name, the party affiliation he holds, or the color of his skin. I’m all for debate and compromise. There’s a lot about Obama’s policies that worry the hell out of me. But it’s really hard to discuss any of them when Tilda from rural South Anywhere is yelling incoherently during said debate. More over, how can I begin to debate ole’ Til when she’s convinced that Air Force One is now actually a space ship?

Don™t you hate when the people around you talk and joke during The National Anthem?  I sure do. To me, those are both signs of rudeness and stupidity at the least, and more than likely disrespect toward our country. I officiate high school basketball, and have the privilege of hearing The National Anthem 30-50 times a year. Sometimes, it™s a small child singing totally off key, sometimes it™s the standard Whitney Houston-Super Bowl version, and sometimes it™s an amazing version done by the home team™s pep band(Upland High™s gets me every time!). There are two things in common with every version. One is I get the goose bumps staring up at the flag on the wall just as the impossibly difficult part begins to build.. Oh, say does that star-spangled banner yet wave.O’er the land of the free ¦ It™s one of those moments that instantly makes me proud to be American.Unfortunately, the other thing that invariable happens is the good folks in the stands with ADD like symptoms (the ones still eating that big tub of Orville Redenbacher™s), feel compelled to yell out, whistle or otherwise draw attention away from the reason we all stand and face the flag. Because let™s face it, yelling out..YEAAAAAAAAAAAAAAAAAAAA!!! is far more important than doing something we so seldom do enough of, taking a moment to share in our patriotism of this country. So next time you are at a game, do me a favor. Save your yelling until The Anthem is over. You™ll have plenty of time to tell me how bad I suck DURING the game.

Micheal Vick absolutely deserves another chance…. at freedom. No doubt in my mind. He has paid his debt to society, and is free (therein being the key word) to do what he chooses with the rest of his life. Now, here comes the good part. Under no circumstances does he “deserve” another chance in the NFL. First of all, being deserving means you’ve done something meritous. I think we can all agree dog fighting isn’t that. Michael Vick chose to head up,foster and make money from a felonious enterprise,dog fighting. This  while making millions under the employ of the Atlanta Falcons. And then lied to his boss about it.

None of my agents can run a sub 5 second 40, nor do their jerseys sell in our lobby. But you can bet your sweet pig skin that if an agent ever brought  a fraction of that  kind of embarrassment to my company, I don’t care how many homes he sold, he’s not welcome back. Or as another example, what happens to your license if you get caught by your state committing a heinous felony? You’re probably looking to get your CFL (and that doesn’t stand for Canadian Football League) license. Because your Real Estate Department banned you for life.

Yes, I am a dog lover.Mine is asleep under my feet right now. But I’m not the PETA, throw fake blood on your fur, kind of fanatic. And I’m a huge lover of sports as well. What I’m not a fan of is stupidity, arrogance, manufactured contrition or self-entitlement. Off the field, I hope Michael Vick gets his life together. After all, he is a 29 year old young man. On the field, I don’t wish him bodily harm. However,I do hope he fails miserably.Then, and only then, will he  realize that he  blew an opportunity very rarely seen in life.

We need to have more investors in the market and we need them flipping properties. There, I said it. I know it won’t be long until the riotous crowds start descending on me. But before they do, let me explain. Investors aren’t the scourge of the earth. Well, at least not most of them. They are looking to buy an under-valued asset. No different than a stock or a bond fund. And here’s why investors are helpful in this market:

1. There are hundreds of thousands of REO and short sale properties on the market. Values will not be going up until demand at least equals supply. In the ever tightening lending markets, investors fill a void by paying cash. It’s very true that they may take a potential buyer out of a transaction, but that buyer should be putting offers in on multiple homes, thereby taking two properties off the market.

2. Investors buy up a lot of the very distressed (read: completely trashed) properties. These are units that, due to health and safety issues, can not be financed anyway. Investors buy these up cheap, and fix the inherent problems. At this point,the unit is now gone from total disrepair to some form of turn key for a buyer. That subsequent buyer will get into a home and not have to spend thousands doing repair work they would other wise need to. And I’m pretty sure the neighbor living next door doesn’t mind a lawn that actually has grass and windows not made of plywood.

3. Investors buy/sell or buy/rent repeatedly. One by one, that gets more properties out of the hands of the REO listing agents and non-responsive banks  we’ve all grown so fond of dealing with.

When you put all of that together,investors help stabilize the market. Since I see the agitated crowd starting to mill outside now, I will make one more point before the horse mounted,riot police descend. In an effort to quell investor purchases/flips ,FHA, Fannie Mae & Freddie Mac(the latter two having made repeated, brilliant decisions to the point of government receivership) have mandated that no property can get a loan on it if title has changed within the previous 90 days. In fact, an offer can not even be written prior to the 90th day. Hmmmmmm. That law might have worked really well 3-6 years ago,  BEFORE the appreciation horse left the barn.THAT’S the time investors needed to be reigned in. THAT was the time when demand far outstripped supply. THAT’S when everyone was on Easy Street. It would have made great sense to calm the market by making “flippers” hold their investments for 90 days. But in the market today, it makes no sense. If your house is worth less that it was 3 years ago, raise your hand. 1…2…1,453,312. I count fast. The point is, why take away a tool that can actually help stabilizeand start to appreciate an asset that you are either living in, or hope to buy? I think it’s time to conclude this post. It’s some what unnerving to see yourself burned in effigy.

We need to have more investors in the market and we need them flipping properties. There, I said it. I know it won’t be long until the riotous crowds start descending on me. But before they do, let me explain. Investors aren’t the scourge of the earth. Well, at least not most of them. They are looking to buy an under-valued asset. No different than a stock or a bond fund. And here’s why investors are helpful in this market:

1. There are hundreds of thousands of REO and short sale properties on the market. Values will not be going up until demand at least equals supply. In the ever tightening lending markets, investors fill a void by paying cash. It’s very true that they may take a potential buyer out of a transaction, but that buyer should be putting offers in on multiple homes, thereby taking two properties off the market.

2. Investors buy up a lot of the very distressed (read: completely trashed) properties. These are units that, due to health and safety issues, can not be financed anyway. Investors buy these up cheap, and fix the inherent problems. At this point,the unit is now gone from total disrepair to some form of turn key for a buyer. That subsequent buyer will get into a home and not have to spend thousands doing repair work they would other wise need to. And I’m pretty sure the neighbor living next door doesn’t mind a lawn that actually has grass and windows not made of plywood.

3. Investors buy/sell or buy/rent repeatedly. One by one, that gets more properties out of the hands of the REO listing agents and non-responsive banks  we’ve all grown so fond of dealing with.

When you put all of that together,investors help stabilize the market. Since I see the agitated crowd starting to mill outside now, I will make one more point before the horse mounted,riot police descend. In an effort to quell investor purchases/flips ,FHA, Fannie Mae & Freddie Mac(the latter two having made repeated, brilliant decisions to the point of government receivership) have mandated that no property can get a loan on it if title has changed within the previous 90 days. In fact, an offer can not even be written prior to the 90th day. Hmmmmmm. That law might have worked really well 3-6 years ago,  BEFORE appreciation horse left the barn.THAT’S the time investors needed to be reigned in. THAT was the time when demand far outstripped supply. THAT’S when everyone was on Easy Street. It would have made great sense to calm the market by making “flippers” hold their investments for 90 days. But in the market today, it makes no sense. If your house is worth less that it was 3 years ago, raise your hand. 1…2…1,453,312. I count fast. The point is, why take away a tool that can actually help stabilizeand start to appreciate an asset that you are either living in, or hope to buy? I think it’s time to conclude this post. It’s some what unnerving to see yourself burned in effigy.

Have you ever thought about buying a foreclosure on “the court house steps”? The process is a public auction that lenders sometimes hold at the county court house.  I recently attended one in Florida. Thankfully, if was held in a nicely air conditioned room. Florida, in late July, can be a bit on the tropical (read: so humid the mosquitoes can’t breath) side. But I must warn you, that road to riches is paved with some bus-sized pot holes.

I have worked with a local broker in Florida who was nice enough to take me along and explain some of the ins and outs. There were two glaring ones. The first is the property itself. When buying at any kind of auction, it is the biggest case of “buyer beware” you will ever encounter. You can be the lucky winner of a property that seems well under market. But (there’s always one of those, huh?), if you don’t do your homework, you may also be the lucky recipient of all kinds of previous tax liens, mechanics liens, IRS liens and various other hidden problems. You need to research these through a local title company, and possibly a real estate attorney. Then you have the physical condition of the property. Keep in mind, this is not only a home that was probably in some state of disrepair when the previous sellers left, it has sat for an extended period of time since then. Homes tend to die when left vacant. The roof, plumbing, electrical, appliances are but a few things that can rapidly deteriorate when a house is left vacant. Throw in mold, vandalism and vagrancy and you have a potential money pit.

The other gem in all this is the auction process. I was in a room with 40-50 other bidders, an interesting lot to say the least. Of all the people in the room, there were 5 or 6 “players”. Basically, these were brokers that had a lot, I mean a LOT, of investor money behind them. They all know each other and, to some degree, work in concert. To say most of them were anything but cordial to the rest of the folks in the room would be an understatement. Let’s just say that Southern hospitality was not a concept these folks were familiar with. So, if you as an eager, prospective home purchaser are interested in 1 or a few homes, know who you are going into battle against. You are not just bidding against those particular guys. You are bidding against them and all of their clients as well.

That is a short version of four hours spent in a public auction. There is money to be made buying property this way. There’s a bunch of money there. But, (there’s that pesky “but” again), if you are unfamiliar with the process, be very careful. You may end up with a nightmare instead of your dream home. Please have a look at this article. It will give you some more information: http://www.realestatewebmasters.com/blogs/gulf-coast-associates/5166/show/

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What does HVCC stand for, and what it is? Well, it stands for Home Valuation Code of Conduct. And it’s Fannie Mae & Freddie Mac’s (this does not appy to FHA)  attempt at sending appraisers to their rooms for being bad. The assumption is that because lenders/brokers and  appraisers had an actual working relationship, that appraisers would risk their licenses and give that lender the value needed to do a loan for a client. Did that happen? Of course it did.  There’s bad appraisers, just like there’s bad lenders,bad post men and so on. But appraisals are an opinion of a range of value, most generally given by a licensed,qualified appraiser.  The guy walking around your house with a little wheel on a stick isn’t Bernie Madoff.  And he probably didn’t cause the real estate bubble to burst.  But he is a convenient scape goat. Until HVCC became a reality, you most often had an appraisal ordered by either your lender or mortgage broker. And yes, there was this terrible thing called a  rapport established.  How dare two professionals try to work together to get your appraisal done.  In my years, that rapport didn’t lead to the 3 walled hovel down the street getting appraised at $400,000. It led to things like an appraiser  meeting a client after normal hours,looking at comparable sales to establish a general value before the appraiser  took your check for  $350, and things of that nature.

But now in the infinite wisdom of those with the least amount of it, when you order an appraisal, it is given to an appraisal management company. The theory is that by using an intermediary, those bad ole’ appraisers won’t be able to get away with their shenanigans anymore. ‘See the management company will then contact an appraisers on their “list”. The appraiser may be from the local area…maybe not. And almost assuredly, the management company’s knowledge of that appraiser is the resume he turned in, and a license search.  The management company will then charge you between $400-$500 in ADVANCE…on your credit card. Because obviously, an appraiser couldn’t be trusted with collecting a check at the door. Now here’s where it gets very interesting.

Remember in the good old days an appraisal cost around $350? Well now, for the right to baby sit appraisers, the management companies charge you more. And the appraiser(who, by the way, is generally self-employed) may get $200-$250 of that fee, for doing exactly what he used to get $350 to do. Hmmmmm. Guess what quality of work   and responsiveness you may see? And it gets better. Because lenders don’t all use the same management companies….here it comes……they probably won’t accept the same appraisal. Which means, if you decide you  want to go to a different lender, you have to pay  all over again.  In the words of  Homer Simpson….DOHHHHH!!!

The one silver lining in all of this. A bill, H.R. 3044,  granting an 18 month moratorium on the wonderful world of HVCC has just been introduced… Click Here  to read an article on it. Hopefully it will get appraisers out of their Time Out Chairs and back to doing appraisals like they should.