I was interviewed and supplied data Friday for an article for the Tribune Media, which you can find in the LA times at http://www.latimes.com/business/investing/la-na-housing-tax-credit9-2009feb09,0,5148799.story , the Florida Sun Sentinel at http://www.sun-sentinel.com/business/sfl-0208housing-credit,0,278453.story , at The Swamp at http://www.swamppolitics.com/news/politics/blog/2009/02/housing_tax_credit_little_bene.html , and copied below:

$15,000 tax credit won't help low-income home buyers, experts say

The Senate measure offers the credit to anyone buying a primary residence. But buyers must earn enough to have $7,500 in income taxes -- $81,900 per year for a family of four -- to get the full benefit

By Ben Meyerson and Sarah Gantz
February 9, 2009

Reporting from Washington -- The Senate's proposed $15,000 tax credit for home buyers would boost the ailing housing market but do little to help low-income people who need it most, experts say.

The measure, which is part of the $827-billion economic stimulus plan that the Senate will vote on Tuesday, would offer the credit to anyone who buys a primary residence. But to take full advantage of the credit, buyers would have to earn enough to use it and spend at least $150,000 on a home.

As many as 1 million home sales could result from the tax credit, according to Mary Trupo of the National Assn. of Realtors. "By increasing demand and decreasing inventory, it'll help to stabilize home values and result in fewer foreclosures," she said.

But low-income people will not benefit, said Linda Couch, deputy director of the National Low Income Housing Coalition. "The bill is focusing a lot more of its resources on higher-income households and home ownership than it is on the lowest-income people and people really teetering on the edge of homelessness."

Since the money comes as a deductible tax credit spread over two years, home buyers must earn enough to have $7,500 in income taxes -- $81,900 per year for a family of four to get the full benefit, according to the housing coalition.

But if the home costs less than $150,000, the deduction is only worth 10% of the house's value, meaning that those buying the cheapest homes wouldn't receive the full benefit.

Alma Jill Dizon, a Realtor from Riverside, agreed that there wasn't much in the measure for low-income Americans. "From what I can tell, it's really going to benefit people who already have enough salary" to buy a house, said Dizon, who said she sells homes from $150,000 to more than $1 million.

Dizon said her market is dominated by older, three-bedroom, one-bath homes in need of repair. Those houses sell for about $150,000 to first-time buyers who don't have the savings to make a deposit on something larger.

"You have to owe enough in taxes in the first place" to take advantage of the rebate, Dizon said. "That's why it benefits people who earn more money and earn more on taxes."

But the tax credit could greatly help the housing market by making the more expensive homes in the area more appealing, she said. What once were multimillion-dollar homes in Riverside now are priced between $500,000 and $1 million, she said. With a tax credit, those homes -- many of which are on the brink of foreclosure -- are beginning to look more attractive to buyers.

"This isn't actually going to get a lot of people buying houses at the very bottom," Dizon said. "Who is going to start buying more houses is people in the middle and upper range. That can be good as far as staving off more trouble in those ranges, in those better neighborhoods."

But halfway across the country, in Cleveland, another Realtor, Ralph A. Vaneck could use a hand selling nicer homes. There, the median income is half of Riverside's -- $27,007 compared with $54,099.

"The non-foreclosure market is where the major help is needed -- that's the dead part of the market," said Vaneck, president of Westway Realty. Those homes are priced between $95,000 and $120,000.

People are more interested in purchasing foreclosed homes because they can get them for as little as $35,000, he said; 85% of his business comes from selling foreclosed homes.

The Senate measure expands an incentive approved last year -- a $7,500 credit for first-time home buyers that had to be repaid later. The House's version of the economic stimulus package renewed last year's provision and eliminated the payback requirement.

But the Senate bill goes further, making the credit available to anyone buying their primary residence, and doubling the eligible amount to $15,000.

Once the Senate passes its version of the stimulus package, a conference committee will resolve differences between it and the House bill. Then both houses will be asked to vote on the compromise.

Trupo of the National Assn. of Realtors sees hope in whatever the housing credit turns out to be, although Realtors favor the higher amount.

"If it's $15,000, $7,500, or somewhere in the middle, there is going to be a significant impact to the market," she said.

Helping the housing market get back on its feet is in the interest of everyone, said Jerry Howard, president and chief executive of the National Assn. of Home Builders. "Until you stabilize house values, you won't be able to stabilize -- let alone stimulate -- the economy," he said. "This is the kind of stimulus that ought to get buyers off the sidelines and into the housing market."

An Extra Kick in the Teeth at Foreclosure Time

It's a sad fact that desperate people are easily conned, hence the proliferation of scams in which promises are made to fix bad credit and keep home owners from losing their houses. But the word is out now that even lenders are in on the game. A study of foreclosures for people declaring bankruptcy has revealed a stunningly high number of instances where lenders added extra and often unexplained fees. While most were only for a few hundred dollars (which still totals millions of dollars in profit for lenders), some were in the tens of thousands of dollars.

Loan servicing companies also have their fingers in the pockets of the desperate. They can charge all kinds of fees and not send the bill until months after people get their discharge, meaning that these charges weren't approved of in bankrupty court.

It is up to the borrower, however, to examine and dispute the numbers. In one case, Wells Fargo argued that the debtor had the responsibility of verifying the fees even though the bank did not give any details until it was sued. Probably the majority of people are too beaten down by this time to put up much of a fight. And if it's only for a few hundred dollars, they might accept it, not realizing that they're part of a much larger trend (and some might argue, natural tendency) to kick someone who is already down. After all, who will stop it? Our legal system, which gives the best protection to those who can afford it? Ironically, MERS (the Mortgage Electronic Registration System) is now facing a class-action lawsuit for charging people 3-4 times the actual cost of legal services.

To see the article, click on the link below:

NY Times Article on Questionable Foreclosure Fees

Fires and insurance make it hard to close escrow...

An agent in my office told me yesterday that some clients of hers are having trouble closing escrow because they waited until the last minute (and the current raging fires) to try to get insurance on their new house. Whoops, a lot of companies are holding off on new policies in Southern California right now, even in areas that aren't in danger. For buyers whose loan lock is running out, this situation is real cause for stress. In the past, I've had clients who were able to get insurance at the last minute from California Insurance Specialists (www.calins.com) and told me that the rates were reasonable. I don't know what their current stance is, but they're worth a try if you can't find anyone else.

Are you SURE you want to rebuild?

This week has seen some dramatic geological activity in La Jolla, a gorgeous community just north of San Diego. Some years ago, I did some clerical work for a professor at UCSD and got to see surfers walking through the building, taking a short cut to the beach. What a life! But it turns out that there are some problems in the hills there. Back in 1961, some houses slid while under construction, but the city ultimately allowed the builders to continue. Now, those houses are worth serious money, and some homeowners are seeing their life's savings going down the hillside.

Most insurance companies don't cover landslides, and, in the future, the major companies probably won't even want to take on new policies in that area. So who's going to pay for the loss? Hmm, I foresee some huge lawsuits, but it may be hard to track down a seller from over 40 years ago who didn't disclose the original slide. Real estate laws were very different then, and a homeowner several streets over might not have felt the need to disclose it. The lawyers will more likely focuse on the real estate brokers, who will show that they had their clients get 3rd party natural hazard reports. Those companies will show that they released all information that they had access to... So then that brings us to the state, which can only do so much to produce geological reports. Oh, but wait, the CITY knew that there'd been a landslide and yet allowed the builders to go ahead...

So now unnamed city officials are vowing to help residents rebuild while the county assessor has announced that owners of damaged or destroyed properties can have their homes reassessed immediately (oh, great, at least they won't have to pay as much come November--but how do you reassess the value when, say, the house is going, going, gone, and the dirt with it? Or how do you reassess a property that still has the house but under 1/2 of the neighbor's land?). They're not talking yet about reassessing the rest of the neighborhood, which is looking really unattractive now.

Of course, it was the decision to continue building over 40 years ago that started this whole mess in the first place. Maybe they're just thinking that if they can get these homeowners back into houses that are approximately where they lived before, it'll stave off some lawsuits. We'll see who buys into this one.

LA Times article on La Jolla landslide

Jobs are Up even as Houses are Down

Some good news has come out: the Inland Empire is now ranked 3rd in the country for job growth. It was specifically the metro area of Riverside-San Bernardino-Ontario that qualifed for ranking among the Milken Institute-Greenstreet Partners Best Performing Cities 2007. The index takes into account long- and short-term employment, wage and salary, plus technology growth. This news item makes sense to me, given the people I've met over the past few years who have been moving with their companies to the area.

What has been hard on mid-level management who need to relocate was the dramatic rise in prices that we were witnessing up through last year. I worked with one buyer over the Internet for about 6 months before his scheduled move, and by the time he got here, home values had shot beyond both his means and what his company was willing to accomodate. Another buyer also decided not to take a new job in Riverside because, as he told me, they needed to hire someone who was coming from a more expensive area, and indeed, the person who did take the job was from San Francisco.

So for people relocating to the Inland Empire, the slowdown in the real estate market is welcome as it gives them a chance to make their plans, get to know the area, and find the right home. Moving a family is hard enough without the stress of an upward moving market.

PE article on job market growth
Milken Institute

What are the signs of a sale?

Due to the backlog of criminal cases in Riverside, I, like many people I know, was called to jury duty. After 2 days of weeding 2 panels down from about 140 to some 60 people, and then they started calling us to the juror box for questioning. One of the questions that the prosecutor asked me was, "How do you know someone is going to buy a house?" And I responded, "FICO scores and bank statements." He looked surprised, and when he pressed me about being able to see that someone is telling me the truth, I told him, "There are no physical signs," and he looked genuinely surprised. Looking back on the scene, I think now that he was looking for the clichés about home buyers that you always hear, how a presumably happy couple will touch each other in little ways, etc. But I wasn't thinking about wanting to buy a house, I was thinking of actually buying it.

My father is an educated man who worked hard all his life, and he always paid his debts. But even when he was earning a good salary, he liked to be comfortable and wore plain white t-shirts, shorts, and slippers (flipflops for you Mainlanders), and he drove an old Volkswagon bug for years. There were times when people wouldn't treat him well because they thought he wasn't well off, but he was never turned down for a loan and always bought what he intended to.

On the other hand, I've known lots of sales people, quite a few of them in real estate, who dress well and drive nice cars. They like to shop even when they don't have the money in the bank and their credit cards are maxed out. So just because a woman has a great manicure doesn't tell me that she have the wherewithal to buy a house.

When the market was hot, I asked for and got FICO scores and bank statements in order not to waste time in escrow with a buyer who couldn't close. And now that the market is slow, I also do so because, again, there's no point in opening escrow when no one can fund the loan. In fact, I do so whether I'm representing the seller or the buyer. My seller wants to see the evidence, and my buyer has to show proof to a seller that wants it. I need to see it from my buyer, so I know that I'm not wasting everyone's and my time. The numbers have changed in that lenders now require high FICOs and more down, but the principle remains the same: get it in writing.

Of course, people who are capable of buying can get cold feet and back out. But I saw this when the market was climbing, too. During the sellers' market, I saw buyers who were crazy about a house fall out of love with it inside of a week and bolt. Real estate is an emotional business, and the same buyer can show the physical signs of wanting and now wanting a house, experiencing both extremes completely. In this case, which is true? Well, both, yet ultimately this buyer doesn't buy. So I always say, "It's not over until the title lady sings," meaning the loan has funded AND title has recorded. The buyer actually bought, being financially able AND not having backed out. Then, and only then, do we have all the signs of a sale, and they weren't dependent on the buyer's appearance or body language.

Yard Art or Junk?

While we were in graduate school, my husband and I had the luck of being invited to someone's house where L.A. area sculptor Michael Todd, a friend of my in-laws, was installing a wonderful abstract piece in the backyard. Up until that time, I hadn't really seen any yard sculpture, per se, apart from the occasional mass-produced pink flamingo. I'd seen some gorgeous pieces in museum gardens but had never thought that we could do something like that. Unfortunately, we haven't yet been asked to foster parent a yard sculpture indefinitely, so we're still looking for something (should you have an extra!). We do have a metal dog to greet visitors outside the front door as well as a nodding bird with glasses. The bird is a funky work composed of old tools that a regular at the Riverside Farmers Market (Fridays, behind Sears, off Arlington and Streeter) solders together.

Some home owners, however, can't get enough of yard decorations. You know them, the ones who can't help but put in a dozen gnomes rather than just one (he'd be lonely!). It can be hard living next door to the tackiest house in town. But unless you have a vary controlling HOA, it can be expensive for both sides if a neighbor decides to launch a legal war over the matter. Let's face it, a sense of humor is cheaper.

And if you are also an overly decorative person, outdoors as well as in, you should reconsider packing up some of those cherubs should you decide to sell. There's a large house in a very exclusive neighborhood here that didn't sell precisely because it's just too kitschy to show. The MLS photos were enough to keep me away...

For an article on a neighborhood's legal battle over yard art, click on the following link:

Yard Art