The Pending Home Sales Index, a forward-looking indicator, rose 5.2% to 79.4 based on contracts signed in July from a downwardly revised 75.5 in June, but remains 19.1% below July 2009 when it was 98.1. The data reflects contracts and not closings, which normally occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, cautioned that there would be a long recovery process. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” he said. “But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity.”

Yun added, “Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates, helped partly by the Fed’s very accommodative monetary policy. The loan underwriting standards are tighter, but home buyers can improve their chances of getting a loan by staying well within their budget.”

The PHSI in the Northeast rose 6.3% to 62.5 in July but is 21.1% below a year ago. In the Midwest the index increased 4.1% to 66.7 but remains 25.7% below July 2009. Pending home sales in the South rose 1.2% to an index of 86.3, but are 15.6% lower than a year ago. In the West the index jumped 11.6% to 95.0 but is 17.6% below July 2009.

The national index had fallen 29.9% in May and another 2.8% in June.

For more information, visit www.realtor.org. From RIS Media

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Roseboom is part of a growing number of adults logging onto social networks such as Facebook and Twitter to stay connected, according to a study released recently by the Pew Research Center’s Internet and America Life Project.

In fact, for adults 50-64 years old, the use of social networking sites have jumped by 88% in the past year, the study found. For those 65 and older, it has doubled.

The younger generation remains the biggest users of Facebook and other sites. But the report shows that seniors currently make up the fastest-growing group.

“It’s surprising to see just how fast they are growing,” said Mary Madden, senior research specialist and author of Pew’s study.

Orlando, Fla., grandmother Rosie Chapman, who only revealed that she’s older than 65, joined Facebook more than a year ago. Like Roseboom, she prefers to go online to keep tabs on friends and loved ones, especially her three college-age grandchildren. Neither she nor Roseboom, however, generally share their daily activities.

Chapman was struck by some of the spiritual comments her grandson posts. “I never saw that side of him before,” she said with a smile. “I’m so proud of him.”

For the study, a survey was conducted of 695 adults who were 50-64 years old and 518 adults who were 65 and older.

The Pew Center points to several factors that contribute to why older adults are logging on to social networks now.

-It helps bridge the “generation gap.” The social networking sites bring people of all ages together in one space. Roseboom and Chapman are examples of that.

-More social network users are more likely to reconnect with people from their past. These reconnections can be powerful support when people are entering another phase of their life, such as retirement or a new career.

-Older adults are more likely to be living with chronic diseases, and those with diseases are more opt to seek support online.

More organizations, such as AARP, that cater to older adults are promoting social media networks.

Jeff Johnson, AARP manager of Florida operations, said the nonprofit organization uses Facebook and Twitter, as well as e-mail and traditional mail to reach members. “Over the past year, we have noticed more and more people discovering Facebook,” he said.

For the first time, AARP included a session last year at its annual convention that focused on social networking. It turned out to be a standing-room only event. It proved to be so successful that a session is scheduled at this year’s convention, which will be held in Orlando next month.

In May, AARP also taught its volunteer leaders for the first time how to use Facebook and Twitter to advocate for older adults.

“There is a growing understanding” on how it can be used, Johnson said.

John Evans Henderson, 62, knew he needed to embrace Facebook and Twitter as he embarked on a new career. He’s taking classes and focusing his new business on design building, especially homes, that are both “green and healthy.”

The Maitland, Fla., man has two Facebook accounts—one personal and a fan page for his business, Mr. House Guy. He spouts his opinions on his personal account, but opts to share environmental issues on his fan page. “I use it to get the word out about what I’m learning and what I can do for people,” he said.

Henderson isn’t surprised to hear more people his age are using social networking. He’s reconnected with several high school friends. It feels more like a natural progression for him, he said. “I think more people are seeing the way businesses are going,” he said, adding they have to adapt to the changing technology.

Seniors Now Computer Learning Center, which offers computer training at two Orange County, Fla., senior centers, doesn’t have a class dedicated to social networking, but it may develop one, said the group’s president Tom Springall.

Most older adults, he said, come to the organizations wanting to know two things: how to e-mail and how to get on the Web.

So far, e-mail is the most popular way older adults prefer to communicate online, he said. That, too, was reflected in Pew’s study.

Overall, 92% of those ages 50-64 and 89% of those 65 and older send and read e-mails. “While e-mail may be falling out of favor with today’s teenagers, older adults still rely on it heavily as an essential tool,” the report said.

Twitter, the micro-blogging site, tends to be lagging far behind Facebook. For example, Roseboom wasn’t sure what it was and Chapman didn’t find a need to use it. But it is slowly gaining ground.

In 2009, just 5% of users ages 50-64 had used Twitter or another status update service. That’s gone up to 11% now.

From RIS Media

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Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

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In a clarification of a policy announced this year, mortgage giant Fannie Mae now says that applicants will need to come clean about any debts they’ve incurred since they submitted their mortgage application — or debts they never disclosed during the application. But a formal pre-closing credit report will not be mandatory to confirm their creditworthiness.

Instead, loan officers can use other techniques to verify that you haven’t financed a new car, taken out a personal loan or even applied for new credit in any amount that might make it more difficult for you to afford your monthly mortgage payments.

Among the techniques Fannie expects lenders to use on all applicants: commercial or in-house fraud-detection systems that have the capability of tracking applicants’ credit files from the day their loan request is approved to the moment of closing.

Though Fannie made no reference to specific services in its recent clarification letter to lenders, some commercially available programs claim to be able to monitor mortgage borrowers’ credit activities on a 24/7 basis, flagging such things as inquiries, new credit accounts and previous accounts that did not show up on the credit report pulled at the time of initial application.

One of those services is marketed by national credit bureau Equifax and dubbed Undisclosed Debt Monitoring. Aimed at what Equifax calls “the quiet period” between application and closing — often a month to three months — the system is “always on,” the company says in marketing pitches to mortgage lenders.

Home loan applicants failed to mention — or loan officers failed to detect — “up to $142 million in auto loan payments” during mortgage underwriting in first-mortgage files reviewed by Equifax last year alone, according to the credit bureau. Those loan accounts had average balances of $361 a month — more than enough to disqualify many borrowers on maximum debt-to-income ratio standards imposed by Fannie Mae, Freddie Mac and major lenders.

Why the sudden concern about new debts incurred after mortgage applications? It’s mainly because Fannie and others have picked up on a key type of consumer behavior pattern that has helped trigger big losses for the mortgage industry in recent years: Some buyers and refinancers delay creating new credit accounts until they’ve cleared strict underwriting tests on the debt-to-income ratios and been approved for a loan.
Then they splurge. Additional debt loads can run into the tens of thousands of dollars, executives in the mortgage and credit industries say. Had those new accounts been present on their credit files at application, borrowers might have been turned down for the mortgage, or required to make a larger down payment or pay a higher interest rate.

Fannie’s new policy puts the burden of detecting these debts squarely on lenders’ or loan officers’ shoulders. Whether they pull additional credit reports — still an option allowed under the revised policy — or use some form of monitoring service, lenders must guarantee that the debt loads stated in any mortgage package submitted for purchase by Fannie Mae are scrupulously accurate as of the moment of closing. If not, the lender probably will be forced to endure the most painful form of punishment in the financial industry: a forced “buyback” of the mortgage from Fannie Mae.

Billions of dollars in buybacks have been demanded by Fannie Mae and Freddie Mac this year alone — a fact that is likely to make lenders even more eager to conduct some type of refresher credit check or continuous monitoring of all new loan applicants.
What does this mean for you if you’re planning to finance a home purchase or refinance your existing mortgage into one with a lower interest rate? Tops on the list: Be aware that sophisticated new credit surveillance systems are being placed into operation in the mortgage industry.

Next, try not to inquire about, shop for or take on new credit obligations during the period between your application and the scheduled closing. If you want that new loan, keep your credit picture simple — no significant changes, no additions — until you get the mortgage.

During the heady days of the housing boom, nobody was looking for debt add-ons before closings. Now they are scanning for them all the time.

From L.A. Times

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There was a collective gasp when the news broke Tuesday that existing home sales had fallen off by a whopping 27%. Economists stammered and teared up over the deterioration of the housing market. And we’re sure that more than a few real estate agents — the ones who managed to take their heads out of the oven — went straight to call Mom and see if their old bedrooms were still available.

Time to take a deep breath. Here’s what the news really means to you: Likely nothing.

Do you have a house you need to sell? No? Then put your crying towel away, or loan it to someone who really needs it.

There are 75.1 million owner-occupied housing units in America and only 4 million of them are on the market today, according to the National Association of Realtors. The rest of you should just go quietly away. Yes, your home is worth less on paper than it was a year ago or even five years ago. But that was paper money, just like what you play Monopoly with. You don’t have to sell, you likely can’t anyway, so why drive yourself nuts over it?

Now that those people have left the post, let’s work on those who really do need to sell. I may have some encouraging news for you. While that 27% free-fall is no doubt accurate, it may not be where you live. Now, more than ever before, the real estate market is hyper-localized. That means the depth to which you are impacted by the housing market crash depends not just on which city you live in or even which neighborhood of that city, but actually on which streets within that neighborhood.

Ernie Carswell, a top-producing agent with Teles Properties in Beverly Hills, offers a neat micro market report each month for Los Angeles. Looking at the one he sent me yesterday, you get a totally different feel for what’s going on in the housing market.

Here’s but one example: Comparing July 2009 with July 2010, in the high-end community of Bel-Air, Calif., the median price of sold homes went up 1.4%. Yes, up. In July 2009, there were 213 properties on the market for an average of 96 days; the inventory moving at the snail’s pace of 19.6 months. Yet in July 2010, there were 178 properties on the market for just 48 days and the inventory was expected to last 6.2 months. Higher sales prices, fewer homes to compete with, things moving faster.

Those numbers would suggest a different real estate story than what the national figures tell. Location really does matter. And before you dismiss me as out of hand and think prices are only holding in the high-end market, let me assure you they are not. Again, it’s pockets. If you are in a hot pocket, you may not be as bad off as the broader numbers suggest.

I’m not saying don’t panic, just don’t panic yet. One thing is really does underscore is the need to hire an agent who seriously knows your street. This isn’t a job for the sister-in-law who just got her license or someone who assures you that they “can sell anywhere.”

Carswell says, “As the economy and the real estate markets continue to change, the nuances between different areas and different neighborhoods are becoming increasingly magnified. One neighborhood may show a sales increase, while another neighborhood just blocks away may be experiencing a dramatic drop in sales from the previous year. While the media publishes its statistics based on national, state and county trends, this distorts the public’s perception of what could actually be happening in their own neighborhood.”

Listen to the man. He speaks the truth. Bloggers love to post items about how far the rich and famous have fallen or tell you which celebrities had to drop their asking prices by millions. But there is only one address you should be concerned with: Yours.

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Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

Data prepared for The Wall Street Journal by research firm CoreLogic, examining about seven million home loans made by hundreds of lenders, show that losses from mortgage fraud—ranging from falsified credit reports to identity theft—rose 17% last year after declining 57% in the two years after its 2006 peak.

In 2009, $14 billion in loans, or about 0.7% of all mortgage loans made in the U.S., were originated with fraudulent application data.

The figures are a fraction of the mortgage market, but the increase is sharp.

CoreLogic, which tracks fraud only by mortgage value, examines about 7 million loans each year using a proprietary computer program that detects discrepancies in loan documents and predicts the likelihood of fraud. The real losses to banks won’t be known for several years when banks are forced to write off the value of the loans’ value.

New data suggest losses from mortgage fraud nationwide rose 17% last year. Above, a view of Las Vegas, where home prices have fallen.

Some of CoreLogic’s profits come from selling market research to lenders aiming to cut losses from mortgage fraud.

Investigators and lenders say they are seeing a similar upswing in fraud.

The Federal Bureau of Investigation in June indicted a Phoenix man for mail and wire fraud among other alleged crimes when the agency says he tried to steal a house from his landlord. Also in June, federal prosecutors in New Jersey charged 29 defendants—including 12 real-estate agents, four mortgage consultants, an appraiser, a bank employee and a mortgage broker—with wire fraud in an alleged scheme involving 17 properties in the state and losses of $5.5 million.

“Even though we have certain compliance measures in place, people will adapt whatever scheme,” said Sharon Ormsby, the FBI’s section chief for financial crimes. “It doesn’t matter if the market is going up or down.”

The kinds of fraud that contributed to the mortgage crisis and the collapse of the housing market were relatively simple. Crooks took advantage of the size of mortgage loans and the lax rules governing who qualified for them.

In one common con, they would recruit as accomplices “straw buyers” with good credit to apply for “no-doc” loans, which required no documentation or proof of income, to buy their house. Good credit was required because lenders generally did check a borrower’s credit score, even if they didn’t require pay stubs or bank statements.

When the bank sent funds, typically to make a down payment or for a home-equity loan, the schemers and the fake buyer would split the profits and walk away, leaving the house to fall into foreclosure and the bank stuck with the loss.

Since the mortgage crisis, banks and the government-sponsored entities that underwrite or insure mortgages, including Fannie Mae, Freddie Mac and the Federal Housing Administration, have tightened lending standards and closely scrutinize mortgage applications.

No-doc loans are a thing of the past, and many lenders now require borrowers to furnish proof of employment, tax forms, credit reports, bank statements and other documents.

Fraudsters have adapted to the new restrictions. With banks less apt to lend to borrowers with shaky finances, criminals rely more on falsifying documents, recruiting loan officers and other bank insiders to work for them, and stealing identities to get loans, federal investigators and mortgage industry research reports.

In the Phoenix case, prosecutors allege, Jose Victor Buencamino did all three. Some people who knew Mr. Buencamino describe him as a large, friendly man devoted to his children, the life of many a party and a passionate golfer. Gary Weaver, who rented a home to Mr. Buencamino last year, has a different impression. He said the Arizona businessman tried to snare him in an elaborate mortgage scheme.

According to a federal indictment unsealed in June, while Mr. Buencamino was renting Mr. Weaver’s house on the golf course at Moon Valley Country Club, he intercepted mail intended for Mr. Weaver and obtained his social security number, then applied for a driver’s license in Mr. Weaver’s name.

Then, the indictment alleges, with the help of a friend who worked as a loan officer at a local branch of Compass Bank, a unit of Spanish bank Banco Bilbao Vizcaya Argentaria SA, Mr. Buencamino obtained a $245,000 cash-out mortgage on the property. A homeowner using a cash-out mortgage refinances the home loan for more than the mortgage is currently worth and pockets the difference in cash.

A Compass Bank spokesman didn’t respond to requests for comment. Mr. Buencamino, who couldn’t be located for comment, has not responded to the charges.

A federal agent said he had been tracked to Vancouver, where the agent said he is applying for Canadian residency. Prosecutors involved in the case said he didn’t have an attorney on whom they could serve court papers. U.S. authorities said they were seeking his extradition.

“Fraud continues to be a pervasive issue, growing and escalating in complexity,” said an April report from LexisNexis’s Mortgage Asset Research Institute, which cited as reasons easy access to records via the Internet and, in many cases, though not Mr. Weaver’s, the vulnerability of cash-strapped homeowners.

MARI’s breakdown of the numbers reflects the shift in technique. Fraud related to falsified credit reports has declined each year since the boom years, MARI reports, while the share of mortgage fraud involving false appraisals jumped 50% between 2008 and 2009.

Application fraud—in which borrowers lie about their names, where they live, how much money they earn, their employment, their debt or their assets—remains high, accounting for 59% of all mortgage fraud.

One of the defendants in the New Jersey dragnet, a mortgage consultant with Newark-based Invest & Investors LLC named Viviane Bernardim, allegedly paid accomplices $15,000 apiece to steal the identities of several New Jersey residents who earned $90,000 or more and had good credit ratings. She used those identities to obtain second mortgages on a number of homes in the Newark area, according to U.S. Attorney Paul J. Fishman, head of the office prosecuting the case.

But since good credit ratings are no longer enough to get a mortgage, Ms. Bernardim also needed friends who worked for the lenders to pull off the caper.

“Having players at every level of a conspiracy makes it easier to carry out fraud,” said Mr. Fishman. “But each bad actor and criminal act is also another chance for law enforcement to find a way in.”

Maria Delgaizo Noto, an attorney for Ms. Bernardim, said that she had no comment until an indictment was unsealed, but that her client “maintains her innocence of any criminal activity.”

Beth Phillips, left, a U.S. Attorney in Missouri, announces a pair of indictments Aug. 4 in Kansas City in a $2.7 million mortgage-fraud case.

In Phoenix, Mr. Buencamino’s alleged fraud was assisted by an insider, but also by easy access to public documents on the Internet. After intercepting mail intended for Mr. Weaver and obtaining his Social Security number, Mr. Buencamino applied online for an Arizona driver’s license in Mr. Weaver’s name, according to the criminal complaint and law enforcement agents involved in the case.

When he received the permit, he submitted mortgage application documents by mail to Compass Bank and, with the help of co-conspirator William Baxaveneous, the Compass loan officer, obtained a second mortgage on Mr. Weaver’s home—which had no mortgage—without ever having to meet any bank officials face to face, Mr. Weaver said. He said he learned this from the federal agents investigating the case.

Mr. Baxaveneous’s attorney said he was trying to settle the case and declined to comment further.

From Wall Street Journal

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Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

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Guessing the value of hand soap on a game show isn’t all that dicey, but throwing a random number on your “for sale” sign is risky if you’re trying to sell. Before you settle on a price, try one or more of these valuation methods:

Automated Valuation Methods

The Process: Automated valuation methods (AVMs) are online programs that use public home sale records, demographics and property characteristics to find your home’s value. You key in your home’s information, like the location, square footage and number of bedrooms and bathrooms, and the software returns with an estimated value.

Pros: AVMs are quick and easy, and many are free. AVMs are a great way to watch trends in value, because they gather statistics from public records.

Cons: “It’s just software, so if you have a home that’s next to the freeway, or if your neighbor painted his home purple, which detracts from your home’s value, there’s no way it can know,” says Jay Thompson, designated broker at Thompson’s Realty in Phoenix, Ariz.

The software isn’t great at nailing the specific value of your home — it might tell you your overall value is decreasing, but it might not get the actual value correct. Areas with fewer sales will be even less reliable because the pool of data is smaller.

Also, national AVMs often aren’t as reliable as local software. “They’re actually a complete waste of time in New York. What we do have are Property Shark and StreetEasy, which are local to New York,” says Wendy Sarasohn, senior vice president at Corcoran in New York, N.Y. “These two services are affiliated with the different brokerage companies, so they’re getting actual closing prices.”

Appraisals

The Process: The first step of an appraisal is a property inspection, where the appraiser takes notes about what the property has and what it’s lacking. For example, says Leslie Sellers, president-elect of the Appraisal Institute and appraiser in Knoxville, Tenn., if a home has two bedrooms and the market for the area usually demands three bedrooms, that would negatively affect the home’s value. Appraisers also look for defects in the home that buyers typically ask to have fixed before they sign on the dotted line.

Then the appraiser sits down and crunches the numbers, comparing the house to others that have recently sold or are for sale in the neighborhood. “If it’s bigger than a house that sold, we might adjust the price upward…if it’s smaller, we would adjust it downward,” explains Sellers.

Next, the appraiser gives the homeowner the facts: Information about the homes in their area competing for buyers, a list of things that may add value and appeal to the abode and, of course, a recommended listing price.

Pros: “Appraisers are disinterested and objective,” says Michael H. Evans, a Fellow of the American Society of Appraisers and owner of Evans Appraisal Service in Chico, Calif. “A broker is trying to get a listing, whereas we’ll tell you the truth whether you like it or not.”

Appraisers can also discover problems that could delay a sale before you put your home on the market. For example, if an appraiser notices you’ve added square footage without a building permit, they’ll send you to the building department to resolve the issue before you sell.

Cons: No appraiser is going to assess your home’s value for free. The home review will cost between $200 and $500, depending on what part of the country you’re in.

Also, not all appraisers are created equal — people that are inexperienced or new to the area might not have the breadth of knowledge necessary to pinpoint your home’s value. When looking for an appraiser, be sure to look for someone licensed at the state level and accredited by a national professional organization, like the American Society of Appraisers or the Appraisal Institute.

Comparative Market Analysis (CMAs)

The Process: After looking at the house, agents usually start the process with a look around the neighborhood for “comps,” or comparable homes that were recently (usually in the past three months) sold in the area. In suburban areas, comps usually come from the half-mile radius around the house.

In especially dense areas, like New York City, where a $25 million pre-war co-op could be a block away from a building full of $2 million dollar post-war apartments, comps typically come from inside the apartment building, says Sarasohn.

In a falling market, it’s equally important to look at pending sales because they are the future comps for the house. “Sometimes the agents will tell you the sale price, sometimes they won’t, but you can use a median of the sale prices to see where things are going,” explained Elizabeth Weintraub, broker associate at Lyon Real Estate in Sacramento, Calif. You can then adjust down a percentage based on the softer market.

In a foreclosure-heavy city, that can also play a part in the agent’s recommended sale price. “One other foreclosure in the neighborhood doesn’t really affect your price, but when 4 out of 5 sales in the neighborhood is a foreclosure…those are the comps,” says Weintraub.

Sarasohn also asks six or seven colleagues from other firms to price the home. “Sometimes I’ll say whoever gets closest to sale price gets some kind of award, like house seats to a Broadway play or gift certificates, so there’s an incentive to think about what they’re saying,” she says.

Pros: CMAs are typically a free service, and you can (and should) get the numbers from multiple agents before you choose a listing agent. Agents have access to the same information and records as appraisers, but typically don’t provide as much detail in their report, says Dee Hake DeMolen, a broker and realtor in Dover, Del.

Cons: Real estate agents have a motive for doing a CMA for free — they want to list your home. As a result, some will recommend you list your home at a price higher than the market rate in an effort to get your business.

“I always encourage sellers to list the apartment where we think the market is, but sellers make the mistake of saying, ‘Well, another broker said could get me X amount.’ No broker can determine what they can get — the market determines that,” cautions Sarasohn. To avoid this, get estimates from three agents at three different companies, and don’t necessarily choose the highest offer.

Also, some agents are better at doing CMAs than others. To make sure you’re getting the right information, ask each agent to explain their process so you can understand how they’re crunching the numbers.

From HGTVFrontDoor

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Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

On Tuesday, key administration officials conferred with about 200 industry executives, affordable housing advocates and other experts about the role the government should play in the nation’s housing finance system. Treasury Secretary Timothy F. Geithner asserted that federal involvement still was needed, but he promised “fundamental change.”

“It is not tenable to leave in place the system we have today,” he said, adding that Fannie and Freddie will change dramatically when they emerge from government control.

Pressure is growing to remake or replace the mortgage leviathans, which were seized by the government in September 2008 after huge losses from subprime mortgages put them on the brink of bankruptcy. The bailout has cost U.S taxpayers nearly $150 billion. But lawmakers must tread carefully to keep from further damaging a housing market that Fannie and Freddie almost solely are supporting. The two companies, along with the Federal Housing Administration, collectively guarantee more than 90 percent of all new U.S. home loans.

“Nobody wants to mess up the mortgage market,” said Douglas Elliott, an economics fellow at the Brookings Institution think tank. “And any transition with Fannie and Freddie is going to be fraught with some risk.”

Tuesday’s event came as the second anniversary of the government seizure of the firms approached, a bailout that left taxpayers as 80 percent owners. The administration faces a January deadline, added by lawmakers to the financial reform legislation, to make recommendations to end the expensive federal conservatorship of the firms.

Congress plans to ratchet up its involvement as well, with House Financial Services Committee Chairman Barney Frank, D-Mass., saying his committee will begin hearings when members return next month.

That’s not fast enough for many Republicans, signaling another bitter partisan reform fight. They have been pushing the administration for more than a year to address the mounting losses at Fannie and Freddie by getting the government out of the housing finance business.

“It is past time to rid the American taxpayer of the liabilities of these financial institutions once and for all,” Rep. Mike Pence, R-Ind., said Tuesday as he blasted the Obama administration for continuing the bailouts of Fannie and Freddie begun under President George W. Bush.

But the Obama administration has been moving slowly for fear of further harming the housing market. There was fresh evidence of problems Tuesday as Southern California home sales plunged 21.4 percent in July compared with a year earlier, according to research firm MDA DataQuick of San Diego.

“It’s much more important to get this issue right than to do it fast,” said Michael Berman, chairman-elect of the Mortgage Bankers Association.

Shaun Donovan, the secretary of Housing and Urban Development, said the stakes were high not just for the financial system but also for average Americans because of the major investment in their homes.

Donovan said the federal government’s involvement in the housing market needed to be reduced. And Geithner said there was a strong case for a “carefully designed” government mortgage guarantee in the future, a point echoed by panelists at the conference.

There also appeared to be consensus among the participants that any government guarantee needed to be explicit, not murky and implicit like the guarantee that stood behind Fannie and Freddie as private, government-sponsored enterprises before they were seized.

William Gross, managing director of bond fund giant Pimco, said government guarantees were crucial to the housing market, helping keep mortgage rates low.

But there still is major debate about how to structure such a guarantee and what size mortgages it should cover.

“The challenge is to make sure that any government guarantee is priced to cover the risk of losses, and structured to minimize taxpayer exposure,” Geithner said.

Fannie and Freddie were created by Congress and later turned into private, government-sponsored enterprises mandated to expand homeownership with requirements to purchase a set amount of loans made to low- and moderate-income borrowers.

Fannie and Freddie combined hold the credit risk on about $5 trillion in mortgages, and losses from loans made during the housing boom have continued to mount. The Treasury Department has pledged it will cover an unlimited amount of losses through 2012. As of June 30, the department had pumped $144.9 billion into the two companies.

Federal officials have stressed that the losses came from loans purchased before the government seizure and said standards at Fannie and Freddie have tightened significantly since then. And as the housing market has stabilized, the losses at Fannie and Freddie have lessened. Fannie lost $1.2 billion in the second quarter, down from $11.5 billion in the first quarter. Freddie lost $4.7 billion in the second quarter, down from $6.7 billion in the first quarter.

Still, the losses meant the two firms would need an additional $3.3 billion from the Treasury Department, bringing their bailout cost to $148.2 billion.

From RIS Media

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Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

Why is NAR’s Green Designation important in today’s market?
Staying educated in a rapidly changing marketplace is vital to the success of any agent. NAR’s Green Designation prepares REALTORS® to seek out, understand and market homes with green features to potential buyers. By educating themselves in green building and sustainable business practices today, Realtors are preparing themselves for the future of real estate. And if green homes have not reached your area, they will soon.

Established areas that have green homes show a clear marketplace advantage compared to traditionally built homes in terms of time on the market and sales price. For instance, in 2009, in the Atlanta area, certified green homes on average sold 31 days faster than traditionally built homes. Today’s market requires a Realtor who is aware of these statistics in their community, and earning NAR’s Green Designation is a step in that direction.

How do brokers benefit from encouraging their sales associates to seek NAR’s Green Designation?
Having successful sales associates equates to a successful broker/manager. And success in today’s market means keeping up with green. Between local building codes that encourage green construction, federal government incentives and the increasing adoption of energy efficiency within the lifestyles of homeowners, the future of residential real estate is shifting toward green properties. The green home of today will be the standard home of tomorrow.

To adapt to this change, we created an education path tailored to an agent’s area of specialization. Brokers and agents interested in this designation complete a core course covering a broad range of green principles followed by an elective course based on their area of specialization, whether that is residential, commercial or property management.

What value does earning NAR’s Green Designation provide to agents who work primarily with buyers?
Today, green real estate is just as much about energy efficiency as sustainability. Our core and residential elective courses teach Realtors that buyers interested in green homes are motivated for different reasons and adopting green at various levels. Understanding these motivations enables Realtors to more effectively guide their buyer-clients. The course work explains the cost/benefit value of green homes, specific green home features, the various green home certifications and available buyer incentives and credits. Having knowledge in these areas and sharing them with buyer-clients adds value and allows agents to differentiate themselves from the competition.

How can working with buyers on green issues impact local communities?
NAR Green Designees are trained to be “the source of the source” and to create relationships with energy auditors, green lenders, builders and other real estate professionals who have a specialization in green. This allows agents to not only grow their business network, but to increase consumer awareness on green issues, ultimately improving the communities in which they live.

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Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.

1. Wood species or cabinet covering material. The material that covers the cabinet will effect the overall pricing of a kitchen renovation, but not as much as you might think. A stainless steel clad cabinet will be the most expensive and a melamine (thin plastic laminate) surface will be the least costly. Cherry is usually about 7-10% more than oak, while hickory, oak and pine usually run very close in price. Unusual cabinet woods like alder, mahogany, fir, rift cut woods, redwood, teak, etc. will usually cost more than common oak or pine.

2. Kitchen layout. The layout of the kitchen and the cabinet configuration will largely affect the price of a remodel as well. For example, a lazy susan will cost more than a sink cabinet, a stack of drawers will be higher priced than a one drawer/two door base cabinet, a U-shaped kitchen costs more than an L-shape with an island and a wall oven/cooktop combination makes the kitchen cost about $1,000 more than a free standing range. Setting a budget to design within can often save homeowners many hours of re-design.

3. Cabinet door style. A door with many details will usually cost more than a simple door. If an arch is added to a square panel, homeowners can expect to pay more. A door with lots of grooves or molding generally cost more than a simple door and a full overlay door (door that covers almost the entire cabinet face) costs more than a traditional overlay door. Doors set inside the cabinet frame (called inset) cost more than doors that are mounted over the cabinet frame.

4. Type of cabinet finish. The type of cabinet finish you choose will vary the pricing of a kitchen remodel as well. Painted cabinets will run 10-15% more than a standard stain finish and glazes or layered finishes will run 7-15% more than a standard stain due to the extra labor.

5. Cabinet construction methods and materials. Don’t skimp in the area of cabinet construction in order to save money on your kitchen renovation as better construction methods make a kitchen durable. In fact, cabinet construction may be 60% of the entire cabinet cost.

From RIS Media

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Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of the book published by Simon and Schuster Heart and Sold: How to Survive and Build a Recession-Proof Business.

Search Luxury Homes in Los Angeles at Valerie Fitzgerald Real Estate Listings or contact Valerie Fitzgerald at 310-285-7515.