What Does It Mean To Build Green?

Perhaps Kermit should explain what it means to be green. He could probably give a clearer answer than home builders, buyers, and Realtors possibly could. After all, he was born green.

Building green is a real conundrum for home builders. There is no national standard by which the ground rules are defined. There are currently some 80 different building organizations, local and national, promoting their own set of guidelines for what consitutes a green home.

The plethora of varied guidelines and the lack of a national standard creates confusion in the green marketplace for builders and buyers. The National Association of Home Builders is working on standards for green building but running into some resistence. But this is like asking the National Association of Realtors to promote a labyrinth for Realtors to traverse in order to sell a house.

Commercial buildings generally go for the LEED certification through the US Green Building Council (USGBC). LEED stands for Leadership in Energy & Environmental Desisgn. The residential LEED program is not as long-lived and is still operating under a pilot program which costs the participating builder a $2,000 inspection fee for certification. The inspection fee is in addition to any additional construction cost to build or bring homes within LEED compliance.

A builder is likely to build a green house only if:

• it furthers their ability to sell their product,
• it adds value to the home in the eyes of the buyer (same thing really),
• government regulations force them to thereby leveling the playing field,
• it does not deduct from the bottom line.

A buyer is likely to buy a green home only if:

• they hold a firm belief that it is the only responsible decision and is willing to pay for that contribution to the environment, or,
• it doesn't involve a sacrifice either in terms of cost or housing preference.

Will building green give a builder the advantage in capturing the attention of a buyer? Probably so with all other things being equal. Marketing green is no doubt a positive message and buying green, with caveats, is self-satisfying for buyers. We all want to be seen as doing right thing for society.

If sustainable houses are more sellable then home builders should have a HUGE advantage over resales with less energy efficiency and sustainability.

The Environmental Protection Agency reports that a typical house emits approximately 3 tons of carbon every year. A typical car is responsible for 1.5 tons a year. To put all this into perspective, a heifer emits up to 300 pounds of methane a day thanks to a ruminant stomach. The natural gas is 20 times worse for the atmosphere than CO2, but it dissipates faster. (This was not from the EPA but from Wired Magazine.) The "C" word has a scary connatation and now implies new terrors of CARBON.

Is it enough, however, for a builder to market their homes as green when no one has a clear idea of what that means? Seems like an empty promise to me. Some builders say that green homes tend to sell much faster than traditionally built homes but there is no real way to quantify that statement.

With the housing slump and credit crunch we may have to wait until better times to make huge advancements in the residential green business. Maybe by then reasonable, effective, sellable, national-wide standards can be tailored for home builders that will render new houses sustainable. Today, the name of the game is survival.

The green movement seems to be an unstoppable train with a few decades of steam behind it. Sustainability is probably the most often used term, other than "green", by devoted developers, land planners, architects and real estate futurists. Now that the effects of global warming can be seen with the naked eye (vs. the invisible consequence) the regular man on the street is covertly drinking water out of a designer plastic bottle.

Being green is our only responsible choice, but I can't help but feel that to some degree it is like the health warnings which change daily. One day it is only acceptable to drink spring water, the next you might be pegged as a Communist if you don't drink tap water. One day our saving grace is tomorrow's deadly threat. But to not try to leave a smaller footprint on the planet is not acceptable.

We know too much to turn back now.

How the Wall Street Journal Led Me To My Windfall and Taught Me A Marketing Lesson

The week is getting off to a pretty good start. The Wall Street Journal's article on Monday, Five Houses Vie to Become Most Expensive Home Sale has lead me to the real estate buy of the century. Forget Antartica. I have just found my little piece of heaven in Bel Air for $45,000. Can you believe it? But BACK OFF! I have already sent a contract to Westside Estate Agency for this little gem. But there is more where that came from. Check it out. If you hurry you can own Beverly Hills...or at least Westside Estate Agency. And you will be forevermore a dedicated reader of Real Concepts. Honey! Pack our bags, we're moving! But let me start at the beginning. When I got up this morning it was just another Tuesday: the credit news was still as bad as it was last week but we're at least getting used to hearing it, and the stock market was rocky but not disasterous - yet. Then the WSJ got my imagination going with their Monday morning quarterback duties on the listings of five MEGA properties. What are the really, really rich doing? Turns out, same as us regular guys - they're trying to sell their little private piece of the rock. But in their world, it's a cool $100 million plus, plus, little piece of the rock.

The WSJ seemed a little reticent to weigh in on the great real estate sell-off, "It might seem foolish given the recent news from Wall Street, but a group of homeowners is holding firm on an ambitious goal -- to break the record for the most expensive home sale in American history. The price to beat is $103 million."

In light of the real estate bust it is a testament to the strength of the upper echelon that the rapid price increases continue for unique estates. Or at least the asking price. Only two years ago the US market produced only a few homes that were listed for $75 million. Now there are five contenders over $100 million – way over $100M.

At the top of the heap weighing in at an impressive $165,000,000 is The Hearst Estate in Los Angeles, Beverly Hills to be more exact. The seller is Leonard Ross, a financier, but who really cares? There is a mere 72,000 square feet under several Mediterranean roofs on 6.25 acres. The main house was built in 1927 for Milton Getz. William Randolph bought the property in 1947 paying about $120,000. He promptly moved in his paramour, Marion Davies, as well as life-size paintings of the actress and statues from the gardens of his San Simeon Castle. Hearst died at the estate in 1951 at the age of 88.

Now here is the real kicker – the architect of the Hoover Dam designed the original estate. Is that really a sales point??? Call me crazy but I would have guessed an engineer (or a hundred engineers) designed the Hoover Dam (but I degress). The house was also featured in “The Godfather” in the scene in which a movie producer awakens to find a severed horse's head in his bed. It is one of the largest houses in the tony district of 90210, and…the Kennedy's honeymooned there. According the WSJ, one broker familiar with the property described it as "Liberace"esque. In some environs pink stucco is always in. According the to LA Times Mr. Ross is seeking an alternative lifestyle. Hmm…..

Fat chance? Some in the know say no way it will sell for over $100M. Supposedly Mr. Ross turned down $65M five years ago and showed the property last winter at $88M. Mr. Ross says No, No, No. After all it was redone only 15 years ago.

The property is listed by Stephen Shapiro, co-owner of Westside Estate Agency.

Now what I found interesting on these properties listed over $100 million was the way in which they are being marketed. First of all let me make it perfectly clear that I am in no way an expert in the marketing of the ultra, ultra stratosphere of $100M+ properties. I simply found it interesting and wanted to comment on the strategies.

When you're in this category the press will take care of the marketing. When you have the Wall Street Journal, the New York Times, USA Today , Forbes, etc., etc. doing the coverage, what more does a real estate agent need to do in the way of the marketing. It's news!

Take a look at the Westside Estate Agency site. The buyer of a $165M estate is probably not going to let their fingers do the shopping on-line, so sites dedicated to multi-million dollar properties must be up just for the public’s entertainment. Obviously the rules of engagement do not apply here.

First of all Westside did not get the memo that marketing is not about you, it’s about your customer. Home page tells you just how spectacular they are. I bought into it. Fabulous pictures, sleek, static. I’m sure they’re working on the video. Niche market, I guess. (I don't really care. I'm just so thrilled with my new $45,000 diggs.)

The next contender is the Hala Ranch in Aspen, Colorado is listed for a cool $135,000,000. The seller is Prince Bandar bin Sultan, the national -security adviser for Saudi Arabia.

A modest 56,ooo square foot, 15-bedroom chalet on 95 acres, built in 1991, is the largest residence in Aspen and the facilities rival a private resort. Much of the expense is tied up in security measures and odd extras -- including 243 phone lines. (Who wouldn't just die to have that kind of access.)

Pitkin County recently assessed the property at $83.8 million. The asking price is nearly triple the area's current home-sale record of $47 million.

The listing agent is Joshua Saslove, Joshua & Co., an affiliate of Christie's Great Estates. Their marketing is good but I found a lack of warm and fuzzies between Joshua and Christie's. The Christie's web site had a dynamite video with barely a mention of Joshua, ok, an email address. The Joshua-Hala web site has a few very pretty pictures but no video and no mention or link to Christie's. Oh well, you will really enjoy the masculine rousing intro to Joshua On-Line.

NEXT! Presenting Fleur de Lys in the Los Angeles corner wearing a price tag of $125,000,000. The seller is The Ex-Wife.

I'm already becoming jaded. This is a pretty ho-hum story. 41,000 square foot chateau on five acres. Built in 2000 and in mint condition. It was fashioned after the Vaux le Vicomte, the home of Louis XIV's finance minister, Nicolas Fouquet. Seen one Louis XIV redux, seen them all.

Go to the RealEstalker where there are a series of blogs with photos of the chateau. Locals say it would be perfect for a rich Russian. The French wouldn't touch it.

Listing agents are Joyce Rey of Coldwell Banker Previews International and Robert Kass of Windermere Real Estate. I could not find listing info on either CBPI or the Windermere web site (although it was just too much trouble on both tedious sites) but I did easily find the listing on Movoto - Your Real Estate Revolution. You can even just push a button to get a viewing appointment. Wow!

The contenders go downhill from here starting with Donald Trump. The estate of Maison de l'Amitié, which is the Donald's estate in PalmBeach, Florida, is on the market for $125,000,000.

The 33,000-square-foot, French Regency-style main house, built in 1990, has seven bedrooms and eight full baths. The listing is with Cristina Condon of Sotheby's International Realty.

An incredible piece of land, the property is seven acres with 475 feet of ocean frontage. It "ranks among the largest oceanfront parcels in Palm Beach. Brokers say the land alone could be worth $75 million to $95 million. Mr. Trump paid $41.4 million for the property in 2004 and has done only a cosmetic renovation. Brokers say the buyer will have to spend millions on upgrades, or tear the house down." But don't tell Mr. Trump.

"If somebody wants to move into Palm Beach and get a lot of publicity and money is no object, they might pay a huge price," says local broker Carol Digges (from the WSJ article). Ah yes, the wow factor.

Check out the Real Estate Bloggers' insights on offers. The Donald wants the big prize - the highest price sale. This is the ultimate marketing test. Does the Trump brand add value to the tune of multi millions? Stay tuned.

Number Five, Tranquility in Zephyr Cove, Nev. is listed for $100,000,000 so it probably won't make the grade in the real estate price contest. Although not actually on Lake Tahoe, it is stunning! If I didn't already have this contract in on the $45,000 Bel Air castle, I would probably go for this. Call me plebian.

Well, we'll have to wait to see who grabs the real estate sales price of over $100,000,000. I'm sure the media will let us know.

Thanks for joining me on this epic journey of excess.

A Little Good News Today: Take It When You Can - New Home Sales Up In July

I venture to guess there was not a single American newspaper that failed to report on the positive July numbers posted by the Commerce Department. Friday’s news was particularly uplifting as economists were predicting a 1%+ decline in new home sales and Moody’s had placed several homebuilders on a list for possible credit downgrades.

So it was received with a great deal of jubilation and fanfare when the Commerce Department reported that new home sales rose 2.8% in July. Attributable to the good news and an additional report that factory orders for big-ticket goods jumped 5.9 % in July (the most in 10 months), stocks closed on Friday with an average increase of 1.25%.

The overall increase in new home sales was due to a surge of sales in the western states (don't know why) which more than offset a plunge of sales in the northeast. New home sales in the central states were flat and southeastern states were slightly higher.

But…but…but… it’s always the BUTs that spoil the euphoria….economists – the pesky pessimists – say it won’t last.

I found it interesting that the Commerce Department’s numbers are based on contracts, not closings. So their numbers are really more indications of market activity and do not reflect cancellations or indicate the builder’s financial benefit of the closing, which in some cases could be a year or more away. The builders are reporting cancellations in substantial numbers which is not at all surprising with the tightening of credit.

So why do the economists say it won’t last? Well the numbers were for July before Armageddon was announced. “The effect of the credit tightening — both in terms of its real effect on mortgage availability and its psychological effect on consumers — has yet to unfold.”

The National Association of Home Builders reported last week that builder confidence was the lowest since January 1991. Not only are builders lowering prices to a larger extent than last year but they are also offering more and larger incentives.

Does this mean that we’ll grab at any scrap of good news, no matter how ethereal? That would be a YES!

Grab the GOOD NEWS whenever you can...

Carbon Trading Could Make Swamp Land The Next Smart Real Estate Investment

The buying and selling of carbon credits is is a thriving industry in Europe. Basically and very simply put, if a company emits too much carbon in the course of it's business, it has to buy credits from other companies that have excess credits because of their emission cut-backs. Carbon trading, somewhat like stock trading, is regulated and monitored by the European Union Emissions Trading Scheme (EU ETS), the largest multi-national, greenhouse gas emissions trading scheme in the world and the main pillar of EU climate policy.

Want to be a carbon trader? Sky-rocketing interest in carbon neutrality insures a profitable future. Not without controversy, the European Emissions Trading Scheme has created a $4 billion a year industry.

In the US, real estate developers accomplish comparable mitigation by buying additional undeveloped land and designating it as wetlands as compensation to the government for wetlands they negate during development and construction. There are US companies specializing in buying wetland areas then selling mitigation credits to developers. This makes buying swamp land a little more palatable and valuable.

The successful system of eco-trade could lead to other ecological applications for real estate developers like watershed protection and erosion control. "Think of the implications when (not if) carbon cap-and-trade comes into it's own in the US. There will be no shortage of demand and all of corporate America will be shopping for mitigation credits." Developers and builders will be lined up.

On a global scale however, carbon credit trading would be a very complicated puzzle. It would require an entirely new financial infrastructure of standardized trades in eco-commodities with international monitoring and world-wide registries. Whew!

The first investors buying massive land reserves for carbon trading have been through private investors. The ball is slowly starting to roll. Wired magazine is where I first read about this phenomena. I have been involved with the wetlands banking locally but did not understand the implications on a much wider international playing field. The opportunities could be enormous.

Wired's article in their September issue, Turns Out, Money Does Grow on Trees, tells the story of David Brand, a pioneer in the land mitigation game, who raised over $200 Million in England in the matter of a couple of weeks to buy inland rain forests in Malaysian Borneo. The natives of Borneo could not understand that this crazy westerner did not want to strip-log the rain forest.

Brand's sheme will not only make him rich, it will make him a hero. The handsome returns for Brand and his investors will come not from illegal logging but from sales of credits to "companies shopping for pollution off-sets or with NGOs and governments that will pay to protect the planet's wild places - not because they're pretty, but because they perform a service."

So start your engines...it may be time to buy swamp land.

Angry Homeowners Take to the Web: And the Winner? Beazer, Hands Down

The internet is rampant with web sites devoted to builder complaints. Not just builder complaints – the internet has turned “you’ll pay for this” into an art form. You can now tell the world about your problems. My background is in sales and marketing of new home communities so my curiosity was peaked when I saw a couple of articles in Business Week on builder complaint web sites.

Some of what I found on these web sites was just plain incomprehensible (my comments in red) ….

From Deb in NJ - I was to get an upgraded kitchen with standard carpets etc. Of course the deal I was getting was stressed. A stressed deal? But, no one essentially told me in the apring of 05 that the carpet laid throughout the house was not functional. You mean you could not walk on it? Had I known that I would have gotten the upgraded carpet. I became the owner in 9--05.Shortly thereafter, I noticed the carpet was attracting furr and hair balls. Yes, that’s what a v-a-c-u-u-m is for. It actually attracts hair and dirt to the surface and according to the inspector, breaks down. What? My 18 month old already has been to the emergency room due to hair being wrapped around her toe from the carpet where dirt and hair stick like a magnet at the surface. My claim is that had I been made aware of the lack of functionality, I would not have chosen this carpet. Is freedom of speech overrated?

But most of what I found was fairly typical. I found very short complaints on construction and warranty issues and I saw some very detailed documents on the problems of customers and homeowners concerning contract negotiations, non-delivery, late delivery of houses, earnest money disputes, construction problems, punch-out disputes, warranty issues, and sales agent and management complaints.

I am familiar enough with the issues that I could read between the lines of complaints with some degree of confidence. Most of the matters dealt with construction issues and while frustrating to the nth degree, much of it was normal tolerance within industry standards. Many others seemed to have legitimate complaints. Boom years are fraught with a unique set of problems for builders such as too much work, not enough time and people, and pressure to produce more inventory. No one is going to extend sympathy to the builders or agents for the problems that come with success, but they exist nevertheless.

Although this was a cursory look-see, I felt proud that most builders fared pretty well by the absence of internet complaint logging. Many builders are obviously doing a good job for their homeowners. Pulte and Toll Brothers faired much better than most with very little negative chatter and KB Homes and Centex were a little more beleaguered but the issues were not on a large scale. Home building is a very complicated process involving scores of people and products and a million things that can and will go wrong. Throw in the weather and personal emotions as a wild cards and you are bound to have a few perfect storms.

We all understand the emotions that accompany the home buying process and understand and agree that the home investment is extremely important to a buyer. Although any complaint is serious to a homeowner, the added element of preconceived ideas, unfulfilled expectations, human nature, and emotion embed the home building and home buying process with numerous land mines. It takes level heads all around to maneuver.

But what was somewhat alarming was what I found when it came to the on-line presence of disgruntled patrons of Beazer Homes. This post is not to pound Beazer, but in light of the mounting difficulties faced by the home building industry, an industry leader such as Beazer facing such serious ethical and legal allegations is a black eye to the entire industry.

For years Beazer was very successful, providing a reasonable product at a value price and for a long time provided good returns to their shareholders. They are hometown Atlanta stock and I want to see them do well. But their tarnished reputation is a reflection on the industry which is, on the whole, doing a very, very good job. The perfect analogy is the incompetent real estate agent that tarnishes the value of the professionals providing an excellent service.

I am not judging Beazer; I don’t know all the facts and hey, everybody deserves their day in court. But there is too much smoke not to suspect a fire of some proportion. Every company has a belief system even if it is the lack of a belief system in things most of us consider important to the real estate and home building business, i.e., customer respect, fair-play, quality products, and customer service.

This is a very long post as blogs go. If you choose to read further I have included word-for-word (misspellings and all) four very interestings postings concerning Beazer that run the gamut of subjects. You can read to your heart’s content via any search engine. At the end of the post I have also included several links on recent news articles concerning Beazer.

Derrick of Lancaster CA (06/29/07) My wife and I signed a purchased contract on May 20, 2007 to buy a property with Beazer Homes located on 19669 Mathilde Lane, Saugus, CA. We were committed to this house and placed a deposit of Twenty Thousands Dollars ($20,000) on May 20, 2007. Fifteen days later (Jun 5, 2007) , we haven’t heard anything from Beazer and decided to contact Beazer’s loan office to inquire on the status of our loan. We were told there was a problem with our contract and we need to contact Nancy C, VP of sale in Los Angeles. We then called Nancy C and were not able to reach her on the phone.
Later that day, we received a phone call from the new home consultant, Asbery R, stating that our contract was revoked because the house was sold to another buyer. Beazer then offered us another home on the same street but with smaller in both living space and lot size for the same price.
After a day of discussion, we elected not to continue to do business with Beazer because we strongly believe that Beazer has purposefully use “bait and switch��? scheme to sell us the house and requested to cancel all contract. An official letter of cancellation was sent June 7, 2007 and we also requested our deposit check to be returned immediately since escrow was never opened. To our disappointment, our deposit check was cashed and Beazer told us that we would not receive our deposit 4 to 6 weeks from today.
As of today (29Jun2007), my wife and I had placed several calls to Nancy C's voice mail, inquiring on the status of our refund but she never called us back. We would like to express how disappointed we are with the whole process of purchasing a Beazer home.

My guess here is that they simply did not qualify for the loan and the sales process moved quickly with another buyer. But the customer service is dismal. $20,000 is a lot of money and might keep this couple from putting a deposit on another house they could afford. Why would this process take a month or more?

Elizabeth of Clarksburg MD (04/25/07) We were very happy be moving our family of 6 into a larger home and a new community. So we signed the contract and put $27,000 towards the purchase of our home in November 2005. The home was to be completed in March 2006. However, we were unable to sell our home and could not afford the home. We were told if we did not purchase the home we would lose our $27,000. This was untrue because the addendum included with the contract stated that our deposit would be refunded if we were not approved for a loan.
Since we were not able to get approved for a loan without having the down payment we were going to receive from the sale of our home. We knew we couldn't get approved. Well, Beazer has its own mortgage company and gives a huge incentive if you use their title company. They found a company that would do our loan.
I spoke with the person doing the paperwork and explained to her our financial situation and that I could not afford to lose $27,000 (that was borrowed) and could not afford the house. She is the one that explained that if the loan can't get approved i would get my money back.
Miraculously the loan was approved. In reviewing the paperwork I saw my loan application where they outright lied about our monthly household income and I told them I would not sign it attesting that it was true. They told me I didn't have to sign it if I was not comfortable with it. That is how they got our mortgage rate approved.
I could tell that the person that was doing the actual paperwork for the loan sympathized and didn't feel good about the loan. But she seemed to be pressured to get this loan approved. I don't know what kind of leverage Beazer had on them. When we sat down at the title company in July 2006 to sign the papers the loan application appeared again. I told the attorney how they lied and that should be some type of fraud. That that is the only way they got our loan approved, and we really can't afford the house but as long as the loan got approved, we couldn't get out of it without losing $27,000. He just chuckled and said I didn't have to sign the form but it didn't really make a difference.
I feel that some type of law should be out there to protect this kind of thing from happening to people. But we are so broke right now I am scared to approach an attorney about it.My husband and I or on the brink of foreclosure now. We love the home love the neighborhood so are really trying to manage. We have refinaced and taken out money from the home that helped for a month or so. I got a christmas bonus that went straight into paying the mortgage. We were able to rent our our old house. That has taken off some strain. But there is still a negative because the rent does not cover the mortgage and utilities.
On top of that we received a letter stating that all the resident in our new community will be charged $1,500 annually to pay for the sewer system in the community. That is something that should be made aware to people before they put any money down to buy housed in the community. We have thought about selling the home but it is now worth less than what we owe.

Ouch! I wish they would have had the help of a good Realtor. Perhaps this would not have happened.

David of Gaithersburg MD (11/17/06) We attempted to purchase a house with Beazer in Clarksburg, MD. We were committed to purchasing this house and placed a deposit of Fifteen Thousands Dollars ($15,000). The process was very unpleasant. After much dispute over the contract terms, we received a letter from Beazer saying that our contract for the house was terminated and that our deposit would not be refunded to us.
As we tried to renegotiate the contract, we found out that the house was sold. Our new homes consultant, Jay Smat, assured us that we would receive our deposit back if the following conditions were met.
1) We submitted with our contract was an addendum that made this sale contingent upon us selling our home. 3 months later Rob Shapiro, the general manger, selectively choose not to sign this addendum without notifying us of this action;
2) We were assured we would not qualify for two mortgages therefore we could not settle and our deposit would be fully refunded to us. Instead, Beazer qualifed us for predatory type loans (bridge loans and upto 12% int rate loans). This is despite our high credit scores.
3) We would lose concessions (discounts) and not the contingency in the event we could not settle.
4) If Beazer cancelled our contract, our deposit would be refunded;
5) We were convince that our contract would not be approved unless we deposited more than $10,000 dollars.
We would like to express that we have been disappointed with the whole process of trying to purchase a Beazer home. Beazer Corp, is not customer friendly and is unethical in its practices. Beazer had not in any way suggested a positive course of action for us to purchase the house other than threatning and ultimately refusing to return our deposit. We strongly believe that Beazer has purposefully manipulated and taken advantage of us during this process.
To be disputed in court. Upto $15,000 in lossed deposit and court/legal fees.

This is really confusing and much information is missing, but something feels very wrong here, even if it is nothing more than very, very bad customer relations.

Beth in Arlington, TN (4-5-07) In a nutshell* I tried several times to cancel the contract prior to close because I kept finding MAJOR issues with the home starting with they built the wrong floor plan & was threatened by Beazer so I put off the closing by 2 months & they agreed to fix a long list of problems & then they refused to allow me to go inside the property for a last inspection prior to close.* Upon getting the keys to the home - I found several items were not repaired at all* My kids & I became very ill after the first day of living there which at first didn't seem super strange but after things just kept getting worse I knew something with the house was causing this. * My new neighbors kept stopping by to meet us & to tell us all sorts of horrible things about their homes, Beazer's lack of response on repairs, & problems with the neighborhood's common areas that the supposed homeowners association was in charge of. Some of them even asked to look at various things in my house to make sure I wasn't getting "screwed" like they did.* I & my realtor started contacting Beazer on a minimum of once a day until at the 2 week mark with NO response, I sent an email to every Beazer person I had an email address for, every local government official who had an email address on their website, & every local news organization in town, The BBB, & HUD. I finally got a response within 2 hours of hitting send.* They did have all sorts of sub-contractors come & repair several small things; but when it came to anything major they either tried to tell me there was no problem, that the problem was actually normal or they said they would get back to me. Well I immediately contacted a lawyer & all sorts of specialty folks to come & give me their unbiased opinions. It ends up that I have major construction defects some of which have cause structural integrity issues, I have electrical & HVAC issues (the AC Unit would not shut off until I had the power to the house shut off), my yard is not sloped properly at all & it slopes down to the house on 3 of 4 sides, my soil is not compacted properly or to code, there isn't a wall, ceiling or floor that is level or to code, my roof is not to code, my insulation (lack there of) is not to code. Then from the mold/environmental testers - I have 7 types of mold in my home & when they drilled all their holes in the walls; I don't have vapor barrier on the exterior walls of my home & I barely have any insulation in my walls either. They found visible mold under the carpet in one room too. So then I started asking a lot of questions of my neighbors, my city board,etc. and found out my house was built on their construction burn pit & it was strongly suggested that my house is sinking & the soil is probably full of toxins. So I had the survey crew come back out again & survey the slab & they came back 3 weeks later & the house sank 2 5/8" on the east side. I do not have enough money to get the soil tested.* Me & my kids moved out on day 52 when I got the mold test results & after my infant had pneumonia for the 2nd time & had a fever over 100 degrees for 4 days & I had taken him to the ER twice!* I sent them a proposal 2 weeks later to buy the house back or I would sue & they rejected that proposal at which time they told me I had agreed to the forced arbitration clause in the sales contract (which by the way my attorneys tell me this contract contains many fraudulent sections) so they contacted PWC to start the arbitration.* Two months later after bugging the crap out of Beazer I finally heard from Dick Wood at PWC who told me that Beazer told him I had moved from the home (which I had because of MOLD) & they had no way to contact me other than my email & they spelled it wrong PURPOSEFULLY. He ended up pulling my original warranty paperwork from their files (which was sent to them at close)& called the work # on those papers & surprise surprise he reached me & he commented that they lied to him! Well after a month, Mr. Wood told me he felt that my case was way over his head & he sent it on to another company. A week later he called me to tell me that company also felt it was over their heads & so he was sending it to yet another company. SO 4 months after moving out - I finally had contact with the 3rd company & was assigned a mediator. It's now another 4 months later & we can't get Beazer to come to the table!I just want to say that I have a whole huge group of lawyers at my access either thru work, thru friends, & I even have an Uncle who's an attorney so I have lots of advice for free.I was advised to send a complaint to all of the following:*BBB which they have an online submission form & email addresses to contact your local office & they got back to me very quickly but because of the forced arbitration they had to put my complaint on hold until we at least try that route.*HUD - they also have an online complaint form & an email address: hotline@hudoig.gov* The Federal Trade Commission who's email is: COMPLAINT@FTC.GOV * The National Association for Home Builders - they also have an online complaint form as well as links to your local office - I filed my complaint with both.* I also emailed every local government official (got their email address from their website), every news reporter in town (got their email addresses from their websites) - don't forget the newspapers even the uncommon ones.* I also emailed all sorts of national news organizations like Associated Press, Reuters, MSNBC, CBS, ABC, etc. Here's all the email addresses I found & some of them have online submission forms so check them out.oreilly@ureport.foxnews.com, ontherecord@ureport.foxnews.com, 2020@abc.com, abc.news.magazines@abc.com, niteline@abc.com, assignment@cbsnews.com, evening@cbsnews.com, scams@cbsnews.com, weekend@cbsnews.com, Today@NBC.com, Nightly@NBC.com, WT@nbc.com, viewerservices@msnbc.com, Dateline@NBC.com, msnbcinvestigates@msnbc.comTHEN & this one finally got some attention - on March 28th, 2007 the US Justice Dept issues a subpoena to Beazer after an FBI investigation so I FAXED every state's US Attorney's office in each state that Beazer conducts business & I started getting calls. Several of them already had a lot of complaints & had forwarded them on to their local FBI & some of them told me to contact my local FBI so on the FBI's website is a submission form for crime tips - I filled it out along with faxing my complaint along with all my proof to my local FBI. My local FBI then contacted me asking for some other documents along with more info on which of my neighbors also had problem homes.Feel free to contact me if you want info & have helpful info to give me!!!!!THANKS Beth

Homebuilding 101 – Do not mess around when it comes to complaints and/or lawsuits concerning mold. Address it, resolve it, move on – and do it promptly. Also, don’t jeopardize the kids! And lastly, don’t mess with Beth.

I had a personal experience where a homeowner used mold as a threat to coerce a builder into buying back a house. It was a very different unfolding of events from what is described above but we must remember that there are ALWAYS two sides to every story. To prove ourselves true professionals we must try to discover and understand all the facts, no matter who we represent.

Related Articles

Atlanta Business Chronicle: Beazer Stock Drops, Addresses Bankruptcy Rumors

Forbes: Moody's Lowers Beazer's Credit Ratings

Business Week: Feds are Investigating Hhomebuilder Beazer
Residential builder probed in connection with potential mortgage fraud

Forbes: Beazer Sues to Stop Default Notice

The list goes on and on....you get my drift...you can't treat your customers like this forever without payback. Beazer called the rumors that the company was headed for the "B" filing "scurrilous and unfounded". OK, fine. We're not going anywhere...

Subprime Mortgage Meltdown in Cartoons

MSNBC.com's editorial cartoonists weigh in

on the subprime mortgage meltdown.

The Twilight Zone - In Real Time

It is a muggy summer evening in Manhattan and the regular crowd shuffles into the bar. To be more specific, it is 7:00 p.m., Tuesday, August 21, 2007 in a much visited bar and this crowd definitely does not shuffle anywhere. They are the movers and shakers of this town interspersed with the wanna-be’s, and the used-to-be’s.

It has been a long day and you can see the stress in their smiles and in the crease of their clothes. Two men order beers at the bar and look around for familiar faces. The taller of the two asks if there is any news.

“None. Mums the word, apparently. Can’t get any information out of anybody but everybody is on pins and needles. Layoffs, cutbacks but yet they put on the dog, trot out a press release saying they are going to save the entire mortgage industry. What a joke. How ‘bout you, man?”

“Had a listing appointment today for a condo in my building.”

“How’s that? I thought they just started closing a couple of months ago. I have a couple loans parked waiting on the units to be finished.”

“Yeah, this is one of my new neighbors spooked by all the bad news. Really rattled. Says she wants out although she just closed – hates the uncertainty of the market. She’s not even in the credit or real estate business, has a regular job with a good salary. She’s going to loose her ass selling now. It’s really crazy how paranoid she is. I’ll do what I can but for God’s sake, how can I compete against the developer who still has units to sell? And the market is feeling softer.”

“How could that be? New York is the bright spot for real estate in the country.”

“Could be past tense. Not feeling as shored up as it did even a few weeks ago. And a lot of new stuff coming on-line.”

“Shit.”

“I’ve heard rumors that some people are trying to get out of closing.”

“In your building? Why? They’re not investors are they?”

“No, none of that going on anymore. This credit mess and housing news has set off a new panic that prices are coming down, even in Manhattan. So they’re trying to renegotiate their contracts or just not close. Last week's article in the Wall Street Journal didn’t help any – the one that gave tips on how to renegotiate your contract! Nice move. Now you don’t know if you have a deal until after the money is in the bank.”

“Plenty of that going on with mortgages too. You’d think people would take some responsibility.”

“Shit, no.”

“Uhm. Martini, please. Bombay on the rocks with a twist. . . Thanks, man.”

“Did you read the – ‘Bonfire of the Builders’?”

“Interesting article. Said that home builders were pushing these risky loans down the throat of the buyers. Beazer is being investigated. I don’t think I buy the push down of the builders. They were dealing with the same set of tools the rest of us were. The loans weren’t against the law. Is it our responsibility to make a moral judgment as to what is the best loan for the borrowers? I don’t know what their situation will be in 3 years or what the house will be worth then.”

“But you did tell borrowers they could just refinance in a few years, didn’t you?”

“Yeah, didn’t you tell your people the same thing? You real estate agents come to us and say, ‘make this happen’ and if we don’t get your people qualified for the house you want them to buy, along with an appraisal high enough to match your sales price, you threaten to move all your business to someone who will! God, you guys are the limit!”

“Are you saying this mess is our fault? I can’t believe this is coming out of your mouth!”

“Hey, take it easy. Jessss…Everybody is to blame on this side of yesterday. Except the homeowners who want someone to bail them out. Why should it be their fault? Someone has to pay. Thanks, I’ll have another martini and my friend here will have a Long Island Iced Tea.”

“Yeah, right. I’ll have another beer.”

“Hell, we both heard the mantra, “The Fundamentals are Sound” about a million times a day. The whole damn country heard it a million times a day and every builder and every Realtor in the country were saying the housing slow-down would be nothing more than a blink of the eye. At least the lenders weren’t slinging hash to every Tom, Dick, and Harry that everything was OK. The eternal optimists leading anyone who would listen down the primrose path.”

“Us? What about the stockbrokers being the eternal optimists. After all, they’re the ones touting the strength of the global market will save us all.”

“We’re talking stocks vs. real estate.”

“August 16th taught us just how related it all is. N’est pa, old buddy?”

The guy sitting next to them at the bar looks over and sneers, “You won’t even be recognizable as the same sleazebags when the Feds get finished re-regulating you for this mess.” The stranger pays his tab, picks up his New York Times and hands the two friends each a business card. “You guys have elevated me on the food chain. Thanks. See you around.”

The elegant business card reads “Attorney at Law”.

Yes…it’s the Twilight Zone.

Midnight Ride of Ben Bernanke

Is Bernanke our latest American hero? Only time will tell but at least the Fed’s move on Friday told us they are in the fray. I can’t shake the association with Paul Revere, corny as it is, and how one day we’ll sit around and tell the young industry fledglings about the day Bernanke saved us from ourselves…

Listen my children and you shall hear
Of the midnight ride of Paul Revere,
On the eighteenth of April, in Seventy-five
Hardly a man is now alive
Who remembers that famous day and year.

Strains in the market had been mounting for weeks but the events that unfolded on August 16th showed a dramatic change requiring quick action and nerves of steel. The following “day in the life” is a synopsis from today’s in-depth article in the Wall Street Journal entitled, “How a Panicky Day Led the Fed to Act”. These shocks made for one of the most perilous days in the history of the global credit market.

Dawn in London - $45.5 billion in short-term IOUs were maturing and had to be rolled over. Traders usually have buyers for such paper by lunchtime in London (7 AM in New York). “On this morning, demand had dried up, and it would take the whole day to sell less than half of it.”

7:30 AM, New York - The largest maker of mortgages in the U.S., Countrywide Financial Corp., said it was tapping $11.5 billion in bank credit lines – bad news, they could no longer raise money in the financial markets.

Noon, New York – The yen surged against the dollar, rising 2% in just minutes. Many unsuspecting currency-market players were crushed by the sharp move.

Noon, EST - the London trading floor of Goldman Sachs Group Inc. - Salesmen wielded two phones at once, others shoving and grabbing to get in front of traders, shouting orders to execute trades.

Afternoon - Investors start jumping into short-term U.S. Treasury securities, considered safe because they're backed by the U.S. government. The gap between yields on T-bills and corporate commercial paper widened sharply. "It was an extraordinarily violent move," said Jason Evans, head of government-bond trading at Deutsche Bank. "It became clear that the market was at a point of distress and expected a response from the U.S. Federal Reserve.”

On the opposite shore walked Paul Revere.
Now he patted his horse's side,
Now he gazed at the landscape far and near,
Then, impetuous, stamped the earth,
And turned and tightened his saddle girth;

Evening – Conference call convened by Fed Chairman, Ben Bernanke.

And lo! as he looks, on the belfry's height
A glimmer, and then a gleam of light!

Friday Morning – Only 10 days after declaring that inflation was still its predominant worry, the Fed declared “downside risks to growth have increased appreciably”. The Fed hinted that it may soon cut its target for short-term rates. In an unusual move, it also encouraged banks to borrow directly from the Fed and made such loans more attractive.

You know the rest. In the books you have read
How the British Regulars fired and fled,---

Bernanke has been accused (complimented in my book) of being an academic instead of a market insider but that may just be what brought us relief. During Bernanke’s days as a Princeton professor one of his personal sources was a book entitled “Lombard Street” written by a British journalist, Walter Bagehot in 1873. The following passage is very familiar on this side of 8/16, “In times of ‘internal discredit’ -- when uncertainty leads private players to pull back -- the prescription to the central bank is: Lend freely.”

And further, "A panic...is a species of neuralgia, and according to the rules of science you must not starve it," Bagehot wrote. "The holders of the cash reserve" -- today's central banks -- "must be ready...to advance it most freely for the liabilities of others. They must lend to merchants, to minor bankers, to 'this man and that man,' whenever the security is good."

Through all our history, to the last,
In the hour of darkness and peril and need,
The people will waken and listen to hear. . .

So many answers lie in history and Bernanke seems to be a man who can apply lessons learned through history. “In the Panic of 1907, the stock market crashed, the U.S. slid into recession and bank runs broke out across the country. Famed financier J.P. Morgan organized other bankers to direct credit to troubled banks, secure international lines of credit and buy stock, and calm was restored.”

In a January speech, Bernanke noted that the Fed was founded "in response to the periodic episodes of banking panics and other forms of financial instability that had plagued the U.S. economy during the 19th and early 20th centuries." After the Federal Reserve was founded in 1913, banks were able to access the discount window, the same mechanism the Fed is now using to stimulate a willingness to lend.

A cry of defiance, and not of fear,
A voice in the darkness, a knock at the door,
And a word that shall echo for evermore!

“This week, the Fed will find out if it did enough to bolster the confidence that was in such short supply last week, when investors refused to buy or accept as collateral securities that in normal times would be of unquestioned worth.”

The Fed "really wanted to drive home the point that if [bankers] were complaining about not being able to borrow money against liquid, high-quality securities -- mortgages -- we have no more basis for complaint. We were all given a clear message," says one banker.

The people will waken and listen to hear
The hurrying hoof-beats of that steed,
And the midnight message of Paul Revere.

September 18th will be the next day of reckoning. Much is at stake.



Longfellow’s “The Midnight Ride of Paul Revere” was obtained from Amy Ridnour’s National Center Blog, a Project for the National Center for Public Policy Research. Definietely worth checking out. Not only can you find poetry as evidenced above, you can also find such esoteric postings as:
"Possibly Non-Existent Mouse Shatters Family's Dreams"
A Wyoming family's dream to build an indoor horse-riding arena on their property is on hold because the area on which they want to build is designated critical habitat for Preble's Meadow Jumping Mouse - whose existence as a separate, identifiable species is being debated.

Amy is the mother of 3 second graders, which might explain the esoteric part, and the President of the National Center for Public Policy Research. Where does she find the time?

Yale U Speaks to WSJ on Credit & Housing - Tell Us Something We Didn't Know - Apple vs. Microsoft

This piece should be entitled "Stating the Obvious - Yale University's Take on the Credit Crises and the Housing Market". I would have guessed this was an interview from a month ago except for the mention of the Fed's move on Friday.

Maybe Harvard has something fresh to add.



Now on to something pretty useful. This is a really good evaluation of Apple's new iWork vs. Microsoft's Office by the Wall Street Journal's Tech guru, Walt Mossberg.

Thank God This Week Is Over - And Other Prayers Heard Around the Block

A REALTOR'S PRAYER

Dear God,

I've been good so far today . . .

I haven't yelled at the kids,

I haven't told my Sellers their house will sell when Hell freezes over,

I haven't told my Buyers they need to rob a bank to close,

I haven't shredded three low-ball offers, and

I haven't told my Broker to get a real job . . .

. . . But God, I'm about to walk into that office . . .

And from then on, I'm going to need a lot more help!

Are You Serious - They're Doing What in Texas?

For crying out loud! What a day! It's a 100 degrees outside with no relief in sight, the real estate world just entered yet another stage (Armageddon), and these people in Texas have nothing better to do than argue about where people are going to park cars and the NAR, in their REALTOR Magazine, has nothing better to do than re-report it.

The Houston City Council is contemplating a law making it illegal to park a vehicle on the front lawn of a single-family home. The "mob" behind this beautification project claims environmental issues of leaky oil products as the culprit.

The opponents of the new law, the Greater Houston area chapter of the League of United Latin American Citizens, cry foul! Would that be easier if we shortened it to GHACLULAC?

GHACLULAC says it is a case of the haves and the have-nots. GHACLULAC must represent the have-nots as they are quoted as saying: " We have a new generation of people moving into the city...and (they) have been living in this style for many years." This is obviously a matter of cultural tradition to GHACLULAC.

Just where is this going? Well apparently the haves, who are opponents of lawn parking, still will not be entirely satisfied if the new law passes because the new law will allow home owners to pave over their yards to accommodate their cars.

Pave paradise; give me a parking lot.

Note: I could have told you about the old Atlanta neighborhood battle against Ted Turner's daughter who decided to go green amongst the blue-bloods. But that's for another day.

This Would Have Been Good Advice Two Years Ago

I found this on The Real Estate Blogger today. It is priceless considering our current mortgage defaults.

Mind Mapping: Leary Would Have Loved This

Timothy Leary may not have needed mind expanding drugs if he'd had today's sophisticated mind mapping software.

A mind map is a cognitive map with no restrictions, a free-flowing diagram that represents thought patterns, ideas, or tasks that are linked radially around a core concept, project, or issue at hand. "It is used to generate, visualize, structure, and classify ideas and as an aid in study, organization, problem solving, decision making, and writing."

The mind map below is a portion of a simple visual I prepared for a developer to illustrate the various sales and marketing steps to consider for a new community start-up.

I choose the Nova Mind software because I liked the way it looked and is simple to navigate. It is completely pliable and allows for easy collaboration and an eye catching presentation. I first tried a free application but it crashed my computer. You get what you pay for, or rather, you get if you pay.

The process of preparing a mind map encourages brainstorming and problem solving. Whether working alone or with a group the mind map helps to sort out a complicated idea or problem. I would normally get out huge pieces of paper and draw diagram after diagram of radiating thoughts with edits and scratch-outs as so many blights on the landscape.

Whether hand-drawn or done with sophisticated software, the concept is really productive. But hands down, the computer wins with the ability to collaborate in color and to evolve a project with each edit producing the final product. It is a powerful graphic organizer and a huge time saver.

Mind mapping can be traced to the academics surrounding Aristotle, graphically visualizing his concept categories in 3 BC. It is believed by some that the process taps the deeper levels of consciousness and unused mental potential. They also believed it balances the brain and stimulates intuition.

Scholars also tout the effectiveness of mind mapping in note taking because it doesn't lead to the "semi-hypnotic trance" induced by traditional note forms. I seem to remember that trance from my college days.

Wikipedia provides a listing of several mind mapping applications.

Happy Trails.

New Orleans' Newest Victims: Unbelievable!

Katrina Survivors Face New Threat: City Demolition

New Orleans plans to flatten 10,000 hurricane-ravaged properties. The problem is that a number of these properties weren't badly damaged or have been significantly repaired. Through a bureaucratic screw-up, the property owners often don't even know they are on the demolition list.

"Nearly two years after Katrina, city officials are toughening enforcement of an ordinance giving them the power to bulldoze homes and businesses that remain smashed, moldy or abandoned." This makes perfect sense but something bad went awry. In tiny print, 1,700 notices were published in the local paper filling 25 newspaper pages. Letters were also to be sent to the property owners but many were never received.

Unbelievable confusion and chaos ensued as homeowners fought to save their perfectly good houses. I can't imagine the monumental efforts that will be required to reconstruct New Orleans, the near impossibility of the task, but demolishing the structurally sound, occupied properties does not instill confidence in the process.

When Katrina hit, one couple rescued about 25 people in their fishing boat before giving it away and trudging out of the city on foot. How does she feel about the demolition debacle? "She is angry that anyone trying to save New Orleans could have so much trouble fighting city hall."

The scramble is on..tune in to the video and slide show:

My thoughts?

A Widened Apeture on the Credit Problems: A Short History

Sit back, relax, get a good stiff drink, and settle in for a bed-time story of epic financial porportions. Greg Ip and Jon Hilsenrath of the Wall Street Journal take us through the history of the current credit crises in How Credit Got So Easy and Why It Is Tightening, published today. Their take is a broad economic picture of what led up to the current milieu.

For the faint of heart, I have included this short video by Mr. Hilsenrath who gives a five minute Cliff Notes' version of the article. But don't short-change yourself. For those on the fringe of the financial inner-office, this article is a very good in-depth explanation of how we got here. I have also offered up some highlights from the article below.

Although the article doesn't get off to a promising strart..."An extraordinary credit boom that created many first-time homeowners and financed a wave of corporate takeovers seems to be waning." No Kidding? "Home buyers with poor credit are having trouble borrowing." What's wrong with that picture? But these smart journalists came through immediately.

The origins of todays credit woes are convincingly traced to the 1980 changes in bank regulations due to the savings and loan debacle, the Asian financial crises of the 1990's, and the Fed's cut of interest rates in 2001 to the lowest rate in a generation.

Greenspan Redux was quoted today, "These adverse periods are very painful, but they're inevitable if we choose to maintain a system in which people are free to take risks, a necessary condition for maximum sustainable economic growth." The WSJ explains further, "The evolving financial architecture is distributing risks away from highly leveraged banks toward investors better able to handle them, keeping the banks and economy more stable than in the past, he says. Economic growth, particularly outside the U.S., is strong, and even in the U.S., unemployment remains low. The financial system has absorbed the latest shock."

In June 2003 the short-term rates were cut to 1% and stayed there for a year with the intent to bolster housing and consumer spending until business investment and exports recovered. Mission accomplished, but at the same time the seeds of excess were planted.

Did rates stay too low too long? Pay me now or pay me latter. In June 2004 the Fed began to raise short-term rates eventually reaching 5.25% where it has been for the past year. Long-term rates did not follow which was unusual. Greenspan also says today, "We tried in 2004 to move long-term rates higher in order to get mortgage interest rates up and take some of the fizz out of the housing market. But we failed."

Both Greenspan and Bernanke believe that demand from investors also fueled the surge in capital pouring into the U.S. from overseas. "Chinese government entities recently poured $3 billion into U.S. private-equity firm Blackstone." When the U.S. begs, cajoles, and threatens China to let their currency float (as Congress is currently doing), they remind us of their cooperation in 1998 when we begged them to hold their currency valuations. They agreed and the U.S. praised them. Well they just kept the currency pegged instead of floating it again when we said "release it now."

Then came the suction from Wall Street in the mid 90's wanting more and more paper. 90% no-doc loans went to 100%. Well, you know the story from there. "Demand from consumers, on one side, and Wall Street and its customers on the other side prompted lenders to make more and more subprime loans." Originations went from $160 billion in 2001 to over $600 billion in both 2005 and 2006. Defaults were low because home prices were rising so much borrowers who fell behind could easily refinance.

The S&L crises in the 80's and early 90's shifted much of the lending from banks to unregulated lenders who financed themselves by Wall Street credit lines and by selling their loans to investors.

Example of the painful consequences: New Century Financial was the 2nd largest subprimelender by 2006. When its borrowers began falling behind, Wall Street cut off its lines of credit and forced it to buy back some of its poorly performing loans. Result - they filed for bankruptcy protection in April wiping out shareholders and triggering market-wide fears about the health of the subprime business.

"The stock market collapse and low interest rates of 2001 to 2004 nurtured a class of investors and products to fill that role." Anything to get those yields up, and up they went. "Low interest rates made many investors willing to buy exotic securities in an effort to boost returns." Mortgage-backed securities became big business on Wall Street and the offerings became larger as the investor appetite fueled the fire. The risk spread and the credit ratings however were superimposed on opaque portfolios and funds.

But the upside was evident: Everybody could get a loan, banks shifted the risks to investors and investors could pick either more-risky or less-risky pieces of pie - supposedly. Now the downside, too, is painfully evident.

"Recent events show that financial innovations meant to distribute risk can end up multiplying it instead, in ways neither regulators nor investors fully understand. Fed officials believe that even if their policies led to housing and debt bubbles, the strength of the overall economy shows that the policy was, on balance, the right one."

Market veterans predict the most egregious underwriting practices and products will disappear, but the benefits of innovation will continue.

Yes lessons have been learned. Glenn Reynolds of CreditSights sums up quite aptly the credit industry, "...you have to run it like a prudent risk-taking venture, not like it's casino night and you're on a bender. "

Well said. Good night.

Glenn Kelman: You've Got To Admire A Tech Guy Who Can Quote Dostoevsky and Get Excited About Real Estate

Glenn Kelman is Redfin’s founder and CEO. Redfin is the controversial internet-based real estate concern that was covered on 60 Minutes in May. It was the real estate shot that was heard around the block.

This is obviously is a really smart and interesting fellow. He is stirring the pot and creating controversy wherever he goes. By following him I have found some real jewels and decided to share those pieces.

The first is Glenn’s Keynote address at Inman News’ Blogger Connect that just concluded in San Francisco. He talks about the fascinating and funny experience of being on 60 Minutes and the behind-the-scenes Leslie Stahl. Although not as interesting as backstage CBS, Glenn's pointers on blogging are well worth a listen (after all it is a real estate blogger convention). About 45 minutes.

Real Estate Video by - Real Estate Blogger

Another interesting morsel is Glenn’s guest post on Guy Kawasaki’s How to Change the World blog. The post is called “On the Other Hand: The Flip Side of Entrepreneurship” and is a good piece on building a new company. It is here that I discovered this guy is a Renaissance Man, talking about the souls in Dostoevsky and quoting Ezra Pound. Phenomenal response by Guy’s readers, but not for his literary references.

But my all-time favorite was the video of guys dancing on treadmills that he posted to Redfin's August 5th blog. The 360° of Renaissance.



I'll stay tuned in to see if he stays with the real estate thing.

CNBC's Cramer's Scary Take on the Credit Market: Brace Yourself

Go to CNBC's Realty Check to see the fall-out from Jim Cramer’s Friday melt-down on the credit markets. But first, brace yourself. It is a disturbing emotional reaction to what he sees as the bottomless pit of the credit/subprime and beyond debacle. Cramer is an emotional guy but I have never seen him as upset as he was at the end of the day on Friday. He is probably regretting his vehemence through a bad adrenaline hangover, but perhaps it was necessary to make his point. Cramer barely took his last breath as CNBC slapped up their disclaimer that Cramer’s opinions are not necessarily that of CNBC, etc., etc., etc.

Cramer was adamant that Bernacke had to lower interest rates. But if interest rates are lowered will a downward adjustment even make it to the consumer, or would it rather go to bolster the allure of mortgage securities to the secondary market? See the follow up video from Friday with further explanation from Cramer to soften the earlier melt-down.

In a phone interview with Donald Trump today I heard that he agreed with Cramer that Bernacke needs to lower the rates. Cramer didn't mind finding Trump in his corner. We'll have to wait to hear the Feds tomorrow.

Further related news today: This morning the Wall Street Journal reported that American Home Mortgage, the nation’s 10th largest mortgage lender, filed for Chapter 11 Bankruptcy today, just days after the layoff of 90% of its work force. The big tree that fell in the forest. Last known forwarding address: Bankruptcy Court.

So credit becomes the problem du jour in the news but it should go down in history as the problem of the year. It seems that credit has now surpassed housing as the more beleaguered industry and unlike the housing, credit (at least appeared) to come blasting down the slippery slope at a much faster pace.

Just to be on the safe side of tomorrow, somebody might want to remind the private equity funds not to forget the equity.

Take a look at a couple of videos on related topics from today's news:

Credit Market Worries - Tim Harris, Head of Markets Strategy at JP Morgan Private Bank, about the credit market worries.

Government Subprime Bailout? - Sen. Chuck Schumer, D-N.Y., has proposed a $300M fund to help homeowners avoid foreclosure.

Beyond Subprime: Interest Rates on the Ascent: Bernacke Not the Culprit: Further Housing Pressure

It looks like we’re heading into the next phase of the housing slow down – “Beyond SubPrime”.

Mortgage news this week was just one more blow for the housing industry. The Wall Street Journal reported yesterday that home-mortgage lenders are pulling in their horns on a substantial portion of mortgage options and raising interest rates on other surviving loan product.

The higher mortgage rates are not tied to the cost of money; the Feds have not raised rates. Lenders have hiked interest rates to make their loans more attractive in order to move them in the secondary market. Increased mortgage defaults have wreaked havoc on the value of mortgage-backed securities (as in Bear Stearns “extreme credit storm”) and investors just aren’t buying what they consider to be fraught with undisclosed credit risks.

American Home Mortgage stopped making loans early this week and slashed their work force by 90% disbanding 6,250 people. Countrywide this week issued a strong statement of financial stability which had only a midly soothing effect on mortgage jitters.

Investors are steering clear so in order to sell their loans lenders are going back to the basics, returning to more conservative lending practices of a decade ago, before the housing boom. And they are also adding the value of a higher interest rate as a carrot to investors.

As a result of secondary market demands, the subprime loans are expected to decrease by 50% this year. Lenders are also being forced to stop, or drastically cut back, on what is called Alt-A loans - loans that fall between prime and subprime and usually have some form of no-verification or no down payment.

Investors are pressuring lenders to require more stringent underwriting. Unlike with the subprime and Alt-A loans, this means most buyers/borrowers now must have NOT ONLY money for a down payment, BUT ALSO good credit, AND substantiated income to demonstrate ability to repay the loan.

The further pressure on the housing industry is obvious and seriously sobering. Higher monthly payments, fewer loan products, stricter underwriting, it all boils down to fewer borrowers and fewer house sales for the foreseeable future.

I no longer know how to spell RELIEF.

Hear John Lonski, Chief Economist at Moody's on unemployment figures, credit tightening, and housing worries.

Real Estate Deal of the Century: Russia Lays Claim to the Artic

I thought I had the real estate scoop of the century when I heard in passing today that Russia was claiming the Artic Circle. I laughed and thought, big deal the Artic is an ice berg, not a continent – there is nothing to claim! It's going to melt!

I immediately did a search on the Wall Street Journal but to no avail. Nothing about this news flash. If the WSJ was not covering it, must there be a hoax? Further investigation brought coverage on both the International Herald Tribune and USA Today.

While the US was arguing with China over their over zealous currency control, the Russians sneak in with a miniature submarine and plant a flag on the Artic ocean floor. Does that count? Try to plan a media event around that.

Apparently there is gold in them waters, liquid gold as in gas and oil that is believed to lie below the ocean floor. All you have to do is wait around a few years for the ice to melt and wham-o - Russia is the new Dubai. What a scheme. Why didn’t the US or Canada think of simply planting a flag?

There, that's taken care of. All in a day's work.