Everybody’s Suing — Music To My Ears

Only because I have two lawyers in my house, but I kind of saw this coming a few week’s ago. If people have no money to pay their attorneys fees, think they’ll take chickens?

Time To Change Texas Foreclosure Laws?

Texas AG Greg Abbott says yes, give homeowners 45 days rather than the current 20 to cure (legal lingo for figure out a way to pay) a loan default before the notice of sale. Meantime, 80,000 Californians have lost their homes to foreclosure in the last three months, prompting an emergency change in California law: lenders must give borrowers 30 days before initiating foreclosure proceedings, which has helped lower default notices. Swear those adjustable rate mortgages should be illegal.

California: 228% Increase in Home Foreclosures

We have witnessed the spectrum, the rise of California real estate to the fall.

Jim Landers: Blame The Credit Rating Agencies

Oh yes, oh yes! Standard and Poor’s and Moody’s hired financial engineers who cooked the computer assessment of securities and tweaked until they got the answers they liked, then gave them to the rating agencies for AAA ratings. Not only does this sound like Enron, it also reminds me of those studies the government pays millions of dollars to figure out something we all know, like how children get better grades when they do homework in a quiet room without the distraction of televison.

Foreclosures: They Put Feces On Doornobs?

Oh yuck. Think I’m going to be sick. Finally got around to reading Daniel McGinn’s story on foreclosure properties in last week’s Newsweek, where he interviewed agents on the hazards of selling foreclosures. One example: a house with an indoor (filthy) swimming pool. ‘Tis true: whenever we hear the word “foreclosure” a few neurons do the Neimans Last Call dance in our brain: a bargain, something for (almost) nothing. But the truth is, many foreclosure properties are a mess and may not be such a bargain. (I mean, who would be dumb enough to build an indoor swimming pool without a proper ventilation system?) You want a Money Pit? Buy a foreclosure. Tell us what you’ve seen in Dallas foreclosures — I haven’t seen that many, but having just received Roddy’s Foreclosure List, I’m going to be hunting and posting. Meantime, will someone please tell these Realtors back east to carry Lysol wipes, not Purell?

What About All The Banks?

Peggy Levinson over at the D Home blog queried me a few days ago: since there are now more banks than churches or gas stations in Dallas the USA, what would we do if they had to shutter? You may recall I told you a year ago that Wachovia’s $451,000 monthly land lease at Preston and Mockingbird is one of the highest in the nation… wonder how much traffic they are losing with all that construction? (Now Wells Fargo pays the rent.) Anyhow, Preston Center is only getting busier what with the Staubach building and more development, including rumors that George Bush will office in that building (which have been denied) or in Trammell Crow’s redevelopment of the old Parkland Hospital. But read an article today saying that smaller and mid-size banks may actually weather this economic crisis and — you’ll never guess it — profit.

Business Week Says UP Could Be Hit Hard

By the economic crunch… but remember the two most beautiful words in North Texas: Barnett Shale.

Foreclosure in Chi Chi Montclair Parc?

This is a gated community out near Colleyville, 5700 Miramar where a lot of sports stars live – lookie at all the granite you can get for $755,100. ($755,100? That extra $100 is random.) What is the deal with that carpet in the game room?

$700 Billion Bail Out Hammered Out… WaMu Execs Make Out Like Bandits?

They say it all started with housing: low interest rates that were supposed to help more people buy homes. But it wasn’t just low interest rates. It was mortgage brokers and others who saw gaping loopholes in the system and ways to make instant money. Over the weekend I spoke with a Real Estate investor who built condos on the Gulf coast. He told me something I’ve heard whispered at many a cocktail party: mortgage brokers were making upwards of $400K and $500K/year in commissions a year pushing mortgages. (Do you recall, about five years ago, how every other spam email you received was from a mortage broker trying to sell you a new loan or re-fi an existing?) Of course they tried to get everyone “qualified” — that was how they got paid. What a racquet! Stated income loans, no money down loans, 110% equity loans, all around 6% interest rates or lower teaser rates. Everyone with a pulse got a loan regardless of whether they could pay it back or not. Then these shaky, shot-gun loans were “bundled” (whatever that means) and sold as Wall Street “securities” to unsuspecting investors. Us. Now we’ve got to bail out the idiots who conceived this. But wait, they are not idiots: most have MBAs from places like Wharton and Northwestern. And the CEO’s negotiated mega salaries and bonuses and giant severances even if the companies failed! At Washington Mutual,  it appears that the departing execs are going to make out like bandits:

“The WaMu executive with the biggest termination package is Stephen Rotella, president and chief operating officer, who is entitled under his current employment agreement to a cash severance of $12.7 million if he is terminated or quits with “good reason.”

Is anyone else as agitated as I am about this? Bad enough when people get stiffed, worse when the “stiffer” flees with millions in tote. Why don’t the shareholders revolt? Where in the bejesus has Barney Frank been, he is chairman of the House Financial Services Committee? His office sent this press release in July… it should have been out three years ago! (more…)

Sanger House On I-35

If you’ve driven I-35 north to Oklahoma, you’ve probably seen this unfinished mansion on the west side of the highway. Just. Sitting. There. I snapped this photo a few weeks ago while en route to Heather Nielson’s wedding in Wichita, Kansas. Does anyone know who built this, why it has not been completed, and generally what the dirt is?

The Day The Housing Market Turns Up

We will have much to celebrate this New Year’s Eve, when the national housing market might be close to being wheeled out of ICU and into a regular HMO hospital room. (No private suites – too many ailing roommates on that policy – Bear Stearn, Lehman Brothers.) Alan Greenspan tells us we have to wait until 2009 for the national housing market to stabilize — stabilize meaning the patient is no longer on death’s doorstep, not meaning patient is jogging across the ICU floor. An article by James J. Cramer, co-founder of TheStreet.com. in last week’s issue of New York Magazine, targets the market-pick-up date as June 30, 2009. Personally, I think they are both taking Happy Pills.

Greenspan gets a lot of heat for the mess we are in, but I think he tried to make homes affordable for more Americans, particularly the influx of immigrants that our nation needs, immigrants the current administration has tried to keep out. (Cramer says it doesn’t matter who wins the election, both Obama and McCain will be more immigrant friendly than Bush has been. As the grandchild of immigrants, I have always thought it was dumb to try and “close the door”. We need immigrants, we just need to screen for terrorists better than we do. But illegal immigrants do overload our healthcare system, the next ICU patient.) It is not Greenspan’s fault that greedy mortgage brokers and even greedier Wall Street financiers made slippery loans, pocketed their fees, and then sold the packages to the next unsuspecting investor. Like a game of hot potatoe, these were passed to the last person holding the bag with the most subprime loans. 

How Mr. Cramer can decide on a specific date is interesting. I hope he’s right: since Dallas hasn’t been hurt as much as other parts of the nation, that is only good news for us. June 30 will be the time next year’s spring market starts revving up, the key turning over about March. Maybe he means people will dip their toes in the water in April, May and June and find out the water’s not too bad. So everyone will dive in, much like they did five years ago. Some folks trusting enough to get back in the mortgage business would help. June 30, 2009? Let’s see what happens this week as more poo poo comes down… enough poo poo perhaps to maybe push interest rates down further?

(Cannot wait for New Year’s Eve!) 

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More Takes On The Fannie Mae/Freddie Mac Move

From Zillow who says look for a cut in interest rates this week… (but will even that help sales??? It’s a credit crunch… low rates for a select few who can jump through the lenders’ higher hoops…) and Forbes., also positive but no mention of rate cuts. Full disclosure: I own Fannie Mae shares and can kiss them goodbye.  Forbes says “no accounting wrongdoing” but that the companies may have overstated their capital resources. If you or I overstate income or Real Estate values on a financial statement, that is considered illegal. These people had a fiduciary duty to shareholders. And as a shareholder about to lose money, it pains me further to learn that Freddie’s former CEO could walk with millions, as the Wall Street Journal reported –

“At Fannie, Herb Allison, who formerly served as chairman of the investment company TIAA-CREF, succeeds Daniel Mudd. Freddie’s chief executive, Richard Syron, was succeeded by David Moffett, who has been vice chairman and chief financial officer of U.S. Bancorp.

Potentially, Mr. Syron could walk away with an exit package totaling as much as $15 million, said David Schmidt, a senior consultant at James F. Reda & Associates LLC, a compensation consulting concern in New York. That includes a pension and deferred compensation, about $3.7 million in severance pay and a possible payment of $8.8 million to compensate for forfeiting recent equity grants. A Freddie spokesman said Mr. Syron had said he doesn’t “anticipate receiving nearly that much.”

What severance pay? Take that pension and pay back shareholders! Ask me, neither should get a penny.

August Home Sales Stats and Asking prices: Most of the Nation, Down, Dallas OK

The August report from Altos Research shows that asking prices declined in 20 markets, were flat in one and up in only 4 of 25 markets. Price weaknesses in August could signal further price reductions this fall. Now the Dallas story: price indexes were actually up 1.3%, while inventory was down — a good thing, product is selling. Average days on market now 92 days. See it all here.

Not Worth Repairing Microwave Ovens?

That’s what the experts tell us. Ever heard of RepairClinic.com?

Gotta Love The Donald

So he’s buying Ed McMahon’s Beverly Hills home that’s been reduced to $4,600,000 from $7 million, then letting McMahon lease it… bet Mr. Trump got a heck of a deal. I’ve heard $3,500,000 tossed around…

RE: United Title of Texas

One local agent’s story: His listing was scheduled to close with United Title, went to close last week, you know the story, earnest money nowhere to be found. The sellers were kind enough to credit the buyers with $1500 (amount of earnest money), thus reducing their sales price by $1500 to get the deal done at another title company. Question for United Title: how and when will buyers get their earnest money?

What’s Brewing With United Title of Texas?

Dallas Dirt Exclusive: I have just received word that United Title of Texas changed locks on their doors yesterday at 5 pm which will make it mighty hard for anyone with a closing scheduled at their offices to get in the door, much less close. Developing. Hear anything, let me know. (Ironic, I was just interviewing a company in New York about a new key-less lock system by Schlage.)

Dallas Home Prices Down 3.1 Percent

So reports the Dallas Business Journal. And Back Talk Preston Hollow, where Jeff Siegel brings up his voyage to Chicago where the market is just plain God awful. I was in California last week where there are a lot of homes on the market, record foreclosures up 261% from a year ago. Yes, I said 261%. But the Peninsula area near San Francisco is still pretty insulated, folks there told me. I think the bottom line in this Real Estate story 2008 is that people with plenty of money who are either buying or selling are smelling like roses. They don’t have to worry about sales prices because they sold a company and live on non-earned income of $56,000 a month. OK, maybe the CPA will eventually suggest they chop a hundred thou off the price of a $4.5 million home. Tinkling in the ocean. This is the buyer every high-end spec builder in town is killing to have. No, the people hurting are those who over-shopped and who used home equity in one home to finance others. They bought into some experts’ advice — hey, I read those books too— for a moment I thought I could be Donald Trump. I heard lots of these stories in CA: one guy borrowed 90% against his home and bought not one but two homes out of state as investment props. (Idaho seems to be where everyone is buying investment props.) When he went to flip, the market had turned and he couldn’t sell them. Then the value of the home he had the 90% loan against declined — he had taken out the loan at the peak of the boom. Now he had two inflated loans on two props declining in value — not selling — plus the 90% loan on his home. What could he do? He walked, lost his equity. Just a few years back in Texas we could not take out loans against our homesteads because back in the wild west, men were gambling away the ranch at the poker table.

My, how times have changed.

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Centex Loses $150 Million, Will That Affect Tim Eller’s Building Budget On Lakeside?

Just wondering.

Rolando Blackman Bids Belle Nora Adios

Dallas Dirt Exclusive: Belle Nora is truly available. Told you how Rolando Blackman no-showed for his closing of Belle Nora on July 14. Last week he left a voice-mail with the listing agent indicating he still wanted to buy the home and hoped to close by month’s end. Saturday, the agent received word from Blackman’s agent, Allie Beth Allman, that he couldn’t get the financing together and would not be buying the property after all. So she is on the market again. Mr. Blackman will not return my phone calls to his office. Wish he would: maybe we could post his W props and help get them sold.  

RE: Hot Springs Hotel

I SAID a little TLC.

For Sale: Famous Hotel In Downtown Hot Springs, Arkansas

You can own this hotel, which is listed on EBay , for less than a million dollars. Of course, it may need a LITTLE TLC. But hec, no more security lines at the airport: it’s about a three-hour drive from Dallas.

Southern Cal: Home Values What They Were In 2004

I have this theory: the high cost of Real Estate in California drags us all down. I mean, who invented variable rate mortgages because with home prices this high — 2004 values are no bargain — who can afford a fixed rate mortgage? Make sense?

Fed To Shape Up Lending Industry & Practices

So the Federal Reserve has adopted a new plan that just may clean out the shady lending house… for starters, no more no-doc loans, require lenders to escrow tax/insurance on riskier borrowers (if any of “those folks” even get a loan, if any living folks ever get a loan), forbid brokers from coercing appraisers to inflate a property’s value (no, they didn’t do that!), and limit or ban pre-payment penalties. In other words, let’s go back to buying homes to live in and not bounce around like stocks. Or checks.  

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Rolando Blackman No Shows At Closing

Exclusive: DallasDirt has learned that Rolando Blackman no-showed at yesterday’s closing for the property he had under contract, Belle Nora, a historical East Dallas home located at 8254 Garland Road overlooking White Rock Lake and listed for sale at $2,790,000. According to sources, the contract did not have a third party financing contingency –Blackman had made a cash offer for the property and planned to restore it. Yesterday Tim Rogers reported on Frontburner that one of Blackman’s three W condominiums was in foreclosure. As for Belle Nora, it is back on the market again and has several interested parties swirling, including the Forest Hills Homeowner’s Association. Blackman’s agent: Allie Beth Allman.