A SUMMARY OF THE ECONOMIC STABILIZATION ACT
On October 1, the Senate passed the Emergency Economic Stabilization Act (EESA) on a bipartisan vote of 74 – 25. NAR supported both the Senate package and the one the House defeated September 29.
This summary uses some general subject headings to illustrate the many pro-taxpayer and pro-borrower provisions in the bill, as well as to showcase the provisions that encourage banks to work more closely with borrowers in foreclosures and short sales.
Help Homeowners and Borrowers: The Senate legislation responded to the criticisms that lenders have been slow and/or unwilling to work with homeowners and borrowers. It encouraged negotiation in short sales and consumer efforts to refinance or reconfigure existing mortgages:
· When the Treasury (or other federal agency that holds mortgages) acquires troubled existing mortgages from financial institutions, agencies are required to work with lenders and mortgage servicers to find ways to avoid foreclosures.
· All federal agencies are required to work with servicers to facilitate loan modifications that will consider the net present value of the mortgage.
· Similar refinancing and foreclosure prevention requirements apply to mortgages involving owners of multi-family properties and owners of commercial properties. Policy goal is to assure that tenants don’t lose their residence or their place of business when an owner has problems with the mortgage.
· Changes to existing mortgages can include (but are not limited to) revisions in principal, interest rate and period for repayment.
Tax Relief: The Senate added an extensive package of extensions of expired and expiring provisions that had passed previously on a vote of 93 – 2. Extended provisions include the 15-year life on leasehold improvements, brownfields clean-up deductions, deductions for mortgage insurance premiums and relief from the Alternative Minimum Tax.
Get Money into the Financial System Quickly: The credit markets are nearly frozen. Lenders can’t lend because they are receiving no payments on existing loans. The legislation allowed the government to buy troubled loans and mortgage securities. The funds that the institutions received when the government purchased the existing portfolios were to be available to issue new mortgages with more carefully specified and monitored lending standards. Provisions include:
· Create a Troubled Asset Relief Program (TARP) to purchase and guarantee the troubled assets from the financial institutions that hold mortgages and/or mortgage-backed securities.
· A new Office of Financial Stability within the Treasury to operate TARP, with input from the Federal Reserve, Federal Deposit Insurance Corp (FDIC – the agency that works with failed and failing financial institutions to insure and protect consumers), the Comptroller of the Currency (bank regulator), Office of Thrift Supervision (regulator of former savings and loan companies) and the Secretary of Housing and Urban Development.
· Don’t give out all the money at one time. First release of funds to purchase troubled assets will be $250 Billion. Second release of up to $100 Billion must be authorized by the President. Final $350 Billion can be issued only on Congressional approval. Congress given 15 days to act.
Follow, Protect and Watch Over the Money: Congress will keep a tight rein on TARP. Congress will have the assistance of numerous agencies charged with specific tasks and reporting responsibilities:
· TARP Oversight Board at Treasury -- monthly activity reports to Congress.
· Secretary of Treasury -- detailed reports to Congress for each $50 Billion in transactions.
· Government Accountability Office (Congress’s auditor) -- financial reports about TARP activities every 60 days.
· Judicial Review -- Federal courts may issue injunctions when there is a finding that the Secretary of the Treasury has acted in a manner that is arbitrary, capricious or outside the law.
· Create a new Inspector General (IG) for TARP. An IG might be viewed as the “cop on duty” who has authority to investigate TARP’s activities. IG will make quarterly reports to Congress.
· Appoint a Congressional Oversight Panel – receive and process all these reports to keep Congress apprised of the state of financial markets, activities of the regulatory system and the use of TARP’s asset acquisition and disposition authority.
· Federal Reserve -- provide reports to Congress on utilization of the lending authority created earlier this year. That authority was intended to assist ailing financial institutions.
Put Brakes on the Bad Guys: Congress wanted to curtail “bad acts” of executives who gambled and lost.
· Assure that skilled asset managers who buy and sell TARP assets have no conflicts of interest with prior employers or firms.
· No golden parachute or severance payments to executives of companies that sell assets to TARP. An executive who receives a parachute payment will be required to pay a 20% excise tax on it.
· No tax deductions allowed for any executive’s compensation of more than $500,000.
· All financial regulatory agencies are required to cooperate with the FBI in its investigations of fraud, misrepresentation or malfeasance in the selling or advertising of financial products.
Give the Taxpayers a Stake in the Profits: Historically, when the government has intervened to shore up a company’s or government’s financial dealings (such as the loan guarantees made to Chrysler and the aid given to New York City during a fiscal crisis), the long-term effect has been that the government has made money back on the deal. The legislation provided an “upside” benefit for taxpayers:
· Any profits generated when the government subsequently sells TARP assets would be used to pay down the national debt.
· The government will receive warrants in the companies that participate in TARP. The warrants are similar to stock, but do not grant any voting authority to the government. If the participating company pays dividends at some future time, the warrants would allow the government to receive the dividend. Similarly, if the government sells its stake in the company, the warrants would entitle the government to any appreciation.
Safeguard Savings: Increase the amount of federal insurance on bank accounts from $100,000 to $250,000. This will be particularly helpful to smaller and local banks and small businesses.
Recoup What’s Still Owed: If, after five years from the date of enactment (the date the President signs a bill), the program has lost money, the sitting President will be required to present a plan to Congress for ways to recover the funds from the financial institutions that benefited from the TARP relief.
Wednesday, October 08, 2008
Tuesday, October 07, 2008
Fannie and Freddie's Dual Obligations
For years our nation has tried to encourage home ownership. The tax benefits are wonderful plus this encourages people to have pride of ownership and take care of their neighborhoods and properties. I have been in this business long enough to remember when getting people into Community Home Buying programs was a good thing. We all wanted the teachers, fireman and gardners to have a place that they could call home. And before affordable housing programs became the rage (which is almost completely subsidized) the Community Home and mandated FNMA and FDMC buying programs that allowed people in homes with zero down and shaky incomes were strongly encouraged by Congress and Clinton. I tried to find a non-partisan take on this issue. This article is from June 2003Fannie and Freddie Mac Meeting Dual Obligations
Troubled Asset Relief Program Was A Necessary Evil
We now own a property that went into foreclosure only because the owner lost his job and couldn't find a comparable job for two years. How many of us can withstand 2 years of no income? The housing bust is the symptom of a recession economy that was left unchecked. Instead if saying hey...we are in a recession so let's stabilize it...barely anything was done to correct the trend. So here we are. And Congress is frozen and afraid to do anything. I can almost understand when you have hundreds of economists saying something like http://prospect.org/csnc/blogs/beat_the_press. But let's not do "anything" and let's just sit on the sidelines while this train wrecks into a deep depression is in my opinion not an option. We haven't been a completely free market, capitalistic economy after the depression and banks were required to keep reserves, the FDIC , labor unions and anti-trust, anti monopoly laws, etc, etc were formed. Let's not pretend to be a free market now. Let's see if the ecomonists and Congress can come up with a plan that will work and do something because mainstreet... everyone is going to be effected by this credit crunch! Troubled Asset Relief Program (TARP)
Emergency Economic Stabilization Act Slow To Ease Homeowners
Emergency Economic Stabilization Act will be slow to ease the difficulty that
homeowners feel today. Many homeowners only have days not months before their
homes go into foreclosure. What definitely needs to reviewed are the bankruptcy laws and
regulation on Wall Streets hidden economic sink hole Swaps and Derivatives.
homeowners feel today. Many homeowners only have days not months before their
homes go into foreclosure. What definitely needs to reviewed are the bankruptcy laws and
regulation on Wall Streets hidden economic sink hole Swaps and Derivatives.
Tuesday, September 30, 2008
A SUMMARY OF THE PROPOSED ECONOMIC STABILIZATION ACT
What's At Stake?
Reprint for National Association of Realtors Action Center
Pass the Emergency Economic Stimulus Act
A SUMMARY OF THE PROPOSED ECONOMIC STABILIZATION ACT WHAT’S AT STAKE FOR REALTORS
The House has defeated the Emergency Economic Stabilization Act (EESA) on a vote of 205 – 228. NAR supported the package. Media reports about it did not present the case for the many ways it would have supported the real estate industry.
The summary below presents all the bill’s provisions, condensed into some general subject headings. Many of these provisions are likely to survive in whatever legislation comes next.
Help Homeowners and Borrowers: The legislation responded to the criticisms that lenders have been slow and/or unwilling to work with homeowners and borrowers. It encouraged negotiation in short sales and consumer efforts to refinance or reconfigure existing mortgages:
When the Treasury (or other federal agency that holds mortgages) acquires troubled existing mortgages from financial institutions, agencies are required to work with lenders and mortgage servicers to find ways to avoid foreclosures.
All federal agencies are required to work with servicers to facilitate loan modifications that will consider the net present value of the mortgage.
Similar refinancing and foreclosure prevention requirements apply to mortgages involving owners of multi-family properties. Policy goal is to assure that tenants don’t lose their residence when an owner has problems with the mortgage.
Changes to existing mortgages can include (but are not limited to) revisions in principal, interest rate and period for repayment.
Get Money into the Financial System Quickly: The credit markets are nearly frozen. Lenders can’t lend because they are receiving no payments on existing loans. The legislation allowed the government to buy troubled loans and mortgage securities. The funds that the institutions received when the government purchased the existing portfolios were to be available to issue new mortgages with more carefully specified and monitored lending standards. Provisions include:
Create a Troubled Asset Relief Program (TARP) to purchase and guarantee the troubled assets from the financial institutions that hold mortgages and/or mortgage-backed securities.
A new Office of Financial Stability within the Treasury to operate TARP, with input from the Federal Reserve, Federal Deposit Insurance Corp (FDIC – the agency that works with failed and failing financial institutions to insure and protect consumers), the Comptroller of the Currency (bank regulator), Office of Thrift Supervision (regulator of former savings and loan companies) and the Secretary of Housing and Urban Development.
Timing for TARP purchases designed to assure that all the authorized $700 Billion is not released at one time.
First release of funds to purchase troubled assets will be $250 Billion. Second release of up to $100 Billion must be authorized by the President. Final $350 Billion can be issued only on Congressional approval. Congress given 15 days to act.
Follow, Protect and Watch Over the Money: Congress will keep a tight rein on TARP. Congress will have the assistance of numerous agencies charged with specific tasks and reporting responsibilities.
TARP Oversight Board at Treasury -- monthly activity reports to Congress.
Secretary of Treasury -- detailed reports to Congress for each $50 Billion in transactions as the transactions are completed.
Government Accountability Office (Congress’s auditor) -- financial reports about TARP activities every 60 days.
Judicial Review -- Federal courts may issue injunctions when there is a finding that the Secretary of the Treasury has acted in a manner that is arbitrary, capricious or outside the law.Create a new Inspector General (IG) for TARP. An IG might be viewed as the “cop on duty” who has authority to investigate TARP’s activities. IG will make quarterly reports to Congress.
Appoint a Congressional Oversight Panel – receive and process all these reports to keep Congress apprised of the state of financial markets, activities of the regulatory system and the use of TARP’s asset acquisition and disposition authority.
Federal Reserve -- provide reports to Congress on utilization of the lending authority created earlier this year. That authority was intended to assist ailing financial institutions.
Put Brakes on the Bad Guys: Congress wanted to curtail perceived “bad acts” of executives who made big bets and lost.
Assure that skilled asset managers who buy and sell TARP assets have no conflicts of interest with prior employers or firms.
No golden parachute or severance payments to executives of companies that sell assets to TARP. If a company that sells assets to TARP does make any post-employment payments (other than retirement compensation), the executive (not the company) must pay a 20% excise tax.
If a company sells assets to TARP, then no tax deductions for salary or other compensation will be allowed if a worker’s compensation package is more than $500,000.
All financial regulatory agencies are required to cooperate with the FBI in its investigations of fraud, misrepresentation or malfeasance in the selling or advertising of financial products.
Give the Taxpayers a Stake in the Profits: Historically, when the government has intervened to shore up a company’s or government’s financial dealings (such as the loan guarantees made to Chrysler and the aid given to New York City during a fiscal crisis), the long-term effect has been that the government has made money back on the deal. The legislation provided an “upside” benefit for taxpayers:
Any profits generated when the government subsequently sells TARP assets would be used to pay down the national debt.
The government will receive warrants in the companies that participate in TARP. The warrants are similar to stock, but do not grant any voting authority to the government. If the participating company pays dividends at some future time, the warrants would allow the government to receive the dividend. Similarly, if the government sells its stake in the company, the warrants would entitle the government to any appreciation.
Recoup What’s Still Owed: If, after five years from the date of enactment (the date the President signs a bill), the program has lost money, the sitting President will be required to present a plan to Congress for ways to recover the funds from the financial institutions that benefited from the TARP relief.
Reprint for National Association of Realtors Action Center
Pass the Emergency Economic Stimulus Act
A SUMMARY OF THE PROPOSED ECONOMIC STABILIZATION ACT WHAT’S AT STAKE FOR REALTORS
The House has defeated the Emergency Economic Stabilization Act (EESA) on a vote of 205 – 228. NAR supported the package. Media reports about it did not present the case for the many ways it would have supported the real estate industry.
The summary below presents all the bill’s provisions, condensed into some general subject headings. Many of these provisions are likely to survive in whatever legislation comes next.
Help Homeowners and Borrowers: The legislation responded to the criticisms that lenders have been slow and/or unwilling to work with homeowners and borrowers. It encouraged negotiation in short sales and consumer efforts to refinance or reconfigure existing mortgages:
When the Treasury (or other federal agency that holds mortgages) acquires troubled existing mortgages from financial institutions, agencies are required to work with lenders and mortgage servicers to find ways to avoid foreclosures.
All federal agencies are required to work with servicers to facilitate loan modifications that will consider the net present value of the mortgage.
Similar refinancing and foreclosure prevention requirements apply to mortgages involving owners of multi-family properties. Policy goal is to assure that tenants don’t lose their residence when an owner has problems with the mortgage.
Changes to existing mortgages can include (but are not limited to) revisions in principal, interest rate and period for repayment.
Get Money into the Financial System Quickly: The credit markets are nearly frozen. Lenders can’t lend because they are receiving no payments on existing loans. The legislation allowed the government to buy troubled loans and mortgage securities. The funds that the institutions received when the government purchased the existing portfolios were to be available to issue new mortgages with more carefully specified and monitored lending standards. Provisions include:
Create a Troubled Asset Relief Program (TARP) to purchase and guarantee the troubled assets from the financial institutions that hold mortgages and/or mortgage-backed securities.
A new Office of Financial Stability within the Treasury to operate TARP, with input from the Federal Reserve, Federal Deposit Insurance Corp (FDIC – the agency that works with failed and failing financial institutions to insure and protect consumers), the Comptroller of the Currency (bank regulator), Office of Thrift Supervision (regulator of former savings and loan companies) and the Secretary of Housing and Urban Development.
Timing for TARP purchases designed to assure that all the authorized $700 Billion is not released at one time.
First release of funds to purchase troubled assets will be $250 Billion. Second release of up to $100 Billion must be authorized by the President. Final $350 Billion can be issued only on Congressional approval. Congress given 15 days to act.
Follow, Protect and Watch Over the Money: Congress will keep a tight rein on TARP. Congress will have the assistance of numerous agencies charged with specific tasks and reporting responsibilities.
TARP Oversight Board at Treasury -- monthly activity reports to Congress.
Secretary of Treasury -- detailed reports to Congress for each $50 Billion in transactions as the transactions are completed.
Government Accountability Office (Congress’s auditor) -- financial reports about TARP activities every 60 days.
Judicial Review -- Federal courts may issue injunctions when there is a finding that the Secretary of the Treasury has acted in a manner that is arbitrary, capricious or outside the law.Create a new Inspector General (IG) for TARP. An IG might be viewed as the “cop on duty” who has authority to investigate TARP’s activities. IG will make quarterly reports to Congress.
Appoint a Congressional Oversight Panel – receive and process all these reports to keep Congress apprised of the state of financial markets, activities of the regulatory system and the use of TARP’s asset acquisition and disposition authority.
Federal Reserve -- provide reports to Congress on utilization of the lending authority created earlier this year. That authority was intended to assist ailing financial institutions.
Put Brakes on the Bad Guys: Congress wanted to curtail perceived “bad acts” of executives who made big bets and lost.
Assure that skilled asset managers who buy and sell TARP assets have no conflicts of interest with prior employers or firms.
No golden parachute or severance payments to executives of companies that sell assets to TARP. If a company that sells assets to TARP does make any post-employment payments (other than retirement compensation), the executive (not the company) must pay a 20% excise tax.
If a company sells assets to TARP, then no tax deductions for salary or other compensation will be allowed if a worker’s compensation package is more than $500,000.
All financial regulatory agencies are required to cooperate with the FBI in its investigations of fraud, misrepresentation or malfeasance in the selling or advertising of financial products.
Give the Taxpayers a Stake in the Profits: Historically, when the government has intervened to shore up a company’s or government’s financial dealings (such as the loan guarantees made to Chrysler and the aid given to New York City during a fiscal crisis), the long-term effect has been that the government has made money back on the deal. The legislation provided an “upside” benefit for taxpayers:
Any profits generated when the government subsequently sells TARP assets would be used to pay down the national debt.
The government will receive warrants in the companies that participate in TARP. The warrants are similar to stock, but do not grant any voting authority to the government. If the participating company pays dividends at some future time, the warrants would allow the government to receive the dividend. Similarly, if the government sells its stake in the company, the warrants would entitle the government to any appreciation.
Recoup What’s Still Owed: If, after five years from the date of enactment (the date the President signs a bill), the program has lost money, the sitting President will be required to present a plan to Congress for ways to recover the funds from the financial institutions that benefited from the TARP relief.
Monday, September 29, 2008
$700B Bailout Could Be Less When Assets Sold
The 700 Billion Dollar Bail Out
By Scott Martin
Premier Mortgage Group an Affiliated Company of Cherry Creek
As you have probably heard, the U.S. Treasury Department is working on a plan to allow the federal government to buy troubled assets (primarily bad mortgages) from private companies.
Although we don’t yet know all the details of the Treasury Department’s bailout plan, we do know that SOMETHING is being done, and that has brought some calm to the financial markets.
The mortgage backed securities markets have been in a vicious circle of “de-leveraging.” In other words, If a market participate wants to de-leverage their assets, they will begin to sell Mortgage Backed Securities (MBS – or Mortgage Bonds). If too many market players sell at the same time, it will drive down the price. This can sometimes create a panic with other MBS sellers. The more sellers that try to sell drives the price even lower. And the lower the price of the mortgage bond, the HIGHER the interest rate – which translates DIRECTLY to a higher rate for new mortgages.
The Treasury’s plan will break that circle and allow normalcy to return to the mortgage markets. That mean better and more stable interest rates, and more available liquidity. In fact, we’re already seeing a more stable and calm Wall Street.
The Cost;
The final cost can’t be determined for years. But first it’s important to note that the Feds may not spend all $700 billion. Some economist estimate that there may not be that much to be bought.
Some banks won’t want to sell, believing they can do better themselves. Some of the bad debt has already been written off.
ALSO, for every bad mortgage Uncle Sam buts, there is a house that comes with it. Sooner or later the they will SELL that house and recoup some of their costs.
Scott MartinPremier Mortgage Groupan Affiliated Company of Cherry Creek MortgageMortgage Broker License # MB 100019187direct line (303) 302-3901fax (303) 449-4455cell (303) 941-7287
By Scott Martin
Premier Mortgage Group an Affiliated Company of Cherry Creek
As you have probably heard, the U.S. Treasury Department is working on a plan to allow the federal government to buy troubled assets (primarily bad mortgages) from private companies.
Although we don’t yet know all the details of the Treasury Department’s bailout plan, we do know that SOMETHING is being done, and that has brought some calm to the financial markets.
The mortgage backed securities markets have been in a vicious circle of “de-leveraging.” In other words, If a market participate wants to de-leverage their assets, they will begin to sell Mortgage Backed Securities (MBS – or Mortgage Bonds). If too many market players sell at the same time, it will drive down the price. This can sometimes create a panic with other MBS sellers. The more sellers that try to sell drives the price even lower. And the lower the price of the mortgage bond, the HIGHER the interest rate – which translates DIRECTLY to a higher rate for new mortgages.
The Treasury’s plan will break that circle and allow normalcy to return to the mortgage markets. That mean better and more stable interest rates, and more available liquidity. In fact, we’re already seeing a more stable and calm Wall Street.
The Cost;
The final cost can’t be determined for years. But first it’s important to note that the Feds may not spend all $700 billion. Some economist estimate that there may not be that much to be bought.
Some banks won’t want to sell, believing they can do better themselves. Some of the bad debt has already been written off.
ALSO, for every bad mortgage Uncle Sam buts, there is a house that comes with it. Sooner or later the they will SELL that house and recoup some of their costs.
Scott MartinPremier Mortgage Groupan Affiliated Company of Cherry Creek MortgageMortgage Broker License # MB 100019187direct line (303) 302-3901fax (303) 449-4455cell (303) 941-7287
Wednesday, September 24, 2008
Is this the end?
Reprint:
Commentary: Bailouts will lead to rough economic ride
By Ron PaulSpecial to CNN
Editor's note: Ron Paul is a Republican congressman from Texas who ran for his party's nomination for president this year. He is a doctor who specializes in obstetrics/gynecology and says he has delivered more than 4,000 babies. He served in Congress in the late 1970s and early 1980s and was elected again to Congress in 1996. Rep. Paul serves on the House Financial Services Committee.
(CNN) -- Many Americans today are asking themselves how the economy got to be in such a bad spot.
For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.
Unfortunately, the government's preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention.
Ever since the 1930s, the federal government has involved itself deeply in housing policy and developed numerous programs to encourage homebuilding and homeownership.
Government-sponsored enterprises Fannie Mae and Freddie Mac were able to obtain a monopoly position in the mortgage market, especially the mortgage-backed securities market, because of the advantages bestowed upon them by the federal government.Laws passed by Congress such as the Community Reinvestment Act required banks to make loans to previously underserved segments of their communities, thus forcing banks to lend to people who normally would be rejected as bad credit risks.
These governmental measures, combined with the Federal Reserve's loose monetary policy, led to an unsustainable housing boom. The key measure by which the Fed caused this boom was through the manipulation of interest rates, and the open market operations that accompany this lowering.
When interest rates are lowered to below what the market rate would normally be, as the Federal Reserve has done numerous times throughout this decade, it becomes much cheaper to borrow money. Longer-term and more capital-intensive projects, projects that would be unprofitable at a high interest rate, suddenly become profitable.
Because the boom comes about from an increase in the supply of money and not from demand from consumers, the result is malinvestment, a misallocation of resources into sectors in which there is insufficient demand.
In this case, this manifested itself in overbuilding in real estate. When builders realize they have overbuilt and have too many houses to sell, too many apartments to rent, or too much commercial real estate to lease, they seek to recoup as much of their money as possible, even if it means lowering prices drastically.
This lowering of prices brings the economy back into balance, equalizing supply and demand. This economic adjustment means, however that there are some winners -- in this case, those who can again find affordable housing without the need for creative mortgage products, and some losers -- builders and other sectors connected to real estate that suffer setbacks.
The government doesn't like this, however, and undertakes measures to keep prices artificially inflated. This was why the Great Depression was as long and drawn out in this country as it was.
I am afraid that policymakers today have not learned the lesson that prices must adjust to economic reality. The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay.
Additionally, the government's actions encourage moral hazard of the worst sort. Now that the precedent has been set, the likelihood of financial institutions to engage in riskier investment schemes is increased, because they now know that an investment position so overextended as to threaten the stability of the financial system will result in a government bailout and purchase of worthless, illiquid assets.
Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term.
The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.
It is time this process is put to an end. But the government cannot just sit back idly and let the bust occur. It must actively roll back stifling laws and regulations that allowed the boom to form in the first place.
The government must divorce itself of the albatross of Fannie and Freddie, balance and drastically decrease the size of the federal budget, and reduce onerous regulations on banks and credit unions that lead to structural rigidity in the financial sector.
Until the big-government apologists realize the error of their ways, and until vocal free-market advocates act in a manner which buttresses their rhetoric, I am afraid we are headed for a rough ride.
The opinions expressed in this commentary are solely those of the writer.
Commentary: Bailouts will lead to rough economic ride
By Ron PaulSpecial to CNN
Editor's note: Ron Paul is a Republican congressman from Texas who ran for his party's nomination for president this year. He is a doctor who specializes in obstetrics/gynecology and says he has delivered more than 4,000 babies. He served in Congress in the late 1970s and early 1980s and was elected again to Congress in 1996. Rep. Paul serves on the House Financial Services Committee.
(CNN) -- Many Americans today are asking themselves how the economy got to be in such a bad spot.
For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.
Unfortunately, the government's preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention.
Ever since the 1930s, the federal government has involved itself deeply in housing policy and developed numerous programs to encourage homebuilding and homeownership.
Government-sponsored enterprises Fannie Mae and Freddie Mac were able to obtain a monopoly position in the mortgage market, especially the mortgage-backed securities market, because of the advantages bestowed upon them by the federal government.Laws passed by Congress such as the Community Reinvestment Act required banks to make loans to previously underserved segments of their communities, thus forcing banks to lend to people who normally would be rejected as bad credit risks.
These governmental measures, combined with the Federal Reserve's loose monetary policy, led to an unsustainable housing boom. The key measure by which the Fed caused this boom was through the manipulation of interest rates, and the open market operations that accompany this lowering.
When interest rates are lowered to below what the market rate would normally be, as the Federal Reserve has done numerous times throughout this decade, it becomes much cheaper to borrow money. Longer-term and more capital-intensive projects, projects that would be unprofitable at a high interest rate, suddenly become profitable.
Because the boom comes about from an increase in the supply of money and not from demand from consumers, the result is malinvestment, a misallocation of resources into sectors in which there is insufficient demand.
In this case, this manifested itself in overbuilding in real estate. When builders realize they have overbuilt and have too many houses to sell, too many apartments to rent, or too much commercial real estate to lease, they seek to recoup as much of their money as possible, even if it means lowering prices drastically.
This lowering of prices brings the economy back into balance, equalizing supply and demand. This economic adjustment means, however that there are some winners -- in this case, those who can again find affordable housing without the need for creative mortgage products, and some losers -- builders and other sectors connected to real estate that suffer setbacks.
The government doesn't like this, however, and undertakes measures to keep prices artificially inflated. This was why the Great Depression was as long and drawn out in this country as it was.
I am afraid that policymakers today have not learned the lesson that prices must adjust to economic reality. The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay.
Additionally, the government's actions encourage moral hazard of the worst sort. Now that the precedent has been set, the likelihood of financial institutions to engage in riskier investment schemes is increased, because they now know that an investment position so overextended as to threaten the stability of the financial system will result in a government bailout and purchase of worthless, illiquid assets.
Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term.
The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.
It is time this process is put to an end. But the government cannot just sit back idly and let the bust occur. It must actively roll back stifling laws and regulations that allowed the boom to form in the first place.
The government must divorce itself of the albatross of Fannie and Freddie, balance and drastically decrease the size of the federal budget, and reduce onerous regulations on banks and credit unions that lead to structural rigidity in the financial sector.
Until the big-government apologists realize the error of their ways, and until vocal free-market advocates act in a manner which buttresses their rhetoric, I am afraid we are headed for a rough ride.
The opinions expressed in this commentary are solely those of the writer.
Economist's Commentary: September 22, 2008
$700 Billion for What?
By Lawrence Yun, Chief Economist
A massive $700 billion bill will be fast-tracked through Congress this week to give the U.S. government the authority to buy bad mortgages off the books of Wall Street firms. People are calling it the 'mother of all bailouts' and the 'biggest bailout in the history of mankind.' I am inclined to view it as the biggest sovereign wealth fund investment to date.
Several sovereign wealth funds - essentially a mutual fund run by a government for the government (or its taxpaying citizens) - have been investing in Wall Street firms and mortgage-related debts since late last year. Singapore, South Korea, United Arab Emirates, Saudi Arabia, and China were among the countries putting up a few billion dollars in the hopes of turning a big profit once the housing market recovers. Treasury Hank Paulson, a former CEO of the top U.S. investment bank Goldman Sachs and perhaps missing his old job, has now created a U.S. sovereign wealth fund that outstrips in size all other sovereign funds put together. Some may even view it simplistically as the Treasury Department going "all-in" in this $700 billion Texas Hold 'Em poker bet.
The principal goal of this new Treasury authorization is not to make money but to unclog the financial pipelines. Worries about capital inadequacy, further mortgage debt write-downs, and margin calls have hemorrhaged the movement of capital. The overnight borrowing rate has been skyrocketing, as any firm with excess cash was unwilling to lend that precious dough should it face the fate of Lehman Brothers. The very essence of capitalism - of allocating capital to its most productive use - was collapsing before our very eyes last week. The whole economy and Main Street civilians would have eventually suffered greatly from the mistakes of Wall Street.
The way to unclog the system is to buy certain mortgage backed securities off the books of financial firms. Because of illiquidity many mortgage securities, even those performing reasonably well, are being valued at pennies on the dollar if forced to sell. Let's say, for example, that you as a bank hold 100 mortgages and half of your clients are paying mortgages on time. At worst, these 100 mortgages would get at least 50 cents on the dollar. However, if you need to raise capital because of margin calls in the current panic, you would not get 50 cents but only few pennies on the dollar. These unrealistically low valuations are paralyzing the balance sheets of financial institutions and hindering the liquidity flow.
Treasury intervention will help restore the proper valuation of these illiquid assets. However, Treasury should not reward the mistakes of Wall Street by bailing out at an unreasonably high price and handing out "free money." Buying at a deeply discounted price could potentially lead to huge revenue benefits for Treasury on the behalf of taxpayers once the housing market and mortgage debt valuation recovers, but the financial firms may be unwilling to sell at unreasonably low prices. If this happens, we are back to square one. Subsequently, a delicate balance must be pursued with the goal of helping unclog the financial pipeline, but also protecting taxpayers' money.
Understandably, there will be anger and outcries from the Main Street public of this massive Wall Street 'bailout.' Politicians will feel the heat in this election year. But those same politicians have no choice: if the bill does not pass, the acute financial pain will quickly trickle down to Main Street.
The Main Street disgust of executive pay is also understandable. I will defend the '$700 billion bailout' to help stabilize the housing market and economy, but not the golden parachutes of fallen Wall Street executives. How is it that failed managers are able to get away with a fistful of dollars? The same can be said of Fannie Mae (FNMA) and Freddie Mac (FHLMC) executives. Many past managers of these government sponsored enterprises were paid a gigantic sum for running the very simple business of borrowing cheap and lending high. It was possible for Fannie and Freddie to borrow cheap on the backs of government (i.e. U.S. taxpayer) guarantees. Most of this borrowing cost advantage should have been passed onto consumers and not kept by Fannie/Freddie managers.
Hank Paulson has a tough task. He must permit capital to move around. That is the essence of capitalism. He must at the same time also protect taxpayer money. The return on the taxpayer gamble depends on two things: at what price the Treasury will buy bad mortgage debts off Wall Street books, and the future mortgage default rate. The default rate, in turn, will depend on the housing market recovery. Knowingly or not, the 75 million homeowners and 100 million taxpayers have now become the key stakeholders on the side of housing market recovery. In the end, if all goes better than anticipated, Mr. Paulson may perhaps get his own super hero figure made for returning a healthy rate of investment to taxpayers on this $700 billion gambit.
By Lawrence Yun, Chief Economist
A massive $700 billion bill will be fast-tracked through Congress this week to give the U.S. government the authority to buy bad mortgages off the books of Wall Street firms. People are calling it the 'mother of all bailouts' and the 'biggest bailout in the history of mankind.' I am inclined to view it as the biggest sovereign wealth fund investment to date.
Several sovereign wealth funds - essentially a mutual fund run by a government for the government (or its taxpaying citizens) - have been investing in Wall Street firms and mortgage-related debts since late last year. Singapore, South Korea, United Arab Emirates, Saudi Arabia, and China were among the countries putting up a few billion dollars in the hopes of turning a big profit once the housing market recovers. Treasury Hank Paulson, a former CEO of the top U.S. investment bank Goldman Sachs and perhaps missing his old job, has now created a U.S. sovereign wealth fund that outstrips in size all other sovereign funds put together. Some may even view it simplistically as the Treasury Department going "all-in" in this $700 billion Texas Hold 'Em poker bet.
The principal goal of this new Treasury authorization is not to make money but to unclog the financial pipelines. Worries about capital inadequacy, further mortgage debt write-downs, and margin calls have hemorrhaged the movement of capital. The overnight borrowing rate has been skyrocketing, as any firm with excess cash was unwilling to lend that precious dough should it face the fate of Lehman Brothers. The very essence of capitalism - of allocating capital to its most productive use - was collapsing before our very eyes last week. The whole economy and Main Street civilians would have eventually suffered greatly from the mistakes of Wall Street.
The way to unclog the system is to buy certain mortgage backed securities off the books of financial firms. Because of illiquidity many mortgage securities, even those performing reasonably well, are being valued at pennies on the dollar if forced to sell. Let's say, for example, that you as a bank hold 100 mortgages and half of your clients are paying mortgages on time. At worst, these 100 mortgages would get at least 50 cents on the dollar. However, if you need to raise capital because of margin calls in the current panic, you would not get 50 cents but only few pennies on the dollar. These unrealistically low valuations are paralyzing the balance sheets of financial institutions and hindering the liquidity flow.
Treasury intervention will help restore the proper valuation of these illiquid assets. However, Treasury should not reward the mistakes of Wall Street by bailing out at an unreasonably high price and handing out "free money." Buying at a deeply discounted price could potentially lead to huge revenue benefits for Treasury on the behalf of taxpayers once the housing market and mortgage debt valuation recovers, but the financial firms may be unwilling to sell at unreasonably low prices. If this happens, we are back to square one. Subsequently, a delicate balance must be pursued with the goal of helping unclog the financial pipeline, but also protecting taxpayers' money.
Understandably, there will be anger and outcries from the Main Street public of this massive Wall Street 'bailout.' Politicians will feel the heat in this election year. But those same politicians have no choice: if the bill does not pass, the acute financial pain will quickly trickle down to Main Street.
The Main Street disgust of executive pay is also understandable. I will defend the '$700 billion bailout' to help stabilize the housing market and economy, but not the golden parachutes of fallen Wall Street executives. How is it that failed managers are able to get away with a fistful of dollars? The same can be said of Fannie Mae (FNMA) and Freddie Mac (FHLMC) executives. Many past managers of these government sponsored enterprises were paid a gigantic sum for running the very simple business of borrowing cheap and lending high. It was possible for Fannie and Freddie to borrow cheap on the backs of government (i.e. U.S. taxpayer) guarantees. Most of this borrowing cost advantage should have been passed onto consumers and not kept by Fannie/Freddie managers.
Hank Paulson has a tough task. He must permit capital to move around. That is the essence of capitalism. He must at the same time also protect taxpayer money. The return on the taxpayer gamble depends on two things: at what price the Treasury will buy bad mortgage debts off Wall Street books, and the future mortgage default rate. The default rate, in turn, will depend on the housing market recovery. Knowingly or not, the 75 million homeowners and 100 million taxpayers have now become the key stakeholders on the side of housing market recovery. In the end, if all goes better than anticipated, Mr. Paulson may perhaps get his own super hero figure made for returning a healthy rate of investment to taxpayers on this $700 billion gambit.
COMPATABLE DEVELOPMENT IN SINGLE-FAMILY NEIGHBORHOODS WORKSHOP
(Formerly Known as Pops & Scrapes or FAR Issue)
Neighborhood Workshops6:30 - 8:00 p.m.Sept. 15, 17, 22, and 23See Neighborhood Workshop page for more
"Public Affairs Dispatch" Boulder Association of Realtors
The city of Boulder invites you to participate in the community kick-off event for the Compatible Development in Single-Family Neighborhoods project. The intent of this workshop is to provide participants with a project overview, interact with the project team, and participate in small break-out group activities. Discussions will center on the defining characteristics of existing neighborhoods, current regulations that relate to single-family development, and redevelopment trends.
The city of Boulder is launching this effort to examine the impacts that surround what is often referred to as "pops and scrapes" redevelopment. This project may result in a variety of outcomes related to the regulation of single-family development and redevelopment. The city is interested in hearing all perspectives on this topic.
This community workshop will be followed by a series of smaller neighborhood workshops in mid-September. Community feedback will be used in identifying potential strategies.
Neighborhood Workshops6:30 - 8:00 p.m.Sept. 15, 17, 22, and 23See Neighborhood Workshop page for more
"Public Affairs Dispatch" Boulder Association of Realtors
The city of Boulder invites you to participate in the community kick-off event for the Compatible Development in Single-Family Neighborhoods project. The intent of this workshop is to provide participants with a project overview, interact with the project team, and participate in small break-out group activities. Discussions will center on the defining characteristics of existing neighborhoods, current regulations that relate to single-family development, and redevelopment trends.
The city of Boulder is launching this effort to examine the impacts that surround what is often referred to as "pops and scrapes" redevelopment. This project may result in a variety of outcomes related to the regulation of single-family development and redevelopment. The city is interested in hearing all perspectives on this topic.
This community workshop will be followed by a series of smaller neighborhood workshops in mid-September. Community feedback will be used in identifying potential strategies.
Monday, September 22, 2008
Rentals/Renters
Let us know if you or a friend would like to rent one of these properties or others or rent one of there own.
Louisville Homes for rent!
Louisville Homes for rent!262 Buchanan $1,450.00/ month. A four bedroom home on a quite circle close to Heritage Park and Fireside Elementary school! Very cute! extremely well kept, nice fenced yard, deck. Also has a living room, family room and unfinished basement area!
303-588-8999
954 Willow 
$ 1600.00
$ 1600.00This cute little 3 bedroom/ two car garage home in Louisville is at the top of the Mesa surrounded by very expensive homes. It has a huge back yard and a hot tub. Very close to Mesa Elementary School, Harper Lake and Cute playgrounds. Call us for a showing!
303-588-8999
Buyer Needs/ Active listings
Buyer Needs:
Buyer 1: We need a 2-3 condo loft within walking distance to Pearl Street Mall. Up to
1Million.
Public Comments: VERY VERY PRIVATE PRISTINE MOUNTAIN PROPERTY!!! BUILD YOUR DREAM HOME ON 9+ ACRES OF PRIVACY!!! COMPLETELY SURROUNDED BY FOREST SERVICE LAND SO THAT YOU FEEL LIKE YOU OWN 9000 ACRES!!! ONLY 30 MINUTES TO BOULDER.***ROCK OUTCROPPINGS, PONDEROSA PINES, DOUGLAS FIR & NATIVE GRASS MEADOWS ON A SLOPPING TERRAIN!!! UNRECORDED PHYSICAL ACCESS VIA OPEN FOREST SERVICE ROAD. IRES MLS#: 579160
Buyer 1: We need a 2-3 condo loft within walking distance to Pearl Street Mall. Up to
1Million.
Buyer 2: A live/work condo home ready to move into for an artist.
Listings:
647 Princeton Place: $395K INDIAN PEAKS GOLF COURSE HOME ON A CUL DE SAC AND BACKING UP TO GREENBELT*** UPDATES GALORE ON THIS BEAUTIFUL AND WELL DESIGNED OPEN FLOOR PLAN INCLUDING NEW GRANITE COUNTERS, DOUBLE SIDED FIREPLACE, REFINISHED WOOD FLOORS ON THE MAIN LEVELS, LARGE GREAT ROOM, GAS STOVE, OVERSIZED TWO CAR GARAGE, NEW SOD IN THE LARGE YARDS, NEW PAINT AND TILE THROUGHOUT!***
IRES MLS#: 580590
IRES MLS#: 580590
325 Kohl. 219K WELL-ESTABLISHED COMMUNITY; OPEN FLOORPLAN; 4 BDRMS W/ 3 BATHS; ONE OF LARGEST MODELS IN NEIGHBORHOOD; SHORT DISTANC
E TO EMERALD ELEMENTARY; LARGE, PRIVATE BACK YARD; ONE OF FEW WITH 2-CAR GARAGES IN NEIGHBORHOOD--- QUITE A GEM!
Public Comments: WELL-ESTABLISHED COMMUNITY; OPEN FLOORPLAN; 4 BDRMS W/ 3 BATHS; ONE OF LARGEST MODELS IN NEIGHBORHOOD; SHORT DISTANCE TO EMERALD ELEMENTARY; LARGE, PRIVATE BACK YARD; MINI- MAL FIX-UP; ONE OF FEW WITH 2-CAR GARAGES IN NEIGHBORHOOD--- QUITE A GEM! Ires MLS#580071
1360 Walnut $1,050,000 ***Twenty-Four by Twenty-Eight square feet is the size of this great room! Landmark Development with views of the Foothills and Downtown Boulder****Panoramic ceiling to floor store front windows, exposed brick, bamboo floors, stainless appl, balcony***Elegant Finish work in Industrial style loft***12.5 ft ceilings & exposed ducts***Zodiac Counters, Stainless Sinks & Seamless Entry Shower*** Elevator*** Go to work,
workout, go home, enjoy dinner and Live bands W/O a car!!! It is a lifestyle!!!
Public Comments: ***Twenty-Four by Twenty-Eight square feet is the size of t
his great room! Landmark Development with views of the Foothills and Downtown Boulder****Panoramic ceiling to floor store front windows, exposed brick, bamboo floors, stainless appl, balcony***
Public Comments: ***Twenty-Four by Twenty-Eight square feet is the size of t
his great room! Landmark Development with views of the Foothills and Downtown Boulder****Panoramic ceiling to floor store front windows, exposed brick, bamboo floors, stainless appl, balcony***Elegant Finish work in Industrial style loft***12.5 ft ceilings & exposed ducts***Zodiac Counters, Stainless Sinks & Seamless Entry Shower*** Elevator*** Go to work, workout, go home, enjoy dinner and Live bands W/O a car!!! It is a lifestyle!!!
IRES MLS#: 561901
8900 Sugar Loaf Rd VERY VERY PRIVATE PRISTINE MOUNTAIN PROPERTY!!! BUILD YOUR DREAM HOME ON 9+ ACRES OF PRIVACY!!! COMPLETELY SURROUNDED BY FOREST SERVICE LAND SO THAT YOU FEEL LIKE YOU OWN 9000 ACRES!!! ONLY 30 MINUTES TO BOULDER.***ROCK OUTCROPPINGS, PONDEROSA PINES, DOUGLAS FIR & NATIVE GRASS MEADOWS ON A SLOPPING TERRAIN!!! UNRECORDED PHYSICAL ACCESS VIA OPEN FOREST SERVICE ROAD. IRES MLS#: 561901
Public Comments: VERY VERY PRIVATE PRISTINE MOUNTAIN PROPERTY!!! BUILD YOUR DREAM HOME ON 9+ ACRES OF PRIVACY!!! COMPLETELY SURROUNDED BY FOREST SERVICE LAND SO THAT YOU FEEL LIKE YOU OWN 9000 ACRES!!! ONLY 30 MINUTES TO BOULDER.***ROCK OUTCROPPINGS, PONDEROSA PINES, DOUGLAS FIR & NATIVE GRASS MEADOWS ON A SLOPPING TERRAIN!!! UNRECORDED PHYSICAL ACCESS VIA OPEN FOREST SERVICE ROAD. IRES MLS#: 579160
Thursday, September 18, 2008
Signs of A Stabilizing Market
(From an Article By John W. Schoen, Senior producer of MSNBC; Aug. 26, 2008)
Though home prices continued to fall in July, there are growing signs that the market may be stabilizing as lower prices lure some buyers off the sidelines. But a broad housing recovery faces stiff headwinds in the form of rising unemployment, tighter credit for borrowers and a huge inventory of unsold homes. The widely watched Standard & Poor's/Case-Shiller national home price index fell by a record 15.4 percent during the second quarter compared to the same period a year ago. Still, the report offered a glimmer of hope that the slide in home prices may be easing: The rate of price drops slowed from May to June, and regional price data showed that nine of the 20 cities tracked by the index posted slight month-to-month gains.
Though home prices continued to fall in July, there are growing signs that the market may be stabilizing as lower prices lure some buyers off the sidelines. But a broad housing recovery faces stiff headwinds in the form of rising unemployment, tighter credit for borrowers and a huge inventory of unsold homes. The widely watched Standard & Poor's/Case-Shiller national home price index fell by a record 15.4 percent during the second quarter compared to the same period a year ago. Still, the report offered a glimmer of hope that the slide in home prices may be easing: The rate of price drops slowed from May to June, and regional price data showed that nine of the 20 cities tracked by the index posted slight month-to-month gains.
The New 2008 Home Owner Laws & What They Mean For You
(From an Article Written by Jay Taylor about The Housing Rescue Bill, signed into law July 30, 2008)
Some highlights:
The law will extend a tax credit of up to $7,500 to first-time homebuyers. A first-time homebuyer is defined as someone who hasn't owned a home in three years. The tax credit is for 10 percent of the purchase price, up to $7,500, but phases out for higher-income homeowners. Homeowners are eligible for the tax credit if they bought after April 8 of this year and before July 1, 2009.
This is a tax credit, not a deduction. It reduces the homeowners' tax bill by up to $7,500 for the tax year in which the purchase was made. If you buy a house this year, you get the tax credit for the 2008 tax year -- the one with a filing deadline of April 15, 2009. If you buy a house next year by the end of June, you get the tax credit for the 2009 tax year. It's a one-time credit; you don't get to keep taking it year after year.
But the money has to be repaid over 15 years, starting two years after you buy the house. That makes the tax credit an interest-free loan. If you take the full $7,500 tax credit, your income tax bill will increase by $500 a year for 15 years. If you sell the house before then, you'll have to pay the remaining balance.
Under current law, you can deduct your property taxes from federal income tax -- but only if you itemize deductions on Schedule A. That leaves out people who don't have enough deductions to warrant filling out Schedule A. They have to take the standard deduction -- they can't deduct property taxes. For homeowners who pay property taxes, it increases the standard deduction by $500 for single filers and $1,000 for couples filing jointly.
There are maximum amounts for loans that the FHA will insure, and that Fannie Mae and Freddie Mac will guarantee. Those limits were raised temporarily this year. The new law raises limits permanently. For FHA-insured mortgages, the new limit will be 115 percent of the median home price in that area, up to $625,500. That provision will affect loan limits in higher-cost areas. In lower-cost areas, the current FHA limits won't decrease. For conforming mortgages -- those eligible to be bought by Fannie Mae and Freddie Mac -- the conforming limit will remain at least $417,000 for a single-family home. It can be higher than that. Starting next year, the new limit is either $417,000 or 115 percent of the area's median home price, whichever is higher -- up to $625,500. After that, the limits go up or down according to a price index. More regulations on reverse mortgagesA reverse mortgage is an advance against home equity. It's for homeowners age 62 or older, and the reverse mortgage doesn't have to be repaid until the borrowers die or move out. Borrowers are required to get counseling first, to learn the pros and cons of reverse mortgages. The law will result in strengthened qualifications for counselors. The law bars insurance salesmen from originating reverse mortgages and prohibits originators from requiring homeowners to buy annuities or insurance products. (There's one big exception: The FHA insures reverse mortgages, and borrowers will buy that coverage.)
Finally, the law limits origination fees on reverse mortgages. They can't exceed 2 percent of a reverse mortgage of up to $200,000. For a reverse mortgage amount above that, the limit is $4,000, plus 1 percent of the loan amount above $200,000. Origination fees can't exceed $6,000 in any case. In future years, this upper limit is indexed to inflation. It will establish an Office of Housing Counseling, which coordinate all federal housing counseling functions, as well as produce booklets that will be given to people applying for mortgages.
Some highlights:
The law will extend a tax credit of up to $7,500 to first-time homebuyers. A first-time homebuyer is defined as someone who hasn't owned a home in three years. The tax credit is for 10 percent of the purchase price, up to $7,500, but phases out for higher-income homeowners. Homeowners are eligible for the tax credit if they bought after April 8 of this year and before July 1, 2009.
This is a tax credit, not a deduction. It reduces the homeowners' tax bill by up to $7,500 for the tax year in which the purchase was made. If you buy a house this year, you get the tax credit for the 2008 tax year -- the one with a filing deadline of April 15, 2009. If you buy a house next year by the end of June, you get the tax credit for the 2009 tax year. It's a one-time credit; you don't get to keep taking it year after year.
But the money has to be repaid over 15 years, starting two years after you buy the house. That makes the tax credit an interest-free loan. If you take the full $7,500 tax credit, your income tax bill will increase by $500 a year for 15 years. If you sell the house before then, you'll have to pay the remaining balance.
Under current law, you can deduct your property taxes from federal income tax -- but only if you itemize deductions on Schedule A. That leaves out people who don't have enough deductions to warrant filling out Schedule A. They have to take the standard deduction -- they can't deduct property taxes. For homeowners who pay property taxes, it increases the standard deduction by $500 for single filers and $1,000 for couples filing jointly.
There are maximum amounts for loans that the FHA will insure, and that Fannie Mae and Freddie Mac will guarantee. Those limits were raised temporarily this year. The new law raises limits permanently. For FHA-insured mortgages, the new limit will be 115 percent of the median home price in that area, up to $625,500. That provision will affect loan limits in higher-cost areas. In lower-cost areas, the current FHA limits won't decrease. For conforming mortgages -- those eligible to be bought by Fannie Mae and Freddie Mac -- the conforming limit will remain at least $417,000 for a single-family home. It can be higher than that. Starting next year, the new limit is either $417,000 or 115 percent of the area's median home price, whichever is higher -- up to $625,500. After that, the limits go up or down according to a price index. More regulations on reverse mortgagesA reverse mortgage is an advance against home equity. It's for homeowners age 62 or older, and the reverse mortgage doesn't have to be repaid until the borrowers die or move out. Borrowers are required to get counseling first, to learn the pros and cons of reverse mortgages. The law will result in strengthened qualifications for counselors. The law bars insurance salesmen from originating reverse mortgages and prohibits originators from requiring homeowners to buy annuities or insurance products. (There's one big exception: The FHA insures reverse mortgages, and borrowers will buy that coverage.)
Finally, the law limits origination fees on reverse mortgages. They can't exceed 2 percent of a reverse mortgage of up to $200,000. For a reverse mortgage amount above that, the limit is $4,000, plus 1 percent of the loan amount above $200,000. Origination fees can't exceed $6,000 in any case. In future years, this upper limit is indexed to inflation. It will establish an Office of Housing Counseling, which coordinate all federal housing counseling functions, as well as produce booklets that will be given to people applying for mortgages.
Home Staging Tips
(From an Article by Debra Gould, President of "Six Elements Inc.")
1. Consider the curb appeal.
Landscaping is nice, but not in everyone's budget. At minimum, lawns should be freshly mowed, leaves raked, or snow shoveled. Consider a hanging or potted plant for the entrance. Sweep the porch, deck and all walk ways and ensure garbage and recycling are tucked neatly away from the front of the house. Scrub your front door, porch, outside railings and steps. This is cheaper than repainting and makes a world of difference. Once the outside entrance is clean, decide if the paint really needs a touch up.
2. Get rid of clutter!
Pick one closet or area at a time so the task isn't as daunting. Look at every item with a very critical eye and ask yourself why you're keeping it. Remember that how you live in your home and how you sell your house are two entirely different things. You're going for a "show home" look! Forget about hanging onto items for a garage sale. Pick your favorite charity and donate it. You paid for these things long ago, why not just give them away to others who REALLY need them? You'll probably have to edit the same closets a number of times to really whittle them down to the "essentials". If rooms and closets still look cramped, rent a storage locker.
3. Turn excess inventory into cash.
If you have a collection of items for projects you never got around to, return them. This also applies to the two-year supply of light bulbs, canned goods or paper products sitting in your basement. Without a receipt you won't get cash, but you will have a store credit that you can use once you move. Less clutter and less stuff to pack, move and unpack again!
4. Watch where the eye goes.
There are speedy and low cost solutions to many of the little problems that together make a home seem shabbier than it needs to. Walk along each corridor and into every room and check where your eye is drawn (you can ask a real estate broker or family member). If the eye is drawn to the chipped white paint on the door frame, take some "white out" and fill it in. If it's those old nail holes in the wall, see if you can hang a picture to cover them. Glue any peeling wallpaper. If it's really horrible and you can't afford the time or money to fix it properly, hang pictures and strategically place baskets. You won't cover the problem entirely (which would be wrong anyway), but you will draw your audience's attention away from the problem and onto something more visually pleasing to focus on.
5. Find a fix-it person.
Ensure cupboards open and shut and that no taps are dripping. Look in all rooms for things you never got around to fixing and decide which ones might be distracting to potential buyers. No, it's not OK for door handles to fall off, even if you have learned to ignore it!
6. Clean, clean and clean again.
Most mortals can't live in a spotless environment all the time. This can be one of the more stressful aspects of having your home on the market— but it's worth the effort to sell your home for top dollar. You can hire a professional service to come in and deep clean everything; then take 20-30 minutes each day to maintain it. Don't neglect hallways. They lead potential buyers through your home and should be bright and clutter free. Remember you're trying to maximize the feeling of space in your home! Appliances should sparkle even if you're not including them with the house. After all, you might throw them in later as a negotiating tool. Counter tops, taps, sinks and bathtubs should be shiny and free of water spots.
If you have a pedestal sink, don't forget the dust that collects on top of the plumbing where it attaches to the wall. If the whole sink is spotless and the taps aren't dripping, it will look new!
Dust shelves and vacuum or "Swiffer" the floors. Naturally, all beds should be made. At a recent open house for a home listed over $500,000 (and over 60 days on the market), they hadn't even bothered with these two simple steps! It made you wonder what bigger things had been neglected.
If all this attention to detail seems over the top, remember that a very clean home leaves the impression that the house is well cared for. This helps put buyers at ease— especially a first time buyer who may be worried about the responsibilities of owning a house.
7. Let in some air.
Open some windows for at least 10 minutes. There is nothing worse than walking into a stuffy house or one that smells of smoke and pet odors.
8. Let in some light.
It might be mood lighting to you, but if you're trying to sell your home, keep it bright! Dimly lit rooms tend to look small and dingy— especially during the day.
If you have a particularly dark room, consider investing in a floor lamp that will bounce light off the ceiling. If your walls are so dark that they're sucking up all the light, consider repainting. You can even buy a small can of a lighter shade of your wall color, mix it with glaze and rub it onto the wall. It will reflect light and give the room a more open feeling. This approach saves much of the preparation and clean up involved in repainting.
9. Don't forget fresh flowers.
You don't need to spend a fortune to have fresh flowers throughout your home. Even a daisy in a bud vase brightens a bathroom counter. Ask your florist which blooms last a week. You can also use potted flowering plants that are in season for a low-cost solution. Don't use plastic or obviously fake flowers, especially in an expensive home!
10. Carefully consider music.
Soft background music can help create a soothing environment and camouflage neighbor and traffic noise. But make sure the volume is very low. Blaring TVs are definitely a no-no, but you'd be surprised how many people leave them on for showings!
Step back and look at your home with the eye of a highly critical buyer. Be honest with yourself! Most buyers can't look past unattractive or disorganized rooms or figure out how their furniture might look in an empty room. Home staging creates the "dream home" environment for buyers so they don't have to use their own imagination and can immediately fall in love and say "this is home!"
1. Consider the curb appeal.
Landscaping is nice, but not in everyone's budget. At minimum, lawns should be freshly mowed, leaves raked, or snow shoveled. Consider a hanging or potted plant for the entrance. Sweep the porch, deck and all walk ways and ensure garbage and recycling are tucked neatly away from the front of the house. Scrub your front door, porch, outside railings and steps. This is cheaper than repainting and makes a world of difference. Once the outside entrance is clean, decide if the paint really needs a touch up.
2. Get rid of clutter!
Pick one closet or area at a time so the task isn't as daunting. Look at every item with a very critical eye and ask yourself why you're keeping it. Remember that how you live in your home and how you sell your house are two entirely different things. You're going for a "show home" look! Forget about hanging onto items for a garage sale. Pick your favorite charity and donate it. You paid for these things long ago, why not just give them away to others who REALLY need them? You'll probably have to edit the same closets a number of times to really whittle them down to the "essentials". If rooms and closets still look cramped, rent a storage locker.
3. Turn excess inventory into cash.
If you have a collection of items for projects you never got around to, return them. This also applies to the two-year supply of light bulbs, canned goods or paper products sitting in your basement. Without a receipt you won't get cash, but you will have a store credit that you can use once you move. Less clutter and less stuff to pack, move and unpack again!
4. Watch where the eye goes.
There are speedy and low cost solutions to many of the little problems that together make a home seem shabbier than it needs to. Walk along each corridor and into every room and check where your eye is drawn (you can ask a real estate broker or family member). If the eye is drawn to the chipped white paint on the door frame, take some "white out" and fill it in. If it's those old nail holes in the wall, see if you can hang a picture to cover them. Glue any peeling wallpaper. If it's really horrible and you can't afford the time or money to fix it properly, hang pictures and strategically place baskets. You won't cover the problem entirely (which would be wrong anyway), but you will draw your audience's attention away from the problem and onto something more visually pleasing to focus on.
5. Find a fix-it person.
Ensure cupboards open and shut and that no taps are dripping. Look in all rooms for things you never got around to fixing and decide which ones might be distracting to potential buyers. No, it's not OK for door handles to fall off, even if you have learned to ignore it!
6. Clean, clean and clean again.
Most mortals can't live in a spotless environment all the time. This can be one of the more stressful aspects of having your home on the market— but it's worth the effort to sell your home for top dollar. You can hire a professional service to come in and deep clean everything; then take 20-30 minutes each day to maintain it. Don't neglect hallways. They lead potential buyers through your home and should be bright and clutter free. Remember you're trying to maximize the feeling of space in your home! Appliances should sparkle even if you're not including them with the house. After all, you might throw them in later as a negotiating tool. Counter tops, taps, sinks and bathtubs should be shiny and free of water spots.
If you have a pedestal sink, don't forget the dust that collects on top of the plumbing where it attaches to the wall. If the whole sink is spotless and the taps aren't dripping, it will look new!
Dust shelves and vacuum or "Swiffer" the floors. Naturally, all beds should be made. At a recent open house for a home listed over $500,000 (and over 60 days on the market), they hadn't even bothered with these two simple steps! It made you wonder what bigger things had been neglected.
If all this attention to detail seems over the top, remember that a very clean home leaves the impression that the house is well cared for. This helps put buyers at ease— especially a first time buyer who may be worried about the responsibilities of owning a house.
7. Let in some air.
Open some windows for at least 10 minutes. There is nothing worse than walking into a stuffy house or one that smells of smoke and pet odors.
8. Let in some light.
It might be mood lighting to you, but if you're trying to sell your home, keep it bright! Dimly lit rooms tend to look small and dingy— especially during the day.
If you have a particularly dark room, consider investing in a floor lamp that will bounce light off the ceiling. If your walls are so dark that they're sucking up all the light, consider repainting. You can even buy a small can of a lighter shade of your wall color, mix it with glaze and rub it onto the wall. It will reflect light and give the room a more open feeling. This approach saves much of the preparation and clean up involved in repainting.
9. Don't forget fresh flowers.
You don't need to spend a fortune to have fresh flowers throughout your home. Even a daisy in a bud vase brightens a bathroom counter. Ask your florist which blooms last a week. You can also use potted flowering plants that are in season for a low-cost solution. Don't use plastic or obviously fake flowers, especially in an expensive home!
10. Carefully consider music.
Soft background music can help create a soothing environment and camouflage neighbor and traffic noise. But make sure the volume is very low. Blaring TVs are definitely a no-no, but you'd be surprised how many people leave them on for showings!
Step back and look at your home with the eye of a highly critical buyer. Be honest with yourself! Most buyers can't look past unattractive or disorganized rooms or figure out how their furniture might look in an empty room. Home staging creates the "dream home" environment for buyers so they don't have to use their own imagination and can immediately fall in love and say "this is home!"
Mortgage Delinquencies Decline in Colorado
(From an Article in the Denver Business Journal, Sept. 5, 2008)
Colorado ranked 41st in the nation in mortgage delinquencies in the second quarter, down from 39th in the first quarter, accord to data released Friday by the Mortgage Bankers Association.
Meanwhile, the percentage of Colorado loans on which foreclosure was started in the April-though-June quarter fell three basis points to 0.84 percent.
“The national foreclosure numbers continue to be driven by the hardest-hit states continuing to get much worse,” Jay Brinkmann, the MBA’s chief economist, said in a statement. “The increases in foreclosures in California and Florida overwhelmed improvements in states like Texas, Massachusetts and Maryland.” California and Florida accounted for 39 percent of all foreclosures started during the second quarter, and 73 percent of the increase in foreclosures between the first and second quarters. Only eight states had rates of foreclosure starts that were above the national average: Nevada, Florida, California, Arizona, Michigan, Rhode Island, Indiana and Ohio. The remaining 42 states plus the District of Columbia were below the national average.
“The other factor that continues to drive foreclosure rates is loan type,” Brinkmann said. “Subprime [adjustable-rate mortgage] loans accounted for 36 percent of all foreclosures started and prime ARMs, which include option ARMs, represented 23 percent.”
Colorado had 20 percent nonprime borrowers, compared with a national average of 19 percent.
Colorado ranked 41st in the nation in mortgage delinquencies in the second quarter, down from 39th in the first quarter, accord to data released Friday by the Mortgage Bankers Association.
Meanwhile, the percentage of Colorado loans on which foreclosure was started in the April-though-June quarter fell three basis points to 0.84 percent.
“The national foreclosure numbers continue to be driven by the hardest-hit states continuing to get much worse,” Jay Brinkmann, the MBA’s chief economist, said in a statement. “The increases in foreclosures in California and Florida overwhelmed improvements in states like Texas, Massachusetts and Maryland.” California and Florida accounted for 39 percent of all foreclosures started during the second quarter, and 73 percent of the increase in foreclosures between the first and second quarters. Only eight states had rates of foreclosure starts that were above the national average: Nevada, Florida, California, Arizona, Michigan, Rhode Island, Indiana and Ohio. The remaining 42 states plus the District of Columbia were below the national average.
“The other factor that continues to drive foreclosure rates is loan type,” Brinkmann said. “Subprime [adjustable-rate mortgage] loans accounted for 36 percent of all foreclosures started and prime ARMs, which include option ARMs, represented 23 percent.”
Colorado had 20 percent nonprime borrowers, compared with a national average of 19 percent.
Xcel Moving on SmartGridCity Project in Boulder
(From an Article in the Denver Business Journal, Aug. 21, 2008)
Xcel Energy Inc. said Thursday it’s installed 82 miles of fiber-optic cables and the first of 13,000 new electricity meters in Boulder as part of its $100 million SmartGridCity pilot project in Boulder.
The equipment can respond to a power outage by automatically isolating the incident and rerouting power so fewer customers are left in the dark. The trailer also has a web portal that allows customers to pre-set their furnace, air conditioning and lights to save energy. “SmartGridCity is a prime example of how in Colorado we are using new technologies to build the New Energy Economy,” Gov. Ritter said in a statement. “This project is a great example of a public and private partnership between the state, the city of Boulder, Xcel Energy and its partners.” Xcel said the utility and its SmartGridCity technology partners are making significant progress in Boulder. The first so-called “smart” meters have been installed, and are working with two-way communication between the customer and Xcel through the fiber-optic cables.
By the end of 2008, Xcel expects to have more than 13,000 homes with smart meters. By next summer, another 10,000 meters will be available for installation at the customer’s request.
In addition, Xcel said two substations in Boulder have been upgraded with smart technology, which can automatically detect, isolate, and restore electricity load when an outage occurs. This information allows Xcel to cut the impact of outages by predicting them, and thus preventing outages, and technology to reduce their duration.
Xcel Energy Inc. said Thursday it’s installed 82 miles of fiber-optic cables and the first of 13,000 new electricity meters in Boulder as part of its $100 million SmartGridCity pilot project in Boulder.
The equipment can respond to a power outage by automatically isolating the incident and rerouting power so fewer customers are left in the dark. The trailer also has a web portal that allows customers to pre-set their furnace, air conditioning and lights to save energy. “SmartGridCity is a prime example of how in Colorado we are using new technologies to build the New Energy Economy,” Gov. Ritter said in a statement. “This project is a great example of a public and private partnership between the state, the city of Boulder, Xcel Energy and its partners.” Xcel said the utility and its SmartGridCity technology partners are making significant progress in Boulder. The first so-called “smart” meters have been installed, and are working with two-way communication between the customer and Xcel through the fiber-optic cables.
By the end of 2008, Xcel expects to have more than 13,000 homes with smart meters. By next summer, another 10,000 meters will be available for installation at the customer’s request.
In addition, Xcel said two substations in Boulder have been upgraded with smart technology, which can automatically detect, isolate, and restore electricity load when an outage occurs. This information allows Xcel to cut the impact of outages by predicting them, and thus preventing outages, and technology to reduce their duration.
Denver Home Price Rise Tops 20-City List
(From an Article in the Denver Business Journal, Aug. 26, 2008)
Denver home prices show the strongest rebound of the 20 markets studied, according to the S&P Case-Shiller Home Price Indices. The report said home prices rose in June from a month earlier in nine cities. Denver had the biggest gain, at 1.5 percent, followed by Boston at 1.2 percent.
A separate report, by the Office of Federal Housing Enterprise Oversight, showed more positive news for the Denver market. Home prices in the Denver-Aurora area are up 0.38 percent in the past year. The report relies on home sales and refinancing of mortgages for its data. Home prices in Boulder were up 2.47 percent in value from a year ago, and 0.25 percent higher in the second quarter. For Colorado as a whole, prices rose by 1.82 percent in the past year and by 0.32 percent in the second quarter.
Denver home prices show the strongest rebound of the 20 markets studied, according to the S&P Case-Shiller Home Price Indices. The report said home prices rose in June from a month earlier in nine cities. Denver had the biggest gain, at 1.5 percent, followed by Boston at 1.2 percent.
A separate report, by the Office of Federal Housing Enterprise Oversight, showed more positive news for the Denver market. Home prices in the Denver-Aurora area are up 0.38 percent in the past year. The report relies on home sales and refinancing of mortgages for its data. Home prices in Boulder were up 2.47 percent in value from a year ago, and 0.25 percent higher in the second quarter. For Colorado as a whole, prices rose by 1.82 percent in the past year and by 0.32 percent in the second quarter.
Passco Buys Land in Louisville
(From an Article in the Denver Business Journal, Sept. 3, 2008) A California company has purchased a 20-acre site within the Colorado Technology Center in Louisville for $3.8 million and plans to construct a series of office buildings there. The site includes two approved planned unit developments, or PUDs. Passco Companies Development LLC said it expects to break ground this fall on the first phase of development, an 84,000-square-foot building called One Technology Center. The company will have space available for lease from 20,000 to 84,000 square feet. Phase two will be Two Technology Center, a 104,000-square-foot building. The third phase will be two 40,000-square-foot multi-tenant office or flex properties.
Denver Water Considers Higher Rates
(From an Article in the Denver Business Journal, Sept. 2, 2008) Water’s board will decide Sept. 24 whether to raise water bills by $19 to $33 a year for residential customers, depending on if they live in the city or the suburbs. The agency needs to raise an extra $18.5 million in 2009 to cover rising costs for maintaining and improving its water system.
Other projects in 2009 include the replacement and rehabilitation of aging infrastructure, Hayman Fire watershed recovery work, potential enlargement of Gross Reservoir and expanding conservation education, rebates and incentive programs, the utility said.
Increasing water rates will close that gap, the utility said, since it doesn’t receive any tax dollars.
Under the current proposal for 2009, reviewed by the Denver Water board, Denver residential customers would see their bills increase by about $19.14 a year, on average. Suburban residential customers served by Denver Water would see an increase of $33.12 per year, on average. The effects of the proposed changes on customer bills would vary depending upon the amount of water the customer uses and whether the customer lives in Denver or is served by a suburban distributor under contract with Denver Water.
The utility is also looking at ways to revise its rate structure for 2010 designed to encourage water conservation. Public comment on the 2009 water rate increase and the 2010 rate structure is being taken.
Other projects in 2009 include the replacement and rehabilitation of aging infrastructure, Hayman Fire watershed recovery work, potential enlargement of Gross Reservoir and expanding conservation education, rebates and incentive programs, the utility said.
Increasing water rates will close that gap, the utility said, since it doesn’t receive any tax dollars.
Under the current proposal for 2009, reviewed by the Denver Water board, Denver residential customers would see their bills increase by about $19.14 a year, on average. Suburban residential customers served by Denver Water would see an increase of $33.12 per year, on average. The effects of the proposed changes on customer bills would vary depending upon the amount of water the customer uses and whether the customer lives in Denver or is served by a suburban distributor under contract with Denver Water.
The utility is also looking at ways to revise its rate structure for 2010 designed to encourage water conservation. Public comment on the 2009 water rate increase and the 2010 rate structure is being taken.
Forest City Breaks Ground on 184 acre Park
(From an Article in the Denver Business Journal, Sept. 3, 2008)
Developer Forest City Science + Technology Group broke ground on the 184-acre Colorado Science and Technology Park in Aurora Wednesday. The new park will house an incubator for emerging businesses, a hotel and conference center and a 175,000-foot-foot office building for University Physicians Inc. The Fitzsimons Federal Credit Union also will break ground on the site. During the groundbreaking, Aurora Mayor Ed Tauer unveiled a study that showed that development in the former Fitzsimons Army Medical Center — which includes the Anschutz Medical Campus, The Children’s Hospital and Research Center and a planned veterans hospital — will generate up to $4.5 billion in “annual economic impact” by 2013. Forest City Science + Technology Group is a division of Forest City Enterprises Inc. (NYSE: FCEA, FCEB), a real estate development company based in Cleveland, Ohio.
Developer Forest City Science + Technology Group broke ground on the 184-acre Colorado Science and Technology Park in Aurora Wednesday. The new park will house an incubator for emerging businesses, a hotel and conference center and a 175,000-foot-foot office building for University Physicians Inc. The Fitzsimons Federal Credit Union also will break ground on the site. During the groundbreaking, Aurora Mayor Ed Tauer unveiled a study that showed that development in the former Fitzsimons Army Medical Center — which includes the Anschutz Medical Campus, The Children’s Hospital and Research Center and a planned veterans hospital — will generate up to $4.5 billion in “annual economic impact” by 2013. Forest City Science + Technology Group is a division of Forest City Enterprises Inc. (NYSE: FCEA, FCEB), a real estate development company based in Cleveland, Ohio.
Ascendant, Cobalt Plan Spec Building
(From an Article in the Denver Business Journal, Sept. 4, 2008)
Ascendant Development and Cobalt Industrial REIT II will break ground this month on a 100,000-square-foot speculative light industrial building in the Denver Business Center. The building site is 6.10 acres. Privately held Ascendant Development is based in Denver. The company specializes in buying and developing business parks, plus build-to-suit and speculative office and industrial buildings in the Rocky Mountain Region.
Dallas-based Cobalt Capital Partners, a private equity firm that buys, manages and develops light industrial properties, manages Cobalt Industrial REIT II and its predecessor, Cobalt Industrial REIT I. Together, the REITs own more than 23 million square feet of space in 15 markets.
Ascendant Development and Cobalt Industrial REIT II will break ground this month on a 100,000-square-foot speculative light industrial building in the Denver Business Center. The building site is 6.10 acres. Privately held Ascendant Development is based in Denver. The company specializes in buying and developing business parks, plus build-to-suit and speculative office and industrial buildings in the Rocky Mountain Region.
Dallas-based Cobalt Capital Partners, a private equity firm that buys, manages and develops light industrial properties, manages Cobalt Industrial REIT II and its predecessor, Cobalt Industrial REIT I. Together, the REITs own more than 23 million square feet of space in 15 markets.
Metro State board backs energy-tax measure
(From an Article in the Denver Business Journal, Sept. 4, 2008) Trustees of Metropolitan State College of Denver have endorsed a ballot measure to collect more severance taxes from energy companies to fund scholarships and are opposing an initiative that would curtail affirmative-action programs. The college’s board of trustees voted unanimously to support Amendment 58, which would end a tax credit enjoyed by gas and oil companies that drill in Colorado.
The measure would raise more than $300 million in severance-tax revenue, about two-thirds of which would go into a college-scholarship fund for qualifying Colorado students. Proponents say energy companies don’t need a tax credit, which they don’t get in other states, and that the money could help thousands of Colorado students attend college who might not otherwise be able to go. Opponents say it could cause gas and oil companies to flee the state and result in higher energy prices for consumers.
The measure would raise more than $300 million in severance-tax revenue, about two-thirds of which would go into a college-scholarship fund for qualifying Colorado students. Proponents say energy companies don’t need a tax credit, which they don’t get in other states, and that the money could help thousands of Colorado students attend college who might not otherwise be able to go. Opponents say it could cause gas and oil companies to flee the state and result in higher energy prices for consumers.
Monday, May 05, 2008
Trial Attorneys Use Guerilla Tactic on REALTORS
Politics can get really ugly.
Trial Attorneys Use Guerilla Tactic on REALTORS®: Employing the “misery loves company strategy,” the Colorado Trial Lawyers Association filed a proposed ballot initiative to limit commissions on real estate sales. The trial lawyers did this because of a proposed ballot question which would limit their fees and used the tactic in an attempt to force REALTORS® to become their allies. The proposal would reduce commissions on the sale of homes valued above $500,000 to one percent, commissions on homes valued between $250,000 and $500,000 to three percent and leave commissions on homes valued under $250,000 at six percent. CAR immediately voiced strong opposition to the proposal and is negotiating with the trial lawyers to get the proposal withdrawn. The Colorado Trial Lawyers Association has filed nine different ballot measures, all designed to restrict professional fees or salaries of various groups. In a press release, the Executive Director said "For too long, corporate interests have been put ahead of consumer interests in this state."
Trial Attorneys Use Guerilla Tactic on REALTORS®: Employing the “misery loves company strategy,” the Colorado Trial Lawyers Association filed a proposed ballot initiative to limit commissions on real estate sales. The trial lawyers did this because of a proposed ballot question which would limit their fees and used the tactic in an attempt to force REALTORS® to become their allies. The proposal would reduce commissions on the sale of homes valued above $500,000 to one percent, commissions on homes valued between $250,000 and $500,000 to three percent and leave commissions on homes valued under $250,000 at six percent. CAR immediately voiced strong opposition to the proposal and is negotiating with the trial lawyers to get the proposal withdrawn. The Colorado Trial Lawyers Association has filed nine different ballot measures, all designed to restrict professional fees or salaries of various groups. In a press release, the Executive Director said "For too long, corporate interests have been put ahead of consumer interests in this state."
Monday, April 28, 2008
Scary Ballot Initiative
There are some Special Interest Groups that would like to see real estate take a plummet. They would like to see deflation as the order of the day and possibly undermine the health and wealth of our state. Or they have a poor basic understanding of what Realtors do on a daily basis. Realtors have individual businesses with individual expenses and overheard. Great Realtors absorb expenses for web sites, written advertising, staff, gas etc on the success of a sale in the future. A lot of risk is taken on our part. If an initiative like this gets any traction then sellers and buyers will need to be ready to get their check books out to pay hourly rates plus itemized expenses. It also seems crazy that someone with a higher priced home in this initiative will have to pay less than someone who owns a lower priced home. It leads me to believe that the people behind this measure own a home higher than $500,000.00 .
If the general trend is still to believe that Realtors get paid to much...then maybe those folks should get there license and start selling!
Ballot Initiative Update
There are now three active initiatives that have been filed which address real estate transfer taxes – all brought forward by the same groups. To address flaws existing in the current initiative, the proponents submitted the two additional proposals this week. CAR remains actively engaged in this process and will continue to intervene on behalf of REALTOR® interests.
In addition to the transfer tax proposals, initiative #109 was filed this week concerning the restriction of earned real estate broker fees. In a nutshell, a six percent cap would be placed on transactions up to $250,000; three percent for $250,000 – $500,000; and one percent for transactions above $500,000 (but no more than $500 per hour).
In reaction to initiative #109, CAR has released the following press statement:
First the Colorado Association of REALTORS® believes the ballot initiative process is an unproductive way to deal with consumer and business issues. Second we believe this proposed ballot initiative specifically is bad for consumers. It changes the relationship between the consumer and the real estate agent/REALTOR® by mandating a fixed price whereas, current commission rates are negotiable regardless of the selling price of a property.
The sliding scale is patently unfair, particularly to the majority of buyers who are purchasing homes on the lower dollar value of this scale. For example, using the proposed ballot initiative scale, a family purchasing a $200,000 home would be required to pay a $12,000 commission. A family purchasing a $500,000 home would only pay a $5,000 commission based on the 1 percent mandated rate.
Our current system encourages innovative business models that clearly benefit the consumer. As an association, our desire is to encourage and support our varied professionals in being creative for the consumer and providing diverse solutions to their real estate needs.
If the general trend is still to believe that Realtors get paid to much...then maybe those folks should get there license and start selling!
Ballot Initiative Update
There are now three active initiatives that have been filed which address real estate transfer taxes – all brought forward by the same groups. To address flaws existing in the current initiative, the proponents submitted the two additional proposals this week. CAR remains actively engaged in this process and will continue to intervene on behalf of REALTOR® interests.
In addition to the transfer tax proposals, initiative #109 was filed this week concerning the restriction of earned real estate broker fees. In a nutshell, a six percent cap would be placed on transactions up to $250,000; three percent for $250,000 – $500,000; and one percent for transactions above $500,000 (but no more than $500 per hour).
In reaction to initiative #109, CAR has released the following press statement:
First the Colorado Association of REALTORS® believes the ballot initiative process is an unproductive way to deal with consumer and business issues. Second we believe this proposed ballot initiative specifically is bad for consumers. It changes the relationship between the consumer and the real estate agent/REALTOR® by mandating a fixed price whereas, current commission rates are negotiable regardless of the selling price of a property.
The sliding scale is patently unfair, particularly to the majority of buyers who are purchasing homes on the lower dollar value of this scale. For example, using the proposed ballot initiative scale, a family purchasing a $200,000 home would be required to pay a $12,000 commission. A family purchasing a $500,000 home would only pay a $5,000 commission based on the 1 percent mandated rate.
Our current system encourages innovative business models that clearly benefit the consumer. As an association, our desire is to encourage and support our varied professionals in being creative for the consumer and providing diverse solutions to their real estate needs.
Ritter approves 'land grab' bill
Ritter approves 'land grab' bill
Adverse possession law set to change
By Heath Urie (Contact)Saturday, April 26, 2008
Beginning July 1, people hoping to use "adverse possession" to take control of another person's land had better be prepared to pay for it, thanks to a bill signed into law Friday by Gov. Bill Ritter.
Ritter gave final approval to House Bill 1148, which modifies the longtime legal concept that allows trespassers to claim another's land after using it openly and continuously for at least 18 years.
The bill, which garnered wide bipartisan support among state lawmakers, requires that an adverse possessor believe in "good faith" that the land is actually his or her own. It also raises the burden of proof in an adverse-possession case and gives judges the power to make plaintiffs payfor any land they are awarded.
Rep. Rob Witwer, R-Evergreen, and Sen. Ron Tupa, D-Boulder, co-sponsored the bill, which was crafted in the wake of a controversial Boulder land dispute.
Richard McLean and Edith Stevens sued neighbors Don and Susie Kirlin in 2006 using adverse possession. In October, the former district court judge and attorney won their case -- and 34 percent of the Kirlins' vacant, next-door lot.
"I'm just so impressed and happy with the Colorado Legislature," Don Kirlin said. "The fact that they were able to change a law so that no one would have to endure what we went through ... is pretty monumental."
Witwer on Friday said the bill is a victory for property owners.
"This will make it harder to abuse adverse-possession law," he said. "Frankly, it should have been done decades ago. But it's better late than never."
Earlier this month, Ritter signed a bill sponsored by Rep. Claire Levy, D-Boulder, which -- beginning Aug. 6 -- will require Colorado district and county court judges to step down from cases involving other current or former judges within the same district when requested.
Levy said she sponsored her bill in reaction to the Kirlin case.
Adverse possession law set to change
By Heath Urie (Contact)Saturday, April 26, 2008
Beginning July 1, people hoping to use "adverse possession" to take control of another person's land had better be prepared to pay for it, thanks to a bill signed into law Friday by Gov. Bill Ritter.
Ritter gave final approval to House Bill 1148, which modifies the longtime legal concept that allows trespassers to claim another's land after using it openly and continuously for at least 18 years.
The bill, which garnered wide bipartisan support among state lawmakers, requires that an adverse possessor believe in "good faith" that the land is actually his or her own. It also raises the burden of proof in an adverse-possession case and gives judges the power to make plaintiffs payfor any land they are awarded.
Rep. Rob Witwer, R-Evergreen, and Sen. Ron Tupa, D-Boulder, co-sponsored the bill, which was crafted in the wake of a controversial Boulder land dispute.
Richard McLean and Edith Stevens sued neighbors Don and Susie Kirlin in 2006 using adverse possession. In October, the former district court judge and attorney won their case -- and 34 percent of the Kirlins' vacant, next-door lot.
"I'm just so impressed and happy with the Colorado Legislature," Don Kirlin said. "The fact that they were able to change a law so that no one would have to endure what we went through ... is pretty monumental."
Witwer on Friday said the bill is a victory for property owners.
"This will make it harder to abuse adverse-possession law," he said. "Frankly, it should have been done decades ago. But it's better late than never."
Earlier this month, Ritter signed a bill sponsored by Rep. Claire Levy, D-Boulder, which -- beginning Aug. 6 -- will require Colorado district and county court judges to step down from cases involving other current or former judges within the same district when requested.
Levy said she sponsored her bill in reaction to the Kirlin case.
Friday, April 18, 2008
2008 Short Term Freddie Mac Rules
Update on Purchases of Conforming Jumbo MortgagesUpdated April 17, 2008
On February 13, the President signed into law the Economic Stimulus Act of 2008 that includes a temporary increase in Freddie Mac's conforming loan limits in high cost areas, as defined by the U.S. Department of Housing and Urban Development (HUD).
Freddie Mac believes the temporary increase in conforming loan limits will allow us to provide much-needed liquidity and stability to the jumbo portion of the residential mortgage market, and is in the best interest of the economy and consumers.
We are using the descriptive term “conforming jumbo” mortgages to distinguish Freddie Mac-eligible jumbo mortgages from other jumbo mortgages that are ineligible for purchase by Freddie Mac and from eligible conventional, conforming mortgages.
New Loan Limits
The new loan limits are applicable to high cost areas only and are the higher of the 2008 conforming loan limit ($417,000) or 125% of the area median house price, not to exceed $729,750 for a 1-unit property. The law also allows the purchase of eligible loans originated with note dates between July 1, 2007 and December 31, 2008.
HUD has published the list of high cost Metropolitan Statistical Areas (MSAs) and applicable loan limits per number of units. This information is available on:
HUD's website. HUD offers a user-friendly, look-up tool that provides loan limits for all MSAs and counties.
OFHEO's website [PDF]. This list provides only the high cost counties and MSAs affected by the new loan limits.
New Originations of Conforming Jumbo Mortgages
For deliveries beginning June 1, we will offer Guarantor contracts for newly originated conforming jumbos for delivery through our selling system. We consider newly originated mortgages to be originations with note dates on or after March 1, 2008 up to and including December 31, 2008. Below are our requirements for originating conforming jumbo mortgages.
The ability to sell conforming jumbo mortgages to Freddie Mac is available on a limited, negotiated basis. We are offering the ability to sell these mortgages in a phased approach to eligible Guarantor customers. Freddie Mac Account Managers will contact eligible Guarantor customers to begin contracting discussions.
For all other customers, we recommend you contact a lender that you have a wholesale relationship with and who is offering conforming jumbo loans. If you don't currently have a relationship with a wholesaler, or if you are unsure if your wholesaler is currently selling conforming jumbo mortgages to us, please contact your Freddie Mac Account Manager or representative. We will assist you whenever possible to determine a wholesale relationship.
Requirements for New Originations
We've defined specific credit and pricing requirements for conforming jumbo mortgages that will be different from our current conforming mortgages requirements. At this time, our credit and underwriting requirements for originations with note dates on or after March 1, 2008 up to and including December 31, 2008, include the following:
General Eligibility
Please note, where the requirements below are silent, conforming jumbos mortgages must comply with all other requirements in the Single-Family Seller/Servicer Guide.
Eligible Products, Purpose and Occupancy Requirements
Products
15-, 20-, 30- and 40-year fixed-rate, fully amortizing mortgages (no balloons)
30-year fixed-rate mortgages with 10-year interest-only periods
Fully amortizing 5/1 adjustable-rate mortgages (ARMs)
5/1 ARMs with 10-year interest-only periods
Purpose
Purchase
No cash-out refinance
Cash-out refinances for primary residence only
Occupancy
1-unit primary residences, including condos and PUDs
1-unit second homes
1-unit investment properties
Maximum Loan-to-Value (LTV) and Total Loan-to-Value (TLTV) Ratios
The following chart outlines the maximum LTV and TLTV ratio requirements for conforming jumbo mortgages:
Loan Purpose
LTV/TLTV
Minimum Indicator Score
Primary Residence
Purchase
90%
LTV >75%: 700LTV <75%: 660
No cash-out refinance
90%
LTV >75%: 700LTV <75%: 660
Cash-out refinance
75%
720
Second Home and Investment Property
Purchase
60%
660
No cash-out refinance
60%
660
Cash-out refinance
N/A
N/A
Eligibility for New Originations
Loan Characteristic
Requirement
Reserves
Primary residence: 2 months verified
Second home and investment property: 6 months verified
Maximum Cash-Out Amount
Per Guide requirements, including mortgage proceeds to the borrower or any other payee may not exceed $100,000
Maximum Seller Contributions
Maximum of 3% is permitted for primary residence and second homes regardless of LTV
Maximum of 2% is permitted for investment properties
Required Documentation
All Loan Prospector® documentation classes apply, including Accept Plus
Full documentation requirements apply for all other mortgages
Housing Payment History
No 30-day late housing payments within the last 12 months
Nontraditional Credit
Not permitted
Debt-to-Income Ratio
45% maximum
Appraisals
Full URAR - interior and exterior inspection required
In addition, a field review (Form 1032) is required if the LTV/TLTV > 75% and the value is > $1,000,000
The person performing the appraisal must be qualified to perform appraisals without oversight or supervision by a "supervisory" or "review" appraiser
Freddie Mac's Declining Markets requirements apply. If the appraiser or Seller has determined that a property is located in a declining market, maximum financing must be reduced. Section 23.5 of the Guide provides that a lender must not offer financing to the maximum LTV/TLTV ratio in any instance in which property values are declining.
Age of Documents
120 days
Mortgage Insurance
Standard mortgage insurance (check with your MI provider to obtain its eligibility requirements)
Financed MI not permitted
Eligible Underwriting Path
For loan amounts less than $1 million
Loan Prospector Accept Plus and Accept
In addition to the Loan Prospector assessment, you will need to ensure that the loan meets our credit requirements for conforming jumbos
Manually underwritten mortgages
Settlement Cycle
5-day minimum settlement cycle
Ineligible Products and Features
Balloon Mortgages
FHA Mortgages
Financed MI
Streamlined refinances
Special purpose cash-out refinances
Second liens
Manufactured homes
Cooperative units
Temporary subsidy buydowns
Home Possible® Mortgages or other lender-branded affordable programs
2- to 4-unit properties
Servicing
There are no special servicing requirements related to the servicing of conforming jumbo mortgages. The minimum servicing spread will be 25 basis points.
Securitization
The Securities Industry and Financial Markets Association (SIFMA) indicated that conforming jumbos will be traded as non-TBA securities:
30-year fixed-rate mortgages will be pooled in a separate prefix and trade non-TBA.
ARMs will be pooled in specific conforming jumbo pools using existing non-TBA prefixes. Co-mingling will not be allowed.
Pricing
Our pricing for conforming jumbos will be as follows:
Your standard guarantee-fee
Plus, current Single-Family Seller/Servicer Guide Exhibit 19 delivery fees
Plus, unique conforming jumbo mortgage postsettlement delivery fees. To determine the delivery fee, take the standard delivery fee rate and apply all applicable delivery fee rate adjustors, as defined in the tables below.
Fixed Rate Mortgage Standard Delivery Fee Rate
Product Type
Delivery Fee
Fixed Rate
0.25%
Fixed Rate Mortgage Delivery Fee Rate Adjusters
Product Type
Purpose Type
LTV/TLTV
Delivery Fee
Fixed Rate
No Cash-Out Refinance
> 75%
0.50%
Cash-Out Refinances
All eligible LTV/TLTVs
1.00%
Fixed-Rate 10-year Initial Interest
All purpose types
All eligible LTV/TLTVs
0.25%
Adjustable Rate Mortgage Standard Delivery Fee Rate
Product Type
Delivery Fee
ARM < 80% LTV/TLTV
0.75%
ARM > 80% LTV/TLTV
1.50%
Adjustable Rate Mortgage Delivery Fee Rate Adjusters
Product Type
Purpose Type
LTV/TLTV
Delivery Fee
ARM
No Cash-Out Refinance
> 75%
0.50%
Cash-Out Refinances
All eligible LTV/TLTVs
1.00%
Please contact your Freddie Mac Account Manager or representative if you have any questions regarding our offering for new originations.
Existing Portfolios of Eligible Mortgages
In addition to purchasing new originations, we are purchasing existing lender-held portfolios of qualifying loans with note dates on or after July 1, 2007, and up to and including February 29, 2008, through our bulk transaction path. This is a negotiated offering available to lenders experienced in selling through our bulk process. A broader product set may be available for this option. If you are interested in selling a qualifying portfolio to Freddie Mac, please contact your Freddie Mac Account Manager or representative.
© 2008 Freddie Mac
On February 13, the President signed into law the Economic Stimulus Act of 2008 that includes a temporary increase in Freddie Mac's conforming loan limits in high cost areas, as defined by the U.S. Department of Housing and Urban Development (HUD).
Freddie Mac believes the temporary increase in conforming loan limits will allow us to provide much-needed liquidity and stability to the jumbo portion of the residential mortgage market, and is in the best interest of the economy and consumers.
We are using the descriptive term “conforming jumbo” mortgages to distinguish Freddie Mac-eligible jumbo mortgages from other jumbo mortgages that are ineligible for purchase by Freddie Mac and from eligible conventional, conforming mortgages.
New Loan Limits
The new loan limits are applicable to high cost areas only and are the higher of the 2008 conforming loan limit ($417,000) or 125% of the area median house price, not to exceed $729,750 for a 1-unit property. The law also allows the purchase of eligible loans originated with note dates between July 1, 2007 and December 31, 2008.
HUD has published the list of high cost Metropolitan Statistical Areas (MSAs) and applicable loan limits per number of units. This information is available on:
HUD's website. HUD offers a user-friendly, look-up tool that provides loan limits for all MSAs and counties.
OFHEO's website [PDF]. This list provides only the high cost counties and MSAs affected by the new loan limits.
New Originations of Conforming Jumbo Mortgages
For deliveries beginning June 1, we will offer Guarantor contracts for newly originated conforming jumbos for delivery through our selling system. We consider newly originated mortgages to be originations with note dates on or after March 1, 2008 up to and including December 31, 2008. Below are our requirements for originating conforming jumbo mortgages.
The ability to sell conforming jumbo mortgages to Freddie Mac is available on a limited, negotiated basis. We are offering the ability to sell these mortgages in a phased approach to eligible Guarantor customers. Freddie Mac Account Managers will contact eligible Guarantor customers to begin contracting discussions.
For all other customers, we recommend you contact a lender that you have a wholesale relationship with and who is offering conforming jumbo loans. If you don't currently have a relationship with a wholesaler, or if you are unsure if your wholesaler is currently selling conforming jumbo mortgages to us, please contact your Freddie Mac Account Manager or representative. We will assist you whenever possible to determine a wholesale relationship.
Requirements for New Originations
We've defined specific credit and pricing requirements for conforming jumbo mortgages that will be different from our current conforming mortgages requirements. At this time, our credit and underwriting requirements for originations with note dates on or after March 1, 2008 up to and including December 31, 2008, include the following:
General Eligibility
Please note, where the requirements below are silent, conforming jumbos mortgages must comply with all other requirements in the Single-Family Seller/Servicer Guide.
Eligible Products, Purpose and Occupancy Requirements
Products
15-, 20-, 30- and 40-year fixed-rate, fully amortizing mortgages (no balloons)
30-year fixed-rate mortgages with 10-year interest-only periods
Fully amortizing 5/1 adjustable-rate mortgages (ARMs)
5/1 ARMs with 10-year interest-only periods
Purpose
Purchase
No cash-out refinance
Cash-out refinances for primary residence only
Occupancy
1-unit primary residences, including condos and PUDs
1-unit second homes
1-unit investment properties
Maximum Loan-to-Value (LTV) and Total Loan-to-Value (TLTV) Ratios
The following chart outlines the maximum LTV and TLTV ratio requirements for conforming jumbo mortgages:
Loan Purpose
LTV/TLTV
Minimum Indicator Score
Primary Residence
Purchase
90%
LTV >75%: 700LTV <75%: 660
No cash-out refinance
90%
LTV >75%: 700LTV <75%: 660
Cash-out refinance
75%
720
Second Home and Investment Property
Purchase
60%
660
No cash-out refinance
60%
660
Cash-out refinance
N/A
N/A
Eligibility for New Originations
Loan Characteristic
Requirement
Reserves
Primary residence: 2 months verified
Second home and investment property: 6 months verified
Maximum Cash-Out Amount
Per Guide requirements, including mortgage proceeds to the borrower or any other payee may not exceed $100,000
Maximum Seller Contributions
Maximum of 3% is permitted for primary residence and second homes regardless of LTV
Maximum of 2% is permitted for investment properties
Required Documentation
All Loan Prospector® documentation classes apply, including Accept Plus
Full documentation requirements apply for all other mortgages
Housing Payment History
No 30-day late housing payments within the last 12 months
Nontraditional Credit
Not permitted
Debt-to-Income Ratio
45% maximum
Appraisals
Full URAR - interior and exterior inspection required
In addition, a field review (Form 1032) is required if the LTV/TLTV > 75% and the value is > $1,000,000
The person performing the appraisal must be qualified to perform appraisals without oversight or supervision by a "supervisory" or "review" appraiser
Freddie Mac's Declining Markets requirements apply. If the appraiser or Seller has determined that a property is located in a declining market, maximum financing must be reduced. Section 23.5 of the Guide provides that a lender must not offer financing to the maximum LTV/TLTV ratio in any instance in which property values are declining.
Age of Documents
120 days
Mortgage Insurance
Standard mortgage insurance (check with your MI provider to obtain its eligibility requirements)
Financed MI not permitted
Eligible Underwriting Path
For loan amounts less than $1 million
Loan Prospector Accept Plus and Accept
In addition to the Loan Prospector assessment, you will need to ensure that the loan meets our credit requirements for conforming jumbos
Manually underwritten mortgages
Settlement Cycle
5-day minimum settlement cycle
Ineligible Products and Features
Balloon Mortgages
FHA Mortgages
Financed MI
Streamlined refinances
Special purpose cash-out refinances
Second liens
Manufactured homes
Cooperative units
Temporary subsidy buydowns
Home Possible® Mortgages or other lender-branded affordable programs
2- to 4-unit properties
Servicing
There are no special servicing requirements related to the servicing of conforming jumbo mortgages. The minimum servicing spread will be 25 basis points.
Securitization
The Securities Industry and Financial Markets Association (SIFMA) indicated that conforming jumbos will be traded as non-TBA securities:
30-year fixed-rate mortgages will be pooled in a separate prefix and trade non-TBA.
ARMs will be pooled in specific conforming jumbo pools using existing non-TBA prefixes. Co-mingling will not be allowed.
Pricing
Our pricing for conforming jumbos will be as follows:
Your standard guarantee-fee
Plus, current Single-Family Seller/Servicer Guide Exhibit 19 delivery fees
Plus, unique conforming jumbo mortgage postsettlement delivery fees. To determine the delivery fee, take the standard delivery fee rate and apply all applicable delivery fee rate adjustors, as defined in the tables below.
Fixed Rate Mortgage Standard Delivery Fee Rate
Product Type
Delivery Fee
Fixed Rate
0.25%
Fixed Rate Mortgage Delivery Fee Rate Adjusters
Product Type
Purpose Type
LTV/TLTV
Delivery Fee
Fixed Rate
No Cash-Out Refinance
> 75%
0.50%
Cash-Out Refinances
All eligible LTV/TLTVs
1.00%
Fixed-Rate 10-year Initial Interest
All purpose types
All eligible LTV/TLTVs
0.25%
Adjustable Rate Mortgage Standard Delivery Fee Rate
Product Type
Delivery Fee
ARM < 80% LTV/TLTV
0.75%
ARM > 80% LTV/TLTV
1.50%
Adjustable Rate Mortgage Delivery Fee Rate Adjusters
Product Type
Purpose Type
LTV/TLTV
Delivery Fee
ARM
No Cash-Out Refinance
> 75%
0.50%
Cash-Out Refinances
All eligible LTV/TLTVs
1.00%
Please contact your Freddie Mac Account Manager or representative if you have any questions regarding our offering for new originations.
Existing Portfolios of Eligible Mortgages
In addition to purchasing new originations, we are purchasing existing lender-held portfolios of qualifying loans with note dates on or after July 1, 2007, and up to and including February 29, 2008, through our bulk transaction path. This is a negotiated offering available to lenders experienced in selling through our bulk process. A broader product set may be available for this option. If you are interested in selling a qualifying portfolio to Freddie Mac, please contact your Freddie Mac Account Manager or representative.
© 2008 Freddie Mac
FREDDIE MAC TO BUY CONFORMING JUMBO MORTGAGES IN HIGH COST MARKETS FROM WELLS FARGO, CHASE, CITIMORTGAGE, WAMU
FREDDIE MAC TO BUY CONFORMING JUMBO MORTGAGES IN HIGH COST MARKETS FROM WELLS FARGO, CHASE, CITIMORTGAGE, WAMU
Temporary Stimulus Act Authority May Add $10-$15 Billion in Mortgage Sales This Year
McLean, VA – Freddie Mac (NYSE: FRE) has agreed to purchase billions of dollars of new conforming jumbo mortgages with original loan amounts up to $729,750 from Wells Fargo Home Mortgage, Chase, CitiMortgage and WaMu. Freddie Mac conforming jumbo mortgages can be used to finance properties in hundreds of high cost markets designated in the Economic Stimulus Act of 2008 President Bush signed on February 13.
Today's announcement marks the first large-scale effort to jump-start the stalled jumbo mortgage market under the Economic Stimulus Act, which temporarily raised Freddie Mac's conforming loan limit from $417,000 to as much as $729,750 through December 31, 2008. Freddie Mac's purchase of conforming jumbo mortgages is restricted to 224 high cost markets where median home prices exceed Freddie Mac's $417,000 loan limit.
As a result, qualified borrowers can now apply for an array of fixed-rate or adjustable rate conforming jumbo mortgages that will be less expensive than non-conforming jumbo loans in high cost markets. Borrowers can use Freddie Mac conforming jumbo mortgages to finance up to 90% of a property's value.
Because Freddie Mac is buying the new conforming jumbo mortgages for its portfolio, Wells Fargo, Chase, CitiMortgage and WaMu will have instant liquidity and can offer a stable jumbo market rate to qualified borrowers. By working with Wells Fargo, Chase, CitiMortgage, WaMu and other national lenders, Freddie Mac expects to finance between $10 and $15 billion in new jumbo mortgages in 2008.
"Purchasing conforming jumbo mortgages for our portfolio shows how we can bring new liquidity to markets other investors have all but abandoned and make full use of the new tools Congress gave us to help restore stability during the current housing crisis," said Freddie Mac Chairman and CEO Richard Syron. "We initially expect conforming jumbo mortgages to have rates that are as much as half a percentage point below the jumbo market rate in many of these high cost markets."
"I want to thank Wells Fargo, Chase, CitiMortgage and WaMu for working with us and enabling us, in a new way, to fulfill our public mission to America's lenders and borrowers," Syron added.
"CitiMortgage applauds Freddie Mac for agreeing to buy loans for these qualifying borrowers, and we are looking forward to working with Freddie and borrowers to improve housing affordability in these higher cost markets," said Bill Beckmann, CitiMortgage president.
"These new conforming jumbo mortgages will reduce homeownership costs for families in high-cost areas," said Dave Lowman, CEO of Chase Home Lending. "Freddie Mac's involvement will help increase availability."
"We value our relationship with Freddie Mac which enables us to collectively do great things for consumers," said Mike Heid, co-president of Wells Fargo Home Mortgage. "While Wells Fargo has offered jumbo loans directly to consumers throughout the current market correction, this important agreement provides a reliable investor for loans in high-cost areas which, in turn, further broadens our ability to serve these customers."
While specific product availability may vary by lender, Freddie Mac has said it will buy 15-, 20-, 30- and 40-year fixed-rate, fully amortizing conforming jumbo mortgages; 30-year fixed-rate mortgages with 10-year interest-only periods; fully amortizing 5/1 adjustable-rate mortgages (ARMs) and 5/1 ARMs with 10-year interest-only periods. Qualified borrowers can also obtain cash-out refinance conforming jumbo mortgages that provide a maximum cash-out of $100,000.
For more information on Freddie Mac conforming jumbo mortgage products, visit www.freddiemac.com/singlefamily/increased_limits.html.
Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible more than 50 million times, ensuring financing for one in six homebuyers and more than four million renters.
Temporary Stimulus Act Authority May Add $10-$15 Billion in Mortgage Sales This Year
McLean, VA – Freddie Mac (NYSE: FRE) has agreed to purchase billions of dollars of new conforming jumbo mortgages with original loan amounts up to $729,750 from Wells Fargo Home Mortgage, Chase, CitiMortgage and WaMu. Freddie Mac conforming jumbo mortgages can be used to finance properties in hundreds of high cost markets designated in the Economic Stimulus Act of 2008 President Bush signed on February 13.
Today's announcement marks the first large-scale effort to jump-start the stalled jumbo mortgage market under the Economic Stimulus Act, which temporarily raised Freddie Mac's conforming loan limit from $417,000 to as much as $729,750 through December 31, 2008. Freddie Mac's purchase of conforming jumbo mortgages is restricted to 224 high cost markets where median home prices exceed Freddie Mac's $417,000 loan limit.
As a result, qualified borrowers can now apply for an array of fixed-rate or adjustable rate conforming jumbo mortgages that will be less expensive than non-conforming jumbo loans in high cost markets. Borrowers can use Freddie Mac conforming jumbo mortgages to finance up to 90% of a property's value.
Because Freddie Mac is buying the new conforming jumbo mortgages for its portfolio, Wells Fargo, Chase, CitiMortgage and WaMu will have instant liquidity and can offer a stable jumbo market rate to qualified borrowers. By working with Wells Fargo, Chase, CitiMortgage, WaMu and other national lenders, Freddie Mac expects to finance between $10 and $15 billion in new jumbo mortgages in 2008.
"Purchasing conforming jumbo mortgages for our portfolio shows how we can bring new liquidity to markets other investors have all but abandoned and make full use of the new tools Congress gave us to help restore stability during the current housing crisis," said Freddie Mac Chairman and CEO Richard Syron. "We initially expect conforming jumbo mortgages to have rates that are as much as half a percentage point below the jumbo market rate in many of these high cost markets."
"I want to thank Wells Fargo, Chase, CitiMortgage and WaMu for working with us and enabling us, in a new way, to fulfill our public mission to America's lenders and borrowers," Syron added.
"CitiMortgage applauds Freddie Mac for agreeing to buy loans for these qualifying borrowers, and we are looking forward to working with Freddie and borrowers to improve housing affordability in these higher cost markets," said Bill Beckmann, CitiMortgage president.
"These new conforming jumbo mortgages will reduce homeownership costs for families in high-cost areas," said Dave Lowman, CEO of Chase Home Lending. "Freddie Mac's involvement will help increase availability."
"We value our relationship with Freddie Mac which enables us to collectively do great things for consumers," said Mike Heid, co-president of Wells Fargo Home Mortgage. "While Wells Fargo has offered jumbo loans directly to consumers throughout the current market correction, this important agreement provides a reliable investor for loans in high-cost areas which, in turn, further broadens our ability to serve these customers."
While specific product availability may vary by lender, Freddie Mac has said it will buy 15-, 20-, 30- and 40-year fixed-rate, fully amortizing conforming jumbo mortgages; 30-year fixed-rate mortgages with 10-year interest-only periods; fully amortizing 5/1 adjustable-rate mortgages (ARMs) and 5/1 ARMs with 10-year interest-only periods. Qualified borrowers can also obtain cash-out refinance conforming jumbo mortgages that provide a maximum cash-out of $100,000.
For more information on Freddie Mac conforming jumbo mortgage products, visit www.freddiemac.com/singlefamily/increased_limits.html.
Freddie Mac is a stockholder-owned corporation established by Congress in 1970 to support homeownership and rental housing. Freddie Mac purchases single-family and multifamily residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible more than 50 million times, ensuring financing for one in six homebuyers and more than four million renters.
Thursday, April 17, 2008
Defining house-size problem
My definition of loss of character occurs when regulations overly restrict the creative tools necessary to establish an interesting achitecture or genre`. What we are otherwise left with when restrictions are too limiting are homes that look like boxes so that every allowable square foot is useable space. It is a "loss of character" when porticos, carriage homes, gazebos, covered patios, dog houses, doll houses, sheds, green houses, studios and more are detered by regulations that define "loss of character" by house size or FAR (Floor Area Ratios).
Defining house-size problem
Boulder leaders address what exactly amounts to 'loss of character'
By Heath Urie (Contact)Wednesday, April 16, 2008
Boulder's leaders Tuesday night began formally discussing a problem involving large houses replacing smaller ones in established neighborhoods.
But they struggled for hours to define exactly what the problem is — or if there is one.
Boulder City Council members have said some new and remodeled homes are affecting "neighborhood character."
The council began an initial conversation Tuesday about how to move forward limiting "pops and scrapes," or smaller homes that are demolished and replaced with homes many thousands of square feet in size.
A proposal to temporarily limit house sizes was put on hold last week following public outcry and a recommendation by the Planning Board not to move forward with it.
After an extended debate that stretched into the late night, City Councilman Macon Cowles helped piece together a definition of the problem that leaders want to address.
It defined the goal, in part, as fixing the "loss of character of established single-family neighborhoods by assuring that new construction and additions are compatible" with existing neighborhoods.
It also included directing city staffers to include "due consideration" of house size, open space, mass, loss of space between houses, views, lot coverage, blank walls, setbacks, height and the visual character of individual areas when considering how to move forward with an ordinance.
The council also asked staffers to consider the loss of mature trees, older homes and how the city's solar-access ordinance affects the shape of houses.
"I do think that we've got to get more precise about what the problem is," Councilwoman Suzy Ageton said. "We're not clear yet. We need to start defining what it is that makes people feel that what's next to them is a mega-mansion."
Councilwoman Angelique Espinoza said the group might need to change how it's handling the matter completely, but she agreed with Cowles' definition.
"I would prefer, myself, to change the approach altogether," she said.
Espinoza said she wants to convene another "brainstorming" session where council members can perform a "gut check" about whether to go on spending money and time examining the issue of large houses.
"Some of these things it is our business to regulate, and some of these things I think may not be," Espinoza said.
The council also reached a general agreement that any ordinance aimed at limiting house sizes should focus on low-density residential zones, that it should not include affordable housing projects and should include an appeals process to address “unintended consequences.”
While they didn’t set a firm timeline for moving forward, most of the council agreed the issue should be resolved before the end of the year, although there was some concern about a lack of staff resources available to work on the project.
The city's Planning and Development Services division asked the council to answer some other basic questions, including whether it's worth spending between $80,000 to $100,000 to hire a consultant to study the issue further.
The council didn’t specifically address the issue, but gave an initial nod to using “consultants as needed.”
The first real move by the Boulder City Council on the topic of limiting large, "out-of-scale" houses could come at a May 6 meeting, when city planners will return after considering the council's Tuesday discussion.
Ruth McHeyser, acting planning director for the city, said she appreciates the council pausing from its first approach of pursuing a fast-track temporary ordinance.
"I think people are appreciating a little bit of our stepping back," she said.
One thing most of the council members agreed on with little debate was that moving forward with an interim ordinance to limit house sizes isn’t a good idea.
“One of the things we gained by stepping back was giving people some breathing space,” Ageton said. “I will not be supporting that kind of proposal.”
Defining house-size problem
Boulder leaders address what exactly amounts to 'loss of character'
By Heath Urie (Contact)Wednesday, April 16, 2008
Boulder's leaders Tuesday night began formally discussing a problem involving large houses replacing smaller ones in established neighborhoods.
But they struggled for hours to define exactly what the problem is — or if there is one.
Boulder City Council members have said some new and remodeled homes are affecting "neighborhood character."
The council began an initial conversation Tuesday about how to move forward limiting "pops and scrapes," or smaller homes that are demolished and replaced with homes many thousands of square feet in size.
A proposal to temporarily limit house sizes was put on hold last week following public outcry and a recommendation by the Planning Board not to move forward with it.
After an extended debate that stretched into the late night, City Councilman Macon Cowles helped piece together a definition of the problem that leaders want to address.
It defined the goal, in part, as fixing the "loss of character of established single-family neighborhoods by assuring that new construction and additions are compatible" with existing neighborhoods.
It also included directing city staffers to include "due consideration" of house size, open space, mass, loss of space between houses, views, lot coverage, blank walls, setbacks, height and the visual character of individual areas when considering how to move forward with an ordinance.
The council also asked staffers to consider the loss of mature trees, older homes and how the city's solar-access ordinance affects the shape of houses.
"I do think that we've got to get more precise about what the problem is," Councilwoman Suzy Ageton said. "We're not clear yet. We need to start defining what it is that makes people feel that what's next to them is a mega-mansion."
Councilwoman Angelique Espinoza said the group might need to change how it's handling the matter completely, but she agreed with Cowles' definition.
"I would prefer, myself, to change the approach altogether," she said.
Espinoza said she wants to convene another "brainstorming" session where council members can perform a "gut check" about whether to go on spending money and time examining the issue of large houses.
"Some of these things it is our business to regulate, and some of these things I think may not be," Espinoza said.
The council also reached a general agreement that any ordinance aimed at limiting house sizes should focus on low-density residential zones, that it should not include affordable housing projects and should include an appeals process to address “unintended consequences.”
While they didn’t set a firm timeline for moving forward, most of the council agreed the issue should be resolved before the end of the year, although there was some concern about a lack of staff resources available to work on the project.
The city's Planning and Development Services division asked the council to answer some other basic questions, including whether it's worth spending between $80,000 to $100,000 to hire a consultant to study the issue further.
The council didn’t specifically address the issue, but gave an initial nod to using “consultants as needed.”
The first real move by the Boulder City Council on the topic of limiting large, "out-of-scale" houses could come at a May 6 meeting, when city planners will return after considering the council's Tuesday discussion.
Ruth McHeyser, acting planning director for the city, said she appreciates the council pausing from its first approach of pursuing a fast-track temporary ordinance.
"I think people are appreciating a little bit of our stepping back," she said.
One thing most of the council members agreed on with little debate was that moving forward with an interim ordinance to limit house sizes isn’t a good idea.
“One of the things we gained by stepping back was giving people some breathing space,” Ageton said. “I will not be supporting that kind of proposal.”
Wednesday, April 16, 2008
ConocoPhillips will bolster local economy, green movement
ConocoPhillips will bolster local economy, green movement
By Shannon CoeSaturday, April 12, 2008
Who would have thought oil would seep its way into our green backyard? ConocoPhillips' purchase of the former StorageTek campus in Louisville is proving to be one of the more dramatic changes in our green community.
The Houston-based company will tear down most of the buildings on the 432-acre campus to build a global training center and global technology center, which will teach employees from more than 40 countries. The company made the $58.5 million purchase in January from Sun Microsystems, which is leasing the campus until the end of 2008 when development will begin for ConocoPhillips. ConocoPhillips is the powerhouse that will put Colorado in the lead for alternative renewable energy sources with the development of the new training campus that will have a high economic impact, especially in the Louisville community. It is a great addition to the area.
The company has a large portfolio of assets and is a well-established global company, with $194.5 billion in revenue in 2007. The original Conoco, Continental Oil Company, located its headquarters in Denver in the 1870s. ConocoPhillips has 600 employees currently in Colorado. It has a large gas line storage terminal in Commerce City, oil and gas production in Garfield County and a gas pipeline from Colorado to Texas. The number of permanent employees is not known, but the training facility will attract thousands of ConocoPhillips employees annually. The estimated number of permanent jobs is 10,000, which will create another 18,000; this will contribute $1.7 billion a year to the Louisville economy.
The development of the Louisville campus also will help aid Colorado's real estate sector. CB Richard Ellis, the potential developer, estimates construction on over 4.7 million square feet of building on the campus.
And ConocoPhillips is committed to contributing to renewable energy and carbon-fuel recovery. Its investment in renewable energy in 2007 was $150 million. ConocoPhillips is using this location for research and development for renewable energy. Fear-driven environmentalists are scared this will be a center for toxic waste. It will not only foster sharing of knowledge, innovation, and creativity, but it will certainly provide flexibility and alternatives for the ever-changing energy market.
ConocoPhillips' move also will establish Colorado as leading state for renewable energy. It will further legislation to require energy alternatives and support Colorado's $7 million dollar clean energy fund. Gov. Bill Ritter stated at a new conference announcing the deal, "They are building a bridge to the future by investing in new, cleaner technologies and in renewable energy."
Environmentalists, businesses, lawmakers and residents alike will be pleased with the changes big oil-tycoons, such as ConocoPhillips has made with their advanced efforts in the Green Movement. Check it out greenies, oil is in the cause!
Shannon Coe is from Boulder
By Shannon CoeSaturday, April 12, 2008
Who would have thought oil would seep its way into our green backyard? ConocoPhillips' purchase of the former StorageTek campus in Louisville is proving to be one of the more dramatic changes in our green community.
The Houston-based company will tear down most of the buildings on the 432-acre campus to build a global training center and global technology center, which will teach employees from more than 40 countries. The company made the $58.5 million purchase in January from Sun Microsystems, which is leasing the campus until the end of 2008 when development will begin for ConocoPhillips. ConocoPhillips is the powerhouse that will put Colorado in the lead for alternative renewable energy sources with the development of the new training campus that will have a high economic impact, especially in the Louisville community. It is a great addition to the area.
The company has a large portfolio of assets and is a well-established global company, with $194.5 billion in revenue in 2007. The original Conoco, Continental Oil Company, located its headquarters in Denver in the 1870s. ConocoPhillips has 600 employees currently in Colorado. It has a large gas line storage terminal in Commerce City, oil and gas production in Garfield County and a gas pipeline from Colorado to Texas. The number of permanent employees is not known, but the training facility will attract thousands of ConocoPhillips employees annually. The estimated number of permanent jobs is 10,000, which will create another 18,000; this will contribute $1.7 billion a year to the Louisville economy.
The development of the Louisville campus also will help aid Colorado's real estate sector. CB Richard Ellis, the potential developer, estimates construction on over 4.7 million square feet of building on the campus.
And ConocoPhillips is committed to contributing to renewable energy and carbon-fuel recovery. Its investment in renewable energy in 2007 was $150 million. ConocoPhillips is using this location for research and development for renewable energy. Fear-driven environmentalists are scared this will be a center for toxic waste. It will not only foster sharing of knowledge, innovation, and creativity, but it will certainly provide flexibility and alternatives for the ever-changing energy market.
ConocoPhillips' move also will establish Colorado as leading state for renewable energy. It will further legislation to require energy alternatives and support Colorado's $7 million dollar clean energy fund. Gov. Bill Ritter stated at a new conference announcing the deal, "They are building a bridge to the future by investing in new, cleaner technologies and in renewable energy."
Environmentalists, businesses, lawmakers and residents alike will be pleased with the changes big oil-tycoons, such as ConocoPhillips has made with their advanced efforts in the Green Movement. Check it out greenies, oil is in the cause!
Shannon Coe is from Boulder
Public Input on Judge Klein Due
Public input sought on judge in 'land grab'
Hearing for judges up for retention set for Thursday
Camera staffOriginally published 07:56 a.m., April 16, 2008Updated 07:56 a.m., April 16, 2008
The Colorado Judicial Commission will hold a public hearing from 5 to 6:30 p.m. Thursday seeking input on six judges in the 20th Judicial District up for retention this fall.
The judges who will be on the November ballot include District Judge James Klein, who has drawn intense criticism for his decision to award one-third of a south Boulder couple's vacant lot to their neighbors.
Also up for retention are district judges Roxanne Bailin, Maria Berkenkotter and Gwyn Whalen, and county court judges John Stavely and Thomas Reed.
The hearing will be held in Courtroom F of the Boulder County Justice Center at Sixth Street and Canyon Boulevard in Boulder.
The commission will accept public input, either written or in person, from anyone who has had matters before those judges since Jan. 1, 2007.
Since 1990, judges in Colorado must have their names appear on the ballot every four or six years. Voters can choose to either keep the judges on the bench or kick them off.
The Colorado Judicial Commission issues recommendations in the "blue books" that are distributed to voters every election.
Letters also may be sent to William Eckert, 20th Judicial District Judicial Performance Commission, 5431 Omaha Place, Boulder, CO 80303.
Letters must include the name and address of the person submitting the comments, and the judge will receive an anonymous copy of the letter.
Hearing for judges up for retention set for Thursday
Camera staffOriginally published 07:56 a.m., April 16, 2008Updated 07:56 a.m., April 16, 2008
The Colorado Judicial Commission will hold a public hearing from 5 to 6:30 p.m. Thursday seeking input on six judges in the 20th Judicial District up for retention this fall.
The judges who will be on the November ballot include District Judge James Klein, who has drawn intense criticism for his decision to award one-third of a south Boulder couple's vacant lot to their neighbors.
Also up for retention are district judges Roxanne Bailin, Maria Berkenkotter and Gwyn Whalen, and county court judges John Stavely and Thomas Reed.
The hearing will be held in Courtroom F of the Boulder County Justice Center at Sixth Street and Canyon Boulevard in Boulder.
The commission will accept public input, either written or in person, from anyone who has had matters before those judges since Jan. 1, 2007.
Since 1990, judges in Colorado must have their names appear on the ballot every four or six years. Voters can choose to either keep the judges on the bench or kick them off.
The Colorado Judicial Commission issues recommendations in the "blue books" that are distributed to voters every election.
Letters also may be sent to William Eckert, 20th Judicial District Judicial Performance Commission, 5431 Omaha Place, Boulder, CO 80303.
Letters must include the name and address of the person submitting the comments, and the judge will receive an anonymous copy of the letter.
McLean, Stevens deny path was recently fabricated
Judge nears 'land grab' rehearing
By Heath Urie (Contact)Wednesday, April 16, 2008
Courtesy Don and Susie Kirlin
This photo taken one day after Richard McLean and Edith Stevens filed a lawsuit seeking a portion of the Kirlins' lot in October 2006 shows no visible path on the lot, according to the Kirlins.
Courtesy Don and Susie Kirlin
This photo, taken by Don Kirlin in November 2007, shows a section of an 80-foot walkway that cuts across the Kirlin property on Hardscrabble Drive in south Boulder. The path arches around three pine trees and back toward the street down a small hill.
A Boulder County District Court judge charged with revisiting a controversial land dispute should not consider "outrageous" claims that Richard McLean and Edith Stevens lied to win their case, according to the couple's attorney.
In court documents submitted Tuesday, Boulder attorney Kim Hult responded pointedly to accusations made by Don and Susie Kirlin that their neighbors fabricated a path across their Hardscrabble Drive vacant lot.
The thin dirt trail, which has come to be known as "Edie's Path," was a critical piece of evidence that in part led Judge James C. Klein last fall to award about a third of one of the Kirlins' lots to McLean and Stevens under the longtime legal concept of "adverse possession."
The path, McLean and Stevens successfully argued at trial, represented more than the 18 years ofcontinuous use required by state law in order to assert the squatter's-rights law.
However, the Colorado Court of Appeals earlier this month granted a request by the Kirlins to send the case back to Klein based on "new evidence" that, they say, indicates the path was faked.
The Kirlins are asking Klein to overturn his trial court decision based on aerial and ground photographs of the disputed property and sworn affidavits of neighbors who say the path was a recent creation -- not the result of longtime use.
Hult's response to the Kirlins' package of evidence included an argument that Klein is under no obligation to find in favor of the Kirlins because they knew about, but failed to use, certain evidence in the original trial.
"In the apparent hope that the negative publicity garnered about the court's judgment will produce a new result on remand, Kirlin seeks to retry this case with long-available evidence to support arguments he made at trial," Hult wrote.
She said the Kirlins' evidence does not point to misconduct on the part of her clients.
"(The Kirlins') 'new' evidence proves little, other than that his witness cannot agree about when Edie's Path was allegedly 'fabricated,'" she wrote. "(They) further misunderstand the significance of the path, which was evidence of but one of McLean's many uses of the disputed property proved at trial."
She argued that the path, by itself, did not win the trial for McLean and Stevens.
"Kirlin, therefore, fails to prove -- by clear and convincing evidence -- that the alleged 'fabrication' of the path would have altered the outcome at trial had he chosen to introduce his 'new' evidence then," Hult wrote.
Hult's filing also includes more than 10 sworn affidavits in support of McLean and Stevens -- including two signed by McLean and Stevens themselves.
"My wife, Edie Stevens, and I have not taken any action to alter the condition of Edie's Path or to 'fabricate' that path after the filing of this case," McLean wrote.
Other witnesses include several former law clerks for McLean -- a former Boulder district judge -- who wrote that they recalled attending parties at the couple's home in which a nearby path was used.
On Tuesday, McLean said the paperwork "says it all" and declined to talk about the pending case.
Susie Kirlin said she hadn't seen the response Tuesday night and didn't want to comment except to say she feels she and her husband have a "strong case."
Both of the attorneys involved in the case said it would be inappropriate to comment.
Andy Low, the Kirlins' attorney, has until April 24 to file a response to Hult's brief.
Klein has been urged by the Colorado Court of Appeals to act quickly to resolve the Kirlins' request. The judge has the option to hold a limited hearing with each side, a full hearing complete with witnesses or to make a decision about the case after reviewing the written arguments.
The Kirlins have said they plan to continue the appeals process if Klein rules against them again.
Judge nears 'land grab' rehearing
By Heath Urie (Contact)Wednesday, April 16, 2008
Courtesy Don and Susie Kirlin
This photo taken one day after Richard McLean and Edith Stevens filed a lawsuit seeking a portion of the Kirlins' lot in October 2006 shows no visible path on the lot, according to the Kirlins.
Courtesy Don and Susie Kirlin
This photo, taken by Don Kirlin in November 2007, shows a section of an 80-foot walkway that cuts across the Kirlin property on Hardscrabble Drive in south Boulder. The path arches around three pine trees and back toward the street down a small hill.
A Boulder County District Court judge charged with revisiting a controversial land dispute should not consider "outrageous" claims that Richard McLean and Edith Stevens lied to win their case, according to the couple's attorney.
In court documents submitted Tuesday, Boulder attorney Kim Hult responded pointedly to accusations made by Don and Susie Kirlin that their neighbors fabricated a path across their Hardscrabble Drive vacant lot.
The thin dirt trail, which has come to be known as "Edie's Path," was a critical piece of evidence that in part led Judge James C. Klein last fall to award about a third of one of the Kirlins' lots to McLean and Stevens under the longtime legal concept of "adverse possession."
The path, McLean and Stevens successfully argued at trial, represented more than the 18 years ofcontinuous use required by state law in order to assert the squatter's-rights law.
However, the Colorado Court of Appeals earlier this month granted a request by the Kirlins to send the case back to Klein based on "new evidence" that, they say, indicates the path was faked.
The Kirlins are asking Klein to overturn his trial court decision based on aerial and ground photographs of the disputed property and sworn affidavits of neighbors who say the path was a recent creation -- not the result of longtime use.
Hult's response to the Kirlins' package of evidence included an argument that Klein is under no obligation to find in favor of the Kirlins because they knew about, but failed to use, certain evidence in the original trial.
"In the apparent hope that the negative publicity garnered about the court's judgment will produce a new result on remand, Kirlin seeks to retry this case with long-available evidence to support arguments he made at trial," Hult wrote.
She said the Kirlins' evidence does not point to misconduct on the part of her clients.
"(The Kirlins') 'new' evidence proves little, other than that his witness cannot agree about when Edie's Path was allegedly 'fabricated,'" she wrote. "(They) further misunderstand the significance of the path, which was evidence of but one of McLean's many uses of the disputed property proved at trial."
She argued that the path, by itself, did not win the trial for McLean and Stevens.
"Kirlin, therefore, fails to prove -- by clear and convincing evidence -- that the alleged 'fabrication' of the path would have altered the outcome at trial had he chosen to introduce his 'new' evidence then," Hult wrote.
Hult's filing also includes more than 10 sworn affidavits in support of McLean and Stevens -- including two signed by McLean and Stevens themselves.
"My wife, Edie Stevens, and I have not taken any action to alter the condition of Edie's Path or to 'fabricate' that path after the filing of this case," McLean wrote.
Other witnesses include several former law clerks for McLean -- a former Boulder district judge -- who wrote that they recalled attending parties at the couple's home in which a nearby path was used.
On Tuesday, McLean said the paperwork "says it all" and declined to talk about the pending case.
Susie Kirlin said she hadn't seen the response Tuesday night and didn't want to comment except to say she feels she and her husband have a "strong case."
Both of the attorneys involved in the case said it would be inappropriate to comment.
Andy Low, the Kirlins' attorney, has until April 24 to file a response to Hult's brief.
Klein has been urged by the Colorado Court of Appeals to act quickly to resolve the Kirlins' request. The judge has the option to hold a limited hearing with each side, a full hearing complete with witnesses or to make a decision about the case after reviewing the written arguments.
The Kirlins have said they plan to continue the appeals process if Klein rules against them again.
Friday, April 11, 2008
Top 10 Best Cities for Home Sellers and Buyers
Daily Real Estate News April 10, 2008
Top 10 Best Cities for Home Sellers Four factors are widely seen as affecting whether a housing market is a good one for sellers: job growth, amount of new construction, vacancy rates, and credit availability. Forbes magazine used a variety of resources to determine how the country’s 40 largest metro areas fared according to these measures. The result is this list of top 10 cities for sellers.
San Jose, Calif. Because of a tough regulatory environment, new home construction dropped 63 percent last year.San Francisco. When the conforming loan limit recently jumped from $417,000 to the maximum $729,750, that made credit much easier to get for many of the city's homebuyers.
Salt Lake City. The 3 percent annual job growth rate, paired with a declining inventory of existing homes and one of the nation’s sharpest declines in construction made this market a good one for sellers.
Austin, Texas . Texas is very affordable, plus the city has the nation’s fastest job growth at 4.1 percent.
Kansas City, Mo. The number of unsold, vacant houses dropped by 40 percent last year.
San Antonio, Texas . Jobs are growing by 3 percent and construction starts have dropped by 42 percent.
Denver. The 49 percent drop in construction starts paired with the 2 percent rise in new jobs are good news for sellers.
Providence, R.I. Vacancy rates at 1.6 percent combined with a 42 percent cut in inventory help sellers.
Charlotte, N.C. Moderate prices and strong job growth bode well for sellers.Seattle, Wash. Strong job growth and a 42 percent decrease in new home construction are good news for sellers.
Source: Forbes, Matt Woolsey (04/07/2008)
Top 10 Best Cities for Home Sellers Four factors are widely seen as affecting whether a housing market is a good one for sellers: job growth, amount of new construction, vacancy rates, and credit availability. Forbes magazine used a variety of resources to determine how the country’s 40 largest metro areas fared according to these measures. The result is this list of top 10 cities for sellers.
San Jose, Calif. Because of a tough regulatory environment, new home construction dropped 63 percent last year.San Francisco. When the conforming loan limit recently jumped from $417,000 to the maximum $729,750, that made credit much easier to get for many of the city's homebuyers.
Salt Lake City. The 3 percent annual job growth rate, paired with a declining inventory of existing homes and one of the nation’s sharpest declines in construction made this market a good one for sellers.
Austin, Texas . Texas is very affordable, plus the city has the nation’s fastest job growth at 4.1 percent.
Kansas City, Mo. The number of unsold, vacant houses dropped by 40 percent last year.
San Antonio, Texas . Jobs are growing by 3 percent and construction starts have dropped by 42 percent.
Denver. The 49 percent drop in construction starts paired with the 2 percent rise in new jobs are good news for sellers.
Providence, R.I. Vacancy rates at 1.6 percent combined with a 42 percent cut in inventory help sellers.
Charlotte, N.C. Moderate prices and strong job growth bode well for sellers.Seattle, Wash. Strong job growth and a 42 percent decrease in new home construction are good news for sellers.
Source: Forbes, Matt Woolsey (04/07/2008)
Thursday, April 10, 2008
Govenor Ritter To Receive Adverse Possession Bill
Ritter receives 'adverse-possession' bill for approval
By Heath Urie Originally published 03:40 p.m., April 3, 2008Updated 03:23 p.m., April 3, 2008
STORY TOOLS
A bill that would change the longtime legal concept of “adverse possession” gained final approval from the Colorado General Assembly today and is on its way to Gov. Ritter’s desk.
Evergreen Republican Rep. Rob Witwer and Boulder Democrat Sen. Ron Tupa are co-sponsoring House Bill 1148, which the pair crafted in the wake of a controversial Boulder land dispute.
McLean and Stevens sued neighbors Don and Susie Kirlin in 2006, using the long-standing doctrine — essentially a squatters’ rights law — to claim the land next door.
Ritter has 30 days to either approve or veto the bill, which has garnered overwhelming support among state lawmakers.
If he approves it, a “good faith” provision and other requirements would be added to the law of adverse possession, which now allows trespassers to claim land after using it openly and continuously for at least 18 years.
Witwer said the bill is a victory for property owners.
“It’s a great day for private-property rights,” he said. “I only wish we could have done it sooner.”
Tupa has said the bill will likely become “one of the strongest adverse-possession laws in the country.”
House Bill 1193, introduced by Rep. Claire Levy, D-Boulder, also is awaiting Ritter’s final approval.
If Ritter signs that bill, Colorado judges would be barred from presiding over cases involving other current or former judges within the same jurisdiction.
Levy said she sponsored the bill in reaction to the Kirlin case.
© 2006 Daily Camera and Boulder Publishing, LLC
By Heath Urie Originally published 03:40 p.m., April 3, 2008Updated 03:23 p.m., April 3, 2008
STORY TOOLS
A bill that would change the longtime legal concept of “adverse possession” gained final approval from the Colorado General Assembly today and is on its way to Gov. Ritter’s desk.
Evergreen Republican Rep. Rob Witwer and Boulder Democrat Sen. Ron Tupa are co-sponsoring House Bill 1148, which the pair crafted in the wake of a controversial Boulder land dispute.
McLean and Stevens sued neighbors Don and Susie Kirlin in 2006, using the long-standing doctrine — essentially a squatters’ rights law — to claim the land next door.
Ritter has 30 days to either approve or veto the bill, which has garnered overwhelming support among state lawmakers.
If he approves it, a “good faith” provision and other requirements would be added to the law of adverse possession, which now allows trespassers to claim land after using it openly and continuously for at least 18 years.
Witwer said the bill is a victory for property owners.
“It’s a great day for private-property rights,” he said. “I only wish we could have done it sooner.”
Tupa has said the bill will likely become “one of the strongest adverse-possession laws in the country.”
House Bill 1193, introduced by Rep. Claire Levy, D-Boulder, also is awaiting Ritter’s final approval.
If Ritter signs that bill, Colorado judges would be barred from presiding over cases involving other current or former judges within the same jurisdiction.
Levy said she sponsored the bill in reaction to the Kirlin case.
© 2006 Daily Camera and Boulder Publishing, LLC
Boulder City Council agrees to hold off on home-size regulations
Boulder City Council agrees to hold off on home-size regulations
Wilson: 'I think we need to step back'
By Heath Urie Wednesday, April 9, 2008
Public outcry and a recommendation by the Boulder Planning Board not to move forward with a temporary ordinance limiting house sizes prompted the City Council to put the issue on hold late Tuesday night.
In a surprise move after 10 p.m., the council voted unanimously not to hear a first reading of an interim ordinance on the matter, which had been scheduled for its April 15 meeting.
Instead, the council will hold a discussion at next week's public meeting about the possible options for crafting such an ordinance. It will not consider any formal plan.
Mayor Shaun McGrath proposed holding off on the matter at the end of a special meeting in which the council appointed Jerry Gordon as city attorney.
McGrath said he's simply heard too many negative responses about the ordinance, which the entire council previously indicated would be a positive step toward eliminating "pops and scrapes," or huge homes built on the lots of demolished smaller ones.
"It's my belief that, given the input we received from the Planning Board, the direction we gave focused on (floor-area ratios) ... may not really work in a lot of ways," McGrath said.
The Planning Board last week agreed that using a proposed "floor-area ratio" calculation -- or the percentage of a lot covered in finished square footage of a house on all levels -- to tell people how big a house can be is a "blunt tool" that does not achieve the council's goals of controlling the largest homes and preserving neighborhood character.
Many of the board members said they were concerned the City Council would act to draft a short-term ordinance regardless of the board's recommendation.
Opponents of the measure also say it would violate personal property rights and could harm the local economy.
On Tuesday, Councilman Ken Wilson supported McGrath's call for a slowdown in the face of mounting opposition to the plan.
"I think we need to step back and think about the process," he said.
Wilson said, based on the sliding national economy and tightening credit market, an increase in so-called speculation homes in Boulder isn't likely to be an immediate concern.
Councilwoman Susan Osborne said she's received more than 1,100 e-mails about the proposed ordinance and that the community is feeling disengaged from the process in general.
"We need to take the time to think about how we have that discussion," Osborne said. "I think the bigger shame would be having a large sector of our community feeling like we didn't listen ... that we didn't get it that their values and issues weren't being addressed.
"I think it makes a lot of sense to take some time with our staff to figure out how we go forward."
The matter will be placed on the council's April 15 agenda under the title, "discussion of options to address remodels and demolition rebuilds that greatly impact established neighborhoods."
The public will be allowed to speak for 45 minutes during public participation time.
© 2006 Daily Camera and Boulder Publishing, LLC.
Wilson: 'I think we need to step back'
By Heath Urie Wednesday, April 9, 2008
Public outcry and a recommendation by the Boulder Planning Board not to move forward with a temporary ordinance limiting house sizes prompted the City Council to put the issue on hold late Tuesday night.
In a surprise move after 10 p.m., the council voted unanimously not to hear a first reading of an interim ordinance on the matter, which had been scheduled for its April 15 meeting.
Instead, the council will hold a discussion at next week's public meeting about the possible options for crafting such an ordinance. It will not consider any formal plan.
Mayor Shaun McGrath proposed holding off on the matter at the end of a special meeting in which the council appointed Jerry Gordon as city attorney.
McGrath said he's simply heard too many negative responses about the ordinance, which the entire council previously indicated would be a positive step toward eliminating "pops and scrapes," or huge homes built on the lots of demolished smaller ones.
"It's my belief that, given the input we received from the Planning Board, the direction we gave focused on (floor-area ratios) ... may not really work in a lot of ways," McGrath said.
The Planning Board last week agreed that using a proposed "floor-area ratio" calculation -- or the percentage of a lot covered in finished square footage of a house on all levels -- to tell people how big a house can be is a "blunt tool" that does not achieve the council's goals of controlling the largest homes and preserving neighborhood character.
Many of the board members said they were concerned the City Council would act to draft a short-term ordinance regardless of the board's recommendation.
Opponents of the measure also say it would violate personal property rights and could harm the local economy.
On Tuesday, Councilman Ken Wilson supported McGrath's call for a slowdown in the face of mounting opposition to the plan.
"I think we need to step back and think about the process," he said.
Wilson said, based on the sliding national economy and tightening credit market, an increase in so-called speculation homes in Boulder isn't likely to be an immediate concern.
Councilwoman Susan Osborne said she's received more than 1,100 e-mails about the proposed ordinance and that the community is feeling disengaged from the process in general.
"We need to take the time to think about how we have that discussion," Osborne said. "I think the bigger shame would be having a large sector of our community feeling like we didn't listen ... that we didn't get it that their values and issues weren't being addressed.
"I think it makes a lot of sense to take some time with our staff to figure out how we go forward."
The matter will be placed on the council's April 15 agenda under the title, "discussion of options to address remodels and demolition rebuilds that greatly impact established neighborhoods."
The public will be allowed to speak for 45 minutes during public participation time.
© 2006 Daily Camera and Boulder Publishing, LLC.
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