Source: People.com

Vera Wang

Beloved by celebrities for her princess-perfect wedding gowns, Vera Wang is no stranger to Fashion Week. The 2005 “Womenswear Designer of the Year” winner has been on the forefront of fashion’s most elegant collections for years.

WARNING: Short Sales…love em or hate em…they are here to stay! Go beyond the basic ‘expert’ short sale designation. Watch the FREE 2012 Agent Short Sale Secrets video and download the FREE Short Sale training guide. NOTICE: Free book guaranteed for the first 100 agents only.

According to the Wall Street Journal, the native New Yorker has been spending more time in Los Angeles and decided to purchase a mid-century modern house in star-studded Trousdale Estates for a reported $10 million. The home was once owned by Burt Reynolds and was completely renovated top-to-bottom by celebrity designer Steve Hermann. Sleek and modern, the home features views nearly as stunning as Wang’s gowns.

> See more photos of Vera Wang’s home (below)

Source: Huffington Post

Jenna Lyons

As the creative director of J.Crew, Jenna Lyons is credited as the visionary responsible turning the brand from preppy basics to oh-so-chic earning endorsements from the First Lady herself.  Lyons’ Park Slope townhouse radiates with the same high-end design aesthetic.

Stunning in its simplicity, Lyons’ townhouse has been the darling of shelter magazines and interior design blogs alike.  Purchased by Lyons and her estranged husband, artist Vincent Mazeau in 2004 for $1,308,000, they knocked it back to the studs for a delicious remodel. The couple is reportedly headed for divorce, so the beautiful home was recently listed on the Brooklyn real estate market with a $3.75 million price tag.

> See more photos of Jenna Lyons’ home (below)

Source: youritlist.com

Nina Garcia

Marie Claire magazine fashion director Nina Garcia is better known as the “Señora Don’t Bore Me” judge on the hit Bravo reality show “Project Runway.”

Back in 2010, Garcia sold her sprawling apartment on the New York real estate market for a whopping $8.5 million. Located but a few Manolo Blahnik steps from the retail haven of Madison Avenue, Garcia’s two-unit co-op home is everything one would expect from the stern fashion editor. The home is stylish, but elegant with dramatic 11.5-foot ceilings, picture windows, a master suite with two humongous dressing rooms, library, staff room and adjoining dining and living rooms that are separated by double pocket doors.

> See more photos of Nina Garcia’s home (below)

Source: Wikipedia

Christian Audigier

The man behind edgy brands Von Dutch, Ed Hardy and the trucker hat trend, Christian Audigier’s home is more on-par with his French roots.

Listing details for Audigier’s fully gated estate note the 8,276-square foot property was “exquisitely decorated and remodeled by top designer with the finest quality.” The $7.65 million estate is a work of art featuring a grand foyer, tall ceilings and several outdoor living spaces.

> See more photos of Christian Audigier’s home (below)

Source: IMDb

Lauren Conrad

The down-to-earth and likeable star of “The Hills” started her fashion career as an intern at Teen Vogue, and now Lauren “LC” Conrad is also a budding fashion designer. She’s taken a break from her reality lifestyle to launch her clothing lines, one which is sold at Kohl’s.

From the looks of it, Conrad is trying to fully put her reality television days behind her by listing her home for $2.25 million on the Hollywood real estate market. Conrad’s home was where the hit TV show “The Hills” was filmed. The 3,000-square foot property was completely renovated and updated, and includes refinished hardwood floors throughout and a custom kitchen with high-end stainless steel appliances.

> See more photos of Lauren Conrad’s home (below)

Source: Fashionmatters.com

Donald J. Pliner

Visionary designer Donald J Pliner launched his line of luxury footwear and accessories in 1989, and immediately established a reputation for innovative design and high style for both men and women.

If Pliner’s shoes are made for walking, his Moroccan-style home is made for living. Painted in bold blues and magenta and outfitted with Southwestern, African, and Balinese-influenced decor, Pliner’s estate (below) is currently listed on the Miami Beach real estate market for $22.5 million.

> See more photos of Donald J. Piner’s home (below)

Source: Askmen.com

James Perse

In 1994, Perse launched a T-shirt line that epitomized his design philosophy of low-maintenance and high fashion.  Perse’s Southern California home follows the same aesthetic of his brand, boasting clean minimalist design and an open floor plan.

The mid-century modern features floor-to-ceiling walls of glass, providing plenty of natural light and sunshine. Listed on the Los Angeles real estate market for $3.75 million, the home is available furnished or unfurnished.

> See more photos of James Perse’s home (below)

Please contact me with any and all of your real estate needs!

Jeff Lemen

310-482-2006

Jefflemen@kw.com

Not so.

From the blitzing headline break-up of Kim Kardashian and Kris Humphries’ 72-day marriage to the collapse of Arnold Schwarzenegger and Maria Shriver’s 25-year union, this past year was rife with storybook romances ending badly.

Heidi Klum and Seal

Heidi and Seal appeared to be one of the celebrity couples that would “make it.” Theirs was a marriage surprisingly free from tabloid rumors and scandals. They renewed their vows each year and gushed about their relationship in interviews. So, it came as a shock when the gorgeous couple made the announcement last week that their 7-year marriage was ending.

Their current home is a mansion that was a foreclosure. They snatched it up for $14.2 million in 2010. It includes some unique features, like a fireplace imported from Scotland that dates back to 1603, as well as the entire reassembled dining room from the Paris Pierre Hotel.

Whether the couple will keep the Brentwood property, above, as their home base for their four children remains to be seen.

Demi Moore and Ashton Kutcher

Source: E! Online

When Demi Moore and Ashton Kutcher married in 2005, it seemed to be an unlikely pairing. The brunette beauty was 43, the former “That 70′s Show” TV star was 27. A few years into their marriage, it appeared that age didn’t matter for the smart and dedicated couple.

Earlier this year, rumors started to fly regarding Ashton’s infidelity. The star first defended his marriage on Twitter until it became apparent that the rumors were more fact than fiction. Demi officially filed for divorce in mid-November.

Ashton and Demi never purchased property together; rather Ashton moved into Demi’s longtime home in Beverly Hills, above, and listed his custom bachelor pad on the Beverly Glen real estate market for $2.6 million.

Even if Demi was interested in selling her home, it won’t be any time soon; according to the latest celebrity gossip, she has her hands full with other things.

Katy Perry and Russell Brand

Source: People magazine

A reformed British bad boy and a darling pop star with a penchant for mischievous and catchy lyrics — Katy Perry and Russell Brand’s union seemed just unusual enough to work. After a whirlwind romance, the two wed in India in a traditional Hindu ceremony.

However, stories of a rocky first-year plagued the couple as Perry was touring and Brand acted in “Arthur.”

The two first lived in a stately Los Feliz mansion, a present from Brand to Perry when they were first dating. The couple listed the home in May 2011 for $3,395,000 and it sold for $3.3 million a few months later. Parallel to the sale, the couple purchased an intensely private love nest (below) in Hollywood Hills in June for $6.5 million, according to property listings.

According to reports, Russell is the one moving out but that doesn’t guarantee that Katy will want to keep the enormous 7-bedroom, 9-bath home, above, for herself.

Jennifer Lopez and Marc Anthony

Source: E! Online

Although their 2004 wedding was very private, Marc Anthony and Jennifer Lopez’s divorce became very public. After being hitched in a secret ceremony, Marc and Jennifer went on to gush about their marriage for years and appeared as devoted spouses and parents. They formally announced their separation in 2011, and if the tabloid reports are true — have effectively moved on, each dating new (and younger) people.

The former couple owns three homes together, one in Hidden Hills, CA and two in Glen Head, NY — none of which have hit the open real estate market yet.

The Hidden Hills home, above, will likely cause quite a stir when it goes up for sale. Over 17,000 square feet with 9 bedrooms and 12 bathrooms, the home was previously featured in Veranda magazine.

Scarlett Johannson and Ryan Reynolds

Source: US Weekly

When Scarlett Johannson and Ryan Reynolds announced their engagement in 2008, it seemed like an A-Lister match made in Hollywood heaven, akin to the beautiful pairing of Brad and Jennifer Aniston. Unfortunately, like Brad and Jen, the celebrity union didn’t last and after three years of marriage, Johannson and Reynolds filed for divorce.

Built in 1969, Ryan and Scarlett bought their Los Feliz home in 2010 for $2.9 million. The mid-century modern “Wong House” was designed by Buff & Hensman and features walls of glass and patios with views of downtown L.A. The home was recently restored by the couple, who added eco-friendly amenities including solar power. The ultra-private 2-bed, 3-bath home is listed on the Los Feliz real estate market for $3.65 million.

Kobe and Vanessa Bryant

Source: NY Daily News

Kobe and Vanessa’s relationship weathered the Lakers’ star admitted adultery in 2003, but after 10 years of marriage, the duo called it quits in mid-December. The breakdown of Kobe’s marriage is having some unfortunate effects on his real estate holdings. According to a recent report, the titles of three of their Newport Beach mansions have been transferred to Vanessa’s name.

They purchased their first home (shown below) in Newport Coast, CA, on October 1997 for $1.7 million. The estate, which is now valued at around $4.6 million, is situated on nearly half an acre and has 6 bedrooms.

In August 2003, the couple picked up another home just two short blocks away in the same gated community of Pelican Ridge for $2.65 million.

The couple purchased their last home for $9.54 million. The 4-floor ocean view home is still under construction and was designed with more than 14,000-square feet of living space.

Arnold Schwarzenegger and Maria Shriver

Source: Hollywood Reporter

The 25-year marriage of former body builder and Governor of California, Arnold Schwarzenegger, and his wife, journalist and Kennedy family member Maria Shriver, exploded in a messy mistress and love child scandal this past summer, causing Maria to file for divorce and move out of the shared family home in Brentwood.

Although there have been rumors of reconciliation — the pair were spotted spending the holidays together — Maria is currently renovating a home she bought in Brentwood shortly after the split. If she’s spied at their family home, it’s only because she’s visiting her children who currently live with Arnold.

The couple purchased the home, above, in 2002. The Mediterranean-style estate has 7 bedrooms, 12 bathrooms.

Their former home in Pacific Palisades hit the market earlier this year. Maria and Arnold purchased the 2.5-acre estate in 1986, the year of their marriage, and lived there until 2003, when they sold the home for just under $18 million.

Please contact me for all of your real estate needs! Jeff Lemen 310-482-2006 Jefflemen@kw.com

Kanye West

Song of the Year, Best Rap Album, Best Rap/Sung Collaboration, Best Rap Performance

Kanye West upped his arrogantly bad boy status for his scene-stealing antics at awards shows. And with a critically acclaimed new recording and tour with fellow rapper Jay-Z, Kanye might be amped to pull off another unscripted surprise. The talented rap artist is nominated this year for seven awards, including the coveted “Song of the Year” for his collaborative piece “All of the Lights” with Rihanna, Fergie and Kid Cudi.

West picked up his LA digs in 2003 for $1,750,000. The 2002-built home was described as a “modern masterpiece” designed by a “world-renowned Italian architect” most likely appealed to West’s love of style. The 3-bedroom, 3.5-bath piece of Hollywood Hills real estate sits on a winding drive with views of the city below. It was listed for sale for $3,995,000 in 2010.

Source: IMDb

Rihanna

Album of the Year, Best Rap/Sung Collaboration, Song of the Year

Another year, another Grammy nomination for Barbados-born singer Rihanna — or three. The ubiquitous crooner, who could sing the phone book and make it sound hot, is up for a trio of awards, including Song of the Year for her collaboration with Kanye West.

While Rihanna’s luck in her musical career has been stellar, her luck in real estate has been the exact opposite. RiRi bought her Beverly Hills modern mansion, above, for $6.9 million, but later filed several lawsuits against the builder, previous owner, home inspector and real estate agents. She charged that her home was poorly constructed, with numerous water leaks causing extensive damage. She then listed the home as a $4 million short sale. There’s no word where the star is staying now, but her real estate drama may leave her a little gun-shy when it comes to purchasing a new home.

Katy Perry

Best Pop Solo Performance

Pop-star Katy Perry ended her year on a sour note with an impending divorce with her husband Russell Brand, but the pop diva could ring in the new year with another Grammy win.

Before Perry and Brand called it quits, the two shared a stately 3-acre Los Feliz home, pictured below, that Brand purchased as a Christmas gift for Katy in 2009. The pair listed the home on the Los Feliz real estate market in May 2011 for $3.395 million; it sold for $3.3 million.

Perry and Brand bought another, bigger, home in Hollywood Hills in June 2011, where movers were spotted hauling Brand’s stuff away. Whether Katy sticks with this property remains to be seen.

Source: IMDb

Taylor Swift

Best Country Solo Performance

The guitar-strumming blonde has already won 4 Grammys, (as well as numerous other awards) including her win for Album of the Year in 2010, making Taylor Swift the youngest artist in Grammy history to nab the coveted award.

Although Swift owns two homes in Nashville — one is currently on the market — she left the country music capital to make Tinseltown her primary residence when she bought a private piece of Beverly Hills real estate in April for $3.97 million.

Swift’s new home, above, is a charming Cape Cod-style home situated on an over-an-acre lot with 4 bedrooms and 4 bathrooms.

Source: IMDb

Christina Aguilera

Best Pop Duo/Group Performance

A year ago, things were a little rough for Christina Aguilera. There was a lyrical snafu at the Super Bowl, a spill at the Grammy’s, a highly publicized divorce, and a public intoxication arrest. So far, 2012 appears to be going a bit better for the diva, who is in her second year on NBC’s “The Host” and has a Grammy nomination for “Moves Like Jagger” with Maroon 5.

Maybe that portends a turnaround in real estate for Aguilera as well. Although she was finally unable to unload one of her properties, she still has a home for sale in Beverly Hills.

The stucco mansion was put up for sale on the Beverly Hills real estate market in March 2011 for $13.5 million and although it’s been nearly a year, Aguilera hasn’t dropped the price. The home was previously owned by rocker family The Osbournes. They sold the whimsical property to Aguilera and her former husband Jason Bratman in 2007 for $11.7 million.

R. Kelly

Best R&B Album

It’s been a decade since R. Kelly picked up a Grammy for “I Believe I Can Fly,” which he received three nods for Best R&B Song, Best Male R&B Vocal Performance and Best Song Written for a Motion Picture. Now the singer has been nominated for his album, “Love Letter.” Maybe he can again add a Grammy to his other award wins, including those at the AMAs, Billboard Awards and BET Awards in years past.

As for real estate, R. Kelly faced a $2.9 million foreclosure suit earlier this summer, although reports were that it was a strategic foreclosure. The singer-songwriter moved out of his mansion and stopped making payments to force the lender to make a loan modification. The home is now formally listed as a short sale for $1.595 million.

Built in 1997, Kelly’s Olympia Fields, IL mansion is only 30 miles from his hometown of Chicago. The 22,000-square-foot home sits on a private, wooded lot surrounded by a 12-foot high concrete and wrought-iron wall.

Kings of Leon

Best Rock Album

The Grammys are old hat for rock band Kings of Leon. The American rockers won both Record of the Year and Rock Song of the Year in the 52nd Grammy Awards. The family band, comprised of brothers Nathan, Jared, and Caleb Followill and their cousin, Matthew Followill, also picked up nominations the following year for Best Rock Song and Best Rock Performance in the 53rd Grammys. This year, the group is back with a nominee for Best Rock Album.

Amidst the hype of winning their first Grammy Awards in 2010, Jared Followill decided to hop on the real estate train and purchased a gorgeous Nashville home in his home state of Tennessee. Followill’s home, above, is a new construction property by Rogan Allen and sits on a private hill-top lot measuring just over an acre in size. The 7,441-square-foot home has three stories, 5 bedrooms, 6 bathrooms and gorgeous views of the Davidson County countryside. Public records show Jared dropped $1,825,000 for his new pad — a hefty step up from the “small, fixer-up” he was apparently living in before.

Please contact me winy of your real estate needs:

310-482-2006

jefflemen@kw.com

Source: People.com

So long, New York?

Jennifer Aniston continues to inspire media and paparazzi buzz with her recent sighting in L.A., where the famously flat-iron-haired star is said to have bought a new place in Hollywood.

That’s what the Wall Street Journal and TMZ – who broke the story — are reporting: A source close to the star has revealed that Aniston and current beau Justin Theroux have plunked down mega-bucks for a modern love nest in Bel-Air.

Maybe this Big Apple friend has had a change of heart?

If so, it’s a quick turnaround for Aniston, who sold her custom L.A. home “Ohana” a little over six months ago and moved to the Big Apple, where she picked up two penthouse apartments in West Village.

At the time, as she explained to “Good Morning America,” she had been missing New York City.

I grew up here. I miss it. There’s nothing like being in the city…[it's] the city of every man. It’s all walks and I love that.”

But celebrity love can be fleeting — or perhaps the winter weather in the Big Apple had her pining for L.A. sunshine. There had been rumors about Aniston and Theroux shopping together for New York apartments, but apparently they have decided to go West and buy a piece of Bel-Air real estate instead.

Only 6 miles from Aniston’s previous Beverly Hills mansion, Ohana, the couple’s reported new place is a mid-century modern home designed in 1965 by noted Los Angeles architect A. Quincy Jones.

According to the property listing, the home was first listed in 2008 and has bounced on and off the market. Priced at $24.9 million, Aniston reportedly snagged the home for around $22 million.

The Bel-Air home is set on a 3+ acre promontory with high gates, providing Aniston and Theroux privacy as well as spectacular city views. The 8,500-square-foot, 4-bedroom, 6.5-bath home is a decent size upgrade from Aniston’s New York penthouse. Embracing a California indoor-outdoor lifestyle, the property also has extensive lawns, patios, pool and vineyards.

Contact Jeff Lemen today for all of your Picfair Vilage/Wilshire Vista Real Estate Needs!

Source: FoxSports.com

Pop-punk princess Avril Lavigne has let go of two things this week: Her longtime boyfriend, Brody Jenner, and her Bel Air mansion.

While Avril and long-time boyfriend Brody Jenner called it quits, she finally got an offer on her mansion, which has sat on the Bel-Air real estate market for the past six months.

Scooping up Lavigne’s mansion is another LA celebrity of sorts, Los Angeles Clippers’ point guard Chris Paul. It looks like the four-time NBA All-Star decided to spend a bit of his $68 million, four-year contract by buying Lavigne’s Mediterranean-style home for a reported $8.5 million.

Source: IMDb

Lavigne listed the mansion for $9.5 million last May after divorcing Sum 41 frontman Deryck Whibley. The 8-bedroom, 10-bath home is situated in one of the most exclusive parts of the affluent Los Angeles area in the gated neighbor hood of Bel Air Crest. Median Bel Air home values are currently $1,722,000.

According to property records, the former couple purchased the Bel Air mansion in 2007 for the current listing price of $9.5 million. The punk-pop princess filed for divorce in October 2009; it was finalized in November 2010. The home hit Los Angeles real estate market in May.

Built in 2003, the private home is situated on a little over half an acre and includes a sprawling lawn, fountains and sparkling pool, surrounded by high walls.

Other home features include a two-story foyer, large gourmet kitchen with breakfast nook, and first-floor dual offices as well as a guest suite with private bath. Upstairs, each of the four bedrooms has its own bathroom. The master features a small kitchenette, fireplace, patio, custom walk-in closets, and dual baths. The basement level has a wine cellar and tasting room, large gym with bath and sauna, 10-car garage, laundry and staff quarters.

The home is no stranger to celebrity owners; before Lavigne and her former hubby moved in, it was owned by Blink-182 drummer Travis Barker and his former wife.

Contact Jeff Lemen for all of your Picfair Village/Wilshire Vista real estate needs: 310-482-2006

Thanks to CNBC’s Diana Olick for another great housing report (is there another housing reporter other than Diana?)

Housing is showing signs of having FINALLY bottomed!

Here are the facts:

Distressed sales are now 32% of the market.

ALL cash buyer are 31%.

Home sales INCREASED in December. I think this is not a small point. When was the last time that housing sales INCREASED in December? (never)

The overall supply of homes has dropped from 11 months to 6.2 months.

National Association of Realtors is calling this a substained recovery. Meaning, we have seen consistently positive housing reports over the last 90 days. Granted, these positive reports have been mere blips on the radar. We will take all the positive blips- positive momentum we can get!

Diana makes a point that does put some water on the optimistic fires of recovery: 6,000,000.

Thats the number of homes currently being held in the banks shadow inventory. One way or another those will become listings for REALTORS (YOU?) For the housing market to truly turn the corner we must clear that inventory. How long will that take…what do you think?

Contact me with all of your real estate needs! Jeff Lemen 310-482-2006

Let’s run through a few basics so that you can help yourself understand your policy and ensure you have the proper coverage in place for your needs. Go head and pull out your insurance policy binder, it’s about 40 pages thick, then flip to the third or fourth page that contains line items like: Building/Dwelling, Separate Structures, Personal Property, Loss of Use, Medical, and Extended Replacement. This section also includes corresponding amounts of maximum coverage, which tells you how much coverage you have in case of a loss. You need to look at each line item of coverage and discuss with your agent if you believe that amount is sufficient.

Building/Dwelling Coverage

The top item is usually for building/dwelling/property and that covers the cost to rebuild your property for covered perils like fire, wind damage, vandalism, etc. The coverage is based on your selected estimate of the cost to rebuild the structure, not the land value as land rarely gets destroyed and regardless is not covered by insurance. Additionally, your normal policy does not cover earthquakes or floods, either, but you can get separate policies for these if you are in earthquake or flood-prone areas. Policies for these perils can be expensive, but you decide if it’s worth it. Other items are also not covered like wear and tear, so talk to your agent about what is and what isn’t covered.

While your agent can help you estimate how much coverage you need for one of the line items like building/dwelling (e.g., $400,000 coverage for a 2,500 square foot house based on the size, quality of building materials, age of property, etc), you ultimately pick the dollar amount of coverage. Don’t under-insure, but don’t over-insure, either. Most important is to make sure to review your policy each year and increase your coverage to an appropriate amount if local building costs increase.

Liability Coverage

Many people don’t know this but you also have liability coverage with your homeowner’s policy. For example, if your dog bites someone or if someone slips on your property and gets hurt and you get sued, the insurance provider will step in and pay for a lawyer to defend you and/or pay any settlement or judgment against you. But that coverage has a limit of how much they will pay, usually about $300,000. If you have net worth above that, you can buy additional liability coverage called an umbrella policy in increments of $1,000,000 of additional coverage. It’s dirt cheap too, like $350 per year for an additional million dollars in coverage, so go for it if you think you need it.

Deductibles

The deductible amount is chosen by you. A deductible is how much you pay out of pocket for a loss. If you have a $500 deductible, and there is a $7,500 loss, you pay the first $500 and the insurance carrier pays the other $7,000 up to your maximum covered loss. The higher the deductible you choose, the lower the annual insurance premium you pay. Likewise, the lower the deductible, the higher the annual insurance premium you pay. Discuss this with your insurance professional and decide what makes sense for you.

HOA/Common Interest Development Properties

If you own a unit in a condominium, townhome, co-op, PUD or any other common interest development, whether a personal residence or an investment property, make sure you have an interior HO-6 policy that covers you for damage to the inside of your unit, PLUS for liability. This isn’t covered by most homeowners association’s master insurance policy.

You don’t want to wait until you or your tenant accidentally floods the nine units below you and every one of those nine owners is looking to you to reimburse them for their losses. Your HO-6 policy should cover this liability and damage – discuss the coverage with your agent. You should also get a copy of your HOA’s master insurance policy and meet with your personal insurance agent to determine if there are any gaps in coverage.

Specialty Items

Additionally, normal policies don’t cover expensive jewelry, artwork, firearms, precious metals, etc. If you have expensive “other” items, make sure to discuss these with your agent and get the proper coverage in place.

The last item to note is that insurance is for major financial losses that will cause a disruption to your life and livelihood if you did not have the coverage in place to pay for all the damage. You generally should not make small claims because the insurance carriers will raise your rates and/or eventually if you make enough minor claims they may drop you from coverage. Reserve making claims for when everything hits the fan.

Having the proper type and amount of insurance in place is vital in today’s world. Pull out your policy and schedule a talk with your agent to discuss what you have and what you need. This should help you sleep better at night by knowing if there is a big loss, you’ve got some help on your side.

Leonard Baron, MBA, CPA, is a San Diego State University Lecturer, a Zillow Blogger, the author of several books including “Real Estate Ownership, Investment and Due Diligence 101 – A Smarter Way to Buy Real Estate”, and loves kicking the tires of a good piece of dirt! See more at ProfessorBaron.com.

Contact Jeff Lemen 310-482-2006 For All Of Your Picfair Village/Wilshire Vista Real Estate Needs!

If you have ANY questions about this information please call me at 310.482.2006.  I can assist with your questions.

Sincerely,

Jeff

Distressed Property Coalition Monthly Newsletter

“The Publication of Record for the Distressed Property Professional”

Volume II, Issue #1

January 2012 – Washington, D.C.

DPC Monthly Issue Briefing: The Cost of Bad Housing Policies

The following is an editorial prepared by DPC lobbyist John Grant on the recent lawsuit by California against the GSEs.

Freddie Mac: California Vice Lords

California Attorney General Kamala Harris should be applauded for filing suit to get some answers from Fannie Mae and Freddie Mac concerning abandoned properties they own in the state. Evidence suggests that these properties have been converted into houses of prostitution and drug distribution and manufacturing hubs.

The dereliction of Fannie and Freddie to unwind their literally toxic portfolio of mortgages not only represents a clear and present danger to the housing market and the overall economy, but now to communities threatened to be overrun by crime.

The current state of these properties in California, and for that matter around the country, begs the larger question: how after nearly four years are there so many abandoned properties? One answer lies within the taxpayer-funded offices of Freddie Mac.

While taxpayer handouts continue to flow to Freddie Mac, the government-sponsored enterprise has developed a new tactic to shift blame for its own profound failures to professional homebuyers and property rehabbers.

Previously, investors who purchased toxic assets from the failed institution were required to disclose their intent to resell the property. But Freddie Mac now claims it has discovered a new type of fraud, perpetrated by homebuyers who fail to disclose the amount of resale value. Think of a potato farmer suing McDonald’s for not disclosing the price of french fries, and you get the idea.

Freddie says its goal is to protect American taxpayers. (Where this vigor was years ago when Freddie let taxpayers foot the bill for garbage loans who knows?) Really, Freddie’s attempts to undo legitimate home purchases is nothing more than an attempt to prop up the myth that it was real estate investors, not Freddie Mac, who caused the housing crisis.

Freddie officials are careful not to say failure to disclose the resale price illegal. Why? Because it’s not. Still, earlier this year Freddie imposed a ban on resales of distressed properties by professional home buyers. Which begs the question: how can Freddie tell a buyer what to do with a property once it is sold? Unlike Freddie’s false claims of fraud, this one has some precedent, starting with the Magna Carta.

Distressed homeowners and communities are feeling the collateral damage of Freddie’s decision to stop investor-driven short sales throughout California. While not a perfect option, short sales are far preferable to foreclosure. Abandoned properties remain in disrepair without home rehabbers to fix them, and serve as a perfect host to criminal activity. Contractors, real estate agents, title insurers and buyers are all losing jobs and income.

The damage does not end there. Besides a job-killing piece of overregulation adopted by an institution with no authority to make housing policy, let’s add lawsuit abuse to the list. Freddie is using the false claim of fraud as a gateway to examine transactions that occurred long before it implemented its ban on resales. If the investigation reveals any technicality calling the transaction into question, civil lawsuits will follow. This is Freddie Mac’s plan for housing recovery.

True recovery of the housing market begins with the transition of distressed inventory to the retail market. For decades, distressed property professionals have served this need, saved at-risk homeowners from foreclosure, salvaged homes and communities decimated by economic downturn, and provided essential liquidity to the market. Without these services, the housing market will remain stagnant and taxpayer exposure will increase exponentially.

In many ways, distressed property professionals present the only tangible solution to current housing market problems. Removing the restraints Freddie has placed on homebuyers would not be radical change, but rather a restoration of law and recognition of the value of private market solutions.

It’s time Congress exercises some oversight. This issue is a litmus test for any politician claiming to support distressed homeowners, job creation, tort reform, small businesses, the American taxpayer, and an end to bailouts.

Freddie must be forced to abandon its policy of restricting resales of properties purchased by investors. Freddie’s investigations into what it has conceded is not a crime must stop. And to protect taxpayers, Freddie must disclose the value of its notes, its true assets, so taxpayers have a thorough and accurate accounting of the risk they’re under.

Without immediate Congressional action and an affirmative rebuke of this policy, the housing market will remain on the verge of collapse, and states will be visited with higher crime rates. Congress must decide whether it, or Freddie Mac, makes housing policy and whether institutions that receive taxpayer money should be given a competitive advantage over the private market.

DPC On The Hill

The Distressed Property Coalition is back on the Hill January 10^th for meetings with members of Congress and staff on broad short sale policy issues, an update on the status of the short sale and REO affidavit campaign, and to brief members on our position regarding seller finance issues. A full briefing of our meetings will be provided to subscribers shortly after the 10^th.

DPC Submissions to Congress/Agencies/Media

January 3, 2012

Via Electronic Mail

The Honorable Carole J. Galante

Acting FHA Commissioner

U.S. Department of Housing and Urban Development

451 7^th St. SW

Washington, DC 20410

Re:       GSE Interference of the Implementation of FHA’s Anti-Flipping Waiver

Dear Commissioner Galante:

           I am writing to you on behalf of the Distressed Property Coalition, a group of professional home rehabbers for whom I am registered to lobby before Congress and federal agencies. In addition to its core members, DPC also has a grassroots base of 400,000 professional and part-time homebuyers throughout the country.

           On December 28, 2011 HUD issued a release (HUD No. 11-292) announcing the extension of its anti-flipping waiver through 2012. DPC fully supports this policy as an effective approach to assist with the purchase of foreclosed and distressed properties. Unfortunately, because of policies implemented by Fannie Mae and Freddie Mac (“the Enterprises”), FHA’s sound policy cannot produce its intended results.

           The Enterprises have prohibited the resale of short sale properties purchased by investors for a period of 90 days. The Enterprises force buyers to sign affidavits preventing resale, and have required servicers to use the affidavits as well. While initially the ban was for 30 days, most servicers have extended it to 90. Secondly, the Enterprises are dictating the amount for which REO properties purchased by investors may be resold. Both policies are in direct conflict with the HUD waiver.

           HUD is a legitimate and accountable policy-making federal agency, while the Enterprises have no legitimate policy-making authority. On behalf of my clients, I would like to offer the following comments in order to help see that your policy is implemented effectively.

1. The Short Sale and REO Contractual Affidavits Created by the Enterprises Are Illegal. The affidavits constitute an unreasonable restraint on alienation and thus violate hundreds of years of established contract law. Once the properties are purchased by private buyers, the Enterprises have no authority to dictate resale terms.

2. The Enterprises Believe They Should Receive Full Market Value for the Collateral on Their Toxic Notes. The Enterprises argue that they are losing money when an investor purchases and resells a property at a higher value. This assertion is false. The Enterprises lost billions of taxpayer dollars when they purchased and guaranteed notes that they did not fully understand. The notes are the assets, and they are essentially worthless. The homes are the collateral, and since they are considered distressed properties, the Enterprises cannot receive full market value for them. This is a rather basic tenet of the housing market, yet it escapes the business units at the Enterprises. But more obvious, if the Enterprises think they can receive more money for their toxic assets, why not charge more? After all, the Enterprises set the price, not investors.

3. The Affidavits Are Costing Taxpayers Billions of Dollars. For every short sale that is not executed because of the affidavit, taxpayers take an additional 20% loss when that property enters foreclosure. The REO affidavit is even more puzzling, as it has led to an increasing shadow inventory of abandoned properties. Those properties are not aging like wine, they are increasing potential taxpayer liability.

4. The Enterprises Are Not Interested in Fraud Prevention. The thesis behind the affidavits according to the Enterprises is fraud prevention, specifically to prevent what is known in the industry as “front-running.” This takes place when a higher offer is concealed from an owner, in this case the Enterprises. Evidence of front-running might include a same day resale for a dramatically higher price than the original offer. But the affidavit policy treats a same day resale with a 500% profit exactly the same as a resale in 75 days with a 5% profit. Both are considered fraud by the Enterprises, without any supporting evidence. To be clear, the act of making money in the real estate market is considered suspicious and cause for an investigation by the Enterprises. The Enterprises are not interested in fraud prevention, the affidavits are a scheme to stall the unwinding of the Enterprises, and conceal the revelation that they have lost substantially more than they are admitting. According to the Securities and Exchange Commission, this would not be the first time the Enterprises have engaged in this conduct. If the Enterprises dispute this allegation, then let them reveal the value of the notes they hold.

5. The Affidavits Are Destroying Communities. California has recently been forced to sue the Enterprises because of the rise in crime at abandoned homes owned by the Enterprises. This problem is not unique to California. The shadow inventory created by the affidavits is having a real and dramatically negative effect in communities already being punished by foreclosures. Besides increased crime, the affidavits prevent home rehabs, and thus cost jobs, and deprive state and local communities of much needed tax revenues.

           In summation, the legitimate and thoughtful policy offered by HUD is being undermined by an illegal and careless policy the Enterprises are trying to enforce throughout the country. Any fraud prevention benefits of the affidavits are far outweighed by their negative consequences to taxpayers, distressed homeowners, communities, job-creators, the housing market, and the overall economy. I ask that HUD work with Congress and FHFA to end these affidavits, or revise the HUD anti-flipping waiver to note that it does not apply to properties owned or guaranteed by the Enterprises.

           I have briefed several Congressional offices on this matter and met with FHFA on it as well. I have copied several of them on this letter. Should you wish to discuss this issue further, please feel free to contact me directly at (202) 525-3089. Thank you for your service.

Sincerely,

John P. Grant

DPC Briefings on Congressional Hearings

There were no major Congressional hearings this past month on distressed property issues. DPC would like to use this space to remind subscribers of our efforts to build a grassroots base in order to push Congress to hold a hearing dedicated solely to distressed property issues. DPC clients have started sending out material for the launch of the grassroots effort starting January 9^th. DPC will also send a reminder to subscribers before the 9^th as well.

Upcoming Events

DPC Monthly Visits to Washington: DPC lobbyist John Grant and clients will be in Washington on January 10^th for meetings with members of Congress and staff on several distressed property issues. DPC will provide a briefing for members at the conclusion of those meetings.

About DPC

The Distressed Property Coalition is a privately-funded lobbying effort comprised of residential real estate investors and marketers of residential real estate products. Our mission is to establish a permanent voice for our community in Washington and obtain a permanent seat at the table on all policy issues impacting the industry. The goal of the Coalition is to make it easier to buy and sell houses. For information about becoming part of the coalition, please visit www.distressedpropertycoalition.com

LEGAL DISCLAIMER: UNAUTHORIZED DISTRIBUTION OF THIS NEWSLETTER AND WEEKLY UPDATES IS STRICTLY PROHIBITED. SUBSCRIBERS ARE PROHIBITED FROM SHARING ANY UPDATES PROVIDED BY DPC OR J.P. GRANT LLC WITH A THIRD PARTY. THIS INFORMATION IS PROVIDED FOR EDUCATIONAL PURPOSES ONLY. NONE OF THE CONTENT IS TO BE CONSTRUED AS A RECOMMENDATION FOR ANY PARTICULAR PRODUCT OR REAL ESTATE STRATEGY. INVESTORS SHOULD CONSULT WITH AN ATTORNEY WITH RESPECT TO THEIR PARTICULAR INVESTING STRATEGIES AND THE LAWS GOVERNING SPECIFIC TRANSACTIONS THAT THEY MAY UNDERTAKE. CIRCUMSTANCES SURROUNDING LEGISLATIVE PROPOSALS AND REGULATORY PROPOSALS ARE EXTREMELY VOLATILE AND MAY CHANGE AT ANY TIME WITHOUT PRIOR WARNING. THE CONTENT PROVIDED IN THIS NEWSLETTER AND IN WEEKLY UPDATES IS CURRENT BASED UPON THE BEST AVAILABLE INFORMATION AT THE TIME OF PUBLICATION. NEITHER DPC NOR J.P. GRANT LLC ASSUME ANY RESPONSIBILITY FOR INVESTMENT DECISIONS OF SUBSCRIBERS.

With nearly half of all REALTORS® using social media in 2011, it’s safe to say that it’s no fad. But will further adoption of social media be a driving force of change for the real estate industry in 2012, or will other trends prove more disruptive? I asked several social-media-savvy real estate professionals, “What new tools or trends will have the biggest impact on the real estate industry in 2012?” Here’s what they had to say.

Social Becomes Normal

“In 2002, we stopped calling it ‘e-business.’ In 2012, ‘social marketing’ meets a similar fate. Going forward, this is just ‘business,’” says Dan Green, loan officer with Waterstone Mortgage in Cincinnati and author of The Mortgage Reports. In some ways, social media’s mass adoption now makes it less disruptive. But as this form of marketing hits critical mass with the agent population, the companies they work for will try to leverage it. Green predicts that, “brands/brokers will begin actively amplifying their individual agents’ marketing messages. Expect top-down ‘messaging’ within a brokerage for agent Web sites, blogs, and social network presence.” Derek Overbey, senior social media manager at VerticalResponse, has a similar view, “In 2012, we will see deeper social integration into every aspect of business, including e-mail, promotions, advertising, and public relations.”

Ines Hegedus-Garcia, a Miami REALTOR® with Majestic Properties, thinks competence in technology will need to become the norm for real estate professionals: “2012 will not be about the best and newest shiny objects, but instead about how we, in the industry, are able to stay atop technology and able to integrate it into our daily business in a way that is useful. The consumer has learned to ask the right questions, and agents will have to show proof of successful business practices which incorporate technology.

Search Becomes More Socialized

I think social search could have a significant impact on how consumers connect with agents. I will even moderate a panel about this it Inman Connect next month. Adding a social layer to the way consumers search for an agent is a reality from general search sites like Google to Industry specific portals like Zillow and Trulia. “We’ll continue to see advancements in social search.” says Ginger Wilcox, head of industry training at Trulia. “In 2012, more consumers will want social proof that their agent is an expert and trusted in their field. Having strong online profiles with customer recommendations will be essential to gain the trust of connected consumers.”

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The Rise of Mobile

Real estate has always been about location, location, location. Mobile will make that mantra apply to the Web as well.

In 2011, smartphones made up the majority of all US cell phone purchases. “We saw unprecedented growth in mobile in 2011 and will continue to see mobile explode in 2012, especially with smartphones being the norm and inexpensive tablet options expanding and becoming mainstream.” Wilcox says. “Mobile solutions for real estate pros will be essential to help agents connect with mobile consumers.”

Bill Lublin, managing member for the Social Media Marketing Institute, thinks the rise of mobile will change how consumers use real estate Web sites and social media, “The increased use of mobile by consumers will drive agents and companies to create mobile Web sites (as opposed to mobile compliant), participate in local review sites (to demonstrate their connection to the local community), and provide consumer tips on location-based services like Foursquare, Foodspotting, Yelp, etc.”

The ‘Great Data Debate’ Heats Up

“In 2012, listing data and how it is shared across multiple platforms — from IDX to syndication to social media platforms — will be a hot topic. It could fundamentally change how real estate agents do business,” says Jay Thompson, broker/co-owner Thompson’s Realty and a member of NAR’s MLS Committee. Jay lobbied for the creation of a special subcommittee to help sort through these issues.

In 2011, Edina Realty made a decision to withhold their  syndication feeds to third-party sites like REALTOR.com, Trulia, and Zillow. Lublin believes the rest of the industry is watching. “Large and small companies alike will be watching Edina to see what happens as they leave aggregators’ sites in an attempt to drive consumers directly to their company site. If REALTORS® decide to disintermediate third-party sites, the impact on the industry could be immense.” Nobu Hata, 2012 YPN chair and Minneapolis REALTOR® with Edina Realty,  hopes all agents understand the stakes. “I can tell you first-hand that brokers waking up to listing syndication issues will be heavily impacting us in 2012.  It’s a numbers game, and a lead-gen and empowerment issue that all brokers — big, small, indie, franchise — will be gunning for.  Here’s hoping that their agents realize this, and advise when necessary.”

A New Focus on Conversion

“Tools and trends will (finally) focus more on client conversion rather than lead generation …  social and otherwise,” argues Jeff Corbett, chief thinking officer for XVentures. I agree. Agents are beginning to understand that social networking is not a numbers game. It’s more about who is in your sphere of influence than how many. The focus must be on networking and prospecting practices that can convert into real business. As Dan Green predicts, “In 2012, the agents with the best lead-generation tools plus lead-management tools win. It’s not just *how* you earn a lead, but what you do with it once the lead’s in your CRM.”

Now it’s your turn. What new tools or trends will have the biggest impact on the real estate industry in 2012?

Contact Jeff Lemen for all of your real estate needs! Picfair Village/Wilshire Vista