douchebag collarsOh! I totally forgot to tell you about how these Wall Street big whigs tried to cheat a Realtor in the Hamptons out of a summer rental commission. One even happened to be a lawyer! Few months ago, a real estate broker at Rosehip Partners showed a couple of Wall Streeters around some rental properties, as reported by Curbed Hamptons. One was an attorney with an investment bank, Goldman Sachs I believe, and one was a portfolio manager with a hedge fund. They dangled the phrase “all cash deal” under the broker’s nose, like most big shots do.  The poor broker spent a whole Saturday showing these guys seven rentals, which they apparently liked.

Yes, liked them so much they went behind the broker’s back to cut a deal with him not part of it. One of the Wall Street dudes actually left this note behind on the kitchen counter for the homeowner:

Douchebag note 1

Next, “The agent got a call from a Southampton lawyer who’d had dinner with the owner of one of the rental properties. The owner was very upset after finding a note on the kitchen counter after the showing. The second was shoved under the front door later in the afternoon when the two guys returned by themselves.”

Here’s the note shoved under the door:Douchebag note 2

Don’t you just love that smiley face? Have you ever encountered Real Estate douchebags? Tell us all about it for a new little series we are cooking up, inspired by quite possibly the worst move-out experience I have ever heard. We will call this series “Real Estate Douchebags” — self explanatory.

If you’d rather remain anonymous, and we do not blame you, email us the story and we will post it! Candace@CandysDirt.com

DollarBillFanThis caught my eye in the Wall Street Journal last week: “more than half of all homes sold last year and so far in 2013 have been financed without a mortgage, according to an analysis by economists at Goldman Sachs Group.”

According to the analysts, 20% of all homes sold before the housing crash were “all-cash” sales, or around 30% of sales by dollar volume. But that has changed dramatically over the past seven years. Now the all-cash share of home sales has more than doubled, increasing by more than 30 percentage points.

Where did they get their numbers? Goldman scrutinized home sales figures from the Census Bureau and the National Association of Realtors and mortgage-origination data from the Mortgage Bankers Association and Lender Processing Services.

This explains why home sales have jumped over the past two years despite more hoops to jump through to become qualified for a mortgages, and the declining mortgage application index. Today Wells Fargo reports laying off 2300 employees due to increases in mortgage rates, which are stymying re-fis.

Who is making all these cash purchases? Investors, foreign buyers, and wealthy homeowners that likely do not want to go through the hassle of getting a mortgage. Some are downsizing to smaller homes equity rich before closing on a sale. Others are loving real estate as an investment more than the stock market. We sure know how lending standards have tightened up since the housing bubble. Banks now scrutinize borrowers’ tax returns and bank statements to verify their incomes and the source of their down payment, and the self-employed have been targeted.

I know of a lot of cash deals in Dallas, tell us what you are seeing on the real estate streets.

 

Oh my, on the housing real estate front, his SOTU speech was even more dissappointing than I had anticipated. While President Obama spoke, I was at the rain-drenched McFarlin Auditorium at SMU hearing out Michael Lewis, author of The Big Short and his latest book I am dying to devour, Boomerang. I thought it ironic that Lewis told us how we are socializing big banks, and described the incredible graft and greed in Greece that has led to their almost total economic downfall. Example: on the Greek railroad, the average worker earns about $150,000 a year.

As a result, train tickets in Greece are inflated to such an extent that it costs the government less to put citizens in a private taxi than to provide transportation via a train ticket. Oh and Goldman Sachs helped the Greeks dig their economic grave. Lewis spoke for over an hour, but his point: we cannot blame any one political party, Wall Street (grrr) institution, legislation, or President for our financial crisis. We brought it about ourselves because we want everything but want to pay for nothing.

So I come home and learn our President merely touched upon a couple initiatives and potential bills that would impact homeowners about as much as a hangnail: refinancing mortgages by expanding HAMP, one of the most failed federal programs ever, and more policing/punishment of those who broke the law that led to this crisis: Real Estate Retro-Cop. That is just plain stupid! First of all, many did not break the law, they found loopholes. Secondly, how will you get the money back and how much will it cost? Thirdly, how does that help get the housing market get chugging again so we can create jobs?

Bottom line: Lewis said that in 9 years when his daughter graduates from college, he expects we’ll still be slogging through a constipated (my word) economy. And it will be tough for her to find a job.

On refinancing mortgages from the SOTU:

“Responsible homeowners shouldn’t have to sit and wait for the housing market to hit bottom to get some relief. That’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust.”

A deficit of trust, wow.

Fund this with a fee on financial firms with more than $50 billion in assets. Which they will likely pass onto  consumers. Loosen the restrictions on who is eligible to refinance their mortgage beyond those who have loans backed by Fannie Mae and Freddie Mac. With  long-term rates hitting 3.88 percent last week, the initiative could help individual homeowners. Course rates are low, the problem is as we all know, no one’s lending.

On RE retro-cop:

“This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans. A return to the American values of fair play and shared responsibility will help us protect our people and our economy.”

The unit that President Obama described will include officials from the SEC, IRS and the Department of Justice. It would be co-chaired by New York Attorney General Eric Schneiderman. Just what we need. More overhead after the fact. The guy just doesn’t GET IT!

Everyone is talking about the guy in Flower Mound — Kenneth Robinson — who moved into a $300,000 home at 2205 Waterford Drive and is claiming adverse possession. Dallas — actually, Flower Mound, has been making the national media rounds on this story. And Curbed graciously pointed out that Flower Mound is also the home of the Divorced Divas’ $20 million spread. The one with the musical toilets, ‘member?

Kenneth Robinson told WFAA-TV he moved into the house at 2205 Waterford Drive on June 17 because the home was abandoned for foreclosure, then the mortgage company that owned it went out of business. After researching a Texas law called “adverse possession” Robinson moved in. Robinson claims he filled out an online form and then filed it at the Denton County courthouse for $16. This gives him rights to the house, he claims, which was abandoned due to a foreclosure. Now he is claiming ownership.

Lewisville/Flower Mound Realtor Charles Nuber did a little digging for me and found that the owner of the home, a William P. Ferguson, moved out of the house but there seems to be no foreclosure on record. The home was built in 1997 and has a swimming pool. Ferguson bought the 3910 square foot home in 2004 for $276,000 ish. The home is now valued at $328,000. Ferguson appears to have a mortgage of $332,000. Which means he is underwater. The home was listed for $340,000 (reduced from $355,000) by KW agent Holly Hiller, who tells me she cannot comment due to client confidentiality.

The mortgagor was San Diego-based Accredited Home Lenders, who went into bankruptcy May 1, 2009.

According to AHL’s bankruptcy petition, its ten largest unsecured creditors hold “repurchaser claims” — (my son-in-law will clarify this for us):

  1. HSBC … $91 million
  2. Citigroup … $33 million
  3. Goldman Sachs …  $21 million
  4. Morgan Stanley Mortgage Capital … $13 million
  5. UBS … $9 million
  6. SG Mortgage … $6 million
  7. Wells Fargo … $5.7 million
  8. HSBC … $5.5 million
  9. Lehman Bros. … $5.6 million
  10. Merrill Lynch … $5.2 million

So there are two or more layers of litigation going on here. Now my head is swimming. If the water is off, as WFAA reported, what in the world is the condition of that pool? And what are the liabilities should anyone be injured on the property or in that pool?

Adverse possession is a common law concept developed in the 1800s to protect abandoned property. It requires posting clear, public notice that someone is at the property — like through a court filing — and that someone would remain in the home for a specific period of time. The idea was to make sure property was maintained and monitored by someone, anyone. Supposedly, and I am NOT an attorney, after the time requirement is satisfied, squatters like Robinson can claim clear title to the property. The original owner can fight the action, but what underwater homeowner on the verge of foreclosure is going to do that? This is a huge problem in Seattle and Florida, too, and many web sites are now offering on-line courses in how to claim abandond homes by adverse possession. They claim having warm bodies in a house is actually better for the neighborhood. They are, they claim, helping society.

Whatever company owns the assets of Accredited needs to step forward and go to court — that’s the only way to get Robinson out, I’m told. On the other hand, banks that are overwhelmed with foreclosures and robo-signing may just see this case as tinkling in the ocean. Which means, Robinson may well end up living in 2205 Waterford for a few long years.

Owner Name : Ferguson William P Tax Billing Zip : 75028
  Tax Billing Address : 2205 Waterford Dr Tax Billing Zip+4 : 2341
  Tax Billing City & State : Flower Mound TX Owner Occupied : O
Location Info:
  Location City : Flower Mound Panel Date : 03/30/1998
  School District : Lewisville ISD Flood Zone Code : X
  MLS Area : 41 Zoning : 549t
  MLS Sub Area : 3 Block ID : D
  Subdivision : Waterford Park Estate Ph 01 Lot Number : 2
  Census Tract : 217.14 Legal Description : Waterford Park Estates Ph 1 Blk D Lot 2
  Census Block : 2 Mapsco Book : DA
  Carrier Route : R059 Mapsco Page-Grid : 549-T
  Flood Zone Panel : 4807770533F
Tax Info:
  Parcel ID : SL1121A00000D000000020000 % Improv : 76%
  Short Parcel ID : R185594 Exemption : Homestead
Assessment & Tax
  Assessment
 
Assessment Year : 2008   2009   2010  
Assessment Type : Certified   Certified   Certified  
Mkt Value – Total : $357,137   $359,226   $328,385  
Mkt Value – Land : $79,807   $79,807   $79,807  
Mkt Value – Improved : $277,330   $279,419   $248,578  
Assd Value – Total : $357,137   $359,226   $328,385  
Yr-to-Yr Assd Value
Change ($)
:    $2,089   -$30,841  
Yr-to-Yr Assd Value
Change (%)
:    0.5%   -8.5%  
  Tax
 
Jurisdiction   Type Tax Year Tax Amount Chg ($) Chg (%) Tax Rate
Total Tax : Actual 2008  $7,377       
Total Tax : Actual 2009  $7,573  $196 2.6%  
Total Tax :   2010  $7,061  -$512 -6.7% 2.150300 
Town Of Flower Mound : Actual   $1,477      0.449700 
Denton County : Actual   $899      0.273900 
Lewisville Isd : Actual   $4,685      1.426700 
Characteristics:
  Universal Land Use : SFR County Use Code : Single Family
  State Use : Single Family Cooling Type : Central
  Lot Acres : .347 Heat Type : Central
  Porch : Open Porch Garage Type : Attached Garage
  Garage Sq Ft : 641 Building Sq Ft : 3269
  Gross Bldg Area : 3,910 Roof Material : Composition Shingle
  Roof Shape : Hip Stories : 2
  Interior Wall : Drywall Exterior : Brick Veneer
  Foundation : Slab Pool : Pool
  Total Baths : 3 Year Built : 1997
  Full Baths : 2 Effective Year Built : 1998
  Half Baths : 1 Fireplaces : 1
Last Market Sale:
  MLS Sold Date : 06/08/2004 MLS # : 10034680
  MLS Sold Price : $276,500
Sales History:
  Recording Date : 11/07/2005 07/19/2004 12/03/1997 00/00/1997
  Buyer Name : Ferguson William P Tritschler Mark & Melody Terry Theodore Jr & Lorie R  
  Buyer Name 2 :   Tritschler Melody Terry Lorie R  
  Seller Name : Tritschler Mark & Melody Terry Theodore Jr & Lorie R Concordia Homes  
  Document No : 138747 94879 84604 26142
  Document Type : Warranty Deed Warranty Deed Warranty Deed Deed (Reg)
Mortgage History:
  Mortgage Date : 11/07/2005 06/03/1999 12/03/1997  
  Mortgage Amt : $332,000 $225,700 $218,700  
  Mortgage Lender : Accredited Hm Lenders Nationsbanc Mtg Corp Alternative Cap Grp Inc  
  Mortgage Type : Conventional Conventional Conventional

The New York Times ran this wonderful interview with former First Lady Laura Bush on April 1, I hope the link to the slide show works — never know with the pay walls these days. In the interview, she says she didn’t know she was stressed until they moved back home,¬† Barney and Miss Beazely had a harder time adjusting and miss the large White House staff, she has found how incompetent she is around the house after 14 years of not cooking (which would be, to me, the best part about being First Lady), she and President Bush have a secret door from their bedroom to the girl’s part of their home in anticipation of grandkids, she loves Hilary Clinton & walking canes by Roosevelt Wilkerson, the Crawford ranch was green before its time, and she loves to clean. I recall Mrs. Bush saying, years ago, that she Cloroxed her kitchen counters and cleaned cabinets regularly, that she loved to keep a clean, organized home. But the best part of the interview, for me, was learning that her most cherished rug was one she bought from ARZU. I had the pleasure of interviewing the woman who started ARZU about a year ago when she was in Dallas.

I learned about ARZU through a local designer friend whose company, BKM Total Office of Texas Corp. BKM partnered to market and sell Arzu Studio Hope rugs — beautiful authentic wool creations woven by Afghan women as part of an empowering social business enterprise that markets and sells the creations they weave. A whopping 92% of the money paid for the rug is paid directly to the weaver, poor rural women in Afghanistan.

The Arzu Studio Hope Rugs story started, ironically, with a trader from Goldman Sachs in 2004. Chicago native Connie Duckworth, a retired Wall Street partner and managing director, visited Afghanistan with the U.S. Afghan Woman’s Council to try and figure out a way to give these women some hope — subservient women who (some) were beaten by their husbands, covered in burkas, women who washed clothes in icy-cold Chicago-like weather with bare bleeding hands because they had no laundromats, no hot water. It was a most unusual trip for Goldman’s first female sales and trading partner, but Duckworth had already retired and was looking for the next chapter of her life.

She flew in on a military C 130 cargo plane — no seats, no heat, special forces strapped out scouting for missiles, circular landing to avoid attack. There, in 2003, she saw first hand that Afghan women suffered a 100% illiteracy rate in rural areas. Virtual slaves to their husbands, they had no medical care, and they stayed indoors hidden in refugee camps raising children and caring for their families. One thing they did have, however, was the centuries old gift of rug weaving in a country renown for it’s delicately beautiful and high-quality rugs: rugs that were knotted and tied by hand, created of natural abrash-style vegetable dyes, rugs that took time to create. Duckworth decided to harness their talent for rug-making so they could become self-sustaining, earn enough money to become self-reliant and support their families.

But she wisely didn’t stop with salaries alone. Duckworth created an infrastructure that helped the weavers become literate. She devised contracts that husband and wife had to sign, husbands signing with a fingerprint (because they cannot write) to indicate acceptance of the contract promising that if Arzu contracted for the rug, the weaver would be paid not only for her work but for attending school to become literate and she would also send her children to school, educate them.

Duckworth set up a business model for Arzu Rugs with as much pro bono support as she could, from the architect Zaha Hadid, interior designer Thomas Schoos, graphic artists and others she recruited from top U.S. contract design firms — such as Odegard Rugs  — even an office in the John Hancock Building in Chicago. She created a framework that, in six years, created 800 jobs in rural Afghan areas, those jobs providing support for 2100 individuals. She used her own money initially, but subsequently received a U.S. Agency for International Development grant. She’ll take as many freebies as she can to minimize overhead with the ultimate goal of returning 100%  of the purchase price of the rug — ranging from $500 to $15,000 — back to the Afghan women. What I don’t want to do, she told me, is have to be dependent on donations.

“Billions of dollars have been poured into that country,” she told me. “Very little has touched the people at the lowest level.”

U.S corporations have made major image shifts in the last two years, says Duckworth, to take a more wholistic approach and make a statement about who they are through conscientious design. Many buy Arzu rugs and hang them as art, labeling them with the Arzu story. They have learned that most of their employees don’t appreciate the haute quality of the pieces anyhow and aim, instead, for a more socially-conscious, less conspicuous display. Consumers, too, are practicing responsible consumerism.

“Families all want the same basic things,” Duckworth told me. “They want their children to be healthy and grow up safely to enjoy a better world. That’s what we want, that’s want these Afghan men and women want.”

Once the Afghan women began earning money, says Duckworth, they gained a new sense of empowerment and respect within their own families. They were the breadwinners. Now, she says, the women will sign the contracts because they have learned to read and write while their illiterate husbands are still making fingerprints. Through grants, Arzu has helped bring midwives and healthcare to the rural Afghan communities and even just completed what must be the most sought-after structure in all of Afghanistan: an indoor laundromat with hot water and a tea-room.

“Our women tell me they feel like a blind woman getting their eyes back once they learn to read,” says Duckworth. “And then one told me, I weave, so my daughters won’t have to.”