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 We often call the chairman of the Federal Reserve "Gentle Ben" Bernanke, because that has been his approach so far to the subprime mortgage crisis: No table-thumping, no finger-wagging, no jawboning -- just gentle prodding of lenders to be more careful in the future.
The Fed and other regulators issued new guidelines Friday advising -- but not requiring -- some lenders to fully consider whether subprime borrowers can afford their mortgage payments after the cheap "teaser" rates expire.
The guidelines do not apply to independent, state-regulated lenders, but are still expected to have some impact. The New York Times: "The rules are likely to make it harder for some borrowers to qualify for loans, although many lenders have been tightening their standards in response to rising levels of foreclosures and mortgage delinquencies."
The Fed could have thrown its weight around, but chose not to, as Floyd Norris points out: "The Federal Reserve chose not to use the authority it has under a 1994 law to impose the rules on all mortgage lenders, said Michael D. Calhoun, president of the Center for Responsible Lending."
The problem, as we see it, is that the Fed waited so long that it can't really throw its weight around. Much tougher lending standards now would probably drive housing prices lower, which would leave even greater numbers of recent home-buyers upside-down, which would lead to more foreclosures, which would scare Wall Street investors away from mortgage-backed securities, which would tighten credit even further, and on and on. The Fed is stuck at this point, wishing and hoping that the mortgage mess doesn't get worse.
Photo Credit: Reuters
 What does $3 million buy these days? The Real Estalker blog, one of our favorites, asks that question in Brentwood and comes away disappointed.
In this post, RealEstalker's Your Mama is flummoxed by how little house -- and how little luxury -- $3 million buys in Brentwood.
The house: a renovated five-bedroom traditional, with 3,276 square feet, owned by former "JAG" stars David James Elliott and Nanci Chambers, listed for $3.25 million. No pool.
RealEstalker: "The Elliott/Chambers house is located in a nice, non-descript section of Brentwood that sits in the morning shadow of the Getty Museum. The area is nice, it's Brentwood after all, but seriously people, Your Mama is falling down with flabbergast and shock to learn that home prices top $3 million in this lackluster part of town."
More: "It's not a bad house for a suburbanish family house, and clearly the couple have sunk some dough into renovating the kitchen and baths. Nonetheless, for three and a quarter million clams Your Mama wants electronic security gates and a heated swimming pool. No question about it. For that amount of money we want to feel insulated and protected from the wild and dangerous streets of Brentwood, and have a recreational oasis out back."
Photo Credit: RealEstalker
 Good morning, and it really is a good one. Not a hint of June gloom in Santa Monica. Today Pieter Severynen, our tree-loving friend, celebrates one of those archetypal Southern California things that isn't really from California at all: the olive tree.
"Olea europaea -- Cultivated in Greece and the eastern Mediterranean area since the Stone Age, the olive tree was revered both as a symbol of peace and wisdom, and as a dependable provider of cooking oil. The Franciscan friars brought it here from Spain by way of Mexico. From their mission gardens the tree spread across California as a beloved symbol of our pastoral past, be that real or imagined.
"This drought-tolerant, evergreen tree grows slowly to 25 to 30 feet high and as wide. It can live as long as 600 years. Foliage is silvery gray, trunk and branches dark gray. With age the trunk forms a buttress network of awe-inspiring gnarly shape. Those who want an instant historic garden can successfully transplant even old trees. The olive tree comes in both fruiting and fruitless varieties and can be shaped as a single or multi-trunk specimen."
Thanks, Pieter
E-mail Pieter: PISeve@earthlink.net
Photo Credit: OliveCoop.com
 Remember the Bear Stearns big shot who was blogging about movies and how tough his job was while a hedge fund he managed was going down the subprime drain?
Richard Marin was head of Bear's asset management business -- and not a fan of the new Kevin Costner movie. We say he "was" head of asset management, because he was bounced from that job Friday:
Reuters: "The investment bank Bear Stearns replaced the head of its asset management business today after two of the unit’s hedge funds almost collapsed after making bad bets on mortgage-related securities.
"The meltdown of the hedge funds embarrassed Bear Stearns.... The funds buckled on wrong-way bets tied to subprime loans, which are made to people with weak credit. Bear said that Jeffrey B. Lane, a longtime senior executive at Lehman Brothers Holdings Inc. and Neuberger Berman Inc., would succeed Richard A. Marin as chairman and chief executive of Bear Stearns Asset Management.
Was the blog a factor? It couldn't have helped Marin's cause. Then again, having a hedge fund explode doesn't help either.
Photo Credit: Reuters
 It's Mortgage Fraud Week Here at L.A. Land, and we have a wild one for you today. It involves possible obstruction of justice at a major home builder under investigation by the FBI.
From the Atlanta Journal-Constitution: "Atlanta-based Beazer Homes USA said it fired its chief accounting officer, Michael T. Rand, for attempting to destroy documents. The home builder, facing federal probes into its mortgage practices, disclosed the move in a filing with the Securities and Exchange Commission.
More: "'Michael T. Rand has been terminated for cause . . . due to violations of the company's ethics policy stemming from attempts to destroy documents in violation of the company's document retention policy,' Beazer said in the SEC filing."
Wall Street Reaction: "This raises red flags regarding the content of the documents in question, in our view," Michael Rehaut, an analyst at J.P. Morgan Securities.
Backstory: Beazer said it was "fully cooperating" with an FBI investigation that it steered North Carolina home buyers into mortgages they could not afford.
Comments? Thoughts?
Photo Credit: Reuters
 Good morning. That Dr. Housing Bubble sure does have an eye for a bargain -- he writes:
"Real Homes of Genius: Today we Salute you Compton. $279,900 for 768 Square Feet. This 768 square foot palace will wet the appetite of any hungry home buyer. Take a look at the gates. Doesn’t it remind you of the entrance of Windsor Castle? I’m glad we both had the same initial reaction."
"In addition, this place has some uncanny ability to squeeze gold out of turnips. This place has 3 bedrooms in 768 square feet. How they do this is like asking Oscar Mayer's how they make hot dogs, you probably don’t want to know."
Here's the news nugget, though: The house sold for $282,000 in April 2005, and $293,000 in January 2006. The Doctor: "Fascinating. So you are telling me we have a place in Southern California with 2 years of zero appreciation? Blasphemy! This goes against the sunshine tax laws and all things that make this world spin. But here is the real kicker. The Zillow Zestimate is $418,000! Bwahaha! Who are we to believe? Zillow, the current price, or our gut?"
Photo Credit: Dr. Housing Bubble
Real Estate Fraud Week continues here at L.A. Land. Tonight, an update on that alleged real estate investment scheme that has resulted in a big mess of foreclosures in Riverside and Temecula, and a bunch of lawsuits: The brokers who arranged the investments have agreed to forfeit their real estate licenses:
From the Press-Enterprise: "Stonewood Consulting Inc. and its broker, Hendrix Moreno Montecastro, will forfeit their real estate licenses rather than contest a wide range of violations filed against them by the California Department of Real Estate, according to an agreement filed with the department.... Among the accusations the department filed late last month against Stonewood and Montecastro was that they used inflated appraisals and took commissions ranging from $74,000 to $115,000 for each house they bought for investors."
Very large commissions, no?
Read the original post here.
To refresh: The alleged victims say the scheme preyed on older, middle-class investors who overpaid for more than 100 "investment properties" in Riverside and Temecula, believing the extra cash was being wisely invested on their behalf, only to see the cash disappear.
Click here to see a very elaborate website run by the alleged victims.
 As you probably know, Gentle Ben Bernanke (pictured) and his Fed friends left their key short-term rate unchanged today at 5.25%.
Long-term rates, and mortgage rates, continued to slip this week -- investors witnessing the carnage in the subprime market are paying more for stability, which drives rates down.
Inman news reports: "In Freddie Mac's survey, the 30-year fixed-rate mortgage dipped to an average 6.67% from 6.69% last week.... In Bankrate.com's survey, the average 30-year fixed mortgage rate this week in Los Angeles held steady at 6.79%.
Freddie Mac Timeline
6/14 6.74%
6/21 6.69%
6/28 6.67%
Comments? Insights?
Photo Credit: Reuters
 Everybody blogs, right? It sometimes seems that way: the head of the Bear Stearns unit that ran those suprime hedge funds into the ground? He was blogging while the hedge funds were gasping for air.
The New York Times found the blog, Whim of Iron, authored by Richard Marin, in which he talks about the stresses of trying to save those hedge funds:
"The blog was personal, he said, intended for his friends and family. It let him talk about movies, life on Wall Street and his efforts to lose weight. Still, the episode — and Mr. Marin’s blog — offer some insight into Bear’s response to the near collapse of the funds."
More: "On June 23, he posted an entry saying he had spent two weeks 'trying to defend Sparta against the Persian hordes of Wall Street.' ... 'Nothing like a good dog fight 24X7 for a few weeks to remind you why you chose the life you chose,' he wrote. 'The good news is that after two embattled weeks both I and my loyal staff are still standing to fight another day.' "
It sounds like Marin locked up the blog after he realized the N.Y. Times was going to write about it. It's now locked. But those people at the Times think fast: They captured some pages, so you can see what the blog looks like.
Comments? Thoughts?
Photo Credit: Wall Street Trading, by Reuters
 Oh, now we understand. This entire slowdown in home-buying, the collapse of the subprime lending industry, the surge in bankruptcies, it's our fault -- bloggers and journalists made this happen.
This, at least, is the thrust of an essay by Lawrence Yun, the senior economist for the National Assn. of Realtors. Read the whole thing here. Highlights:
"To a great extent, we can thank steady media coverage of the real estate market “correction” for unfounded consumer concerns.... But there’s no real correction where consumers are concerned. Yes, home price appreciation has slowed considerably, and nationally we’re expecting a price drop of 1% for 2007. But that drop comes at the tail end of a five-year spurt that increased home prices by 53%. We may have taken one small step back, but that’s after taking 53 steps forward."
More: "When today’s consumers look at real estate markets, they need to use the same analytical approach as investors in the stock market. Those buyers aren’t generally concerned about the volume of stock trades on a given day. Why should they be? They’re focused on price trends. And by that measure, now is a great time for consumers to be in the housing market: Prices have steadied, and inventories are healthy."
Yun replaced David Lereah, who was widely criticized -- ridiculed is more accurate -- on blogs for being a cheerleader for the housing bubble. This essay will earn Yun similar attention -- in fact, there's already at least one blog dedicated to yun-watching, www.lawrenceyunwatch.blogspot.com.
Comments? Thoughts? (Warning: They will be slow to post; L.A. Land is outside the TMZ.)
Thanks for the tip: The new-and-improved Blown Mortgage
Photo Credit: Reuters
 We've been writing for a while that the high end of L.A. real estate has been pretty strong. If this item in Curbed L.A. is accurate -- and they're usually on the money -- the high end market is, as they say on ESPN, en fuego. That is, On Fire.
Curbed L.A.: "'The Singleton House Is For Sale! The Singleton House Is For Sale!' writes an excited Curbed reader. And so it is. Listed at $19.955 million, the Richard Neutra-designed 1959 home sits on 5.2 acres in Bel Air. 'Two potential extra building pads on site," notes the listing. And there's a "long, imposing private drive.'"
More: "Unless we've lost our minds, which we might have, it appears that the home was put on the market in 2004 for $5.9 million. According to this article, back then it sold for $6 million. That's some damn fast appreciation."
Neutra in a Nutshell (Hey, I wasn't all that sure, so I went to Wikipedia): "Considered one of modernism's most important architects.... He was famous for the great attention he gave to defining the real needs of his clients, whether he was commissioned to build a simple house or a mansion.... His domestic architecture was a blend of Art, landscape and practical comfort.... The revival in the late '90s of mid-century modernism has given new cachet to his work, as it's become (along with Lautner and Schindler's) trophy property for wide variety of Los Angeles pop culture, arts and media figures."
Comments? Thoughts?
Photo Credit: Curbed L.A.
 Apologies in advance: Comments will be slow to post for the next 48 hours. Your blogger, in an attempt to complete one of the more treacherous legs of the Southern California Cultural Whiplash Tour, is headed south.
Ojai on Sunday, Legoland on Thursday, that my friends, is a high degree of difficulty on that tour.
Keep the comments coming. They will see the light of day.
Photo Credit: Wikimedia.org
 We've meant to ask your guidance for a while: which property search sites do you like, and why?
A blogger we rely on -- Manhattan Beach Confidential -- writes that he can't rely on Trulia.com for accurate property searches:
"At this hour, a Trulia search for SFRs in MB 90266 pulls up 36 entries. By contrast, a ZipRealty search pulls up 121... The Trulia results are not just skimpy, but several are simply wrong. For instance, try to find 7 Highland Ave. on a map. Oops, it's in Connecticut! ... In sum, Trulia is a disaster for someone trying to get a handle on the current RE market in Manhattan Beach."
So help us out here? Which sites work for you?
E-mail story tips to lalandblog@yahoo.com
 Good Morning. Mortgage fraud in California is surging, and we now rank second in the nation in fraud. So says a new report prepared for the Mortgage Bankers Assn.
"California’s reported fraud had been quite low in the past few years, and some industry experts have suggested that its problems were masked by high real estate appreciation. The recent slowdown in its housing market may explain California’s return to high ranking in this year’s report," says the report, prepared by the Mortgage Asset Research Institute.
The report notes a nationwide surge of 30% in fraud activity from 2005 to 2006, and contains this warning: "The current unsettled state of the subprime segment of the industry does not bode well for fraud in the coming year."
The report says California ranks second to Florida in fraud, according to an index that adjusts for the size of each state's mortgage industry. California has been climbing the fraud rankings -- it ranked 30th in 2002, 23rd in 2003, 19th in 2004, 8th in 2005, then 2nd in 2006.
Broken record department: Is there a prosecutor in California who is aggressively bringing fraud cases? We'd be happy to spotlight such a person, if such a person in fact exists.
Photo Credit: Reuters
 More housing news on a newsy day from Tom Petruno, who files early for LATimes.com and informs us of two developments worth noting:
Up the road in Calabasas: "One market rumor had the FBI raiding offices of Calabasas-based mortgage giant Countrywide Financial Corp. The company called the reports "unfounded," but its stock slid 2.6%."
More on the company run by Angelo Mozillo (pictured): "In an e-mailed statement the company said: 'Countrywide has become aware of reports today that federal investigators have raided one or more of our offices. We are unaware of any such activity taking place and at this time we believe these rumors to be unfounded.'"
And down the road in Newport Beach: "Bill Gross, the Newport Beach-based bond fund guru at PIMCO, cast more aspersions on the market for bonds backed by high-risk mortgages, likening them to hookers who lured credit-rating firms and investors with an attractive come-on."
More: "In a commentary on Pimco's website, he also reiterated his view that the financial woes of homeowners with sub-prime mortgages would further drag down the U.S. economy over the next year or so."
We encourage you to read the whole Gross commentary here -- Gross is one of our favorites, and we're always bragging about his writing. Bearish? Yes he is: "Mortgage payments are going up, up, and up…and so are delinquencies and defaults. ... Currently 7% of subprime loans are in default. The percentage will grow and grow like a weed in your backyard tomato patch. Now I, the curmudgeon of credit, am as sure of this as I am that the sun will set in the west. The uncertain part is by how much."
Comments? Certainly you have something to say about Countrywide.
Photo: Countrywide CEO Angelo Mozillo, by Reuters
 A few quick headlines from today worth noting:
Sales of new homes in May fell 1.6% from April's rate and came in below expectations, at an annual rate of 915,000 units. The pace of sales is running 15% behind year-ago levels.
The Case-Shiller Home Price Index -- which we consider the most accurate measure of the probable change in value of a given home -- showed a decline of 0.5% of home values in Los Angeles from March to April, and 2.6% for the year ending in April.
And maybe the biggest housing story of the day: "Standard & Poor's sees dramatic rise in Alt-A delinquencies." From Inman News: "Alt-A mortgage loans made in 2006 are going bad at more than four times the rate as similar loans made in 2004, analysts at Standard & Poor's said Tuesday." Alt-A loans are a notch above subprime; this is a new development, and troubling for the mortgage business.
Comments? Thoughts? Insights?
Photo Credit: Reuters
 At 2:27 pm, these were the six top headlines on CNBC.com. Notice a common theme?
--Stocks Finish Lower, Burdened By Housing, Subprime Worries
--Investors Brace for Ripples from Hedge Fund Fallout
--Bear Stearns Funds' Woes Triggered by Small Writedown: Gasparino
--Pimco's Gross: Subprime to Hit Main Street Harder than Wall Street
--New-Home Sales Fell 1.6% in May; Consumer Confidence Declines
--SEC Has Opened 12 Debt Securities-Related Investigations
 We'll warn you in advance, this one is big, messy and may not fit the legal definition of fraud. As the illustration at right indicates, law enforcement has been investigating it for months, and no one's been charged.
What are we talking about? An alleged scheme that preyed on older, middle-class investors who overpaid for more than 100 "investment properties" in Riverside and Temecula, believing the extra cash was being wisely invested on their behalf, only to see the cash disappear. Click here to see a very elaborate website run by the alleged victims.
Now houses are piling up in forelcosure and so are the lawsuits. Reporter Chris Bagley at the North County Times has been all over this story: "Nurses and other middle-class investors bought more than 100 Murrieta-area houses in 2004 and 2005 through Stonewood Consulting Inc., a Murrieta mortgage brokerage that the California Department of Real Estate is now seeking to bar from the industry."
More: "The first of those houses fell into the foreclosure process last fall, and the owners began filing lawsuits in January. Stonewood clients often paid far more for their houses than did buyers of comparable houses nearby and, according to numerous neighbors and real estate agents who followed the purchases, $50,000 to $120,000 more than the original asking prices -- a pattern that raised eyebrows in the slackening market."
Investors now allege Stonewood, and a bunch of other companies, courted them with religious come-ons, pressured them to sign incomplete loan applications that were later falsified, arranged for inflated appraisals, and then pocketed millions of dollars from excess mortgage payouts. An attorney for Stonewood calls those allegations "just plain untrue."
Law enforcement's take? The Riverside County district attorney's office has been investigating for months but says it's a complicated case.
Your thoughts? Comments?
Illustration Credit: Core Clients Against Fraud
 Good Morning. The big home builder Lennar reported this morning that it lost $244 million in the quarter ending May 30 -- that's $2.7 million a day by our math. Not good.
From Reuters: "As we look to our third quarter and the remainder of 2007, we continue to see weak, and perhaps deteriorating, market conditions," Stuart Miller, chief executive, said in a statement.
Thoughts? Comments?
Photo Credit: Reuters
Those of you who believe it's a bubble will want to clip and save this item, which comes courtesy of the Irving Housing Blog. As you can see, it's a map of the "Psychology of a Bubble":
"The above graph is an excellent depiction of the psychological stages of a market bubble. It is fairly easy to put time frames to each of these stages as displayed by our local housing market:
• Take off: 1998-1999
• First Sell Off: 2000
• Media Attention: 2001-2002
• Enthusiasm: 2003
• Greed: 2004-2005
• Delusion: 2006
• Denial: 2007
• Fear: 2008
• Capitulation: 2009-2010
• Despair: 2011-2013
• Return to the Mean: 2014
Obviously, the past is easier to document than the future, so we may reach future stages sooner or later than shown above, but we will reach them."
Where are we now? "Right now, we are in the denial stage. Prices have not dropped enough to cause real fear. Denial is apparent in polls like this one ... where 85% believe their home will rise in value during the next five years, and 63% believe a house is a good investment. That is serious denial."
What do we think? L.A. Land is in the Greenspan camp, which holds -- in a rather wimpy fashion -- that bubbles reveal themselves only by popping. That is, until it pops, you don't know for sure if it's a bubble.
And -- though it is true we have been accused many times of being a bad listener -- we haven't heard the distinct sound of a pop in L.A.
Your thoughts? Comments? Insights?
Thanks for the link: Patrick.net
Graphic: Hofstra economist Jean-Paul Rodrigue via Irvine Housing Blog
 Interesting piece in today's L.A.Times we meant to get to earlier, but the day got away from us. It's about the city of Paramount -- 15 miles southeast of downtown -- and its White Picket Fence Program.
The city, eager to replace chain-link fences, pays 75% of the cost when homeowners put in white picket fences (made of rust- and graffiti-resistant polyurethane).
Paramount resident Jose Luis Romero tells The Times: "'I've noticed a few more fences have gone up on the street since I got mine. I bought my home in 1994 for about $120,000. Now, I could get $400,000 for it, no problem,'"
More: "Paramount has spent $708,380 on the fences in the last decade, about $70,000 a year, city officials say. About 325 homes have been spruced up.
This strikes us as smart and inexpensive. We also like the sounds of this policy: The city creates "pocket parks" out of trash-strewn vacant lots. "The city entered into no-cost leasing agreements with the property owners to landscape their lots and accept liability while the land is in public domain, but the owners retain the right to sell at any time."
Thoughts? Comments?
Photo Credit: LATimes.com
 Asking prices in Greater L.A. held steady over the last week as inventory continued to pile up, according to Housing Tracker's analysis of MLS listings, which we monitor here every week. Housing Tracker shows the median asking price at $539,000 this week. Inventory lurched higher again, with an additional 735 homes listed, and now 42,059 are on the market.
Random fact: Since we started this blog two months ago, inventory has spiked by 6,500 houses, or 19%.
More on the numbers: The $539,000 median asking price represents a drop of 6.9% over the last year, and 0.2% over the last month. Inventory increased 5.3% in the last month and 19.3% over the last year.
Date Median Price Inventory
4/16 $545,000 35,489
4/23 $545,000 36,348
4/30 $545,000 37,338
5/07 $545,000 37,511
5/14 $545,000 38,297
5/21 $545,000 39,100
5/28 $540,000 39,941 (up 24.6% y/y)
6/4 $540,000 40,458 (up 23.3% y/y)
6/11 $540,000 40,766 (up 20.4% y/y)
6/18 $539,000 41,324 (up 18.7% y/y)
6/25 $539,000 42,059 (up 19.3% y/y)
Comments? Analysis? Let loose. E-mail story tips to lalandblog@yahoo.com.
Photo Credit: LATimes
 News item: Stocks rally as another weak housing report shows sales of existing homes fell to a four-year low in May.
First the housing numbers: From CNBC: "The National Assn. of Realtors said existing home sales in May fell slightly, by 0.3%, to 5.99 million units.... Inventories, however, rose by 5.0% to an 8.9-month supply, the highest since June 1992."
Why the stock market bounce? Two theories, as you will see they are mutually exclusive.
Theory one: The housing numbers were actually pretty good. Housing may be hitting bottom. "I think the numbers were essentially flat and that's good news," one analyst tells CNBC.com. "I think we're seeing a settling of the housing market, and this inventory will eventually clear."
Theory two: No, stocks are rallying because of a dip in bond yields. Bond yields, in turn, are falling because the housing market -- as evidenced by today's numbers -- continues to be so weak that the Fed can't really raise rates. "The data still show a lot of weakness so prices are slipping. The inventory levels number was up again, suggesting that probably there will be further (downward) price pressure," economist Gary Thayer tells Reuters. "It doesn't look as if there are any signs of a turnaround yet."
A Trend Worth Noting: Doubling up. Lawrence Yun, NAR senior economist, observes, “Household formation has slowed dramatically since late 2006, implying that many people are doubling-up – they’re adding roommates or moving in with parents."
Comments? Thoughts?
Photo Credit: Reuters
 It is Real Estate Fraud Week at L.A. Land -- send your stories to lalandblog@yahoo.com. This one came to us from a friend of a friend, and it involves a brazen scam we'll call "Let's Rent Out That Abandoned House."
Jessica bought a 1,400-square-foot Spanish fixer in Wilshire Vista in November and hasn't moved in because she's still working on architectural drawings and permits. Result: empty house, unmowed lawn.
Jessica, meantime is at her parent's in Rancho Mirage on a Saturday night, searching Craig's List for a new rental and sees a house for rent that she can afford -- coincidentally, it's in the same neighborhood as her fixer.
"It's two bedrooms, one bath, and then I see the address and it's MY ADDRESS!" she tells L.A. Land. "I'm totally shocked! I told my parents, 'I just saw my house on Craig's List! I click on it and it describes my house to a T.There's no contact information, but it says there's going to be an open house on Sunday!"
Continue reading below to find out what happened. Trust us, it's wild.
Read more It's Real Estate Fraud Week at L.A. Land: Chapter 2 -- Why Is My House on Craig's List? »
Good Morning. "Hope Builds in South L.A.," says the headline in this morning's L.A. Times, on a story that raises some questions for us:
--Is there a market for 150 new condos at $340,000 to $380,000 in this part of town? The developer calls it a "rough area" where "We have had drive-by shootings in the past."
--Are we the last to know that Wall Street backs church projects like this one? The story says Morgan Stanley has already invested $5 million through "New Markets Tax Credits" and is likely to put in $6 million more.
--Lastly, do people say "South Los Angeles" or do they still say "South Central"? We know, we know, the name has been officially changed. Sometimes name changes work -- nobody says "Rhodesia" or "Persia" anymore. Sometimes they don't.
Your thoughts?
Photo: The Watts Towers, via I Build the Tower
A  Common thread in a bunch of celebrity items we saw this weekend: In what's supposed to be a soft market, these celeb sellers are hoping to walk away with decent -- in some cases indecent -- profits.
(Disclaimer: it wasn't the strongest weekend for celebrity items -- lots of B-list and below stuff.)
Sitcom actress ("'Til Death") Joely Fisher has listed her Encino Hills home for $4.295 million, Ruth Ryon reports in the L.A. Times. She bought it two years ago for $3.5 million. If she gets her price, that's 23% appreciation.
Local TV anchorman David Ono has listed his house in Toluca Lake (pictured) for $3.5 million. He bought it in 2005 for $2.2 million. If he gets his price, that's 59% appreciation in two years.
RealEstalker says actor Stacy Keach is looking to sell his Calabasas place for $2.295 million, having purchased it for $1.69 million a year ago. That would be 36% in a year.
And Nico Santucci isn't close to being a celebrity -- he's a Las Vegas character and a friend of Michael Jackson's, as RealEstalker explains.-- but he thinks he can flip like a celebrity. He bought in Beverly Hills 11 months ago for $2.78 million and, after some redo magic, is trying to sell same for $4.5 million, RealEstalker reports. That would be a 62% pop.
Photo Credit: L.A. Times
 Good morning. When we say "there goes the neighborhood," we mean, there go prices -- higher, if the governor buys a place up in Ojai.
The L.A. Times reported this weekend that the Schwarzeneggers have been house-hunting in Ojai, the artsy enclave (see below) 90 miles north of L.A.
The Ventura County Star had the story Friday, but apparently it's been bouncing around for a while -- The Sacramaento Bee reported that the Schwarzeneggers have already bid on a $6-million house.
We've wanted to visit Ojai ever since moving to L.A. three years ago. We've decided today is the day, so take this as a notice that comments will be slow to post today.
"Artsy enclave?" We think we can do better than that, with your help. Give us a pithy description of Ojai that encompasses the whole green dream-organic-yoga-liberal-artsy-outdoorsy vibe.
Comments? Insights? Thoughts on living in Ojai?
Photo Credit: Ojai Valley Inn & Spa
 Good Morning. Freddie Mac had 30-year fixed rates averaging 6.69% last week, down slightly from the week before. Without further ado, our random roundup on rates:
Conrad De Aenlle writes in the New York Times: "No change in key interest rates is foreseen when the Fed meets on Thursday. The federal funds rate stands at 5.25%." The real news will be the Fed's statement, and what hints it gives about whether the Fed is leaning toward higher rates or lower rates.
We like Lou Barnes at Inman News for several reasons, one being his willingness to make predictions: "Everyone assumes the 10-year T-note will make a run through 5.25%, and mortgages will climb to 7%, but I don't think we will stay that high unless there is worse news on inflation or the global economy runs away from the central banks."
Caroline Baum at Bloomberg reasons that the recent rise in interest rates is not entirely a bad thing: For an individual presented with a 6.75% 30-year rate compared with 6.125% six months ago, the choice may be unpalatable. For the economy as a whole, however, it's a "positive development,'' says Jim Glassman, senior U.S. economist at JPMorgan Chase & Co. "It says the economy is getting better, driving the natural level of rates higher.''
We'll continue to monitor fallout from the Bear Stearns hedge fund mess. The New York Times' Gretchen Morgenson (sorry, no link, she's behind the pay wall) is predicting more trouble: "Do the math: Bear Stearns is paying $3.2 billion to shore up a fund that once had $10 billion in value, according to one investor. That’s 32 cents on the dollar. ... Values of securities higher up in the capital structure of these asset pools will likely take a hit. The bad performance is bleeding upward."
Your thoughts? E-mail story tips, and links to your favorite Fed watchers, to lalandblog@yahoo.com.
Photo: Fed Chairman Ben Bernanke, by Reuters
 Good morning. We noticed our in-box was filling up with fascinating (to us, at least) stories about real estate fraud. So we made an executive decision: This is Real Estate Fraud Week at L.A. Land.
First out of the box, a good one. Kate, the voice behind the quirky, Valley-based blog "May 5 & Everything After," writes about an agent who was determined to give her $40,000 cash back at closing -- even though she didn't want it!
Read the whole thing here, it's worth your time. Kate describes her conversation with an agent about a house in Sherman Oaks -- a house Kate feels is worth about $725,000.
"Me: You want me to write an offer for $800k, and take back about $40k, so I am giving the seller only $760k.
Agent: Yes! Yes!
Me: But I pay 5% commission on that higher sales price?
Agent: Well... yes but you are getting cash back for your closing costs and improvements...
Me: Again, I am paying 5% commission on $800k instead of $760k, and my property tax basis will be $800k instead of $760k?
Agent: Well, the property tax is only 1.25%
Me: Every year."
So what did Kate finally tell the agent? "Trust me, I know how it works: You get a bigger commission and you get to delay the inevitable price crash in your little pocket neighborhood. The sales data for the area will reflect artificially high prices so honest people with decent incomes and good credit scores who used to be able to afford the area no longer can. And what do I get? A $40k loan that I don't want or need. As a bonus, I will not only pay interest on this wholly unnecessary $40k loan but I will pay an additional $2,000 sales commission to you and my agent up front because that $40k is being treated like purchase money. But that's not all! No! I will also have to pay an additional $500 in property taxes every year I own the house because the records will reflect an artifically high purchase price."
You go, Kate.
Send us your stories of fraud, shady deals and unethical behavior. E-mail story tips to lalandblog@yahoo.com
Photo Credit: May 5 & Everything After
 Here's a new item we'll try to bring you from time to time: Celebrities in Foreclosure. Today, the pride of Thousand Oaks, the Olympic Golden Girl, Marion Jones.
As Lance Pugmire reports in today's L.A. Times, Marion Jones is down to her last $2,000, and last year a bank foreclosed on her $2.5 million cheateau-style "dream home" in Chapel Hill, N.C.
Jones -- who was seen driving a Porsche SUV last year -- says she's not sure where the money went. "Who knows? I wish I knew. Bills, attorney bills, a lot of different things to maintain the lifestyle."
Jones hires lawyers for a lot of different reasons. She sues people, they sue her. She is accused of cheating by allegedly using performance enhancing drugs, then she sues to defend her name.
Comments? Thoughts? E-mail tips about other celebrities in foreclosure to lalandblog@yahoo.com
Photo Credit: AP
 Weird news item: Tensions between labor unions and home builder Pulte Homes have escalated to the point where protesting workers in Arizona were hosed down at a home construction site, as this YouTube video documents.
From the AFL-CIO's news blog: "The construction workers were protesting at a Pulte Homes construction site in Florence, Ariz., last month demanding that the home builder and its subcontractors pay decent wages and provide safe working conditions.... The video shows a Pulte representative obviously frustrated at workers demonstrating at the site. After he leaves, a water truck, normally used to dampen the desert dust at construction sites, arrives and repeatedly douses workers with high-pressure water. As soon as the truck passes, it goes into reverse to soak workers again with water, as they try to avoid the painful spray."
Pulte tells CNBC's Realty Check blog the truck was driven by a subcontrator, the argument is really between the unions and subcontractors, and the AFL-CIO has been harassing Pulte.
Thanks for the link: CNBC's Realty Check
Photo Credit: AFLCIO.org
 Good Morning, and welcome to our Saturday morning reminder of one of the reasons it's great to live in L.A.: the world-beating climate that gives us such terrific trees.
From our tree-loving friend Pieter Severynen:
Maidenhair tree –- ginkgo biloba
"A living fossil dating back 270 million years, the ginkgo tree is a lonely leftover from dinosaur times. It might have become extinct had it not been preserved in small temple groves in China.
"The unique, fan-shaped leaves with a little notch in the middle make it look like a broadleaf tree, but its pollination and fruiting habits tell us that is actually a gymnosperm, related to conifers and cycads.
"Gawky in youth and slow to moderate in growth, the tree eventually becomes a beautiful pyramid, 35 to 70 feet tall and about half as wide. The leaves turn a stunning golden yellow in fall before dropping. Some Asian cuisines consider the fruit a delicacy, but here its rancid butter smell is thought to be malodorous enough that only grafted male trees should be planted.
"Urban ills, air pollution and insects don’t normally bother this amazing tree; it can get centuries old, and extracts of the leaves may have healthful or medicinal properties.
Thanks, Pieter. Do you have a favorite tree, flower, bush or shrub that merits notice? E-mail lalandblog@yahoo.com.
Contact Pieter: PlSeve@earthlink.net
Photo Credit: Imaginatorium.org
 On second thought, we're glad we promised to stay on top of the Bear Stearns hedge fund mess. Bear Stearns has now pledged to bail out one of the two nightmare hedge funds. The second one could be a bigger problem. There is more to this story.
In simplest terms, Bear's big bets on subprime mortgages -- with the backing of Wall Street bankers and insiders -- were idiotic. Lou Barnes at Inman News tonight: : "Insiders entered the market for mortgage trash in the fall of 2006 when several million civilians knew that you might as well juggle nitroglycerine."
This is a big story -- the developing crisis drove stocks down 185 points today. It is turning into the costliest -- and most humiliating -- hedge fund bailout in a decade.
From NYTimes.com: "Bear Stearns Companies, the investment bank, pledged up to $3.2 billion in loans yesterday to bail out one of its hedge funds that was collapsing because of bad bets on subprime mortgages."
How badly did Bear Stearns miscalculate the subprime fallout? “They didn’t realize this was Katrina,” an investor tells the Times. “They thought it was just another storm.”
Why is Bear Stearns bailing out out the fund? "Because it is worried about the damage to its reputation if it stuck investors and lenders with big losses."
More from Lou Barnes at Inman News: "It never occurred to me that the insiders didn't know what they were doing. They were so drunk on money and power that they didn't know their incompetence."
More (he's on a roll): "As of this morning, rumor has it that Bear is offering a self-rescue injection of $3.2 billion (double the initial capital), theoretically for pride. I believe that there is more going on. It is a serious accusation, but the Street for months has appeared to be in a conspiracy of silence, working to conceal the real value of $1.5 trillion in bad mortgage ideas created from 2004 to 2006, abetted by the glacial pace at S&P and Moody's to acknowledge their massive rating error. The Federal Reserve is just as silent, which may preserve calm for a time, but transparency is the only antidote to episodes like this one."
Powerful stuff. Your thoughts?
Photo: Bear Stearns headquarters in New York
Photo Credit: Wikipedia.org.
 While real estate agent (and blogger) Linda Slocum was whisking us to five open houses this morning, the temperature was rising to 101 degrees. It's hot in Canyon Country. Think about a pool.
Listings:
--19003 Fairweather St.: White's Canyon: 4-bedrooms, 2 baths, 1,144 SF, granite in kitchen, pretty lawn, converted garage, above-ground pool. $449,000.
--19535 Fairweather St. (pictured): 3-bedroom, 2-bath, 1,598 SF with in-ground pool, nice curb appeal on tree-lined street. Was in escrow, fell out. $525,000.
--17235 Crest Heights, off Sierra Highway: Mediterranean "showcase home," built in 2004 with beautiful mountain views, 5 bedrooms, 3 baths, huge kitchen, 3,660 SF. $785,000. Was listed early last year at $889,000 -- based on a neighborhood comp that proved misleading.
--17370 Sierra Sunrise: Same development as above, 5 bedrooms, 3 baths, 3,300 SF, $770,000.
--27102 Buckskin Lane: Golfer's delight in gated Robinson Ranch, 5 bedrooms, 6 baths, 4,681 SF Colonial-style with stadium kitchen, built in 2005 on large (24,398 SF) lot. $1.699 million.
Comments? Thoughts?
Photo Credit: www.danapope.com
Self-promotion alert: We played guest blogger today at CNBC's real estate blog, Diana Olick's Realty Check, and weighed in with some thoughts about the $800,000-and-higher market. You can read the whole thing through the above link, but here's our take: There's a weak spot in the middle of the high-end market, in the $1-million to $3-million range.
Thoughts? Comments?
 The temperature flirted with triple digits today in Santa Clarita, but the real estate market is nowhere near as warm. New homes are still being built, buyers still come north from the San Fernando Valley because their money buys more house here, but the buses of investors -- yes, they came up in buses two years ago to snap up new houses -- have stopped coming. If a home isn't new, it will often sit on the market.
"One home will go on the market and get an offer in two days. Another will sit for a year," real estate agent (and blogger) Linda Slocum told us. Traffic is down at open houses, and in some cases, prices are too: a 2 1/2-year-old five-bedroom Mediterranean (pictured) was listed a year ago at $889,000, a price based on a comparable sale in the neighborhood that proved misleading. The house didn't sell and is back on the market, this time priced at $785,000.
"Buyers are more cautious," Linda tells LA Land. "People aren't as anxious to buy as they were. And sellers are frustrated that they can't get the price that they want."
Multiple offers are down but not gone: "Even for lower-priced condos we still see some multiple bids -- not four or five bids, but two or three," Linda says.
One snag in the market: unrealistic pricing by sellers, who hold on to older comps and hope to get them. "Sellers are still thinking about what their neighbor's house sold for eight months ago," Linda says. "Sorry, it's not eight months ago."
Read more Micro-Market Snapshot: In Santa Clarita, Buyers Are "Cautious," "Confused" »
A note: We'll be out of pocket today, so comments will be slow to post. No, we are not playing golf. Though, the last time we played Robinson Ranch, we deposited half a dozen Titleists in the Santa Clarita Valley, and we will be looking for them today.
We'll be looking at new listings on Brokers' Caravan in Canyon Country in Santa Clarita. Look for items this afternoon.
Photo Credit: Robinson Ranch
Did something change on this post? Yes, eagle-eyed one. The previous version mentioned Stevinson Ranch, which is in Northern California.
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We often call the chairman of the Federal Reserve "Gentle Ben" Bernanke, because that has been his approach so far to the subprime mortgage crisis: No table-thumping, no finger-wagging, no jawboning -- just gentle prodding of lenders to be more careful in the future.
