Neighbors flip out over "Flipping Out" star's behavior

Los Angeles real estate reality television star Jeff Lewis, who is known for his cocksure, confrontational style, has made the neighbors of one of his projects very afraid, they said, and they want a restraining order to keep him at bay. Lewis is the star of "Flipping Out," a Bravo channel show that follows him as he buys, renovates and resells homes.

Terence Beesley and Ashley Jensen, who live next door to a house Lewis is improving on Valley Oak Drive in Los Feliz, said in a lawsuit filed Wednesday that the developer constructed a deck at the house that encroached on their property. When they became aware of the encroachment earlier this year, Lewis offered them $10,000 to buy an easement, but their real estate experts concluded the easement was worth $100,000, they said.

Lewis countered during an unexpected nighttime visit to their house with an offer of $30,000 and threatened to make their lives miserable by casting them in a negative light in front of 3 million television viewers, they said in their complaint. Named in the suit is Lewis' partner, Ryan Brown, who the neighbors described as Lewis' "supposedly relatively even-keeled" foil, and Lewis' company, Vicious Investments. It accuses the pair of trespassing, property damage and assault, and demands that the encroaching deck be removed. No financial damages were specified.

According to Beesley and Jensen, Lewis' actions at their home are in keeping with his TV persona. Their suit says the show "involves documenting the rude, outrageous, boorish, offensive, mean-spirited bullying by Jeff Lewis of anyone or anything in his way."

Mr. Lewis, if you care to comment we will post your response! (As long as it's not rude, outrageous, boorish, offensive, mean-spirited or bullying.) OK, maybe bullying.

--Roger Vincent

L.A. Land profile: Kal Wayman, "Not your mother's mortgage broker"

Who remembers Kal Wayman from the early days of this blog? Uncle Billy, you remember Kal, right? That's him pictured, partying recently at the Playboy Mansion in Holmby Hills.

Here's the back story: in May 2007, I wrote a snarky post about Kal, an Atlanta mortgage broker and party promoter who came to my attention because he used a babes-in-bikinis video on YouTube to promote his mortgage business.

After I climbed on my high horse and labeled the video "disturbing," a surprising thing happened: Dozens of Kal's mortgage clients came on the blog to comment in his defense. I learned that he had lots of clients who were remarkably loyal to him. This little chapter taught me a valuable lesson -- often a blog post is just the beginning of the story; the readers write the ending.

But that's the back story. The reason for this post is that Kal was in L.A. recently to party with Hef at the Mansion. No, I didn't go. But I did have lunch with him and one of his L.A. clients, and was so impressed with his marketing skills, and enthusiasm, that I thought he might spice up a dull day on the blog (falling prices, no sign of a bottom, falling prices, no sign of a bottom, etc). So I invited Kal to share his ideas and insights on marketing and building a mortgage business that targets younger borrowers.

Here's a teaser, with more below: Kal says one of his most successful marketing efforts was very old-fashioned: he printed 20,000 matchbooks advertising his business, and delivered them to the hottest bars and nightclubs in Atlanta. The word of mouth continued long after the matches were gone, he says. "As a matter of fact, I was at SkyBar in Los Angeles last year," Kal told me, "and two girls screamed out, 'Hey Kal, where's your matches??' "

CNBC's Jim Cramer calls the bottom for housing*

CNBC's Jim Cramer has accurately called some of the major turning points in the ongoing housing bust, and he is making another call today. He sees the bottom for housing. But here's the asterisk: *Cramer said he expects a bottom by the third quarter of 2009.

In explaining his call, Cramer cobbles together a familiar litany of signs the housing market is stabilizing: an increase in sales spurred by falling prices; a slowdown in home building; federal efforts to help troubled borrowers; and population growth that will spur household creation and demand for housing.

More, from CNBC's article on why Cramer sees signs of a turnaround:

"The horror shows that are the California, Florida and Arizona real estate markets are no longer bleeding into other areas. These heavy losses are being cordoned off, Cramer said, and different markets are evening out.

Lastly, even these horrible areas –- Bradenton in Florida and the Central Valley in California –- are bottoming. The first to fall is usually the first to return, Cramer said. He’s predicting that Miami and the Inland Empire are next."

I've complimented Cramer's calls before, and that usually encourages a number of you to cite chapter and verse of big things he's messed up. Before you jump on him -- and you're welcome to -- I'll say for the record: He was the loudest voice last summer saying, correctly, that the Bernanke Fed was behind the curve in fighting the credit crisis (this was the classic "Bernanke has no idea!" meltdown on live television). He was also one of the first talking heads to articulate just how bad the housing bust was getting in places like the Inland Empire.

-- Peter Viles
Your thoughts? Comments? E-mail story tips to Peter Viles.

Nouriel Roubini: Dr. Doom's moment in the spotlight

Call him what you want: Dr. Doom, a permabear, a perpetual naysayer, a peddler of pessimism. It doesn't matter, because economist Nouriel Roubini predicted what is happening now. He is vindicated, and is the subject of this long and generally sympathetic profile in the New York Times Sunday Magazine:

"... Roubini, a respected but formerly obscure academic, has become a major figure in the public debate about the economy: the seer who saw it coming. ... and is making others see it too: the mainstream economic establishment appears to be moving closer, however fitfully, to his way of seeing things."

Roubini's assessment of what's next, if you haven't read it lately: The crisis in mortgage debt is only the first wave of a rolling financial disaster that will ultimately expose weakness and bad underwriting in almost every kind of debt in America: commercial real estate loans, corporate debt, credit-card debt, student-loan debt, etc.

Like I said, Dr. Doom.

My favorite takeaway from the article: Almost without exception, economists as a group are too optimistic; large groups of economists are almost always unable to see recessions coming:

"A recent study looked at 'consensus forecasts' (the predictions of large groups of economists) that were made in advance of 60 different national recessions that hit around the world in the ’90s: in 97 percent of the cases, the study found, the economists failed to predict the coming contraction a year in advance. On those rare occasions when economists did successfully predict recessions, they significantly underestimated the severity of the downturns. Worse, many of the economists failed to anticipate recessions that occurred as soon as two months later.

-- Peter Viles
Thoughts? Comments? Read Roubini's blog here.

Meet today's buyer: A saver steps up

It's always interesting to hear from recent buyers, and this e-mail caught my eye. Because the buyer is still in escrow, he asked that I refer to him as "West L.A. Buyer." Here's his story:

"I just wanted to give you and the L.A. Land blog my experience with my recent house purchase. My bid was recently accepted and I am in escrow right now.

"To give you a little background on the kind of buyer I am, I saved roughly $120,000 over the past seven years. I saved it by driving a motorcycle and living in a one-bedroom apartment I sometimes shared. I got out of debt the first year and stayed out of debt, putting all my money into fairly conservative investments. Using that, together with some money from my parents and my fiancee, we were able to put down around 35 percent down on a $385,000 purchase.

"I did wait as I saw the market going up a few years ago and I think now is a good time to buy. Let me caution, though, that the market out there is very mixed. I feel like I got a good deal on my place, but in many of my bids the seller was unwilling to negotiate much lower than their listing price. 

"I'll give you an example.  I put in a bid on a condo in West LA that was small -- only 800 feet, a one bedroom unit with a loft.  I was attracted to the building because it had many amenities, gym, pool, etc.  I noticed that other units recently sold for approximately $385,000 to $410,000. So I began the bidding process at $385,000. The seller was listing this unit for $499,000. They countered back at $495,000. Of course I stopped the bidding process and moved on.

"I give you this example because I think the places available now are a mixed picture. I found some sellers responsive to a bidding process and willing to negotiate around prices that are the current market value. I also found many sellers, though, that still wanted very high prices and were not willing to negotiate.

"For other buyers I would say move on if you find the seller non-responsive, as there are many sellers who are willing to negotiate."

Thanks, West L.A. Buyer, and good luck.

-- Peter Viles

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Bloomberg News

Sean O'Toole on the "five Ds" of foreclosure

Sean O'Toole, the founder of ForeclosureRadar, has been helpful to this blog for over a year now, and always provides solid insight on real estate trends, so it is good to see him receive some nice ink in today's L.A. Times.

Highlights of Peter Hong's profile of O'Toole:
--In normal real estate markets, O'Toole believes foreclosures are caused by what he calls "the five Ds": divorce, death, drugs, disease and denial.
--His website, ForeclosureRadar.com, lists every default, auction and foreclosure in California. The cost is $50 per month.
--He sees the foreclosure crisis as a failure of "personal responsibility" -- on the part of home borrowers, policymakers and business leaders.
--During the housing boom, he invested in foreclosed homes, buying and selling 152 homes.  He's no longer buying, and believes the market for foreclosed homes has become a "speculator's market."
--He does not invest in stocks and is an avid water-skier.

Good stuff, Peter.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com

Pasadena story: From flipper to accused fraud ringleader

In the 2004 photo at right, an Ameriquest account executive named Jeanetta Standefor makes her pitch to appear on a cutting-edge cable TV show: She's talking about the quick money she's going to make remodeling a Pasadena condo and reselling it for a quick profit. Out with the Formica, in with the granite counters. She's a flipper!

Fast forward four years to today's newspaper: "The FBI arrested the president of a Pasadena company Wednesday, a day after a federal grand jury indicted her on fraud charges, accusing her of operating a real estate investment scam. The 11-count indictment, handed up in Los Angeles, charges Jeanetta M. Standefor of Altadena with wire fraud, mail fraud and money laundering."

Same woman? From flipper to accused fraud ringleader?  A parable for our times? I asked FBI agent Linda English, who spent Wednesday in federal court with Standefor and took a look at the photo above. "It is the same woman," she told me. I put in two phone calls to Standefor's lawyer, and haven't heard back.

The fraud charges against Standefor have nothing to do with flipping. She's accused of running a Ponzi scheme in which she allegedly convinced 600 people to invest $18 million dollars in what was described as a "foreclosure reinstatement" program. Investors allegedly believe they would make returns of up to 50% in 30 to 45 days by investing in a program that helped distressed homeowners refinance their mortgages and avoid foreclosure. The government alleges there was no such program at all, and that Standefor simply pocketed some of the cash -- and spent $1.9 million on cars, a fancy wedding and honeymoon, home renovations and other personal expenses.

Big giant hat tip: Geek Seek.
Photo Credit: L.A. Times.
Those who want to read the entire, original profile of the aspiring flipper, click below, the whole thing is there.                        

Goodbye to an L.A. real estate legend

It is the end of an era here at the Los Angeles Times -- Ruth Ryon, creator and author of the "Hot Property" column about celebrity real estate, has filed her final column. Though she is, as she reliably reported in her final column, "only '39'," she is taking a buyout and moving on to other projects.

Ruthie, as she is known around here, pretty much invented the celebrity real estate genre. Her columns were newsy, witty, cheerful and full of appreciation for fine houses -- like the Lautner-designed beach house in Malibu pictured here.

Even for L.A.'s fabulous people, it was a big deal to be featured in Ruth's column. During the O.J. Simpson trial, the contents of Nicole Brown Simpson's safe deposit box were entered into evidence. The world learned that her box of treasured possessions included an old newspaper clipping -- a Ruth Ryon Hot Property column that told of Simpson's purchase of a Laguna Beach home.

She wrote the column for 24 years -- that's more than a thousand columns. "I loved my job and could have continued for ages," she writes in her final column. "I am, after all, only '39' -- but I saw the real benefit of The Times' latest buyout: a chance to do something new."

Thanks, Ruth, and good luck. We'll miss you.

Photo Credit: Michael McCreary

Update: Meet today's homebuyers. Seriously.

(Updates to include a third buyer. They are coming out of the woodwork, folks.)

No, this is not an April Fool's item. A reader asked who, exactly, is buying houses in today's market? According to DataQuick, 3,468 homes changed hands in L.A. County last month -- that's roughly 120 buyers a day. Meet three of them:

Milla writes, "I just closed on a house in Highland Park, high up in the hills in a safe neighborhood, a foreclosed property that I got an amazing deal on..."

She continues, "I've gotten so tired of people (criticizing) the housing market, which, in my estimation as someone who was just out there, is not that bad. I mean, it's bad and all, but it's not THAT bad, certainly not as bad as people make it seem. And the idea of two markets -- high and low -- is very real. I went in as a first-time homebuyer, low-income, under the Cal-HFA and Los Angeles Housing Department programs for people like me. These programs are real, very good and allow people the opportunity to buy in L.A. proper, so the idea that housing is so out of reach unless you make six figures is total b.s. I did it with a modest income, a small down payment and very good credit. And I bought a detached, single-family home, a 3/1, on a big lot with a great view for well under half a mill."

Another buyer speaks -- this from Mommy, in the comment section: "Just wanted to say that my husband and I finally made the leap -- we are in escrow on a repo in Long Beach, 90808.  Sales price is $429,900 -- others in that neighborhood (Lakewood Village) are from mid-500s to $900k (though much larger and better updated).  We're putting down 10%, and will be financing at 6%.  We're buying because we took a giant hit on our taxes this year not owning a home, and the mortgage payment will be pretty close to what we pay for rent."

From a third buyer, Perks: "My wife and I closed at the end of February on our new house in the San Fernando Valley.  We purchased our bank-owned fixer for $375k, a comfy $225k less than the house sold for 18 months earlier and after many months sitting on the market.  After a month of sweat, equity and an extra $20k in cosmetics work, the house looks spectacular and we're almost ready to move in.  With six-figure incomes and excellent FICO scores, we could have easily qualified for a bigger house and a bigger mortgage, but I know better than to be strapped to a house I have to scrape to afford while it continues to lose value.  In our case, our house payment is less than our current rent, and we're in a bigger place with a bigger yard in a nicer neighborhood than where we have been renting."

So there you have it -- real buyers. Yes, Virginia, there is a housing market.

Your thoughts? Comments? Do me one favor: don't write in demanding more details on the above transactions. These people have opened themselves up to all manner of criticism and second-guessing, which it seems to me is above and beyond the call of duty. E-mail story tips to peter.viles@latimes.com.
Photo Credit: The view from Milla's new deck, from millatimes.com.

'Condoblue' explains: Why I'm walking away

An update this morning from Condoblue. For those of you just joining us, Condoblue is the poster who plans to walk away from a mortage and move into a new home -- even if it means foreclosure. Reaction here was split on whether Blue's decision was a smart business move, or a sign of poor personal character. Condoblue read your comments and responds this morning:

"As the original poster, I'd like to add some facts to the story since there have been so many assumptions made about my situation. Apparently, it hit quite a nerve, judging from the torrent of postings.

"I did not get House #1 with a liar loan; it was fully documented. I could have put money down but chose to hold on to my cash. As it turns out, the value has dropped so much, it would have just been money down the drain anyway. I never planned to flip the place or make a quick buck (although I don't see anything wrong with making money). I just figured I'd sell or refinance it before the ARM readjusted. At the time I was looking, it was one of the cheapest condos I could find in a decent area.

"I don't have a grudge against big companies (hell, I work for one) or feel like I'm 'sticking it to the man.' Like many posters have said, it's just business.

I have a good income, credit, and savings, so am qualified to buy House #2 using my savings as a down payment. I have adequate income to meet the lenders' debt ratios to cover both homes, and then some. Servicing the debt is not an issue. Ironically, House #2 is a short sale.

When I applied for the loan on House #2, I expected the lender to question the upside-down status of House #1 (they can Zillow as well as I can), but they approved the loan with no questions or issues. I was surprised that they didn't even ask how much the new ARM payment on House #1 would be, but was told that they don't take that into consideration. Huh?

As for Big Lender on House #1, I called their loan department to see if I could refinance the mortgages and was told they don't refi homes with negative equity. I asked the loan officer if they have any programs available for people in my situation. He said he didn't know of anything, but that they did have loan counseling people available, but you have to fill out a questionnaire first before they'll talk to you. So I called another 800 number to get the questionnaire and requested it via their automated voice system. That was 2 weeks ago; no questionnaire (not that I have a hardship anyway). Later, buried on Big Lender's website, I saw where they supposedly contact borrowers 4 months before their loan reset, which would be early February. We'll see.

In terms of selling House #1, this is a cookie cutter condo in a town full of them, so it's easy to figure out its market value (zilch) and average days on market (eternity). There are plenty of short sales right here in the neighborhood, and they are not moving.

Finally, I realize my credit score will take a hit, but remember that I don't need to rent since I own House #2. I have stable long-term employment, decent car, and no debt so speak of. So what if my car insurance goes up a bit. Incidentally, the Federal tax-exempt status on mortgage debt forgiveness is only temporary, so if you are considering walking away from your equity-less home, better call your CPA and lawyer to find out the rules and start making plans..."

Thanks, Blue. Your thoughts? Comments? Be respectful, and please don't expect Condoblue to explain every intricate financial detail of these transactions. There's a lot of information here.
Read below for Condoblue's first post.