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
 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.
Read more Pasadena story: From flipper to accused fraud ringleader »
 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
 (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.
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.
Read more 'Condoblue' explains: Why I'm walking away »
 Good morning. A reader passed this along, and I'll do the same. Give it some thought. Thanks.
"Scott Kleinman of Sotheby's International Realty and the Pasadena-Foothills Assn. of Realtors was diagnosed with Chronic Lymphocytic Leukemia five years ago. Since then, he has undergone three cycles of chemotherapy at City of Hope and has participated in an experimental drug protocol. The chemotherapy has been ineffective, and his condition is critical. Scott is now in need of a bone marrow transplant, and so far there are no matches in the bone marrow registry.
"Registering requires only swabbing the inside of your mouth. Donating marrow is now typically done by removing stem cells from the blood, not the hip. You will not be asked to donate marrow unless you are a match for someone whose life depends on your marrow."
For more information, call PFAR at (626) 795-2455, or go to Scott's website.
 Seeking widsom from the front lines of the foreclosure crisis, we paid a visit today to the Big Kahuna himself -- big wave surfer and foreclosure sales specialist Leo Nordine. His take on the market: it's bad. Really bad.
We began by asking his assessment of the current market in relation to the last big downturn. "Armageddon," he said. "This one's worse, especially in the Inland Empire."
What's different? In some cases, he said, "Banks and institutional lenders are just giving up. They're just renting out some houses (instead of trying to sell them). That didn't happen before."
Are foreclosed homes selling at all? "Any place where there were first-time buyers is dead. South LA is dead. Anywhere prices are under $400,000 is really, really hard to sell right now."
He predicts prices will fall 65% in some areas of the Inland Empire, and sees the market hitting bottom in 2009. "There's one buyer, maybe, for every 20 houses for sale in Riverside," he said.
"We're not gonna bottom out until 2009 -- because they were doing so many crappy loans in 2006 -- even until March of '07. It'll be a while before those loans start defaulting. I hope I'm wrong. But I'm not wrong."
In a declining market, it makes sense to get a house on the market as soon as possible. For that reason, banks often speed the foreclosure process by paying defaulting homeowners cash to vacate the house -- "cash for keys." The going rate is $1,500, but in a sign of how quickly the market is deteriorating, some lenders are now paying up to $6,000, he said.
Banks and lenders are finally realizing how weak the market is, and slashing prices. "Just in the last month, they finally woke up -- we're getting $50,000 price reductions all over the map."
How bad will it get? "The banks will start selling houses in bulk -- very quietly, they'll sell off, say $20 million worth of loans. That always happens at the bottom. I arranged a couple of those deals (in the last down cycle), and my clients made a ton of money."
Thoughts? Comments? Email story tips to lalandblog@yahoo.com.
Photo Credit: Malibur Surfing Assn.
Good morning, John David Booty, you too are on the all-name team. The LATimes profiles DataQuick chief analyst John Karevoll, calling him "the housing market's Mr. Objective."
Highlights:
--Karevoll believes predictions about the housing market are pointless right now: "The kinds of loans that have been made in the last five years, especially the popular interest-only mortgages, 'don't have enough history to predict we're going to sail past this or that the sky will fall -- or anywhere in between,' Karevoll says. 'No one knows.'
--He lives in a house in Running Springs in the San Bernardino Mountains purchased out of foreclosure in 1991.
--He's not a big fan of blogs: "Karevoll tries to ignore the blogosphere, saying, 'Good questions get raised there, but I don't think they get answered.' In any case, he adds, 'predictions of imminent doom started in 2001. If you listened then, you were out a bucket of money.'"
Thoughts? Comments? Email story tips to lalandblog@yahoo.com.
 Good morning. Even in a sinking housing market, Cable TV still loves house-flippers. But as Meg James reports in today's L.A. Times, market realities might force these shows to take a turn to the dark side.
"The question is: How much will producers and networks have to shift to keep current with the changing circumstances of the real estate market?" said advertising exec David Scardino. "A lot of these shows are uplifting and feel good, some people get burned but not too badly. But are those stories going to get darker? How much real reality will they let in?"
Carlos Ortiz, exec producer of "Flip That House": "When people lose money, we are going to show them losing money," Ortiz said. "We're not going to spin everything so there are rainbows and bunnies at the end of every show."
Robert Sharenow of cable network A&E predicts programs such as "Flip This House" would endure beyond "this hiccup in the market."
Sharenow: "The show is kind of recession-proof. If there are more foreclosures, that will make flipping opportunities more readily available. Even if the profit margins are slimmer, there will still be plenty of challenges and pressure and drama. It turns the heat up on the drama when times are tougher."
Your thoughts? Insights? E-mail story tips to lalandblog@yahoo.com.
 What's more jarring: newly built Martha Stewart-branded houses in the Inland Empire, or in Lancaster? KB Homes is the builder in both places, and says the Stewart-branded homes are selling well.
The LA Times article linked above mentions two Martha homes that sold in Perris, one at $440,000, the other at $372,000.
But in an indication of just how soft the new home market is in Riverside County, KB Homes tells the LA Times it has cut the price even on some the Martha houses in "Olive Grove." "'The Riverside-San Bernardino market is quite soft right now,' said KB Home CEO Jeffrey Mezger said. In response, KB Home has cut prices on certain Olive Grove models since January. ... Still, Mezger added, the idea behind the homes 'generates traffic and buyers that benefit us in our other communities as well.'"
It sounds like KB Homes is happy with the way the Martha homes are selling, and in this market, anything that sells is a small success story. But we can't imagine KB homes went into business with Martha in hopes of "generating traffic" -- it did this deal to make money. The company lost $174 million in the second quarter.
Photo Credit: AP
 This one's complicated, but I'll just spell it out: remember Casey Serin, the 24-year-old no-money-down investor from Sacramento who bought eight houses, lost them all to foreclosure, then became famous for blogging about it? Then, tail between his legs and marriage on the rocks, he shut down his blog? OK, here's the new part: According to CNET, he has reopened the blog, says he has fled to Australia, and is threatening to sue all the bloggers who pick on him for not paying his bills.
Declan McCullagh of CNET News.com: "A failed real estate speculator who created a popular website touting his exploits has begun threatening to sue his critics and claims to be in hiding in Australia. ... The latest kerfuffle arose last week after Serin blogged about a contract with a mysterious "independent publisher" for self-help material about how to deal with foreclosure. To the so-called haterz, this represented an enticing challenge, which they met by outing the publisher as self-styled Internet marketer Marty Stewart and even unearthing a confidential business plan for iamfacingforeclosure.com and related audio files that Stewart left on a website that was not password-protected. The files have since been mirrored elsewhere."
Follow the Haterz' Hunt For Casey at Exurban Nation.
Photo Credit: CNET News.com
 I'm never sure whether the story of Casey Serin is funny, sad, or important, or some combination of all three, but here is the latest: Casey, the 24-year-old speculator profiled on ABC's Nightline, and dubbed America's Most Hated Blogger because of his blog about going broke while trying to 8 flip houses with no money down, has closed down his blog.
CNET said Casey's iamfacingforclosure.com "rocketed him to internet stardom." Sounds like his long-suffering wife forced him to shut down the blog: "Casey Serin, the 24-year-old would-be real estate mogul who was reduced to sharing a diminutive West Sacramento, Calif., townhouse with his sister-in-law, announced on Thursday that iamfacingforeclosure.com is dead and "will never return."
More: "Since the blog's launch in September, Serin's regular posts about his refusal to get a job or pay off up to $420,000 that he owes creditors have garnered him an enthusiastic--if unrelentingly critical--audience known as "haterz."
Missed the whole Casey craze? What made it interesting, in part, was the "haterz." And they are alive and well at Exurban Nation, where Casey lives on, whether he likes it or not.
Comments? Thoughts?
Photo Credit: CNET
 If you haven't been following the saga of Atlanta mortgage originator Kal Wayman, this item is not for you. For those playing catch-up, we criticized Kal's over-the-top, sex-drenched TV ad as inappropriate to the serious business of mortgages, and then dozens of Kal's friends and clients rushed to his defense in the "comments" section of this blog.
Which raised a number of questions -- Why did we publish so many promotional comments about Kal? Didn't all those supportive comments add up to free advertising? And how do we know Kal himself wasn't sitting there at a keyboard, sending one love letter after another to himself?
That's what one regular reader asked tonight: "Have you checked the IP addresses of all the Kal fanboys to be sure it isn't Kal himself spamming the blog?"
I'll deal with that issue first, and then the others. First of all, comments are moderated, in the sense that I try to keep profanity and personal attacks off the blog. So I had seen all the comments. Sheepishly, I went back and checked IP addresses of all 48 comments, and found only two that were suspicious -- different names, same IP address. So it appears Kal really does have that many friends.
Read more Inside The Blog: So Everybody Loves Kal; Why is That News? »
Reuters today has more from Countrywide Financial CEO Angelo Mozilo on what went wrong and who's to blame for the mortgage mess:
"Perched on an arm chair on a ballroom stage, Mozilo, who made $387 million in pay and stock options over the past five years, disavowed blame for the collapse, pleasing his audience of fellow mortgage-banking industry leaders and foot soldiers.
"'You've got to be careful here about blaming ourselves too much," the deeply tanned and sharply dressed chairman of Countrywide told the Mortgage Bankers Association this week. The real culprits, he argued, are the Federal Reserve with its series of interest rate hikes, crooked real estate speculators, falling housing prices and regulators' attacks on interest-only and other risky subprime loans.
More from AM: "Regulation ... is better for the crooks because only the good people have to comply," Mozilo said to a reporter before taking the stage. "So I'm against it. In fact, it's regulators, in my opinion, that have caused part of the problem when they attacked the pay option and interest-only loans."
Your thoughts? Comments?
Photo Credit: Reuters
Morning pop quiz: How does a 38-year-old grade-school dropout with no money and no training make $80 million in five years?
Easy: Go into the mortgage business. If you're as cunning as Daniel Sadek, within five years you'll have a $4 million mansion, a fleet of Ferraris, Lamborghinis, and Porches, and you can still wear flip-flops and a t-shirt to work.
Highlights of this fascinating OC Register profile of Sadek and his TV informercial-fueled lending business, Quick Loan Funding:
--It's easier to become a mortgage lender in California than it is to become a barber.
--State supervision is effectively non-existent.
--Margins in the business can be huge -- Quick Loan's were 29 percent.
--Easy come, easy go: "I've sold all my cars to keep the company going," Sadek told the Register. "Every property I own is mortgaged to the max."
Comments? Insights? Always welcome.
Photo Credit: Orange County Register
You have to hand it to Countrywide CEO Angelo Mozilo -- in an industry that's as buttoned down as Brooks Brothers, he says what everybody else is thinking. He did it twice today -- first telling Congress and the regulators to back off the mortgage industry, then talking about the buyers' strike he sees in real estate.
First, why he opposes new regulations on the mortgage industry: "It's better for the crooks," Mozilo told Reuters. "It's only the good people who have to comply. Regulation, in my opinion, has caused part of the problem. When they attacked the pay option and interest-only loans, that really put a dent in a lot of the product, which is perfectly good product."
Then, the market as Angelo sees it: "The reason why people can't sell their houses is there are no buyers around," Mozilo said. "And there are no buyers around because they can't get the financing."
Things I learned about "short sales" (definition below) today from Palmdale Realtor Donna Oehler:
--Most Realtors Don't Like Them: Most Realtors don't like to handle short sales, and there are good reasons: The commission, at 5%, is lower, the transaction is complicated, there is more paperwork, and months of hard work can be erased in a heartbeat if the bank or lender vetoes the sale.
--No Fire Sales, Yet: Even in the Antelope Valley, there are no fire sale prices on short sales. Buyers are often investors looking to remodel and resell quickly. And banks are not yet accepting real lowball offers.
--Mystery Sellers: Banks are playing their cards close to the vest. How much are they willing to lose on a house to avoid foreclosure? That's the key question, and banks usually won't say up front.
--No Staging, Please: If you're the listing agent, you don't want the "short sale" house to look perfect. If it looks too good, the bank is likely to believe the house is worth more and veto the short sale. "Dead grass helps," Donna told me. That is, it helps convince the bank that they ought to accept a "short sale" offer.
Read on for InmanWiki's definition of a short sale (What's an InmanWiki? Read on for that too).
Read more The Art of the Deal: The Short Sale »
David Ferrell's breezy piece in Los Angeles magazine about successfull real estate agents kicks off with some sobering stuff: "Most agents are doomed to fail ... historically, in five years' time, more than half of those who enter the business give up and seek a steadier line of work." So Ferrell profiles three winners:
Marna Brennan of Long Beach (pictured). Assertive and confident, "the White Tornado," as she's known, drives a gold Cadillac and closed 106 transactions worth $82 million in the past two years. Did someone say "slowdown"? Not to Marna. www.marnabrennan.com.
Brock Harris of Silver Lake: Catchphrase: "Glassel Park's the new Echo Park." Uniform: Black Prius, untucked dress shirt. Player: at 31, has already bought nearly a dozen investment properties in LA. www.silverlakerealestate.com.
Mike Deasy, co-owner of deasy/penner&partners of Beverly Hills: Self-described "architectural groupie," studied architecture at Yale, specializes in houses with pedigrees. Keywords: Kappe, Killingsworth, Neutra, Schinder, etc. www.deasypenner.com.
Blogger's Note: I have already broken blog etiquette by splitting the 225K Couple thread into separate posts, but thought this merited a new thread (Backstory: Couple Makes 225K, But Can't See Buying a House in LA); Now, The Couple speaks, again...
"Hello all. I am the "wife" of the $225K couple - I read through everyone's responses with a lot of interest and will try to respond to as many points as possible. First off, neither of us is driving a BMW and we're not eating out every night of the week either. We (I) do have student loans to pay - wouldn't be making my income without them so I guess it comes with the territory.
In any case, I won't run down all of our finances because our point was never that we couldn't afford the payment on a $650-$750K house, it was the fact that these prices are inflated (unreasonably inflated, in our estimation, inflated at least 25%). And inflated prices DO have an increased possibility of deflating (if the "bubble bursts," so to speak).
Read the entire response from 225K Couple by clicking below.
Read more '225K Couple' Responds: 'It's A Bubble, People!' »
HANCOCK PARK -- Realtor Carole Gillie of Prudential California Realty doesn't mess around. If she's going to sell your house, one of the first things she'll do is walk through it briskly -- and I mean fast -- ripping paper and leaving scraps of it on your furniture. The scraps all say the same thing: REMOVE.
"Most people have way too much furniture," she explains. "I take a lot of things out." Why? So buyers don't have to use their imagination to see what the house might look like. "Generally, most people don't have a great imagination," she says.
She's anti-clutter, anti-tchotchke, believes in fresh flowers (but not too many), a splash of color and keeping the lights on. Carole is not a "stager" -- she's a Realtor who stages homes and sells them. Fast. She once sold a home, from listing to closing, in four days.
For more on her philosophy of staging a house -- why fresh flowers go on the right-hand side of the front entrance, why iced tea is important, and the most important thing to do to the bathroom, read on below.
Read more Staging By Carole: Two Dozen Roses, Iced Tea, and Remove, Remove, Remove. »
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"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.