Tuesday, June 12, 2012

HOA Extreme Overreach At Its Worst

By FRANK MICKADEIT COLUMNIST

Today's homeowners association horror story takes place in the happy village of Irvine. Style points here for capturing the quintessential master-planned community at its worst and great video of a confrontation in which an irate homeowner by sheer verbal barrage got an HOA crew to back off, at least temporarily, from ripping out his landscaping. (Video: ocregister.com/columns/frank)

View video

Linda Lester moved into the Vista Filare tract of Irvine in 1984. Al Schwartz, a retired chemist, moved in with Lester in 1990. Their front yard is subject to HOA landscaping regulations.

The feud between them and the HOA began in 2010 when Schwartz objected to the HOA's desire to trim their front yard tree. Schwartz placed a sign on the tree warning the trimmers not to touch it. The HOA came back and simply cut the tree down – and removed all of the landscaping Schwartz had planted in the HOA-maintained area.

Bill Westlund, the HOA president, told me the yard was "overgrown." Schwartz calls the way they left it "ugly" and says the HOA acted out of retaliation. (Go to the photos online and you can judge the before and after.)

Next, in 2011, the couple got a notice from the city that another tree was too close to their chimney. Westlund says he doesn't know who turned in the couple, but the couple blamed the HOA and called it selective enforcement and retaliation. Schwartz looked through his 268-home neighborhood and found 48 other violations of the same rule. All had to be trimmed or come down, further inflaming the situation.

Litigation out of the 2010 incident resulted in a settlement that called for a third landscaping plan, agreed to by both sides. Lester and Schwartz contend the HOA breached the deal because it didn't plant a vine where the pact called for one. Also, they say, part of the front yard was not included in the deal at all.

Schwartz, an amateur gardener with a vast knowledge of plants, again put in some of his own choosing. His tend to be more drought-tolerant and to flower prodigiously, but they also tend to be bushier than the rest of the tract's sculpted shrubbery.

Whether a "bushy" plant is also a nonconforming plant is in the eye of the beholder in Vista Filare because, as Westlund admits, the HOA has no list of approved plants. But Westlund contends any objective observer would see the couple's plants don't belong. "They're not in sync with the neighborhood," he told me. "(The plants) are all different. It's completely overgrown."

Schwartz had been told to expect crews to show up Monday morning and rip out his handiwork. He was particularly upset about the pending destruction of a fragrant night-blooming jessamine and a rare turquoise puya, which produces a single magnificent bloom every decade.

I arrived at 7 a.m. The property manager and a security guard arrived about 8:10, and the gardeners a few minutes later. In a showdown on the sidewalk, Schwartz verbally tore into the property manager, Bree Douglas, as the guard videoed.

An excerpt from a barrage that went almost nonstop: "You are about to destroy the value of our home again! You are liable! You are corporately liable and you are individually liable! Your Nuremberg Defense will not work! You are not just following orders! You are doing this willfully, maliciously, obnoxiously, purposefully, despite homeowner objection! ..."

They stood about 15 feet apart most of the time, but as Schwartz moved to close the gap, Douglas held up her hand and asked him to stop. Douglas kept her cool, trying to engage Lester in conversation. The gardeners stood by, shovels ready.

But Schwartz repeatedly interjected. If Douglas and Lester started talking quietly, Schwartz later indicated, the gardeners might feel safe to move in. "You don't know what you're doing, do you? he yelled at Douglas. "You're just here as a lap dog here to destroy!"

Finally, after about 25 minutes, the HOA retreated. Westlund told me later its lawyer will have to get involved.

Schwartz was ranting so loud and was so red in the face that, at one point, I expressed concern for his health. He looked at me like I was a rube.

"I'm from Brooklyn," he said. "You can't be nice to them. It doesn't work. We do this all the time. You have to meet them on their own terms."

Mickadeit writes Mon.-Fri. Contact him at 714-796-4994 or fmickadeit@ocregister.com

Sunday, June 10, 2012

Sen. Sanders: Calls for End of Wall Street as an 'insane gambling casino'

Vermont Sen. Bernie Sanders explains the conflicting interests between Wall Street banks and the New York Federal Reserve in charge of keeping them in check, as he and Sen. Barbara Boxer push for legislation barring bankers from sitting on the regional boards at the Federal Reserve. He sounds off on Jamie Dimon, the CEO of JPMorgan, before Dimon’s testimony to the Senate Banking Committee on June 13th.

Video Transcript Excerpts:

Sen. Sanders says, “Wall Street is still acting like an ‘insane gambling casino’ and no lessons were learned from the financial crisis of 2008 by the big banks.

Since Wall Street drove us into the worst financial crisis since the depression, they have learned nothing about what financial institutions in this country should be doing, which is investing in the productive economy. Helping small businesses grow. Creating real jobs. Helping us produce real goods and services.

The fed, among other things, is supposed to regulate financial institutions, have people there to protect the consumers of this country, yet you have the head of one of the largest banks (JP Morgan) as one of the regulators regulating himself. If this is not a conflict of interest, tell me what is? It’s like the fox guarding the hen house.”

Excerpts from Senator Sanders Press Release:

In late-May, Sen. Bernie Sanders introduced legislation to prohibit banking industry

executives from serving as directors of the 12 Federal Reserve regional banks. The recent multi-billion-dollar trading loss at JPMorgan Chase underscored the need to structurally reform the Federal Reserve System to make a more democratic institution responsive to the needs of ordinary Americans, not just Wall Street CEOs.

Sen. Barbara Boxer is an original co-sponsor of the measure to end conflicts of interest involving regulators and the financial institutions they regulate. "Allowing bank presidents to play such an important role at the Fed - the institution that regulates their industry - is a conflict of interest, plain and simple, and it must come to an end. This legislation will help restore the confidence of the American people that the Fed is a truly independent entity," Boxer told a Capitol news conference.

Under current law, two-thirds of the Federal Reserve Bank board members are directly appointed by the financial services industry and one-third of the Fed directors are employed in the financial services industry that the Fed is in charge of regulating.

Under the legislation, no one who works for or invests in a firm eligible to receive direct financial assistance from the Fed would be allowed to sit on the Fed's board of directors or be employed by the Fed.

(source: Full Court Press with Bill Press)

(source: MSNBC Dennis Ratigan Show)

(source: Office of Senator Bernard Sanders)

Most fire calls are not for blazes

Less than 2% of fire calls were in response to fire emergencies according to a grand jury report.

by Teri Sforza

Orange County Register

The image of the gallant firefighter rushing into a blazing building to rescue its terrified occupants is an endearing and enduring one — based more on lore than on current workloads, asserts a new report by the Orange County grand jury.

Once upon a time, fire departments were mainly in the business of putting out fires. But that was many decades ago: Less than 2 percent of the Orange County Fire Authority’s calls were to fire emergencies last year, the grand jury found.

Instead, the vast majority of calls — at least 70 percent — are for medical emergencies. In other O.C. fire departments, medical calls comprised 80 percent of the total.

“This transition from fire emergencies to medical emergencies has not generated major changes in the operation model for responding to these emergencies,” the grand jury wrote. “Each emergency call generally results in both fire trucks and ambulances being dispatched to the site of the emergency regardless of the type of emergency. The emergency response communities have discussed developing new models, but little change has been accomplished.”

It’s high time that changed, especially with municipal budgets in the tank, the grand jury said.

We at The Watchdog have heard from those who wonder if fire engines respond to medical calls because sick people might spontaneously combust; we have also heard jaundiced colleagues surmise that screaming fire trucks are responding to “dog hit by car.” These folks might have friends on the grand jury this year: Its report is cheekily titled “Emergency Medical Response in Orange County: Where did all the ‘fires’ go? Long time passing. Apologies to Pete Seeger.” (download pdf)

“Of the 180,000 incidents reported in Orange County in 2010 by the various fire departments, approximately 134,000 (76%) were for medical emergencies and 44,000 (24%) were for fires and ‘other,’” the grand jury wrote. “The Orange County Fire Authority alone reported less than two percent of their 88,227 responses were for ‘Fire/Explosion.’”

You can see all this in the chart to the right. Note the high, green EMS calls line (emergency medical services) ; the medium “other” line, which include “ruptures,” “hazmat,” “service calls,” “good intent,” “false alarms” and “natural disasters;” and the wee red “fire” line.

So why, in these times of tight budgets, do fire engines staffed with full crews show up when someone has a heart attack?

‘MINIMUM STAFFING’

Labor agreements with minimum staffing requirements, pretty much.

“Most fire departments now respond to traffic collisions, hazardous materials spills, remote rescues, medical aid calls and various other emergencies,” the grand jury wrote. “The typical emergency responses include a fire truck and an ambulance. The staffing of the OCFA emergency equipment is specified by their Memorandum of Understanding that states: 1. Each single-piece engine company shall have a minimum of three (3) personnel. 2. Each paramedic engine company shall have a minimum of four (4) personnel… Each truck company or urban search and rescue vehicle shall have a minimum of four (4) personnel… 3. Each paramedic van shall have a minimum of two (2) paramedic personnel.”

The grand jury interviewed fire chiefs scattered throughout the county — all of whom were relatively new, and all of whom had been challenged to look at their organizations and propose alternative ways to provide services.

“A problem that faces all of these agencies is financial,” the grand jury said. “The labor agreements adopted in good times have become financial burdens during the recent business downturn. These burdens not only affect the current but also future budgets. In most departments, the costs of the long-term benefits are not transparent to the boards of directors, city councils, and the public, consequently the challenge that the governing bodies have given to the new fire chiefs.”

This very issue was raised recently after it was revealed that overtime pay boosted the paychecks of more than 60 Costa Mesa firefighters and police officers by at least 40 percent over their base pay last year, and that a handful of them — all from its fire department — earned overtime that nearly doubled their base pay.

Councilman Jim Righeimer said the huge overtime bills were the firefighters’ fault, for refusing to adjust minimum staffing levels. The president of the firefighters association said it was the city council’s fault, for creating political chaos and failing to fill vacancies in the department.

This was also a big issue in Santa Ana, where city dissolved its fire department and contracted with OCFA for fire services. It will save between $8.7 million and $10 million per year — largely by revamping minimum staffing requirements. The number of firefighters on duty at any one time dropped from 63 to 48.

This sort of thing is possible due to the low percentage of fire emergencies, the grand jury wrote. And that’s thanks to “improved building codes, more alarm devices, fire suppression systems, stricter code enforcement, and perhaps greater public awareness,” it said.

SO WHAT NOW?

The grand jury wants OCFA and other fire departments to hire outside experts to cast cool, clinical eyes on fire operations. ”This re-evaluation should consider the strengths, weaknesses, opportunities and threats to the economics and operations of both the OCFA and city fire department’s emergency response models,” it said.

It would like those reports made public by July 31, 2013, thank you very much.

It also suggested that the departments should consider forming a unified Emergency Response Department that includes fire and medical response; separating the fire response from the medical response; and privatizing the emergency medical response. Agencies must respond, in writing, within 90 days.

We asked OCFA to weigh in, and spokesman Kris Concepcion told us this by email: “OCFA is in the process of reviewing the grand jury report and its recommendations. We will draft a response that will presented to our Board of Directors. We don’t yet have a tentative date for that presentation.”

Brandman University public administration professor Fred Smoller has long been advocating logical consolidation of municipal services, to save folks money.

“Amazing that only 2 percent of the calls are for actual fires,” he told us by email. “Of course, it is like the guy who plays right field: 99% of the time he just stands there watching the game. But during those key seconds when you need him to catch the fly ball, he better be there and know what he is doing.”

http://bit.ly/LvfKQs

Thursday, June 7, 2012

Fannie Mae's New CEO

FHFA's DeMarco Announces Timothy J. Mayopoulos as Fannie Mae CEO

Fannie Mae has elevated one of its own into the role of president and chief executive officer. The Fannie Mae board of directors announced the appointment of Timothy J. Mayopoulos to replace Michael J. Williams effective June 18. Williams had said last January he would be stepping down when a successor was picked.

Mayopoulos, who joined Fannie Mae three years ago, is currently executive vice president, chief administrative officer, and general counsel. He has managed key corporate functions including the business transformation program, human capital strategy, communications and marketing, government and industry relations, and the legal function. As CEO, Mayopoulos will focus on ensuring that the company manages its legacy issues effectively, while driving the company's contributions to a better housing finance system. Fannie Mae said the new CEO's promotion follows an extensive search involving internal and external candidates.

The outgoing president said, "We have successfully completed the first phase of conservatorship and I am proud of our employees and what we have accomplished together. I know that I am leaving Fannie Mae in very capable hands with Tim as CEO. As Fannie Mae transitions to the next phase of conservatorship, Tim will be a champion of our dedicated employees, continue the company's progress, and help to create a stronger housing finance system."

Prior to joining the government sponsored enterprise Mayopoulos, 53, was executive vice president and general counsel at Bank of America and previously served in senior management roles at Deutsche Bank, Credit Suisse First Boston, and Donaldson, Lufkin & Jenrette. He is a graduate of Cornell University and the New York University School of Law.

"I am honored with this extraordinary opportunity to lead Fannie Mae during this critical period," said Mayopoulos. "We have a responsibility to return value to taxpayers and to contribute our expertise and experience to building a more effective and stable housing finance system for the future. Our nation needs and deserves a better system to support sustainable homeownership. Delivering on our responsibilities is a team effort, and I will maintain a sharp focus on attracting, developing, and retaining terrific people at all levels of the company. Together, I am confident that we have what it takes to achieve our priorities."

Edward J. DeMarco, Acting Director of the Federal Housing Finance Agency (FHFA) which serves as conservator of Fannie Mae said he was pleased by the appointment. "Tim brings a breadth of knowledge and experience in housing finance and financial services that is vital at this important time for Fannie Mae and the nation's housing finance system. I look forward to working with him on the next phase of the conservatorship and the efforts to transition beyond." DeMarco also thanked Williams for his leadership at Fannie Mae.

(source: Mortgage News Daily)

Mortgage application: a borrower's guide

By Marcie Geffner • Bankrate.com

Highlights

When it asks for your two-year job history, it means two years. At least.
The section on monthly income can get kind of tricky. You might need help.
In the assets section, the lender wants to know if you have saved money.

A mortgage application serves a simple purpose: to help the lender decide whether to lend money to the borrower. But the industry standard Uniform Residential Loan Application, also known as Fannie Mae Form 1003, is more complicated than that straightforward intent might suggest.

This section-by-section summary should help you figure it out.

Section 1: Type of Mortgage and Terms of Loan. This section, which describes the loan program for which the borrower wants to apply, is "generally not something the consumer is going to be able to complete," explains Greg Cook, a loan consultant and first-time homebuyer specialist at Guild Mortgage Co. in Temecula, Calif. Instead, the loan officer will fill in the details.

Section 2: Property Information and Purpose of Loan. Most homebuying loan applicants haven't identified the property they want to purchase. That means parts of this section will be marked "to be determined," Cook explains. Borrowers will need to indicate who will own the property and how title will be held. They'll also have to disclose the source of their down payment (e.g., cash, gift, first-time homebuyer program).

Section 3: Borrower Information. This section asks for the borrower's and co-borrower's full names, birth dates, addresses, telephone numbers, Social Security numbers, marital status and other details. All of it, Cook says, should be "a no-brainer" for borrowers.

Section 4: Employment Information. This section enables the lender to contact the borrower's employer (or employers) to verify the length and terms of employment.
A two-year job history typically is a minimum requirement, according to Jay Dacey, a mortgage broker at Metropolitan Financial Mortgage Co. in Minneapolis. That means specificity is crucial. "If you get lazy and two years was really one year and 10 months, then all of a sudden the whole loan could be messed up," he warns.

Section 5: Monthly Income and Combined Housing Expense Information. The left side of this section is used to determine whether the borrower has the financial ability to repay the mortgage. Cook says this information often "requires some tweaking" because lenders calculate income differently than most borrowers perceive it.

Virtually all lenders require you to sign Internal Revenue Service Form 4506-T, which authorizes the lender to request a transcript of your tax returns.

One potential glitch for self-employed borrowers early in the year is that last year's earnings can't be used for loan qualification purposes until the lender can obtain verification of a current tax return from the IRS, Dacey explains. It takes four to six weeks for the IRS to process and verify a Form 4506-T.

The right side of this section discloses the so-called payment shock the borrower will experience as he or she transitions to new, often higher monthly housing costs.
"If someone has been living with Mom and Dad, paying zero rent, and is taking on a $1,500 payment and hasn't been able to save any money, that's a signal to the lender to look closer," Cook says. "If they're paying $1,200 in rent and the new house payment is $1,400 and they have a down payment and good credit scores, the lender is not so worried."

Section 6: Assets and Liabilities. Assets refer primarily to savings, checking, and retirement accounts and other investments. "If you have demonstrated an ability to save and it's your own money in the deal, it makes lenders feel better," Cook says.
Retirement savings typically aren't counted at 100 percent, Dacey explains, due to investment volatility and early withdrawal penalties and taxes. As a general rule, retirement savings are marked down to 60 percent or less, he says.

Liabilities can be listed from the borrower's credit report, Cook says. Alimony and child support payments also must be disclosed, so the lender can evaluate the borrower's financial obligations.

The separate Schedule of Real Estate Owned gives the lender a snapshot of the borrower's other properties, if any. This section is especially important for move-up buyers who intend to keep their current home as a rental.

Section 7: Details of Transaction. Cook says borrowers are "never going to fill out" this section because the details depend on the terms of the loan origination. Still, read it carefully.

Section 8: Declarations. This section is the last chance for borrowers to "own up," to use Cook's words, to any financial hiccups they've experienced such as a bankruptcy, foreclosure or lawsuit. "Tell your lender everything," he advises. "If it can be fixed, we can fix it up front. If it can't be fixed, there's no sense getting into escrow on a house you're never going to close on."

(source: Bankrate.com)

Mortgage Rates Tumble to Record Lows Five Weeks Straight

The 30-year mortgage loan rate fell to an average 3.75 percent on May 31st, according to Freddie Mac's recent Primary Mortgage Market Survey®, the lowest rate since long-term mortgages began in the 1950s. Regional rates vary between 3.70 and 3.75 with fees and points averaging 0.7 to 0.9.

(source: Freddie Mac)

Noteworthy, the 10-year U.S. Treasury bond rate hit a dramatic new record low on Thursday at an unprecedented 1.54 percent, sharply lower than 1.62 percent the day before, beating out the previous mark of 1.55 percent set in November 1945.

(source: U.S. Department of the Treasury)

Market watchers predict this is not just a temporary dip. Mortgage rates have been below four percent since December and had been steadily dropping. Projections are for these historic rates to remain low over the coming weeks due to several key economic factors.

So what is driving mortgage rates to such historic lows? Renewed uncertainty about how Europe will resolve its sovereign debt crisis is coupled with a volatile stock market. Investors are scrambling to put their money into secure instruments such as mortgage-backed securities.

Mortgage rates have dropped steadily tracking the yield on 10-year U.S. Treasury bonds, which are benchmarks for mortgages and corporate bonds. The bond yield fell for nine straight weeks through mid-May, the longest stretch since the late 1990s.

What does this mean for you, the borrower? Unprecedented low rates provide the ideal incentive for first time buyers to enter the housing market, current homeowners to refinance, or relocating families who need to purchase a new home. The window of opportunity is real and timely. Traditionally, summer months herald the peak move season of the year for families, since most schools are out of session and relocation is less disruptive for children.

~~ Linda Ivanov, author

Friday, June 1, 2012

HR 5823 introduced in US Congress to stop bulk foreclosure sales

Congressman Gary Miller (R-Brea) and several other congressional members have introduced legislation that calls for the Federal Housing Finance Agency (FHFA) to cease its plan to sell Fannie Mae-owned foreclosed homes in California to large investors. Cathy Haney, an Orange County real estate broker, provides a summary.

H.R. 5823, "Saving Taxpayers from Unnecessary GSE Bulk Sale Programs Act of 2012," prevents the FHFA from implementing an initiative to sell Fannie Mae real estate-owned (REO) properties in California to institutional investors.

The bill was introduced as many industry veterans and realtors believe that the bulk REO sales program would negatively impact the housing market in California and potentially further delay a housing recovery.

The California Association of Realtors believes bulk REO sales are not necessary in California because housing inventory is extremely low and demand is high.

According to C.A.R. data, sales of bank-owned homes are closing in an average of less than 60 days – and often above the list price – without government intervention.

The FHFA pilot program calls for the sale of more than 400 Fannie Mae-owned foreclosed units in Los Angeles and Riverside counties to institutional investors.

According to an early summary of the units in Los Angeles and Riverside, approximately 80 percent of the properties were already rented. Interested investors were invited to prequalify for the program beginning back in February of this year.

(source: OC Register)

Read more>> Open Congress; US Government Printing Office