The real estate blog.

If you read the headlines this year, you might think the housing Grinch stole Christmas this year. Did he?

Black Friday sales came out stronger than expected and November retail sales far exceeded expectations, yet today’s business stories pointed out weakness in the retail sector this holiday.

I enjoyed the holidays this year and for the sake of market research and helping out an old friend I joined the ranks of retail workers, part-time, for the first time in over a decade.

What did I see this year? Business as usual for the most part. Shoppers were looking for deals, but when supply ran low, they bought what was available. The spirit of Christmas trumps the economy I suppose. People of limited means waited till the last minute, but shopped nonetheless.
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President Bush gave struggling homeowners a gift on the 20th when he signed the Mortgage Forgiveness Debt Relief Act into law.

The act will remove tax liability from homeowners that complete short sales or foreclosures. Under current law, forgiven debt is treated as income and taxed accordingly. This is true unless the debtor can show they are financially insolvent.

Replacing the revenue earned from these types of taxes is an exclusion on 2nd homes that fall into the current primary residence exemption.

I see the new law as a mixed bag of sorts. It’s a lot like white elephant gift swapping during the holiday time where good gifts are mixed with gag gifts and someone ends up with the short end of the stick. Struggling homeowners are encouraged to get rid of
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The Salt Lake Tribune reported today that Utah’s foreclosure rate for November increased over last year by 7.2%.

Foreclosure filings in Utah rose 7.2 percent in November, compared with the same month one year ago, reversing a trend of declining foreclosures in the state, a new report shows.

The data for this story came from RealtyTrac, a primary source for this sort of information. RealtyTrac’s press release led with the title “Foreclosure Activity Decreases by 10% in November.”

Sadly, the fact is foreclosure activity in the United States increased 68% year over year. Only seven states in the country saw a decrease. Utah moved up to #17 per capita in the foreclosure statistics.

It’s been said over and over that Utah’s strong economy will keep home
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November saw a slowdown in job growth for Utah where a trend is now developing. Job growth in the state has slowed since August of this year, when the subprime mortgage mess blew up on Wall Street and banks and lenders started hoarding cash.

Utah’s homebuilders are slowing down, but commercial builders, including government projects, are increasing their payrolls.

Builders along the Wasatch Front took out 382 permits for the construction of new homes in November, down from 1,048 in November 2006 and the lowest total since 1990.

Construction industry employment is up 8.7 percent over last year, with commercial construction more than compensating for a downturn in residential construction, Knold said.

Financial activities employment - a category that includes mortgage and title company personnel, and real estate brokerage employees - is up 5.2 percent over last year.
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It was announced today the Federal Reserve Board will change a number of rules when it comes to policies and procedures made by lending institutions.

After reading through the proposed changes, I find myself disappointed, for the Fed has missed the target. Most of the new rules should be directed at mortgage brokers and lender compliance officers. The remainder of changes are already law, or will require significant restructuring of the broker system.

Let’s take a look at the key changes and see how they figure into my assessment.

Since the subprime meltdown began, both Fannie Mae and Freddie Mac have changed their debt to income ratio requirements to factor in the higher payment. FHA already had this policy in effect. What this means is if the introductory
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Disclaimer: My intended audience for this article is Realtors/real estate agents who blog. Please don’t be offended if you read this and are not in this group.

It’s been a year and a half since I started blogging about real estate and the promise of Web 2.0 revealed itself to agents across the nation. It was also about the same time symptoms of the housing downturn presented themselves and Bubble bloggers gained large audiences.

For a while real estate professionals, myself included, denied things would be as bad as the housing bears made them out to be. The test of time has spoken and the bears have been proven correct. Due to a number of circumstances, faith in the U.S. credit markets have been shaken and lenders are very cautious about originating new loans and the risks associated with such lending.
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More details emerged today about the K. C. Tebbs real estate related ponzi scheme. As you may recall, it was reported that Tebbs is being sued by jilted investors for failing to deliver on high promised returns.

Tebbs is not yet facing criminal charges, but details revealed today by KSL show Tebbs falsified real estate documents to help pull off his schemes. Over 100 people have lost money for real estate investments through Tebbs.

Like dozens of others, Merkley’s cash was supposed to buy residential lots in booming areas of the Salt Lake Valley. He thought his investment was safe when he got deeds of trust for the properties.

But when Merkley tried to verify the deeds, his heart sank. We found out why when we took two of his deeds to the
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It’s been a busy week for the courts system as another real estate fraud indictment was handed out, this time to Wayne Reed Ogden. Unlike some of the other fraudsters profiled on this site who were first timers, Ogden has a history of this sort of thing.

In the 90’s Ogden made headlines for bilking investors out of $7 million dollars in a real estate investment scheme. He was convicted of the crime in 1998 and paroled in 2000. Most of his victims were friends and neighbors of the former Eagle Scout.

In 2002, Ogden solicited investment funds to buy a property in Colorado called Kiowa. The property was purchased as planned, but Ogden continued to solicit investors. The Deseret News reports -

By October 2002, Ogden allegedly had convinced enough investors with
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The FHA reform bill that passed the House of Representatives in September has been approved by the Senate. However, the Senate’s version of this legislation differs significantly from House Resolution 1852.

Key components of the FHA reform bill allow homeowners in subprime loans to refinance through the FHA. Lower down payments and risk based mortgage insurance are also part of the plan. The legislation will also make it easier to become an FHA lender.

Perhaps the most important part of the bill is an increase of loan limits to match the conforming limit at $417,000 for higher priced parts of the country. This is where the challenge lays. The next step is for the Senate and the House to present a version for President Bush to sign into law, but the loan limit differ significantly.
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Brad Kitchen, accused ringleader of the Provo Riverbottoms fraud scam, is no stranger to the Utah County jail. As I did further research on Kitchen, I found his trouble with the law is no infrequent affair.

Kitchen was arrested (bottom photo) and charged for his complicity with the mortgage scam on February 28th of this year. He was charged with Communications Fraud, Conspiracy and Theft. Kitchen left the jail in slightly over 24 hours.

Prior to that, Kitchen was arrested (middle photo) in 2003 for Assault and was out of jail in 52 minutes according to the Sheriff’s records.

Other records show Brad Kitchen was convicted of Unlawful Sexual Conduct with a minor in December of 2002. Those charges were filed on May 1st, 2002. Kitchen entered a plea in abeyance later that month for a Zoning Violation.
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