Paper Money - Paper Tales

Monday, November 27, 2006

Home Listing Details: "Grubby, Cramped and Dirty!"

Things must be getting seriously out of whack in the formerly hot UK housing bubble, so much so that it's driven this real estate agent to dropping all niceties and calling a spade a spade... although, with some really odd wordplay. Read the following article from UPI:


GLASTONBURY, England, Nov. 25 (UPI) -- A British real estate agent, in a new twist, is describing homes for sale in newspaper ads as "grubby, cramped and dirty," or "suitable for a midget."

Julian Bending of Somerset told The Independent he was fed up with accolades heaped upon properties that were undeserved at best and downright misleading at worst.

He decided to take a blunt approach to selling houses. In one ad, the details read, "Dear God, it's difficult to imagine a more disgusting house than this."

Bending told the Telegraph that he has found a following among people who are impressed with his stark honesty.

"If you get called up by an estate agent and they tell you somewhere is lovely and perfect for you and it's not, they have no trust in you," he said. "People thank us and say it's exactly how you said, thanks for not wasting our time, while sellers are also grateful they don't have to bother with people who aren't interested."

Friday, November 24, 2006

Shisty Mortgage Broker Cheats "Captain Dumbass"!

Here's a tale from Denver Post proving that even "Captain Dumbass" is not immune from mortgage fraud.


Barbara Mattern called Altus Real Estate as soon as she heard the radio ad touting no mortgage payments for a year.

The "Freedom Loan" sounded too good to be true. For Mattern, who later lost her Morrison home to foreclosure, it was.

Mattern didn't qualify for the offer, so she took a loan with a low interest rate and monthly payments to refinance her home. Months later, she realized that the monthly payment to cover principal and interest was three times what she had expected.

"I wish I had never signed those loan papers," she said.

She's not the only one.

The Denver/Boulder Better Business Bureau has received 20 complaints about Altus during the past three years, more than any other mortgage company in Colorado. Five involve allegations that Altus brokers lied or misled them about loan terms.

Altus owner Ferren Rajput said in a statement that 15 of the complaints have been resolved. He added that the BBB complaints are a tiny fraction of the loans Altus handled in the past three years.

All loan terms are disclosed to customers prior to closing, Rajput said.

"The vast majority of Altus customers have been very satisfied," he said.

Rajput, 42, pleaded guilty last month to failure to pay $1.1 million in employment taxes from Altus Financial Inc., a predecessor to Altus Real Estate that went bankrupt in 2004. A judge told him jail time is likely.

Mortgage brokers play a key role in the American dream of homeownership. They connect borrowers with banks in more than two-thirds of mortgage transactions.

They can earn thousands of dollars more on some loans than on others. Lenders, for example, pay brokers based on a loan's profit margin.

Yet, deceptive practices by some brokers are helping to push homeowners into foreclosure, experts say.

"It's a serious problem. People are getting into loans they can't afford," said Colorado Attorney General John Suthers. "That puts them at a higher risk of foreclosure."

The state's foreclosure rate has led the nation for eight consecutive months, according to RealtyTrac, a California company that tracks foreclosures. One of every 327 Colorado homes is in the foreclosure process.

Some brokers take advantage of consumers with misleading advertising and sales tactics, luring them into expensive loans.

A typical pitch involves describing a loan with a rock-bottom interest rate as "fixed" or with a "fixed payment." But rather than a 30-year fixed-interest loan, it's an adjustable-rate mortgage with a one-month introductory rate and a minimum-payment option that builds up debt that can crush a homeowner.

It's buyer beware. Borrowers who fail to carefully read and understand their loan documents before signing have little legal recourse.

"The payment shock that comes with many of these option-ARMs ... is already leading to high foreclosures, and that rate is only going to go up," said Debbie Goldstein, executive vice president of the Center for Responsible Lending in Durham, N.C.

Registration soon mandatory

Colorado will soon take its first step toward regulating mortgage brokers. They must register through the state Division of Real Estate and pass criminal background checks as of Jan. 1. More than 1,100 brokers have either been approved or are awaiting a background
Mortgage Problems?
Have you obtained a mortgage, through a broker, that subjected you to higher payments than you expected when you signed the papers? Has that forced you into foreclosure or put you at immediate risk of foreclosure? If so, please contact Greg Griffin at The Denver Post, 303-954-1241 or

Brokers with convictions for crimes involving fraud, theft or deceit in the past five years will be barred from the business, as will those who have lost licenses in other states for those reasons.

The new law doesn't go far enough, some say. Unlike real-estate brokers and appraisers, mortgage brokers still won't need to be licensed. That means the state will not require training and cannot investigate and discipline rogue brokers.

Arizona, North Carolina and Oregon are states that require education, three years of experience and an exam before licensing. Prior to its new law, Colorado was one of just two states - Alaska is the other - that didn't regulate mortgage brokers at all.

Critics will be pushing for licensing legislation at the statehouse next year.

"You should have to take a test," said Chris Streiff, director of the Denver- based Society of Mortgage, Appraisal, Real Estate and Title Professionals. "You've got somebody's largest financial investment in your hands. You ought to know what you're doing."

The big opponent of licensing is the Colorado Mortgage Lenders Association, which says additional regulation will hurt the industry and drive up consumers' costs. The group advocates more enforcement.

But despite a rising number of complaints, there's been little enforcement of existing laws that protect consumers from unscrupulous brokers in Colorado.

Suthers' office has yet to prosecute such a case. The office recently began investigating a handful of mortgage companies for deceptive marketing. Suthers would not say if Altus is among them.

Altus has never been charged with deceptive advertising or illegal sales tactics.

However, some of its brokers have run afoul of the law, either before or after working at Altus companies.

Thomas and Janel Skinner, who worked for Altus Financial from 2001 to 2003, went to jail last year after pleading guilty to falsifying documents and defrauding lenders in 2000 and 2001, pocketing $274,800. The activities occurred before they worked for Altus.

A federal grand jury indicted former Altus Financial broker Torrence James in August in an alleged $2.1 million fraud ring. James has pleaded not guilty. The alleged mortgage fraud occurred after he left Altus.

It's unclear what effect Colorado's new mortgage-broker law will have on Altus' operations.

Mortgage companies are not regulated, just brokers. Though his tax charge could disqualify him from brokering loans, state officials said, it would not keep Rajput from owning a mortgage brokerage.

If any current Altus brokers have fraud convictions, they would be barred from originating loans under the new law.

"To the best of Altus' knowledge, no mortgage brokers affiliated with Altus have any felony criminal record," wrote Sean Paris, an attorney for Rajput, in an e-mail in response to The Denver Post.

Talked into a different loan

Mitch Hyder cringes as he looks through the loan-refinancing documents he signed in December 2005.

There, on one document, is the 7.46 percent interest rate. Another document spells out details of his option ARM, an adjustable-rate mortgage with a variety of payment options.

His mortgage brokerage: Altus Real Estate. Hyder called Altus after hearing a radio spot offering no payments for 12 months. His wife, Reva, had quit work after they adopted a daughter, and they needed help adjusting to one income.

Hyder said the broker quickly talked him into a different loan, with a 2.9 percent interest rate for five years. The broker never told him it was an option ARM or that the low numbers were for a payment that would cause his loan debt to grow up to 125 percent of the original balance, Hyder said.

He admits he didn't read the closing documents carefully, relying instead on what the broker told him.

"I now call myself Capt. Dumbass," said Hyder, 43, a radio sports announcer who calls games for the University of Denver Pioneers basketball team.

Hyder's $244,000 loan and an accompanying $48,800 equity line of credit were through lender Washington Mutual. Altus collected $11,100 in fees, $7,800 from Washington Mutual and $3,300 from Hyder.

"We're making the minimum payment and losing all the equity in our home," Hyder said. "It's going to be a very expensive lesson."

The Hyders are trying to determine what's next. They hope Reva doesn't have to take a job, but they don't want to sell the house at a loss or, worse, lose it to foreclosure.

Barbara Mattern's experience was similar. The former Morrison resident said she was told by an Altus broker that the monthly payment on her $556,0000 loan would be less than $1,000. But when her first mortgage-payment stub arrived in mid-2005, the principal-and-interest payment was about $3,000, she said.

Mattern, 58, walked away from the home she loved. The loan was just one factor in her foreclosure. Others included a divorce, loss of her business, bankruptcy and the purchase and loss of yet another house - in Lakewood.

Now she's living with a relative in Nebraska, and her belongings are in storage. "I don't know what I'm going to do," she said. "I'm just kind of lost right now."

In a written statement, Rajput said this about the Mattern and Hyder cases:

"In both of these instances, full disclosure was made both verbally, and in writing, through the closing documents. Further, each also had three days after closing, ... in which time they could cancel their transaction without penalty. In each of these cases, the customer expressed a need to increase monthly cash flow. In each case that objective was met."

More disclosure on risky ARMs

Deceptive lending practices have been gaining the attention of regulators and lawmakers nationwide.

Federal regulators recently issued stricter guidelines directing banks to disclose more to customers about risky adjustable-rate loans. Banks were instructed to use the highest possible interest rate to qualify borrowers.

The Federal Trade Commission has sued 21 mortgage companies in recent years for unfair practices. An affiliate of Citigroup Inc. paid $215 million in 2002 to settle claims in the largest case.

Last year, the FTC secured a $128,300 judgment against Colorado Springs mortgage broker Phillip Ranney for advertising no-cost, low-interest loans that weren't delivered.

Altus owner Rajput said his company's ads - which have run prominently in The Denver Post and Rocky Mountain News business sections and on radio stations - comply with the federal Truth in Lending Act.

The company's ads catch the eye with offers such as 12 months without payments, no closing costs, or both. A recent Altus print ad touted a 4.6 percent rate on a 40-year fixed mortgage. In fine print, Altus discloses it is an "equivalent bi-weekly rate," which accelerates the borrower's repayment of the loan.

Another Altus newspaper ad quotes a $685 monthly payment on a $350,000 loan. It's unclear what kind of loan it is or what interest rate it carries.

Altus isn't the only Denver-area mortgage company running such advertising. Many brokers advertise interest rates as low as 1 percent for five years. Typically those are one-month rates on loans that could put borrowers deeper in debt later on.

Altus spent a quarter of its revenue on marketing in 2004, according to documents from Rajput's bankruptcy. Rajput has said Altus' sales will be about $4 million this year.

The ads work. The phones in Altus' office in the Inverness business park in Douglas County ring constantly, according to former brokers.

"The sole purpose of these ads is to get people to pick up the phone and call," said Bill McClearn Jr., who worked for Altus Financial in 2003.

McClearn said he wasn't pressured by Rajput or Altus managers to put people in loans they couldn't afford.

The temptation to do so is there for any broker. Loans with higher rates or prepayment penalties can boost the lender-paid broker commission by one to three percentage points, or up to $9,000 on a $300,000 loan.

A former Altus broker said Altus tried to put customers into high-commission loans. "I was asked by a manager 'Why aren't you selling the option-ARM?"' said the former broker, who asked not to be named.

Rajput said brokers using "shady tactics" will be fired. In a September interview, he said that fewer than one third of Altus' loans are option-ARMs.

"When offering an option ARM mortgage ... it is Altus' company policy that the loan officer discusses all the pros and cons. ... We understand that this loan is not appropriate for all customers," he said. Altus brokers "present other mortgage programs so the customer can make an intelligent decision."

In all cases, Rajput added, customers sign legally binding documents explaining their loans.

That pinpoints a challenge for law enforcement. The 18th Judicial District Attorney's office has received at least 18 complaints about Altus.

Those customers "all signed the closing documents," said Mason Finks, the district's director of fraud prevention. "That's a hard thing to overcome."

Tuesday, November 21, 2006

"Molly"... an Incentive?

Apparently, home sellers are beginning to completely lose their marbles down in Florida. It seems that one seller is even offering their dog Molly as an incentive to the buyer of their $2.9 million single family!!

Read this article from First Coast News 25:


JACKSONVILLE, FL -- It's a buyer's market and sellers are offering creative incentives to reel potential homeowners in.

Take a ride through almost any neighborhood in Jacksonville and you'll see "For Sale" signs on plenty of streets.

"Sellers are now becoming a little more creative, so they're trying to lure buyers in," said local realtor Anita Vining.

One home in Neptune Beach is going for $2.8 million. The seller is throwing in a $200,000 boat if the asking price is paid. Another house in San Marco valued at $300,000 is offering a brand new Hyundai to whoever pays their asking price.

Incentives are the name of the buying game and one of the most interesting out there right now is "Molly" the dog, going for $2.9 million. The owner's four bedroom, four bath house on the river comes with "Molly."

"You'll see some sellers paying closing costs. Other sellers are offering to pay points on their mortgage to buy their rates down," said Vining.

Real estate experts on the First Coast believe buyers are in the driver's seat. "There's a lot of inventory on the market to sell. The buyer can pick and choose their product. Buyers are more in control than they were before," according to Northeast Florida real estate expert Raymond Rodriguez.

Motivated home sellers are even enlisting the help of home auction companies to help them move their products. "They come to us and they want to get rid of it quickly," said Vita Paltridge, a realtor with Good Earth Realty and Auction Company in Palatka.

If you do decide to buy a home from someone offering a creative incentive, real estate experts warn that you get everything in writing to avoid problems later on.

Friday, November 17, 2006

Bet Your Bottom Dollar!

Here's an interesting Newswire release promoting a real estate agent that's taking a "new" approach to home sales. It seems the agent is attempting to create a buzz by listing a Highland Park IL home for 1$!! Check out the listing at


NewswireToday - /newswire/ - Deerfield, IL, United States, 11/16/2006 - The 2.1 bath, three bedroom house is listed in the MLS for $1. Is this a joke? Is this a mistake? $1 listing attracts the eye of not only potential buyers, but other real estate agents.

8:30 A.M. Evan Kane from Endeavor Realty listed a two story three bedroom home for sale in the MLS at a listing price of $1.00.

It is not often that you see a house in the affluent Chicago suburb of Highland Park listed for sale at $1, but that is what Evan Kane the Broker/Owner of Endeavor Realty has done to help his clients sell their home in an increasingly tough real estate market.

Most Real Estate Brokers do not think to use the science of social psychology to help sellers. The real estate market has become increasingly tough causing brokers and real estate agents to have to think of other ways to attract buyers. Endeavor Realty has come up with a different strategy to serve the best interest of its clients.

Citing a recent study by Gillian Ku of the London Business School, Adam D. Galinsky, and J. Keith Murnighan of Northwestern University Kane says, "although this is not an auction, the principles are very similar and the evidence is clear that starting low can lead to more traffic and a higher sale price."

Not only is approaching a slow market with creative ideas and new strategies increasing traffic and sales for the clients of Endeavor Realty, but it is also attracting other traditional real estate agents that have not thought of going beyond their guiding principles to try something different.

Deciding to implement this strategy has caused a few adverse reactions. "They don't like it. I am using the system in a way they didn't contemplate" says Kane of the reaction of more traditional agents. "I have to deal with a few angry phone calls, but it's in the best interest of my client, so I do it."

For additional information on the news that is the subject of this release, contact Evan Kane or Janessa Gonzalez.

About Endeavor Realty

It is the mission of Endeavor Realty to be the catalyst of change that brings transparency, efficiency, and honesty to the residential real estate industry.

Thursday, November 16, 2006

You can't choose your neighbors!

Here's one from the Star Beacon, a local paper in Ohio. Check out the the part where Vicki Miller of Miller Realty suggests that a home seller might want to buy the filthy neighbors property and clean it up to enhance their own sale!!


The old saying "You can't choose your neighbors" rings true when homeowners are trying to sell their home and a neighbor's unsightly property inhibits the sale.

The problem is not uncommon and could be costly to the homeowner, but are there solutions to the problem? The answer is: Yes. However, they vary depending on the community in question.

Zac Shadduck, of Saybrook Township, has been trying to sell his North Bend Road home for some time. He has been unsuccessful due to the mess on his neighbor's property, he said.

"My Realtor told me people call to see the house, but they drive by and see the neighbor's house and cancel their appointment," Shadduck said. "I just want to sell my house."

The modular home that sits on the acre of land next to Shadduck's, has no siding on the sides of it. There are several animals on the property including four dogs and several cats, he said.

"There are at least 12 cats that run loose all the time," Shadduck said. "They're in my mud room, eating my cat food. I'm chasing cats out of my house every day."

Aside from the animals, he said there is trash all over the property. Shadduck said he has gone to the township trustees and spoken with the zoning inspector, but the issue has not been resolved.

Gary Timonere, Saybrook Township zoning inspector, said he has been to the property and spoken with the owners and the property has been cleaned up enough to meet the township's standards. The county health department was also called to visit the property and Timonere said they did not find any violations.

"The owner took care of it as best she could," he said. "Mr. Shadduck has a good complaint. He's trying to sell his house. I wish we could pick our neighbors."

As far as the animals are concerned, Timonere said there is no limit to the number of cats a township resident is permitted to have, but there is a limit to the number of dogs. Township residents are permitted to have three adult dogs, anymore than that requires a kennel's license, he said.

The township will be checking the property every couple of weeks to ensure it still meets the zoning specifications, but at this point, the township has done all it can do, Timonere said.

Cities and villages operate a little differently than townships do. Rock Creek Village has been working diligently over the past several months to get various properties cleaned up. Village officials recently restructured and passed new zoning regulations. If the zoning inspector finds someone is not in compliance with the new regulations, a letter is issued to the individual, said Mayor Bob Schultz.

The individual is given a specific time frame to comply and if that time frame is not met, the mayor issues a citation. After the citation is issued, the village solicitor files suit in Western County Court, he said.

"For the most part people comply," Schultz said. "We're making quite a bit of progress."

A lot of Rock Creek's success comes down to peer pressure, Schultz said.

"If they see someone else cleaning up, they tend to want to do the same," he said.

Violations to Rock Creek's regulations include overgrown weeds and grass and exterior maintenance issues such as paint, he said. If weeds and grass grow over a certain height, the resident is ordered to mow it. If it is not mowed, village officials mow it for them at a cost of $50 per hour, which in turn is added to the individual's property taxes, Schultz said.

Ashtabula city has similar regulations. Residents who have old tires, broken furniture, wood, trash bags, etc., are warned to clean up their property. The residents who refuse to comply will pay the city to remove the trash. The weight, number of loads and man hours is all calculated into the amount a resident is charged, Ashtabula Sanitation Supervisor Dom Iarocci said in a Star Beacon article published April 15.

Vicki Miller of Miller Realty in Jefferson said the best thing to do in these situations is to work with the neighbors. She said the first thing a homeowner can try to do is buy the property and clean it up themselves, but that will cost the homeowner money and the neighbor has to be willing to sell.

"You always have neighborly disputes," she said.

Homeowners living in an area where something can be done should take advantage of it, she said. A neighbor's unkept property can have a significant impact on a person's property value.

"It could almost make the home unsaleable," Miller said.

Cordie Stevenson, of Price Real Estate in Andover, said Realtors can show the property, but there is nothing they can do about the neighborhood. It is the seller's responsibility to do what they can to have the situation rectified.

"We can advise the homeowner of what they can do to their home to make it more marketable," she said.

Stevenson said Realtors cannot give their opinions on a neighborhood to a potential buyer. It's called steering.

"We give out information sheets and they drive by and determine whether they want to see inside," she said. "Sometimes (the neighborhood) doesn't matter, sometimes it does. Neighborhoods are what they are."

When it comes to real estate, location is everything, Miller said.

"You look to the left and look to the right, if you don't like what you see, you leave," she said. "If (neighbors) don't care enough to take care of their property for themselves, they're not going to take care of it for you."

Tuesday, November 07, 2006

Media... Just Shut the **** Up!

Another beauty from HDTV’s Buying and Selling Homes Forum. Apparently the housing collapse is all the media's fault!


Ya know I wish the media would just shut the **** up about home sales already. It's stressful enough in today's market trying to sell yet everynite on the news they have to announce HOME SALES ARE DROPPING! MAKES ME WANNA PUKE!

Response 1:

You have to take selling your home in your own hands now. The realtors are not bringing the buyers in! Put your home on Craigslist!
My house is sold thanks to myself and Craigslist.
The media loves to just flap their lips about negative stuff.
Believe me, you can sell your home at a good price. I did.

There's no place like home...

Response 2:

I agree whole heartedly. All the media wants to report is gloom and doom. They can even make things look bad that aren't bad. One realtor we spoke with, (friend) told us not to pay attention to the media. She said she is still selling homes every week.

Response 3:

Yeah, I know that it is real estate gloom and doom all day long in the media. Unfortunately, the market in my area agrees with alot of what they are saying. I've lost at least $50,000 in equity in my house in the past year, based on what houses are selling for now compared to last year at this time.

Response 4:

Yes, it is certainly getting harder and harder to stay positive when there is all this negativity around you re: home sales. I was thinking the same thing you were re: the media and it's apparent blitz on the state of the housing market.

We too didn't buy during a boom - atleast I don't think we did. We weren't following the news of the economic state at that time. All we knew is we found a found we liked in a magazine. John just went to the grocery store. We hadn't even thought or talked about buying at that time. He just grabbed the mag like he always did. We had just finished renovating our apartment - complete gut job. It was in my BIL's 2 family house.

Misery loves company I guess. There are a boatload of us out here trying to sell our homes.

Response 5:

I agree with you....seems like every other day there is a rather depressing article on the FRONT page no less...about how bad the Real Estate market is....

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