Mortgage And Real Estate News

Tuesday, June 28, 2011

Home prices up first time in 8 months

WASHINGTON - Home prices in major U.S. cities have risen for the first time in eight months, boosted by an annual flurry of spring buyers.

The Standard & Poor's/Case-Shiller home-price index reported Tuesday that prices rose in 13 of the 20 cities tracked. Washington, D.C., saw the biggest price increases, followed by San Francisco, Atlanta and Seattle.

Still, six metro areas are at their lowest levels in the nearly four years. Those markets are: Charlotte, Chicago, Detroit, Las Vegas, Miami and Tampa.

Last month, home prices in big metro areas sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.

The index, which covers metro areas that include about 50 percent of U.S. households, rose 0.7 percent, the first increase since July. The index measures sales of select homes in those cities compared with prices in January 2000 and provides a three-month average price. The April data is the latest available.

David M. Blitzer, chairman of Standard & Poor's index committee, cautioned that while the price index increase was a "welcome shift from recent months," much of the improvement was likely because of the beginning of the traditionally busy spring and summer home-buying seasons.

A delay in processing foreclosures is also a factor. Homes in foreclosure sell at a 20 percent discount on average, which can hurt prices in neighborhoods. But many foreclosures have been delayed while federal regulators, state attorneys general and banks review how those foreclosures were carried out over the past two years.

Even with the increase, housing remains the weakest part of the U.S. economy.

Sales of previously occupied homes sank in May to a seasonally adjusted annual rate of 4.81 million. That's far below the roughly 6 million sold in healthy housing markets. Since the housing boom went bust in 2006, sales have fallen in four of the past five years.

New-home sales haven't fared any better. They fell in May to a seasonally adjusted annual rate of 319,000 - fewer than half the 700,000 that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the recession ended. Last year was the worst for new-home sales on records dating back half a century.

Larger down payment requirements, tougher lending standards and high unemployment are preventing people from buying homes. Many people who can afford to buy are holding off, worried that prices have yet to bottom out.

The depressed housing market has weighed on the broader economy. Declining home prices have kept people from selling their houses and moving to find jobs in growing areas. They have also made people feel less wealthy. That has reduced consumer spending, which drives about 70 percent of economic activity.

by Associated Press June 28, 2011



Home prices up first time in 8 months

Glendale's Westgate City Center changed face of city

Westgate City Center, Glendale, Arizona David Kadlubowski/The Arizona Republic

Westgate City Center, a retail-and-entertainment center with opulent fountains and flashy billboards, opened in Glendale in 2006.


Ten years ago, Steve Ellman surveyed miles of Glendale farm fields in a helicopter and decided this was where he would build a massive sports-and-entertainment district.

The developer had fashioned a career out of envisioning what others doubted.

He promised Glendale officials their sleepy suburb would soon boast a state-of-the-art hockey arena and an urban entertainment zone.

Ellman made his dream a reality. Westgate City Center opened in 2006 with fountains and fanfare.

The Phoenix Coyotes played there, and the Arizona Cardinals moved in next door.

Then, a deep recession pummeled the region.

The fate of the hockey team was in doubt. Still, in February of this year, Ellman told West Valley leaders that a housing shortage could occur in three years.

"Hold onto your property. You will have tremendous profit," he told a Glendale audience as a speaker at Mayor Elaine Scruggs' state-of-the-city speech.

In the background, however, problems lurked.

Even as Ellman uttered those words, lenders were demanding nearly $500 million in unpaid loans used to build Westgate. The money was 2 1/2 years past due.

Last week, Ellman announced that the flagship project of his 39-year career faces foreclosure and will go to auction.

Whether this signals the end of Ellman's control of Westgate isn't yet known.

Selling a vision

The developer first saw the farm fields of his future Westgate in 2001 at Loop 101 and Glendale Avenue.

For three years, he had tried to sell Scottsdale on a plan to revive the faded Los Arcos Mall with new shops and a hockey arena for the Coyotes. Then Glendale came forward.

City leaders wanted Ellman to help push Glendale's economy beyond housing development. They were thrilled by his vision of Times Square-style flashing billboards, restaurants and glass-paned offices.

In a month, Ellman had an initial deal with Glendale, calling for him to build a $180 million arena and commercial center.

Glendale's mayor beamed and pronounced the 2001 vote "historical."

The sports district could attract 10,000 to 15,000 jobs to the Loop 101 corridor by 2012, city official Jim Colson predicted at the time.

Glendale projected that even in a dismal economy, the city could generate enough to pay off its arena and reap an extra $100 million, mostly from sales-tax revenue at Westgate. In a normal economy, that could soar to $475 million.

A city consultant called it "real revenue, not smoke."

Those numbers haven't panned out.

A fraction of the predicted jobs have sprung up thus far in the sports district, and Westgate sales-tax revenue alone has not paid the city's arena debt.

Still Mayor Scruggs points to companies that have moved to Glendale and the city's exposure on national television.

"We have built a solid foundation and created a strong vision," she has said.

Problems arise

Westgate experienced hitches early on.

Ellman changed his deal so that Glendale took out loans for arena construction instead of him. He defaulted on a $7 million loan. He was two years late opening Westgate.

Just months before it opened, he cut ties with the Coyotes, selling the team to Jerry Moyes, a Glendale trucking magnate who had heavily invested in Ellman's dream. Three years later, his former partner declared the team bankrupt.

The Coyotes were the anchor to the dream, pulling fans to Westgate. The city scrambled to save the team.

Ellman, no longer an owner, was not publicly involved. When fans planned a rally to support the Coyotes, Westgate refused to allow the gathering.

Ellman said he supported the city's efforts to find a buyer and didn't consider purchasing the team since other ownership groups were hot in pursuit.

"We did what we could to support these buyers," he said in an e-mail Friday, though he didn't offer specifics.

Ellman cited the two-year struggle to find a team buyer as one reason Westgate is on the road to foreclosure. The real-estate meltdown was the other.

Ellman would not say why he failed to make the balloon payments on several loans. His spokesman confirmed they came due in November 2008. That was before the worst of the recession and the Coyotes' bankruptcy.

An auction for Westgate's buildings, built in part with a $97.5 million loan from iStar Financial, is scheduled Sept. 19, according to Hadden Schifman, a commercial real-estate analyst with Phoenix-based IBIS Report.

Other loans from Credit Suisse for $376 million are in default, he said, and the land around Westgate will go to auction.

Ellman isn't the only developer struggling. Many tracts of land purchased and offices built near Glendale's sports district have gone to auction as some developers opted to let go as values tanked.

Few can dispute Ellman raised Glendale's profile. He landed the city its first professional sports team, the Coyotes, and then set up a white tent in farm fields as he pitched the area to the Cardinals.

He wowed skeptics when Westgate debuted as a colorful complex with Bellagio-like fountains, shops and a movie theater. It has attracted millions to Glendale.

The crowning moment was hosting Super Bowl XLII in 2008.

Westgate itself pumped about $8 million in sales taxes last fiscal year into Glendale's coffers.

Ellman once pointed proudly to a map of sports venues and commercial projects popping up and took credit for starting it all.

"We brought a billion dollars to a freaking cotton field," he said.

Future uncertain

Even if Westgate goes to auction, it isn't likely to shut down.

Lenders may allow foreclosed homes to sit empty and vacant land to grow weeds. But no one wants a commercial complex as large as Westgate with rent-paying tenants to stop bringing in business.

Ellman hopes to remain a part of the development.

"Westgate will always be my favorite project," he said. "Just as Phoenix has 24th and Camelback, Tempe has Mill Avenue and Scottsdale has Old Town, Glendale has Westgate."

The developer told Glendale leaders last week that he hopes to strike a deal before the auction with lenders to keep Westgate. At the least, he believes he could stay on with a new owner as property manager.

Failing that, Ellman will continue to own Westgate's towering billboards. The sign advertising was set up under a different company.

"I don't think he's going to give it up without a fight," Glendale Councilwoman Joyce Clark said. "It is obvious when you talk to him that Westgate is something very near and dear to his heart."

But others could be interested at the right price.

One possibility: a new Coyotes owner could benefit from remarrying the team to the entertainment complex.

Matthew Hulsizer, who was in negotiations to buy the Coyotes, said he would consider purchasing Westgate if he took over the hockey franchise. But on Monday, the National Hockey League confirmed Hulsizer had pulled out of talks with Glendale.

Cardinals President Michael Bidwill, whose team plays next door, has development aspirations, with skyscrapers planned near the football stadium.

"We aren't pursuing Westgate but are obviously following the recent developments," he said Friday.

Whoever owns the Glendale center, a new economic landscape offers scant hope of completing the course charted a decade ago, including $2 million condos that were to be built in a 10-story tower.

"Years from now, our initial vision will still be evident," Ellman said. "Our original plan, with modifications to address a changing market, was sound."

by Rebekah L. Sanders The Arizona Republic Jun. 28, 2011 12:00 AM





Glendale's Westgate City Center changed face of city

Arizona's jobless able to keep homes with help of federal funds

Even as unemployment aid in Arizona dwindles, a federally funded program is quietly helping more people in the state afford their mortgages after they lose a job.

An Arizona Housing Department program called Save Our Home AZ gives qualified homeowners cash assistance to make their mortgage payments if they are unemployed or underemployed.

The program uses $36 million of a Treasury Department allocation given to states suffering the most from the real-estate crash.

When the aid program launched last year, the cash-assistance plan was largely overshadowed by another portion of the plan that aimed to help homeowners by modifying their mortgages to reduce their payments. The money paid for paperwork assistance and gave lenders incentives to modify loans.

But the loan-modification plan has foundered, partly because it requires that banks forgive a portion of the amount borrowers owe, something lenders are reluctant to do.

As Housing Department officials found themselves unable to use the money for loan modifications, they ramped up the mortgage-aid aspect of the program.

The department can offer qualified homeowners up to $2,000 a month to pay their mortgages for as long as 24 months.

Housing advocates applaud the program and say not enough homeowners know about it. So far, 67 Arizona homeowners have received aid, and the agency expects hundreds more will follow this year. The program has until 2017 to spend the money, and almost 900 applications are pending.

Help under way

Heather Owens applied for mortgage help from the Housing Department four weeks ago and has been approved and has made her first partial payment. The Housing Department is helping her, with $287 a month, make the payment on the Tempe home she and her husband, Daniel Owens, have owned for 17 years. Their two children, who go to Scottsdale Community College, live in the guesthouse in the back and pay the couple rent.

"I was working in the offices of an air-conditioning firm when my mother got ill," Heather said. "I took temporary leave to take care of her, but when I went to get my old job back, it was gone."

Daniel works full time as an AC repairman, but his hours go down in the winter and spring.

Heather said the couple used savings to make their mortgage payments for more than a year while she looked for another job. Then, she was contacted by her lender about obtaining a loan modification with a lower monthly payment. She thought the offer came at a perfect time.

She filled out the paperwork and was told she qualified and to stop making her payments until her loan was modified. She said she kept calling and never heard back, until the lender told her it had started foreclosure proceedings against her in March.

The Owens' story has become common. Lenders initially approved borrowers for loan modifications and later started foreclosure proceedings.

Heather heard about the Housing Department's program and found its website.

"It was so easy to apply, and the housing counselors are so nice," she said. "I was so depressed before. I would have sold everything to save our house."

Who qualifies

Not all unemployed homeowners qualify for the Housing Department aid.

The applicant must live in the home. Applicants must show they are unemployed or have reduced income and can no longer afford their mortgages.

A homeowner can't owe more than 120 percent of what the house is worth now. So, many homeowners won't qualify because home values have dropped 55 percent since the boom.

A borrower can't have cashed out any equity through a refinancing or second mortgage. Many metro Phoenix homeowners tapped their equity during the first half of the past decade as home values soared. Finally, the borrower must be 60 days behind on his or her mortgage payment.

The requirements may sound tough, but several have been recently changed so more people can qualify.

"The program has been updated," said Patricia Garcia Duarte, chief executive of the non-profit Neighborhood Housing Services of Phoenix Inc. "I believe many people don't know about the program. More people should now be able to qualify."

Loan modifications

The Treasury Department's so-called Hardest Hit Housing program focused mostly on loan modifications, setting aside far more money for those plans - more than $230 million in Arizona. But that segment has been a disappointment to borrowers, the federal government and the Housing Department.

The plan requires lenders to write down as much as $50,000 of a borrower's principal, which the Housing Department will match. The idea is to reduce the loan amount and monthly payments enough so homeowners can avoid foreclosure and aren't tempted to walk away from their homes.

The Housing Department has been able to complete only four loan modifications in Arizona. Early this year, Bank of America agreed to work more diligently with the state on the program. Housing Department Director Michael Trailor believes the first BofA loan modification under the program will be finalized in the next week.

For now, the payment-assistance program is mostly helping homeowners who are waiting for a new job rather than a loan modification.

Heather Owens is going to night school to become a chemical-dependence counselor.

She said her lender wouldn't even help her try to find Arizona's payment-aid program.

Trailor and housing counselors hear similar stories all the time. He is glad Owens didn't give up.

"We want to get the word out to people unemployed and underemployed," Trailor said.

by Catherine Reagor The Arizona Republic Jun. 28, 2011 12:00 AM




Arizona's jobless able to keep homes with help of federal funds

Maracay Homes to join Scottsdale Quarter

Maracay Homes likely will bait a different kind of shopper to the Scottsdale Quarter when it moves its headquarters to the retail-oriented center later this month.

The Arizona-based homebuilder will relocate its corporate office and combine with a design studio in roughly 20,000 square feet on the third floor above anchors Pottery Barn and Gap, the company said last week.

Andy Warren, president of Maracay, said about three dozen employees will relocate from offices near Hayden Road and Raintree Drive.

"The 10,000 square feet dedicated to corporate office space will house our 34 full-time corporate team members, including the marketing, land-acquisition, land-development and executive departments," Warren said. "The design studio, on the other hand, was created with the customer in mind and allows new homeowners to come in, configure their home to their own specifications and get a feel for our exceptional build quality before their home is even constructed."

Designs by Phoenix-based McCarthy Nordburg Ltd. are aiming for a modern yet earthy ambience throughout the office and studio. Exterior signage will give Maracay visibility from busy nearby intersections such as Scottsdale Road and Greenway-Hayden Loop.

Maracay figures the Quarter's trendy shops and upscale amenities will give it a competitive advantage, said Laurie Tarver, vice president of sales and marketing for Maracay.

"We believe our corporate culture is essential to retaining existing talent while attracting the very best in the industry," Tarver said in a statement.

Later this year, Starwood Hotels & Resorts Worldwide will relocate its Arizona headquarters from Phoenix to the Quarter. It will occupy a roughly 55,000-square-foot space above Nike and other retailers.

Developer Glimcher Realty Trust expects the Quarter's 205,000 square feet of Class A office space to be 90 percent occupied by year's end. The second- and third-story office tenants sit above 370,000 square feet of retail, restaurant and entertainment space.

Glimcher's projections jibe with recent upticks in office occupancy around the Scottsdale Airpark area, according to Colliers International in Phoenix. Of roughly 6.19 million square feet of Class A office space in the airpark, vacancies in the first quarter improved to 29.4 percent from more than 35 percent in the fourth quarter of 2010.

However, the area still is behind the Valley's 22.1 percent for the first quarter.

by Kristena Hansen The Arizona Republic Jun. 27, 2011 12:00 AM





Maracay Homes to join Scottsdale Quarter

Sunday, June 26, 2011

As Fed bond buying ends, uncertainties may emerge

BOSTON - Expect investing to get more uncertain starting next month and potentially less rewarding.

That's the warning from pros who are preparing for slightly more volatile markets when the government's latest government stimulus program ends. Thursday will be the last day of a Federal Reserve program dubbed QE2, short for quantitative easing, round two.

The first such bond-buying program began in March 2009, when the stock market bottomed out near the end of the Great Recession. In the second round, begun last November, the Fed bought $600 billion in Treasury bonds.

Now, the biggest buyer of those government IOUs will play a new role: Eventually, it will sell those bonds back to the market.

Investors have anticipated that shift for months. Yet the program's end is making some money managers more cautious because of the greater uncertainty it creates.

The Fed expanded the pool of buyers for Treasuries by purchasing around $75 billion of the bonds each month, starting in November. The purchases helped reduce Treasury yields, making them unappealing for any investor seeking a decent return. Yields for 10-year Treasuries, for example, have recently slipped below 3 percent. This has helped prompt investors to seek out other assets, such as stocks and higher-yielding corporate bonds, whose prices have rallied since the recession.

"QE2 has been a pretty big source of demand for riskier assets, and with that going away, that's one of the reasons we're cautious now," said Mike Buckius, co-manager of the Gateway Fund, a $5 billion stock mutual fund.

Here are some key trends money managers expect in coming months as the effects of QE2 wear off:

Stocks

The stock market is all about expectations, and prices generally move months before anticipated developments in the economy actually play out.

It's been known for months that QE2 would cease on Thursday, so the market has likely priced in the program's end. Many think that's a key reason stocks declined six straight weeks starting in May, in addition to factors such as growing worries about Greece's debt crisis.

"Are we going to have a big market meltdown on June 30 because that is the day QE2 ends? No," said Kent Croft, co-manager of Croft Value, a $404 million stock mutual fund.

Without QE2, it is likely stock prices would not be as high as they are today, said Bob Doll, chief stock strategist with asset manager BlackRock Inc.

"However, this does not mean that when QE2 ends, stock prices will go down," he said. "It merely means there will be one less positive tailwind for the markets."

Bonds

Marilyn Cohen, a manager of $325 million in bond portfolios for clients of Los Angeles-based Envision Capital Management, said the end of the Fed's Treasury purchases should eventually drive up yields. Other investors may be unwilling to buy Treasuries at their currently low yields, unless prices for stocks fall, driving investors into the perceived safety of government debt.

Cohen will closely watch Treasury auctions to see whether adequate demand exists to keep yields low. She expects volatility, as investors assess a new Treasury market without the Fed as a buyer.

"It will take multiple auctions before we know who the natural buyers of Treasuries will be, since the unnatural buyers (the Fed) will be stepping aside," Cohen said. "All you need is two lousy back-to-back Treasury auctions, and then it will be, 'Look out, below.' "

Economy

Many economists credit QE2 for heading off the threat of deflation - a destabilizing drop in wages, the prices of goods and services, and the value of stocks, homes and other assets.

However, critics fear QE2 and other stimulus programs have increased chances of long-term inflation. That hasn't happened yet, although there was a rise in oil and gas prices early this spring, a factor that helped trigger the recent slowdown in the economic recovery. Prices have recently slipped below $4 a gallon, but remain high, with the current national average at $3.60.

by Mark Jewell Associated Press Jun. 26, 2011 12:00 AM




As Fed bond buying ends, uncertainties may emerge

Phoenix exec admits plotting wire fraud

Joseph Bowen Brown has pleaded guilty in federal court to conspiracy to commit wire fraud in a mortgage-fraud scheme based in Phoenix.

According to the U.S. Attorney's Office in Phoenix, five others have entered guilty pleas in the same scheme and are awaiting sentencing.

The case against Brown, 30, and his co-conspirators is based on an investigation conducted by the Internal Revenue Service's Criminal Investigations Division, the U.S. Attorney's Office said in a news release.

Brown acknowledged in his Tuesday guilty plea that, as a principal of the Solid Group, a local real-estate firm that has since collapsed, he orchestrated illegal "cash-back" mortgage sales on homes in the Phoenix area.

From 2005 through 2007, he and others at the Solid Group purchased properties at or below market value and resold them based on inflated appraisals.

They used some of the profits to provide cash kickbacks to the buyers and failed to disclose those cash payments to the mortgage lenders. Brown and his co-conspirators then pocketed the difference.

Many of the buyers were "vastly unqualified" for the mortgage loans and obtained them only because of false statements concerning income, employment and assets made on the loan applications, according to federal prosecutors.

In all, 49 properties were involved in the scheme. Prosecutors said all the properties have gone into foreclosure.

The scheme resulted in nearly $10 million in losses to the mortgage lenders, they added.

Brown admitted in his plea agreement that he and his co-conspirators pocketed almost $2.5 million in the deals.

"This is yet another reminder of the damage that mortgage fraud has caused to our community," U.S. Attorney Dennis Burke said.

"The mortgage crisis wasn't just the result of an economic downturn. It was made larger and more painful for everybody by criminals."

This case is one in a series of recent successful federal mortgage-fraud prosecutions in Arizona. Many of the prosecutions were the result of a multi-agency initiative called Operation Stolen Dreams, in which dozens of defendants were indicted in the summer of 2010. Brown's guilty plea is the 28th conviction obtained as a result of the joint effort.

A conviction for a single count of conspiracy to commit wire fraud is punishable by a maximum fine of $1 million, a maximum term of imprisonment of 30 years, or both, and a term of supervised release of five years.

by J. Craig Anderson The Arizona Republic Jun. 26, 2011 12:00 AM




Phoenix exec admits plotting wire fraud

Only tap an IRA, 401(k) as last resort

You've built a financial fortress with several walls of protection. Now, facing a job loss, you need to decide which bastions to hunker down behind.

There are advantages to tapping certain accounts and assets before others.

"Jobless benefits and personal savings would be the first line of defense," said Gary Daniels of Personal Financial Mavens in Payson. After that, he said, it's often a matter of individual circumstances.

Ideally, like a stout castle, you will have several rings of defense, perhaps with a moat and drawbridge for good measure. Occupying the innermost sanctum of your castle should be your retirement accounts.

Financial advisers routinely suggest restraint before withdrawing retirement money, even when times get tough.

If you pull cash from 401(k)-style plans or traditional Individual Retirement Accounts, you would trigger federal and state taxes, typically on the full amount. You also face a 10 percent early-withdrawal penalty if under age 59 1/2, though that drops to age 55 if you pull money from 401(k) accounts and you're laid off or leave the job for other reasons.

"The taxes are almost always much higher than expected, often more than 40 percent of the amount withdrawn if there is a 10 percent early-withdrawal penalty," Daniels said.

Taxes and penalties even could apply on early withdrawals from Roth IRAs.

But taxes aren't the only reasons to leave retirement accounts alone.

With withdrawals, you'd also be depleting your retirement savings and raising the likelihood of having to rely solely on Social Security in old age. As it is, millions of Americans already are way behind in retirement planning.

"An issue even bigger than taxes or penalties is what your account could be worth in 10 or 20 years," said Stephen Barnes, a certified financial planner and chartered financial analyst at Barnes Investment Advisory in Phoenix.

Plus, you'd be removing money from accounts that enjoy legal protections.

"Both federal and Arizona laws protect $1 million or more of retirement funds from creditors in a bankruptcy," said Daniels, who is also a certified public accountant.

If you withdrew money from retirement accounts, those amounts would be subject to regular taxes and possibly penalties that probably wouldn't be discharged in a bankruptcy proceeding, he said.

But while many jobless and underemployed Americans seem to recognize these dangers, they still might not be able to avoid retirement-account withdrawals if their employment problems persist.

Respondents in a new survey by the Transamerica Center for Retirement Studies said they relied mainly on jobless benefits and personal savings during the first year out of work or being underemployed. But after a year, more survey respondents started using credit cards heavily and draining their retirement accounts.

Many of these people didn't have much of a nest egg anyway, with 36 percent reporting less than $10,000 in household retirement savings and 49 percent with less than $50,000.

During that first year of a job loss or an underemployment situation, many respondents said they relied mainly on jobless benefits, non-retirement savings and spousal income.

Cost cutting also should be a priority.

"Immediately scrub the budget and get rid of any expenses that aren't absolutely necessary," Barnes said.

Such non-essential costs might include cable TV, movies and the "daily latte," he said.

If you must rely on credit cards or other debt to make it through a rough patch, try to access your least costly form of borrowing, said Mike Sullivan, director of education at Phoenix debt-counseling firm Take Charge America.

For example, if you participate in a 401(k) plan, you typically can take out a loan against your account balance at a low interest rate. This could be an option for underemployed individuals. But if you get laid off, such borrowings must be repaid.

Credit cards would be a more costly form of debt, and options such as auto-title loans more expensive still, he said.

"Taking on more debt only makes sense if you're pretty confident you'll have more income soon," Sullivan said.

Even if you focus on other lines of defense, you still might come to a stage where retirement accounts are next up. Here are a few considerations for dealing with that.

- If you have a Roth IRA, this could be a good retirement account to withdraw from first. You can pull amounts equal to your original contributions (not earnings) from a Roth without triggering taxes or the early-withdrawal penalty, Daniels said.

- If you must pull money from a retirement account, you might be able to minimize the tax bite by doing so in a year when you have little taxable income - which could be the case anyway if you're jobless.

- If you're in your late 50s, it might pay to rely on credit cards or loans from other sources such as relatives, Daniels said. Upon reaching 59 1/2, you could then withdraw from retirement accounts and pay off the debts without incurring the 10 percent penalty.

But Barnes suggests caution here. "The last place I'd want to go is adding more debt," he said.

by Russ Wiles The Arizona Republic Jun. 26, 2011 12:00 AM



Only tap an IRA, 401(k) as last resort

Smart Moves: Money diet can help buyers save for a home | NewsOK.com

Contrary to popular belief, these days you may not need a whopping 15 to 20 percent down to finance a home. Though mortgage-lending standards remain stringent, low down payment options are becoming more widely available.

Still, nearly all homebuyers need cash, if only for closing costs and moving expenses. Are you cash-tight yet still want to take advantage of today's home prices? If so, amassing a war chest of cash could make your homebuying offer even more competitive.

“The more cash you have, the better deal you get,” said Mary Kuehn, a veteran real estate agent affiliated with the Council of Residential Specialists (www.crs.net).

Kuehn said that homeowners selling in today's market are especially nervous about a deal falling through due to a financing glitch. That's why some sellers who receive multiple bids will take a slightly lower offer from purchasers who have more cash in the deal, realizing they're probably better fixed financially.

For those who believe the economy will gradually improve over time and that current homebuying bargains won't last forever, Kuehn said the sacrifices involved in a crash savings program could be worth it.

Here are pointers for those who wish to embark on a crash savings program to buy a home:
• Examine your attitudes about spending.

What stops people from sticking to a money diet? Financial planners say emotional impediments — not a lack of professional financial guidance — are often to blame.

“People come to financial advisers hoping for a miracle. But we're not miracle workers,” said Shawn Koch, a planner affiliated with the Garrett Planning Network (www.garrettplanningnetwork.com). Koch said many people attempting a crash savings program first need to deal with the reasons for their bad money habits, such as impulse spending or a sense of material entitlement.

• Start by doing an inventory of your current financial situation.

A major obstacle to saving for a home is uncontrolled day-to-day spending, Koch said. But before you can decide how to reallocate your funds, she said you need to review where your money has gone for a period of several months. This can be done either with pen and paper or a personal finance tool such as Quicken software. Such a review can bring surprises, Koch said.

For example, she said many of her clients are shocked to learn how much they're spending on restaurant meals, carryout food and coffee breaks. Doing a spending inventory can be time-consuming because you must sift through credit card and checking account statements. Indeed, for those who don't routinely track their spending, this process could take the better part of a weekend. But Koch said it's essential to determine where cuts are possible before you can slash spending.

• Sign up for an automatic savings plan.

Because they live paycheck to paycheck, many people find it hard to summon the discipline to extract a chunk from each paycheck for savings. And they fear automatic withdrawals from their pay. But financial planners say automatic withdrawals can be the answer for people who aren't methodical savers. And they say those who have direct debits taken from their pay rarely miss the money. Meanwhile, their savings accounts add up quickly.

“With an automatic debit plan, you just set it and forget it. That's a big plus for anyone trying to save money for a house,” Koch said.

by Ellen James Martin Universal Syndicate June 25, 2011



Smart Moves: Money diet can help buyers save for a home | NewsOK.com

Trillium Pinnacle Peak apartments sold to Weidner for $76 mil

Pinnacle Peak Apartments LLC of Tempe sold Trillium Pinnacle Peak at 24250 N. 23rd Ave. in Phoenix to Weidner Investment Services Inc., an S-corporation of Kirkland, Wash., for $76 million. Mark Forrester and Ric Holway of Hendricks & Partners in Phoenix represented the seller. The buyer was self-represented in the sale of this 724-unit community that was 95 percent leased at the time of sale. The deal took longer than usual to complete because Trillium Pinnacle Peaks is located on state trust land and the buyer had to be approved by the Arizona Land Department to assume the lease.

The Trillium project is Weidner's 14th Arizona apartment-community acquisition in about 18 months. In May, Weidner paid a combined $68 million for four multifamily properties in the Phoenix area. They now have nearly 5,000 units and plan to acquire 6,500 units in Arizona.

by John McLean Arizona Business Gazette Jun. 16, 2011 12:00 AM



Trillium Pinnacle Peak apartments sold to Weidner for $76 mil

Saturday, June 25, 2011

Silverleaf project at DC Ranch revived after 2-year delay

Silverleaf development Courtesy of Sterling Collection Development Group

The Sterling Collection Development Group is building nine more villas at the Sterling at Silverleaf development in Scottsdale. This villa and six others were built between 2006-08. Villa prices start at $1.2 million for about 2,700 square feet.


Construction has resumed on a small collection of villas at Silverleaf at DC Ranch after the development stalled more than two years ago.

The Sterling Collection Development Group is reviving a project designed and developed by in-demand Scottsdale architect Bing Hu from 2006-08. Seven villas were completed before the economy and the project tanked.

Nine more are planned, starting at $1.2 million or about $446 per square foot, with the first two scheduled for completion this fall.


Sterling at Silverleaf also is planned to include homes on 12 lots and 180 condominiums in six buildings of up to five stories.

The development sits on 12 acres northeast of the DC Ranch Village Club at Thompson Peak Parkway and Legacy Boulevard.

Sterling President Nathan Day said the villas are an incredible value for Silverleaf, and the timing is right to resume development.

"We are positioned on the leading edge of development as the market begins to recover," Day said.

Although $1.2 million is hardly affordable for most buyers, it's a relative bargain in Silverleaf where a 9,986-square-foot home recently sold for $6.2 million and 30 large custom homes are under construction.

Silverleaf market active

At a time when analysts disagree on the recovery of the Valley's housing market, Silverleaf and DC Ranch are showing strong signs of life.

"People are buying good houses at hefty prices," said Bob Nathan of RH Nathan Exclusive Real Estate Services.

Twenty-three Silverleaf homes have sold through mid-June and another 13 are in escrow, compared with all of last year when 33 homes were sold, Nathan said.

The Sterling at Silverleaf villas are in a great location and well-suited for lock-and-leave owners, he said.

They will compete with casitas near the Silverleaf clubhouse built by Scott Edmunds' company CSE & Associates.

The $1.2 million price for the Sterling villas "might be a little aggressive in my opinion," Nathan said.

Originally, Hu priced the villas at $1.4 million to $1.9 million before the recession hit.

Day said he bought the note for the Sterling property in late 2008 from M&I bank.

Low-maintenance courtyards

The villas of roughly 2,700 to 3,100 square feet feature Mediterranean architecture with stucco walls, clay roof tiles, landscaped courtyards, spa pools and shared driveways.

The design contrasts with the Tuscan -style homes common in Silverleaf.

The original villa design has been updated to make it more energy-efficient and to include the latest in home-automation technology, Day said.

Luster Custom Homes has framed two of the two-story villas, and they should be finished by the end of October, Day said.

Sales will begin later this summer.

Sterling at Silverleaf is the first development for the Sterling Collection Development Group.

by Peter Corbett The Arizona Republic Jun. 24, 2011 08:54 AM




Silverleaf project at DC Ranch revived after 2-year delay

Planning panel OKs hike in building height, density for Safari's Phase 2

The Scottsdale Planning Commission has endorsed ST Residential's proposal for the second phase of the Safari Drive condominium complex along the Arizona Canal north of Camelback Road.

The proposal seeks amended development standards under the city's downtown infill-incentive district and plan. Those include:

- An increase in maximum building height to 105 feet from 65 feet.

- An increase in overall density to 55 units per acre from 50.

- An increase in the floor area of the buildings.

The proposed height increase would make Phase 2 substantially higher than the first phase, which is approximately 60 feet. However, it would be hidden from Scottsdale Road behind Gray Development Group's Blue Sky apartment complex, which will have a maximum building height of 128 feet.

The Safari Drive Phase 2 building heights would be 63 feet and 68 feet nearest the first phase and then would reach 105 feet next to Blue Sky.

The commission unanimously recommended Wednesday that the City Council approve the changes. The council will consider the proposal when it returns from its break in August.

Commissioner Jay Petkunas, a Safari Drive resident, wasn't at the meeting, while Commissioner Michael Edwards, an architect, recused himself from considering the case because he is working for ST Residential on the second phase.

Commission Chairman Michael D'Andrea supported the proposal, saying he liked the transition in building heights and that it would be "relatively obscure" compared with Blue Sky.

The seven-building first phase includes 89 units on about 3 acres. The second phase would include 160 units in two buildings on 1.87 acres.

Commissioner Michael Schmitt said he was "pleasantly surprised" by the proposal and likes the spacing of the buildings and the transition in building heights.

"It does get lost behind Blue Sky," he said.

The infill-incentive district and plan established a building-height maximum of 150 feet north of the Arizona Canal and surrounding Scottsdale Healthcare Osborn Medical Center.

In April, the council approved Blue Sky, the first proposal filed under the district and plan and is set to consider the second proposal, Scottsdale and Angus, at its meeting Tuesday. That proposal seeks a maximum building height of 90 feet at Scottsdale Road and Angus Drive.

by Edward Gately The Arizona Republic Jun. 24, 2011 12:52 PM



Planning panel OKs hike in building height, density for Safari's Phase 2

G-20 lists measures to steady food prices

PARIS - The largest economies in the world agreed Thursday to a series of measures to stabilize world food prices after recent fluctuations caused global instability, especially in poorer countries.

French Agriculture Minister Bruno Le Maire said the G-20 summit of agriculture ministers had agreed to calm the world market by establishing a transparent system to track global supplies, set up emergency food reserves, engage in more research into new wheat strains and create a rapid-response mechanism to deal with drought in producer countries.

"It is a tour de force for the international community that lets you still believe in the power of solidarity and working together to address the big questions facing the planet, like the future of world agriculture," Le Maire told journalists.

Non-government organizations working on food issues, however, slammed the accord as too timid, saying it did not address the controversial issue of biofuels, which take up land that could be used to grow food, and doesn't focus enough on building up emergency stocks.

"Fixing the global food system and ending the food-price crisis requires major surgery, yet the G-20 produced little more than a sticking plaster," said Jean-Cyril Dagorn of Oxfam, adding that measures needed to be taken to stop the prices rising in the first place.

Their criticisms were seconded by the international alliance of Catholic development agencies and the Action Aid international poverty organization.

The accord was still, however, a rare case of international agreement in the area of food and agriculture, where countries have long been at loggerheads because of divergent interests.

International farm groups have also called for more regulation in the market, but that has been resisted by more free-market-oriented governments like Britain.

The gravity of the situation, however, was driven home when rising energy prices prompted a spike in food prices in 2008 that sparked riots in almost two dozen nations over three continents.

Last week, David Nabarro, the U.N. special representative on food security and nutrition, said that a repeat of 2008 is very likely and shortages of food, water and power are bound to create social anxiety and political instability in the future.

A recent U.N. study also predicted that prices will be 20 percent higher for cereals and up to 30 percent higher for meat in the coming decade compared to the past ten years.

With the global population expected to increase from 6.9 billion to 9 billion by 2050, the problem of feeding the world put food security at the top of G-20 summit's agenda.

"We all recognize the necessity of putting in place on the market of agricultural products new rules and regulations," Le Maire said.

Several dozen French farmers dressed as livestock and ears of corn demonstrated near the Paris bourse on Wednesday, protesting the role of financial markets in the food crisis.

The largest organization of European farmers, the COPA-COGECA, however, welcomed the agreement.

by Paul Schemm Associated Press Jun. 24, 2011 12:00 AM



G-20 lists measures to steady food prices

Building outlook dim for West

A leading national indicator of future construction activity declined for the second consecutive month in May, with the West region showing the most disappointing results, according to a report issued this week.

On the heels of a sizable decrease in April, the Architecture Billings Index slowed even further in May, according to the American Institute of Architects, which reports on the index each month.

The index reflects the relative change in billings for architectural services, which usually lead to construction projects about nine to 12 months later.

The Institute of Architects reported an index of 47.2 in May, a slight decrease from April's index of 47.6.

It said the scores reflect a continued decrease in demand for architectural-design services.

A score above 50 indicates an increase in demand, while a score below 50 indicates a decrease.

"Whatever positive momentum that there had been seen in late 2010 and earlier this year has disappeared," said Kermit Baker, the institute's chief economist.

"The prolonged credit freeze from lenders for financing commercial projects is the Number 1 challenge to a recovery for the design-and-construction industry."

The West, which includes Arizona, had the lowest regional index in May (47.7), while the Northeast had the highest (51.2), according to the report.

by J. Craig Anderson The Arizona Republic Jun. 24, 2011 12:00 AM




Building outlook dim for West

Phoenix-area real-estate agents subdued, report says

An apparent breakdown in the basic economic law of supply and demand has shaken Phoenix-area real-estate agents' confidence in the local housing market, according to a report issued Thursday.

Despite several consecutive months of increasing buyer demand for housing, the median price of homes hasn't budged, said Bob Bemis, chief executive of the Arizona Regional Multiple Listing Service.

Similar to the Consumer Confidence index, the listing service's subscriber index gauges the confidence level of real-estate agents who have represented a buyer or seller in at least one home sale in the past 12 months.

For the first time since it began reporting the Subscriber Confidence Index in December, the listing service found a significant drop in real-estate agents' confidence in June.

The index fell about 13 points from nearly 74 in May to just above 61 in June, the listing service said.

Of the 5,900 eligible listing-service members who received the survey, 457 responded to the survey in June, Bemis said.

Before the most recent confidence survey, the index had increased consistently since December.

Bemis said he suspected the change reflected a sense of frustration among agents that, despite a number of positive trends happening that are commonly associated with price increases, the median home price actually decreased in May to a decade low.

Positive housing-market indicators in recent months include an increase in the number of transactions, a decrease in the available inventory of homes for sale and drops in both foreclosures and pending notices of foreclosure.

"And yet, it's not reflected in the value of the homes," Bemis said.

The median sale price of homes sold via the listing service in May was $108,300 - a decade low point, and a decrease of 2.4 percent since April.

Bemis said he believed the disturbing disconnect between positive demand indicators and further declines in price contributed to the erosion in real-estate agents' confidence in June.

"It's a snapshot in time of what the real-estate practitioners - the agents - are thinking," he said.

Another reason for the drop in confidence, Bemis said, could be that agents were coming to the realization that home prices are not going to change significantly from what they are today.

"The Number 1 question is, 'When are we going to get back to normal?'" he said. "I think it's very possible that this is it - we're not going to have boom days returning like we did in 2005 and 2006."

In addition to maintaining a Web-based database of homes available for purchase, along with various details about each property, the listing service collects, analyzes and reports on a variety of Phoenix-area housing market statistics.

Bemis said the decision was made in December to begin regularly conducting a survey to measure its subscribers' confidence in the area real-estate market.

The listing service initially conducted the confidence survey every two months, and then switched to monthly surveys in April.

Bemis added that confidence indices were not definitive economic indicators, and he advised against reading too much into the results.

"I've learned that it is an imprecise science," Bemis said. "I think it is a point of interest - nothing more and nothing less."

by J. Craig Anderson The Arizona Republic Jun. 24, 2011 12:00 AM



Phoenix-area real-estate agents subdued, report says

Recovery revealing more cracks

WASHINGTON - Sour reports Thursday on the number of people who sought unemployment benefits and buyers of new homes illustrate what Federal Reserve Chairman Ben Bernanke acknowledged Wednesday: Many factors weighing on the economy are proving to be more chronic than first imagined.

Applications for unemployment benefits rose to a seasonally adjusted 429,000 last week, the Labor Department said Thursday. It was the biggest jump in a month and marked the 11th straight week that applications have been above 400,000. Elevated unemployment-benefit claims signal a worsening job market.

New-home sales fell in May to a seasonally adjusted annual rate of 319,000, the Commerce Department said. That's far below the 700,000 homes per year that economists say must be sold to sustain a healthy housing market. Sales of new homes have fallen 18 percent in the two years since the Great Recession ended. Last year was the worst for new-home sales on records dating back half a century.

Stocks fell after the weaker data on housing and layoffs were released. It came one day after the Fed lowered its outlook for growth and unemployment for the rest of the year.

A renewed warning from the European Central Bank's chief about Europe's debt crisis contributed to the day's bleak economic news.

And an agreement by 28 countries to boost global oil supplies forced energy stocks lower, contributing to the sell-off on Wall Street.

"We have had a worrisome string of soft numbers, which is painting a fairly bleak picture of the recovery," said Sal Guatieri, senior economist at BMO Capital Markets. "The labor market is weakening, according to the jobless-claims numbers, confidence appears to be slipping among households and small businesses and home sales are still very depressed."

The Fed cut its economic-growth forecast to between 2.7 percent and 2.9 percent this year, down from its range of 3.1 percent to 3.3 percent in April. The Fed also raised its unemployment-rate estimate slightly, saying it will not fall below 8.6 percent this year.

Economists say they are worried by potential conflicting explanations for the more downbeat view.

In its policy statement, the Fed blamed the worsening outlook, in part, on temporary factors. High gas prices have forced consumers to spend less on discretionary items, such as appliances and vacations, which help boost growth. And supply disruptions from Japan's natural disasters have slowed manufacturing growth. The Fed said that those problems should abate by the fall and that growth will pick up.

But, when pressed by reporters, Bernanke acknowledged that some of the troubles are stronger and more persistent. He singled out the weaknesses in the financial sector and the housing market, adding that those problems could linger.

"The chairman talked about temporary factors, but housing is clearly not temporary. It's a structural problem. This is going to stay with us for a while," said Yelena Shulyatyeva, an analyst at BNP Paribas.

The White House is trying to avoid further unexpected setbacks to the economy. The Obama administration announced Thursday that it was releasing 30 million barrels of oil from the country's emergency reserve, the largest ever. It is intended to increase U.S. supplies during the busy summer driving season and will likely send the cost of gas, which has already been falling, down further.

The other 27 nations said they will release a combined 30 million gallons. Together, that will add an extra 60 million gallons of oil to the world's supply. Still, American motorists use about that much in just three days.

What would help the economy most are jobs, analysts say. But, according to an Associated Press economy survey last week, the nation will add only about 1.9 million jobs this year and the unemployment rate will fall to only 8.7 percent at the end of the year.

The economy needs to generate at least 125,000 jobs per month just to keep up with population growth.

At least twice that many jobs are needed to bring down the unemployment rate, which rose to 9.1 percent in May.

Companies pulled back on hiring in the spring in the face of higher gas and food prices. That has cut into consumer spending on other discretionary items, such as furniture and appliances, which help boost economic growth.

Employers added only 54,000 net new jobs in May, much slower than the average gain of 220,000 per month in the previous three months.

Unemployment applications fell as low as 375,000 in February, a level that signals sustainable job growth. But applications surged in April to an eight-month high of 478,000 and have shown only modest improvement since that time.

by Martin Crutsinger and Derek Kravitz Associated Press Jun. 24, 2011 12:00 AM



Recovery revealing more cracks

Fed chief puzzled by continuing economic woes

WASHINGTON - The economy's continuing struggles aren't just confounding ordinary Americans. They've also stumped the head of the Federal Reserve.

Fed Chairman Ben Bernanke told reporters Wednesday that the central bank had been caught off guard by recent signs of deterioration in the economy. And he said the troubles could continue into next year.

"We don't have a precise read on why this slower pace of growth is persisting," Bernanke said. He said the weak housing market and problems in the banking system might be "more persistent than we thought."

The Fed cut its forecast for economic growth this year to a range of 2.7 percent to 2.9 percent from an April forecast of 3.1 percent to 3.3 percent. It also cut its forecast for next year to a range of 3.3 percent to 3.7 percent from an earlier 3.5 percent to 4.2 percent. The Fed also said unemployment would stay higher than it had expected.

In a policy statement issued at the end of a two-day meeting, the Fed blamed the worsening economic outlook in part on higher energy prices and the earthquake and tsunami in Japan, which slowed production of cars and other products.

But at a news conference afterward, Bernanke said the economy's troubles are more puzzling and potentially more long-lasting than a pair of temporary shocks.

The Fed's statement Wednesday stood in contrast to its more upbeat view when officials last met, eight weeks ago. At that time, the central bank said the job market was gradually improving.

Since then, the economic news has been gloomy. The government reported that the economy grew at an annual rate of only 1.8 percent in the first three months of the year.

The Fed stuck to its plan to bring an end this month to a program to help the economy by buying $600 billion in government bonds. The Fed also intends to keep short-term interest rates near zero "for an extended period," a phrase it has been using the past two years. Though the central bank noted that inflation had risen, it expected that to be temporary as well.

by Paul Wiseman and Martin Crutsinger Associated Press Jun. 23, 2011 12:00 AM




Fed chief puzzled by continuing economic woes

Hedge funds face added regulation

WASHINGTON - Hedge funds will face closer scrutiny under rules being approved Wednesday that seek to protect investors from risky trades and prevent another financial crisis.

The rules were mandated under the financial overhaul law passed last year. They require hedge funds and private equity funds to open their books to periodic inspections by the Securities and Exchange Commission. They also force the funds to disclose information about their operations, finances and investors.

Hedge funds are lightly regulated investment pools that collect money from pension funds, endowments and wealthy individuals. They use complex trades to seek big returns. Private equity funds focus on buying and reselling companies.

The SEC is expected to adopt the rules at its meeting on Wednesday. The funds will be required to register by early 2012.

Groups representing hedge funds and private equity funds have expressed support for the registration requirement. Many hedge funds have already registered voluntarily, according to industry groups.

Until now, hedge funds have been able to avoid registering with the SEC because of an exemption for investment groups that have fewer than 15 clients. Nearly all hedge funds qualify for the exemption because they are a collection of funds that count each individual fund as one client. In reality, a large hedge fund could have hundreds of individual investors.

The hedge fund industry commands trillions of dollars in assets and invests in anything from commodities to real estate. They account for an estimated 20 percent of all stock trading and have grown dynamically in recent years. At the same time, there has been a rise in fraud among hedge funds, according to regulators.

During the 2008 financial crisis, private funds had to come up with money when their capital was put at risk. That contributed to the strain on financial markets, regulators said. Some hedge funds suffered huge losses, notably from investments backed by high-risk mortgages.

The requirements vary in accordance with the size and complexity of a fund. For example, funds with more than $1 billion in assets under management will have to provide more details. Private funds with less than $150 million in assets under management in the U.S. will be exempt from the registration requirement, as will venture capital funds.

by Marcy Gordon Associated Press Jun. 23, 2011 12:00 AM



Hedge funds face added regulation

Realty Executives files reorganization plan

Phoenix-based Realty Executives Inc. has submitted its Chapter 11 reorganization plan to the U.S. Bankruptcy Court and hopes to emerge from bankruptcy by the end of September, a consultant to the company said Wednesday.

The plan, along with an accompanying document known as a disclosure statement, explains the circumstances that led the company to file for bankruptcy and offers a proposal for repaying creditors, most of whom would be paid in full.

The residential-real-estate agency, which does business as Realty Executives Phoenix, filed for Chapter 11 reorganization on April 30.

Both the franchise and its parent company, Realty Executives International, are based in Phoenix and owned by Richard Rector.

In legal documents filed along with the bankruptcy petition, attorneys for Realty Executives explained that only the franchise is a debtor in the bankruptcy, and that the parent company and its owner are two of its biggest creditors.

A list of the 20 largest creditors, filed with the company's Chapter 11 petition, includes Rector as the largest creditor, saying the company owes him about $1.25 million. Franchisor Realty Executives International is the third largest, with a claim of about $600,000.

Other creditors include Phoenix law firm Greenberg Traurig, owed about $838,000, and Johnson Bank in Scottsdale, which is owed $400,000.

Morrie Aaron, founder and president of Phoenix-based MCA Financial Group, which is the bankruptcy consultant to Realty Executives Inc., said that under the reorganization plan, the law firm and bank would likely be repaid in full.

In addition, all claims by current and former employees would be paid in full, including deposits owed to former agents.

Aaron said Rector has agreed to defer repayment of any debts which he is owed and actually would pay an additional $300,000 toward the repayment of other creditors.

Most of the remaining contractors, landlords and other unsecured creditors would receive an estimated three-fourths of the money owed to them, based on the now-profitable company's current projections, Aaron said.

However, he noted that a pending legal claim by former company president John Foltz could affect the company's ability to repay those unsecured creditors.

If a claim by Foltz for breach of contract and unpaid compensation is successful, Aaron said, it could reduce the amount paid on unsecured claims - including Foltz's claim - to as little as 25 cents on the dollar.

If a judge approves the reorganization plan and disclosure statement, it would then go to a vote of creditors, including Foltz. Each creditor also would have the opportunity to submit a competing reorganization plan.

Aaron said if no creditors object, the company could emerge from bankruptcy as early as Sept. 30.

The real-estate agency already has implemented a number of cost-cutting measures that have made it a viable business again, Aaron said.

"The company is profitable and we expect to have a successful emergence from bankruptcy," he said. "Internally, I feel that we're already there."

Company representatives have said that the agency ran into financial trouble in 2007 when the real-estate market crashed, in part because Realty Executives had grown to a large organization with 17 offices, 1,800 real-estate agent contractors and about 120 payroll employees.

After downsizing and cutting overhead costs, the company is now in relatively good financial health except for several expensive lease agreements, they said.

Of the roughly 15 leases Realty Executives holds for various offices in the Valley, there are four in particular in which renegotiations with the property owners had broken down, making it necessary to file the bankruptcy petition, Aaron said.

A motion filed along with the bankruptcy petition most likely will allow Realty Executives to "reject," or walk away from, four of the 15 lease agreements.

Those leases include two Tucson offices, one in Peoria and another in north Scottsdale, which cost the company a combined $37,733 per month.

In exchange for breaking the leases, Realty Executives proposed adding the amount still owed on each lease, not to exceed 12 months' worth of payments, to the company's list of unsecured debts to be settled in the bankruptcy, which is standard.

The U.S. Bankruptcy Court generally gives debtors broad discretion to decide which lease agreements and other service contracts to reject or keep in a reorganization proceeding.

The other party to each contract has a right to claim damages, which may or may not be paid as part of the reorganization plan.

One of the company's landlords, Montana-based Saypo Cattle Co., filed a complaint March 31 in Maricopa County Superior Court alleging non-payment of lease and fraud.

Aaron has characterized the fraud claim as false and said there were problems with the north Scottsdale location and that Saypo had been unwilling to work out a deal.

by J. Craig Anderson The Arizona Republic Jun. 23, 2011 12:00 AM



Realty Executives files reorganization plan

Former Radical Bunny partners face contempt charges

A U.S. District Court judge on Tuesday ordered four defendants in a recently decided case against former Mortgages Ltd. investor Radical Bunny LLC to appear in court to face charges of civil contempt for failing to pay a judgment of about $3.7 million.

Judge Susan R. Bolton had issued an order on April 12 requiring former Radical Bunny partners Tom Hirsch, Harish Shah, Howard Walder and his wife, Berta "Bunny" Walder, to each pay their share of the penalty by May 12.

As of Tuesday, none of the defendants had paid their share of the $3.7 million judgment or submitted an explanation to the court as to why they had not paid, according to court documents.

The outstanding judgment stems from a 2009 fraud lawsuit filed by the U.S. Securities and Exchange Commission against the former, Phoenix-based Radical Bunny and its principals.

The SEC lawsuit accused the defendants of violating federal rules against fraud and failing to register with the SEC.

Hirsch, Shah and the Walders filed an appeal on May 20 in connection with the case. They also recently settled a civil class-action lawsuit brought by a group of former investors, agreeing to pay an undisclosed sum.

Still, SEC attorneys Spencer Bendell and David Brown argued in a brief submitted to Judge Bolton that neither the appeal nor the class-action settlement excused the defendants from paying the $3.7 million penalty as ordered.

Bolton's order issued Tuesday requires the defendants to appear in court on July 28 to explain why they should not be held in contempt for failing to pay.

According to the SEC, the punishment for being held in civil contempt can range from "incarceration, or monetary fines, or such other sanction the Court deems just and proper."

The SEC filed fraud charges against Radical Bunny in July 2009. The firm has since filed for bankruptcy protection.

Radical Bunny raised more than $197 million from nearly 900 investors and then used the money to make high-interest loans to Mortgages Ltd. According to the SEC, the defendants then told investors that their money could only be used for commercial development, when in fact Mortgages Ltd. could use the money for anything.

Attorneys for the defendants could not be reached for comment Tuesday, but they have argued throughout the case that Hirsch, Shah and the Walders had operated Radical Bunny in good faith and had relied on the advice of attorneys and others they knew and trusted. When Mortgages Ltd. went into bankruptcy, it had almost $1 billion in loans outstanding to developers. Since then, most of those projects have stalled because of a shortage of money and the real-estate market's downturn. Several developers, who had been getting loans from Mortgages Ltd., have since gone into bankruptcy.

Radical Bunny's investors forced it into bankruptcy in late 2008.

Purposefully misleading investors is a violation of federal security laws. According to the SEC, the defendants allegedly told investors they weren't subject to securities law.

The SEC also said Radical Bunny was not registered with them and did not register any offering under securities laws. In addition to the securities-fraud charges, Hirsch, Shah and the Walders are charged with offering and selling unregistered securities and acting as unregistered broker-dealers.

The SEC also alleges that Hirsch received at least $3 million, the Walders received at least $2 million, and Shah received at least $700,000 as part of a "vendor fee" for the money they pooled from investors to lend to Mortgages Ltd.

The former Radical Bunny executives' attorneys have insisted all along that the business was not selling "investments" and that the SEC did not have proper jurisdiction to prosecute the case.

by J. Craig Anderson The Arizona Republic Jun. 21, 2011 05:27 PM



Former Radical Bunny partners face contempt charges

Home sales at 2011 low as few first-time buyers make deals

WASHINGTON -- Fewer people purchased previously occupied homes in May, bringing sales down to their lowest level of the year.

Home sales sank 3.8% last month to a seasonally adjusted annual rate of 4.81 million homes, the weakest pace since November, the National Association of Realtors said Tuesday. Economists say that's far below the 6 million homes per year sold in healthy housing markets.

Since the housing boom went bust in 2006, sales have fallen in four of the past five years. They hit a 13-year low last year.

First-time homebuyers ticked down to 35% of sales. First-timers typically drive half of sales in healthy markets and they are critical because they typically improve their properties and invest in their communities, a combination that helps home values rise.

The median sales price for a previously occupied home in May was $166,500. That's 4.6% lower from the same month one year ago. The median price of a new home is nearly 31% higher than the median price for a re-sale, twice the normal markup.

The gap is largely because of the flood of foreclosures or short sales -- when the lender accepts less than what is owed on the mortgage. Those sales are forcing down prices.

Sales of homes at risk of foreclosure fell in May. But they still made up 31% of all purchases. And a large number of pending foreclosures are backlogged in the courts or held up by state and federal probes into troubled foreclosure practices by lenders.

A record 1 million homes were lost to foreclosures last year and foreclosure tracker RealtyTrac Inc. expects 1.2 million more will be lost this year.

Another problem for the housing market is the glut of unsold homes. In May, the supply fell slightly to 3.72 million homes. At last month's sales pace, it would take more than 9 months to clear those homes. Homes priced for less than $100,000 are selling briskly but more expensive homes are having trouble finding buyers. Analysts say a healthy supply can be cleared in six months.

The situation is much worse when taking into account the "shadow inventory" of homes, economists say. These are homes that are in the early stages of the foreclosure process but, because of backlogged courts or the government probes, have not hit the market for re-sale.

Sales fell across most regions of the country. In May, sales dropped 6.4% in the Midwest, 5.1% in the South and 2.5% in the Northeast. There was no change in the West.

Associated Press Jun. 21, 2011 08:17 AM




Home sales at 2011 low as few first-time buyers make deals

Phoenix real-estate investor pleads guilty in fraud scheme

A Phoenix real estate investor on Monday pleaded guilty to conspiracy to commit wire fraud in a $50 million, Phoenix-based mortgage-fraud scheme, federal officials said Tuesday.

Authorities said two others have entered guilty pleas and are awaiting sentencing.

In his guilty plea, 46-year-old Brett Matheson admitted that, as president and CEO of Maricopa Property Investment Solutions Inc., he recruited straw buyers in real-estate seminars, according to Robbie Sherwood, a spokesman for the U.S. Attorney's Office for the District of Arizona. In this instance, a "straw buyer" is someone who pretends to be a legitimate buyer for a property but is actually helping to further a mortgage scam.

From about January 2005 through September 2006, Matheson reportedly helped to speed up the submission of mortgage-loan applications for unqualified straw buyers containing false information such as employment, income, assets and the intent to occupy homes as their primary residence, Sherwood said. Authorities said some loan-application packages contained altered pay stubs, false bank statements, and bogus verifications of employment and deposit.

Matheson personally obtained financing for the purchase of two properties using altered pay stubs and bogus verifications of employment, according to the U.S. Attorney's Office.

Some proceeds were then kicked back to a shell company controlled by Matheson and his co-conspirators, officials said.

Investigators said Matheson would often use the money on personal expenses or to make down payments to qualify additional straw buyers for financing on other properties.

In total, the scheme involved 52 properties and nearly $50 million in fraudulent loans, according to the U.S. Attorney's Office. Lenders, who were not aware of the arrangement between Matheson and the straw buyers, collectively lost nearly $20 million.

"Schemes like this have destroyed property values, crippled lending institutions, and ruined entire neighborhoods in our community," U.S. Attorney Dennis K. Burke said in a prepared statement.

The investigation was conducted by the Internal Revenue Service's Criminal Investigation Division and the Federal Bureau of Investigation. A conviction for a single count of conspiracy to commit wire fraud is punishable by a combination of a maximum fine of $1 million, a maximum 30-year prison sentence and a five-year term of supervised release, according to the U.S. Attorney's Office.

by Brittany Smith The Arizona Republic-12 News Breaking News Team Jun. 21, 2011 02:26 PM


Phoenix real-estate investor pleads guilty in fraud scheme

State trust land in north Scottsdale sells for $3.5 million

A 20.64-acre parcel of state trust land in north Scottsdale sold for $3.49 million today at an Arizona State Land Department auction.

The commercially zoned land northwest of Bell Road and Thompson Peak Parkway wraps around the Windgate Crossing shopping center.

The winning bidder was McDowell Windgate Holdings LLC, whose principals are Charles and Kelly Byxbee.

Scottsdale-based Byxbee Development Partners developed Windgate Crossing, which includes Bank of America, CVS Pharmacy and Temple Bar.

The property is just south of Windgate Ranch, a gated community under development by Toll Brothers.

The winning bid was at the minimum bid price set by the Land Department.

by Peter Corbett The Arizona Republic Jun. 21, 2011 10:51 AM




State trust land in north Scottsdale sells for $3.5 million

Zoning request would allow Scottsdale homes, dealerships

Scottsdale would allow car dealerships and 935 additional homes on state land along Loop 101 under a rezoning request recently filed by the Arizona State Land Department.

The change would permit retail use, including car sales, on parts of the 1,000 acres of state trust land between Scottsdale and Hayden roads from north of Princess Drive to the southern edge of Grayhawk.

Zoning for the area, referred to as Crossroads East, also would allow construction of 4,378 homes, up from 3,443 under the current plan.

"We want to get the land prepared as things start to rebound," said Vanessa Hickman, deputy land commissioner. "This would give us additional flexibility."

A land-use plan for Crossroads East was initially set about 25 years ago. The proposed amendments would reflect changes in the market and uses of adjacent properties, according to the state's request.

Scottsdale has a meeting planned from 4 to 6 p.m. Monday at the Scottsdale Airport, 15001 N. Airport Drive, to explain the proposed changes for Crossroads East.

Kroy Ekblaw, a Scottsdale planner overseeing strategic projects, said the proposed changes are consistent with the latest Greater Airpark Character Area Plan.

The State Land Department eventually plans to sell portions of Crossroads East at auction as the market recovers. The vast acreage is in a prime location for office, commercial, light-industrial and mixed-use development along Loop 101 north of the Scottsdale Airpark.

It is expected to be an important employment hub as it develops over the next few decades.

One developer is interested in buying 29 acres of state trust land at Chauncey Lane, east of Scottsdale Road, for a car dealership.

Diversified Partners CEO Walt Brown Jr. said he has been meeting with the Land Department and city to gauge development costs for the site.

"There are some major regional drainage issues that need to be resolved," he said. "I don't think anyone is prepared to move forward unless those things are addressed."

The site Brown wants is just east of an auto mall on the Phoenix side of Scottsdale Road.

A full slate of car dealerships also line Frank Lloyd Wright Boulevard a mile to the southeast.

Ekblaw said he did not expect an exodus of nearby dealerships to any new sites in Crossroads East.

"We thought most of the auto uses had been accounted for," he said, adding that there has been some additional interest.

Scottsdale approved a Lund Cadillac dealership in 2002 southeast of Loop 101 and Scottsdale Road on a former tract of state land but it was never built despite $7.5 million of unused city incentives.

Crossroads East includes areas south of Loop 101 used for Waste Management Phoenix Open parking west of Hayden Road, and by Russo and Steele for its collector car auction east of Scottsdale Road.

MORE ON THIS TOPIC

Land plan may change

Scottsdale has a meeting planned from 4 to 6 p.m. Monday at the Scottsdale Airport, 15001 N. Airport Drive, to explain proposed zoning changes for state trust land along Loop 101 between Scottsdale and Hayden roads.


by Peter Corbett The Arizona Republic Jun. 22, 2011 11:50 AM

Glendale Centerline project gets the go-ahead

Revitalization efforts for downtown Glendale moved forward Tuesday. The City Council unanimously approved the establishment of the Centerline Overlay District to give property owners more flexibility when it comes to building in the Glendale Avenue corridor from 43rd to 67th avenues between Myrtle and Ocotillo avenues.

The new zoning option is Glendale's attempt to boost the redevelopment of vacant and underperforming properties along one of the city's main corridors. The new standards allow for taller buildings, more floor space and mixed-used development.

City officials launched the renewed focus on Glendale Avenue more than two years ago. They want to transform Glendale's aging downtown into a pedestrian-friendly urban village with dining, entertainment, retail shops and housing.

Councilman Phil Lieberman, whose district includes part of Glendale Avenue, called the new standards "a very vital part of our Centerline project" in that it allows businesses more opportunities.

Councilwoman Yvonne Knaack, who owns an insurance business in the Centerline project area, applauded the new building standards.

"It's a very progressive economic tool for the city," Knaack said. "It will do wonders for this area."

Property owners will be able to develop their properties using the existing zoning or the overlay district but not both.

The overlay bans certain uses such as tattoo parlors, halfway houses and car dealerships.

The overlay's main benefit is greater height, intensity and density in building. In the Historic Downtown District, buildings would be allowed to reach 60 feet, compared with the current cap of 30 feet. And the overlay would allow for up to 50 dwelling units per acre, which is prohibited in the current zoning.

by Cecilia Chan The Arizona Republic Jun. 20, 2011 07:12 AM




Glendale Centerline project gets the go-ahead

Experts offer varied housing outlooks

Housing-market watchers are searching for signs Phoenix's five-year housing crash is near an end.

There's lot of real-estate information out there with different forecasts. Several reports show the market improving, and prices inching up this year. But there's also research implying the crash isn't over.

Data from Phoenix groups the Cromford Report and the Information Market:

- Home sales were up 3.5 percent in May over April.

- Pending sales were almost flat in May from April, signaling June could be another good month.

- Listings continue to fall and are down almost 10 percent from May.

- Both pre-foreclosures and foreclosures are down.

The news isn't as good for the new-home market, which must still compete with foreclosures.

RL Brown and Greg Burger's latest "Phoenix Housing Market Letter" tracked nearly 600 new-home permits in the Phoenix area, which is this year's norm for the market.

The report states the homebuilding industry, which was once the driver of Phoenix's economy, won't be healthy again until the economy adds 300,000 jobs.

The less-upbeat forecast comes from the Arizona Regional Multiple Listing Services Price Index. The data, based on pending sales, show metro Phoenix's median home price could fall to $106,000 in July and $97,000 in August.

If you read this column last week, you will know that the region's median price has been holding steady at about $115,000 for the past six months.

Meanwhile, former vice-presidential candidate Sarah Palin's recent $1.7 million Scottsdale home purchase is drawing more attention.

A Massachusetts official and mortgage-fraud investigator believes a "robosigner" was involved in Palin's deal.

Several Arizona real-estate experts believe Palin's title is clear and legal and say they need more evidence of any illegal signing.

by Catherine Reagor The Arizona Republic Jun. 22, 2011 12:00 AM




Experts offer varied housing outlooks

Auction set for Glendale center


Westgate City Center, the flashy dining and shopping complex that anchors Glendale's football stadium and hockey arena, is facing foreclosure.

The Ellman Cos. announced Monday that the property at Loop 101 and Glendale Avenue has been scheduled for auction.

"Despite Herculean efforts, the Westgate ownership group, including a consortium of Wall Street real-estate entities, is not immune from the real-estate collapse," the Phoenix-based Ellman Cos. said in a statement.

The developer blamed the national recession and uncertainty surrounding the future of the Phoenix Coyotes staying in Glendale for the complex's struggles. The Coyotes have been without a permanent owner for two years, hurting the number of visitors to hockey games and to Westgate shops and restaurants.

The situation has several potential outcomes: Developer Steve Ellman could negotiate a deal with lenders to keep the property; new buyers could purchase the complex at auction; or lenders could take over the complex if no buyer is secured.

At least one potential investor has already expressed interest. Matthew Hulsizer, working on a deal to purchase the Coyotes, said Monday that he might be interested.

Westgate has played a major role in Glendale's economic aspirations.

Ellman worked with the city a decade ago to build a sports and entertainment district. The city paid $180 million to build Jobing .com Arena for the Coyotes, a team that Ellman owned at the time. Ellman built Westgate, which the city depends on for sales-tax revenues to make annual $8 million to $10 million debt payments on the arena.

Westgate opened in 2006, behind schedule and behind in the size of the promised development. The complex boasts Bellagio-style fountains, a movie theater, more than a dozen eateries and night spots like Saddle Ranch Chop House.

Glendale Mayor Elaine Scruggs said Ellman assured her Westgate would stay open and visitors would notice no changes.

"We're disappointed to hear the news," she said, but "it really isn't surprising. Steve Ellman has poured tens of millions of dollars into the project. But just like all other properties, his valuation has dropped so low in comparison to what is owed on the property."

Glendale issued a statement that Westgate businesses "will be open as usual."

Eric Bennett, Saddle Ranch's acting general manager, echoed that, saying that "who we write our check to is a moot point."

He said Westgate and Saddle Ranch would continue to be a destination for Valley residents.

The complex is owned by subsidiaries of Ellman Cos., Entertainment Center Development LLC and Coyote Center Development LLC. Records of the trustee sale were not immediately available from the Maricopa County Recorder's Office. Ellman Cos. spokesman Jason Rose said the auction should take place in 90 days or more.

Rose said the developer was current with all payments on interest, vendors, services and staff salaries, but that a lead lender found the developer and other lenders in default for missing payment on the balance of the loan when it recently came due.

Hulsizer, who has been working with the city for a year on an arena lease agreement for the Coyotes, said the foreclosure process will not deter him from trying to purchase the team. Hulsizer said he even would be interested in buying or partnering in the purchase of Westgate.

"We're investors, and we believe in Arizona long-term," he said. "There might be some interest in purchasing Westgate if it came for sale."

by Rebekah L. Sanders The Arizona Republic Jun. 21, 2011 12:00 AM



Auction set for Glendale center

Monday, June 20, 2011

Inman News writers win 3 awards | Inman News

Flickr image courtesy of <a href="http://thegoldguys.blogspot.com/">thegoldguys.blogspot.com</a>.

Flickr image courtesy of thegoldguys.blogspot.com.

Reporters and blogger recognized by National Association of Real Estate Editors


SAN ANTONIO -- Inman News writers received three awards in an annual National Association of Real Estate Editors competition, including awards in the Best Team Report, Best Series and Best Blog categories.

Inman News reporters Matt Carter and Andrea V. Brambila shared a second-place award for a three-part series, "Rebuilding Homeownership," that focused on the depleted pool of borrowers and the financial challenges in store for consumers to buy back in to the American Dream of homeownership after enduring a foreclosure or short sale.

The judges commented, "Rather than wringing their hands at another gloom and doom article, the reporters assessed the damage and went on to explain what needed to happen for the real estate market to turn around. The exhaustive report compiled results from surveys and official reports."

The category was open to all media. The first-place winners, Sanjay Bhatt and Jennifer Lafleur of The Seattle Times, teamed with ProPublica, an independent, nonprofit investigative news organization, in a report that highlighted common foreclosure triggers.

Inman's Brambila also won a second-place award for a three-part report, "Meet the Cash Buyers," that included interviews with real estate buyers and industry professionals participating in all-cash transactions, which now account for a significant share of all real estate sales.

Judges commented, "This solid series describes the positive effect of the real estate crisis for a variety of buyers who have cash. It is one of the few entries that focuses on who is purchasing foreclosed properties and why."

The category was open to all media. Kirsten Grind of The Puget Sound Business Journal won the first-place award in this category for a series that focused on "the struggles of two Oregon community banks to survive amid the financial crisis," judges noted.

Katie Lance, social media manager for Inman News and writer for the Future of Real Estate Marketing blog, a part of Inman News, won a second-place award for Best Blog in NAREE's 61st annual awards, based on several submitted sample blog posts and the judges' review of the site itself.

Judges commented, "On the surface, this blog seems to offer conventional, common sense tips on effective real estate marketing, but the writer brings research to the blog and is particularly aware of the value of lists and links. The information is fresh because the writer updates it regularly."

Sheree R. Curry, a freelance writer for AOL Real Estate, won the first-place award in the category, with judges commenting, "This is a newsy blog, well written in a personal style. It also is well targeted to people buying and selling homes."

Mary Umberger, a regular Inman News contributor who also writes for The Chicago Tribune, for the second year in a row won the award for Best Freelance Collection.

Judges commented, "Reading this writer is like getting good advice from an old friend. Her columns particularly are memorable because they are easy to read and yet full of good information for those interested in real estate. They are a pleasure to read."

Also during the NAREE conference, winners were announced for the 2011 Robert Bruss Real Estate Book Awards, named for the former Inman News syndicated columnist who died in 2007 and sponsored by NAREE President Leigh Robinson, founder of Express Publishing; and by Bradley Inman, publisher for Inman News and video book company Vook.

Sheri Koones, author of "Prefabulous + Sustainable," published by Abrams, won the first-place Gold Award in the annual book competition. Head judge Allen Norwood commented: "Authoritative and beautiful. Once again, Koones builds her case for prefab thoroughly, and presents it in a compelling, well-organized package."

Galina Tachieva won the second-place Silver Award for "The Sprawl Repair Manual," published by Island Press. Norwood commented that the book is "filled with interesting and innovative case studies."

And authors Ben Kinney and Jay Papasan won the third-place Bronze Award for "Soci@l," published by Rellek Publishing Partners Ltd. Norwood said in his comments that "Soci@l" is "one of the most timely -- and helpful -- examinations of the media transforming real estate. (This book) belongs on every agent's desk."

Gregory Zuckerman, author of, "The Greatest Trade Ever," won the First-time Author Award for what Norwood commented is a "detailed account" that "reads like a compelling novel ... from (the) perspective of one of the most important periods in the nation's financial history."

Norwood, a freelance editor for HGTV online who is a retired homes section editor for the Charlotte Observer newspaper and a past NAREE vice president, was joined by fellow judges Judith Stark, freelance editor and writer, and retired real estate and homes editor for the St. Petersburg Times; and Byron Koste, executive director emeritus for the University of Colorado Real Estate Center.

Awards for the book competition ranged from $250 to $1,000, and first-place winners in the NAREE journalism competition received $250.

A full list of journalism awards winners follows:

Best Overall Entry by an Individual
Winner: Shannon Behnken, The Tampa Tribune
Judges' comment: "This year's competition is filled with articles about foreclosure processing and some of its dubious practices, but this article focuses directly on the processing fees which are more harmful than helpful to homeowners. The writer extensively investigated billing documents and internal record to make this problem apparent to readers and to state officials."

Best Freelance Collection Award
Winner: Mary Umberger,The Chicago Tribune
Judges' comment: "Reading this writer is like getting good advice from an old friend. Her columns particularly are memorable because they are easy to read and yet full of good information for those interested in real estate. They are a pleasure to read."

Ruth Ryon Best Entry by a Young Journalist
Winner: Alyssa Abkowitz, SmartMoney magazine
Judges' comment: "This writer won the largest category (number 16) by noticing patterns in the real estate industry that not every writer noticed. She coupled her initiative in finding fresh stories with lively writing."

Category 1: Best Residential Real Estate Report (daily newspaper)
Winner: Robbie Whelan, The Wall Street Journal
Judges' comment: "The title of this story, 'The 25-Year Foreclosure From Hell,' tells it all. This was a great story about a trendsetter in the movement to resist foreclosure while refusing to pay a mortgage and using the courts to stay in her home. The story is exceptionally well written and resourced and shows how careless lenders can sometimes be their own worst enemy."

Second Place: Dina ElBoghdady, The Washington Post
Judges' comment: "This is a good attempt to explain the psychological aspect of a broken housing market in which the buyers and sellers do not seek the same end. Not taking a typical approach to this problem, the writer describes the buy-low-and-sell high concept in the extreme."

Honorable Mention: Josh Flory, The Knoxville News-Sentinel
Judges' comment: "This story chronicles the plans of a luxury home developer in Tennessee and shows how these plans went from ambitious dreams to projects fraught with unpaid tax bills, law suits, and upset buyers. It is a particularly well told regional story that reflects a situation happening nationwide."

Category 2: Best Mortgage or Financial Real Estate Report (daily newspaper)
Winner: Nick Timiraos, The Wall Street Journal
Judges' comment: "This writer deserves kudos for looking at big picture questions in the current real estate muddle. The story focuses on the government's role in propping up the housing sector and questions how much risk that taxpayers should be willing to take on. The irony is not lost on the writer of the story of a New Deal agency, which was founded to solve the depression's housing problems in the 1930s and is now embroiled in another housing crisis."

Second Place: Dina ElBoghdady, The Washington Post
Judges' comment: "This in-depth story looks at the foreclosure crisis and how owners are lured into participating in a loan modification only to find out that they spend unexpected money on fees and often end up in foreclosure. This is one of the better examples of a common story told over and over by real estate writers."

Category 3: Best Commercial Real Estate Report (daily newspaper)
Winner: Kris Hudson, The Wall Street Journal
Judges' comment: "This is an original story that reveals that the professional scam of going to exotic resorts for conventions has come to an end for a number of reasons in addition to the recession and penny pinching. Particularly interesting was the writer's observation that the word 'resort' in a title can hurt a hotelier's bottom line."

Second Place: Eric Pryne, The Seattle Times
Judges' comment: "The writer gives readers a comprehensive look at a major player in the region's real estate, who is developing an area in Seattle which is the size of Boston but which has gone largely unnoticed by the public. This is a great piece of in-depth reporting."

Category 4: Best Report (daily newspaper, under 250,000 circulation)
Winner: Eric Pryne, The Seattle Times
Judges' comment: "This extensively researched profile paints a picture of a family-owned real estate empire and the secretive individual at its helm. Given the subject's unwillingness to speak to the press, the writer does a superb job of accessing public records and interviewing people close to the subject."

Second Place: Kristy Eppley Rupon, The State newspaper, Columbia, SC
Judges' comment: "The story is an excellent example of service journalism. The writer shows how difficult it is for consumers to glean information about the past records of home building companies and the failure of lawmakers to regulate licensing."

Honorable Mention: Mimi Whitefield, The Miami Herald
Judges' comment: "This feature is an example of solid trend reporting. The writer noticed the interest of foreign buyers in low-priced Miami real estate and builds an argument that international buyers represent a solution to the housing slump."

Category 5: Best Report (weekly business newspaper)
Winner: Theresa Agorino, Crain's New York Business
Judges' comment: "This analysis of loans of CMBS deals points to a problem that U.S. regulators are paying little attention to compared to the problems with residential mortgages. It is a difficult, unsexy subject, but the writer brought it alive. The story issued a warning that this is going to happen again."

Second Place: Adrianne Pasquarelli, Crain's New York Business
Judges' comment: "The headline -- "ICK!" -- and the blowup of a bedbug leaping off the page caught the judges' attention, just as it probably did the readers. The story shows that no place is safe from an infestation of pests, and it describes what two Manhattan companies were doing to lessen the financial impact of this on real estate. The writer also shows the efforts to conceal the extent of the problem."

Category 6: Best Real Estate, Mortgage or Financial Report (magazine)
Winner: Cindy Hoedel, The Kansas City Star
Judges' comment: "This is a piece on modernist architecture coming of age and being eligible for historic preservation. Without falling into a nostalgic tone, the writer considers technological advances that shaped 1960s designs and stresses the importance of the modernist movement, whether its products were striking architectural icons or simply uninteresting."

Second Place: Pat Regnier, Money magazine
Judges' comment: "This is an excellent description of the impact of the mortgage crisis on an upscale Orange County development in California. In many ways, it establishes that upscale communities are affected much the same as downscale suburban developments that drew much less wealthy buyers before 2006."

Category 7: Best Trade Magazine Report for the Residential Real Estate, Mortgage/Finance or Building/Development Industries
Winner: Kerry Curry, HousingWire
Judges' comment: "This well written article focuses on a segment of the foreclosure market that would not necessarily be on readers' minds: foreclosed golf courses. She describes challenges with this 'asset class' and how everyone thought the future of golf courses was on a continual upswing."

Second Place: Jon Prior, HousingWire
Judges' comment: "This article on minority real estate brokers shows the challenges that they face working in a largely white-dominated field. Framing the story in historical terms, he notes the industry today cannot afford to ignore the contributions of minority professionals."

Category 8: Best Trade Magazine Report for the Commercial Real Estate Industry
Winner: Sarah Ryley, Real Deal magazine
Judges' comment: "This writer took a fresh angle to the financial foreclosure story by tracing 100 years of downturns in the New York City real estate market. And while readers may not feel much comfort in learning that this is only the fourth worst downturn, it does put what has happened in an historical perspective."

Second Place: Elaine Misonzhnik, Real Traffic magazine
Judges' comment: "This is an excellent speculative think piece for retail store operators. It is a difficult story to write. The writer remains credible throughout by constant reference to current communication technologies that support her futuristic predictions."

Category 9: Best Residential Real Estate or Mortgage/Finance Report
Winner: Prashant Gopal, Bloomberg News
Judges' comment: "This feature highlights how the downturn in the downtown Miami real estate market in condos actually improved the city, bringing in a lot of young professionals, who otherwise would not be able to afford to live there. The story highlights the ironies of the current real estate market and is well researched and written."

Second Place: John W. Schoen, MSNBC.com
Judges' comment: "This report traces the failure of the government's foreclosure relief program. It does so with thorough, understandable reporting."

Honorable Mention: Leah Culler, MSN Real Estate
Judges' comment: "This feature was interesting because the writer looked at a real estate area that is largely overlooked: life in trailers. It shows how the stigma of living in a mobile home park appears to be changing."

Category 10: Best Commercial Real Estate Report
Winner: Dan Levy, Bloomberg News
Judges' comment: "The writer takes readers into the Napa Valley to hear from vineyard owners on how dropping land values and consumers' love of bargain wines are resulting in a 'vintage' year for foreclosures. The story demonstrates how the financial crisis hits the affluent involved in agricultural commerce."

Second Place: David Levitt, Bloomberg News
Judges' comment: "Given that we still hear from mainstream media, especially television, how stable New York City real estate remains and how expensive it is, this is an excellent analysis of the overbuilding and vacancies among Wall Street office buildings. It not only looks at the present but speculates on the real estate market's future."

Category 11: Best Blog
Winner: Sheree R. Curry, Freelance-AOL Real Estate
Judges' comment: "This is a newsy blog, well written in a personal style. It also is well targeted to people buying and selling homes."

Second Place: Katie Lance, Inman News
Judges' comment: "On the surface, this blog seems to offer conventional, common sense tips on effective real estate marketing, but the writer brings research to the blog and is particularly aware of the value of lists and links. The information is fresh because the writer updates it regularly."

Category 12: Best Broadcast Report (online, radio or television; local, network or cable channels)
Winner: Shannon Behnken, The Tampa Tribune
Judges' comment: "This is an example of local broadcast investigative reporting that revealed the homeowner association fee scandal to a broad audience. It featured fresh interviews with people on both sides of the issue and performed a real service."

Second Place: Amy Hoak, MarketWatch
Judges' comment: "This report explained innovative building practices that create homes with low energy usage. Viewers could watch a home come together from the foundation to the finished product."

Category 13: Best Home and Design Feature
Winner: Elizabeth Fenner, Money magazine
Judges' comment: "This feature nicely establishes the principles of inexpensive design upgrades, based on scientific research, and then illustrates their application throughout a two-story home. This was the most helpful, most interesting feature in this category."

Second Place: Rebecca Teagarden, The Seattle Times
Judges' comment: "In tough financial times, many people may want, or be forced, to move into smaller accommodations. The writer does an intriguing story on a man who imaginatively arranged an extremely small condo (only 182 square feet) and made it quite livable, thus perhaps encouraging others to try the same thing."

Category 14: Best Column
Winner: Kenneth R. Harney, Washington Post Writers Group
Judges' comment: "Regular readers of this writer's syndicated column come to expect the occasional 'Kaching!!!' Or 'Wow!!!' that punctuate his lively writing. Particularly noteworthy was a column on private transfer fees that can catch unwary buyers and sellers."

Second Place: Ralph Bivins, RealtyNewsReport.com and CultureMap.com
Judges' comment: "This writer has the ability to be entertaining, thus keeping a reader wanting more, while discussing serious topics dealing with real estate. This makes not only for a lively read but an informative one. Clearly, this writer knows the difference between a column and a feature."

Category 15: Best Series
Winner: Kirsten Grind, The Puget Sound Business Journal
Judges' comment: "This series details the struggles of two Oregon community banks to survive amid the financial crisis, showing how inaction by federal regulators helped prompt their closure. While Wall Street crises grabbed front-page headlines all year, this series illustrates the critical role of investigative journalism on a community level."

Second Place: Andrea V. Brambila, Inman News
Judges' comment: "This solid series describes the positive effect of the real estate crisis for a variety of buyers who have cash. It is one of the few entries that focuses on who is purchasing foreclosed properties and why."

Honorable Mention: Greta Guest, Detroit Free Press
Judges' comment: "This series examines the cost of walking away from your home, an important topic in a state where one-of-three properties with a mortgage was underwater. The well written articles show the problem through homeowners' stories and statistics."

Category 16: Best Collection of Work by an Individual
Winner: Alyssa Abkowitz, SmartMoney magazine
Judges' comment: "In this year's largest category, these articles stand out because they approached the housing crisis in imaginative ways. They shine because of the writer's personal voice and the fact that they focus on patterns in the real estate industry that not every other writer noticed: the movement toward efficient prefabrications, response to devaluation through property tax protests, and the effort that it now takes for a Realtor to make a sale."

Second Place: Jamie Smith Hopkins, The Baltimore Sun
Judges' comment: "These excellent newspaper features put a face on current damaging patterns in real estate: strategic defaults, mortgage foreclosure frauds, and the effect of foreclosures and defaults on neighborhoods. The writer's stories show rather than merely tell."

Honorable Mention: Dawn Wotapka, The Wall Street Journal
Judges' comment: "Employing the classic Wall Street Journal formula, these stories illustrate how it is possible to make lemonade from lemons. The angles that the writer takes on the housing crisis stand out from so many of the gloom and doom stories submitted in this competition."

Category 17: Best Newspaper Real Estate or Home Section (more than 250,000 circulation)
Winner: Craig Nakano, Lauren Beale, Lisa Boone, Chris Erskine, Mary MacVean, Deborah Netburn, The Los Angeles Times
Judges' comment: "This home section maintains a local focus packaged in great graphic design and contains considerable promotional real estate writing that is informative and readable between excellent feature stories. The section provides particularly helpful information in its section on sales and auctions of classic home accoutrements."

Second Place: Anne Nelson, Susanne Althoff, Chin Wang, Josue Evilla, Veronica Chao, The Boston Globe
Judges' comment: "While this newspaper magazine's design seems a bit cramped among all of the advertising, it offers good photographic display on how to transform a home. The stories take readers inside homes to find out how to implement renovations."

Category 18: Best Newspaper Real Estate or Home Section (less than 250,000 circulation)
Winner: Julie Gallego, Jeff Collins, Scott Albert, Jonathan Lansner, Marilyn Kalfus, Kelli Hart, Erika Chavez, The Orange County Register
Judges' comment: "This real estate section is all about selling, but given that limitation it still produces interesting graphic layouts and provides a great deal of statistical data about the area's real estate market. It also entertains with briefs about hot properties of celebrities."

Second Place: Aisha Sultan, Amy Bertrand, Karen Deer, Debra D. Bass, The St. Louis Post-Dispatch
Judges' comment: "This newspaper's section focuses on home d├ęcor and gardening and does it well with excellent photos and graphic presentations. Readers will be drawn to the advice from experts."

Category 19: Best Shelter Magazine
Winner: Gail Ravgiala, Jenna Talbott, Danielle Ossher, Design New England
Judges' comment: "This showcases upscale homes with elegant photography and design. It is well targeted to its audience of design professionals and architects."

Category 20: Best Residential Trade Magazine
Winner: Denise Dersin, Builder magazine
Judges' comment: "This serves its readers with a solid editorial mix of upbeat success stories, trend analysis, new building techniques, and new product information. It contains readable short articles, columns, and departments."

Second Place: Paul Jackson and Kerry Curry, Housing Wire
Judges' comment: "This magazine does a good job of covering the mortgage banking and financial markets. Its stories feature analysis and profiles of industry leaders, packaged in a no frills but attractive design."

Category 21: Best Commercial Trade Magazine
Winner: Stuart Elliott, Real Deal magazine
Judges' comment: "This publication gives New York City real estate leaders 'best of' rankings, news, and analysis in a no-nonsense, tabloid format. It shouts 'here is the latest news' with well written features and columns."

Second Place: Matt Valley, Denise Kalette, Jaun Mims, National Real Estate Investor
Judges' comment: "This magazine lives up to the 'National' in its name. It covers the country broadly and comprehensively, and it reports on the real estate industry broadly as well. All of this is delivered in a clean design with striking covers and good illustrations."

Category 22: Best Newsletter
Winner: Heather Ogilvie and Carol Johnson Perkins, Fair Housing Coach newsletter
Judges' comment: "The Fair Housing Coach is focused and well written in straight forward English about important topics in real estate and packaged in a simple yet distinctive design. Its extensive coverage is easily assessed."

Second Place: Denise Dersin, Builder magazine
Judges' comment: "Builder Business Update is sent by email to subscribers, giving them well targeted stories and lively videos. It has a clean design, the information is easily assessed, and it has useful articles for general building industry employees, who are targeted by this publication."

Category 23: Best Website Solely Devoted to Residential or Commercial Real Estate and/or Home Design
Winner: Denise Dersin, Builder magazine
Judges' comment: "This site has an excellent front page that uses three-column design as a guide to informative stories. Readers may find it even easier to traverse than its print version."

Second Place: Steve Cook, Real Estate Economy Watch
Judges' comment: "Graphically, this site may be more difficult than necessary to navigate, but it is rich and deep in current information, whether in features or short statistical reports. It is easy to read after you jump to the stories."

Category 24: Best Team Report
Winner: Sanjay Bhatt and Jennifer Lafleur The Seattle Times
Judges' comment: "The reporters teamed with ProPublica to create a special report debunking the notion that predatory loan features were common triggers of foreclosures. The investigation compared King County to other regions in the U.S."

Second Place: Matt Carter and Andrea V. Brambila, Inman News
Judges' comment: "Rather than wringing their hands at another gloom and doom article, the reporters assessed the damage and went on to explain what needed to happen for the real estate market to turn around. The exhaustive report compiled results from surveys and official reports."

Honorable Mention: Anton Troianovski and Nick Timiraos, The Wall Street Journal
Judges' comment: "There is LEED, Green, and Energy Star Building, but not all efforts, including a 'trash house,' are attractive to mortgage companies and financing firms. This was an interesting report on over-the-top green building techniques, the limits of LEED building, and the problems of appraising innovative buildings."

Category 25: Best Investigative Report or Series
Winner: Kirsten Grind and Jeanne Lang Jones, The Puget Sound Business Journal
Judges' comment: "This series illustrates excellent investigative reporting at the local level using court records, depositions, property records, and interviews. The reporting uncovered the story of a small company's lending deals that lost millions of dollars for its investors in four states."

Second Place: Christine Willmsen and Sanjay Bhatt, The Seattle Times
Judges' comment: "This is a great piece of investigative work revealing another side of the housing downturn: lenders loaning desperate homeowners money at high rates in an effort to capture their properties. The story brought to light the lack of consumer safeguards."

Honorable Mention: Laurie Udesky, The New York Times
Judges' comment: "This story presents a new angle on foreclosures. How many sad pet stories have appeared in connection with foreclosures? Only now are we hearing about confused, elderly people being thrown from nursing homes because owners do not need to notify residents that they are being foreclosed. Computer-assisted reporting and on-the-ground investigative footwork were used to create a compelling story."

by Inman News June 20, 2011



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