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Friday, July 31, 2009

Chinese drywall, eggs and lawsuits.

Chinese drywall, eggs and lawsuits.

The internet ocean is teaming with information about Chinese drywall but the frenzy of lawyers imitates Jimmy Buffett's "Fins to the left..fins to the right". I read until I got to the end of the internet and the "technical" info was the little fish and the law suit info was the Great White. So.I'll give you what I got.If your Florida property was built after 2004 and you have noticed a sulphur or "rotten egg" smell and/or had recurring problems with corrosion of your air conditioning, appliances or electrical wiring, your property may have been built using defective drywall manufactured in China by Knauf (company). This drywall was imported into the free waters of the US and used by builders during a shortage of "red white and blue" drywall caused by the construction boom in 2005-2006 even though other reports included imports as early as 2001. One theorized possibility is that the Chinese drywall was made using gypsum that was first used in slurry containing carcinogens to de-sulphur coal. This drywall product emits toxic hydrogen sulfide gas and sulfur dioxide. Heat and humidity seem to trigger the drywall to bleed (emit sulphuric odors) sulphuric acid AND this stuff was imported, distributed and installed in throughout the south, hmmmm. Toxic Chinese drywall is being blamed by homeowners suffering symptoms ranging from nosebleeds to breathing problems. Many Florida homeowners have had to vacate their castles because of the Chinese drywall smell and affects, so some builders are scrambling to gut and replace the drywall throughout the house.

Here's something else to think about.in the old days when a drywall sub may have been paid by the board, any/all pieces ordered were all "hung" whether it was in the house or in the dumpster. In order to cut costs, some contracts were by the job. That means, extra pieces were taken to the next job by the sub contractor. It is therefore possible that a home may have something fewer than a whole house installation of the defective stuff. The only current way to prove you have it is via destructive investigation (bulk sample) and lab testing. Pricing per sample may run anywhere from $500-$3000. So just because one piece tests negative (or positive), doesn't prove the rest of the house is the identical. The cost to test the whole house may well exceed just guttin' the thing and starting over.

And as you would expect (besides the attorneys) the Chinese drywall inspection business is now in full swing. The chum is in the water and the rods are ready so be careful folks. "Inspectors" who will charge you to observe your house for blackened wiring or other corroded metals in order to establish the existence of defective Chinese drywall may find themselves in the cannery. I would obviously advise you to look for these things and if you need assistance that's cool too but if you believe you have the bad stuff, contact your builder first and foremost. As the legal dance progresses from the builder to the sub to the supplier to the wholesaler to the manufacturer, your contract was with the builder. They are protected by Florida Statutes and permitted the option to remedy before you go making repairs. Thankfully some builders are making good.

Builders known to have installed the drywall include Lennar, Taylor Morrison, WCI, Trans­eastern, Ryland and Standard Pacific.

Lt. Gov. Jeff Kottkamp, suspects a problem with tainted drywall in his own home and is moving his family out of their home in Fort Myers according to Professional Builder magazine. Heck, even Senator Bill Nelson is getting involved and calling for action.

So anyway, most of the blame has been passed on to Knauf Plasterboard Tianjin, a German-owned company with plants in China. The company said the sulfur in its drywall came from a Chinese mine that contained too much iron disulfide, a naturally occurring mineral. Knauf says it has since switched to another mine. Lucky you.

I've not heard of any Central Florida issues but at a recent Florida Association of Building Inspectors (FABI) meeting, the thought amongst those in the know, was that it was probably just a matter of time. ProLab says that they are testing dozens of samples a day trying to keep up and have only had a couple samples in from Central Florida in the recent past. So if anyone here thinks they have issues, please let me know! If we all stick together, nobody gets burned or Moo Goo Gai Panned!

Monday, July 27, 2009

FBI: Scams on the Rise, Here to Stay

FBI: Scams on the Rise, Here to Stay

How to Protect Yourself and Your Home

Brett Widness, Senior Editor at AOL Real Estate


According to a study recently released by the FBI, mortgage fraud was on the rise last year, and is expected to continue this year.

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The top states for mortgage fraud in many ways mirror the list of places where the home owners have suffered the worst from the rise of unemployment and foreclosures, with California, Florida, Michigan, Arizona, Ohio, and Nevada making list of top 10 states.

"Mortgage fraud trends in 2008 reflected the overall downturn in the US economy initiated by the sub-prime mortgage crisis of 2007. The US stock markets suffered their deepest losses since the 1930s; unemployment increased dramatically; the mortgage loan industry reported a spike in foreclosures and defaults; and financial markets continued to contract, diminishing credit to financial institutions, businesses, and homeowners. These combined factors uncovered and fueled a rampant mortgage fraud climate," the report states.

In fact, the Manhattan District Attorney recently indicted 13 suspects as part of an investigation into a $100 million fraud, although these individuals are accused of defrauding big banks rather than individuals.

* Get referrals for real estate and mortgage professionals when you want to buy or sell a home. And once you do, check out their licenses with state, county, or city regulatory agencies. Most of these people are exceedingly honest and above-board -- it's just a small percentage who have given the overall profession a black eye.

* Do your own research into what other homes in the neighborhood have sold for. Also, look into recent tax assessments of neighborhood homes.

* Beware of "no money down" loans. These are a gimmick used to entice people to buy a home they really can't afford.

* Don't let anyone (i.e., a realtor, mortgage broker) talk you into making a false statement on your loan application, like overstating your income or lying about where your down payment is coming from.

* Never sign a blank document or a document containing blank lines. Be sure to read and review all loan documents signed at closing. If you don't understand what you're signing, get an attorney who can review the documents for you.

As the FBI report concludes:"The downward trend in the housing market during 2008 provided a favorable climate for mortgage fraud schemes to proliferate. Several of these schemes have the potential to spread if the current economic downward trend, as expected, continues into 2009 and beyond. Increases in foreclosures, declining housing prices, and decreased demand place pressure on lenders, builders, and home sellers."

Sunday, July 26, 2009

Freddie Mac Names New CEO

Freddie Mac Names New CEO
After several months of inaction, Freddie Mac has finally named mutual fund executive, Charles Haldeman, the new CEO of the struggling mortgage company....

Sunday, July 19, 2009

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Thursday, July 9, 2009

13 Real Estate Professionals Indicted for Fraud

13 Real Estate Professionals Indicted for Fraud

July 9, 2009, 4:44 am

The Manhattan district attorney announced the indictment of 13 people Wednesday in what he called a multimillion-dollar mortgage-fraud scheme that victimized lenders and low-income homeowners.

The 13, employed in nearly every profession in the real estate industry — including lawyers, real estate agents, appraisers and bank workers — were accused of participating in 19 sham real estate transactions, The New York Times’s C.J. Hughes reported.

Each of the defendants has been charged with a handful of larceny and fraud charges, the most serious of which, enterprise corruption, could result in 25-year sentences.

Prosecutors said the fraud occurred over a four-year period ending in April in Cypress Hills and East New York in Brooklyn, Washington Heights in Manhattan, and in Westchester County and on Long Island.

The criminal enterprise, which they said tricked lenders into issuing loans for homes whose values were artificially inflated and then had lawyers pocket some of the money, could ultimately show losses of more than $100 million, as the investigation is continuing, Manhattan District Attorney Robert M. Morgenthau said. The 19 transactions that prosecutors called shams totaled $12 million.

A financial system that encouraged the bundling of many overvalued home loans for sale as securities to unwitting investors, in a practice that has been blamed for kick-starting the current economic crisis, also played a role, he added.

“The banks had no occasion to be concerned or to check up because they were going to get rid of these mortgages,” Mr. Morgenthau said. “It was too easy for corrupt employees to falsify documents.”

The lenders that took the heaviest losses, according to Wednesday’s announcement, were New Century Mortgage, which probably lost more than $32 million and is no longer in business; Fremont General, which lost about $18 million; and Long Beach Mortgage Company, which has since been absorbed by Washington Mutual, and lost about $9 million.

Among the people indicted on Wednesday were the three principals of the AFG Financial Group, a mortgage broker based in Garden City, on Long Island, who, according to the indictment, were the masterminds of a plan hatched at Manhattan strip clubs in 2004.

AFG, which had 20 employees, was founded expressly to defraud banks, Mr. Morgenthau said. “If they had a legitimate side, it was by accident,” he said.

Under the complex plan, which the indictment charged was devised by Aaron Hand, the company’s president, and Eugene Culbreath and Eric Shields, the company would seek out homeowners in trouble with their mortgages, often by finding owners who had missed mortgage payments, and offer to take their homes off their hands.

If the owners agreed, the defendants would recruit buyers with good credit histories who would apply for mortgages to buy the properties, according to the indictment. Simultaneously, the defendants would use falsified documents to inflate the home’s value, to get the largest mortgage possible.

Finally, at the closings the sellers’ lawyers, who Mr. Morgenthau said were also in on the scheme, would essentially pocket the checks from the lenders. He said that the buyers, who were promised they could get out of the deal at some point, were stuck with mortgages they could not afford.

The indictment did not accuse any of the buyers or sellers of wrongdoing.

Mr. Hand pleaded not guilty on Wednesday afternoon before Judge Michael H. Melkonian in State Supreme Court in Manhattan. He was released on $400,000 cash bail, according to Richard Wool, his lawyer, who told The Times that his client had no comment.

Seven other defendants pleaded not guilty on Wednesday, another was expected to appear in court on Thursday, and the other four are not yet in custody. Twelve other people have already pleaded guilty to their involvement in the crimes, Mr. Morgenthau said.

Not only did AFG inflate the value of homes, according to the district attorney, but it also invented some. At one point during the press conference announcing the charges, Mr. Morgenthau held up a photo that was supposed to be of a two-family Bronx house valued at $500,000. It showed an empty, weedy lot.

Go to Article from The New York Times »
Go to Press Release from the Manhattan District Attorney »

Tuesday, July 7, 2009

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QuickBooks Question

Ronald, Hi, Mike

We are new students from Burlington, Iowa. We met you in Boston. We drove out east, so we just got home and looked at your system. Sally and I both have laptops, and we have a PC. Can we load it to all three? One has QB Simple Start 2009. Is that good enough?
Ron & Sally

by the way, i am coming to Iowa in October, i think...

your question...

very sensitive question.....

1.) Sally and I both have laptops....
Answer: awesome and great.

2.) and we have a PC....
i assume this is a desktop PC parked at home or in an office?

3.) Can we load it to all three?

I don't mean to sound like Bill Clinton, but it depends on what "It" is... I will give you two answers.

Answer 1: you can loan QB Pro onto all 3 computers... (both laptops and your desktop)

Answer 2.: because and you Sally will both be accessing your Investor Books company file and your Tenant Tracking files with new data, entries and more... I recommend to install (restore) your Investor Books file and your Tenant Tracking file onto your desktop pc and treat it as home base, the master file, the original...

How to make it work?.... remember, with internet access, you and sally can access these files from anywhere and at anytime..

Try this on for size... let's pretend for a minute both you and sally were writing a book together.... and the name of the book is "See Sally and Me Work Together" ...... this is a 356 page book you both have spent a lot of time, energy and effort putting together.... once again, you both have a laptop, and you have a pc at home....

both of you want to edit, review and make changes to your book.... therefore, you put a copy of the microsoft word file on your laptop and you put a copy of the microsoft word document on Sally's laptop.....

Now you both, independant of one another, begin to make changes, edit, and add more content to your book.... you have edited things in multiple chapters, even added another chapter and Sally has done the same thing in her copy on her laptop......


See the challenge... the answer is to keep the original on the pc, and then you each can go in and make changes, edit, and add more stuff.... all on the original file and all is kept in order...

NOTE: i do recommend, if you want to keep a copy on your laptops for REFERENCE ONLY, but never to make changes or update...

One has QB Simple Start 2009. Is that good enough?
ANSWER: Nope, you must have QuickBooks Pro, and I recommend just go online to Intuit, download it right now for $99 and REQUEST a CD to be shipped to you as well... you can get the software right now along with them shipping you a cd of the software in a day or two or three...

Friday, July 3, 2009

new law to fund real estate deals WIRED Funds

I just received this email from Alan Johnson, in my local KREIA..

Hi All,
Since we are KREIA I thought I should spread the word of a new Indiana law on wired funds being needed for real estate closings.
A new law just came in effect for Indiana on July 1, 2009. If you are sending $10,000 or more to a real estate closing it must be wired funds. Less than $10,000 does not have to be wired. Details below.
I just recheck Kentucky law with a real estate attorney and there still is no law requiring delivery of wired fund for a Kentucky property closing. In Kentucky certified non wired funds are still ok. Details below.
Your Friend,
Alan H Johnson
cell phone 502-376-3275
Sonshine Realty
Are you Wired??
By John Kraft-SIRA Legal Counsel
Young, Lind, Endres & Kraft
July 1 begins a new year for new laws!

One such law affects you as REALTORS® in a big way! It is the Good Funds Law ("GFL"). The purpose and intent of the GFL is to guarantee to parties that the money funding a real estate transaction in Indiana is immediately available for disbursement. A copy of the full text of the law is also within this edition of Property Writes for your own review. GFL requires wired funds for real estate escrow closings performed by Young, Lind, Endres & Kraft ("YLEK") or other title agents in the State of Indiana when the aggregate amount being taken to closing by one party is Ten Thousand ($10,000.00) Dollars or greater. This means to properly prepare your customers and clients for closing you need to obtain the wiring instructions from the title company in advance of the closing. This would be especially true to help facilitate back-to-back closings so funds have been accepted in the escrow account of the title agent of the first closing. For transactions involving Ten Thousand ($10,000.00) Dollars it will not be as easy as the buyer just picking up a cashier's check on the way to closing. Do not ask your title agent to alter the requirement-no matter how good of a relationship you have with the title agent-it is the law!

GFL allows for other types of "Good Funds" when the aggregate amount required at closing in less than ten thousand ($10,000.00) dollars. "Good Funds" can include a certified or cashier's check drawn on an existing account at a bank, savings and loan association, credit union or savings bank chartered under the laws of any state or the United States of America. It also allows for a check from a licensed real estate broker's trust account or the escrow account of another closing agent provided closing agent in the escrow transaction has reasonable and prudent grounds to believe that sufficient funds will be available for withdrawal from the account upon which the check is drawn at the time of disbursement of funds from the escrow account of the closing agent in the escrow.
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Thursday, July 2, 2009

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