A few weeks ago, I told you about irregularities in the accounting of foreclosures:

One researcher found errors or “questionable” fees in almost half the cases she examined: interest rate miscalculation; late fees; overnight mail fees; “demand fees”; payoff statement fees; property inspection fees over and over; checks lost or outright destroyed by the lender or mortgage service company. Mostly little fees here and there, they add up quickly and often exceed $10,000.

Today, we have “Federal agency investigates foreclosures by Countrywide“:

The U.S. agency monitoring the bankruptcy courts has subpoenaed Countrywide Financial, the largest mortgage lender and loan servicer in the United States, to determine whether the company’s conduct in two foreclosures in southern Florida represented abuses of the bankruptcy system.

The subpoenas for Countrywide documents were issued in late October by the U.S. Trustee after the federal agency announced an effort to move against mortgage servicing companies that file false and inaccurate claims in foreclosure cases. The inquiries into Countrywide by the trustee’s office, a division of the Justice Department, come as foreclosures are increasing across the country.

The ways that lenders and loan servicers deal with troubled borrowers are also coming under increased scrutiny by judges. In recent weeks, three federal judges in Ohio have dismissed 73 foreclosure cases brought by lenders and loan servicers against borrowers because the companies failed to show proof that they owned the notes underlying the properties they were trying to seize.

In an environment where foreclosures are up 94% over last year, this is an issue that will be important — and hopefully heavily scrutinized — over the next several months.

Perhaps unrelated, but still a follow-up: even though the UN says that the American housing market is a “drag” on the world economy, at least new home sales were up last month. When all is said and done, we all need a place to call home.

I wish I could get away without mentioning the biggest drop in housing prices ever measured — matching the previous record set just last quarter. We are talking about a year-over-year drop of 4.5%. Tim Iocono has charted the action of 20 local housing markets for you. According to the L.A. Times, homeowners are asking “How Low Can It Go?”

Furthermore, there is the foreclosure mess, which the BondDad declares “Nowhere Near The Bottom.” Nationally he may well be right; locally I am not so sure. He believes “super-glut of inventory will be the standard for the foreseeable future”, and the only possible result of that is lower prices. The Associated Press reports that foreclosures “will lead to billions of dollars in lost economic activity next year in the nation’s major metropolitan areas.” Make that tens of billions:

The biggest losses in economic activity are projected for some of the nation’s largest metropolitan areas. New York is expected to lose $10.4 billion in economic activity in 2008, followed by Los Angeles at $8.3 billion, Dallas and Washington at $4 billion each, and Chicago at $3.9 billion.

It is telling that people holding seminars on how to make money on foreclosures are smiling.

It was just yesterday that J.P. Morgan announced 100 layoffs in it’s subprime lending unit, but I think the interesting part is this:

About 40 percent of JPMorgan’s 2006 subprime originations would not be approved under today’s standards, the bank said in a statement.

The bank has discontinued, for example, all subprime home equity loans. JPMorgan has said that it expects to originate about $1 billion subprime loans per month.

That’s right, a 40% reduction of subprime originations is still a billion dollars of loans — $1000 million — each and every month. The continuing scale of this mess is astounding. It rather makes the Fed’s offer of $8 billion in loans to banks seem paltry!

CitiGroup is under pressure to ease mortgage terms and help people keep their homes — a win/win/win situation in my opinion: people don’t become homeless, Citi doesn’t have to get their equity out right now and can continue to make money, and the house doesn’t sit on the market depressing housing values for everyone else. However, this same company is talking about a second massive round of job cuts. Perhaps as many as 45,000 people will join the 17,000 laid off barely six months ago. As Brilliant Jill points out, these people will be hard pressed to find new jobs:

You know as well as I do that it isn’t top executives — those who actually make the decisions — who will pay the price, other than a few hundred million less in bonus money this year. But when you consider the amount of money lost in this mortgage disaster, these 45,000 likely layoffs at Citigroup are only the beginning. That’s 45,000 more people pounding the pavement looking for jobs that will be next to impossible to find because every other company that might hire them will be cutting back as well. So they’ll be looking for whatever work they can scrounge up in the retail and service industries…

At risk of pointing out the obvious, these people are going to have a lousy Christmas, and a tough time making the mortgage payment.

Perhaps all this is why consumer confidence is down.

Nevertheless, I have watched the stock market long enough to know that the more voices cry panic, the more people proclaim there is no end in sight, the more people say it’s a disaster, the closer to the bottom we really are.

Las Vegas is considered by many people to be one of the great dining cities of the world.  This being the case, it has been frustrating to me is that Las Vegas restaurant guides focus almost entirely on the Strip.  Don’t get me wrong, there are a lot of very good restaurants on the Strip, but I don’t always feel like driving there.  While a Strip focus is great for tourists, it is not necessarily helpful for residents.  In short, you’d miss a lot of great places if all you had to go on were those guides!

As much as I would love to tell you about some of my favorite places to eat, that can wait. Today, I have other people’s opinions to share.  First,  we have an item by Ed Murrieta of The News Tribune in Tacoma (go figure) called “Off The Strip You can dine and drink well in Las Vegas while never setting foot on The Strip“.  His picks include Rosemary’s, Pamplemousse, Lucille’s Smokehouse Bar-B-Que, Memphis Championship Barbecue, CJ’s Texas Barbecue (clearly the man likes barbecue), Kilroy’s, In-N-Out, Hash House A Go Go, and Orchids Garden.  Yes, addresses and phone numbers are included.

The second item I have for you today is from yesterday’s newspaper, and it includes both on and off-Strip eateries.  It is the Las Vegas Review-Journal’s round up of local Happy Hours.   I’ve eaten at a few of these places — just lunch or dinner, not happy hour — and sincerely hope the rest are as good.

I’ve written a rather lengthy post on the government’s response to the current mortgage crisis, based largely on this New York Times item by a Yale economics and finance professor. You can read it at my personal site.

Thanks to BoingBoing for pointing out this USA Today story about Teller’s 10 acre mansion retreat near the edge of town.  Teller is the “quiet” half of comedian/magician act Penn and Teller. Interestingly enough, Teller is his full name!

Recently I watched this item on a family that thinks they saved $26,000 by selling their home themselves. First, I feel a little gypped that 60 minutes bothered posting this one minute and eight second long clip, and then made me sit through a 30 second commercial to see it. But I digress.

This couple seems to think that all a licensed real estate agent would have done for them is print some brochures for the sign in front of their place and held an open house. The fact is that a licensed real estate agent does a lot more.

First, the agent can get your house into the Multiple Listing Service. According to the NAR, 75% of home buyers in 2006 used a buyers agent and the MLS — this family limited themselves to one in four potential buyers at the outset. They got a small online listing, sure, but you only saw that listing through the Owner/Seller site they used. This site is used by a tiny minority of the people in any given time and place who are interested in buying a house.

Second, an agent has a rolodex full of trustworthy contractors he or she has done business with many times before. People like carpenters, painters, cleaning crews, electricians, plumbers, title companies, and even loan officers. These people want to do a good, fast, and reasonably priced job so they will be called back again. If you think your house is in perfect shape and you need no contractors, fine. But I bet you are wrong.

Third, because an agent is not you, they can get feedback you can’t about your house. People might be too polite to tell you your house is cluttered, or smells bad, or that the paint in your kid’s room is awful. But you want to know why people aren’t buying your house, don’t you?

Fourth, an agent knows how to do an accurate market comparison in an impartial fashion. It’s a lot more complicated than punching an address into Zillow. You might say “But the house on the next block sold for $30,000 more than that!” But the agent can say “Yes, and they have a pool, new carpet throughout, and 500 more square feet,” or “Yes, but that was 6 months ago and right now there’s a house in your floorplan 3 blocks away selling for even less.” The agent wants you to list for a fair selling price, because even though her pay is a percentage of the sales price, she doesn’t get paid until after it closes. In short, she wants it to be the highest price that it will sell for in a reasonable period of time. She doesn’t want your house to sit on the market for ten to twenty months any more than you do.

Fifth and most importantly, a licensed real estate agent will help you follow the law. Do you know whether you are required to give a statement about the dangers of lead paint? At what point you must give a disclosure about anything that might be wrong with the house? If there is a particular form you need to use for that? What the legal description of your house is? How to get a payoff amount from your mortgage company? How to fill out a sale agreement? What items must be notarized? The difference between owning property as “Joint Tenancy” or “Tenancy in Common”? What things you can and can’t put in your advertising from a Fair Housing Law standpoint? In short, she is paid to make sure things are done right.

And that’s just 5 of the biggest things. Sure, this couple thinks they’ve saved $26,000. But they haven’t figured out what their time is worth, nor do they know how much the home would have sold for marketed by a professional. You wouldn’t sell a hundred shares of stock without professional, unless of course you were a professional yourself; why would you sell your biggest investment that way?

The other day, I promised I would tell you a bit about a new Master Planned Community that I visited. It’s called Providence. When complete, it will have 7000 homes, 2 elementary schools (the first to open in 2009), one junior high, one police and fire station, and 2 parks. There are 15 different builders involved.

Because of the number of developments and builders involved, there are many different floorplans, and a wide range of prices. I personally toured single family homes with a base price under $200,000, and some that came in well over $500,000 too. It looks like there may be some condo developments in the community as well.

They have made a concerted effort to create a nostalgic, friendly, feel. There is a tree-lined promenade through the middle of the community. Several floorplans I saw included front patios (in addition to the private, rear decks currently favored). One development even has a “million dollar clubhouse” with 3 pools, exercise center, and regular resident events. Pretty impressive considering that much of the area is a construction site! Single-story floorplans are available, which is frankly remarkable for local new construction that does not have age restrictions.

The area has a magnificent view of the Strip and the mountains. A new hospital is under construction nearby. There has been a lot of development within a few miles over the last 5 years.

The downside is that the community just North of the Northwest corner of the 215 Loop. That means it’s relatively remote from central areas of Las Vegas. Yes, you can be at a shopping center in five minutes, but that includes getting on the freeway. Because things are under construction, there is uncertainty about issues such as future growth and development, traffic flow, local business, and school quality.

However, if you are looking for affordable housing in Vegas, and don’t mind a little driving, there are sections of Providence worth considering.  If you want more information — free and with no obligation — about the various developments in Providence, or want to schedule a tour, just click the “Contact Me!” link at the side of this page.

Nevada doesn’t do “primary elections.” Instead we have a caucus. It’s fairly early, on January 19, which explains why the candidates are spending so much time in Nevada. It’s a little different, so the nice folks at the Las Vegas Review-Journal have put together some information to help de-mystify the whole thing. Here’s how you can get involved, and here’s what to expect if you do.

Be sure to keep up with the local spin on national politics with the LVRJ 2008 Elections page. Hope to see you at the caucuses on January 19!

Yesterday, Fannie Mae had a big conference call to discuss changes to their accounting. Earlier in the week, Fortune Magazine accused them of trying to hide losses in the changes. Unfortunately, the conference call was sufficiently unclear that CNBC had to call them back and make them explain it better:

First, they said the Fortune article was inaccurate, and they were in fact trying to be more transparent, not the other way around. Secondly, they break it down like this: When loans reach a certain stage of delinquency, Fannie is allowed to buy them back and attempt to modify them so that they will get out of delinquency.

Now, I have been critical of Fannie Mae (and to a lesser extent Freddie Mac) for years, since before the accounting mess of 2004. That’s no secret. But trying to modify loans so that people can keep their home or get out from under it is a good thing in my book. It is very important to note that we are not talking about sub-prime loans here: Fannie is legally prohibited from touching subprimes. And so if we are worried that Fannie has more bad loans on the books than we know about, there must be a bigger than known problem in the realm of conforming loans too.

And as for the follow-up, CNN has this item on Cleveland called “Fixing foreclosure’s ground zero: Community groups are joining hands with their former foes to help keep the city’s residents from losing their homes.”

You may have read that Vegas is a rapidly growing city. Thousands of people move to the Las Vegas Valley every month, and many of those people have kids. Those kids, in turn, go to school. And that means that the Clark County School District is almost continually building new schools and hiring new teachers. If you are a teacher, and you are thinking of moving to Las Vegas, I have good news for you. The school district would like to help you buy a house:

Under the proposed agreement, dubbed Teachers First, the Nevada Housing Division would offer teachers — most of whom would be first-time homeowners — up to five years of payment assistance on a home or condominium mortgage for a maximum of $15,000.

Yesterday, I toured a new Master Planned community that will have two elementary schools and a junior high (there is already a high school about a mile away). The first of these schools is scheduled to open for the 2009-2010 school year. There were brand new 3 bedroom single family homes available for under $200,000. You can afford to move here and buy a house. I’ll tell you more about it later!