Boomer’s Blog

In this year’s state legislative sessions, lawmakers targeted “foreclosure rescue scams” and “equity stripping schemes” for scrutiny, attempting to protect unwitting distressed homeowners from signing away what little they may have left.

In the past two years, lawmakers in about half of the United States have mandated consumer protections and fines for investors who violate the law. In many instances, these ongoing attempts to restrict real estate investors’ business practices are redefining the distressed property arena.

With a growing number of real estate entrepreneurs using the Internet and other electronic resources to invest in markets outside of their home states, those who are using short sale, pre-foreclosure, and similar types of transaction strategies to invest in distressed properties should be vigilant in monitoring these and other changes in state laws.

Foreclosure Rescues May Be Subject to Fines and Stiff Penalties
Last year, the National Conference of State Legislatures (NCSL) reported that more a dozen states had taken steps to actively regulate foreclosure transactions. These states include California, Colorado, Georgia, Illinois, Indiana, Maryland, Minnesota, Missouri, Nevada, New Hampshire, New York and Rhode Island.

Arizona also weighed in on the issue early on in 2007, and the governor signed SB 1616, better known as the “Mortgage Rescue Fraud Protection Act.”

More Regulation Around the Bend
Because many states have assembled governmental task forces to scrutinize business practices surrounding foreclosure and predatory lending, a Washington D.C.-based lobbying group, the National Association of Responsible Home Rebuilders and Investors (NARHRI), predicts that ongoing legislative efforts will continue to mount as the foreclosure epidemic continues to take its toll on homeowners, markets and tax bases throughout the nation.

According to NARHRI, by increasing restrictions on foreclosure consultants and their multifaceted business practices – especially with regards to equity-based and lease-back to owner transactions –lawmakers are grasping for a hold on situations that in many communities, seem to have spun out of control.

State Legislatures Tackle Foreclosure Rescues, Equity Stripping
This year, more states have passed similar laws geared to protect the interests of distressed homeowners and fine real estate investors who fail to comply with the law. These new laws sometimes impose greater regulation on investors than some of the earlier legislation enacted in other states.

Summaries and Links to new State Laws
This year, nearly a dozen more states entered the fray with foreclosure rescue consumer protection legislation. (This number includes the District of Columbia’s Act A17-0205, which prohibits equity striping and appears to be awaiting congressional approval.)

As I reported on this Blog in May: “Lawmakers Target Real Estate Investors for Regulation,” lawmakers and governors in Oregon and Washington moved quickly to regulate lending practices, restrict property transactions and scrutinize contracts between investors and sellers. These and eight other new laws are summarized and linked below:

• Florida:
  HB 643, now Chapter 79 in Florida law, requires foreclosure counselors to provide a cancellation provision in written agreement and mandates that a title transfer must be included in a separate contract. This legislation takes effect Oct. 1.
• Hawaii:
  HB 2326, now Act 137, ralso known as the “Mortgage Rescue Fraud Prevention Act,” requires mortgage foreclosure counselors to provide specific information and disclosures to distressed property owners. It also regulates “foreclosure rescue” business practices.
• Idaho:
  SB 1431, now Chapter 192 in Idaho law, requires that all contracts be in writing when they residential houses in the foreclosure process. It provides consumers with a five-day right of rescission. It also requires that a warning regarding foreclosure rescue scams is included in foreclosure notification papers and in all written contracts.
• Iowa:
  HF 2653, now law, regulates mortgage foreclosure consultant contracts and mortgage foreclosure reconveyance transactions. This law forbids foreclosure rescue companies from charging up-front fees.
• Maine:
  LD 2189, now Chapter 596 in Maine law, has several key-provisions to regulate business practices and transactions aiming to protect homeowners from equity stripping.
• Maryland:
  HB 361 (Chapter 6) and SB 218 (Chapter 5), Provides for the contents of a foreclosure consulting contract; prohibits foreclosure counselors from arranging or participating in a “foreclosure rescue” transaction and specifies acceptable conditions for commissions. It also specifies that foreclosure counselors must be licensed real estate brokers who are directed to provide homeowners with research on the value of their homes.
• Nebraska:
  Among other things, LB 123, also known as the “Nebraska Foreclosure Protection Act,” regulates foreclosure consulting contracts, generally requiring enhanced disclosure for homeowners and other consumer protections. The law also establishes prohibited actions for foreclosure consultants, contracts and transactions. Meanwhile, LB 851 provides for foreclosure deeds of trust.
• Oregon:
  Here, the legislature convened a special session to consider HB 3630, before it was promptly signed by the governor and became Chapter 19 of Oregon state law. This legislation defines duties and restrictions on foreclosure consultants. It establishes requirements regarding foreclosure counseling transactions, contracts and imposes stiff fines and penalties – including jail time, for violators.
• Virginia:
  HB 408, now Chapter 485 in Virginia law, provides that entities who participate in or who service foreclosure rescues for profit with the intent to defraud consumers, are in violation of the Virginia Consumer Protection Act and subject to its prescribed penalties.
• Washington:
  HB 2791, now Chapter 279 in Washington law, requires foreclosure rescue companies to provide a written contract that gives the original homeowner five days to get out of the deal. The legislation also provides that if the entity that takes possession of the house sells it, 82 percent of the equity must be returned to the original owner.

What’s New in your Real Estate Business?

Is any legislation affecting the way you do business in your state? If so, please drop me a line and tell me about it so that we’re all better informed.

If you would like to see more original REI news stories like this one, sign up my “What’s Working & What’s New” monthly and special reports and you’ll be among the first to learn about timely special reports like these, cutting-edge Webinars and other developments in the world of Real Estate Investing.

Joining the community at GaryBoomershine.com is easy: just use the yellow fields at the right side of my GaryBoomershine.com home page or on the right side of the Boomer’s Blog main page.

Freddie Mac’s New State Foreclosure Time Lines and More!

To give distressed homeowners more time to scramble for cash in fast foreclosure states, Freddie Mac has spiked foreclosure time lines in 21 States and made several other tweaks to some of its increasingly more common procedures. In light of recent foreclosure news, these changes represent a much-needed policy shift, including some solid incentives to get the loan servicers rolling on short and pre-foreclosure sale deals.

According to a July press release from RealtyTrac, the year-over-year foreclosure increase of more than 50 percent indicates we have not yet reached the top of this cycle and bank repossessions are growing more quickly than default notices or auction notices.

In a better late-than-never response to soggy markets, pressure from lawmakers and its own financial woes, Freddie announced yesterday that, effective today, it’s standardizing its foreclosure referral time line requirements to require loan servicers to initiate foreclosure on all mortgages, including second mortgages, home improvement loans and previously modified mortgages by 150 days from the due date of last paid Installment (DDLPI), (DDLPI occurs on the 120th day of delinquency).

Before the change, Freddie required loan servicers to initiate foreclosure on second mortgages, home improvement loans and previously modified mortgages by the 90th day of delinquency and all other Mortgages by the 120th day of delinquency.

Two States Force Freddie to Tweak Foreclosure Time Tables

In June, Freddie issued a bulletin announcing an exention to its Maryland foreclosure time line by 55 days to conform to a new Maryland law requiring a 45-day notice of intent to foreclose.

At the same time, Freddie announced it would raise its Massachusetts foreclosure time line by 60 days to comply with a new Massachusetts law requiring a 90-day notice of right to cure default on all mortgages referred to foreclosure.

What Does this Mean for REI?

There are significant other changes and implications that could stand to benefit real estate investors down the line as the sluggish system takes greater steps to slow the bleeding, such as removing servicer incentives for fast foreclosures and doubling the booty on the following:

• Compensation for repayment plans from $250 to $500,
• Loan modification compensation from $400 to $800.
• Short sales or pre-foreclosure sales-related compensation from $1,100 to $2,200.

If the latter doesn’t speed up their short sale responsiveness, I don’t know what will!

I probably don’t need to tell you that this is great news for troubled homeowners and investors in pre-foreclosure and short sale markets. There’s a lot more nitty gritty to yesterday’s bulletin from Freddie, which makes more sense than the press release, if you’re interested in the rest of the details.

Foreclosure Data Smackdown

Because I couldn’t easily access to all this info elsewhere online, I’ve decided to devote the bulk of this post to crunching some data to light up the big picture for REI.

Below is Freddie Mac’s foreclosure time line information listed by state. Each state name is followed by: number of days from DDLPI to foreclosure sale/ number of days from initiation of foreclosure to foreclosure sale.

Just for kicks, I’ve marked with an “*” and underlined states affected by Freddie’s recent timeline extension and included RealtyTrac’s July “Top Ten Foreclosure State” data in, of course, red text. States that fall under Freddie’s changes and RealtyTrac’s list are cross-referenced in green for reasons totally related to innuendo and symbolism. Enjoy!

1. *Alabama: 300/150,
2. *Alaska: 300/150,
3. *Arizona: 300/150 (One in 201 homes in foreclosure),
4. *Arkansas: 300/150,
5. *California: 300/150 (One in 192 homes in foreclosure),
6. Colorado: 315/165 (One in 429 homes in foreclosure),
7. Connecticut: 370/220,
8. Delaware: 400/250,
9. Florida: 320/170 (One in 211 homes in foreclosure),
10. *Georgia: 300/150 (One in 444 homes in foreclosure),
11. *Hawaii: 300/150,
12. Idaho: 340/190,
13. Illinois: 425/275,
14. Indiana: 415/265 (One in 568 homes in foreclosure),
15. Iowa: 465/315,
16. Kansas: 330/180,
17. Kentucky: 415/265,
18. Louisiana: 370/220,
19. Maine:505/355,
20. *Maryland: 300/150,
21. Massachusetts: 345/195,
22. *Michigan: 300/150 (One in 375 homes in foreclosure),
23. *Minnesota: 300/150,
24. *Mississippi: 300/150,
25. *Missouri: 300/150,
26. Montana: 355/205,
27. Nebraska: 305/155,
28. Nevada: 305/155 (One in 122 homes in foreclosure),
29. *New Hampshire: 300/150,
30. New Jersey: 450/300,
31. New Mexico:400/250,
32. New York: 430/280,
33. *North Carolina: 300/150,
34. North Dakota: 340/190,
35. Ohio: 415/265 (One in 382 homes in foreclosure),
36. Oklahoma: 400/250,
37. Oregon:330/180,
38. Pennsylvania: 450/300,
39. *Rhode Island: 300/150,
40. South Carolina: 365/215,
41. South Dakota: 355/205,
42. *Tennessee: 300/150,
43. *Texas: 300/150,
44. Utah: 315/16 (One in 600 homes in foreclosure),
45. Vermont:510/360,
46. *Virginia: 300/150,
47. Washington: 310/160,
48. *Washington D.C.: 300/150,
49. *West Virginia: 300/150,
50. Wisconsin:460/310,
51. *Wyoming: 300/150.

What’s Your Time Line for REI Success?

I hope that posts such as these help you to build the wealth and retirement accounts I know you’re working so hard to accrue. Sign up my “What’s Working & What’s New” monthly and special reports and you’ll be among the first to learn about timely special reports like these, cutting-edge Webinars and other developments in our world- the world of Real Estate Investing.

Joining the community at GaryBoomershine.com is easy: just use the yellow fields at the right side of my GaryBoomershine.com home page or on the right side of the Boomer’s Blog main page. Like always, I pledge to never share your contact info with anyone or inundate you with useless messages.

Last week, I posted a Blog that examined a report titled “Who is Next?” written by seasoned Ladenburg Thalmann Banking Analyst Richard Bove. In his report, not to be confused with a classic rock album of a similar name, Bove identified several financial institutions that he considers to be in the “danger zone,” or seriously at risk of failure.

Making a List … Checking it Twice
In light of breaking developments and in the spirit of freedom of speech, I’ll repeat which Institutions made the cut on Bove’s now-infamous list: Downey Financial, Corus Bankshares, Doral Financial, FirstFed Financial, Oriental Financial and BankUnited Financial. Bove even adds Washington Mutual to the mix when he divides non-performing assets by reserves and adds common equity.

Now, he’s being sued. And I wish I could find a stable link to the report so you could view it in its entirety online. I had two such links, but it seems that they’re no longer active. Is this a coincidence? What do you think?

Goliath’s Legal Team Takes on the Numbers Cruncher
Bloomberg reports that BankAtlantic, a unit of BFC Financial Corp., has filed a lawsuit against Ladenburg Thalmann that alleges defamation and negligence in connection with Bove’s report. When the complaint was filed in Florida state court, Fort Lauderdale-based BankAtlantic prices spiked as much as 31 percent. Not a bad rebound considering that their prices plunged 25 percent last Monday when news of Bove’s report hit the wires.

Perhaps BankAtlantic’s complaint would be better vented in appointment with Dr. Phil. This suit comes on the heels of an April North Carolina appeals court ruling that found analysts couldn’t be sued for expressing opinions. As the TV shrink likely would say: “Ahhh, BankAtlantic, how does that make you feel? Is this working for you?” (Does anyone out there know if Dr. Phil actually has any medical training?)

But seriously, this is bad news for consumers. Think about it: For better or for worse, without the analysts, what resources do we have on which to base our banking decisions? Astrology? IChing? Craps? Could it possibly be it be any less accurate that the cryptic Magic Eight Ball answers we’re we’re getting from our financial system’s leaders?

SEC Takes an Aggressive-Passive Approach to Short Sales Regulation
Last week, it was widely reported that U.S. securities regulators issued an emergency rule to restrict the increasingly popular practice of short selling among 19 major financial institutions including:

• Fannie Mae,
• Freddie Mac,
• Lehman Brothers,
• Goldman Sachs,
• Merrill Lynch,
• Morgan Stanley,
• JPMorgan Chase and
• Citigroup.

Promptly upon the release of Bove’s viral report, Wall Street cried like a teething baby and the rule stuck. For a few days.

Short Sales OK Sans Nudity
In this context, short selling is a legal practice that allows investors to borrow shares they may consider to have an inflated price so that they can profit when the price drops. A naked short sale however, is when an investor sells stock before it has even been borrowed. Such practices, the SEC says, can endanger the markets. WIth these types of short sales, companies can loose control over their shares.. At that point, they’re at the mercy of anyone who has the mustard to exploit their vulnerability.

According to Reuters, the emergency rule is a strategy to tackle short-sale based market manipulation, which analysts, companies and lawmakers have blamed for free-falling financial stock prices.

A few days following the announcement of the emergency rule, the Securities and Exchange Commission (SEC) gave in to Wall Street’s sobbing and assured that a strong dose of relief would be delivered to help, as Reuters puts it, “maintain order and liquidity in the markets.” In other words, market makers affected by the emergency rule would not be required to pre-borrow shares before shorting the stocks. That effort however, went far to appease Wall Street and the markets. Now if there were only something that could be done to stabilize oil and gas prices.

Next Post: Are Your Deposits Earthquake Proof?
Combine stories like this with images of traffic stalled around IndyMac branches last week with motorists gawking at the at the long lines of desperate folks trying to salvage their deposits is enough to cause worry — even among decaf drinkers. This is a great time to take stock of what protections your deposits may (or may not) have in today’s “shaky” banking landscape. In my next post, you’ll get the scoop — from a Californian’s earthquake-proof perspective. Please stay tuned. You won’t want to miss it.

Stay on top of the REI Curve
I hope these posts help you to protect the wealth and retirement accounts I know you’ve worked so hard to achieve. Sign up my “What’s Working & What’s New” monthly and special reports and you’ll be among the first to learn about timely special reports like these, cutting-edge webinars and other developments in our world- the world of Real Estate Investing. Joining the community at GaryBoomershine.com is easy: just use the yellow fields at the right side of my GaryBoomershine.com home page or on the right side of the Boomer’s Blog’s main page. Like always, I pledge to never share your contact info with anyone or inundate you with useless messages.

As the number of U.S. home foreclosures topped one million this month, cities in the states hardest hit by foreclosure: Arizona, California, Florida and Nevada were named by Fortune magazine as the hottest markets for real estate investment. In addition, emerging reports of real estate market overhang are not surprising. Especially in light of the mid-decade building frenzy in Arizona, California, Florida and Nevada that was spurred by gravity-defiant home prices and easy money loans.

During the Boom
Back then CNNMoney says, dramatic price surges were fueled by investors who used risky mortgages to cash in on hot market activity, Today, these four states combined hold one-third of the nation’s foreclosures, with nearly 400,000 homes hanging in the balance.

According to the Mortgage Bankers Association Q1 report, Arizona, California, Florida, and Nevada combined represent:

• 62 percent of all foreclosures started on prime ARM loans, and 84 percent of the increase in prime ARM foreclosures;
• 49 percent of all of the subprime ARM foreclosures started in the country during the Q1, and were responsible for 93 percent of the increase in subprime ARM foreclosures
• 29 percent of prime fixed-rate foreclosures and 60 percent of the increase in those foreclosures; and
• 25 percent of subprime fixed-rate foreclosures and 53 percent of the increase in those foreclosures.

Fortune’s Five Hottest REI Markets
Especially now that the chips appear to be down, it seems that everyone wants in on the real estate game, and Fortune magazine has named five cities as ideal for real estate investing. These markets are generally the hardest hit in the foreclosure epidemic:

1. Miami
   According to the S&P/Case Shiller index, prices and sales here appear to be circling the drain. Miami house prices have dropped a whopping 21.7 percent in the past year, and dwindling median condo prices. Miami condo and home sales have plunged 40 over last year, and market activity has slowed dramatically. Fortune recommends that the following markets are ripe for real estate investment: Aventura, Bal Harbour, Sunny Isles Beach and Coral Gables
2. Tampa
   The Case-Shiller index reports that in the past year, real estate values have fallen 17.5 percent. Still, Fortune predicts a rebound is in the forecast for Tampa because of its strong local economy and other market forces. Currently, the median home price is $222,000, down from $275,000 last year, and the National Association of Realtors (NAR) predicts 20 percent or greater appreciation value over the next five years. Today, home prices are 50 percent lower than they were during the boom. Those surges may be attributed primarily to speculators flipping houses for quick profits, Fortune says. When the deals began to recede and the investors started started pulling out in 2006, the prices began their free fall. Now, Fortune says, this market is ripe for high-end real estate investment: Gulf-front luxury condos in Clearwater or St. Petersburg, are down from the $1 million a few years ago, to around $600,000 today.
3. Las Vegas
   Here, the real estate bubble swelled with annual price increases of up to 50 percent, making for today’s dramatic price drops and hot bargains. According to the Case-Shiller index, Las Vegas is the hardest-hit locale nationally, with prices dropping nearly 23 percent in one year, and one in 44 homes hitting foreclosure Q1 alone. In this market, with the third-highest rate of foreclosure in the U.S., Fortune predicts that the sun-drenched climate, proximity to pleasure, and glut of luxury homes, combined with the absence of state income tax will attract droves of retirees — and a speedy market recovery. Here, Fortune recommends investing in new construction in outlying areas like Summerlin and Providence, or in high-rise condos, especially in light of their 10 percent price drops since last year.
4. San Diego
   Prices here have plunged nearly 10 percent and foreclosures have surged in the past year, according to Moody’s Economy.com. Despite the fact that the Council for Community and Economic Research deems San Diego County’s cost of living 47 percent higher than the national average, the area’s natural beauty and beach-front locations give it the strength to conquer adversity and recover quickly from the mortgage crisis. Again, Fortune’s forecast is growth in the high-end property appreciation, as these properties have been the slowest to move in the inventory glut.
5. Phoenix
   Although Moody’s Economy.com shows its real estate values plummeting by 8 percent over the past year, and RealtyTrac reports its foreclosure rate has tripled since 2007, Phoenix, like Las Vegas will continue to attract retirees. Here, Fortune says, the planned communities that surround the metropolitan area offer hidden bargains. Also, amenities such as golf, shopping and luxurious recreation centers add additional value for the retirement crowd. Fortune suggests that here, areas like Sun City Anthem, Palm Valley, and Avondale are great places to find housing bargains that’ll likely offer healthy returns as the markets continue their recovery.

NBA star Shaquille O’Neal is shopping a reality TV show based on his plans to invest in Orlando’s burgeoning foreclosure market and “make small profits” by selling the homes back to distressed homeowners with more affordable terms. In some state however, “foreclosure rescue” operations have been scrutinized by lawmakers or banned outright.

The Orlando Sentinel reports that the NBA legend cum real estate investor wants to build his legacy by televising his efforts to help homeowners facing foreclosure in Orlando’s troubled real estate markets in a show to be called “Shaq’s Big Save.” O’Neal’s Attorney, Mark NeJame and Realtor Curtis Cooper arranged for the star center to meet with members of Orlando City Hall this week to float the plans, which may also include an affordable-housing project.

Lawmakers Tackle Foreclosure Rescue Regulation
Florida is not yet among the ranks of states seeking to regulate the activity of real estate investors who profit as foreclosure consultants to distressed homeowners. Last year, the National Conference of State Legislatures (NCSL) reported that a dozen states had taken steps to actively regulate foreclosure transactions. These states include California, Colorado, Georgia, Illinois, Indiana, Maryland, Minnesota, Missouri, Nevada, New Hampshire, New York and Rhode Island.

This year, lawmakers in Oregon and Washington have expanded their regulatory scopes by passing comprehensive laws that regulate lending practices and place restrictions on property transactions as well as contracts between real estate investors and the distressed sellers. Analysts have predicted that regulation trend is likely to accelerate as foreclosure rates continue to rise. This week, the Associated Press reports that foreclosures were up 23 percent in Q1, over Q4 2007.

Shaq Points, Shoots at REI Basket
O’Neal has been dabbling in real estate investment with the fortune he’s amassed through his NBA contracts and product endorsements for some time. In 2006, he created the O’Neal Group, which specializes in commercial and residential development, and housing the $50 million real estate portfolio the athlete has been building throughout his lucrative professional basketball career.

The majority of his development interests to-date have been in Atlanta and New Jersey. In Florida, O’Neal’s holdings include car washes, strip malls, a slice of metro Miami, and a luxury high rise residential tower currently under construction in downtown Miami.

Although O’Neil started his NBA career with the Orlando Magic, he currently plays for the Phoenix Suns. The Orlando Sentinel reports that the star NBA center with a penchant for investing in real estate plans to someday retire to his Florida estate and possibly run for Sheriff of Orange County.

Amid more gory details emerging about California Congresswoman Laura Richardson’s habitual failure to pay her debts, Washington Mutual (WaMu) filed a notice of rescission on her Sacramento home that was sold to real estate investor James York at a foreclosure auction.

Broker Takes a Bath
York, who owns Calif.-based Red Rock Mortgage,recently acquired Richardson’s Sacramento home at a foreclosure auction for $388,000. At that time, the lawmaker had failed to make payments on that property for almost a year and owed $9,000 in unpaid property taxes. She paid $535,000 for the home, which she bought in Jan. 2007, shortly after being elected to the California General Assembly. Soon after, she sank into default on her other homes in Long Beach and San Pedro, Calif.

While Richardson has been filing statements denying the foreclosure and a lengthy history of default and unpaid debts, York, also a broker, has been busy cleaning and repairing her house for sale. He told the Daily Breeze that he plans to file a lawsuit against Richardson and WaMu this week, because he believes that the lawmaker has received preferential treatment from her lender, and that he is the rightful owner of the home.

Richardson, a Long Beach Democrat, has said throughout her foreclosure scandal that her Sacramento home should never have gone to foreclosure auction and claims that she had worked out a loan modification agreement and had begun making payments to WaMu. The Daily Breeze also reports that the lender has declined to comment on the details surrounding Richardson’s case because she has not waived her rights to privacy.

In Richardson’s case, it appears that WaMu already has lost nearly $200,000 on the Sacramento home deal. If the foreclosure were overturned, the lender may have an opportunity to recoup some of that loss - but only if Richardson can manage paying for her three homes and an apartment rental in Washington, D.C., on her $169,300 annual congressional wages. This week, the Sacramento Bee revealed more details surrounding Richardson’s eight-year history of failing to pay her debts.

Richardson Defaults on Mother’s Home
Since 2000, the homes Richardson still owns in San Pedro (where her mother lives) and Long Beach have gone into default six times. The amounts she’s owed on these properties has ranged from $5,742 to almost $20,000, according to documents on file with Los Angeles County.

Lawmaker Racks Up Defaults, Votes
In the past few months however, the defaults have hit the lawmaker with rapid fire: Five defaults in that time period have racked up nearly $71,000 in debt, the LA Times reports. During the same period, Richardson lent nearly $200,000 to her political campaigns, which propelled her meteoric rise from Long Beach City Councilwoman, to California Legislator, and finally to the U.S. Congress.

More Unpaid Debts, Abuses Reported
Richardson also has been under scrutiny for failing to pay her utility bills, for car repairs, and for abusing her vehicle privileges beyond her reign as a city councilwoman. The Press-Telegram reports that the lawmaker promised to pay a mechanic $735 in 2005 for repairing her BMW and never followed through. Later that year she wrecked that car and abandoned it with another mechanic.

Rather than paying for the repairs, the Press-Telegram reports that Richardson checked out a Toyota Prius from the city for official “City Council business.” Thirty thousand miles later — and after she left the City Council, Richardson returned the Prius.

In the year that Richardson used the city’s Prius, she drove it 30,920 miles, city officials report. That amounts to an average greater than 80 miles daily, or about 2,400 miles per month, for Richardson’s part-time council job in a 50-square-mile city, the Sacramento Bee reports. City policy prohibits the personal use of vehicles from its fleet. City records also show that only other two council members who used city vehicles during the same period averaged 900 miles per month and less than 400 miles per month, respectively.

In 2001 and 2002, Richardson reportedly had the highest vehicle expenses of any council member, in part by putting nearly 7,000 personal miles on her car in 2002. At the time, Richardson told reporters that she was unaware of rule prohibiting personal use of a city vehicle.

While Richardson failed to returned the Press-Telegram’s calls for comment on these issues, she did manage to finally pay her debts with the auto shops and sweep the electorate. Last week, Richardson won her Democratic primary for reelection by a whopping 75 percent of the vote.

Doess anyone else out there find this story to be totally outrageous?

HomeVestors of America, the real estate investment (REI) firm with the ad campaign featuring cave man investor Ug, who carries a club and “Buys Ugly Houses,” has announced that Franchise Brands has bought a majority interest in the company.

Almost 20 years ago, the Dallas-based HomeVestors entered the real estate investment (REI) fray with the mission to buy and sell rehab-ready homes for fast profits. It and sold its first franchise in 1996, and has bought about 35,000 homes since its launch. Last year, HomeVestors bought 6,400 homes and sold 5,000, and in 2006, the company reports that it bought about 7,100 properties.

Since its inception, the company has flourished into a national franchise that specializes in buying — and selling — “Ugly Houses.” Currently, HomeVestors boasts about 230 offices in 35 states franchises sell most of their houses to other investors and first-time home buyers.

HomeVestors’ majority interest buyer, Connecticut-based Franchise Brands, formed three years ago with strong support from the founders of Subway restaurants. who also own Utah-based Bajio Mexican Grill, and Indiana-based Mama DeLuca’s Pizza. Terms of the deal were not disclosed, the Dallas Business Journal reports, but executives say that Franchise Brands is committed to using its resources to advance HomeVestors‘ franchise expansion goals and further develop its business model.

To explore the dynamics off what makes for a strong for sale by owner (FSBO ) market, MSN Real Estate asked Bert Sperling, founder of Sperling’s Best Places, to analyze the listings database of ForSaleByOwner.com, a national online FSBO marketplace. Sperling’s day job includes making millions for ranking cities based on livability and other factors.

There likely are several factors spurring FSBO activity in a growing number of metropolitan markets, Sperling says. In places such as Detroit and Florida cities where prices are taking a dive, homeowners may opt for an FSBO transaction because they’re unable to afford real estate agent commissions.

Sperling says that 2007 data show that Utah had almost twice the ForSaleByOwner.com activity as the next-most-active state, Florida. Provo, Utah, had the highest number of FSBO listings among all the U.S. metropolitan areas in his analysis.

In general, FSBO appears to be popular in markets that surged along with the boom and are experiencing rapid depreciation in the bust. Statistics also show that FSBO often is a more popular real estate selling strategy in regions with high Internet usage, such as the Northwest, and among sellers with higher levels of educational attainment.

Below is a list of the 20 hottest U.S. metropolitan FSBO markets and the corresponding number of FSBO listings per 100,000 members of the area’s population:

1. Provo-Orem, Utah: 72.15 listings
2. Wilmington, N.C.: 63.28 listings
3. Myrtle Beach-Conway-North Myrtle Beach, S.C.: 58.38 listings
4. Ogden-Clearfield, Utah: 56.19 listings
5. CapeCoral-Fort Myers, Fla.: 43.22 listings
6. Warner Robins, Ga.: 43.10 listings
7. Fort Lauderdale-Pompano Beach-Deerfield, Fla.: 43.02 listings
8. Panama City-Lynn Haven, Fla.: 42.39 listings
9. Nassau-Suffolk, N.Y.: 41.15 listings
10. Hartford-West Hartford-East Hartford, Conn.: 40.01 listings
11. Lake County-Kenosha County, Wisc.: 39.44 listings
12. Punta Gorda, Fla.: 38.73 listings
13. Edison, N.J.: 37.14 listings
14. Logan, Utah: 37.06 listings
15. Auburn-Opelika, Ala.: 34.51 listings
16. Chicago-Naperville-Joliet, Ill.: 34.17 listings
17. Port St. Lucie-Fort Pierce, Fla.: 34.08 listings
18. Asheville, N.C.: 33.51 listings
19. Virginia Beach-Norfolk-Newport News, Va.: 33.07 listings
20. Valdosta, Ga.: 32.27 listings

A unit of Countrywide Financial Corp. has filed a foreclosure action against Ed McMahon, an ailing 85 year-old TV personality who has been trying to sell his expansive Beverly Hills home for the past two years.

In his heyday, McMahon, was the consummate late night TV sidekick who spent much of his career by original Tonight Show host Johnny Carson’s side. McMahon also hosted the Star Search variety show which foreshadowed American Idol’s incendiary popularity. Still, many remember him for putting Publishers Clearing House (PCH) on the map with his charismatic TV commercials where the Prize Patrol ambushes unsuspecting families with drive-by sweepstakes fortunes.

The Wall Street Journal reports that ReconTrust, an arm of Countrywide Financial, filed a default notice on a $4.8 million Countrywide loan backed by Mr. McMahon’s home in late February. Official documents show that, at the time of the foreclosure filing, McMahon had racked up $644,000 in overdue payments on that loan.

Public records also show that in February, McMahon had a separate home-equity debt with Countrywide of up to $300,000 tied to the same property. It has not yet been revealed whether Countrywide still owns McMahon’s home loan, or is pursuing the debt for real estate investors who may have acquired it.

McMahon first listed his expansive Beverly Hills estate in 2006 for $7.7 million. After a few price drops in the interim, the property currently is listed with Christie’s Great Estates for $5.75 million.

Since breaking his neck in a bad fall on his possibly cursed property last year, McMahon has suffered through a lengthy recovery and has been unable to work. A spokesman for the healing celebrity says McMahon has been in fruitful negotiations with the lender and is optimistic that he’ll be able to work out a deal to avoid foreclosure.

A highly motivated seller, Escondido, Calif.-based Michael Crews Development, has extended its already unbelievable luxury housing “Buy One, Get One Free” offer. Although the deal originally was slated for expiration on May 31, CNBC reports that Michael Crews has extended it through the end of June.

In case you’re wondering what kind of entrepreneur would make such an outrageous offer, developer and self-styled real estate mogul Crews got his start in the business selling real estate at age 19. He has even written an independently-published book on his career’s success ethos: “HARD WORK: Success Made Easy.” Its first sentence muses: “I recently ran into someone I haven’t seen in a long time, and got a surprisingly enthusiastic reaction.”

No kidding.

The $1.6 Million Catch
To get the free house, buyers must first buy one of the Michael Crews Development’s Royal View luxury homes, in a gated San Pasqual Valley community of Escondido, Calif. Starting at $1.6 million, many of these homes feature swimming pools and RV parking.

The free home described in the offer is in the builder’s Escondido Cityscape development. The 2,000 square-foot row-homes, now valued at around $400,000 were reportedly selling for $529,000 last year. Home value depreciation in the Escondido area sometimes appears to be ruled by the Flying Fickle Finger of Fate, but for many it is no Laugh-in.

San Diego Real Estate Shows Widespread Depreciation
Median home prices among San Diego County neighborhoods varied wildly in the Q1, reports the San Diego Union Tribune. In one Escondido zip code, median home prices are reportedly down nearly 43 percent. Even in the traditionally affluent west end of Escondido, high foreclosure rates have taken their toll. According to DataQuick, Q1 foreclosure resales in that area accounted for about half of the 24 homes sold.

Lots of Buzz but Buyers Aren’t Taking the BOGO Bait
So far, no one has taken advantage of this highly unusual offer that has many saying is is an ominous sign of even harder times to come in SoCal’s battered real estate markets. Michael Crews staff told CNBC that this BOGO offer is the firm’s way of coping with the down market and generating traffic. No doubt the latter was a complete success, garnering far more free advertising than the current value of the quaint Escondido row house Crews is looking to unload.