Real Estate Blog Squad

Three Presidents Share Vision For New Orleans;Electrify Thousands of REALTORS At Confab

Leadership. Vision. Hope. Commitment. Enterprise. This is just what this city needs and this is precisely what's on the menu. New Orleans tourism and hospitality is alive and well! Just ask the 25,000 plus conventioneers this week at the National Assn. of REALTORS annual convention in the Big Easy.

Two former Presidents of the United States shared the stage with the outgoing NAR president on Saturday in a bipartisan summit that spells optimism for a city recovering from the devastating wrath of Katrina.

When NAR president Tom Stevens announced last year that the trade group would follow through on plans for a convention in New Orleans this year there were many who expressed skepticism. There were some who called him crazy. Now he can say, "I told you so!"

In the days following the hurricane, NAR raised $18 million in immediate relief; local Boards of REALTORS throughout the country raised an additional $4 million to build 54 homes in New Orleans for Habitat for Humanity. REALTORS picked up hammers and saws and paintbrushes and made it happen!

Bill Clinton and George H.W. Bush came to town on Saturday and applauded REALTORS for their massive contributions to the relief effort and for giving New Orleans a chance to strut its stuff to a national audience. In the same week that concluded a nasty campaign season and saw an election that turned control of Congress to the Democrats, the two Presidents checked their politics at the door and treated the crowd to one of the most inspiring events of a lifetime.

George Bush displayed wit, warmth, and eloquence that melted the hearts of the most diehard liberals in the audience. He talked about respect for his predecessor following his stunning defeat for office in 1992. He talked about his new role on the world stage and vowed not to beat the political drums about Presidential style and decisions even when he disagreed. He said that promise was difficult to keep at times during Clinton's Presidency. And then Bush shared an uncharacteristic moment of candor and said that he suffers the same struggle with silence about Presidential decision making today. He said that his wife Barbara struggles even harder with it. His honesty was exquisite.

Bill Clinton said that Washington has a chance to make accomplishments despite the fact that there is a Republican in the White House and a Democratic Congress. "Each side now has a serious stake in the success of the other," he said.

Three leaders shared a stage in New Orleans to celebrate the early fruits of success. NAR had record-breaking attendance and there is dancing in the streets. But there is still a lot of work ahead. Billions of dollars need to be raised and disbursed. Whole industries and infrastructure need major retooling and repair. Let's hope the leaders in Washington are watching and listening. -- Frances Flynn Thorsen

NAR Blogs Its Brains Out, But CommentsFrom Its Members Are No Longer Welcome

The new blog from NAR started off great and there is a flurry of new posts this week at the group's mid-year meeting in Washington, D.C. But someone in association leadership just pulled the plug on the Comments facility. It seems like the powers that be are determined to make it appear as though NAR speaks with a monolithic voice for its membership. There is dissent within the organization. There are concerned citizens within the ranks of NAR who do not agree with each turn on it legislative road map. Stifling communication is never a good idea. We urge NAR to reconsider its position and reopen its blog to comments from the public and its membership. -- Frances Flynn Thorsen

Foreclosures Are Up In California;The REO Rush May Start Here

BusinessWeek Online Hot Property blog reports that foreclosures are up in California:

"Lending institutions sent default notices to 12,568 California homeowners during the July-to-September period, up 3.5% from last year's third quarter."

I'm predicting that the foreclosure market will enjoy a surge, thanks to the bankruptcy bill that put new rules into effect last month. Bankruptcy attorneys tell me that many consumers who are not able to get relief from credit card debt will not be able to stay current on their mortgage payments and they forecast a huge increase in foreclosures.

David Lereah, chief economist of The National Assn. of REALTORS^®, told reporters that he is uncertain about the impact of the bill on the foreclosure rate, but that it is an open question and he will study the issue. We look forward to his findings. We just wish that NAR had the wisdom to ask their economic talent about such things before supporting that beastly bill in the first place.--Frances Flynn Thorsen

Do home buyers and sellers have the right to free choice without fear of discrimination?

In a democracy that values personal and economic freedom, doesn't this third point of the proposed Real Estate Consumer Bill of Rights seem obvious (or to quote the Declaration of Independence, "to be self-evident")?

DRAFT REAL ESTATE CONSUMER BILL OF RIGHTS

3. Right to be respected as an individual. 
Consumers of real estate services vary as to particular real estate needs. There should be no difference in the way an individual is treated by a real estate professional especially if that individual chooses not to be represented or chooses to use a real estate professional whose services offered may be different in custom or practice from other real estate professionals.

To the contrary, real estate consumers who exercise their right to choose "alternative" real estate service providers, like new flat-fee MLS listing services, run the risk of discrimination.  The same is too often true if they list their own properties "for sale by owner."  Those are the kind of the complaints that the United States Department of Justice and Federal Trade Commission are likely to hear on October 25th when they host their public hearing on anti-competitive trade practices in the residential real estate industry.  If you've been a victim of this kind of discrimination, we'd like to hear about it.  Exercise your own free speech by (1) posting your comment below, (2) sending a private email to recafe@mac.com, (3) recording a message by calling The Real Estate Cafe at 617-876-2117;

Or best of all, exercise your freedom of speech AND assembly by (4) logging onto Essembly.com to nominate your own idea for the proposed Real Estate Consumer Bill of Rights using the discussion boards there for home buyers and home sellers.  We look forward to hearing from you!

Real Estate Consumer Bill of Rights

The Real Estate Cafe has started a 10-day series of posts proposing a "Real Estate consumer's Bill of Rights."

If it is credible enough, they'll submit it as written testimony to the upcoming (October 25, 2005) Competition Policy and the Real Estate Industry workshop being put on by the FTC.

So far the justification for such a bill has been thoroughly presented by the Cafe, so I'll be watching with great interest (and possibly participating in discussion) as this develops over the next few days.

-- Robert Creek (The FSBO Blog)

Internet Crusader/REBS Blogger Throws HatInto Ring For Panelist Seat At FTC/DOJ Confab

InternetCrusader/Blogger Saul Klein told his RealTalk subscribers last night that he has submitted his name as a prospective panelist for the FTC/DOJ workshop in Washington, D.C. next month. Long considered one of the most influential persons in real estate in the U.S., Klein has earned the following testimonials:

"Saul, Thanks for your many achievements and great strides for your community and our great state. I commend your outstanding work - You're a shining example for people everywhere"
      Pete Wilson, Governor of California

"Your commitment to the real estate industry and the community is commendable. Your volunteer efforts in helping others, certainly sets an example for all of us."
      Diane Feinstein, United States Senator

"Your service to the San Diego Region is well known. As a nationally recognized speaker and author, an advocate for consumer protection for home buyers, you have contributed much to our city."
      Bob Filner, Member of Congress

FTC and DOJ Will Host Joint WorkshopOn Competition Policy & The Real Estate Industry

The Federal Trade Commission and the Department of Justice’s (DOJ) Antitrust Div. announced that they will host a joint workshop entitled Competition Policy and the Real Estate Industry.

"...Prompted by the substantial changes in the real estate brokerage marketplace and consumers’ interest in a competitive real estate brokerage industry, the workshop will cover such topics as new and innovative brokerage business models, multiple listing services, and the implications of state-imposed minimum-service requirements."

The event, which is open to the public and the press, will be held on October 25, 2005, at the FTC’s Satellite Building Conference Center located at 601 New Jersey Avenue, N.W., Washington, D.C.  To pre-register, please email your name and affiliation.

Any person may submit written or electronic comments on the panelists’ topics, either before or after the workshop. Comments should be sent both to the FTC and the DOJ on or before Nov. 28, 2005.

Who Owns "For Sale" Property Information?

The National Association of Realtors (NAR), many agents, and even many FSBO companies think THEY do.

I can't answer the question with any authority; the debate has been going on for years. But I can say that consumers will win when property information is treated like the "public record" that it really is.

The NAR / DOJ (Department of Justice) legal battle that just started up again is now concerning an NAR policy that allows agents to restrict who gets their property listing data, and where it goes. The DOJ contends (and rightly so) that this limits innovation, harms consumers, and all manner of other bad things.

The biggest obstacle in real estate is connecting buyers with sellers. That obstacle exists because it's fairly difficult to find all the properties for sale (if you're a buyer), or find all the buyers (if you're a seller). Why is it difficult? Because there are so many different sources of information. Some buyers prefer sources A, B and C, while some sellers prefer sources D, E, and F. You see the conflict here.....

A total breakdown of barriers between sources needs to occur. It is time to have one massive database that EVERYONE can tap into -- buyers and sellers -- without having to fork over an arm, leg, first born child or other comparably valued commodity. Consolidating all this information into one source is called "aggregating," and is visible with tools like KatrinaHousing.net and Relief.WelcomeWagon.com, where multiple sources are searched at once.

But one step further than that, this aggregated database needs to be accessible not only at one central location, like Realtor.com or KatrinaHousing.net, but at the website of any real estate agent or real estate advertising company. This way, no matter where a buyer wants to go, s/he can find all the properties available at once.

That database can't act like the failed IDX, VOW or ILD policies of the National Association of Realtors; to be useful, all properties must be included, and all must be available to everyone for search/display.

Theoretically, that could be accomplished right now with the same methodology behind KatrinaHousing and Relief.WelcomeWagon: an automated spider that collects basic information along with the source. That, however, is why it matters "who owns 'for sale' property information." Doing this would step on some big toes, and just beg for lawsuits from MLS boards around the country who believe they own the compiled data. A spider technology would most likely win in a legal battle, however...there is precedent for it - especially if the purpose was to link back to the original source. But it's just not worth the risk and cost of a legal battle.

Another option would be to get the cooperation of every MLS board in the country. That sounds good, but the problem is most boards have a policy against intermixing the MLS properties with any other type of properties - such as those For Sale By Owner. So there is a structural barrier that would take a while to overcome, with all the power brokers in charge of MLS's.

The last option, and the most promising one especially in light of this clash between NAR and DOJ, is one that has been discussed more and more recently: scrap the existing MLS system, and rebuild a better system from scratch. Go straight to the sources (agents) and recreate the network the way it should be in the 21st century and beyond.

Regardless, so long as the laws remain friendly to free enterprise, consumers will win this. They always do. And consumers must be able to easily search every available property, just like they search every website with Google. When consumers can do that, it will mean they are being better served - because agents and FSBO companies will then be competing based on the service they provide to the public, rather than on the information they have access to.

It has happened with stock trading, travel, and insurance. The time has come for it to happen with real estate.

--Robert Creek (The FSBO Blog)

State Leaders Tell Congress: Say 'No' To BillThat Would Create Financial Lion's Den

Leaders from states with strong predatory mortgage lending laws joined the Center for Responsible Lending to send a clear message to Congress: Any federal bill must not roll back state laws that protect citizens from predatory mortgage lenders. A Ney-Kanjorski bill pending in Congress and supported by much of the lending industry would gut existing state laws. Another bill, sponsored by Reps. Miller and Watt of North Carolina and Barney Frank of Massachusetts, is supported by consumers and civil rights groups, and would let states keep strong laws and protect their consumers. Click here for a side-by-side comparison.

The National Assn. of REALTORS^® joined CRL to design a Shopping for a Mortgage? Do Your Homework First. NAR policy wonks opine: "The Watt-Miller-Frank bill (H.R. 1182) would make the Home Ownership and Equity Protection Act stronger and does not preempt state law. The sponsors are all Democrats, which makes House action unlikely." We're hoping that NAR will send some of its talented lobbyists to round up some Republicans to co-sponsor this bill and make this a bipartisan effort for financial security.

New Mexico Chief Deputy Attorney General Mr. Bluestone said:

"Two years ago, New Mexico passed a progressive Home Loan Protection Act in response to an alarming rise in abusive mortgage lending practices and home foreclosures. Too many homeowners were losing home equity because dishonest lenders rolled points and fees into mortgage loans and did so repeatedly through abusive refinances. New Mexico’s new law stops these abuses, but now Congress proposes in the Ney-Kanjorski bill to usurp our state’s ability to protect our homeowners. That bill would gut our new effective law, install in its place a weak federal standard and prevent us from adequately protecting our residents from lending abuses."

Massachusetts Rep. John F. Quinn warned:

"The passage of the Ney-Kanjorski bill would do irreparable damage to the protections afforded to consumers under the newly enacted anti-predatory lending law in Massachusetts. This bill is bad public policy and would weaken the ability of the states to protect consumers from unscrupulous lenders."

New Jersey Banking Director H. Robert Tillman said New Jersey’s law both protected consumers and preserved the marketplace for sub-prime mortgages, where people with imperfect credit borrow and where most predatory lenders operate:

"Our well-balanced law significantly reduces predatory lending…It appears that our state banks and licensed lenders have prepared for the new law and have helped create a more competitive market," said Executive Vice President Debbie Goldstein of the Center for Responsible Lending, a nonprofit that combats predatory lenders. "Rather than preserve and strengthen state and federal protections for homeowners, the Ney-Kanjorski bill wipes out state anti-predatory lending laws proven effective at preventing abusive practices and significantly weakens some protections available under the federal law today. This is a bad deal for consumers, who would be the real losers here."

North Carolina Reps. Brad Miller and Mel Watt and the ranking member on the House Financial Services Committee, Barney Frank (D-MA), have introduced a bill that prohibits abusive lending practices and ensures that everybody who can afford a home loan will get one. The Prohibit Predatory Lending Act of 2005 (H.R. 1182) is based on the  North Carolina’s predatory lending statute, widely considered the model for preventing abusive lending while preserving access to credit. Miller said,

"This bill protects vulnerable consumers without cutting off credit for lower income borrowers. It’s time that all American consumers have the protection that North Carolina consumers now have."

TAKE ACTION NOW! --Frances Flynn Thorsen

(The opinions expressed in this blog are the opinions of individual authors. The Real Estate Blog Squad is an open forum and does not take a collective stand on political issues.)