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July 31, 2008

It's 3 a.m.: Do you know who owns your mortgage?

One of the lessons of the credit crunch that might have come as a surprise to the average homeowner is the company you're writing your mortgage checks to probably doesn't own the loan. There's a difference between the loan servicer you interact with and the actual mortgage holder, possibly a investment group on Wall Street.

Think Wall Street wants no part of home loans anymore? Think again. As the Associated Press reports:

Dozens of hedge funds, private equity groups and other investors have plunged into the beaten-down mortgage market in recent months, buying tens of thousands of distressed loans and foreclosed properties around the country. They hope to profit from the woes of banks and other investors holding mortgages that have plummeted in value as home values sink and defaults soar.

They are buying them from Wall Street investment banks eager to rid themselves of bad assets. Merrill Lynch & Co., for example, said this week that it would sell mortgage-linked investments once valued at $30.6 billion for just $6.7 billion to Lone Star Funds, a distressed-debt investor in Dallas.

If you have a mortgage, do you know who owns it? Has that ownership changed lately?

Posted by Jamie Smith Hopkins at 12:11 PM | | Comments (0)

July 30, 2008

Silo Point sets prices

Patrick Turner started work on the grain-elevator-turned-condo-project in Locust Point before the housing market took its U-turn, like many developers. Unlike many developers, he skipped presales and said he'd wait to set prices at Silo Point until late in the game.

That day has come, Lorraine Mirabella reports:

Preview pricing on the more than 30 floor plans starts at $264,000 for a one-bedroom condo; in the $450,000s for a two-bedroom unit and about $550,000 for a sky townhouse. Turner said that the priciest units in the tower building will sell for about $1.5 million and that he expects to price two large penthouses at more than $4 million.
Posted by Jamie Smith Hopkins at 9:51 AM | | Comments (81)

July 29, 2008

Whither interest rates? is showing mortgage interest rates in Maryland at about their highest levels in the past five years:


(They've come down a bit after peaking a week ago.)

Wonk reader John, noticing this trend, thought it would be a conversation-starter. Where do you expect rates to go from here? What do you think it means for the housing market? If you're trying to buy or refinance, how are you dealing with the rate gyrations?

Posted by Jamie Smith Hopkins at 9:59 AM | | Comments (9)

July 28, 2008

Settling on the home sale

Requests from an editor and a Wonk reader to cover the settlement process turned into this story about closing the deal, in case you missed it and are interested. Experts weigh in with tips for avoiding problems, including this one from Brian Sullivan of the U.S. Department of Housing and Urban Development:
Get your HUD-1 settlement statement from the company handling your closing - in Maryland, your title agent - 24 hours before you're scheduled to settle. That form lists your bottom-line costs. Buyers especially will want to look closely to make sure the loan origination and other fees match earlier expectations.

"As best as you can, get your good-faith estimate that you were provided at the beginning of the process and compare the line items," Sullivan said. "You shouldn't be doing this math at the closing table. And if you've got questions, challenge these costs so that they can adjust them."

Posted by Jamie Smith Hopkins at 9:06 AM | | Comments (0)

How-to Monday: House trading


Image courtesy of Stock.XCHNG


There's nothing like trying to sell a house in a down market to get one fantasizing about the what-ifs.

For instance: What if you could tap into the large pool of people who, just like you, would be in the market to buy if only they could sell? What if you could find someone with a place you want who in turn wants to buy your place?

Actually, you can. You can give it a try, anyway.

It's called "house trading."

"It's a very viable alternative if it's a tough market, if you're literally unable to sell your home," says Danielle Babb, an author of real estate books, including Finding Foreclosures.

You can handle a trade more or less like any other home sale. You and your co-trader are just selling to and buying from each other.

It might be easier if each of you has a mortgage that's assumable, because then you can swap mortgages as well as houses. But Babb says there's no reason Person A can't get a new mortgage to buy a house from Person B, who gets a new mortgage for A's house.

I checked with Bank of America, and it said traders should coordinate with their lenders to close on both sales the same day. It also suggested using the same settlement agent.

"Make both contracts contingent upon one another," recommends Daniel Westbrook, chief executive of Tampa-based

Westbrook co-founded the website about a year ago to help match up home traders. Roughly 47,000 homeowners have signed up, he says.

Other trading sites include Pad4Pad, and DomuSwap. You can also find would-be traders on Craigslist.

Westbrook says he expects to launch a reality television series about the trend -- which he calls "reciprocal selling" -- later this year. He got the idea for his site while working as a real estate agent. He kept running into coincidences, like the client from Michigan who had to move to Florida while another client had to move from Florida to Michigan.

"I thought, 'God, these people could buy each other's homes,'" he says.

Says Babb: "We see a lot of military jumping onto it."

The traded homes don't have to be the same price, by the way. The key is whether each party wants the other house and if each can qualify for a mortgage on that other house. You might need something bigger while your co-trader wants to downsize.

If you'd like to home-trade but owe more on your loan than the house is worth, Babb says, you'll have to see if your lender will do a "short sale" -- same as anyone contemplating a sale with negative equity. A lender approving a short sale allows the home to be sold for less than the mortgage balance.

Statistics on home trading are thin, so it's hard to say how many are doing it or how quickly people are finding takers. At last count, had about 720 Maryland homeowners looking to trade and about 540 people wanting to buy in the state.

Babb's suggestions, should you decide to jump on board:

--Choose a site with a flat fee, not one that charges you by the month. There's more incentive for a company to help you sell if you're not continuing to pay, she says.

--Send any deposits to an escrow company, not directly to your co-trader. And make sure the company is legit. "Some scammers are creating their own fake escrow companies just to get the cash," Babb says.

--Do your due diligence, just as you would with any sale. Get the house inspected and hire a title company to make sure there are no surprise liens on the property.

--Don't skip the walk-through of the house before settlement, even if it requires a special trip out of state. "I'm recommending the buyers do it themselves," Babb says.

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (2)
Categories: How-to Mondays

July 27, 2008

Cash-outs and cash-ins

Cash-out refinancing, so popular in recent years that homes were compared to ATMs, has slowed but not disappeared since the credit crunch. USA Today reports that homeowners extracted about $38 billion in equity this spring by refinancing loans held by Freddie Mac, vs. almost $80 billion a year earlier.

Also notable in the story:

Of those refinancing, 9% took out new loans that were smaller than their existing mortgages. Freddie Mac chief economist Frank Northaft calls the trend the biggest "cash-in" since 2005, possibly reflecting tougher lending standards.
Posted by Jamie Smith Hopkins at 3:30 PM | | Comments (0)

July 26, 2008

Most expensive places to live

An HR consulting company has compiled a list of the country's 10 priciest cities, and -- no, Baltimore is not on it. But Washington is (coming in at No. 10). No. 1: New York.

Forbes reports that Mercer produced the list by comparing the price of a wide range of products, from rent to food. 

See the story (and a list of the expensive cities) HERE.

Posted by Jamie Smith Hopkins at 9:59 AM | | Comments (0)

West side story

The debate over how (and whether) to replace Baltimore's 1st Mariner Arena has spawned an interesting side argument: What would inject more life into downtown's west side?

This week city officials announced that they want a new arena to rise where the old one stands on Baltimore Street. Some advocates say this would be good news for the west side because it's a chance to redesign the arena, which isolates itself from the neighborhood with its sole entrance and lack of street-level stores.

Others argue that an arena is not what the west side needs.

The AIA Baltimore Urban Design Committee "suggested the site be used for an urban park, a transit center and a mix of retail, residential and office space," Steve Kiehl reports today. He quotes Klaus Philipsen, co-chairman of the committee and president of ArchPlan Inc. in Baltimore:

"We're disappointed the arguments we put forth were not heard," Philipsen said. He said small, intimate blocks would be more inviting than a massive arena which, at 18,500 seats, would be even larger than the present 14,000-seat arena.

Funding is another point of contention. The city suggests using public money for most of the $300 million cost. That's par for the course when it comes to sports facilities, but economists frequently argue that building sports facilities is not an efficient use of taxpayer money. (Washington had this same debate over Nationals Park.) The Boston Globe ran an interesting story in 2006 about cities having second thoughts about who should pay.

If you had the final say on close to $300 million in taxpayer money, what would you do with it?

Posted by Jamie Smith Hopkins at 9:45 AM | | Comments (0)

July 25, 2008

Q: What new homes are selling?

A: Cheaper ones.

The median base price of new homes sold in the Baltimore metro area was about $350,000 in May, down 20 percent from a year earlier when it was about $440,000, according to Hanley Wood Market Intelligence. (The average was down a much smaller 6 percent, to just under $450,000. I assume there are some very pricey homes pulling up the average.)

Net sales of new homes -- which accounts for cancellations -- added up to 220 in May, down 42 percent from a year earlier, Hanley Wood says. Go back two years, and new home sales topped 500.

We normally define the Baltimore metro area as the city, Anne Arundel County, Baltimore County, Carroll County, Harford County and Howard County, but Hanley Wood goes with the federal definition that includes Queen Anne's County too.

What about the inventory of unsold homes? It's just under 400, though that number rises to more than 750 when you add in the homes under construction.

The upside -- for builders -- is the improving cancellation rate. It skyrocketed after the credit crunch hit last summer and got as high as almost 45 percent. Now it's down to 14 percent, about where it was pre-crunch.

Posted by Jamie Smith Hopkins at 11:25 AM | | Comments (18)

July 24, 2008

U.S. home sales fall

U.S. homeowners sold about 15 percent fewer homes last month than they did a year earlier, the National Association of Realtors said this morning. The trade group said the seasonally adjusted annual rate of sales -- meaning a year's worth if the pace in June continued for 12 months -- was just under 4.9 million homes.

Wonk reader John points out that the NAR's 2008 sales prediction, back in May 2007, was about 6.5 million homes.

In its defense, the association notes that May 2007 was before the worst of the credit crunch hit. Sales have slumped much more sharply since then.

The NAR also said yesterday that a recent survey of agents suggests that "nearly a quarter of potential home buyers are waiting on the sidelines."

Posted by Jamie Smith Hopkins at 11:33 AM | | Comments (23)

Housing bill, by the numbers

The House bill intended to deal with the increasing ripples of the housing slump, passed yesterday, includes:

--$4 billion for buying and improving abandoned properties

--$15 billion in tax breaks, including the much-discussed credit of up to $7,500 for first-time buyers

--plans to insure new loans totaling as much as $300 billion for homeowners in trouble

--a permanent increase (to $625,500) to the limit on the size of mortgages that Fannie Mae and Freddie Mac can purchase or guarantee

--no cap on the amount of money the Treasury Department can extend to Fannie and Freddie via a line of credit

--the creation of a new oversight agency for Fannie and Freddie, called the Federal Housing Finance Agency, which could put a lid on the multi-million-dollar executive compensation there

Want more details? See the AP story HERE and The Wall Street Journal story HERE.

Posted by Jamie Smith Hopkins at 10:03 AM | | Comments (0)

July 23, 2008

What costs more: Living in the city or the 'burbs?

If there's one thing current and former Baltimore residents have strong opinions about, it's property taxes. That's because the city's rate is twice as high as Baltimore County's and more than twice the rate of the rest of the counties.

I posted a "yes, but" argument yesterday from Bob Aydukovic of the Downtown Partnership, who says you could save $8,000 or so a year by moving downtown and getting rid of one car. Readers responded with examples of needing cars even if you live downtown, with complaints about city services, with the "yes, but" of higher insurance costs.

As I mentioned yesterday, I'd love to see a calculation of total living costs in the city vs. the suburbs. Failing that, though, I'm interested to know how you think it all comes out. Weigh in:

EDIT at 8:45 p.m.: The results so far are 39 percent for "somewhat higher," 34 percent for "much higher," 14 percent for "about the same" and 13 percent for "somewhat lower." That's about three-quarters who say costs in the city are higher than the 'burbs.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (11)
Categories: Polls

July 22, 2008

Property taxes vs. car costs

Annoyed that the city's property tax rate is twice as high as Baltimore County's? Bob Aydukovic with the Downtown Partnership of Baltimore has a comeback: car costs.

He says AAA calculates the average annual cost of owning and using a car, assuming you drive it 15,000 miles a year, at just over $8,000. (The range is $6,300 for a small sedan and $10,500 for a mid-sized SUV, and it includes gas, maintenance, tires, insurance, payments and depreciation.)

If you're part of a couple living in suburbia, you probably need two cars. But if you move somewhere where you can get rid of one car -- like, oh, say, downtown, he suggests -- then you save $8,000-plus a year on average.

"Owning two cars is almost a necessity in suburban locations, and therefore, it functions as a tax on suburban living," said Aydukovic, vice president of economic development with the Downtown Partnership. "It costs you a lot more than filling the tank every week. And I think people don't realize that."

What I'd love to see is a calculation of all living costs. What's pricier in the city? What's more expensive in the 'burbs? Have you moved from one to the other lately and noticed a difference in your budget?

For that matter, have you moved closer to work (wherever that may be) to deal with gas costs?

Posted by Jamie Smith Hopkins at 10:18 AM | | Comments (14)

July 21, 2008

How-to Monday: Tracking down a property owner


Image courtesy of Stock.XCHNG


So you want to know who, exactly, owns that vacant property near you. Perhaps it's an eyesore and you'd like the name of the guy to complain to. Or you want to buy it and can't figure out where to send the offer. Or you're just nosy. (That's OK; we're all friends here.)

Follow me -- to the Internetmobile, Robin!

Your research trip might be short and sweet. First try the state Department of Assessments and Taxation's property search page, which gives you a variety of information on properties across Maryland -- tax assessment numbers, prior sales history in many cases, whether the property is owner-occupied and, yes, who that owner is.

A search on the Calvert Street address where I spend most of my time shows the owner as Tribune Co. and lists a mailing address in Chicago, for instance.

But what if said owner were a limited liability company with naught but a post office box? The Calvert Street building's previous owner was an LLC, as it happens. And many of the homes bought by real estate investors during the housing boom, some of which are vacantly languishing now, are LLC-owned.

Don't despair: Let me introduce you to another useful state site, MDLandRec.Net. It requires free sign-up, but it's worth the time.

This site collects scanned-in versions of land records such as mortgages and deeds, which is a handy way for finding real people involved with property-owning companies. You can search by address in Baltimore, but you'll need the owner name (in this example, the LLC) for the rest of the state.

Once you find documents associated with your mystery owner, read through to see who signed them. "I Own This House LLC" can hold property, but it can't put its John Hancock on the dotted line -- that's where an actual human being is necessary. When I checked the deed showing Tribune as the new owner of The Sun's building, I did indeed see a human name and signature associated with the LLC that had owned it before.

Ah, the joys of research.

None of this guarantees that you'll be able to talk to the owner of the property you're interested in and/or annoyed about. Local code enforcement officials trying to track down absent owners can't always find them. But this way, at least, you'll have someone to try.

Happy hunting. 

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (2)
Categories: How-to Mondays

July 20, 2008

Home improvement doesn't escape slump

Harvard’s Joint Center for Housing Studies, which follows home improvement trends, has noted a drop in remodeling work during the housing-market shakeout. It doesn't expect that to change soon: Last week it predicted home improvement activity would see an annual decline of about 11 percent by the first quarter of next year.

You might think home improvement companies would benefit from the people who want a bigger place but don't want to deal with selling. But other factors are at work, the center said in a press release:

“The slumping economy and struggling housing sector continues to drag down spending on home improvements,” notes Nicolas P. Retsinas, director of the Joint Center for Housing Studies. “Households are reluctant to undertake major improvements in the context of falling prices.”
Posted by Jamie Smith Hopkins at 9:47 AM | | Comments (1)

July 19, 2008

An appeal from a local nonprofit

In all the discussion and debate about how to stem the tide of foreclosures, there's been fairly little about the aftermath. What happens to homes that sit empty, their new owners  -- the lenders -- unable to sell? What happens to neighborhoods pockmarked with vacant properties?

Vincent P. Quayle, director of St. Ambrose Housing Aid Center in Baltimore, has an appeal to make on this topic. I thought you'd be interested in hearing it.

So I invited him to write a piece for the blog. Here it is:
The Foreclosure Relief Act currently before Congress contains a Neighborhood Stabilization proposal which addresses a piece of the foreclosure crisis that has not received much attention: the tens of thousands of vacant houses, called REOs, that threaten otherwise sound working- and middle-class neighborhoods. The bill includes a $4 billion appropriation to help state and local jurisdictions address these vacant houses. Not all the legislators are enamored of this provision.

A concentration of REOs which sit abandoned and subject to vandalism is not healthy for a neighborhood. Bankers like to remind us they are not in the real estate business. What usually happens is that eventually these REOs are sold to investor-owners rather than homeowners. Some investor-owners do the right thing but most fall into two categories: those who slap some cheap paint and carpeting on the houses and re-sell them to unsophisticated buyers, and those who slap on some cheap paint and carpeting and convert the houses to rental units, often Section 8 units. Neither of these actions bodes well for neighborhoods which are often fragile themselves.

The previous foreclosure crisis in Baltimore around 2000 involved FHA-insured loans, since at that time FHA controlled 40 percent of the Baltimore market. This market share fell to below 3 percent by 2003. Because of the high numbers and concentrations of FHA REOs in 2000, FHA instituted a "neighborhood stabilization" program which assured that many of their REOs were renovated beautifully and re-sold to first-time homeowners. The St. Ambrose Housing Aid Center was one of dozens of nonprofits across the nation that participated in the program.

Between 2000 and 2008 St. Ambrose bought, renovated and re-sold 210 FHA REOs in Belair-Edison, Northwood, Ramblewood, Chinquapin Park, Waltherson and several other neighborhoods, primarily in Northeast Baltimore. Many of these homes were purchased by teachers and police officers.

By 2002 FHA, having tightened its regulations, was replaced by a new generation of untested loan products: interest-only loans, adjustable-rate loans (ARMS), 80-20s (or two loans for one purchase) and what are commonly known as "liar" loans, where lenders accepted the borrower’s word on his or her income and job security. These are the loans that are now in default and threatening so many families and neighborhoods, and there is nothing equivalent to FHA’s "stabilization program."

This is the reason why the $4 billion appropriation in the current Foreclosure Relief Act before Congress to help states and cities stabilize their neighborhoods is so critical.

Have any thoughts on post-foreclosure efforts? Weigh in.

Interested in seeing someone with specialized knowledge discuss another housing issue here? Let me know.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (0)

July 18, 2008

Poll: Buyers weigh in

What stops potential homebuyers from buying? High home prices, according to a Harris Interactive poll. That was the barrier that ranked highest in the survey of 2,462 adults, conducted for Move Inc. Thirty-one percent of those polled gave that answer.

In second place was lack of money for a down payment, with 28 percent of responses. Lack of confidence in the economy was third, with 26 percent.

High home prices are a particular barrier in the West, according to the poll, with 39 percent saying that was their biggest concern. It was 34 percent in the Northeast, which includes Maryland; 27 percent in the South, and 26 percent in the Midwest.

Other topics in the poll include whether buyers think the housing market will improve with the change in presidents in January (44 percent say yes) and whether they're nervous about the state of the housing market now (81 percent say yes).

Posted by Jamie Smith Hopkins at 6:00 PM | | Comments (0)

To pay off faster, or not to pay off faster

There's a comment-duel on a recent How-to post about ways to pay off your mortgage faster. Readers are debating whether you should want to pay it faster, whether it's better to save on mortgage interest or put the extra money you have now into other investments rather than locking it up in your house.

It seems an excellent topic for a poll. Weigh in:

Posted by Jamie Smith Hopkins at 6:09 AM | | Comments (1)
Categories: Polls

July 17, 2008

Fannie, Freddie spend big -- on political influence

Fannie Mae and Freddie Mac are in the top 20 for spending on Washington lobbying in the past decade, the Associated Press notes -- one more twist to the tale:
Critics say they have used their clout and unusual status to create a sort of regulation-free zone around their businesses. When times are good, shareholders and executives of the companies are richly rewarded. When times are bad, as now, taxpayers could be left holding the bag.

"Congress created this problem by creating special rules at Fannie Mae and Freddie Mac and ignored the problem for years," said Sen. Jim DeMint, R-S.C., a sharp critic of what he sees as a looming federal bailout.

Other stories of interest:

Paul Adams reports today about fallout from a television news report about Eastern Savings Bank of Hunt Valley. WMAR-TV said the bank could close due to financial troubles -- but later corrected the report:

A producer at the station mistakenly concluded that Eastern was in danger of closing after it was included in an report of private analyses of banks carrying a high percentage of delinquent loans, a WMAR news director said.

... Eastern officials said such figures are a result of the bank's unconventional business model, which includes buying defaulted loans at a discount from other banks and trying to collect what it can from the borrowers.

Meanwhile, Karen Shih reports about narrow houses in Brooklyn Park -- 12 and 18 feet wide:

While building on these infill lots in mature, developed communities with established roads, sidewalks and other infrastructure is considered "smart growth," residents of Brooklyn Park say the skinny houses threaten the community's identity and decrease property values. While there's nothing neighbors can do about the homes already built - which are legal under zoning law and, local real estate agents say, examples of affordable new housing in the county - the community is fighting the construction of the third narrow home.
Posted by Jamie Smith Hopkins at 11:50 AM | | Comments (1)

July 16, 2008

What home sellers want

Q. What are sellers asking for?

A. To sell, of course.

Q. Besides that, you nincompoop.

A. I'm not the nincompoop asking foolish questions.

Q. That's not an answer. You have to answer -- it's your raison d'être.

A. That's not a question. J'accuse.

Q. What did I do to deserve this?

A. Oh -- you know. And to answer your poorly worded earlier question, sellers are asking for less than they used to. 

Q. Now we're getting somewhere. How much less?

A. Well, the median house on the market in the Baltimore metro area this month is priced at $296,000, according to That's down 9 percent from a year ago, when the median asking price was about $325,000. And it's down 15 percent from July 2006, when the median asking price was almost $350,000.

Q. What's the median? And why should I care?

A. The median is the midpoint, which means half the asking prices are cheaper and half more expensive. And I have no idea why you should care, as you don't technically exist and are therefore not likely to qualify for a mortgage. ... Nowadays, at least.

Posted by Jamie Smith Hopkins at 9:58 AM | | Comments (7)
Categories: Housing humor

July 15, 2008

Take a shot at fixing the mess

Home prices falling. Foreclosures rising. Banks failing. Federal government bailing.

We're way past the point that the only people affected are those who had the bad timing to buy or cash-out refinance during the housing boom. In the words of the Wonk reader who goes by H, "We are all in this real estate mess together."

So: Got any ideas to address the root of the problem or its ripple effects?

I'll let H kick off the conversation with a tax-related suggestion:

There is no mystery to originating good residential loans, and confidence has to be restored to the system, so expect tighter limits on seller closing cost contributions, and elimination or reduction of lender closing help by using buy-up loans (higher rates to get closing money). The recent stock market drop has only increased the problems for home buyers because many have seen their savings disappear in the stock market. Home sales in the state are likely to drop even more unless there is action.

The key to limiting the likely impact in Maryland is to reduce closing cost for home buyers, because it’s invisible to the soon coming tighter mortgage underwriting standard.

I would suggest monthly tax payments for the elderly, first-time home buyers, and any homeowners in trouble. ... Yes, this will cost the state money in terms of cash-flow management and tax-collection operations, but it will lower closing cost across the state for all borrowers without lowering tax rates.

The changes in the '90s from an annual real estate tax payment to allowing a bi-annual tax payment helped a huge number of people buy homes in a fair manner. Given the increase in tax assessment over the years plus our national mess, it's a good time to start talking about state policies that would help elderly, first-time buyers and troubled homeowners. ...

Effective legislative reforms will take time, ... and should take a backseat to limiting the scope of the current crisis. Keep in mind the Great Depression in the 1930s was largely caused and prolonged due to a collapse in residential lending (it also took years to develop effective reforms). The stakes are high for our country, and leaders at all levels need to focus on effective near-term actions.

Chime in, guys.

Posted by Jamie Smith Hopkins at 9:31 AM | | Comments (4)

July 14, 2008

How-to Monday: Neighbor disputes


Image courtesy of Ben Earwicker, Garrison Photography, via Stock.XCHNG


Loud music playing in the wee hours. Front yard doubling as a junk yard. Incursions into your property.

What do you do about a neighbor who's driving you crazy?

A Wonk reader wonders because one of hers planted bushes on her side of the property line. But frustrations with neighbors can be many and varied.

Maryland's Peoples Law Library keeps a handy list of steps you can take to resolve disputes. Before you turn to the police, an attorney or small-claims court, try:

Talking. Broach the subject with your neighbor -- nicely. ("Assume the other person is unaware of the problem, or at least act like it!" the library list advises.) If you've never spoken before, introduce yourself first; complain later.

Writing. Put your concerns in a letter, if talking goes nowhere. Do you think the neighbor is breaking a law or ordinance? Include a copy of the rules with the letter. (The library offers an example of a good letter and a bad letter.) You might also want to track the problem with a log, if it's a recurring one like noise, should you later need to involve the police or other officials.

Reaching out. Are others in the neighborhood bothered, too? Can any of them intervene because they have a better relationship with the neighbor than you do?

Mediation. It's usually cheaper than going to court -- it can be free -- and it's an opportunity for both sides to hash out their issues under the guidance of a neutral third party. 

Nancy Hirshman, director of the Mediation Center of the Anne Arundel County Office of the State's Attorney, says she sees a lot of neighbor disputes. Quality of life issues, she calls them: "'Your music is definitely disturbing me and your dog is running through my petunias' ... All those irritants that really get to you over a period of time," she says.

Think your neighbor would never come to the mediation table with you? You might be surprised. Hirshman says people respond to her "trump card," which is pointing out the mental-health benefit of ending an ongoing battle. And once they sit down together, a "substantial percentage" of neighbors come to an agreement, she adds.

She doesn't recommend that you make the authorities -- whether a homeowners' association or the police -- your first resort.

"As times get more stressful, for whatever the reason -- whether it's the economy or someone's house is about to go into foreclosure -- patience runs thin and they might not handle a situation as nicely as they would have if they didn't have this degree of stress," Hirshman said. "But they're not criminal. ... I always believe that face-to-face communication is the best policy, provided that you don't go over there right after some incident that has really set you off. Wait until you calm down."

Her center offers its services at no charge to Anne Arundel residents. Fees vary elsewhere; you can find a list of Maryland mediation centers HERE and a list of Maryland mediators HERE (click "mediator directory").

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (0)
Categories: How-to Mondays

July 13, 2008

It's a bird! It's a plane! It's ... a Realtor?

Most people probably look at the Metropolitan Regional Information Systems website for home sales numbers, but the multiple-listing service recently added something completely different: a comic-book style storyline, complete with caped crusader "Mr. Is." (Points to you if you noticed that it's a play on MRIS's acronym.)

Why, you ask? Here, let MRIS explain:

Once, life was good in Realopolis. Agents and brokers were masters of all they surveyed. They owned the listings. They owned the customer. They were marketing masters. And, when needed, they were a phone call away.

Much of their might was safely housed in their Fortress of Data: The MLS. Within its walls were the precious gems of information only they, the local REALTOR®, could touch.

But a crack in the foundation appeared one day in the mid 90’s. The Internet had shaken Realopolis. In time, the crack became a gaping crevasse.

And through that rip, outsiders entered. These outsiders were different. With powers all their own. They had Speed. Capital. Flexibility. Some even gave the appearance of benevolence.

As you might know, there's been a huge tug-of-war between traditional agents and online discount brokers, complete with antitrust lawsuits. But this is the first time I've seen it cast as a battle of the spandex-clan titans.

You can see Episode 1 here.

Posted by Jamie Smith Hopkins at 11:19 AM | | Comments (0)

July 12, 2008

The front yard of neighbors' discontent

Check out Larry Carson's story today about an, ah, unusual front yard in Howard County's Sykesville community. It is, depending on your perspective, either hilarious or horrible (with neighbors opting for the latter):
Stuffed animals and signs, some with religious slogans, cover virtually the entire yard, the house and the carport. Used-car-lot-style pennants run between trees.

Plastic reindeer. Smiley faces painted on the driveway. Lampshades tied to bushes. And, protruding from what had been the mailbox support, a bent plastic middle finger. Draped above it is a foot-long belt of rusted bullet shells.

Posted by Jamie Smith Hopkins at 6:53 AM | | Comments (1)

Higher rates coming to a mortgage giant near you?

Experts continue to debate how much trouble mortgage financiers Fannie Mae and Freddie Mac are actually in, but several weighed in yesterday on what it all means. And, as some of you here have speculated, they say it probably means higher interest rates and more restrictive lending standards.

That's likely if the government takes over -- which it said yesterday it is not the plan -- or if the mortgage giants simply need to borrow money on the open market from investors, who are jittery enough to demand better returns.

"The last thing anyone wants to see is higher rates," said Keith T. Gumbinger, a vice president at financial publisher HSH Associates. "That could induce even further downward pressure on home prices."

Also yesterday: The government seized control of IndyMac Bank, saying the "unprecedented stress" in the real estate market had left it "unsafe and unsound."

Posted by Jamie Smith Hopkins at 6:47 AM | | Comments (0)

July 11, 2008

Et tu, Fannie and Freddie?

So much for an easing of the credit crunch. Now investors are betting with their shares that mortgage finance giants Fannie Mae and Freddie Mac are in trouble. The Los Angeles Times reports:
Analysts worry that the mortgage giants won't be able to raise enough money from investors to cover rising losses from loan defaults. Those doubts have ramped up a sell-off by investors, sending shares of both companies to 17-year lows.

Both companies are vital to the housing market, and the government is considered likely to step in to avert any potential failure through loans or guarantees of their debt. But the steep plunges in their stocks - Freddie Mac has fallen 50 percent in just the past week - underscores the potential for the housing downturn to extend well into next year.

Posted by Jamie Smith Hopkins at 9:21 AM | | Comments (7)

More details on June home sales

If you're not sick of housing news yet, feel free to read my story today about local home sales last month, which touches on some of the issues you've all been debating here.

For instance, John McClain, a senior fellow at the Center for Regional Analysis at George Mason University, says that falling prices do eventually seem to bring buyers off the sidelines:

He points to Loudoun County, Va. Average prices in that Washington suburb dropped 17 percent in June - and sales rose 19 percent.

"It may indicate that prices do have to fall to a certain level - and it probably won't be the same level in each jurisdiction - but after they fall to a certain level, buying does increase," McClain said.

A variety of Wonk readers have said they're interested in buying when the price is right. What's your "time to buy" criteria? Are you waiting for a certain percentage drop across the region? For a specific type of house in a specific community to get below a specific dollar amount? For signs that foreclosures have bottomed out? Chime in.

Posted by Jamie Smith Hopkins at 9:06 AM | | Comments (5)

July 10, 2008

Property tax refund -- for some

You could be due a small property tax refund if you live in Baltimore's Charles Village or Bolton Hill neighborhoods, John Fritze reports tonight -- the result of an earlier Sun story pointing out that residents' homestead credit was not being applied to the additional tax bills levied by those two benefits districts.
The city will send letters to residents in the next two weeks. Exactly how many will receive the letter is not yet clear, but a Dixon spokesman said it will likely be shy of 2,000.

The city expects the refunds will cost between $250,000 and $300,000. It was not clear Thursday how the city will pay for that unexpected expense.

Posted by Jamie Smith Hopkins at 9:05 PM | | Comments (0)
Categories: Homestead Property Tax Credit, Property taxes

June home sales: Price and sales down

Home sales in June dropped 31 percent from a year ago in the Baltimore metro area while the average price fell about 4 percent, Metropolitan Regional Information Systems said this morning.

The median price, for those who prefer that measurement, was down almost 7 percent.

Homeowners who sold in June got 92 percent of what they were asking for, or at least 92 percent of their most recent asking price. (It was 95 percent a year earlier.)

All the suburban counties in the metro area saw average prices drop, with the largest coming in Carroll and Howard counties. They were down almost 13 percent. Average prices rose about 5 percent in Baltimore City.

Sales, meanwhile, fell the most in the city -- almost 40 percent -- and the least in Howard (25 percent).

Now I'm off to do some number-crunching. Want more details in the meantime? See the MRIS statistics HERE.

Posted by Jamie Smith Hopkins at 10:11 AM | | Comments (22)

July 9, 2008

Name your price

Yesterday's post about home prices set off a firestorm of comments, but I know many more of you have opinions than the inclination to write about them. So here's an opportunity to weigh in with the click of a button.

What's your opinion of asking prices? Too hot, too cold or just right?

As a follow-up, help me get to know you better: Which category most closely describes you? (In the interest of simplicity, choose one of the "renter" categories if you're staying with family or friends, even if no actual money is changing hands.)

EDIT on Thursday at 8 p.m.: Well, this has certainly been a popular topic. More than 100 votes so far on each poll. The results as they stand now:

Fifty-seven percent think asking prices in the Baltimore metro area are "much too high" and 27 percent think they're "a bit too high" (together, more than eight out of 10). Thirteen percent say prices are "about right," while a lone voter picked one of the "too low" categories.

Judging by the results of the other poll, many of the people who think prices are too high are renters -- but not all. Forty-six percent say they're renting with an interest in buying in the near future, while 5 percent are renters who don't plan to buy soon (together, just over half). Thirty-one percent say they're homeowners who aren't in the market to sell. Most of the rest are homeowners trying to sell now or in the near future.

Have a hot topic you'd like to see me poll readers about? Let me know.

Posted by Jamie Smith Hopkins at 7:18 AM | | Comments (11)
Categories: Polls

July 8, 2008

Up, up and ...

Wonk reader Kate Adams, looking at a piece by Money Magazine, was struck by this statistic: The change in median home prices in Baltimore was nearly 65 percent in the last five years, sixth-highest among the 100 largest cities. (Honolulu, Miami, Virginia Beach, Bakersfield (Calif.) and Los Angeles topped the list.)

Baltimore saw a big jump in prices during the boom. But it's high on the list now in part because values in many former boom places are fast sliding the other direction, while recorded prices here appear to be holding steady. (I say "appear" only because it's so hard to tell, what with sellers paying for closing costs and many homes sitting unsold.)

Out of curiosity, I crunched the most recent numbers from the Office of Federal Housing Enterprise Oversight. They rank Maryland third in price gain in the past five years with almost 75 percent, behind only Hawaii and D.C.

Good news if you're a seller? Well ... If you've been following along, you know about the flip side.

Home sales here have been dropping much faster than average in the country. Statewide, the sales drop was biggest in the nation earlier this year. A number of economists (and some agents) have blamed the sharp drop in local home sales on the comparative lack of significant price drops, noting that the state's low unemployment rate would under normal circumstances mean people able and willing to buy.

Do you agree with them? Disagree? The floor is open for debate.

Posted by Jamie Smith Hopkins at 10:16 AM | | Comments (31)

July 7, 2008

How-to Monday: Where homes are selling

If you don't absolutely, positively have to sell a home at the moment, how do you figure out if you really, honestly want to? Once you get past the financials -- how much do you owe, how much could you get -- you might consider how many homes in your neck of the woods are selling and how many are sitting.

If you're a would-be buyer, you'll probably want to know that, too.

You can ask an agent to run the numbers. Or you could check out your county or ZIP code at Metropolitan Regional Information Systems' stats page, comparing sales to "active listings" (the number of homes on the market).

Or you could look below for my crunch of MRIS and Coastal Association of Realtors data in May, as collected by the Maryland Association of Realtors. The first page ranks Maryland's counties (and Baltimore City) by the number of listings per sale in May, and the second shows the change in sales in May 2008 vs. May 2007.

Read this document on Scribd: May08listingsandsales

Remember, click on the magnifying glass if you want to make the image larger.

As you can see, Somerset County on the Eastern Shore -- one of the poorest jurisdictions in the state -- was really buffeted in May. Fewer than half a dozen homes sold. With 342 properties on the market, that's 68 listings for every sale. Another way of looking at that: It would take 68 months, or more than five-and-a-half years, to sell all those homes if buying continues at the same pace there.

Garrett, Talbot, Worcester and Kent counties all topped 20 months in May, well above the state average of a year.

The Baltimore metro area looks pretty good by comparison, ranging from a high of 11 months in Anne Arundel and Baltimore City to a low of about eight months in Baltimore County and Howard. No other Maryland jurisdiction had a lower share of listings vs. sales than Howard.

The more homes sitting on the market, the harder it is for sellers to sell -- and the easier it is for buyers to make a deal, all else being equal. But it also doesn't hurt to know how the pace of sales in your area is slowing, which is why I crunched the May numbers vs. May 2007.

Washington and Caroline were the only counties that didn't see a slowdown. Washington, in Western Maryland, held steady at 101 sales. Caroline, on the Eastern Shore, rose a heady 45 percent -- though before you get excited, Caroline Countians, keep in mind that's going from 20 sales to 29.

Most of the Baltimore-area jurisdictions saw sales fall about as fast as the state average, 31 percent.

Posted by Jamie Smith Hopkins at 4:00 AM | | Comments (1)
Categories: How-to Mondays

July 6, 2008

Speaking of blame ...

Ted Forstmann, once a player in the private-equity industry, tells The Wall Street Journal in a piece this weekend that the credit crisis will get worse before it gets better. (Why should you care? Because he correctly predicted in the 1980s that the junk-bond boom would end in tears.)

His opinion about why things fell apart in the first place:

To be clear, although Mr. Forstmann talks about "fear and greed" getting out of whack, his is not a condemnation of "greedy speculators" or a "culture of greed" or any of the lamentations so popular among the populists in Washington. It is a diagnosis of the ways in which the financial sector responded to a government policy of printing money that was free, or nearly so. "The creation of much too much money caused all of this excess," he says. In other words, his is not an argument for draconian regulation, but for sound money.

Nor does he blame Alan Greenspan, even though he argues that this all started with the dot-com bubble and 9/11. "Greenspan," he allows, "had really tough decisions to make, so I don't think it's a black-and-white kind of thing at all." It was, and is, rather, "a case of first impression." Mr. Greenspan, he says, admits that he was "totally sure" that what he was doing was right. But he had "no idea what the consequences [were] going to be."

Posted by Jamie Smith Hopkins at 7:23 AM | | Comments (0)

July 5, 2008

Income: $14,000 a year ... or $50,000 a month?

Paul W. Nochumowitz declared in his bankruptcy filing that he made $14,000 a year. Bankruptcy trustee George Liebmann said that sounded a bit off to him. He alleged that the ground rent owner was actually making $50,000 -- a month.

Fred Schulte reports today the newest twist in the saga that started with ground rent: that Nochumowitz "has agreed to a $1.53 million settlement of a lawsuit that accused him of living lavishly from ground-rent income while claiming he was too poor to compensate former tenants harmed by exposure to lead paint."

Liebmann said most of the money would be divided among more than a dozen families suing Nochumowitz and a business partner, alleging lead paint poisoning of their children during the 1990s. The money will be paid by Nochumowitz, the business partner, and members of their families.


Posted by Jamie Smith Hopkins at 7:10 AM | | Comments (0)

July 4, 2008

Step right up to play the blame game

Most people seem to agree that the housing downturn is not a blameless phenomenon. Whom to blame, though -- that's the question.

Homeowners for getting mortgages or lines of credit they couldn't afford? Lenders for making loans no sane professional would touch? Wall Street for happily distributing those loans throughout the financial stratosphere as mortgage-backed securities? The feds for keeping interest rates rock-bottom low and hyping homeownership? Real estate agents and others in the industry for assuring Americans that, no matter what, "now is a great time to buy"?


I pose this question because two journalists have weighed in with a book called Chain of Blame: How Wall Street Caused the Mortgage and Credit Crisis. So, without further ado, I'd like to hear which group you most blame. (Just to be absolutely clear: Choosing one group does not necessarily mean you're saying the rest were innocent.)

UPDATE at 5:15 p.m. on Sunday: Most of you think either homeowners or the mortgage industry is most to blame -- the two categories each have 31 percent of the vote at the moment. Next after that: the "Everyone's equally to blame" category, with 22 percent.

Posted by Jamie Smith Hopkins at 7:19 AM | | Comments (5)
Categories: Polls

July 3, 2008

To hope or not to hope

Is HOPE NOW helping much? Depends on whom you ask.

HOPE NOW, the alliance of mortgage industry players focusing on foreclosure prevention, says it's helping quite a bit, thanks. In a press release yesterday, it estimated that "more than 1.7 million homeowners have avoided foreclosure because of industry efforts" in the last 12 months. That includes 170,000 in May alone.

But the Center for Responsible Lending fired back with a press release of its own that says the numbers "greatly overstate the help being provided" and fail to note that the problem is worsening rather than improving:

[O]ver 16 percent of subprime loans were “seriously delinquent,” that is 90-days or more delinquent or in foreclosure, at the end of March. This is double the 8 percent rate from one year earlier and the highest on record. Furthermore, though defaults on subprime loans continue to drive the overall housing crisis, prime loans are also faltering, with the percent of seriously delinquent prime loans more than doubling from a year earlier.

Foreclosure prevention has been such a hot topic not only because many homeowners are behind on their mortgages but also because rising foreclosures hurt neighborhood home values, government budgets and the lending industry.

Posted by Jamie Smith Hopkins at 9:37 AM | | Comments (3)

July 2, 2008

New sites for housing research

Two new websites to add to your list, if you like to look at everything in the housing arena:

1), which tracks condo developments in the Baltimore-Washington area. The site, started by a former head of market research at a real estate marketing firm, lets you search by area, price, number of bedrooms and the like. A search on "Baltimore" this morning brought up 27 developments.

2) ForeclosurePoint, a find-foreclosures site that says it offers more information for free than its competitors.

Seen other interesting sites? Chime in.

Posted by Jamie Smith Hopkins at 7:36 AM | | Comments (1)

July 1, 2008

How housing affects your daily expenses

Check out the Q&A today with MarketWatch chief economist Irwin Kellner, who talks about the ripple effects of the housing slump (and dubs what we're in a "'Murphy's Law Economy' - if anything can go wrong, it will"). Here's a taste:
What is offsetting the housing slump is spending by business on technology to make its operations more efficient and lower costs. But the resiliency of the U.S. economy in the face of the housing bubble is amazing. It is a testament to the Federal Reserve for doing such a good job at dealing with a difficult situation.

But for every action, there is a reaction. The Fed has flooded the economy with money, and this has depressed the value of the U.S. dollar. This boosts inflation.

Inflation is no longer well-anchored, to use [Federal Reserve Chairman Ben S.] Bernanke's term. This is going to be felt much more today than it was in the 1970s, partly because of how companies interact with their employees. In the 1970s, companies were willing to pay their employees a few percentage points more to beat inflation. But today in the era of downsizing and outsourcing, this has not happened.

Posted by Jamie Smith Hopkins at 9:01 AM | | Comments (1)
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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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