GLENN EZELLE PRINCIPAL BROKER / OWNER

Scottsdale-area home prices edge up in 3 areas---Cost of housing in most of county's ZIP codes declined---The Arizona Republic

GLENN EZELLE — Mon, 10 Oct 2011 02:20:00 GMT

Scottsdale-area housing prices have continued to slide lower this year, but the far-northern region of the city and Carefree showed some healthy gains from a year ago.

It is the first time in four years that any of the Northeast Valley ZIP codes have shown any year-over-year price increases.

Median-home prices in Carefree through Aug. 31 were up 9.4 percent over 2010 and jumped 12.7 percent in the 85262 ZIP code northeast of Pima and Jomax roads. Rio Verde's prices edged up 1.6 percent.

Those three areas were among five ZIP codes out of 120 in Maricopa County that had an increase in median prices.

Twelve other ZIP codes in Scottsdale, Paradise Valley, Cave Creek and Fountain Hills all had declines in median prices ranging from 1 to 16 percent.

"People are picking up some pretty good deals," said Fletcher Wilcox, a Grand Canyon Title Agency vice president who tracks the Valley housing market.

The Republic, using data from the Information Market, analyzed housing prices and foreclosures for the first eight months of 2011 compared with last year.

There were 4,829 existing homes sold in Scottsdale, Paradise Valley, Carefree, Cave Creek, Fountain Hills and Rio Verde. About 21 percent of those sales were foreclosures.

Foreclosures accounted for 12 percent of 50 sales in Rio Verde and 36 percent of 314 sales in the 85257 ZIP code in Scottsdale south of Thomas Road.

The overall Valley median price of existing homes was $116,500.

Northeast Valley median prices for existing homes ranged from $136,006 in far southern Scottsdale to $500,000 in the 85255 ZIP code that includes McDowell Mountain Ranch and DC Ranch and $1.06 million for Paradise Valley.

Wilcox said the luxury market has been hurt by an excess of inventory that is putting downward pressure on prices.

There is a three- to five-year supply of homes priced over $3 million. By contrast, there is only a three-month supply of homes priced from $400,000 to $499,000, he said.

"I see some fantastic deals in Scottsdale Ranch and the East Shea (Boulevard) corridor," Wilcox said. "That is a really hot price range."

People who lost their homes to foreclosures or short sales are turning around and renting homes to be able to stay in their neighborhood, he said.

Bob Bullock, a longtime agent with Realty Executives, said single-family homes in Scottsdale leasing for $1,300 to $2,000 are in heavy demand.

Scottsdale-area median prices have been flat, but sales have been brisk, fewer bank-owned properties are on the market and short sales are closing a lot quicker, he said.

"What we need is for all of these people who needed to short-sale their homes, we need for them to be able to get back in the market," he said.

Bullock said he recently closed a short sale on a townhouse on Granite Reef Road south of McDowell Road for $78,000.

An investor bought the newly remodeled 1,145-square-foot home and quickly rented it for $900.

In another deal earlier this year, Bullock said he handled the sale of a three-bedroom, 1,852-square-foot home in the 85260 ZIP code that went for $245,000, or about $132 per square foot.

He and others warn that buyers cannot be assured that prices will continue to decline.

"The market will turn, and when it does, the general public will realize about six months later," Bullock said.

Fletcher of Grand Canyon Title said prices could still go down but any savings that could come from waiting to buy could be wiped out by an increase in interest rates.

"If I were to wait, I could lose if interest rates go up 2 points," he said.

10 housing markets that will collapse this year Recovery? In these areas, hitting the bottom of will have to come first from Wall Street Journal via MSNBC.com

GLENN EZELLE — Tue, 16 Aug 2011 01:52:00 GMT

10 housing markets that will collapse this year

Recovery? In these areas, hitting the bottom of will have to come first

Alan Diaz / AP file

Partially as a result of Miami staggering unemployment rate, the value of the city’s homes are projected to decrease by another 13 percent by the first quarter of 2013.

By Michael B. Sauter, Douglas A. McIntyre

updated 8/11/2011 8:52:19 PM ET

The real estate market is already in the deepest depression in modern U.S. history. If you think it can’t get any worse, think again.

In several cities, the real estate market is about to drop even more. Home values in many of those cities, such as Las Vegas, have already collapsed as unemployment has shot higher. And with no hope of quick recovery, housing prices are expected to continue to fall. 24/7 Wall St. identified ten housing markets that are expected to drop by at least another 10 percent by 2012.

Methodology: We used data from the Fiserv Case-Shiller Indexes, which track real estate activity in 380 cities. We selected those that are forecast to have the largest percent price drop between the first quarter of this year and the first quarter of next. We added several other pieces of information to our city-by-city information, including June unemployment levels, median household income, and when home prices are expected to reach their troughs in each market.

Median household income in these cities tended to be near the U.S. median, and in some cases well below. We expected to find high unemployment in these cities. This turned out to be the case. In all but one of the cities we examined, unemployment was well above the national average. The rate was over 18 percent in two of the cities. This link between unemployment and expected future drop in home prices shows again how insidious the housing price problem is.

24/7 Wall St.: The nine states slashing unemployment benefits

Home prices fell from all-time highs in 2006. Home equity tapped by second mortgages had been a tremendous source of income then for families who used it for retirement saving, education, and simple consumer purchases. Three years later, many of those homes were worth less than their mortgages. A large population of homeowners still owed a second mortgage. The burden of those two home loans happened to come at a time when national unemployment rose from 4 percent in the mid-2000s to 10 percent. The mix of unemployment and high mortgage payments ripped the home market apart.

The ten markets on the 24/7 Wall St. list of “Housing Markets That Will Collapse This Year,” and several other like them, may not see a full recovery in home prices for years. Inventories in these markets tend to be large. Demand tends to be low as the unemployed cannot be buyers. Finally, fear of further price drops all exacerbate the problem. No person or organization, including the federal government, has been able to help support the housing market, although the administration has tried. Not a single plan has built even a thin net under home values, despite the best efforts of the best economic minds in the world.

10. Fort Lauderdale, Fla.
Expected price drop: -11.1 percent
Median family income: $58,800 (194th highest)
Unemployment rate: 11.8 percent
Median home price: $196,000 (55th highest)
Projected to hit lowest level: Q2 2013

Since 2006, home prices in Fort Lauderdale have dropped by nearly 50 percent. A full 28 percent of that drop occurred in 2009 alone. As was the case throughout most of Florida, the collapse of the housing bubble decimated the construction-based economy. The unemployment rate of nearly 12 percent is evident of the construction sector’s disastrous decline. The value of the 686,000 homes in the Fort Lauderdale area is expected to get even worse through at least the second quarter of 2013. Between Q1 2011 and Q1 2012, the median home price is projected to decline an additional 11.1 percent. Between 2012 and 2013, that number will further decrease by 8.7 percent.

24/7 Wall St.: The 2011 layoff kings

9. Bethesda, Md.
Expected price drop: -11.5 percent
Median family income: $114,100 (the highest)
Unemployment rate: 5.1 percent
Median home price: $417,000 (5th highest)
Projected to hit lowest level: Q3 2012

Bethesda, the extremely wealthy D.C. suburb, has the highest median family income in the country — $114,100. It also has the fifth highest median home price, at $417,000. That position may change, however, as Case-Shiller projects home values will drop by more than $60,000 by next year.

8. Salinas, Calif.
Expected price drop: -11.8 percent
Median family income: $62,100 (145th highest)
Unemployment rate: 12.8 percent
Median home price: $240,000 (34th highest)
Projected to hit lowest level: Q2 2012

Salinas is a small coastal city located 25 miles south of San Jose. Since 2006, the median value of the of the 125,000 houses there decreased in value by more than 61 percent. This is the fourth biggest decline from peak home value among all major American cities. More than 40 percent of this drop occurred in 2009, the year after the housing bubble burst. Unemployment in the city is at 12.8 percent, well above the national average of 9.2 percent. Several companies in the area, including food processing company Romco, expect to continue to lay off workers in the coming months, which should serve to further depress home values.

7. El Centro, Calif.
Expected price drop: -12.1 percent
Median family income: $43,300 (10th lowest)
Unemployment rate: 28.6 percent
Median home price: $130,000 (70th lowest)
Projected to hit lowest level: Q1 2012

El Centro is located five miles from the Mexican border, and is one of the poorest cities in the country. Median income is just $43,300 per family, the tenth-lowest in the U.S. Unemployment is at a staggering 28.6 percent. Between 2006 and 2011, home prices decreased by more than 50 percent. According to a report in the Imperial Valley press, one home was sold in the El Centro area before the recession for $390,000. In 2009, that home was listed at $200,000. Prices are expected to drop an additional 12.1 percent by the first quarter of 2012.

24/7 Wall St.: America’s ten sickest housing markets

6. Miami, Fla.
Expected price drop: -13 percent
Median family income: $47,800 (32nd lowest)
Unemployment rate: 13.4 percent
Median home price: $175,000 (76th highest)
Projected to hit lowest level: Q2 2013

At 13.4 percent, Miami has one of the highest unemployment rates of any major American city. Home values are above average, but are down by more than 50 percent since 2006. Partially as a result of the staggering unemployment rate, the value of the city’s homes are projected to decrease by another 13 percent by the first quarter of 2013. What’s more disturbing, prices will then likely fall an additional 10.1 percent. If this second drop occurs, it will be by far the greatest depreciation of property values in the country in an area already decimated by current low prices.

5. Merced, Calif.
Expected price drop: -13.2 percent
Median family income: $42,900 (8th lowest)
Unemployment rate: 18.6 percent
Median home price: $112,000 (38th lowest)
Projected to hit lowest level: Q2 2012

Merced has a median family income of just $42,900, placing it among the ten poorest major cities in the country. In 2008, the city’s property lost 46.1 percent of its value. This was the second-greatest depreciation in home value for a city since at least 1980. The city’s median home prices are expected to drop an additional 13.2 percent by the beginning of next year.

4. Detroit, Mich,
Expected price drop: -13.4 percent
Median family income: $49,000 (47th lowest)
Unemployment rate: 12.7 percent
Median home price: $42,000 (the lowest median home price)
Projected to hit lowest level: Q2 2012

Since the recession began, Detroit has been the horror story for plummeting home values, foreclosures, vacancies, and unemployment. To date, Detroit’s median home price of $42,000 is the lowest among all 385 major metropolitan areas. While the motor city has been languishing for some time before the recession, the drop in home value has been more steady, as opposed to the rapid drop-offs seen in cities in Florida, Nevada, and California. Detroit’s already record-low values are expected to drop an additional 13.4 percent by the first quarter of 2012.

24/7 Wall St.: Great American stores starving for customers

3. Las Vegas, Nev.
Expected price drop: -13.9 percent
Median family income: $58,900 (196th lowest)
Unemployment rate: 12.4 percent
Median home price: $140,000 (90th lowest)
Projected to hit lowest level: Q4 2012

Las Vegas was one of the center points of the meteoric growth in the first half of the 2000s, only to be followed by a catastrophic fall in the second half. Between 2008 and 2011, home prices in the city dropped by 42.3 percent, the second greatest decline in the country. Although home values in the city are already more than 58 percent off their peak, they are projected by Case-Shiller to drop an additional 13.9 percent by Q1 2012, and then 6.3 percent more by Q1 2013.

2. Riverside-San Bernardino, Calif.
Expected price drop: -15.6 percent
Median family income: $59,700 (190th highest)
Unemployment rate: 13.7 percent
Median home price: $181,000 (70th highest)
Projected to hit lowest level: Q1 2012

Like so many industrial cities in California, Riverside-San Bernadino is being affected by the recession and housing crisis more than most other parts of the U.S. Unemployment has hit 13.7 percent, home vacancy and rental vacancy rates are high, and home values are plummeting. Median home prices are down more than 55 percent from their peak in 2006. By the beginning of next year, prices are expected to drop an additional 15.6 percent, or nearly $30,000.

1. Naples, Fla.
Expected price drop: -16.6 percent
Median family income: $62,800 (137th highest)
Unemployment rate: 10.5 percent
Median home price: $225,000 (40th highest)
Projected to hit lowest level: Q4 2012

Like much of southwest Florida, Naples was one of the fastest-growing communities in the country as it prepared for the millions of baby boomers on the cusp of retirement. When the housing bubble burst, however, the thousands of construction projects for condominiums and retirement communities were halted or lost money, and home values plummeted. From peak home value in 2006, prices dropped by 55 percent. They are expected to keep falling through next year more than any major city in the country. By Q1 2012, home values will drop an additional 16.6 percent, or nearly $40,000.

Judgment Call: Appraisals Weigh Down Housing Sales (Wall Street Journal)

GLENN EZELLE — Fri, 12 Aug 2011 23:14:00 GMT

· AUGUST 12, 2011

Judgment Call: Appraisals Weigh Down Housing Sales

By S. MITRA KALITA And CARRICK MOLLENKAMP

William Maxwell is an expert in finance. He's a professor at Southern Methodist University's business school, has co-authored a book on high-yield debt and spent years calculating values of financial markets.

Yet there's one valuation he can't understand: the appraisal of his Dallas home.

In August 2010, Mr. Maxwell's home was appraised at $790,000 as part of a mortgage refinancing. Yet this past spring, when he tried to sell the four-bedroom home for $756,500, the appraisal commissioned by the buyer's lender, Bank of America Corp., came up with a value of $730,000. Mr. Maxwell said the appraisal killed the sale.

Weak appraisals are "driving down the real-estate market," Mr. Maxwell says. Saying the appraisal process "borders on buffoonery," he's appealing his home's valuation to the Texas regulator.

One of the conclusions from the housing bust: The appraisal system was broken. One of the conclusions some have drawn from the struggling recovery since then: The appraisal system is still broken, but in a different way.

There is little doubt that home values have depreciated sharply in recent years for the most basic of economic reasons: excess supply of homes on the market and weak demand. But some realtors, home-sellers and economists believe low-ball appraisals also are undermining a housing recovery.

Appraisals are supposed to be unbiased assessments of a property's value. The housing bubble that burst a few years ago was inflated, in part, by overly generous appraisals. Now, lenders are pressuring appraisers to come in with lower estimates, some real-estate professionals say. Banks also are using less-experienced appraisers, who often don't appreciate factors that make a home worth more, they say. And valuations are being heavily influenced by distressed sales priced at a discount to the rest of the market.

Lenders are "instructing appraisers to be a little conservative, and that responsibility on the one hand is seen as credit tightening and, on the other, as exacerbating the housing problem," says Columbia Business School economist Chris Mayer. A research paper last year titled "How Much Is That Home Really Worth?" by economist Leonard Nakamura at the Philadelphia Federal Reserve also cited a downward bias in appraisals.

Circle Pix

This 7,000-square-foot house on four acres in Orlando, Fla., was appraised by the builder for $1.2 million in 2008.

Circle Pix

It went under contract for $650,000.

Circle Pix

But another appraisal valued it at just $380,000.

Disputes over valuations are rising. The National Association of Realtors said that 16% of realtors surveyed reported a cancellation in June of this year, and chief economist Lawrence Yun blamed the unusually large number on low appraisals. In June of 2010, only 9% of those surveyed reported a cancellation.

A survey by the group earlier this year found that 10%-12% of members had a contract canceled last year as a result of a low appraisal; 10%-13% had a contract delayed; and 16%-20% reported that the sales price was negotiated lower due to a low appraisal.

Not everyone agrees the appraisal system is broken. The Mortgage Bankers Association, an industry trade group, concedes that appraisals are conservative but says they need to be, partly to protect the banks from future problems with investors who buy mortgages. "There's an extra note of caution," said Steve O'Connor, a senior vice president at the association.

And some appraisers say homeowners are just having trouble facing reality. "It's the market. It's not the changes" in the appraisal process, says Charles MacPhee, a partner with Buttler Appraisals LLC.

Mr. MacPhee's company performed an appraisal in Decatur, Ga., last year that drew ire. John and Michelle Pennie were about to give up on selling their house last spring when an offer came in—just in time to qualify for the 2010 federal tax credit.

The two sides agreed on a sale price of $365,000, with the Pennies paying $8,000 in closing costs. "We were ecstatic," Mr. Pennie says.

But the appraisal put the home's worth at $327,000. And the deal ultimately collapsed. "Understandably in a declining market, you're going to have declining appraisals," Mr. Pennie says. "But when you have two parties who agree on a price, to then have an appraiser come in and make it $40,000 below…how do you ever get out of a falling market?"

For decades, appraising a home was both an art and a science, executed primarily by independent professionals who were experts on their local markets. Designed to protect both the borrower and lender, appraisals were based largely on selling prices of comparable homes. But appraisers also combed through property records and interviewed brokers, buyers, sellers—and even other appraisers. Banks selected the appraiser and often had influence over the outcome. Home buyers paid the fee.

In the aftermath of the housing bust, then-New York State Attorney General Andrew Cuomo sought to reform the appraisal industry by convincing Fannie Mae and Freddie Mac to bar loan officers, mortgage brokers or real-estate agents from any role in selecting appraisers. Besides combating inflated and sometimes fraudulent appraisals, the goal was to eliminate pressure on appraisers to provide estimates that match the contract price, which would increase chances that the mortgage loan would get approved. The sweeping Dodd-Frank financial-overhaul law that went into effect in 2010 went one step further to bolster appraiser independence by regulating both the industry and the fees they are paid.

Rather than hire appraisers whose work is known to them, banks now outsource their selection to appraisal-management companies, which are often units of other banks and financial companies. These appraisal-management companies take a sizable cut of the fee, leaving the appraisers under pressure to work faster and cheaper.

The result has been that appraisers with less experience or who are unfamiliar with a community—but who work cheap—are getting assignments while more experienced appraisers are going out business. That, say critics, is producing appraisals that are less accurate.

"We've lost the best quality appraisers," said Leslie Sellers, the immediate past president of the Appraisal Institute, a trade group. "The people doing it are the ones who have cut overhead to bone, are working out of basements and many of them are not properly educated." The Institute estimates there are currently under 90,000 certified appraisers, down from nearly 100,000 in 2007.

In Mr. Maxwell's case, he says that the appraiser, Jim Applegate, works in Plano, a suburb 20 miles from Dallas, and was unfamiliar with Mr. Maxwell's Dallas neighborhood of Lakewood, an affluent community near a picturesque lake. Mr. Maxwell also claims that Mr. Applegate improperly used less desirable homes as comparables, or "comps," to arrive at a value. In a June 17 formal letter of complaint with the Texas Appraiser Licensing and Certification Board, which regulates the industry, Mr. Maxwell said that Mr. Applegate had used a home near an elementary school that encounters a lot of traffic. Mr. Maxwell's home, by comparison, sits on a quiet, quarter-acre lot.

Calls to Mr. Applegate were returned by a Bank of America spokeswoman, who declined to comment on Mr. Maxwell's situation. She did say the lender has received feedback from customers asking it to reevaluate "geographic competency in our appraisal reports." She said efforts are being made to find appraisers who generally work within 15 miles of a property; if no appraiser is available, the company assigns alternate appraisers with local experience.

Others complain that appraisers are using foreclosures and other distress sales as comps when coming up with estimates. Because foreclosures tend to sell at big discounts from the actual value, some argue that shouldn't be used.

At least four states—Illinois, Nevada, Missouri and Maryland—have considered legislation that would bar appraisers from using distress sales when drawing estimates.

Some economists disagree. They argue that foreclosures account for such a large share of housing sales that it's perfectly acceptable to use them as comps, or to use them but adjust pricing accordingly. "A third of transactions are previously foreclosed homes. In some markets, it's close to 50%," said Columbia's Mr. Mayer. "It would be one thing if you're talking about throwing out a small number of transactions."

Another complaint is that appraisers are increasingly relying on automated valuation models, or AVMs, computer programs that extrapolate home values based on reams of property data, and public and privately compiled databases. The industry began automating in the mid-1990s, but it wasn't until a few years ago that AVMs took hold in a big way.

AVMs are most reliable when there are a larger number of typical transactions to observe. But during the housing slump, typical transactions have been scarce while distressed sales have been abundant.

One of the biggest complaints is that appraisers, in their haste, are overlooking or missing important elements that could add substantial value to a home.

Erin Wanner, a sales executive with Stirling Sotheby's International Realty in Orlando, Fla., says one of her deals fell through when an appraisal came in 40% lower than expected. The property, a custom-built lakefront, 7,000-square-foot home on four acres was appraised by the builder in 2008 at $1.2 million. Ms. Wanner's clients went under contract on the property for $650,000 in a short sale—one in which the bank agrees to receive less than the amount owed on the mortgage. The appraisal came in at $380,000.

"When I first heard it, I thought it was a joke," Ms. Wanner says. She noticed that a guest house on the property and total lot size—as well as the number of fireplaces and its heated pool—weren't included in the valuation, which would have sharply boosted the appraised value. She also thinks the appraiser wasn't familiar enough with the community and may have used comparisons with less affluent houses nearby, such as homes situated on ponds versus lakes.

Ms. Wanner says appraisers today seem less knowledgeable. "Real estate is a neighborhood business," she said. "One neighborhood can be hit, another can be flourishing." She said the new laws prevent lenders and agents from contracting the appraiser directly, which has been especially frustrating. "Once we get the report, it states that individual's opinion of value, and that's that."

Write to Carrick Mollenkamp at carrick.mollenkamp@wsj.com

New Home Sales Unexpectedly Rise in April from FoxBusinessNews.com

GLENN EZELLE — Wed, 25 May 2011 16:49:00 GMT

New Home Sales Unexpectedly Rise in April

Published May 24, 2011

| Reuters

New U.S. single-family home sales rose unexpectedly in April to notch their second straight month of gains and prices increased, according to a government report on Tuesday that offered some hope for the stagnant housing market.

The Commerce Department said sales increased 7.3 percent to a seasonally adjusted 323,000 unit annual rate, the highest level since December, from a slightly upwardly revised 301,000-unit pace in March.

Economists polled by Reuters had forecast new home sales unchanged at a previously reported 300,000-unit rate. All four regions recorded gains in sales, with the West reporting a 15.1 percent rise.

However, compared to April last year sales were down 23.1 percent.

An oversupply of used houses and a relentless wave of foreclosed properties are curbing the market for new homes, even as builders are keeping lean inventories. There were a record low 175,000 new homes available for sale last month, down 2.8 percent from the prior month.

Data last week showed a steep drop in new home construction in April and a dip in sales of previously owned homes.

The Commerce Department report the median sales price for a new home rose 1.6 percent last month to $217,900. Compared with April last year, the median price increased 4.6 percent.

At April's sales pace, the supply of new homes on the market dropped to 6.5 months' worth, the lowest since April last year, from 7.2 months' worth in March.

The People vs. Goldman SachsA Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges/RollingStone.com

GLENN EZELLE — Sun, 15 May 2011 03:17:00 GMT

The People vs. Goldman Sachs

A Senate committee has laid out the evidence. Now the Justice Department should bring criminal charges

--> -->

Goldman Sachs CEO Lloyd Blankfein tesifies before the Senate in April 2010

Mark Wilson/Getty Images

159 Comments

By Matt Taibbi

May 11, 2011 9:30 AM ET

They weren't murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.

Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.

This article appears in the May 26, 2011 issue of Rolling Stone. The issue is available now on newsstands and will appear in the online archive May 13.

The great and powerful Oz of Wall Street was not the only target of Wall Street and the Financial Crisis: Anatomy of a Financial Collapse, the 650-page report just released by the Senate Subcommittee on Investigations, chaired by Democrat Carl Levin of Michigan, alongside Republican Tom Coburn of Oklahoma. Their unusually scathing bipartisan report also includes case studies of Washington Mutual and Deutsche Bank, providing a panoramic portrait of a bubble era that produced the most destructive crime spree in our history — "a million fraud cases a year" is how one former regulator puts it. But the mountain of evidence collected against Goldman by Levin's small, 15-desk office of investigators — details of gross, baldfaced fraud delivered up in such quantities as to almost serve as a kind of sarcastic challenge to the curiously impassive Justice Department — stands as the most important symbol of Wall Street's aristocratic impunity and prosecutorial immunity produced since the crash of 2008.

Photo Gallery: How Goldman top dogs defrauded their clients and lied to Congress

To date, there has been only one successful prosecution of a financial big fish from the mortgage bubble, and that was Lee Farkas, a Florida lender who was just convicted on a smorgasbord of fraud charges and now faces life in prison. But Farkas, sadly, is just an exception proving the rule: Like Bernie Madoff, his comically excessive crime spree (which involved such lunacies as kiting checks to his own bank and selling loans that didn't exist) was almost completely unconnected to the systematic corruption that led to the crisis. What's more, many of the earlier criminals in the chain of corruption — from subprime lenders like Countrywide, who herded old ladies and ghetto families into bad loans, to rapacious banks like Washington Mutual, who pawned off fraudulent mortgages on investors — wound up going belly up, sunk by their own greed.

Read Matt Taibbi on Goldman Sachs, the 'great vampire squid'

But Goldman, as the Levin report makes clear, remains an ascendant company precisely because it used its canny perception of an upcoming disaster (one which it helped create, incidentally) as an opportunity to enrich itself, not only at the expense of clients but ultimately, through the bailouts and the collateral damage of the wrecked economy, at the expense of society. The bank seemed to count on the unwillingness or inability of federal regulators to stop them — and when called to Washington last year to explain their behavior, Goldman executives brazenly misled Congress, apparently confident that their perjury would carry no serious consequences. Thus, while much of the Levin report describes past history, the Goldman section describes an ongoing? crime — a powerful, well-connected firm, with the ear of the president and the Treasury, that appears to have conquered the entire regulatory structure and stands now on the precipice of officially getting away with one of the biggest financial crimes in history.

Read Taibbi's 2010 piece on how bailed-out banks are recreating the conditions for a crash

Defenders of Goldman have been quick to insist that while the bank may have had a few ethical slips here and there, its only real offense was being too good at making money. We now know, unequivocally, that this is bullshit. Goldman isn't a pudgy housewife who broke her diet with a few Nilla Wafers between meals — it's an advanced-stage, 1,100-pound medical emergency who hasn't left his apartment in six years, and is found by paramedics buried up to his eyes in cupcake wrappers and pizza boxes. If the evidence in the Levin report is ignored, then Goldman will have achieved a kind of corrupt-enterprise nirvana. Caught, but still free: above the law.

To fully grasp the case against Goldman, one first needs to understand that the financial crime wave described in the Levin report came on the heels of a decades-long lobbying campaign by Goldman and other titans of Wall Street, who pleaded over and over for the right to regulate themselves.

Before that campaign, banks were closely monitored by a host of federal regulators, including the Office of the Comptroller of the Currency, the FDIC and the Office of Thrift Supervision. These agencies had examiners poring over loans and other transactions, probing for behavior that might put depositors or the system at risk. When the examiners found illegal or suspicious behavior, they built cases and referred them to criminal authorities like the Justice Department.

This system of referrals was the backbone of financial law enforcement through the early Nineties. William Black was senior deputy chief counsel at the Office of Thrift Supervision in 1991 and 1992, the last years of the S&L crisis, a disaster whose pansystemic nature was comparable to the mortgage fiasco, albeit vastly smaller. Black describes the regulatory MO back then. "Every year," he says, "you had thousands of criminal referrals, maybe 500 enforcement actions, 150 civil suits and hundreds of convictions."

But beginning in the mid-Nineties, when former Goldman co-chairman Bob Rubin served as Bill Clinton's senior economic-policy adviser, the government began moving toward a regulatory system that relied almost exclusively on voluntary compliance by the banks. Old-school criminal referrals disappeared down the chute of history along with floppy disks and scripted television entertainment. In 1995, according to an independent study, banking regulators filed 1,837 referrals. During the height of the financial crisis, between 2007 and 2010, they averaged just 72 a year.

But spiking almost all criminal referrals wasn't enough for Wall Street. In 2004, in an extraordinary sequence of regulatory rollbacks that helped pave the way for the financial crisis, the top five investment banks — Goldman, Merrill Lynch, Morgan Stanley, Lehman Brothers and Bear Stearns — persuaded the government to create a new, voluntary approach to regulation called Consolidated Supervised Entities. CSE was the soft touch to end all soft touches. Here is how the SEC's inspector general described the program's regulatory army: "The Office of CSE Inspections has only two staff in Washington and five staff in the New York regional office."

Among the bankers who helped convince the SEC to go for this ludicrous program was Hank Paulson, Goldman's CEO at the time. And in exchange for "submitting" to this new, voluntary regime of law enforcement, Goldman and other banks won the right to lend in virtually unlimited amounts, regardless of their cash reserves — a move that fueled the catastrophe of 2008, when banks like Bear and Merrill were lending out 35 dollars for every one in their vaults.

Goldman's chief financial officer then and now, a fellow named David Viniar, wrote a letter in February 2004, commending the SEC for its efforts to develop "a regulatory framework that will contribute to the safety and soundness of financial institutions and markets by aligning regulatory capital requirements more closely with well-developed internal risk-management practices." Translation: Thanks for letting us ignore all those pesky regulations while we turn the staid underwriting business into a Charlie Sheen house party.

Goldman and the other banks argued that they didn't need government supervision for a very simple reason: Rooting out corruption and fraud was in their own self-interest. In the event of financial wrongdoing, they insisted, they would do their civic duty and protect the markets. But in late 2006, well before many of the other players on Wall Street realized what was going on, the top dogs at Goldman — including the aforementioned Viniar — started to fear they were sitting on a time bomb of billions in toxic assets. Yet instead of sounding the alarm, the very first thing Goldman did was tell no one. And the second thing it did was figure out a way to make money on the knowledge by screwing its own clients. So not only did Goldman throw a full-blown "bite me" on its own self-righteous horseshit about "internal risk management," it more or less instantly sped way beyond inaction straight into craven manipulation.

"This is the dog that didn't bark," says Eliot Spitzer, who tangled with Goldman during his years as New York's attorney general. "Their whole political argument for a decade was 'Leave us alone, trust us to regulate ourselves.' They not only abdicated that responsibility, they affirmatively traded against the entire market."

By the end of 2006, Goldman was sitting atop a $6 billion bet on American home loans. The bet was a byproduct of Goldman having helped create a new trading index called the ABX, through which it accumulated huge holdings in mortgage-related securities. But in December 2006, a series of top Goldman executives — including Viniar, mortgage chief Daniel Sparks and senior executive Thomas Montag — came to the conclusion that Goldman was overexposed to mortgages and should get out from under its huge bet as quickly as possible. Internal memos indicate that the executives soon became aware of the host of scams that would crater the global economy: home loans awarded with no documentation, loans with little or no equity in them. On December 14th, Viniar met with Sparks and other executives, and stressed the need to get "closer to home" — i.e., to reduce the bank's giant bet on mortgages.

Sparks followed up that meeting with a seven-point memo laying out how to unload the bank's mortgages. Entry No. 2 is particularly noteworthy. "Distribute as much as possible on bonds created from new loan securitizations," Sparks wrote, "and clean previous positions." In other words, the bank needed to find suckers to buy as much of its risky inventory as possible. Goldman was like a car dealership that realized it had a whole lot full of cars with faulty brakes. Instead of announcing a recall, it surged ahead with a two-fold plan to make a fortune: first, by dumping the dangerous products on other people, and second, by taking out life insurance against the fools who bought the deadly cars.

The day he received the Sparks memo, Viniar seconded the plan in a gleeful cheerleading e-mail. "Let's be aggressive distributing things," he wrote, "because there will be very good opportunities as the markets [go] into what is likely to be even greater distress, and we want to be in a position to take advantage of them." Translation: Let's find as many suckers as we can as fast as we can, because we'll only make more money as more and more *** hits the fan.

By February 2007, two months after the Sparks memo, Goldman had gone from betting $6 billion on mortgages to betting $10 billion against them — a shift of $16 billion. Even CEO Lloyd "I'm doing God's work" Blankfein wondered aloud about the bank's progress in "cleaning" its crap. "Could/should we have cleaned up these books before," Blankfein wrote in one e-mail, "and are we doing enough right now to sell off cats and dogs in other books throughout the division?"

How did Goldman sell off its "cats and dogs"? Easy: It assembled new batches of risky mortgage bonds and dumped them on their clients, who took Goldman's word that they were buying a product the bank believed in. The names of the deals Goldman used to "clean" its books — chief among them Hudson and Timberwolf — are now notorious on Wall Street. Each of the deals appears to represent a different and innovative brand of shamelessness and deceit.

In the marketing materials for the Hudson deal, Goldman claimed that its interests were "aligned" with its clients because it bought a tiny, $6 million slice of the riskiest portion of the offering. But what it left out is that it had shorted the entire deal, to the tune of a $2 billion bet against its own clients. The bank, in fact, had specifically designed Hudson to reduce its exposure to the very types of mortgages it was selling — one of its creators, trading chief Michael Swenson, later bragged about the "extraordinary profits" he made shorting the housing market. All told, Goldman dumped $1.2 billion of its own crappy "cats and dogs" into the deal — and then told clients that the assets in Hudson had come not from its own inventory, but had been "sourced from the Street."

Hilariously, when Senate investigators asked Goldman to explain how it could claim it had bought the Hudson assets from "the Street" when in fact it had taken them from its own inventory, the bank's head of CDO trading, David Lehman, claimed it was accurate to say the assets came from "the Street" because Goldman was part of the Street. "They were like, 'We are the Street,'" laughs one investigator.

Hudson lost massive amounts of money almost immediately after the sale was completed. Goldman's biggest client, Morgan Stanley, begged it to liquidate the investment and get out while they could still salvage some value. But Goldman refused, stalling for months as its clients roasted to death in a raging conflagration of losses. At one point, John Pearce, the Morgan Stanley rep dealing with Goldman, lost his temper at the bank's refusal to sell, breaking his phone in frustration. "One day I hope I get the real reason why you are doing this to me," he told a Goldman broker.

Goldman insists it was only required to liquidate the assets "in an orderly fashion." But the bank had an incentive to drag its feet: Goldman's huge bet against the deal meant that the worse Hudson performed, the more money Goldman made. After all, the entire point of the transaction was to screw its own clients so Goldman could "clean its books." The crime was far from victimless: Morgan Stanley alone lost nearly $960 million on the Hudson deal, which admittedly doesn't do much to tug the heartstrings. Except that quickly after Goldman dumped this near-billion-dollar loss on Morgan Stanley, Morgan Stanley turned around and dumped it on taxpayers, who within a year were spending $10 billion bailing out the sucker bank through the TARP program.

It is worth pointing out here that Goldman's behavior in the Hudson scam makes a mockery of standards in the underwriting business. Courts have held that "the relationship between the underwriter and its customer implicitly involves a favorable recommendation of the issued security." The SEC, meanwhile, requires that broker-dealers like Goldman disclose "material adverse facts," which among other things includes "adverse interests." Former prosecutors and regulators I interviewed point to these areas as potential avenues for prosecution; you can judge for yourself if a $2 billion bet against clients qualifies as an "adverse interest" that should have been disclosed.

But these "adverse interests" weren't even the worst part of Hudson. Goldman also used a complex pricing method to turn the deal into an impressive triple screwing. Essentially, Goldman bought some of the mortgage assets in the Hudson deal at a discount, resold them to clients at a higher price and pocketed the difference. This is a little like getting an invoice from an interior decorator who, in addition to his fee for services, charges you $170 a roll for brand-name wallpaper he's actually buying off the back of a truck for $63.

To recap: Goldman, to get $1.2 billion in crap off its books, dumps a huge lot of deadly mortgages on its clients, lies about where that crap came from and claims it believes in the product even as it's betting $2 billion against it. When its victims try to run out of the burning house, Goldman stands in the doorway, blasts them all with gasoline before they can escape, and then has the balls to send a bill overcharging its victims for the pleasure of getting fried.

Timberwolf, the most notorious of Goldman's scams, was another car whose engine exploded right out of the lot. As with Hudson, Goldman clients who bought into the deal had no idea they were being sold the "cats and dogs" that the bank was desperately trying to get off its books. An Australian hedge fund called Basis Capital sank $100 million into the deal on June 18th, 2007, and almost immediately found itself in a full-blown death spiral. "We bought it, and Goldman made their first margin call 16 days later," says Eric Lewis, a lawyer for Basis, explaining how Goldman suddenly required his client to put up cash to cover expected losses. "They said, 'We need $5 million.' We're like, what the ***, what's going on?" Within a month, Basis lost $37.5 million, and was forced to file for bankruptcy.

In many ways, Timberwolf was a perfect symbol of the insane faith-based mathematics and blackly corrupt marketing that defined the mortgage bubble. The deal was built on a satanic derivative structure called the CDO-squared. A normal CDO is a giant pool of loans that are chopped up and layered into different "tranches": the prime or AAA level, the BBB or "mezzanine" level, and finally the equity or "toxic waste" level. Banks had no trouble finding investors for the AAA pieces, which involve betting on the safest borrowers in the pool. And there were usually investors willing to make higher-odds bets on the crack addicts and no-documentation immigrants at the potentially lucrative bottom of the pool. But the unsexy BBB parts of the pool were hard to sell, and the banks didn't want to be stuck holding all of these risky pieces. So what did they do? They took all the extra unsold pieces, threw them in a big box, and repeated the original "tranching" process all over again. What originally were all BBB pieces were diced up and divided anew — and, presto, you suddenly had new AAA securities and new toxic-waste securities.

A CDO, to begin with, is already a highly dubious tool for magically converting risky subprime mortgages into AAA investments. A CDO-squared doubles down on that lunacy, taking the waste products of the original process and converting them into AAA investments. This is kind of like taking all the kids who were picked last to play volleyball in every gym class of every public school in the state, throwing them in a new gym, and pretending that the first 10 kids picked are varsity-level players. Then you take all the unpicked kids left over from that process, throw them in a gym with similar kids from all 50 states, and call the first 10 kids picked All-Americans.

Those "All-Americans" were the assets in the Timberwolf deal. These were the recycled nightmare dregs of the mortgage craze — to quote Beavis and Butt-Head, "the ass of the ass."

Goldman knew the deal sucked long before it dinged the Aussies in Basis Capital for $100 million. In February 2007, Goldman mortgage chief Daniel Sparks and senior executive Thomas Montag exchanged e-mails about the risk of holding all the crap in the Timberwolf deal.

MONTAG: "CDO-squared — how big and how dangerous?"
SPARKS: "Roughly $2 billion, and they are the deals to worry about."

Goldman executives were so "worried" about holding this stuff, in fact, that they quickly sent directives to all of their salespeople, offering "ginormous" credits to anyone who could manage to find a dupe to take the Timberwolf All-Americans off their hands. On Wall Street, directives issued from above are called "axes," and Goldman's upper management spent a great deal of the spring of 2007 "axing" Timberwolf. In a crucial conference call on May 20th that included Viniar, Sparks oversaw a PowerPoint presentation spelling out, in writing, that Goldman's mortgage desk was "most concerned" about Timberwolf and another CDO-squared deal. In a later e-mail, he offered an even more dire assessment of such deals: "There is real market-meltdown potential."

On May 22nd, two days after the conference call, Goldman sales rep George Maltezos urged the Australians at Basis to hurry up and buy what the bank knew was a deadly investment, suggesting that the "return on invested capital for Basis is over 60 percent." Maltezos was so stoked when he first identified the Aussies as a target in the scam that he subject-lined his e-mail "Utopia."

"I think," Maltezos wrote, "I found white elephant, flying pig and unicorn all at once."

The whole transaction can be summed up by the now-notorious e-mail that Montag wrote to Sparks only four days after they sold $100 million of Timberwolf to Basis. "Boy," Montag wrote, "that timeberwof [sic] was one shitty deal."

Last year, in the one significant regulatory action the government has won against the big banks, the SEC sued Goldman over a scam called Abacus, in which the bank "rented" its name to a billionaire hedge-fund viper to fleece investors out of more than $1 billion. Goldman agreed to pay $550 million to settle the suit, though no criminal charges were brought against the bank or its executives. But in light of the Levin report, that SEC action now looks woefully inadequate. Yes, it was a record fine — but it pales in comparison to the money Goldman has taken from the government since the crash. As Spitzer notes, Goldman's reaction was basically, "OK, we'll pay you $550 million to settle the Abacus case — that's a small price to pay for the $12.9 billion we got for the AIG bailout." Now, adds Spitzer, "everybody can just go home and pretend it was only $12.4 billion — and Goldman can smile all the way to the bank. The question is, now that we've seen this report, there are a bunch of story lines that seem to be at least as egregious as Abacus. Are they going to bring cases?"

Here is where the supporters of Goldman and other big banks will stand up and start wanding the air full of confusing terms like "scienter" and "loss causation" — legalese mumbo jumbo that attempts to convince the ignorantly enraged onlooker that, according to American law, these grotesque tales of grand theft and fraud you've just heard are actually more innocent than you think. Yes, they will say, it may very well be a prosecutable crime for a corner-store Arab to take $2 from a customer selling tap water as Perrier. But that does not mean it's a crime for Goldman Sachs to take $100 million from a foreign hedge fund doing the same thing! No, sir, not at all! Then you'll be told that the Supreme Court has been limiting corporate liability for fraud for decades, that in order to gain a conviction one must prove a conscious intent to deceive, that the 1976 ruling in Ernst and Ernst clearly states....

Leave all that aside for a moment. Though many legal experts agree there is a powerful argument that the Levin report supports a criminal charge of fraud, this stuff can keep the lawyers tied up for years. So let's move on to something much simpler. In the spring of 2010, about a year into his investigation, Sen. Levin hauled all of the principals from these rotten Goldman deals to Washington, made them put their hands on the Bible and take oaths just like normal people, and demanded that they explain themselves. The legal definition of financial fraud may be murky and complex, but everybody knows you can't lie to Congress.

"Article 18 of the United States Code, Section 1001," says Loyola University law professor Michael Kaufman. "There are statutes that prohibit perjury and obstruction of justice, but this is the federal statute that explicitly prohibits lying to Congress."

The law is simple: You're guilty if you "knowingly and willfully" make a "materially false, fictitious or fraudulent statement or representation." The punishment is up to five years in federal prison.

When Roger Clemens went to Washington and denied taking a shot of steroids in his ass, the feds indicted him — relying not on a year's worth of graphically self-incriminating e-mails, but chiefly on the testimony of a single individual who had been given a deal by the government. Yet the Justice Department has shown no such prosecutorial zeal since April 27th of last year, when the Goldman executives who oversaw the Timberwolf, Hudson and Abacus deals arrived on the Hill and one by one — each seemingly wearing the same mask of faint boredom and irritated condescension — sat before Levin's committee and dodged volleys of questions.

Before the hearing, even some of Levin's allies worried privately about his taking on Goldman and other powerful interests. The job, they said, was best left to professional prosecutors, people with experience building cases. "A senator's office is not an enormous repository of expertise," one former regulator told me. But in the case of this particular senator, that concern turned out to be misplaced. A Harvard-educated lawyer, Levin has a long record of using his subcommittee to spend a year or more carefully building cases that lead to criminal prosecutions. His 2003 investigation into abusive tax shelters led to 19 indictments of individuals at KPMG, while a 2006 probe fueled insider-trading charges against the notorious Wyly brothers, a pair of billionaire Texans who manipulated offshore investment trusts. The investigation of Goldman was an attempt to find out what went wrong in the years leading up to the financial crash, and the questioning of the bank's executives was not one of those for-the-cameras-only events where congressmen wing ad-libbed questions in search of sound bites. In the weeks leading up to the hearing, Levin's team carefully rehearsed the moment with committee members. They knew the possible answers that Goldman might give, and they were ready with specific counterquestions. What ensued looked more like a good old-fashioned courtroom grilling than a photo-op for grinning congressmen.

Sparks, who stepped down as Goldman's mortgage chief in 2008, cut a striking figure in his testimony. With his severe crew cut, deep-set eyes and jockish intransigence, he looked like a cross between H.R. Haldeman and John Rocker. He repeatedly dodged questions from Levin about whether or not the bank had a responsibility to tell its clients that it was betting against the same stuff it was selling them. When asked directly if he had that responsibility, Sparks answered, "The clients who did not want to participate in that deal did not." When Levin pressed him again, asking if he had a duty to disclose that Goldman had an "adverse interest" to the deals being sold to clients, Sparks fidgeted and pretended not to comprehend the question. "Mr. Chairman," he said, "I'm just trying to understand."

OK, fine — non-answer answers. "My guess is they were all pretty well coached up," says Kaufman, the law professor. But then Sparks had a revealing exchange with Sen. Jon Tester of Montana. Tester calls the Goldman deals "a wreck waiting to happen," noting that the CDOs "were all downgraded to junk in very short order."

At which point, Sparks replies, "Well, senator, at the time we did those deals, we expected those deals to perform."

Tester then cannily asks if by "perform," Sparks means go to *** — which would have been an honest answer. "Perform in what way?" Tester asks. "Perform to go to junk so that the shorts made out?"

Unable to resist the taunt, Sparks makes a fateful decision to defend his honor. "To not be downgraded to junk in that short a time frame," he says. Then he pauses and decides to dispense with the hedging phrase "in that short a time frame."

"In fact," Sparks says, "to not be downgraded to junk."

So Sparks goes before Congress and, under oath, tells a U.S. senator that at the time he was selling Timberwolf, he expected it to "perform." But an internal document he approved in May 2007 predicted exactly the opposite, warning that Goldman's mortgage desk expected such deals to "underperform." Here are some other terms that Sparks used in e-mails about the subprime market affecting deals like Timberwolf around that same time: "bad and getting worse," "get out of everything," "game over," "bad news everywhere" and "the business is totally dead."

And we indicted Roger Clemens?

Another extraordinary example of Goldman's penchant for truth avoidance came when Joshua Birnbaum, former head of structured-products trading for the bank, gave a deposition to Levin's committee. Asked point-blank if Goldman's huge "short" on mortgages was an intentional bet against the market or simply a "hedge" against potential losses, Birnbaum played dumb. "I do not know whether the shorts were a hedge," he said. But the committee, it turned out, already knew that Birnbaum had written a memo in which he had spelled out the truth: "The shorts were not a hedge." When Birnbaum's lawyers learned that their client's own words had been used against him, they hilariously sent an outraged letter complaining that Birnbaum didn't know the committee had his memo when he decided to dodge the question. They also submitted a "supplemental" answer. Birnbaum now said, "Having reviewed the document the staff did not previously provide me" — his own words! — "I can now recall that ... I believed ... these short positions were not a hedge." (Goldman, for its part, dismisses Birnbaum as a single trader who "neither saw nor knew the firm's overall risk positions.")

When it came time for Goldman CEO Lloyd Blankfein to testify, the banker hedged and stammered like a brain-addled boxer who couldn't quite follow the questions. When Levin asked how Blankfein felt about the fact that Goldman collected $13 billion from U.S. taxpayers through the AIG bailout, the CEO deflected over and over, insisting that Goldman would somehow have made that money anyway through its private insurance policies on AIG. When Levin pressed Blankfein, pointing out that he hadn't answered the question, Blankfein simply peered at Levin like he didn't understand.

But Blankfein also testified unequivocally to the following:

"Much has been said about the supposedly massive short Goldman Sachs had on the U.S. housing market. The fact is, we were not consistently or significantly net-short the market in residential mortgage-related products in 2007 and 2008. We didn't have a massive short against the housing market, and we certainly did not bet against our clients."

Levin couldn't believe what he was hearing. "Heck, yes, I was offended," he says. "Goldman's CEO claimed the firm 'didn't have a massive short,' when the opposite was true." First of all, in Goldman's own internal memoranda, the bank calls its giant, $13 billion bet against mortgages "the big short." Second, by the time Sparks and Co. were unloading the Timberwolves of the world on their "unicorns" and "flying pigs" in the summer of 2007, Goldman's mortgage department accounted for 54 percent of the bank's risk. That means more than half of all the bank's risk was wrapped up in its bet against the mortgage market — a "massive short" by any definition. Indeed, the bank was betting so much money on mortgages that its executives had become comically blasé about giant swings on a daily basis. When Goldman lost more than $100 million on August 8th, 2007, Montag circulated this e-mail: "So who lost the hundy?"

This month, after releasing his report, Levin sent all of this material to the Justice Department. His conclusion was simple. "In my judgment," he declared, "Goldman clearly misled their clients, and they misled the Congress." Goldman, unsurprisingly, disagreed: "Our testimony was truthful and accurate, and that applies to all of our testimony," said spokesman Michael DuVally. In a statement to Rolling Stone, Goldman insists that its behavior throughout the period covered in the Levin report was consistent with responsible business practice, and that its machinations in the mortgage market were simply an attempt to manage risk.

It wouldn't be hard for federal or state prosecutors to use the Levin report to make a criminal case against Goldman. I ask Eliot Spitzer what he would do if he were still attorney general and he saw the Levin report. "Once the steam stopped coming out of my ears, I'd be dropping so many subpoenas," he says. "And I would parse every potential inconsistency between the testimony they gave to Congress and the facts as we now understand them."

I ask what inconsistencies jump out at him. "They keep claiming they were only marginally short, that it was more just servicing their clients," he says. "But it sure doesn't look like that." He pauses. "They were $13 billion short. That's big — 50 percent of their risk. It was so completely disproportionate."

Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn't make a massive short bet and didn't bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a "big short" and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?

This issue is bigger than what Goldman executives did or did not say under oath. The Levin report catalogs dozens of instances of business practices that are objectively shocking, no matter how any high-priced lawyer chooses to interpret them: gambling billions on the misfortune of your own clients, gouging customers on prices millions of dollars at a time, keeping customers trapped in bad investments even as they begged the bank to sell, plus myriad deceptions of the "failure to disclose" variety, in which customers were pitched investment deals without ever being told they were designed to help Goldman "clean" its bad inventory. For years, the soundness of America's financial system has been based on the proposition that it's a crime to lie in a prospectus or a sales brochure. But the Levin report reveals a bank gone way beyond such pathetic little boundaries; the collective picture resembles a financial version of The Jungle, a portrait of corporate sociopathy that makes you never want to go near a sausage again.

Upton Sinclair's narrative shocked the nation into a painful realization about the pervasive filth and corruption behind America's veneer of smart, robust efficiency. But Carl Levin's very similar tale probably will not. The fact that this evidence comes from a U.S. senator's office, and not the FBI or the SEC, is itself an element in the worsening tale of lawlessness and despotism that sparked a global economic meltdown. "Why should Carl Levin be the one who needs to do this?" asks Spitzer. "Where's the SEC? Where are any of the regulatory bodies?"

This isn't just a matter of a few seedy guys stealing a few bucks. This is America: Corporate stealing is practically the national pastime, and Goldman Sachs is far from the only company to get away with doing it. But the prominence of this bank and the high-profile nature of its confrontation with a powerful Senate committee makes this a political story as well. If the Justice Department fails to give the American people a chance to judge this case — if Goldman skates without so much as a trial — it will confirm once and for all the embarrassing truth: that the law in America is subjective, and crime is defined not by what you did, but by who you are.

Single Story For Sale in Pearl District

GLENN EZELLE — Sat, 02 Apr 2011 02:54:00 GMT

Prime Pearl District Gregory Penthouse

• 1,451 sq. ft., 2 bath, 1 bdrm single story - MLS® $649,000 - PIED A TERRE IN THE PEARL

Pearl District, Portland (Multnomah County) - Stunning one-of-a-kind Gregory penthouse in the heart of the Pearl District offers elegant finishes and true loft living at its finest. This immaculate pied-a-terre penthouse has an open and versatile floor plan and features a gourmet kitchen with maple cabinetry, granite island with eating bar and exceptional stainless appliances including SubZero refrigerator, 2 Thermador convection ovens and Asko dishwasher. French doors open out to two private terraces to enjoy impressive West Hills and city views. The luxurious master bathroom features marble counters, glass and tile shower and extra large soaking tub. This beautiful penthouse offers many amenities including fireplace, hardwoods, tile, artistic lighting, designer paint, automatic window coverings, 2 secure parking spaces and 2 secure storage spaces. Prime Pearl District location steps to the streetcar, shopping and restaurants. 1451 sq ft with one bedroom and 1 1/2 bathrooms, central vacuum, air conditioning and natural gas. This penthouse is a must see!

Property information

Single Story For Sale in Downtown SOLD

GLENN EZELLE — Fri, 11 Mar 2011 21:35:00 GMT

LENDER APPROVES $930,000 FOR QUICK CLOSE

• 2,356 sq. ft., 3 bath, 2 bdrm single story "TOP OF THE ELIOT WITH INSANE VIEWS" - MLS® $998,000 - LENDER APPROVES $930,000

Downtown, Portland (Multnomah County) - PRE APPROVED BY LENDERS !!! SHORT SALE OPPORTUNITY!!! THIS CONDO WILL SELL QUICK AT $930,000. CAN BE CLOSED QUICKLY Extraordinary Eliot Tower Penthouse with breathtaking 280 degree panoramic views of the city and West Hills. This 2356 square foot 18th floor NW corner penthouse with amazing views from every room offers top quality finishes. The gourmet kitchen has outstanding SubZero and Thermador stainless appliances, double oven, built-in wine refrigerator, granite counters and custom island with eating bar, the elegant living room features a floor to ceiling dual sided marble fireplace shared with the adjacent formal dining room, the generous master suite has a West Hills view, closet with organizer and a luxurious marble bathroom with glass shower and jetted tub. The Eliot Tower amenities include a meeting room, library, kitchen, roof top terrace, fitness center and concierge services.
Steel and glass construction with walls of windows
Expansive terrace
Hardwood floors throughout
2 luxury suites with marble bathrooms
2 side by side parking spaces in the secure garage
Generous extra storage unit next to parking
Prime downtown location next to the Streetcar

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Price Reduced on 1044-2309 SW 1ST Ave in Southwest Portland SOLD

GLENN EZELLE — Sat, 17 Jul 2010 23:50:00 GMT

Southwest Portland, Portland (Multnomah County) - Announcing a price reduction on 1044-2309 SW 1ST Ave, a 1,497 sq. ft., 2 bath, 2 bdrm single story. Now MLS® $369,600 - PRICE TO SELL QUICK.

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"New home sales plummet to record low" from CNNMoney.com

GLENN EZELLE — Wed, 23 Jun 2010 16:21:00 GMT

New home sales plummet to record low

By Hibah Yousuf, staff reporterJune 23, 2010: 11:25 AM ET

NEW YORK (CNNMoney.com) -- New home sales plummeted to a record low in May, the first month following the expiration of the homebuyer tax credit. This snapped a two-month streak of gains.

New home sales declined 32.7% to a seasonally adjusted annual rate of 300,000 last month, down from an downwardly revised 446,000 in April, the Commerce Department reported Wednesday. Sales year-over-year fell 18.3%.

This is the slowest sales pace since the Commerce Department began tracking data in 1963. The prior record was set in September 1981, when new homes sold at an annual rate of 338,000.

"We expected a slowdown, but the extent of this decline was a surprise," said Anika Khan, an economist at Wells Fargo. The figure was even worse than her relatively pessimistic forecast of an annual rate of 380,000 in May.

A consensus of economists surveyed by Briefing.com had expected May sales to slide to an annual rate of 430,000.

"Clearly, the lack of a tax credit had a lot to do with it, and it's going to be a bit of a bumpy road ahead as we get a few more months of payback," Khan said.

Home sales had surged in March and April as homebuyers scrambled to sign contracts ahead of the April 30 deadline for the tax credit. First-time homebuyers qualified for a tax credit up to $8,000, while repeat buyers could get as much as a $6,500 break.

Homebuyers have until June 30 to close deals, but the Senate may vote to push that deadline back to Sept. 30.

Khan expects home sales to remain depressed through the third quarter as home construction continues to contract and lending standards remain tight. But, she said, sales should pick up slightly in the fourth quarter.

Although, she added, we are still years away from a normal level of new home sales -- an annual rate between 800,000 and 900,000.

"A full housing recovery is contingent on employment," Khan said. "When we see the unemployment rate abate, and some growth in salaries and incomes, we'll get some sustainable momentum in the housing market."

A real estate industry report released earlier this week showed that existing home sales, based closed sales rather than signed contracts, slipped slightly last month but remained elevated.

Price and inventory: The government report showed that the median price of new homes sold in May was $200,900, down less than 1% from April but a 9.6% drop from May 2009.

An estimated 213,000 new homes were for sale at the end of May, the lowest inventory level in more than 40 years.

Still, at the current sales pace, the government expects it will take 8.5 months to sell through that inventory, up from 5.8 months in April. Six months of inventory is considered normal market conditions.

Sales by region: Sales fell the most in the West, where they decreased by more than 50%; the Northwest saw sales declined by about a third. Sales in the South and Midwest declined by about 25%.

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This Memorial Day, Fix Those Gutters from Realtor.org/Realtor Magazine

GLENN EZELLE — Wed, 05 May 2010 05:10:00 GMT

This Memorial Day, Fix Those Gutters
The flurry of Memorial Day sales at home-improvement retailers offers the perfect occasion to remind sellers to pick up the materials they need to fix any issues, like gutter problems, which could deter buyers.

Buyers are drawn like magnets to well-maintained homes. A sagging gutter here, a gutter with plants sprouting out of it there, and the sellers’ first impression is nothing but a missed opportunity.

For tips you can share with sellers on repairing common gutter problems, head to the REALTOR^® Content Resource, the new tool powered by HouseLogic, where your NAR membership entitles you to download free homeownership content in your consumer Web site, blog, or e-newsletter. Here are just a few of the tips available now at REALTOR^® Content Resource:

• Clear clogged gutters: Sellers can tackle the most common problem of all if they’re comfortable on a ladder, don’t mind getting wet and dirty, and don’t have an extremely tall house. It’s a matter of clearing the muck from gutters and then flushing them with a garden hose to make sure the water drains properly. To really impress potential buyers, sellers can even have gutter covers installed.

• Straighten sagging gutters: Replacing faulty or missing hangers, which secure gutters to a home, is an inexpensive fix. Hangers can deteriorate over time or they can be spaced too far apart to support the gutters’ weight. Sellers can pick up hangers for $10 or less and fasteners for about $1 each.

• Plug leaks: Sealing leaky gutter joints requires only caulking with a $5 tube of gutter sealant.

Demonstrate your knowledge as an expert on home value by using these tips to educate sellers about these relatively easy — but visually critical — fixes to gutter glitches. If sellers have no gutter worries, they’re bound to be able to benefit from tips on saving energy on water heaters, inspecting and maintaining their garage, and improving curb appeal and safety with outdoor lighting, all of which are also available now at REALTOR^® Content Resource.

The REALTOR® Content Resource, powered by HouseLogic, is an exclusive, free benefit for NAR members. HouseLogic is the National Association of REALTORS’^® no-topic-left-uncovered consumer Web site geared to helping home owners make smart decisions to maintain, protect, and increase the value of their home.

Mortgage Insurer Reports Housing Is Recovering from Realtor.org/Realtor Magazine

GLENN EZELLE — Wed, 05 May 2010 04:41:00 GMT

Mortgage Insurer Reports Housing Is Recovering
Mortgage insurer PMI released a report Monday indicating that the housing market is recovering and predicting that prices are likely to rise in many markets over the next two years. PMI considerations include increasing affordability, generally improving mortgage credit quality, decreasing foreclosure rates, and a drop in excess housing supply.

Key findings include:

Of the nation’s 384 MSAs (metropolitan statistical areas), 356 had a declining risk score, with only one showing a slight increase and the remainder unchanged.
The number of MSAs in the riskiest category fell by 26.4 percent during the fourth quarter.
The number of MSAs in the least-risky category increased 26.5 percent.

Large MSAs with the most improved risk scores are:

Columbus, Ohio
Pittsburgh
Memphis
Charlotte, N.C.
St. Louis
San Antonio, Texas
Kansas City, Mo.
Nashville, Tenn.
Chicago-Naperville
Indianapolis

Source: PMI Mortgage Insurance Co.

Pending Home Sales on an Upswing from Realtor.org/Realtor Magazine

GLENN EZELLE — Wed, 05 May 2010 04:36:00 GMT

Pending Home Sales on an Upswing
Pending home sales increased again in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of REALTORS®.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, rose 5.3 percent to 102.9 from 97.7 in February, and is 21.1 percent above March 2009 when it was 85.0; this follows an 8.3 percent increase in February. The data reflects contracts and not closings, which usually occur with a lag time of one or two months.

Lawrence Yun, NAR chief economist, said favorable affordability conditions have been working with the tax credit. “Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” he said. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing.”

Regional Numbers

The PHSI in the Northeast declined 3.3 percent to 75.1 in March, but remains 27.2 percent higher than March 2009.
In the Midwest the index increased 1.2 percent to 98.9 and is 18.5 percent above a year ago.
Pending home sales in the South jumped 12.7 percent to an index of 121.2, which is 28.3 percent higher than March 2009.
In the West the index rose 1.9 percent to 99.9 and is 8.8 percent above a year ago.

“Another encouraging sign is the improvement in the availability for jumbo and second-home mortgages,” Yun said. “As bank balance sheets strengthen, it is just a matter of time before lending of non-government-backed mortgages steadily opens up.”

Source: NAR

REAL ESTATE TAKES OFF IN THE SOUTH OF THE UNITED STATES

GLENN EZELLE — Mon, 03 May 2010 19:29:00 GMT

Home Sales Surge in Southern Cities

By THE ASSOCIATED PRESS

Published: April 22, 2010

Filed at 2:31 p.m. ET

MIAMI (AP) -- March home sales climbed nearly 19 percent in the South as buyers scrambled to claim federal tax credits and take advantage of affordable prices.

There were 160,000 sales of previously occupied homes last month in the South, which also saw prices increase more than 5 percent to $154,800, the National Association of Realtors said Thursday. The last time prices rose in the South on a year-over-year basis was June 2008.

Nationally, sales of previously occupied homes rose nearly 20 percent from March last year to a non-seasonally adjusted mark of 427,000. The median home price was flat at $170,700.

Low interest rates and the looming expiration of two tax credits at the end of April attracted more house hunters. First-time buyers are eligible for a tax credit of up to $8,000, and current homeowners who choose to buy and relocate can get up to $6,500.

When the government incentives end some experts think the housing market's recovery will stumble. But others argue that there are enough potential buyers to keep the market active.

Foreclosure sales, high unemployment and tight lending standards remain obstacles to a steady recovery. Foreclosures continued to stream into some Southern markets.

''Foreclosures are selling quickly, especially in the lower price ranges that are attractive to first-time home buyers,'' said Lawrence Yun, chief economist for the Realtors' group.

In the South, sales increased in 18 of 19 Southern metro areas covered by the Associated Press-Re/Max Monthly Housing Report, also released Thursday. Sales were nearly flat in New Orleans, which is still feeling the effects of Hurricane Katrina.

Median sales prices rose in 8 of the 19 Southern cities covered by the AP-Re/Max report, which analyzes sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

The Texas metro areas of Dallas-Fort Worth and Houston, two markets which didn't see much of a pricing bubble during the housing boom, had the largest median sales price increases of the Southern cities covered by the AP-Re/Max report.

Prices rose nearly 6 percent in Dallas-Fort Worth to $148,00, and existing home sales climbed 6 percent compared with last March. In Houston, March sales increased 10 percent, and prices increased 4 percent to $153,000.

Real estate agent Mike Bowman said the tax credits, low mortgage rates and prices that remain affordable are creating a sales environment in Dallas-Fort Worth that's ''as good as you are going to get.''

''When people are optimistic about everything, then they are going to spend money, and that can only help the economy,'' said Bowman, president of Century 21 Mike Bowman Inc. in Grapevine, Texas.

While Congress seems reticent to extend the tax credits, Bowman said he wants lawmakers to consider it.

''That would give us enough momentum to carry on through the rest of the year and into 2011,'' Bowman said.

In Florida, home sales in Orlando jumped 42 percent, the highest year-over-year sales increase among the Southern cities covered by the AP-Re/Max report.

Foreclosures and overbuilding, which created high inventory, have pushed prices down in the central Florida metropolis. The median sales price in Orlando was just $111,000, down 18 percent from March 2009, the AP-Re/Max report.

Condos and houses are selling for less than half of what they were going for several years ago, said Orlando-area real estate agent Dana Hall. Houses located near Walt Disney World that once sold for $300,000 are now selling for around $90,000 in some areas, Hall said.

Meanwhile, more international buyers took advantage of favorable currency exchange rates to snare low-priced properties.

One of Hall's clients from the United Kingdom bought a two-bedroom, condo with a balcony for about $80,000 in Celebration, Fla.

The condo, a bank-owned foreclosure that was previously purchased for about $200,000, received multiple offers.

''Buyers now are getting steals,'' said Hall, owner of Century 21 Premium Properties in Celebration.

"New-home sales rise fastest in 47 years" from CNNMoney.com

GLENN EZELLE — Fri, 23 Apr 2010 21:44:00 GMT

New-home sales rise fastest in 47 years

By Chavon Sutton, staff reporterApril 23, 2010: 3:36 PM ET

NEW YORK (CNNMoney.com) -- New home sales improved in March at the fastest single-month rate in 47 years, according to a government report released Friday, as buyers snatched up properties ahead of the tax credit that's set to expire.

New-home sales rose 26.9% to a seasonally adjusted annual rate of 411,000 last month, compared to an upwardly revised annual rate of 324,000 in February, the Census Bureau said. The gain snapped a four-month streak of declines.

A consensus of economists surveyed by Briefing.com expected March sales to rise to an annual rate of 330,000.

The March sales were the strongest since last July, and the percentage gain was the biggest on a month-over-month basis since a 31% gain in March 1963.

New-home sales spiked in every region of the United States. The South saw the biggest jump in new home sales, up 43.5%, while the Northeast region saw sales climb 35.7%. The West and Midwest regions both saw single-digit percentage growth, with the West up 6% and the Midwest up 4%.

The Census Bureau data followed a report from the National Association of Realtors on Thursday that showed existing home sales soared nearly 7% in March, as new homebuyers raced to buy up properties before a tax credit expires on April 30.

"It's obvious that homebuyers are rushing in to take advantage of the tax credit that's set to expire," said Robert Dye, senior economist for PNC Financial Services.

In November, the government extended and expanded an $8,000 tax credit, which also allows some repeat buyers to qualify for a $6,500 credit. Buyers have until April 30 to qualify.

Dye expects to see continued strength in April's data before "tailing off" through the summer as the group of buyers who rushed in are "all spent out."

The Census Bureau estimated that 228,000 new homes hit the market in March. At the current sales rate, it would take 6.7 months to sell through that inventory, down sharply from an estimated 9.2 months of inventory in February.

Although new-home sales in March exceeded analyst expectations, sales are still trending near record lows, and prices are still under pressure due to oversupply.

"It's a very good sign to see [the March inventory] number down," said Dye. "But this needs to tighten up more to see upward pressure on prices."

The average price of a new home was $258,600, according to the Census Bureau. That was virtually flat compared to a year earlier, and 12% below average prices in 2008.

A precarious jobs market continues to threaten the housing market. Dye expects the April unemployment rate to dip to a still-high 9.6% from March's 9.7% when data are announced May 7.

"Firming house prices and an improving jobs market will make recovery felt on Main Street as well as Wall Street," said Dye. "We're headed in the right direction."

LOOKING FOR A DEAL TRY THESE

GLENN EZELLE — Sat, 17 Apr 2010 02:33:00 GMT

Economic indicators in these metros have gone from bad to worse, with no sign of recovery.

Miami boasts a popular South Beach club scene, Art Deco Architecture, and perhaps the best Cuban food in the country. But residents don't have much else to celebrate.

More than three years after the economy started its downward slide, the Miami metro area, like a handful of Sun Belt cities, still hasn't begun to recover. Median home prices in Miami have fallen 38% since its market peaked in the second quarter of 2007; the city's 11% unemployment rate is above the national average and has grown more than most of the 40 cities we surveyed.

List: 10 U.S. Cities In Free Fall

Cities in the "Sand States" of Florida, California, Arizona and Nevada, where overbuilding was rampant, are also in trouble, claiming nine of the top 10 spots in our list of cities in free fall. In Las Vegas, Riverside, Calif., and Phoenix, median home prices have fallen 50%, 44% and 37% from their respective peaks. Jobs are vanishing. Though country-wide, employers added 162,00 jobs last month, Riverside gained 13% fewer jobs in February 2010 (the latest numbers available by metro) than it did the same month three years earlier. Tampa, Fla., saw a 10% drop, and Los Angeles added 9% fewer jobs over the same time period.

These cities are also slow to absorb their glut of unsold foreclosed homes, keeping recovery at bay.

"These were highly speculative housing markets," says Jonathan Miller, president of Miller Samuel, a Manhattan-based real estate appraisal firm. "In the markets that have unloaded a lot of foreclosed housing stock there's still a lot more coming."

Behind the Numbers

To find the country's cities in free fall, we rated its 40 largest Metropolitan Statistical Areas (MSA) on six metrics.

We ranked each MSA on the percent its median home price has fallen since its individual peak, using data provided by Local Market Monitor, a housing market data tracker. To get an estimate for the number of new homes being built, we used data from the U.S. Census Bureau, which tracks how many building permits are issued. Roughly 98% of these permits become new home starts. We looked at the percent change in new building permits between February 2007 and February 2010.

We also wanted to know how many people were moving in and out of these metros, since a growing population buoys a local economy. We used the Census Bureau's most recent population estimates to rank each metro on its net population change between July 2006 and July 2009. To judge each city's productivity we also ranked each metro on its per capita gross domestic product in 2008, the most recent year available, using data from Moody's Economy.com. Finally, we ranked the metros on the percent change in unemployment between January 2007 and January 2010 and the number of jobs they added between February 2007 and February 2010, with data from the Bureau of Labor Statistics. We averaged these rankings to arrive at a final score.

Sunshine State Stagnancy

Florida cities dominate our list, with Tampa, Orlando and Jacksonville joining Miami. Florida's real estate market keeps falling even as some herald the start of a rebound. The state's comparatively sluggish foreclosure process keeps those homes from getting easily flushed out of the market. Because every foreclosure must be approved by a judge, the procedure takes a minimum of five months to complete.

"In states with complex foreclosure laws, the recovery is clearly being delayed," says Mike Simonsen, CEO of Altos Research, a Mountain View, Calif.-based real estate research firm, who adds that lengthy foreclosures may be driving away real estate investors in these cities.

A Trouble Spot in the Northeast

Picturesque Providence, R.I., is the only New England metro on our list. Economically, it's struggling far more than other cities in the region. Although Providence saw a slower three-year increase in unemployment than some other major metros, it still has a high unemployment rate, at 14%. The city also added 9% fewer jobs in 2010 than three years earlier. Workers are getting the message and leaving town. Providence is the only city in our top 10 to see a net loss in population.

Grim News for the Golden State

California cities are struggling too. Riverside, Los Angeles and Sacramento are suffering because of the knocks they took after their inflated housing markets began to plummet. Unemployment in the City of Angels has nearly tripled in three years, to 12%. Riverside's unemployment has also ballooned, to 15%. Meanwhile Sacramento saw a 75% drop in new building permits. These are troubling signs for Cali metros, but not surprising. The end of the state's home-price climb triggered more than just a housing slump.

"In California, so many jobs were concentrated in construction," says Michael Fratantoni, vice president of research at the Mortgage Bankers Association, the professional association for real estate financiers. "Jobs building single family homes wound up not being sustainable, and there were a lot of job losses."

The long-term consequences of the housing crash in these cities are still playing out, and new factors that complicate a recovery keep cropping up.

"Places like Phoenix and Riverside may take even longer to recover because people might just pick up and leave to go to places doing better," says Fratantoni. "It may make more sense to leave, rather than wait for jobs to return."

Top 5 Cities in a Free Fall

1. Miami-Fort Lauderdale-Pompano Beach, FL
Net Population Change, 2006-2009: 1.47%
Per Capita Gross Domestic Product: $42,645.52
Change in New Building Permits, February 2007-February 2010: -77.46%
Change in Unemployment, January 2007-January 2010: 202.70%
Change in New Jobs Added, February 2007 - February 2010: -9.68%
Change in Median Home Price from Market Peak: -38%

2. Tampa-Clearwater, FL
Net Population Change, 2006-2009: 2.33%
Per Capita Gross Domestic Product: $42,562.92
Change in New Building Permits, February 2007-February 2010: -44.18%
Change in Unemployment, January 2007-January 2010: 235.90%
Change in New Jobs Added, February 2007 - February 2010: -9.87%
Change in Median Home Price from Market Peak: -32%

3. Riverside-San Bernardino-Ontario, Calif.
Net Population Change, 2006-2009: 4.40%
Per Capita Gross Domestic Product: $32,403.49
Change in New Building Permits, February 2007-February 2010: -65.69%
Change in Unemployment, January 2007-January 2010: 177.78%
Change in New Jobs Added, February 2007 - February 2010: -12.94%
Change in Median Home Price from Market Peak: -44%

4. Jacksonville, Fl.
Net Population Change, 2006-2009: 3.83%
Per Capita Gross Domestic Product: $16,035.65
Change in New Building Permits, February 2007-February 2010: -66.09%
Change in Unemployment, January 2007-January 2010: 227.03%
Change in New Jobs Added, February 2007 - February 2010: -7.74%
Change in Median Home Price from Market Peak: -23%

5. Phoenix-Mesa-Scottsdale, AZ
Net Population Change, 2006-2009: 7.85%
Per Capita Gross Domestic Product: $40,870.16
Change in New Building Permits, February 2007-February 2010: -83.61%
Change in Unemployment, January 2007-January 2010: 148.65%
Change in New Jobs Added, February 2007 - February 2010: -10.01%
Change in Median Home Price from Market Peak: -37%

Click here to see the full list of Ten U.S. Cities In Free Fall

Showing page 1 of 1

Single Story For Sale in Reynolds School District SOLD

GLENN EZELLE — Mon, 12 Apr 2010 01:48:00 GMT

CHARMING 3 BED 2 BATH RANCH

• 1,092 sq. ft., 2 bath, 3 bdrm single story "RANCH" - MLS® $189,900 - GREAT HOME FOR THE MONEY

Reynolds School District, Northeast Portland - CLOVER CREST NEIGHBORHOOD OFF HALSEY AND 192ND CORNER LOT 3 BED 2 BATH 1092 SQ FT RANCH WITH FIRPLACE AND NEW OVEN, SINK, DISHWASHER, CARPET, PAINT, PED LAV AND BEAUTIFUL FENCED YARD WITH 2 CAR GARAGE, ALARM, COVERED PATIO, AND WATER FEATURE

Property information

FIRST TIME HOME BUYER CREDIT EXPIRES APRIL 30

GLENN EZELLE — Thu, 01 Apr 2010 14:29:00 GMT

IF ARE STILL ON THE FENCE ABOUT BUYING A HOME NOW IS THE TIME. THE MARKET IS RECOVERING AND THE HOME PRICES HAVE BEGUN TO STABLIZE. Now is the time to buy before the prices start to go up again. Dont miss the chance to receive that first time home buyer credit of $8000 or the repeat home buyer credit of $6500. There are certain qualifications so check the federal guidlines to make sure you qualify.

First-Time Homebuyer Credit: Answers

"Mortgage Rates Improve, Stocks Fall" from Mortgage Time

GLENN EZELLE — Sun, 31 Jan 2010 22:28:00 GMT

Mortgage Rates Improve, Stocks Fall

While the economic data released this week had little impact, mortgage rates were heavily influenced by two big stories. One was an announcement that China will take steps to slow its economic growth and the other was President Obama's proposed new restrictions on the activities of financial institutions. Both measures are expected to lead to slower economic growth in the US, which hurt the stock market but helped fixed income markets. As a result, mortgage rates ended a little lower.

During the week, China released a report showing that its Gross Domestic Product (GDP) grew at an 8.7% pace in 2009. Rapid growth generally leads to higher inflation. In an effort to slow its economy and prevent inflation, China announced that it is going to curb bank lending. China currently has the third largest economy and is responsible for a significant percentage of global economic growth, so the effects of a slowdown in China will be felt around the world. In the US, President Obama proposed to limit the size and activities of large banks to reduce the risks to the financial system as a whole. If passed by Congress, this too would lead to slower growth for many large US financial services firms. The potential for slower economic growth and the resulting reduction in inflationary pressures was favorable for mortgage rates.

To build capital and reduce risk, the FHA announced that it will raise insurance rates and tighten credit score requirements. The major changes include increasing upfront premiums from 1.75% to 2.25%, reducing the maximum seller contribution from 6% to 3%, and increasing the level of FICO scores from 500 to 580 below which a down payment of 10% is required. At this point, the expected timing of the upfront premium increase will be in the spring, and the other changes will take place over the summer.

"Ten Inexpensive Ways to Wow Buyers" from Realtor Magazine Online

GLENN EZELLE — Thu, 28 Jan 2010 17:49:00 GMT

Ten Inexpensive Ways to Wow Buyers
Now is the time for home owners contemplating a spring sale to spruce up their properties in anticipation of what Mike Larson of Weiss Research calls a potentially vibrant home-selling season. "If you have been beating your head against a wall, this is going to feel a lot better,” he jokes.

Here are 10 cheap ways to make a property more attractive to shoppers.

Improve first impressions. Touch up the paint on the front door and other areas that buyers see first.
Clean up the landscaping. Trim the hedges and trees and plant some annuals in the flowerbeds.
Paint the interior. A coat of light yellow or cream with contrasting white woodwork looks fresh and clean.
Refurbish the floors. Buff the hardwoods. Install new carpets – or at least get them professionally cleaned.
Take care of the big problems. If the house needs a roof or the front stoop is crumbling, get them fixed.
Buy warranties. Putting appliances under warranty gives homebuyers a secure feeling.
Improve energy efficiency. New windows or improved insulation tell a potential buyer the seller is on top of things plus they come with tax benefits.
Replace light fixtures. Updated fixtures, especially at the entrance way and in the foyer, create a good first impression.
Buy a stove. Home owners whose kitchen isn’t top of the line can jazz it up for a few hundred dollars by buying a new stove, which gives the room a fresh feel.
Tidy up the bathrooms. Get rid of mildew, replace caulking and replace stained sinks.

Source: U.S. News & World Report, Luke Mullins (01/21/2010)

"10 Cities Where It's Smarter to Buy" from Realtor Magazine Online

GLENN EZELLE — Sun, 24 Jan 2010 01:52:00 GMT

10 Cities Where It's Smarter to Buy
For people who want to own a home, the premium to buy—the spread between what they’d spend to rent and what they’d pay for a mortgage—is much lower than the 15-year average in many cities.

To determine what cities are smart buys, Forbes magazine computed the premium and also identified locales where economists predict home prices will go up the most over the next five years.

Here are the top 10 cities the magazine chose as the best places to buy right now.

Boston-Cambridge-Quincy, Mass.
Charlotte-Gastonia-Concord, N.C.-S.C.
Chicago-Naperville-Joliet, Ill.-Ind.-Wis.
Cincinnati-Middletown, Ohio-Ky.-Ind.
Denver-Aurora-Broomfield, Colo
Minneapolis-St. Paul-Bloomington, Minn.-Wis.
Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.
Portland-Vancouver-Beaverton, Ore.-Wash.
San Francisco-Oakland-Fremont, Calif.
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V.

Source: Forbes, Francesca Levy (01/21/2010)

2 Story For Sale in Pearl District SOLD

GLENN EZELLE — Fri, 22 Jan 2010 01:41:00 GMT

Pearl District Pinnacle View Penthouse

• 1,854 sq. ft., 2 bath, 2 bdrm 2 story "Townhome Style" - MLS® $699,000 - REDUCED TO SHORT SALE

Pearl District, Portland - Pearl District Pinnacle 2 story penthouse with 2 expansive terraces totalling 1300 square feet offers amazing West Hills, City and River Views! This top floor condo has it all...gourmet kitchen with granite counters, granite island, stainless appliances, 6 burner gas cook top and wine fridge, living room with wall of windows, marble fireplace and door to main 700 sq ft terrace, upper level master suite with city views and 2nd 600 sq ft terrace, wood floors throughout, tandem parking in secure garage and an extra storage unit.The Ultimate in Outdoor Living and Entertaining. Prime Location near Parks and the Streetcar.

Property information

SWITCHING TO A SELLER'S MARKET

GLENN EZELLE — Sat, 02 Jan 2010 17:37:00 GMT

2010 will be the year that the market switches back to a sellers market. Already in the last 3 months 6 out of 10 homes have seen a price increase. Do not wait until it is too late. Now is the time to buy a home. The first time buyer credit and previous home buyer credit has been expanded and extended. The time has never been better. Lenders are starting to lend again and the job market is starting to improve. Call me for a market analysis. If you want to buy or sell call Glenn Ezelle.

30 years of subsidized risk

GLENN EZELLE — Sat, 07 Nov 2009 05:56:00 GMT

Subsidized Risk

There's a reason Dick Fuld didn't believe Lehman would be allowed to fail.

By CHARLES GASPARINO

I recently sat down with legendary investor Ted Forstmann to discuss why, on the one-year anniversary of the financial meltdown, the press has largely ignored the role of government in creating the meltdown—and possibly setting the stage for another one—by allowing Wall Street to borrow cheaply and easily during the past three decades.

"I guess reporters think writing about greedy investment bankers is more interesting," Mr. Forstmann laughed.

Mr. Forstmann knows a thing or two about greedy investment bankers: He's been calling them on the carpet for years, most famously during the 1980s when he fulminated against the excesses of the junk-bond era. He also knows that blaming banking greed alone can't by itself explain the financial tsunami that tore the markets apart last year and left the banking system and the economy in tatters.

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Chad Crowe

The greed merchants needed a co-conspirator, Mr. Forstmann argues, and that co-conspirator is and was the United States government.

"They're always there waiting to hand out free money," he said. "They just throw money at the problem every time Wall Street gets in trouble. It starts out when they have a cold and it builds until the risk-taking leads to cancer."

Mr. Forstmann's point shouldn't be taken lightly. Not by the press, nor by policy makers in Washington. But so far it has been, and the easy money is flowing like never before. Interest rates are close to zero; in effect the Federal Reserve is subsidizing the risk-taking and bond trading that has allowed Goldman Sachs to produce billions in profits and that infamous $16 billion bonus pool (analysts say it could grow to as high as $20 billion). The Treasury has lent banks money, guaranteed Wall Street's debt and declared every firm to be a commercial bank, from Citigroup with close to $1 trillion in U.S. deposits, to Morgan Stanley with close to zero. They are all "too big to fail" and so free to trade as they please—on the taxpayer dime.

The conventional wisdom as perpetuated in the media is that these bailout mechanisms are unique, designed to ameliorate a once-in-a-lifetime financial "perfect storm." They are unique, but only in size. A quick look back at the past three decades will demonstrate what Mr. Forstmann meant when he said the government has been ready to hand out free money nearly every time risk-taking led to losses.

The first mortgage market meltdown of the mid-1980s, spurred by the Fed's supply of easy money, was among the most painful market upheavals in the history of the bond market. The pioneers of the mortgage bond market, Lew Ranieri of Salomon Brothers and Larry Fink of First Boston (the same Larry Fink now considered a sage CEO at money management powerhouse BlackRock), lost what were then unheard-of sums of money. (Mr. Fink concedes to losses of over $100 million.)

"What happened then was a dry run of what was to come," Mr. Fink recently told me, as he looked back on the market he created, which would eventually lie at the heart of the most recent financial crisis. Wall Street took excessive risk in mortgage bonds amid the easy money supplied by the Fed—and lost. When the crisis began, the Fed under then Chairman Alan Greenspan slashed interest rates—as it would do after Orange County, Calif., declared bankruptcy in 1994 because of bad bets on complex bonds; and again in 1998 when the hedge fund Long-Term Capital Management (LTCM) blew up; and of course in the bond-market crisis of 2007 and 2008. The lower rates each time lessened the pain of the risk-taking gone awry, and opened the door for increased risk down the line.

Easy money wasn't the only way government induced the bubble. The mortgage-bond market was the mechanism by which policy makers transformed home ownership into something that must be earned into something close to a civil right. The Community Reinvestment Act and projects by the Department of Housing and Urban Development, beginning in the Clinton years, couldn't have been accomplished without the mortgage bond—which allowed banks to offload the increasingly risky mortgages to Wall Street, which in turn securitized them into triple-A rated bonds thanks to compliant ratings agencies.

The perversity of these efforts wasn't merely that bonds packed with subprime loans received such high ratings. It was also that by inducing homeownership, the government was itself making homeownership less affordable. Because families without the real economic means to repay traditional 30-year mortgages were getting them, housing prices grew to artificially high levels.

This is where the real sin of Fannie Mae and Freddie Mac comes into play. Both were created by Congress to make housing affordable to the middle class. But when they began guaranteeing subprime loans, they actually began pricing out the working class from the market until the banking business responded with ways to make repayment of mortgages allegedly easier through adjustable rates loans that start off with low payments. But these loans, fully sanctioned by the government, were a ticking time bomb, as we're all now so painfully aware.

A similar bomb exploded in 1998, when LTCM blew up. The policy response to the LTCM debacle is instructive; more than anything else it solidified Wall Street's belief that there were little if any real risks to risk-taking. With $5 billion under management, LTCM was deemed too big to fail because, with nearly every major firm copying its money losing trades, much of Wall Street might have failed with it.

That's what the policy makers told us anyway. On Wall Street there's general agreement that the implosion of LTCM would have tanked one of the biggest risk takers in the market, Lehman Brothers, a full decade before its historic bankruptcy filing. Officials at Merrill, including its then-CFO (and future CEO) Stan O'Neal, believed Merrill's risk-taking in esoteric bonds could have led to a similar implosion 10 years before its calamitous merger with Bank of America.

We'll never know if LTCM's demise would have tanked the financial system or simply tanked a couple of firms that bet wrong. But one thing is certain: A valuable lesson in risk-taking was lost. By 2007, the years of excessive risk-taking, aided and abetted by the belief that the government was ready to paper over mistakes, had taken their toll.

With so much easy money, with the government always ready to ease their pain, Wall Street developed new and even more innovative ways to make money through risk-taking. The old mortgage bonds created by Messrs. Fink and Ranieri as simple securitized pools had morphed into the so-called collateralized debt obligations (CDOs), complex structures that allowed Wall Street banks as well as quasi-governmental agencies Fannie Mae and Freddie Mac to securitize ever riskier mortgages.

Mr. O'Neal, the man considered most responsible for Merrill's disastrous foray into risk-taking, told me in an interview last year that in the fall of 2007, when he saw that the firm's problems were insurmountable, he had a deal to sell Merrill to Bank of America for around $90 a share. But Merrill's board rejected it, believing he would be selling out cheaply. The CDOs would eventually recover, they argued, as the Fed pumped life into the markets.

Likewise, nearly to the minute he was forced to file for bankruptcy, former Lehman CEO Dick Fuld believed the government wouldn't let Lehman die. After all, government largess had always been there in the past.

All of which brings me back to Mr. Fortsmann's comment about policy makers helping turn a cold into cancer. What if the Fed hadn't eased Wall Street's pain in the late 1980s, and again after the 1994 bond-market collapse? What if policy makers in 1998 had allowed the markets to feel the consequences of risk—allowing LTCM to fail, and letting Lehman Brothers and possibly Merrill Lynch die as well?

There would have been pain—lots of it—for Wall Street and even for Main Street, but a lot less than what we're experiencing today. Wall Street would have learned a valuable lesson: There are consequences to risk.

Mr. Gasparino is a CNBC on-air editor and the author, most recently, of "The Sellout: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System," just published by HarperBusiness.

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EXISTING HOMES SALES INCREASE FOR THE 8TH MONTH IN A ROW

GLENN EZELLE — Mon, 02 Nov 2009 18:47:00 GMT

Pending Sales of Existing Homes in U.S. Rise 6.1% (Update1)

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By Bob Willis

Nov. 2 (Bloomberg) -- The number of contracts to buy previously owned homes in the U.S. rose in September for an eighth straight month as Americans rushed to meet a deadline for a home-buyer tax credit.

The index of signed purchase agreements, or pending home sales, rose 6.1 percent after a 6.4 percent gain in August, the National Association of Realtors said in Washington. Compared with a year earlier, pending sales rose 19.8 percent, without adjusting for seasonal variations.

Many buyers accelerated purchases of new homes to take advantage of the $8,000 tax credit before it expires Nov. 30. Foreclosure-driven price declines and low mortgage rates have also pushed sales up this year. Home sales may cool in coming months unless the credit is extended under a deal worked out by Senate Democrats.

“Home sales continued to show improvement as we see people rush to take advantage of the homebuyer tax credit, although the sustainability of this move is in doubt, and we expect a far slower growth rate going forward,” David Semmens, an economist at Standard Chartered Bank in New York, said before the report.

Stocks extended gains after separate reports showed that manufacturing expanded at the fastest pace in more than three years and spending on construction unexpectedly increased.

The Standard & Poor’s 500 Index added 1.3 percent to 1,049.43 at 10:21 a.m. in New York.

Factory Index

The Institute for Supply Management’s factory index rose to 55.7 in October, the highest level since April 2006, from 52.6 in September, according to the Tempe, Arizona-based group. Readings above 50 signal expansion.

Construction spending rose 0.8 percent in September, the most in a year, followed a revised 0.1 percent drop in August, Commerce Department figures showed. Spending on residential and government projects climbed, while outlays on private commercial construction slumped.

Pending home sales were projected to be unchanged in September from the prior month, according to the median forecast of 33 economists in a Bloomberg News survey. Estimates ranged from a drop of 2.5 percent to an increase of 5.5 percent.

The Realtors group has collected pending sales data since January 2001, and it started publishing the index in March 2005.

Leading Indicator

Pending home sales are considered a leading indicator because they track contract signings. The Realtors’ existing- home sales report tallies closings, which typically occur a month or two later.

Sales rose in three of four regions from the prior month. They increased 10.2 percent in the West, 8.1 percent in the Midwest and 4.9 percent in the South. Sales fell 2 percent in the Northeast.

“As long as buyers do not overstretch and stay well within their budget, a sizeable pent up demand can be tapped among financially qualified potential buyers,” NAR Chief Economist Lawrence Yun said in a statement. Still, “We’re clearly not out of the woods because an excess of homes remains on the market.”

Sales of existing homes surged a record 9.4 percent in September to a 5.57 million annual rate, a report last month showed. The median price fell at the slowest pace in a year as the number of houses on the market shrank.

Federal Reserve

The Federal Reserve has announced it will phase out its purchases of $1.25 trillion in mortgage-backed securities by March, signaling borrowing costs for home buyers may rise after the average rate on a 30-year mortgage fell to a record 4.78 percent in April.

Housing-related companies are still recovering from the industry’s worst slump since the Great Depression. USG Corp., North America’s largest maker of gypsum wallboard, posted its eighth straight net loss last quarter as sales dropped 32 percent from the same time last year.

“We’re expecting we’ve hit the bottom in housing,” Chief Executive Officer William Foote said Oct. 21 on a conference call with analysts. He added it would take time for any sustained improvement to “really kick in.”

To contact the reporters on this story: Bob Willis in Washington bwillis@bloomberg.net;

Last Updated: November 2, 2009 10:23 EST

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WHY THIS COUNTRY BELONGS TO THE PEOPLE THAT RUN IT.

GLENN EZELLE — Fri, 09 Oct 2009 16:20:00 GMT

Andrea Tantaros

- FOXNews.com

- October 09, 2009

Pelosi's Sinking In the Swamp

If she hopes to survive a bloody battle in 2010 -- one where her own words and actions will be used against her -- Speaker Pelosi must insist that New York Congressman Charlie Rangel resign immediately.

When she became Speaker of the House Nancy Pelosi assured Americans she would “drain the swamp” and clean up ethics violations. To this day, she still boasts about that notion as an accomplishment. Sadly, the swamp is winning.

In perhaps the most appalling display of “cronyism,” -- a word Pelosi herself used almost incessantly when Republicans were in power, -- she has allowed her good friend and political ally, Rep. Charlie Rangel to retain his powerful post as Chairman of the Ways and Means Committee. This, despite calls for him to step down from both sides of the aisle and a litany of unethical transgressions, including the following:

- Evading taxes on $1.3 million in income derived from multiple properties and failing to disclose hundreds of thousands of dollars of assets and income.
- Accusations of taking a $1 million contribution to the Rangel Center at City College from a wealthy businessman who later got a lucrative tax break for his company.
-Accepting a Citigroup-funded trip to the Caribbean in November 2008, when the bank was bleeding the bailout funds dry.
- Unreported rental income from a vacation villa in the Dominican Republic that Rangel failed to acknowledge when filling out financial disclosure forms.

Instead of applying the same guidelines on impropriety that she did for the GOP, Pelosi has largely stayed mum, opting instead to duck, deny, and ignore the gravity of the situation in front of her. It's not surprising since this isn’t the first instance of her favoritism.

She’s also stuck by her closest congressional cohort, John Murtha, who is also facing an investigation into his misdeeds including no-bid contracts awarded to a nephew’s company and $38.1 million in earmarked appropriations for clients of the PMA Group which employs former Murtha staff members and contributed to his campaign.

When asked about attempts to strengthen congressional ethics standards, the Pennsylvania Democrat responded that he thinks it's “crap.” Apparently his buddy Pelosi agrees.

And still, there more! Despite finding photos of $90,000 in cash tucked inside containers of pie crust and Boca Burgers from an FBI raid on the freezer in Louisiana Congressman William Jefferson’s house, Pelosi tried to "gift" him (ironically) with a Homeland Security committee assignment. -- He would later be convicted of 11 counts of racketeering and bribery.

Someone call Joe the Plumber! The drain on the swamp is awfully clogged up.

Even some Democrats agree. Two of the Speaker's own party members broke with ranks with her and voted against Mr. Rangel, a sign that the Speaker will soon have to answer for her actions -- or lack thereof. Many are calling on Rangel to resign, realizing that not only is this hypocrisy in it’s most audacious form, but also that Republicans will make political hay out of this issue until the leadership on the left, primarily Pelosi, speaks up and calls for the New York congressman to step down.

When the ultra-liberal New York Times editorial page wags its finger in disgust at a hometown son and one of their own, the writing's on the wall about the the severity of this mistake in leadership. On Friday here's what The Times said:

“It is time for Democrats in Congress — who once justifiably complained about the corruption of the Republican majority — to demonstrate to Americans that someone in that august body has ethical standards.

“Speaker Nancy Pelosi, maintaining her tunnel vision on behalf of a powerful colleague, led the majority to defeat the Republicans’ latest call to depose the New York lawmaker. She does the nation no favor.”

But many Democrats in Congress still refuse to see what damage this scandal is doing to their credibility. Why? Because Rangel is “a likeable guy.” Congressman Mark Foley was also a likeable guy. But he had to go. More obviously, a chilly demeanor isn’t the charge.

Mr. Rangel is the big cheese when it comes to writing federal legislation that impacts our tax code. To not only shield a member of her caucus as political payback for Rangel’s past support of Pelosi -- but to also reward that member -- shows that the Speaker is willing to risk losing her entire caucus, and what’s left of her almost non-existent credibility, for the sake of a few. That’s not just bad politics. That’s bad judgment.

If she hopes to survive a bloody battle in 2010, one where her own words and actions will be used against her, she must insist Rangel resign immediately.

If I had to talk to The New York Times -- who concluded their scathing rebuke of the Speaker by asserting that the protection of Mr. Rangel as chairman “is a grave misstep” that will only hand the ethics issue back to Pelosi’s political opponents -- I would argue that it’s far too late. The issue has already been returned to Republicans. We can only hope control of the House of Representatives is next.

Andrea Tantaros is a conservative columnist and FOXNews.com contributor. Follow her on Twitter @AndreaTantaros.