If you missed it, Jim Rainey had a piece in Sunday’s L.A. Times about that New York Times series "The Reckoning." L.A. Land readers may recall that we had posts  on the part entitled "White House Philosophy Stoked Mortgage Bonfire" and the subsequent White House apoplexy.

More interesting to me than a rehash of that dust-up was the latest installment of the series that ran Dec. 27 when I was off, "By Saying Yes, WaMu Built an Empire on Shaky Loans."

The lead:

SAN DIEGO — As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers’. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes.

Yet even by WaMu’s relaxed standards, one mortgage four years ago raised eyebrows. The borrower was claiming a six-figure income and an unusual profession: mariachi singer.

Mr. Parsons could not verify the singer’s income, so he had him photographed in front of his home dressed in his mariachi outfit. The photo went into a WaMu file. Approved.

I don’t know how I can still be surprised by anything, but that one was a real head-shaker to me.

– Lauren Beale

Thoughts? Comments?

Photo: The entrance to a Washington Mutual branch in Seattle in September. Credit: Ted S. Warren / Associated Press

Originally posted here.

For instance, for a 30-year fixed-rate mortgage to buy a condominium, allowing for initial payments of interest only and with a 20% down payment, a borrower with a credit score of 690 will pay fees totaling 3.25% of the loan amount for mortgages Fannie purchases after April 1. …

A Fannie spokesman said the higher fees are targeted at some of the highest-risk loans, such as those allowing deferment of principal payments and those allowing borrowers to draw cash when they refinance.

The National Assn. of Realtors registered its displeasure in a letter to Fannie protesting the "major new costs" on buyers and people seeking to make their loans more affordable through refinancing.

Let's back up the truck here. The 20% down seems very respectable, but why, oh why, are they still offering interest-only "teasers"? What happens when the entire payment kicks in — particularly if the property has dropped in value since the purchase? I'm not following the logic.

–Lauren Beale

Thoughts? Comments?

Originally posted here.

The Bradford Pear – Pyrus calleryana ‘Bradford’

The spring-blooming ornamental pear tree Pyrus calleryana was introduced to the West in 1908 from its native China and Korea. The seedling that later became ‘Bradford’ was brought from Nanjing in 1919, but the USDA did not introduce the variety commercially till 1963. It was assumed to be a perfect street and garden tree and was planted ubiquitously in this country, especially in the Southeast. But then its faults started surfacing: the flower odor is somewhat peculiar; the tree lives only 25 years or so; the vertical branches are attached in narrow crotches that split easily, especially under a load of ice or snow; the tree is a nightmare to prune; and hybrids developed to overcome some of the earlier problems produce viable seeds that may become invasive in summer wet climates.

The Bradford Pear is a deciduous, fairly fast-growing tree that may attain 30 to 50 feet in height and 30 to 40 feet in width. The pyramidal shape develops unless changed through pruning. Bark is a fissured gray. Without corrective pruning, the tree develops into a tight cluster of strongly vertical branches without a main trunk. Young growth is thorny. Glossy, dark leaves are oval, leathery and 1½  to 3 inches long. A cold snap in late autumn brings out brilliant purplish-red fall colors. The tree is covered with white flowers in early spring; these are followed by small round inedible fruit. It needs full sun and takes most soils. The tree takes moderate water but is drought resistant. It has some susceptibility to fire blight, a bacterial disease that makes little branches die and look scorched, but is not as susceptible as the Evergreen Pear, P. kawakamii. Other varieties of Pyrus calleryana are more pyramidal (’Aristocrat,’ ‘Chanticleer’) or columnar (’Whitehouse’) in shape.

–Pieter Severynen

Thoughts? Comments?

Photo: Pieter Severynen

Originally posted here.

Among those offering their looks ahead at 2009 in "How to Play the Crisis," accompanying today’s Wall Street Journal story "The Doomsayers Who Got It Right," are Paul Kasriel, economist-researcher at Northern Trust Co. in Chicago, and economist Robert Shiller, co-creator of the Case-Shiller index.

Although not addressing housing per se, Kasriel — who noted that home prices were too high back in 2004 — said he thinks lower interest rates and governmental spending could bring improvements by year’s end. "Now that everyone’s pessimistic, I think there’s a good chance the economy is going to stage a recovery," quotes the WSJ.

Shiller’s summation: Sellers need to accept lower prices to get things moving again, and we could be in for at least a decade of stagnation.

Also in the prediction mode, this from Fortune’s "10 Worst Real Estate Markets for 2009":

1. Los Angeles
2008 median house price: $375,340
2009 projected change: -24.9%
2010 projected change: -5.1%

Eight California cities make their list. Here are the rankings, cities and 2009 projected price changes: 2) Stockton, -24.7%; 3) Riverside, -23.3%; 5) Sacramento, -22.2%; 6) Santa Ana-Anaheim, -22.0%; 7) Fresno, -21.6%; 8) San Diego, -21.1%; 9) Bakersfield, -20.9%

Double-digit drops in home prices on top of this year’s declines? To quote Mr. T: "Prediction? Pain."

–Lauren Beale

Thoughts? Comments?   

Photo: Robert Shiller’s Case-Shiller index compares the latest sales of detached houses with previous sales. Credit: Robert Gauthier / Los Angeles Times

Originally posted here.

What were your favorite posts of the year?  To refresh your memory, here are some of the most-commented-on L.A. Land posts from Peter Viles (and one guest) from the first half of 2008:

– A tipping point: "Foreclose me … I’ll save money" — Jan. 23, 231 comments

– Guest blogger: ‘Please cover the other side’ — Feb. 20, 116 comments

– California freefall: Home prices down 26% in February — March 26, 296 comments

– California foreclosure "surge": Up 327% from ‘07 levels — April 22, 260 comments

– Update: Congresswoman denies foreclosure report — May 21, 338 comments

– In Escondido: Buy one (house), get one free. – June 1, 98 comments

And your picks are? …

– Lauren Beale

Thoughts? Comments

Originally posted here.

If you thought the former Countrywide CEO couldn't sink any lower, think again. Already under attack as the overpaid, over-tanned and over-zealous pioneer of subprime mortgages, Angelo Mozilo doesn't do himself any favors in May after reading a customer's e-mailed plea for help with his home loan.

Intending to forward the missive to a colleague, Mozilo instead hits "reply all" and sends a response calling the beleaguered homeowner's request "unbelievable" and "disgusting." "Most of letters now have the same wording," grouses Mozilo. "Obviously they are being counseled by some other person or by the internet."

Mozilo's heartfelt reply makes its way onto the Internet — and the onetime real estate king finds himself out of a job after Bank of America acquires Countrywide in July.

Fannie Mae's "delusions of grandeur" and Chief Executive Daniel Mudd's forecasting:

Fannie Mae CEO Dan Mudd proves once again that his crystal ball is malfunctioning. In May, Mudd predicts that the government-sponsored mortgage lender will "feast" on weakened competition in the mortgage market — even as its own prospects dim amid mounting credit losses and asset writedowns.

By September, on the brink of collapse, Fannie gets a new owner — Uncle Sam — and Mudd loses a job.

The housing rescue:

Remember Hope for Homeowners? We didn't think so. In July, Congress passes the only housing rescue to date: a plan to guarantee up to $300 billion worth of mortgages and prevent more than 300,000 foreclosures.

But to participate, banks must take steep losses — and doing so is voluntary. The anti-climactic upshot: A piddling 321 applications have been filed since the program's Oct. 1 launch — and not one loan workout has been completed, according to the U.S. Department of Housing and Urban Development.

Read the Fortune list or make up your own. There were certainly enough gaffes to go around.

– Lauren Beale

Thoughts? Comments?

Photo: Angelo Mozilo. Credit: Jay Mallin / Bloomberg News

Originally posted here.

Borrowers and analysts will be closely watching quotes from lenders Wednesday, especially because another key mortgage player is predicting a sharp decline.

The Fed said late today that it would begin purchasing $500 billion in Fannie Mae, Freddie Mac and Ginnie Mae securities early next month.

When the Fed initially announced that plan in November, and when it reaffirmed it two weeks ago, rates promptly plunged — although only for solid, creditworthy borrowers with big down payments or lots of equity in their homes. These borrowers discovered recently that they could get 30-year fixed mortgages in the 4.5% range.

They have since edged back up to just under 5% for solid borrowers who pay a 1% upfront fee and shoulder about $3,000 in closing costs, mortgage brokers said.

There was not much movement in rates from that level today. But as bankrate.com's Greg McBride points out, the Fed spoke today "after market close, so we might see some reaction to that tomorrow."

More encouraging words: Separately today, Federal Housing Finance Agency Director James Lockhart, the regulatory supervisor of Fannie Mae and Freddie Mac — said on CNBC that he expects mortgage rates to fall again by a half percentage point to a whole point.

– E. Scott Reckard

Originally posted here.

The worst declines were among homes priced lower than $351,000, which lost 39% of value during the year. Those same homes have lost 46% of their value since the bubble's peak in 2006.

Higher priced homes, by comparison, have lost 24% since 2006.

– David Pierson

Originally posted here.

It's hardly news that such fields as real estate brokerage and property development are still the near-exclusive province of white males, but it is astonishing that so little has changed in appearance since I first started covering commercial real estate in the mid-1980s.

The industry's premiere trade group, the Urban Land Institute, is frustrated by the seemingly intractable status quo and is about to launch a program to boost minority membership in the organization that also includes architects, lenders and colleagues in other real estate-related fields. Right now, only 1.8% of the ULI's 40,000 members nationwide are racial and ethnic minorities, and only 20% are women. Polyglot Los Angeles is the group's diversity leader, with a 3% minority membership in its local chapter.

The managing director of ULI Los Angeles, Philip S. Hart, has been given the task of attracting more minorities to the business, no small challenge in the middle of a devastating real estate slump. He hopes to persuade members to craft real estate deals that are "diverse and inclusive" when the business finally improves.

–Roger Vincent

Originally posted here.

Lemon-scented gum – Corymbia citriodora 

Tall and towering, with a smooth, pinkish white, bare trunk extending for half its height and graceful open foliage borne in distinct layers, the lemon-scented gum stands out in the landscape. Most people would call this native from the central and northern coasts of Queensland, Australia, a eucalyptus but it was reclassified as a Corymbia.

Fast growing to 45 to 90 feet, this widely planted evergreen tree remains rather narrow at 20 to 40 feet. Eventually it produces a dense, sturdy wood, but initially it grows so fast that judicious cutting back is needed to strengthen the trunk. But since pruning practices too often leave a lot to be desired, here we still see many horizontal branches cut off which shouldn’t be, or indiscriminate heading back taking place. Powdery bark on the tree sheds in thin curling flakes. The tree is deep rooted and often planted closer than normal to walks and walls. The drooping, narrow, adult leaves are 3 to 7 inches long, yellowish green and smooth; the juvenile leaves look similar but have a more sandpapery feel. Crushing a leaf produces a strong lemon smell due to the presence of citronella and other essential oils. Winter and spring blooming white flowers are not very flashy; the urn shaped seed capsules are hard as wood. The tree takes a variety of soils, needs full sun and is medium drought-tolerant. But if its internal moisture content goes down too low the tree becomes quite susceptible to pests and diseases. Introduced tiny predatory wasps are gradually bringing the sometimes fatal attacks by aphid related psyllids under control; this biological control is far preferable over chemical sprays, which have undesirable consequences. 

Unlike the strongly scented oil from the blue gum, Eucalyptus globulus, of vapor rub and lozenge fame, the more delicately scented oils from the lemon-scented gum are used for perfumes, antiseptics, insect repellents, medical applications and aromatherapy. The tree is grown in many subtropical countries for timber and firewood production.

– Pieter Severynen

Thoughts? Comments?

Photo: Pieter Severynen

Originally posted here.